ABL earnings up by 30 percent in 1QCY15

Allied Bank Limited (ABL) has recorded an earning of PkR 4.2bn (EPS: PkR3.7) in 1QCY15, up by 30 percent YoY. The earnings were in line with the expectations of PkR4.1bn (EPS: PkR3.6). The results were accompanied by a dividend of PkR1.75/sh vs. PkR1.5/sh projected. Similarly, the bank's payout stands at 47 percent vs. 42 percent anticipated.
"The prime reason for growth in profitability is the surge in bank's core income by 46 percent YoY to PkR8.4bn," said analysts at Shajar Research. They attributed the increase to higher interest rate sensitive liabilities, which resulted in a 3 percent QoQ decline in interest expense. Concurrently, interest income improved by 1 percent QoQ owing to bank's heavy investment in PIBs (40 percent of deposits as of Dec'14), although re-pricing of advances (ADR: 43 percenbt as of Dec'14) adversely affected the top line.
Provision declined significantly by 37 percentYoY/56 percent QoQ as the bank subjectively booked charge against 50 percent of BYCO exposure in previous quarter. Non-Interest Income improved by 9 percent YoY 14 percent QoQ owing to sustainable fee and brokerage income that accredited by 25 percentQoQ to PkR1bn supplemented by jump in dividend income (+68% to PkR1.3bn).