February 17, 2022 (MLN): Allied Bank Limited (ABL)’s net income for CY21 has clocked in at Rs17.5 billion compared to the earnings of Rs18.4 billion reported in the corresponding period last year, depicting a marginal decline of 4% YoY.
This caused the Bank’s earnings per share to settle at Rs15.29 as opposed to Rs16.05 in the same period last year.
The decline in the bank’s profitability was attributed to lower net mark-up income and higher operating expenses.
During CY21, ABL’s interest expense increased higher by 17.6% compared to the interest income which inched up by 7% YoY. The increase in interest expense was owing to a steep rise in the interest rates in the last quarter of CY21. Consequently, Net Interest Income (NII) was recorded at Rs45.5bn as compared to Rs48.3 bn in CY20; down by 6% YoY.
The total non-interest income of the bank posted a surge of 24.6% YoY primarily due to a 22.8% YoY increase in fee and commission income and a 23.4% YoY rise in capital gains compared to last year.
In addition, dividend income posted a growth of 31% to reach Rs2.3bn during CY21. The increase was primarily attributable to dividends announced by Power & Oil Sector Companies and the uplift of restrictions on dividend distribution, imposed by SBP on Banking Institutions. Likewise, foreign exchange income also recorded a rise of 18.6% YoY to stand at Rs1.97b.
However, the improvement in non-interest income was offset by 11% YoY upsurge in non-interest expenses led by higher administrative and operating costs associated with year-end spending as seen historically.
The bank also booked a reversal of Rs811 million in provisioning expense during CY21 against a charge of Rs843.5mn, which supported the bank’s earnings.
Moreover, the bank’s effective tax rate clocked in at 39% for CY21, the same as last year.
Alongside financial results, the bank also announced a cash dividend of Rs2 per share for 4QCY21, taking cumulative payout to Rs8/sh for the year.
At the time of reporting this, the stock of the ABL is trading at Rs86.05 which fell by 4.31% or Rs3.88 DoD.
| Consolidated Profit and Loss Account for the year ended December 31, 2021 (Rupees in '000) | |||
|---|---|---|---|
| Dec-21 | Dec-20 | % Change | |
| Mark-up/return/interest earned | 118,654,233 | 110,548,776 | 7.33% |
| Mark-up/return/interest expensed | 73,092,393 | 62,153,107 | 17.60% |
| Net mark-up/interest income | 45,561,840 | 48,395,669 | -5.86% |
| NON-MARK-UP/INTEREST INCOME | |||
| Fee and commision income | 7,596,474 | 6,184,600 | 22.83% |
| Dividend income | 2,320,427 | 1,773,857 | 30.81% |
| Foreign exchange income | 1,973,233 | 1,663,815 | 18.60% |
| Income from derivatives | – | – | – |
| Gain on sale of securities – net | 4,306,138 | 3,487,325 | 23.48% |
| Other income | 565,442 | 333,627 | 69.48% |
| Total non mark-up/interest income | 16,761,714 | 13,443,224 | 24.69% |
| Total Income | 62,323,554 | 61,838,893 | 0.78% |
| NON MARK-UP/INTEREST EXPENSES | |||
| Operating expenses | 33,680,176 | 30,281,195 | 11.22% |
| Workers welfare fund | 599,306 | 626,529 | -4.35% |
| Other charges | 170,275 | 112,682 | 51.11% |
| Total non mark-up/interest expenses | 34,449,757 | 31,020,406 | 11.06% |
| Profit before provisions | 27,873,797 | 30,818,487 | -9.55% |
| (reversals)/Provisions and write offs | (811,100) | 843,550 | – |
| Extraordinary / Unusual items | – | – | – |
| Profit before taxation | 28,684,897 | 29,974,937 | -4.30% |
| Taxation | 11,181,669 | 11,597,332 | -3.58% |
| Profit after taxation | 17,503,228 | 18,377,605 | -4.76% |
| Earnings per share – Basic and Diluted (in Rupees) | 15.29 | 16.05 | -4.74% |
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