National Bank of Pakistan (NBP): 2Q2018EPS of Rs3.6, +73% YoY (Above expectations)
- NBP announced earnings of Rs3.6/share, +73% YoY which was also higher than market expectations. Profit before tax was up 36% YoY as effective tax rate during 2Q2018 stood at 21% vs. 38% in 2Q2017 mainly due to tax reversals, we believe.
- Net Interest Income (NII) of NBP improved by 16% YoY to Rs16.1bn as the bank benefited from rising interest rates. Consequently, markup interest earned increased by 20% whereas markup interest expense was up 23%.
- Total provisions of the bank increased from Rs1.4bn in 2Q2017 to Rs2.6bn in 2Q2018 mainly on back of higher provisions against NPLs & investments.
- Non-interest income of NBP was up 17% YoY to Rs9.7bn led by growth in FCY dealings & fee, commission income.
- Non-markup expense also remained flat amid reversals, supporting earnings growth of the bank.
- In 1H2018, earnings of the bank clocked in at Rs6/share, 49% higher than same period last year. NII of the bank increased by 15% during 1H2018.
- Key risks for the bank include 1) deterioration in Pakistan macros, 2) uptick in provisioning charge, & 3) lower than expected rate hike.
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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