reports
Meezan Bank Ltd: 2 directors
Two Directors at Meezan Bank Ltd sold 33,000 shares at between 162.000PKR and 165.600PKR. The significance rating of the trade was 51/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over th...
- Yusra Beg
Meezan Bank: 2QCY23 Review - Revenues growing in the interest rate sli...
MEBL has posted 2QCY23 consolidated NPAT of PKR17.3bn (EPS: PKR9.66), up a sharp 120% YoY, and 12% QoQ. This takes 1HCY23 NPAT to PKR32.7bn (EPS: PKR18.30), up 92% YoY. The result higher than our estimated EPS of PKR8.50 with strong beats on net spread income and fee more than offsetting a large jump in admin expenses. Results were accompanied by an interim cash dividend of PKR4.0/sh, - higher than our estimated PKR3.0/sh. 2QCY23 KEY RESULT HIGHLIGHTS INCLUDE: * MEBL reported 2QCY23 net spre...
- Yusra Beg
Pakistan Banks – 2QCY23 Result Previews - Strong core performance to c...
* Pre-tax 2QCY23 profits for the IMS Banking Universe are expected to rise 10%QoQ, reflecting strong core performance. However, net earnings may come off by 15%QoQ due to retrospective impact of super tax (10% vs. 4% previously). Payouts should remain broadly intact. * Domestic asset quality has remained resilient, which should keep the cost of risk in check. Impairment, if any, should also be contained compared to the last few quarters. We expect MEBL to stand out due to the lagged ass...
- Yusra Beg
Pakistan Banks: Returning conviction
* With the IMF staff-level agreement in place, the much needed breathing space for Pakistan's economy reinforces our liking for the banking sector. The absence of banks from debt restructuring in Zambia and Sri Lanka also provides comfort if this conversation crops up again in Pakistan next year. * 1QCY23 results indicate underlying profitability is strong, on rising margins and resilient asset quality. Our 2023-27f earnings estimates remain broadly unchanged, even as we conservatively ...
- Yusra Beg
Meezan Bank: 1QCY23 Review - Lower NII leads to earnings miss
MEBL has posted 1QCY23 consolidated NPAT of PKR15.4bn (EPS: PKR8.63), up 68% YoY, but lower by 5% QoQ. The result is much lower than our estimated EPS of PKR11.00/sh, primarily due to significantly lower net spread income relative to estimates. Results were accompanied by an interim cash dividend of PKR3.0/sh, inline with estimates. 1QCY23 KEY RESULT HIGHLIGHTS INCLUDE: * MEBL reported 1QCY23 net spread income of PKR41.1bn, up a stellar 91% YoY but surprisingly lower by 8% QoQ – much lower t...
- Yusra Beg
Banks – 1QCY23 Result Previews - Earnings momentum to accelerate
* We expect the IMS Banking Universe to lift by 54% YoY and 20% QoQ in 1QCY23f, as we incorporate strong pickup in NII, a lower impairment charge on overseas bonds (for those banks that have already booked it in CY22), and a lower effective tax rate (43%). This should more than offset rising admin expenses and any untoward increase in loan provisions. * The higher interest rate environment will drive up margins while balance sheet growth remains strong. BAFL may stand out in terms of se...
- Yusra Beg
Meezan Bank: A champion among banks
* We raise our EPS estimates for MEBL by 50% on average – building in very strong 4QCY22 results and record-high margins, which should more than offset swift opex growth. MEBL is a champion among Pakistan Banks – offering sector beating ROEs (53% in CY23f and 20%+ through the cycle). Our new TP is PKR185/sh vs. PKR155/sh previously. Buy! * MEBL’s stock price has failed to perform commensurate to its stellar results. We think investors may be pricing in the risk of a possible rate floor ...
- Yusra Beg
Meezan Bank: 4QCY22 Review - Playing on its strengths – earnings beat!
MEBL posted 4QCY22 consolidated NPAT of PKR16.2bn (EPS: PKR9.08), up a sharp 92% YoY and 40% QoQ. This takes CY22 NPAT to PKR44.9bn (EPS PKR: 25.11), up 59% YoY. The result is much higher than our estimated 4Q EPS of PKR7.0 led primarily by a massive 40% QoQ jump in net spread income which has offset a fresh general provisioning charge. Final cash dividend of PKR3.0/sh is also above our estimated PKR2.0/sh, taking CY22 DPS to PKR8.2. 4QCY22 Key result highlights include: * MEBL reported an i...
- Yusra Beg
Pakistan Banks: 4QCY22 Result Previews - NII growth may be negated by ...
We estimate the IMS Banking Universe to report flat sequential earnings in 4QCY22 (up 19% YoY), as we incorporate significantly lower Fx income, sticky total provisions and higher admin expenses. These factors should offset sequentially higher NII. UBL may stand out in terms of sequential profit growth, given its low base (one-off impairment in the previous quarter). In general, there is room for minor negative surprises on payouts across our coverage, with mark-to-market bond repricing pushi...
- Yusra Beg
Pakistan Banks: D-SIB banks to see lower capital requirements
SBP has reduced the additional CET-1 requirements for systemically important banks by 50bps. This will be beneficial for HBL, NBP and MEBL, allow for more breathing room on capital, and potentially improve the cash payout. This change may have been motivated by other banking sector developments, with (i) the sharp increase in interest rates this year leading to mark-to-market hits on bonds, and (ii) IFRS-9 around the corner. We have Buy stances on HBL and MEBL while NBP is unrated. HBL ENDS U...
