Author Topic: BAFL -- Bank Alfalah  (Read 206504 times)

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Offline SBM

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Re: BAFL -- Bank Alfalah
« Reply #999 on: November 27, 2018, 01:34:59 PM »

Offline zelmc

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Re: BAFL -- Bank Alfalah
« Reply #1000 on: December 31, 2018, 04:52:34 PM »
Relentless selling in BAFL. Is it a change in portfolios by FIs or something negative is cooking in it? SBM bhai?

Offline SBM

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Re: BAFL -- Bank Alfalah
« Reply #1001 on: January 07, 2019, 02:01:21 PM »
Relentless selling in BAFL. Is it a change in portfolios by FIs or something negative is cooking in it? SBM bhai?

nothing that i am aware of
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Offline Farzooq

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Re: BAFL -- Bank Alfalah
« Reply #1002 on: February 20, 2019, 12:15:33 PM »
BAFL: Earnings are expected to witness a 37% YoY uptick during CY18

BAFL is scheduled to announce its CY18 financial result on February 22nd, 2019. We forecast the bank to post earnings of PKR 11.7bn (EPS: PKR 6.59) in CY18, up by a healthy 37% YoY, while on a sequential basis we expect an earnings uptick of 7% QoQ. Surge in profitability is expected to be led by improvement in NII (+6% YoY during CY18) owing to higher interest rates as the bank’s strong deposit portfolio and nominal exposure to PIB’s (currently 7% of assets) throughout the year has positioned it well in the rising rates era.  Moreover the bank’s focus on cost control is expected to result in a 6% YoY decline in OPEX. Cost/Income for the bank is expected to contract to 57% in CY18 vis-à-vis 65% in CY17. An impressive recovery pipeline has ensured net reversals during the year which we expect to clock in at PKR 720mn, up by 177% YoY. We expect a dividend announcement of PKR 1.00/share taking the total dividend for the year to PKR 2.00/share.

 
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Offline Farzooq

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Re: BAFL -- Bank Alfalah
« Reply #1003 on: April 02, 2019, 03:54:11 PM »
BUY stance maintained

Following the release of CY18 detailed accounts, we maintain our “BUY” stance on BAFL with a Dec’19 target price of PKR 58/share offering a 22% upside based on last closing. Incorporating a dividend yield of ~7%, the stock is expected to offer a lucrative total return of 29%. We project CY19 earnings to clock in at PKR 13.8bn, (PKR 7.76/share), expected to portray a ~25% jump in profitability YoY. Our liking of the stock is premised on i) Strong positioning of the bank in the rising interest rate era, ii) Impressive recovery pipeline of the bank to limit asset quality deterioration during high interest rates era, iii) Build-up of a low cost deposit profile to propel NIMs, and iv) Further improvement in CIR (cost/income ratio) despite increasing footprint of the bank. The bank currently trades at a P/B of 1.1x, at an 18% discount to the mid-tier banking sector average of ~1.3x. We expect ROEs of the bank to climb upto 21% during CY19-CY21, primarily led by higher NIMs owing to higher interest rates, compared to ~16.6% during CY16-CY18.

Well placed in the rising rates era

BAFL’s fundamentals place it well in the rising interest rate scenario making it a core beneficiary. The bank’s PIB portfolio has reduced to PKR 54bn (5% of assets) compared to PKR 140bn at the end of CY17 (14% of assets). Banking sector average PIB/assets ratio stands at ~11.4% as at CY18. Furthermore, the bank’s current account ratio stands at a concrete 43.6% currently which is likely to keep it relatively shielded from the impact of rising rates on cost of deposits. The current accounts proportion stands favourably in comparison to sector average of ~35% as at CY18. BAFL’s mighty net ADR of 71.4% compared to average of ~59% of the sector (second only to FABL in the KSE-100 listed banking space) further cements BAFL’s position as a key beneficiary of the rising rates era. As at CY18 PIB’s contribute 19% to the bank’s total investments (CY17: 35%) while MTB’s constitute 58% of total investments (CY17: 47%). We view the rate hike era to come to a hault this year. Banks would be looking to divert investment portfolios towards the longer end of the curve this year and we expect PIB’s to contribute 25% to BAFL’s investment portfolio by the end of CY19.

