BOP’s profits dip slightly on capital loss, higher interest expenses

MG News | August 17, 2022 at 05:58 PM GMT+05:00

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August 17, 2022 (MLN): The Bank of Punjab (BOP) reported net profits for 1HCY22 at Rs5.4bn (EPS: Rs1.8), depicting a slight decline of 2.4% YoY, mainly due to loss on securities and higher interest expenses.

The net interest income of the bank settled at Rs15.9bn during 1HCY22, increasing 14% YoY. Non-interest income dropped by 17.2%YoY, primarily due to capital loss worth Rs861 million booked during the period compared to gains of Rs1.6bn in the corresponding period last year.

Excluding capital loss, non-interest income reported an improvement of 62%YoY led by a 35.5%YoY increase in fee and commission income and a 4.9x YoY increase in income from foreign exchange operations.

On the expense side, operating expenses reported a significant increase of 36.5% YoY, from Rs10.2bn to Rs13.97bn. With this, the cost-to-income ratio stands at 72% compared to 57% in 1HCY21.

Moreover, the bank posted a huge reversal during the review period, clocking in at Rs2.94bn compared to the provisioning charge of Rs632mn recorded in the same period last year which provided a cushion to the bank’s profitability.

Lastly, the effective tax rate was set at 35% during 1HCY22 against 24% last year.

Profit and Loss Account for the half year ended June 30, 2022 (Rupees in '000)
	Jun-22	Jun-21	% Change
Mark-up/return/interest earned	58,937,443	38,927,588	51.40%
Mark-up/return/interest expensed	43,015,246	24,984,717	72.17%
Net mark-up/return/interest income	15,922,197	13,942,871	14.20%
NON-MARK-UP/INTEREST INCOME
Fee and commission income	3,403,914	2,512,352	35.49%
Dividend income	221,549	105,001	111.00%
Foreign exchange (loss) income	685,798	140,764	387.20%
Income/(loss) from derivatives	-	-
Gain / (loss) on securities - net	(861,011)	1,614,972	-
Other income-net	198,440	34,202	480.20%
Total non-mark-up/interest income	3,648,690	4,407,291	-17.21%
Total Income	19,570,887	18,350,162	6.65%
NON-MARK-UP/INTEREST EXPENSES
Operating expenses	13,970,580	10,233,070	36.52%
Worker’s welfare fund	147,071	167,415	-12.15%
Other charges	33,794	502	6631.87%
Total non-mark-up/interest expenses	14,151,445	10,400,987	36.06%
Profit before provisions	5,419,442	7,949,175	-31.82%
(Reversal) / Provisions and write offs - net	(2,940,463)	632,328
Extra ordinary/unusual items	-	-	-
Profit before taxation	8,359,905	7,316,847	14.26%
Taxation	2,949,314	1,772,948	66.35%
Profit after taxation	5,410,591	5,543,899	-2.40%
Earnings per share - Basic and Diluted (in Rupees)	1.80	1.85	-2.70%

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