UBL has scheduled its board meeting on August 6, 2014 for the announcement of 2QCY14 financial results. We are estimating the bank to post earnings of PKR6.3bn (EPS of PKR5.12) up by nearly 13% Q/Q and 46%Y/Y basis. Cumulative earnings for the 1HCY14 comes to around PKR11.8bn (EPS of PKR9.63) vs preceding year same period earnings of PKR9.2bn (EPS of PKR7.55) up by around 28% Y/Y. Along with quarterly results, UBL is likely to declare a cash payout of PKR2.5-3.0/share taking cumulative dividend payout for the year to PKR5.0/share. Primarily the reason sighted behind the higher income would be the improvement in core Net Interest Income (NII) largely on account of higher yield assets acquired by the bank in the preceding few quarters which compensated the contraction in NII. Furthermore in the outgoing quarter, UBL booked greater capital gains; we foresee this trend may continue in the 2QCY14 where KSE-100 gained nearly 9.2%. Investment Perspective UBL with a projected ROE of 23.5% (5-Year) offered at a premium of 1% to our revised target price for June’15. Furthermore UBL also offers a dividend yield of 5.3% taking cumulative return to 4.1%. At current Prices level, UBL is trading a PEx of 10.6x and PBVx of 2.4x. We recommend a neutral stance on the stock.
Posted on: Wed, 06 Aug 2014 04:11:20 +0000