BAHL's Preview: Earnings to rise owing to higher NII

August 21, 2019 (MLN): The Board of Directors of the Bank Al Habib Limited (BAHL) is scheduled to meet today, to discuss and announce the financial results for the half year ended June 30, 2019.

Going by the predictions made by three brokerage houses, the Profit after Tax (PAT) and Earning per share (EPS) of the bank are expected to increase by approximately 16%, as compared to the PAT of Rs. 4.2 billion in last year.

As per research houses, despite higher effective tax rate during the period (on account of super tax adjustment during the first quarter), BAHL’s net profits will rise mainly due to higher Net Interest Income on the back of rising interest rates, as asset yields generally get repriced with a delay of a few months whereas liabilities are generally quicker to adjust to change in interest rates.

Moreover, the sturdy growth in bank’s Fee Income is expected to continue, driven by commission on trade and transaction banking.

In addition, administrative cost is also expected to mount on account of general expansionary focus of the bank as well as inflationary pressures.

With regards to payouts, the brokerage houses do not foresee any interim dividend payout for the period mentioned above.