- Yusra Beg
Meezan Bank: 3QCY22 Review - Strong NII leads to higher earnings
MEBL posted 3QCY22 consolidated NPAT of PKR11.6bn (EPS: PKR6.46), up a sharp 65% YoY, and 47% QoQ. This takes 9MCY22 NPAT to PKR28.6bn (EPS PKR: 15.99), up 45%YoY. The 3Q result is much higher than our estimated EPS of PKR5.46, led by very strong net spread income (up 32% QoQ) and overall strong core business performance, which helped offset sharp rise in admin expenses (up 45%YoY). MEBL announced an interim cash dividend of PKR2.0/sh, above our estimated PKR1.5/sh (9MCY22 DPS: PKR5.2). 3QCY2...
- Yusra Beg
Pakistan Banks: 3QCY22 Result Preview - Earnings trajectory is intact
* We estimate the IMS Banking Universe to report a 21% YoY and 95% QoQ rise in earnings in 3QCY22 as we incorporate a lower taxation charge (52% average effective tax rate) vs. 75% in the previous quarter. Banks with Gross ADR above 50% will again stand out. * We expect margin expansion to continue, assets continue to reprice, while strong balance sheet growth continues. Credit costs are likely to remain soft but Fx gains may moderate sequentially. * Our covered banks have shed c.2...
- Yusra Beg
Pakistan Banks: Tough 2022 but the outlook is better
* Pakistan banks have had a tough 2022, with the economy experiencing significant stress amidst unhelpful politics. Fiscal needs also compelled the government to heavily tax banks, which sharply clipped profitability. The sector has underperformed the KSE100 this year. * The outlook is better. Margins are rising and are expected to be downward sticky. Asset quality is resilient, even with the floods, and while the regulatory climate is tighter, it is in the price. The recently resumed I...
- Yusra Beg
Meezan Bank: 2QCY22 Review – Large Fx gains lead to earnings beat
MEBL posted 2QCY22 consolidated NPAT of PKR7.9bn (EPS: PKR4.84), up 18%YoY. This takes 1HCY22 NPAT to PKR17.1bn (EPS PKR: 10.48), up 34%YoY. The 2Q result is higher than our estimated EPS of PKR4.25, with the deviation largely stemming from very high Fx gains (PKR2.3bn, up nearly 3x QoQ). MEBL announced a second interim DPS of PKR1.75, above our estimated PKR1.25 (1HCY22 DPS: PKR3.50), as well as a 10% bonus. 2QCY22 RESULTS HIGHLIGHTS: * MEBL reported 2QCY22 net spread income of PKR24.0bn, u...
- Yusra Beg
Pakistan Banks – 2QCY22 Previews - Hit hard by tax
* The banking sector is expected to post sharply lower earnings in 2QCY22, on high taxation post the changes introduced in the FY23 Budget. For our coverage, we expect the effective tax rate to come in at an average of 70% in 2Q, driven up by MCB, UBL and HBL. This can affect their accompanied cash payouts. Banks meeting the 50% Gross ADR threshold, such as MEBL, BAFL and BAHL, should be relatively protected. * The higher interest rate environment will drive up margins while balance she...
- Raza Jafri
Pakistan Banks - Court directs economy’s conversion to Islamic mode in...
The Federal Shariat Court (FSC) has ordered to fully convert Pakistan’s economy into Islamic mode by Dec 31, 2027, concluding a long-standing case stretching at least two decades. The Court has also clarified that Pakistan is bound to honor existing international financial commitments, even if they are non Shariah-compliant, but that future borrowing should be through compliant modes. The Finance Minister has tweeted he welcomes the decision and, together with the SBP, will seek guidance on t...
- Raza Jafri
- Yusra Beg
Meezan Bank: 1QCY22 Review – Strong base set for the year
MEBL has posted 1QCY22 consolidated NPAT of PKR9.2bn (EPS: PKR5.65), up a strong 52%yoy and 8%qoq, with the uptick in net markup income a key feature. The result was inline with our projected EPS of PKR5.75, while the first interim DPS of PKR1.75 fell slightly short of our expectation of PKR2.0. KEY RESULT HIGHLIGHTS OF 1QCY22 INCLUDE: * Net markup income of PKR21.5bn, up 43%yoy and 5%qoq. This can accelerate across the next few quarters as the impact of April’s 250bps hike in the policy rat...
- Raza Jafri
- Yusra Beg
Pakistan Banks: Strong results to continue, driven by core performance
We expect the banks under our coverage to post combined NPAT of PKR44.0bn in 1QCY22f, up 23%yoy and 5%qoq. These are high quality earnings, not pushed up by capital gains unlike in 1QCY21. There is room for positive surprises on fx income. Balance sheet growth may sequentially moderate. However, margins should expand, going by the unusually large gap between secondary market yields and the policy rate during the quarter. Asset quality remains intact, with macroeconomic pressures too recent to...
- Team AKD Research
Stock Smart Weekly
StockSmart Weekly Review The momentum gathered in the last trading session of last week, fueled further on the first trading session of outgoing week where investors across the board welcomed newly formed Govt. set up of coalition parties (PML-N, PPP, JUI-F and MQM-P) led by Shehbaz Sharif (the new PM). Filled with exuberance, the benchmark KSE-100 index registered 1,700pts rally on Monday – the largest single day return of 3.83%DoD – to...
- Yusra Beg
Meezan Bank: Correction has opened up valuations
We raise our CY22/23f EPS estimates for MEBL by 10%/5% as we build in higher margins and a larger balance sheet. This is partly offset by higher admin costs while we also increase our cost of risk following the c.50% yoy loan growth seen in CY21. Our Dec'22 TP is unchanged at PKR175/sh. Deposit growth decelerated to 16% yoy in CY21 vs. a 5yr CAGR of 21%. This is due to (i) MEBL’s much larger size – it is now the 5th largest bank by deposits, and (ii) more focus on mix, with CASA at 82%, up 7p...
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