Equity Analysis /

PAKISTAN BANKS: Q1 18 wrap: banks positioned for higher rates; raise target prices and upgrade BAFL

    Rohit Kumar
    Rohit Kumar

    Global Financials/Thematics

    Tellimer Research
    15 May 2018
    Published byTellimer Research
    Adjusting our estimates, raising TPs, upgrading BAFL to BUY. We adjust our estimates after incorporating: i) Q1 18 results; ii) higher super tax in 2018 and lower super tax from 2019 onwards (as per the changes in the latest budget); iii) lower balance sheet growth as banks have reduced their repo-treasury bills transactions; and iv) rolling forward our two-stage DCF valuation model to 2022 (previously 2021). As a result, we increase our target prices by 2-9% (see Table 2) and upgrade BAFL to BUY (from HOLD). Our other recommendations are unchanged.