AKBL’s profitability soars to Rs14.07bn in CY22

February 15, 2023 (MLN): Askari Bank Limited (AKBL) wrapped the calendar year 2022 on a positive note, marking a 45% YoY jump in net profits to clock in at Rs14.07 billion [EPS: Rs11.17], compared to Rs9.7bn [EPS: Rs7.71] in 2021.

The record profit was delivered by strong performance on all key activity drivers amidst challenging market fundamentals.

However, the 48% YoY surge in profits is comparatively lower due to higher and excessive taxation on banking companies introduced in the Finance Bill, which also included retrospective applications.

Revenues increased by 23% YoY, to Rs51.6bn from Rs41.8bn last year.

Net mark-up income increased to Rs40bn from Rs32.4bn. The increase is driven by a combination of solid growth in earning assets and a well-positioned asset liability book aligned with the changes in market rates.

Fee, commission, and brokerage income increased by 18% YoY as the bank recorded volumetric growth in trade flows while card revenues increased due to higher consumption levels.

Foreign exchange income increased to Rs5.5bn attributable to an increase in the volume of large ticket transactions and active participation in the interbank swap market.

The Bank continues to exercise prudent cost management while focusing on building revenue momentum through branch expansion and investment in new initiatives.

Administrative expenses increased by 8% YoY during the year mainly due to the impact of new branches, inflationary upsurge, and Rupee devaluation.

Compensation expenses decreased by 2% YoY during the year mainly due to the implementation of a human capital strategy. The overall cost-to-income ratio improved to 44.7% YoY from 50.7% YoY last year.

Total assets grew by 21.2% YoY to Rs1.53 trillion. Customer deposits increased by Rs127 billion during the year and closed at Rs.1.14 trillion, a 12.5% YoY growth.

Meanwhile, low-cost current deposit increased by 13%; the current account mix was maintained at over 30% YoY while the CASA mix was at 80% YoY on December 31, 2022.

Advances grew by 21% YoY to Rs615bn as the bank capitalized on lending opportunities while maintaining credit discipline and rigorous client selection.

At the year's end, the gross advances to deposits ratio stood at 54% YoY comfortably higher than the threshold of 50% YoY which attracts higher taxation as levied in the finance bill 2023.

Managing asset quality remains a key priority particularly due to higher stress levels and a challenging environment and was enabled by increased rigor and effectiveness of credit evaluation processes, the statement noted.  

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