Pakistan Banks; 4QCY16 Earnings Preview: Limited earnings growth expected
​We expect IMS Banking Universe to post consolidated NPAT of PkR31.8bn in 4QCY16, down 7%YoY, underpinned by (i) high capital gains base and (ii) reinvestment of high yielding PIBs at lower rates. On a sequential basis, earnings are likely to drop by 3%QoQ; capital gains and loan provisioning reversals can surprise, however.
NII during 4QCY16 is expected to clock in at PkR73.6bn, down 10%YoY, on the back of reinvestment/repricing effect. On a sequential basis, NII is projected to remain flattish, supported by higher loan growth (16%YoY vs. 12%YoY in 3QCY16 at systemic level), and reduced borrowing and deposit cost.
IMS Bank Universe earnings are expected to be flattish in CY16. Earnings outlook for CY17F also remains soft, underpinned by potential delay in interest rate liftoff and extension of effect of reinvestment of high yielding PIBs at lower rates. Our top picks are UBL (TP: PkR260/sh), HBL (TP: PkR290/sh) and NBP (TP: PkR89/sh).
Intermarket Securities Limited (IMS) is a full service corporate brokerage firm based in Karachi, Pakistan. We service both domestic and international clients. IMS was ranked #2 Best Local Brokerage and #3 Best for Overall Country Research for 2016 by AsiaMoney.
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.