The Bank of Punjab financial results review for CY20

The Bank of Punjab (BOP) announced earnings for CY20 at PKR 6.8bn (EPS: PKR 2.58), decreasing 16% YoY and 49% QoQ (4QCY20: PKR 0.40/share). The primary reason for the yearly contraction in earnings was the massive jump in provisions while hardly any capital gains as compared to last quarter contributed to the sequential decline. The bank announced a dividend of PKR 1.00/share for the year.

Result Highlights

· Net Interest Income of the bank settled at PKR 23.4bn, down 13% YoY during CY20 while increasing 13% QoQ. Interest expense posted a 5% QoQ decline which countered the stagnant interest earned while on a yearly basis the bank’s interest expense showed a massive 16% YoY increase.

· NFI of the bank saw a 230% YoY jump during CY20 led by aggressive capital gains (PKR 8.5bn – 38x higher YoY). On a sequential basis NFI declined 68% QoQ due to 95% lower capital gains. FX income posted a healthy 2.8x jump QoQ. Fee income during the year managed to post a 6% YoY jump despite COVID induced economic slowdown.

· Provisioning came down this quarter to clock in at PKR 1bn (-58% QoQ) while settling at PKR 6.9bn for the year (+298% YoY).

· OPEX saw a drastic 13% QoQ uptick whilst being up 18% YoY during CY20. CIR stands at 49% during CY20, stagnant YoY.

· Effective tax rate clocked in at 42% for CY20 vis-à-vis 41% SPLY.


· Currently, we have ‘BUY’ call on the stock with a Dec’21 target price of 10.9/share.

Courtesy – AHL Research


Posted in Article & Features.

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