Bank Alfalah (BAFL): 1Q2018 EPS Rs2.0, 13% YoY (175% QoQ) (Above expectations)
- BAFL declared earnings of Rs3.3bn (EPS Rs2) in 1Q2018, up 13% YoY helped by higher provisions reversals and low admin expense growth. The earnings remained slightly higher than expectations.
- Net Interest Income (NII) of the bank improved by 4% to Rs7.6bn led by deposit growth and higher interest rates, we believe. This is also in line with other banks that have announced results so far registering NII growth during 1Q2018 on YoY basis.
- The bank booked provisions reversals of Rs287mn in 1Q2018 vs. reversal of Rs82mn in 1Q2017. On the eve of the improving macros, the bank continued to post recoveries during the quarter.
- Non-interest income rate of the bank improved by 8% to Rs3bn mainly led by higher fee & commission income (+12% YoY) and income from dealing in foreign currency dealing (+75% YoY).
- On the other hand, non-markup expense remained flat as admin expense grew by 6% and the bank posted reversal of provisions against other assets to the tune of Rs415mn.
- On QoQ basis, earnings were up 175% driven by 1) NPL recoveries, 2) capital gains and 3) normalization of admin cost in 1Q2018.
- Key risks for the company include 1) lower than expected hike in interest rate, 2) lower than expected advances and deposit growth, and 3) deterioration in Pakistan macros.
Bank Alfalah Limited is a holding company. The Company's segments include Retail banking, including loans, deposits, trading activity, wealth management and other banking transactions with its retail and middle market customers; Corporate banking, which includes loans, deposits, project financing, trade financing, investment banking and other banking activities with its corporate and public sector customers; Treasury, including liquidity management activities carried out through borrowing, lending and money market operations; Consumer banking, including constitutes consumer financing activities with individual customers; Islamic banking, pertaining to its full scale Islamic Banking operations; International operations, which includes amounts related to its overseas operations, namely, commercial banking activities in Bangladesh and Afghanistan, and wholesale banking activities in the Kingdom of Bahrain, and Others, including merchant banking related activities.
Topline Securities is one of the fastest-growing brokerage houses in Pakistan. It has strong Equity Brokerage, Economic/ Equity Research, Commodity Trading and Corporate Finance & Advisory functions.
Topline Securities has been endowed with numerous awards by renowned international financial organizations. The highlights of which consists of the award for ‘Best Local Brokerage House of Pakistan’ by Asiamoney Brokers Poll (the largest Asia-focused equity services provider poll) in 2016 and ‘Best Equity Brokerage House’ by CFA Society Pakistan in 2015.
Previously, Topline Securities held the title for ‘Best Brokerage House’ for 4 consecutive years (2011-2014) by Asiamoney Brokers Poll. Other awards include the ‘Best Salesperson’ award by Asiamoney for 6 consecutive years (2011-2016), the ‘Arabia Fast Growth 500’ award and ‘Pakistan Fast Growth 100’ award in 2012 and 2013 by AllWorld Network.
JCR-VIS, a credit rating agency providing independent rating services in Pakistan has assigned initial rating of “A-2” for short term and “A” for long term to Topline Securities. Topline Securities is registered as Underwriter, Book Runner and Research Entity with Securities & Exchange Commission of Pakistan (SECP).
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