The share price of Bank Alfalah has increased 48.8% since the beginning of the fiscal year. PHOTO: FILE
International Finance Corporation (IFC), which is part of the World Bank Group, has expressed interest in injecting equity into Bank Alfalah, according to a notice sent to the Karachi Stock Exchange (KSE) on Tuesday.
The State Bank of Pakistan (SBP) has allowed IFC to conduct due diligence of the bank for a potential equity investment, the notice said.
Speaking to The Express Tribune, Topline Securities CEO Mohammed Sohail said the announcement shows IFC has confidence in the banking sector in general and Bank Alfalah in particular. “The bank has repositioned itself after the change in its management. Its focus is more on the corporate side now,” Sohail said, adding his brokerage firm maintains a ‘buy’ rating on Bank Alfalah’s stock.
The share price of Bank Alfalah at the end of trading on Tuesday was Rs27.60. Its share price has increased 48.8% since the beginning of the fiscal year when it was around Rs18.55 per share.
Bank Alfalah has mobilised substantial deposits, as its branch network expanded by more than 100 branches during 2013. The result of this expansion was observed in deposit growth by 15%, which improved its market share in industry-wide deposits to 7% last year, according to Standard Capital Securities research analyst Rajesh Kumar Maheshwari.
In the first quarter of 2014, its profit after tax was Rs1.13 billion as opposed to Rs1.01 billion in corresponding period of 2013, reflecting a year-on-year increase of 11.6%.
The increase in the bank’s net profit was partially on the back of growth in net interest income by 12% during January-March, Maheshwari said. Its net interest income and non-interest income during the first quarter remained Rs4.3 billion and Rs2.05 billion, respectively.
“We expect industry-wide deposits will continue growing based on money supply, favourable business scenario and improving economic conditions. Bank Alfalah, currently with 7% market share in deposits, will enhance its share through branch expansion. We see a good future for it,” he noted.
Published in The Express Tribune, May 21st, 2014.
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Hidden? It should be obvious. Why else would any investor ever invest.
There must be some hidden long term benefit................