AKD Research – Off the Analyst’s Desk
NIB: 9MC Y09 Result Review (Above Expectations)
AKD Research
October 23rd 2009
NIB Bank Limited (NIB) has announced its 9MCY09 result. On an unconsolidated basis, NIB has posted NPAT of PkR795mn (EPS: PkR0.20) in 9MCY09 against NPAT of PkR287mn (EPS: PkR0.07) in 9MCY08, an increase of 176%YoY. This was against our forecasted 9MCY09 NPAT of PkR721mn (EPS: PkR0.18). On a consolidated basis, NIB has posted NPAT of PkR1.61bn (EPS: PkR0.40) in 9MCY09, twice as high as unconsolidated earnings due to share of profit from associated companies (two of the largest private sector asset management companies in Pakistan).
On a sequential basis, 3QCY09 NPAT (unconsolidated) has registered at PkR215mn (EPS: PkR0.05), up 20%QoQ. Following net provisioning reversals of ~PkR500mn in 1HCY09, NIB has booked loan loss provisions of PkR317mn in 3QCY09. Instead, as anticipated, earnings have been boosted by hefty capital gains in 3QCY09 (PkR321mn in 3Q against PkR94mn in 2Q). It does not appear that any FSV-related reversals have been booked in the third quarter.
NIB trades at a CY10F Tier-I P/B multiple of 1.25x (goodwill-adjusted). At current levels, our target price of PkR6.50/share implies an upside of 21% and we have a Buy stance on the scrip. However, we will be looking to update our estimates post release of detailed accounts.
