Bank Al Habib (BAHL): 2Q2020 EPS at Rs3.96, up by 84% YoY (Inline with industry expectation)
- Bank Al-Habib (BAHL) posted earnings of Rs3.96/share for 2Q2020, up by 84% YoY and 55% QoQ primarily due to higher Net Interest Income (NII), which expanded by 63% YoY and 40% QoQ.
- However, earnings came largely in line with industry expectations.
- Early re-pricing of liabilities, as has been with other banks, was evident from 19% QoQ decline in Interest Expense. On the other hand, Interest Earned grew by 2% QoQ due to delayed re-pricing on assets.
- Non-Interest Income declined by 22% YoY and 10% QoQ. The YoY decline was owing to 46% YoY fall in Forex income, while sequential drop was largely because of 15% QoQ lower Fee income.
- Operating expenses continued their upward momentum. To recall, the bank has added 27 new branches to its network in 1Q2020. The costs increased by 28% YoY and 3% QoQ. The Cost to Income ratio for the bank came in at 49% significantly lower than 1Q2020 ratio of 62%, primarily due to higher income.
- Given the strong asset quality of the bank, the big surprise came in provisions, where after recording just Rs342mn in 1Q2020, the bank recorded provisions of Rs1.8bn in 2Q2020.
Effective tax rate of the bank clocked in at 40% in 2Q2020.
Bank AL Habib Limited is a banking company. The Bank operates through Retail banking, Commercial banking, Retail brokerage and geographical segments. Its Retail banking consists of retail lending, deposits and banking services to private individuals and small businesses. The retail banking activities include provision of banking and other financial services, such as current and savings accounts, and credit cards to individual customers, and small and medium enterprises (SMEs). Its Commercial banking represents provision of banking services, including treasury and international trade-related activities to corporate customers, multinational companies, and government and semi government departments and institutions. Its Retail brokerage activities include the business of equity, money market and foreign exchange brokerage, equity research, and corporate financial advisory and consultancy services. It operates in four geographic regions: Pakistan, the Middle East, Asia Pacific and Africa.
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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