Bank Alfalah posts EPS of Rs1.85, up 23%YoY in 3Q2019

Bank Alfalah (BAFL) has posted earnings of Rs1.85/share, up by 23%YoY in 3Q2019 primarily due to NIMs expansion owing to higher interest rates. Cumulative earnings during 9M2019 of the Bank were reported at Rs9.7 billion (EPS: Rs5.48), up by 10%YoY. Although, NII of the Bank increased by 11%QoQ, earnings remained flat on quarterly basis primarily on the back of decline in non-interest income by 16%QoQ and higher provisional expenses by Rs500 million. Non-interest income (NII) remained flat despite recording hefty gains in foreign exchange income of 33% primarily due to loss on securities of Rs373 million compared to gains of Rs185 million during the same period. Non markup expense increased significantly by 26%YoY to Rs7.8 billion as compared to Rs6.2 billion in 3Q2018. This was primarily on the back of higher operating expenses which grew by 26%YoY to Rs7.5 billion. The Bank booked provision of Rs1.0 billion during the outgoing quarter as compared to a reversal of Rs96 million during corresponding period last year. Key risks for the Bank include: 1) lower than expected advances and deposit growth and 2) deterioration in Pakistan macros.

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