Allied Bank Limited (ABL) is scheduled to hold its board meeting on Tuesday, 10th February, 2015 to announce its CY14 results. In today’s Morning report we are discussing our expectations of ABL’s unconsolidated accounts which are as follows.

Profitability to increase by 10%
We expect ABL to post higher earnings growth of 10% as profit after tax to surge at Rs16.05 billion which translates into EPS of Rs 14.02 in CY14 against Rs 14.64 billion (EPS:Rs 12.79) in CY13. This is expected due to higher net interest income, reversal of provisions and rise in non-interest income. In 4QCY14, we expect bank to post after tax profit of Rs 4.50 billion (EPS: Rs 3.93) in 4QCY14 against Rs 4.45 billion (EPS: Rs 3.89) in 3QCY14, up by 1% QoQ due to higher net interest income. Moreover, a cash payout of Rs 2/share is also expected with the earnings, taking the total cash dividend of Rs6.50/share for CY14 along with 10% bonus

Massive surge in non funded income expected
Bank’s non-interest income is expected to increase by 50% to Rs 13.72 billion versus Rs9.60 billion. This is expected due to higher gain on sale of securities which likely robustly up 226% to Rs 4.06 billion versus Rs 1.24 billion in CY13. Furthermore, dividend income rises by 6% to Rs 3.60 billion in CY14 against Rs 3.40 billion in CY13.

Net interest income on the rise
Interest income is expected to surge by 20% to Rs 65.23 billion versus Rs 54.22 billion in CY13 due to growth in earning assets and investments in PIBs. However, Interest expense rise by 16% to Rs 37.88 billion compared to Rs 32.55 billion in CY13 due to rise in saving rate. As a result, net interest income likely to up by 26% to Rs 27.35 billion in CY14 from Rs 21.67 billion in CY13 owing to higher yields on the large government securities portfolio which has been repositioned towards longer tenors i.e. PIBs.


ABL-CY14 Result Preview