MEBL announced earnings (PAT) today for 1QCY23 at PKR 15.4bn (EPS: PKR 8.63), portraying a jump of 68% YoY | -5% QoQ (1QCY22 EPS: PKR 5.13). The overall earnings jump was mainly due to higher Net Interest Income. Moreover, the bank announced a PKR 3.00/share dividend and a 1QCY23 result.

Result Highlights

· Net Interest Income of the bank settled at PKR 41.1bn during 1QCY23, increasing by 91% YoY while declining by 8% QoQ. On sequential basis, Interest expense was up 21% YoY as most likely major impact of interest rate hikes in 1QCY23 was accounted for in the out-going quarter

· NFI depicted a decrease of 8% YoY | 1% QoQ clocking-in at PKR 4.2bn during 1QCY23. This was mainly on the back of: i) Lower Dividend income at PKR 111mn (-36% YoY) and ii) Loss on securities recorded at PKR 92mn.

· Provisioning for the bank clocked in at PKR 2.1bn during 1QCY23 (1QCY22: PKR 228mn), depicting a jump of 835% YoY, while a decline of 13% QoQ.

· The bank’s OPEX during 1QCY23 clocking-in at PKR 15.1bn (1QCY22: PKR 10.6bn, 43% YoY | 5% QoQ). With this, Cost/Income stood at 33.4% in 1QCY23 against 40.6% same period last year.

· Effective tax rate was set at 45% during 1QCY23 compared to 39% SPLY.

Courtesy – AHL Research