MCB & MEBL_CY19 Result Previews, (AKD Daily, Jan 31, 2020)
MCB: CY19 Result Preview
MCB’s CY19 earnings likely to clock-in at PkR19.84/sh: MCB Bank (‘MCB’) is due to announce its CY19 results on Feb 4, 2020 where we expect the bank to record NPAT of PkR23.5bn (EPS: PkR19.84), +15.2%YoY. The result is likely to be accompanied with a dividend of PkR4/sh (c. dividend CYTD: PkR16/sh). 4QCY19E earnings are likely to clock-in at PkR7.4bn (EPS: PkR6.2), +29.4%QoQ/8.8%YoY with NII providing the necessary punch (+18.1%QoQ/51.1%YoY) to the bottom line as NIMs reaches 5.4% (impact of Jul’19 interest rate hike coming through partially in 4QCY19) vs. 4.7% in the previous quarter. Seasonal factors such as higher fee income (+38.0%QoQ) and dividend income additionally supports core income in pulling up earnings growth. The main variable for the quarter would be the income from equities in our view considering bank’s highest exposure to equity market amongst peer banks. To highlight, the bank booked an impairment on equities of PkR2.4bn in 9MCY19 carrying provision against equities to PkR10.6bn where partial reversal of the same could subdue possible credit costs in the event of downgrading of NPLs (exc. power project loan under restructuring phase). That said, higher administrative costs usually witnessed in the last quarter of the year could suppress earnings growth.
MEBL: CY19 Result Preview
MEBL earnings likely to clock-in at PkR12.4/sh in CY19: Meezan Bank Limited (MEBL) is due to announce its CY19 result on Feb 12, 2020 where we expect the bank to post an NPAT of PkR10.9bn (EPS: PkR12.4), +65.0%YoY. The result is likely to be accompanied with a dividend of PkR1.5/sh (c. dividend CY19: PkR4.5/sh ex. bonus). On a quarterly basis, the bank is expected to record an NPAT of PkR5.1bn (EPS: PkR3.95), +32.3%QoQ/1xYoY. ‘Savings rate’ delta between MEBL and conventional banks is expected to have remained stable in 4QCY19 that can pull down MEBL’s share in total deposits to 5.6% vs. 6.0% in the previous quarter. As a result of flat BS growth QoQ, NII is expected to register a growth of 2.0%QoQ but +40.0%YoY. Impairment on equities as of Sep’19 stood at PkR2.4bn (PkR1.2bn booked in 9MCY19) where we believe potential partial reversal could negate accretion in credit costs for 4QCY19. Through stable contribution from NFI (16.3%) and flat C/I ratio (46.2%), the bank is expected record PBT growth of 28.8%QoQ.
Meezan Bank Limited is an Islamic commercial bank. The Bank is engaged in corporate, commercial, consumer, investment and retail banking activities. It offers a range of Islamic banking products and services through a retail banking network of over 550 branches in approximately 140 cities to its corporate, commercial and small and medium-sized enterprise (SME) customers based on their financial requirements. It provides personal banking, business banking, premium banking and branchless banking. The Bank also offers Meezan Rupee Current Account, Karobari Munafa Account, Meezan Rupee Savings Account, Meezan Business Plus Account, Meezan Bachat Account, Meezan Kids Club Account, Meezan Teens Club Account, Meezan Asaan Current Account, Meezan Kafalah, Certificates of Islamic Investment, Meezan Amdan Certificate and Dollar Mudarabah Certificate. It has assets in agriculture, food, forestry and fishing; cement, and others. The Bank operates only in Pakistan.
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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