Pakistan Banks_Pension case comes to a conclusion
After gaining 9.5%MoM in Jan’18, the AKD Banking Universe lost ~1% MTD primarily on concerns pertaining to the outcome of pension case. In this regard, it has been reported that the Supreme Court (SC) has ordered banks to upward revise pension payout to a minimum PkR8,000 per month (banks had been suggesting PkR5,250 p.m.) with an annual growth of 5% in payments. With channel checks suggesting applicability on a prospective basis, the impact in such a scenario will be two pronged: 1) a one-off impact arising from revision of the defined benefit obligation – differential to be routed through P&L and 2) increase in banks’ pension related expenses on a recurring basis. We have presented earnings sensitivity to revision in pension obligation for every 1000 employees assuming various pension differential levels where our calculations indicate impact in the range of PkR0.33-0.56 per share for different banks. Moreover, banking sector results are to commence this week with MCB (Feb 15’18), UBL (Feb 19’18), NBP (Feb 20’18) and ABL (Feb 21’18) scheduled to declare results. Earnings performance in CY17F is expected to remain subpar with profits for B-6 expected to remain flat YoY (adjusting for HBL) as lower yield on earnings assets continue to keep NIMs under pressure. More specifically, BAFL and MCB, outshine peers remaining the only banks expected to post earnings growth on the back of continued improvement in credit quality alongwith double digit growth in fee income.
Habib Bank Limited is engaged in commercial banking and asset management related services in Pakistan and overseas. The Bank's segments include Branch Banking, which consists of loans, deposits and other banking services to agriculture, consumer, small and medium-sized enterprise (SME), and commercial customers; Corporate Banking, which consists of lending for project finance, trade finance and working capital to corporate customers and it also provides investment banking services, including services provided in connection with mergers and acquisitions; Treasury, which consists of trading, fixed income, equity, derivatives and foreign exchange businesses, and it also includes credit, lending and funding activities with professional market counterparties; International Banking, which is engaged in monitoring and reporting purposes and consists of its operations outside of Pakistan, and Head Office/Others. It operates in Pakistan; Europe, Middle East and America, and Asia and Africa.
National Bank of Pakistan (the Bank) is a Pakistan-based commercial bank. The Bank provides commercial banking services, including commercial loans, investment advisory, asset management, global remittances, agency services, forex, leasing, modarba, underwriting, brokerage, and other banking and financial services. The Bank offers retail products, which include saving deposits, current deposits, housing finance, personal loans and agricultural loans; transaction banking services, which include cash management, trade finance and services, and remittance management; Corporate Finance services, which include deposits, structured corporate finance, capital advisory, investment advisory and trade finance; Treasury services, which include forex and financial derivatives, and government to person (G2P) services, which include pension payments, tax and fee collection, and other payments. The Bank serves its customers in over 20 countries.
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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