Bank of Punjab (BOP): 1Q2020 EPS at Rs0.56, down 22% YoY (lower than industry expectations)
- Bank of Punjab (BOP) reported earnings of Rs0.56/share for 1Q2020, down 22% YoY and 26% QoQ.
- The result is lower than industry expectations as Net Interest Income (NII) of the bank in 1Q2020 declined by 7% YoY and 15% QoQ, while OPEX increased by 31% YoY.
- The bank’s deposits have grown by 20% YoY, while Current Account ratio is only ~20% of the total deposits (Dec-2019). With interest rates largely on the higher side during 1Q2020, Interest Expense increased by 88% YoY resulting in the decline in NII.
- Nonâ€markup income during the 1Q2020 increased by 145% YoY mainly due to exorbitant gain of Rs1bn in Gain on Sale of Securities. This has been largely driven by sale of government securities to provide cushion to the bottom line.
- Nonâ€markup expense increased 31% YoY mainly on the back of higher operating expenses while sequentially they increased by 7% QoQ. The increase can be attributed to the branch expansion strategy adopted last year, where the bank added 48 branches in 2019.
- Provisions increased by 2.8x YoY (20-30% in stock investments) given the declining economic conditions and subdued stock market performance.
Bank of Punjab is a commercial banking group based in Pakistan. Co. is engaged in the provision of commercial banking activities such as short term financing for working capital; financing under cash finance, demand financing, running financing and lease financing; equity underwriting; trust receipts; deposit taking; the provision of loans; foreign exchange transactions; investments and placements. In addition, Co. also acts as a clearing house for the transfer of bank funds throughout Pakistan.
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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