Topline Flash Note: Bank Alfalah Limited: Conference Call takeaways
- The bank’s deposits had declined by 3.5% YTD at the end of 1Q2020. Current quarter growth of 7% has increased the YTD number to 3.3%. The bank, however has increased share of Current Accounts in Total Deposits to 46% from 43% in Dec-2019.
- CASA similarly has improved to 80% from 76% in Dec-2019.
- The bank’s mark-up income from loans depicted a decline of 19% QoQ. One reason for the decline is related to Bangladesh operations. Central bank over there has suspended mark-up payments as part of COVID-19 relief measures. Secondly, the re-pricing on loan book happened on a higher percentage of loan book compared to the industry.
- Out of the Rs150bn PIB book, 45% of the PIBs are floaters and the rest are fixed.
- On provisions, the bank re-emphasized the prudent approach, which led them to subjectively downgrade a few loans to the tune of Rs1.4bn. A general buffer of provisions has now reached Rs4bn. Despite the additional provisions, coverage stands at 92%.
- In 1Q2020, the bank had taken 100% impairment on equity book which amounted to Rs710mn, of which Rs320mn has been reversed given the strong market performance.
- The bank has restructured around Rs50bn of loans under the relief measures of SBP.
- The 54% QoQ growth in Fee Income was driven by capital gains on government securities.
MTN product for the bank has gained solid traction. The first tranche of the total Rs50bn on offer is expected to be closed soon. The size of which is Rs10bn and the book is almost full in pre-open. 10% of the book will be for IPO.
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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