Bank Alfalah: Analyst Briefing Performance Review & Outlook - 1Q 2017

Transcription

1. Analyst Briefing – 1Q 2017 Performance Review & Outlook 3rd May 2017
2. Introductory Snapshot Commencement of Operations 1997 Head Quarters Karachi Major Sponsors Dhabi Group Credit Rating (Long Term / Short Term) Branches AA+ / A1+ 639 (including 153 Islamic Branches) Cities Covered 225 cities in Pakistan, 7 cities overseas International Presence 11 International Branches in 3 countries Market Share 5.4% of deposits Assets PKR 905bn / USD 8.6bn Deposits PKR 600bn / USD 5.7bn Net Advances PKR 378bn / USD 3.6bn Staff Strength 7,976 Data as of March 31, 2017
3. Balance Sheet Snapshot Amount PKR mn Mar-16 Dec-16 Mar-17 YoY YTD Cash 43 ,761 74,071 63,407 45% -14% Bal with banks 14,272 9,373 7,374 -48% -21% Lending to FI 12,533 30,149 36,984 195% 23% Advances (net) 323,481 378,720 377,529 17% 0% Investments (net) 434,959 389,093 384,850 -12% -1% 32,273 36,050 34,610 7% -4% 861,278 917,456 904,754 5% -1% 623,359 640,944 600,215 -4% -6% 9,982 8,318 8,317 -17% 0% 143,006 178,311 204,537 43% 15% 29,888 29,759 29,463 -1% -1% 806,235 857,332 842,532 5% -2% Paid up Capital 15,898 15,952 15,952 0% 0% Reserves 27,445 33,233 36,032 31% 8% Reval Surplus 11,700 10,940 10,239 -12% -6% Total Equity 55,043 60,125 62,223 13% 3% Fixed & Others Total Assets Deposits Sub Loans Borrowings Other Liabilities Total Liabilities  Balance sheet size increased by 5% YoY to PKR905bn, while there was a marginal YTD drop.  Advances increased by 17% YoY to PKR378bn where corporate loans grew by 2% YoY. Investments declined 12% YoY.  Deposits dropped 4%YoY, as profitability was prioritized over volumes.  Current deposits increased 17%; whereas term deposits dropped 35% YoY, resulting in 80bp YoY reduction in cost of deposits.  Borrowings grew by 43% YoY due to higher Bai Muajjal and repo levels  Total equity increased by 13% to PKR62bn. 3
4. Profit & Loss Snapshot Amount PKR mn 1Q16 4Q16 1Q17 YoY 14,950 13,796 13,862 -7% Interest Expenses 7,850 6,713 6,600 -16% Net Int Income 7,100 7,083 7,262 2% NPL provisions 229 815 -79 NA 12 33 -4 NA Post Provision Int 6,860 6,234 7,344 7% Non Int Income 2,356 1,941 2,553 8% Non Int. Expenses 5,422 5,774 5,607 3% Profit before tax 3,794 2,402 4,290 13% Taxation 1,327 768 1,502 13% Profit after tax 2,467 1,634 2,788 13% EPS (Rupees) 1.55 1.03 1.75 Interest Income Inv. Impairment DPS (Rupees) - QoQ  Net interest Income increased by 2% YoY. Impact of drop in yields 0% more than offset by -2% reduction in cost of deposits. 3%  NPL provisions depicted NA reversal of PKR79mn, against the charge of NA PKR229mn 1Q16 and PKR815mn in 4Q16. 18% 32%  Non interest income grew 8% YoY to PKR7.3bn on account of 24% growth in -3% Fees and Commission income. 32% QoQ growth 79% is led by Forex Income and Capital Gains. 95% 71%  Growth in operating expenses was contained at 3% YoY at PKR5.6bn.  Profit After Tax increased 13% YoY to PKR2.8bn with EPS of PKR1.75 versus PKR2.5bn and EPS of PKR1.55 in 1Q2016. 4
