ABL’s bottom-line withers by 4% YoY to Rs17.5bn in CY21

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MG News | February 17, 2022 at 02:36 PM GMT+05:00

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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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