FABL announced earnings today for 1QCY23 at PKR 3.3bn (EPS: PKR 2.18), depicting an uptick of 50% YoY, while a decline of 9% QoQ (4QCY22 EPS: PKR 2.38). The rise in YoY earnings is primarily due to a jump in total income.

Result Highlights

· Net Profit Earned by the bank settled at PKR 13bn during 1QCY23, remaining stagnant on a QoQ basis while increasing by 82% YoY. The profit expense was up 115% YoY, and interest earned too showed an increase of 101% YoY during 1QCY23. This jump in net profit earned is primarily on the back of policy rate hikes, we view.

· NFI depicted an increase of 19% YoY primarily due to healthy fee and commission during the quarter of PKR 2.1bn (+31% YoY). In addition, during 1QCY23, the foreign exchange posted a 2.3x YoY increase owed to PKR depreciation against the greenback. However, during 1QCY23, the bank booked a loss on securities of PKR 888mn against a loss of PKR 113mn during the same period last year.

· During 1QCY23, the bank booked provisioning of PKR 1.4bn against a reversal of PKR 147mn recorded SPLY.

· The bank’s OPEX rose 34% YoY to PKR 8bn. With this, Cost/Income stood at 51% in 1QCY23 compared to 54% in SPLY

· Effective tax rate was set at 48.1% during 1QCY23 compared to 51.1% recorded in last quarter of CY22.

Courtesy- AHL Research