JS Securities Limited - Morning Briefing.

Karachi -- April 24, 2019 (PPI-OT)

BAHL and MEBL 1QCY19 earning previews

Bank Al Habib (BAHL) is scheduled to announce 1QCY19 results on April 25, where we expect an EPS of Rs1.55, down 16% YoY.

However, we expect earnings before tax to improve by 11% YoY, as we project higher interest rates to improve the bank's Net Interest Income (NII) by 20% YoY.

Meezan Bank Ltd (MEBL) is scheduled to announce its 1QCY19 earnings on April 25, where we expect 1Q consolidated EPS at 2.58, up 36% YoY.

We expect the recent upward revision in investment yields and sticky deposit rate (currently 5%, vs. conventional banks' MDR at 8.75%) to expand NIMs to 4.78% during 1QCY19, up 160bps YoY.

BAHL: 1QCY19E EPS at Rs1.55, core income up 20% YoY

Bank Al Habib Ltd (BAHL) is scheduled to announce 1QCY19 earnings on April 25. We expect a 16% YoY decline in earnings (EPS: Rs1.55) during the quarter. The drop in profitability is expected to be led by a higher effective tax rate (55%, vs. 39% during 1QCY18), given Super Tax of CY17 to be booked during 1QCY19. Notably, we expect earnings before tax to grow 11% YoY, as higher interest rates could improve the bank's Net Interest Income (NII) by 20% YoY. We also expect Non Interest Income to continue double-digit growth. That said, rapid branch expansion in the past 12 months is likely to push administrative expenses up by 15% YoY. On a sequential basis...