ABL's profitability increases at snail's pace

August 17, 2021 (MLN): Allied Bank Limited (ABL) has announced its half yearly financial results for the period ended on June 30, 2021 today as per which the profitability of the bank has increased by 4.7% to clocked in at Rs9 billion (EPS: Rs7.75), compared to the profit of Rs8 bn (EPS: Rs7.40) in 1HCY21.

Going by the bank’s financial statement sent to PSX, the major highlight from the results includes a 51% increase in dividend income which supported the bank’s non-funded income (NFI). In addition, the bank’s fee and commission income also witnessed a jump of 16%, as it clocked in at Rs3.65bn, against Rs3.15bn recorded during IHCY20.

This time, the bank observed a decline of 3.6% in its foreign exchange income to reach Rs662.5 million during the review period.

During the period under review, the bank’s net interest income (NII) shrunk by 8.63% YoY to Rs23bn compared to the NII of Rs25.18bn in the same period of the previous year. This reduction is mainly on the back of repricing of assets at lower rate.

Further, ABL has booked provisioning reversal of Rs309.54mn during 1HCY21, compared to the provisions of Rs2.21bn corresponding to the same period of CY20 which provided a boost to the Bank’s earnings.

On the expenses front, the bank’s non-markup expenses surged by 10.37% YoY to Rs16.8bn.

On a YoY basis, operating expenses of ABL increased by 10.95% to Rs16.40bn while other charges and worker’s welfare fund declined by 12.6% YoY and 8.72%, respectively, during the period.

On the taxation front, the bank observed a reduction in effective tax rate from 43% to 40% 1HCY21. Meanwhile, ABL also announced an interim Cash Dividend of Rs2 per share for the period.

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