JS Securities Limited – FABL: 1Q2015 EPS stood at Rs1.57, up 4.3x YoY

Karachi, April 29, 2015 (PPI-OT): Faysal Bank Ltd (FABL) announced its 1Q2015 result today posting a PAT of Rs1.88bn (EPS: Rs1.57), against PAT of Rs433mn reported in 1Q2014. Headline earnings surpassed JS Securities Limited’s expectations of Rs0.57/share on the back of whopping Gain on Sale of Securities of Rs1.27bn against Rs95mn in 1Q2014, however core operations came in line with JS Securities Limited’s expectations.

Key drivers of robust earnings were (1) 2x jump in Non Interest Income, (2) 63% YoY decline in provisions and (3) 11% YoY decline in operating expenses. Cost to income for FABL for 1Q2015 clocked in at 47% against 71% in 1Q2014, with major contribution from non-core income. Earnings also increased sequentially by 77% QoQ on the back of (1) higher capital gains and (2) controlled costs.

At current levels the stock is trading at 2015E P/B of 0.68x.

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