5. Key Ratios 1Q16 2Q16 3Q16 4Q16 Yield on Advances 6 .9% 7.1% 6.9% 6.8% Yield on Investments 8.7% 8.5% 7.6% 7.4% Cost of Deposits 3.3% 3.1% 3.0% 2.9% NIM 3.6% 3.8% 3.7% 3.7% ROA 1.1% 0.9% 0.9% 0.7% ROE exc. Surplus 23.0% 17.0% 16.5% 13.5% Admin Cost : income 57.8% 59.4% 66.2% 66.1% Gross ADR 54.5% 56.5% 56.6% 61.8% CASA 77.4% 79.0% 79.0% 83.3% Net Loans (YoY ) 16.1% 13.6% 7.0% 13.3% Deposits (YoY) 8.4% 5.8% 9.5% 0.1% NPL ratio 5.7% 5.3% 5.4% 4.8% Coverage 80.6% 82.1% 83.1% 86.1% CAR 13.9% 13.8% 14.5% 13.2% 1Q17  NIMs were maintained at 3.7% due to 40bps QoQ 6.8% and 80bps YoY decline in cost of deposits. 7.2% 2.5%  ROA increased by 50bps QoQ to 1.2% with ROE growing to 22.0% 3.7% 1.2%  Admin cost to income ratio improved to 56.6% versus 66.1% in the 22.0% previous quarter. 56.6%  Gross ADR clocked in at 65.8% 65.8% from 61.8% in 4Q2016. 85.0%  CASA mix increased to 16.7% 85.0% as compared to 83.3% in 4Q2016 and -3.7% 77.4% in 1Q of 2016. 4.6%  NPL ratio dropped to 4.6%, while specific 88.3% coverage reached 88%. 13.2%  CAR remained flat QoQ at 13.2%, as profit retention was offset by reduction in Tier II Capital benefit and lending to higher yielding 5 segments.
6. 1Q 2017 Performance Review
7. Advances & Asset Quality Trends NPLs mostly contained NPLs Specific Coverage improved to 88% NPLs/gross advances 40 9% 7% 5% 5.7% 19.4 5.3% 5.4% 19.1 18.7 4.6% 4.8% 19.0 30 80.0% 20 60.0% 40.0% 1% - 20.0% 3Q16 4Q16 1Q17 Advances composition (Mar 2017) 4% Corporate Commercial Consumer Islamic Overseas 22% 82.1% 83.1% 15.7 15.7 15.6 25 88.3% 20 16.4 15 16.2 5 1Q16 2Q16 3Q16 4Q16 1Q17 Advances concentration (Dec 2016) Textile 16% 6% 80.6% 86.1% 10 10 2Q16 Coverage 18.3 3% 1Q16 Provisions 100.0% 17% Prod & Trans energy Agri Business 52% 44% 15% Individuals Oil & Gas Food & allied Others 6% 4%5% 9% 7
8. Deposit Mix & Cost CASA Continues to Remain Strong (PKR bn) 700 600 606 500 400 640 641 600 526 Thousands Deposit Growth Trend (PKR bn) 600 83% 300 300 200 200 100 2013 70% 400 70% 457 2012 75% 500 2014 2015 2016 Deposit Mix (Mar 2017) 1Q17 69% 366 328 2012 2013 2014 Term & Others 39% 2015 2016 1Q17 Deposits Composition (Mar 2017) 7% 46% Savings 510 477 419 15% Current 534 85% Conventional 20% Islamic Overseas 73% 8
9. Appendix
10. Balance Sheet Summary 5yrCAGR Amounts in PKR mn 2011 2012 2013 2014 2015 2016 Cash & Bal. with Treasury Bank 50,883 58,044 61,205 50,516 62,369 74,071 8% Balances with Other Banks 17,424 26,721 34,764 12,332 16,552 9,373 -12% 7,765 877 2,522 18,313 27,626 30,149 31% Advances (Net) 198,469 233,933 260,780 297,256 334,159 378,720 14% Investments (Net) 166,532 189,487 219,690 324,319 423,100 389,093 18% 27,221 27,506 32,467 40,392 38,802 36,050 6% 468,294 536,568 611,428 743,128 902,608 917,456 14% 401,233 457,044 525,526 605,963 640,189 640,944 10% 7,149 5,875 9,991 9,987 9,983 8,318 3% Borrowings 18,169 21,228 23,115 55,233 172,393 178,311 58% Other Liabilities 16,190 22,362 20,894 27,126 26,690 29,759 13% Total Liabilities 442,741 506,509 579,526 698,309 849,255 857,332 14% Paid up Capital 13,492 13,492 13,492 15,872 15,898 15,952 3% Reserves & Retained Profit 9,125 12,010 14,774 21,951 26,527 33,233 29% Revaluation Surplus 2,937 4,558 3,636 6,995 10,928 10,940 30% 25,554 30,059 31,902 44,819 53,353 60,125 19% Lending to FIs Fixed & Other Assets Total Assets Deposits Subordinated Loans Total Equity 10
