Bank Al Habib (BAHL): 1Q2018 EPS of Rs1.9, down 10% YoY (-8% QoQ) (In-line with expectations)
- Bank Al-Habib (BAHL) reported earnings of Rs2.1bn (EPS Rs1.9), down 10% YoY primarily due to lower capital gains during the quarter.
- In 1Q2018, Net Interest Income (NII) of the bank registered growth of 13% YoY to Rs7bn mainly driven by strong volumetric deposit growth and higher interest rates. NII of the bank remained in line with expectations.
- The bank continued to booked provision reversals against NPLs amid NPL recoveries given low NPL ratio and improving macros.
- The bank booked provision reversals of Rs271mn in 1Q2018 vs. a reversal of Rs202mn in 1Q2017.
- Non-interest income of the bank was 27% YoY lower in 1Q2018 compared to same period last year, driven by lower capital gains. Capital gains during 1Q2018 clocked in at Rs47mn vs. Rs770mn in 1Q2017 leading to lower profits. Fee & commission income and income from dealing in FCY continued to register strong growth.
- Non-interest expense of the bank increased by 12% to Rs5.4bn in line with quarterly average.
- On QoQ basis, earnings were down 8% as non-interest income was down 7% QoQ. NII of the bank registered 5% QoQ growth in 1Q2018 amid growing balance sheet and higher interest rates.
- 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 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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