IGI Securities Limited – Flash Note

Karachi, August 09, 2018 (PPI-OT): Commercial Banks – Higher capital gains lift bottom-line by +17%YoY (+10%YoY 1H), Net interest income dropped on higher cost; EPS PKR 2.95 – up by +17%YoY / DPS PKR 2.0

On unconsolidated basis, Allied Bank Limited (ABL) reported earnings of PKR 2.95/share or PKR 3.4bn for the 2QCY18, compared to PKR 2.51/share or PKR 2.9bn last year same quarter, posting a growth of +17%YoY.However, on a quarterly basis, earnings are down by 11%.

The bank also announced a cash dividend of PKR 2.0/share for the 2QCY18, taking 1HCY18 total payout to PKR 4.00/share.

Bank recorded a +43%YoY growth in non-funded income to PKR 3.3bn of which, PKR 1.7bn pertains to capital gains and dividend income.

However, higher interest expense relative to interest earning income, dragged bank’s net interest income down by 6%YoY (down by 3%QoQ).

2QCY18, makes it the 9th quarter whereby bank continue to book provisioning reversals under non-performing loans.