MEBL announced earnings (PAT) today for 3QCY23 at PKR 25.8bn (EPS: PKR 14.42), depicting an increase of 123% YoY | 49% QoQ (3QCY22 EPS: PKR 6.46). This jump in overall earnings was driven by a record total income. The Bank announced a dividend of PKR 5 along with a 3Q result.

Result Highlights

Net profit earned settled at PKR 64.1bn during 3QCY23, increasing 102% YoY and 29% QoQ. With this, the total Net Profit Earned for 9MCY23 went up to PKR 154.7bn, marking a 100% YoY jump. Profit earned saw a jump of 84% QoQ depicting an impact of asset repricing in the outgoing quarter.

Other Income depicted an increase of 42% QoQ during 3QCY23 taking 9MCY23’s total to PKR 16.5bn (4% increase YoY). This jump in 3QCY23 is primarily on the back of higher fee and commission income clocking in at PKR 5.2bn (37% YoY) and a jump of 114% YoY in FX gains recorded at PKR 1.58bn. However, the dividend income declined by 12% YoY, recorded at PKR 113mn in 3QCY23.

Provisioning for the bank clocked in at PKR 782mn during 3QCY23 (9MCY23: PKR 4.4bn) depicting a jump of 43% on a YoY basis.

The bank’s OPEX increased 49% YoY in 9MCY23 clocking-in at PKR 51.3bn (3QCY23: PKR 19.8bn, 52% YoY | 20% QoQ). With this, Cost/Income stood at 27.9% in 3QCY23 against 35.7% same period last year.

Effective tax rate was set at 48.3% during 3QCY23 compared to 49.3% in SPLY.

Recommendation

Currently, we have a “BUY” call on the stock with a Jun’24 TP of PKR 177.4/share. Following the release of the 3QCY23 financial results, we are increasing our earnings and dividend projections to PKR 45.9/share and PKR 17/share for CY23.

Courtesy – AHL Research