11. Profit & Loss Summary 5yrCAGR Amounts in PKR mn 2011 2012 2013 2014 2015 2016 Interest Income 44,298 46,080 43,961 55,378 61,438 57,245 5% Interest Expense 25,687 27,500 27,066 33,505 32,811 28,474 2% Net Interest Income 18,611 18,580 16,895 21,873 28,627 28,770 9% NPL Provisions 1,865 1,850 959 1,448 2,150 1,083 -10% Investment Impairment 2,459 1,709 95 86 137 101 -47% 14,281 15,021 15,841 20,340 26,340 27,587 14% Non Interest Income 5,368 7,281 8,279 8,876 8,861 8,868 11% Operating Expenses 14,215 15,519 17,313 20,702 22,598 23,432 11% Profit Before Taxation 5,434 6,783 6,807 8,514 12,603 13,023 19% Taxation 1,931 2,227 2,131 2,873 5,081 5,123 22% Profit After Taxation 3,503 4,556 4,676 5,641 7,522 7,900 18% 2.60 3.38 3.41 4.09 4.73 4.96 14% 17.5% 20.0% 20.0% 20.0% 10.0% 0.0% NA Post Provisions Interest Income EPS (PKR) Dividend (% of Paid - up) 11
12. Key Ratios 2011 2012 2013 2014 2015 2016 8 .6% 8.5% 8.4% 9.6% 9.6% 9.9% 11.6% 12.6% 12.1% 12.8% 13.3% 13.2% 5.1% 4.4% 3.5% 3.9% 4.2% 3.7% Admin Cost to Income Ratio 57.7% 58.8% 68.7% 65.4% 58.6% 62.2% Non Interest Income as % of Total 22.4% 28.2% 32.9% 28.9% 23.6% 23.6% Advance to Deposit Ratio (ADR) 49.5% 51.2% 49.6% 49.1% 52.2% 59.1% YoY Deposit Growth 13.3% 13.9% 15.0% 15.3% 5.6% 0.1% YoY Advances Growth -4.2% 17.9% 11.5% 11.4% 12.4% 13.3% YoY Investments Growth 46.8% 13.8% 15.9% 47.6% 30.5% -8.0% CASA Ratio* 69.0% 71.8% 71.1% 69.1% 74.5% 83.6% 9.0% 8.9% 6.6% 6.4% 5.4% 4.8% 64.6% 62.5% 69.3% 70.1% 83.7% 86.1% 0.8% 0.9% 0.8% 0.9% 0.9% 0.9% ROE excl. Reval. Surplus 16.4% 19.4% 18.0% 18.6% 19.0% 17.1% ROE incl. Reval. Surplus 14.5% 16.8% 15.6% 16.1% 15.2% 13.6% 18.94 22.28 23.65 28.24 33.56 37.69 Capital Adequacy Ratio (Tier-I) Capital Adequacy Ratio Total Net Interest Margins NPL Ratio Coverage Ratio ROA Book Value / Share (incl. Reval.) * Includes CASA deposits of FIs 12
13. Snapshot of the Bank Stock Market Related Data Bloomberg Code BAFL PA Reuters Code BAFL .KA Shares Outstanding (mn) 1595.21 Market Capitalization (PKR bn) 61.4 Market Capitalization (USD mn)* 586 Average Daily Turnover (mn shares) 2.2 Average Daily Turnover (USD mn)* 0.8 Current Stock Price** 12M High/Low** 38.50 47.20/24.07 * Using PKR/USD parity of PKR 104.8 ** Stock Price as of 2nd May 2017 13
14. Disclaimer This presentation contains forward-looking statements . Forward-looking statements are statements that are not historical facts; they include statements about our beliefs and expectations and the assumptions underlying them. These statements are based on plans, estimates and projections as they are currently available to the management of Bank Al Falah. Forward-looking statements therefore speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events. By their very nature, forward-looking statements involve risks and uncertainties. A number of important factors could therefore cause actual results to differ materially from those contained in any forward-looking statement 14
15. Contact Information For any queries : Imtiaz Gadar, CFA Head of Public Markets Bank Alfalah Limited Ph# +92 21 3241 6979 +92 21 3242 3617 Imtiaz.gadar@bankalfalah.com