MEBL_Conference Call Takeaways, (AKD, Off the Analyst's Desk, Aug 19, 2020)
AKD Research - Off the Analyst's Desk Aug 19, 2020 MEBL : Analyst Briefing Notes 1Meezan Bank Limited held its 1HCY20 results conference call today. To recall, the bank posted an NPAT of PkR11.58bn (EPS: PkR8.97) vs. PkR7.0bn (EPS: PkR5.42) in the same period last year. On a quarterly basis, earnings clocked in at PkR5.07/sh, +34.3%QoQ/68.0%YoY. With the results, the bank announced a bonus issue of 10%.Net spread stood at PkR32.3bn in 1HCY20, +56%YoY due to higher asset volume and underlying asset yield complimented by early repricing of deposits.Provision consists of PkR1.5bn specific provision and PkR1bn general provision related to COVID-19 impacts38 new branches were opened since CY19 taking the total branch network to 798. The management stated to have slowed down branch network expansion plan in view of COVID-19.Current Account occupies 38% of the current deposits from 36% in CY19 where the increase in partially part of bank’s strategy. Going forward, normalization can be expected as businesses resume operations.CET-1/CAR ratio stands 14.28/20.89% in Jun’20 vs. 11.3/16.58% in Dec’19. Future payout policy would be consistent with the previous years after the SBP lifts dividend payout restriction.The bank has made significant inroads in digital banking with transaction value/volume standing at 19mn/PkR418bn, +3.2x/70%YoY.The bank is witnessing revival of auto financing and expects it to remain strong going forward.The bank expects infection to rise next year as SBP relief period ends. The management does not foresee any material impact on profitability from IFRS-9 implementation.Loan deferral requests remain below expectation, standing at ~6% of total loan portfolio.The bank has invested PkR34bn in Energy Sukuk-II and PkR51bn in Ijarah Sukuks with yields spread in the range of –ve 10-25bps.NII is expected to normalize by Q4 as assets re-pricing sets in.Fee income is expected to remain under pressure in next 3-6M as reliefs by the Central Bank remain in place.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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