UBL_Buy the rally!
- Gaining 26.0% CYTD, United Bank Limited (UBL) still trades at a CY20F P/B of 0.85x - a discount of 21.0% to historical multiples on ROE per PB unit. Our rolled-over Dec’20TP stands at PkR185.1/sh (Previous: PkR154.6/sh) — offering an upside of 19.8% from last close along with a dividend yield of 8.4% (higher dividends cannot be ruled out given improvement in CAR — 9MCY19 CET-1: 13.25% vs. 11.94% in CY18).
- Conservative assessment of the bank where we have stressed our forecast with a cost of provisioning of 0.7% (~50% of average cost of provisioning of CY08-11 due to lower macro risks and secured/syndicate lending), yields an average CY20-22F ROE of 15.5% with ROE converging to historical mean of ~17% by CY22.
- The gradual inclination in ROE is credited to, i) CY20-22F earnings CAGR of 25.8% attributed to 3y avg. NIMs of 4.5% vs. 3.9% in 9MCY19, ii) absence of one-off market-related impacts, and iii) robust fee income franchise.
- Over the medium run, avg. NIMs are likely to remain ~4.5% with impact from monetary easing likely to be countered by high yielding bonds.
AKD Research
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.