Karachi, February 06, 2014 (PPI-OT): Allied Bank Limited | EPS Rs 10.46 & cum. DPS Rs 5.75
for CY13 – undervalued as against MCB
The board meeting of Allied Bank Limited (ABL) is scheduled on 11th Feb 2014 to announce financial results for CY13.
According to Standard Capital, they see earnings to decrease by 6.6% YoY and may report NPAT of Rs 10.9bn (EPS Rs. 10.46) for CY13 against Rs 11.7bn (EPS Rs. 11.22) in last year. The earning is expected to decrease mainly due to lowering of lending rates during early part of CY13 and subsequent NIMs during as compared to last year, though bank may have recouped earnings base via gains from equities.
Cumulative cash dividend of Rs 5.75/sh
Cash dividend of Rs 2/sh is also expected for the final quarter which will be additional to Rs 3.75/sh interim cash divided already announced till 9M translating into cumulative Rs 5.75/sh for CY13. This brings the ABL’s dividend yield to 6.6% for CY13.
Core income to remain flat:
Although lower discount rate in CY13 was considered as major constraint for growing banking sector industry but ABL’s strategy to broaden branches network for mobilizing higher deposits and advances is the key trigger to sustain core income which may remain on track. We see ABL to post 18% YoY higher net interest income for CY13. Based on 9MCY13 results, ABL is more towards investment side and has 56.7% investment to deposit and 42.7% ADR ratio
Allied Bank Limited Profit & Loss In million Rs CY12 CY13E Interest income 49,503 55,044 Interest expense 31,142 33,221 Net Interest Income 18,361 21,823 Non- Interest Income 13,794 11,123 Prov against Loan 651 600 Operating expenses 15,634 16,064 PBT 15,870 16,282 Taxation 4,195 5,373 PAT 11,676 10,909 EPS 11.22 10.46 DPS 6.50 5.75 Source: Bank records & SCS Research
ABL is one peer to MCB. ABL deciphers PBV of 1.3x based on expected BV of Rs68/sh – MCB deciphers PBV is 2.5x. Based on peer analysis we still like ABL.
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