BAFL_HMB & BOP_1QCY21 Result Previews, (AKD Daily, Apr 22, 2021)
AKD Daily
BAFL,HMB & BOP: 1QCY21 Result Previews
BAFL 1QCY21 EPS likely to stand at PkR1.34: Bank Alfalah Limited (BAFL) is set to report its 1QCY21 results today where we expect the bank to post an NPAT of PkR2.4bn (EPS: PkR1.34) compared to PkR2.9bn (EPS: PkR1.63) in the same period last year. On a sequential basis, earnings are expected to be +9.4% largely driven by, i) potential uptick in non funded income through sustaining fee income (+20.0%) and capital gains (unrealized surplus on investments stands at PkR6.6bn as of Dec’20), and ii) cost of provisioning to decline to 0.20% in 1QCY21 vs. 0.34% in the previous quarter with the bank having already build adequate loss buffer (PkR4.2bn or 0.7% of gross advances as of Dec’20). Core income is to remain flat QoQ with attrition in NIMs (1QCY21: 3.34% compared to 3.62% in the previous quarter) compensated by volumetric growth in balance sheet. We have a buy stance on the stock with Dec’21TP of PkR51.9/sh.
HMB earnings to clock in at PkR3.10/sh in 1QCY21: Habib Metropolitan Bank (HMB) is scheduled to hold its BoD meeting today to announce 1QCY21 results. In this regard, we expect the bank to record earnings of PkR3.10/sh, +2.0xYoY/down 12.3%QoQ. Sequential downtick in earnings is attributable to attrition in net interest income (down 5.8%QoQ) on account of possible repricing of investment book (1QCY21 NIMs: 3.6% compared to 4.3% in the previous quarter) while non funded income is to register contraction of 17.5% due to normalization in FX income though contribution from FX would still remain healthy given recent rupee appreciation and exporters squaring-off their forward positions. We expect provisioning expense to diminish to 0.3% of advances in the current quarter vs. 0.5% in 4QCY20. We have a buy stance on the stock with Dec’21TP of PkR46.1/sh.
BOP to post earnings of PkR0.5/sh in 1QCY21: Previewing 1QCY21 results for The Bank of Punjab (BOP), we expect it to post an NPAT of PkR1.4bn (EPS: PkR0.51) vis-à-vis PkR1.5bn (EPS: PkR0.56) in the same period last year. On a sequential basis, earnings are likely to jump 23.0%QoQ through impetus from lower provisioning expense (1QCY21 cost of provisioning estimated at 0.2% vs. 0.3% in the previous quarter) and possible capital gains (unrealized gain on investments stood at PkR4.5bn as of Dec’20) pushing up non funded income by 42.4%QoQ (NFI contribution in total income to stand at 27.8% in 1QCY21 vs. 19.1% in the previous quarter). Net interest income is expected to be down 12.4%QoQ on account of potential normalization in spreads pulling down NIMs to 2.3% in 1QCY21 compared to 2.7% in the previous quarter.
AKD Research
Bank of Punjab is a commercial banking group based in Pakistan. Co. is engaged in the provision of commercial banking activities such as short term financing for working capital; financing under cash finance, demand financing, running financing and lease financing; equity underwriting; trust receipts; deposit taking; the provision of loans; foreign exchange transactions; investments and placements. In addition, Co. also acts as a clearing house for the transfer of bank funds throughout 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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