National Bank (NBP): 2Q2020 EPS at Rs5.2, up 53% YoY (Higher than industry expectations)
- National Bank of Pakistan (NBP) reported earnings of Rs5.15/share for 2Q2020, up 53% YoY and 164% QoQ.
- The result came in higher than industry’s expectations as the increase in Net Interest Income (NII) clocked in 58% YoY and 92% QoQ higher.
- The bank holds around 70% of interest bearing deposits. Given the decline in interest rates, the bank registered a 27% QoQ decline in Interest Expense, which helped propel the bottom line.
- The earnings is all more impressive, given the exorbitant provision charge of Rs11.6bn for the quarter (+281% YoY). This brings the total provision charge to Rs15.5bn for 1H2020.
- Non Interest Income decline was limited to 2% YoY, whereas it increased by 19% QoQ. The head was driven by higher capital gains and massive increase in Forex Income, which jumped 2.5x QoQ.
The Cost to Income of the bank declined substantially from 56% in 1Q2020 to 38% in 2Q2020. The limited YoY increase of 3% in Operating costs and 13% QoQ increase reduced the drag on earnings.
National Bank of Pakistan (the Bank) is a Pakistan-based commercial bank. The Bank provides commercial banking services, including commercial loans, investment advisory, asset management, global remittances, agency services, forex, leasing, modarba, underwriting, brokerage, and other banking and financial services. The Bank offers retail products, which include saving deposits, current deposits, housing finance, personal loans and agricultural loans; transaction banking services, which include cash management, trade finance and services, and remittance management; Corporate Finance services, which include deposits, structured corporate finance, capital advisory, investment advisory and trade finance; Treasury services, which include forex and financial derivatives, and government to person (G2P) services, which include pension payments, tax and fee collection, and other payments. The Bank serves its customers in over 20 countries.
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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