AKD Research – Off the Analyst’s Desk
Askari Bank Limited 9MCY09 Result Review (Above Expectations)
Askari Bank Limited (AKBL) has announced its 9MCY09 result. On an unconsolidated basis, AKBL has posted NPAT of PkR1.18bn (EPS: PkR2.32) in 9MCY09 against NPAT of PkR0.43bn (EPS: PkR0.84) in 9MCY08, an increase of 2.75xYoY. This was better than our forecasted 9MCY09 NPAT of PkR1.01bn (EPS: PkR1.99). Growth has been led by a 25%YoY increase in net interest income and a 49%YoY decline in loan provisions.
AKBL has posted NPAT of PkR0.59bn (EPS: PkR1.17) in 3QCY09, up ~2xQoQ. While net interest income has contracted by 15%QoQ, earnings growth has arisen from much lower loan provisions (down 88%QoQ to just PkR70mn) and higher non-interest income (spike in forex income). While we expected a relatively better NPL ageing profile to translate into lower loan provisions in 3QCY09, the actual amount of provisions has been much lower than estimated.
AKBL currently trades at a CY10F Tier-I P/B multiple of 0.93x. While our target price is currently PkR25/share we will be looking to revise our investment case post release of detailed 9MCY09 results.
AKD Research
October 27th, 2009