IGI Securities Limited - Flash Note.
Karachi -- October 17, 2019 (PPI-OT)
Commercial Banks - Allied Bank Limited - Recovery in NFI uplifted quarterly EPS by ~6% q/q to PKR 2.9/share up; DPS PKR 2.0 taking 9m 2019 result to PKR 8.21/share down -8% y/y; DPS 6.0
On unconsolidated basis, ABL posted earnings of PKR 3.3bn (or PKR 2.9/share) up by 6% q/q for 3q 2019, taking its 9m cumulative earnings to PKR 9.4bn (or PKR 8.2/share) a decline of ~8% y/y compared to last year. Keeping up with the payout trend, the bank announced a cash dividend of PKR 2.0/share, bringing 9m total payout to PKR 6.0/share compared to a similar payout of PKR 6.0/share last year same period.
Bank's interest income printed a growth of +22% y/y to PKR 28.8bn during 9m compared to a flattish growth last year in 9m 2018. On a quarterly basis, NII is up by +29%y/y to PKR 10.0bn. Break-up wise, interest expense shot up by 2.0x to PKR 23bn from PKR 12.1bn last year 3q. Under Non-Funded Income (NFI), Fee, FX and dividend income cumulatively showed an increase of +5% y/y to PKR 6.6bn during 9m versus PKR 6.3bn last year, which helped to lift overall revenue growth by +13% y/y to PKR 37bn.
Bank's administration cost has started to normalise registering a decline of 2% q/q (9m 2019: admin 19.9bn up by +20% y/y) helping in bringing down C/I ratio to ~57%. Moreover, bank continue to report a net provision reversal; for the qtr bank took a reversal of PKR 0.1bn.