Topline Securities Limited - Bank Alfalah (BAFL): 2QCY19 EPS Rs1.84, up by 12% YoY, DPS Rs2.0 (Lower than estimate)

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Bank Alfalah (BAFL): 2QCY19 EPS Rs1.84, up by 12% YoY, DPS Rs2.0 (Lower than estimate)

Bank Alfalah Limited (BAFL) posted earnings of Rs1.84/share, up by 12%YoY in 2Q2019 primarily due to NIMs expansion owing to higher interest rates. Cumulative earnings during 1H2019 of the bank clocked in at Rs6.4bn (EPS: Rs3.6); up by only 4%YoY.
Along with the results, the bank announced a cash dividend of Rs2.0/share.
Non interest income (NII) declined by 2%YoY despite recording hefty gains in foreign exchange income of 67% primarily due to loss on securities compared to gains of Rs431mn in the same period.
Non markup expense increased significantly by 24%YoY to Rs7.4bn as compared to Rs6.0bn in 2Q2018. This was primarily on the back of higher operating expenses which grew by 22%YoY to Rs7.2bn.
The bank booked provision charge of Rs534mn during the outgoing quarter vs. reversal of Rs250mn during similar period last year.
Key risks for the company include 1) lower than expected advances and deposit growth, and 2) deterioration in Pakistan macros.

19/08/2019 1 EN

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Topline Securities Limited

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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Topline Research

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Bank Alfalah (BAFL): 2QCY19 EPS Rs1.84, up by 12% YoY, DPS Rs2.0 (Lower than estimate)

Pakistan Strategy: Foreign selling at PSX; Will this trend continue in 2021?

Pakistan Strategy: Pakistan Outlook 2021 based on Topline Poll

Pakistan Automobiles: Car sales (including KIA) up ~63% YoY in Nov-2020

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