 
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Offline Farzooq

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Re: BAFL -- Bank Alfalah
« Reply #1004 on: April 24, 2019, 04:37:36 PM »
BAFL: Earnings are expected to witness an 11% YoY downturn during 1QCY19

BAFL is scheduled to announce its 1QCY19 financial result on April 26th, 2019. We forecast the bank to post earnings of PKR 2.9bn (EPS: PKR 1.63) during 1QCY19, down by 11% YoY, but up by 35% QoQ. The downturn on a yearly basis is owing to higher taxation this quarter (super tax on CY17 PBT). Assuming normalized taxation, earnings for the bank are expected to portray a jump of 6% YoY / 61% QoQ. Surge in profitability is expected to be led by improvement in NII (+21% YoY/10% QoQ) owing to higher interest rates as the bank’s strong deposit portfolio (~44% current accounts) and nominal exposure to PIB’s (5% of assets) has positioned it well in the rising rates era. OPEX is expected to contract by 8% QoQ while provisioning expenses are also expected to be lower this quarter. Subjective classification of NPLs resulted in higher provisioning during 4QCY18 and higher OPEX was recorded due to opening of new branches and other initiatives undertaken to enhance customer experience.
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Offline Farzooq

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Re: BAFL -- Bank Alfalah
« Reply #1005 on: May 06, 2019, 09:01:59 PM »
Management Conference Call

The management of BAFL held a conference call today to discuss the 1QCY19 results and give an outlook of the bank’s strategy, going forward. Below are the key takeaways:

Brief Takeaways

•       Full impact of re-pricing of portfolios led to an impressive jump in yield on advances from 8.9% as at Dec’18 to 11.5% in 1QCY19.

•       The bank expects single digit growth in its loan book during CY19.

•       Adoption of IFRS16 will have adverse impact on NIMs and BAFL is one of the banks that has implemented the standard. As a result rent expense is lower (PKR 493mn), interest expense is higher (PKR 388mn), depreciation charge is higher (PKR 429mn), and additional assets and liabilities have been recorded worth PKR 8,863mn and PKR 8,635mn respectively.

•       The bank expects a 50-100bps hike in interest rates in the near term.

•       PIB maturities worth PKR 14-15bn are expected in CY19. The current blended yield on the PIB portfolio is 9.1%.

•       Central bank of Afghanistan has declined the application for approval of sale of BAFL’s Afghanistan operations hence they are now classified as continuing operations. The management confidently asserted that the decline of application has absolutely no negative implication for the bank.

Our take on BAFL – Buy

•       We recommend a “Buy” stance on the bank, with a Dec’19 TP of PKR 58.0/share.
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Offline Farzooq

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Re: BAFL -- Bank Alfalah
« Reply #1006 on: August 16, 2019, 12:22:52 PM »
BAFL: Earnings are expected to witness a 29% YoY jump during 1HCY19

BAFL is scheduled to announce its 1HCY19 financial result on August 19th, 2019. We forecast the bank to post earnings of PKR 8bn (EPS: PKR 4.50) during 1HCY19, up by 29% YoY and 51% QoQ (2QCY19 EPS: PKR 2.71). The surge in profitability comes primarily on the back of expanding NIMs with NII expected to witness an acceleration of 60% YoY / 20% QoQ as the impact of rate hikes continues to reflect. We expect a sequential jump in NFI primarily owing to higher income from FX operations. However, NFI on a yearly basis is expected to contract on the back of minimal capital gains. We may see net provisioning to continue for the bank from NPL accretion owing to the bank’s relatively higher exposure to the consumer book. Higher OPEX (20% YoY / 9% QoQ) is likely to further stress earnings. We expect the bank to announce a payout of PKR 1.50/share during 2QCY19.
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Offline Farzooq

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Re: BAFL -- Bank Alfalah
« Reply #1007 on: August 19, 2019, 01:17:07 PM »
BAFL 2QCY19 result underperform our expectations

Bank Alfalah Limited (BAFL) reported financial results for 2QCY19 wherein the company reported below expected consolidated EPS of PKR1.84 (up 3%/12% QoQ/YoY), taking 1HCY19 EPS to PKR3.65 (up 4% YoY).
Along with the result, the bank also announced cash DPS of PKR2.0, which was higher than our expectations. Our expectation of lower dividend was due to the bank’s high ADR (of ~73%) and higher loan book exposure to commercial and consumer segments.   
Result was below our expectations where deviation mainly came from 6% dip in NII instead of our expectations of modest increase. We believe that this drop in NII might be a result of delay in loan repricing, however, we await further clarity on this.
Non-interest income declined 3% YoY but posted a significant gain of 27% on QoQ basis. This impressive QoQ performance was primarily driven by the fee income (up 8% QoQ), foreign exchange income (up 64% QoQ), and share of profit from associates (up 4.84x on QoQ).
Operating expenses grew 5%/25% on QoQ/YoY basis that pushed up cost/income ratio to 53% compared to 51% in the previous quarter.
Following the ongoing trend, BAFL has also recorded loss on securities worth PKR37.7mn. Although the number is not very significant (0.02/share), it supports our narrative that banks will start reporting losses on their invested securities.
Going forward, we expect NII to record sharp recovery, however, higher provision on loans and losses on securities may affect the bottom-line
Key risks include; i) sharp uptick in infection ratio leading to higher provisions as ~33% of bank’s loan book is composed of consumer and commercial loans and ii) slower than expected uptick in NIMs.
In light of the above we maintain out “BUY” stance on the stock.   
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