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NIT dividend to boost NBP’s EPS

KARACHI: The earnings per share of National Bank of Pakistan will receive a significant boost from the dividend announced by National Investment Trust, analysts say.

NIT has announced better than expected FY09 dividend of Rs 3.25/unit. National Bank of Pakistan (NBP) has 453 million NIT units. "The bank stands to record dividend income of Rs 1.47 billion (EPS impact: Rs 1.23) in CY09F," said Raza Jafri, an analyst at AKD Securities in a report.

He said CY09F EPS estimates for NBP had risen to Rs 14.96 following the announcement of NIT's payout.

"While the stock has gained 19 percent over the last month (largely on NIT dividend expectations and improving economy), we believe there is still steam left for further movement," he said.

Market value of held NIT units is about Rs 12.2 billion. NBP is heavily geared to local equity market performance. Finance Adviser Shaukat Tareen has proposed to eliminate withholding tax on sale of shares. This is likely to support market sentiment from which NBP stands to benefit both directly and indirectly in case of a sustained bull rally, said the analyst.

"NBP has gained 19 percent over the last fortnight (outperforming the KSE-100 Index by 9 percent) but we believe there is more to come," said the analyst. NIT dividend payout has exceeded street estimates (close to Rs 2 per unit) while potential withdrawal of withholding tax bodes well for the market in general, and NBP in particular. staff report

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