ABL likely to post 2Q 2015 earning down 26% on tommorow

Jahangir Hayat

LAHORE: Allied Bank Limited (ABL) is likely to post 2QCY15 EPS Rs2.54, down 26% YoY, experts observed.

“We have projected the bank’s 1HCY15 PAT at PKR7.2bn, translating into EPS of PKR5.86, flat as compared to the corresponding period last year. 2QCY15 EPS is expected to clock in at PKR2.54, down 26% YoY. The bank is also expected to announce a cash payout of PKR1.75/sh taking 1HCY15 dividend to PKR2.75/sh,” they said.

Allied Bank Limited (ABL) is expected to announce its 2QCY15 financial results on August 05, 2015.

It was reported that Net interest income (NII) would remain strong largely owing to lagged asset re-pricing of assets together with yields locked in on PIB portfolio of the bank. Liability side in contrast reprices with immediate effect and would thus result in notable plunge

in interest expense. Overall, net interest income (NII) would likely post 20% growth when compared to the same period last year.

‘ We have projected net interest margin (NIM) of the bank at 4.7%. 2. Non-interest income, on the other hand, is expected to remain weak largely due to a high base impact as the bank posted substantial other income during the corresponding period last year.

‘The bank may however recognize some proportion of its sizeable unrealized capital gains on PIB portfolio which may lead to earnings surprise during the quarter.

NPL provisioning might disappoint ABL’s NPL provisioning for the 1Q clocked in at PKR728mn against a reversal of PKR37mn during 1QCY14. This was largely driven by sharp spike in NPLs due to delinquency related to Byco petroleum.

It was said that the bank is also required to provide for the remaining amount of the loan during 2QCY15 which is why we are anticipating a substantial increase in NPL provisioning of the bank and have projected it at

PKR680mn while NPL stock is projected at PKR24bn, displaying an increase of 3% during 1HCY15.

Owing to easing inflation and bleak oil prices outlook, there can be another interest rate cut by SBP. This will result in further shrinkage of the bank’s margin leading to reduced earnings and PT, it was said.