Earning Preview: Higher NII likely to lift ABL’s net earnings in CY19

February 6, 2020 (MLN): Allied Bank Limited (ABL) is scheduled to announce its financial results for CY19 on Friday i.e. tomorrow, where the Board of Directors of the company will review and discuss the company’s financial performance.

According to the projection table given below, brokerage houses, JS Global and Pearl Securities expect the bank to post a rise in its net earnings by 6% YoY whereas Arif Habib expects the bank to report a slender increment in its net earnings by 3% YoY only.

The slight increase in bottom-line is expected mainly on the account of an increase in the bank’s net interest income.

During CY19, the bank’s interest income is anticipated to increase substantially owing to better asset pricing at higher yields. Moreover, interest expense is estimated to rise due to an increase in deposits volumes and higher deposit rates, resulting in an increase in bank’s NII, as per the research of Pearl Securities.

According to JS Global research, non-funded income is likely to decline due to lower capital gains and drop in dividend income, given unsatisfactory performance of equity market and lower payout from power companies during CY19, leading to limited bottom-line growth expectations.

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