February 2, 2022 (MLN): Bank Alflah Limited (BAFL) continued its fashion of delivering strong profits as its net profits after tax during CY21 clocked in at Rs14.46 billion against the profits of Rs10.8 billion in the previous year, showing a growth of 33% YoY.
The surge in BAFL’s profitability was attributed to higher non-interest income and a significant decline in provision charges.
The growth in net profits translated into earnings per share of the bank which jumped to Rs8.12 from Rs6.1 in CY20.
Alongside financial results, the bank announced a cash dividend of Rs2 per share i.e., 20%, taking a full-year payout to Rs4 per share.
Going by the bank's financial statement, the 27% YoY growth in non-markup income came from a 25.6% YoY increase in fee and commission income, 21.4% YoY surge in foreign exchange income and 37.5% YoY jumped in gain on sale of securities.
On the other hand, net interest income of the bank remained largely flat as it inched up by only 3% YoY due to lower interest rate during CY21 however, in last quarter, the policy rate moved upwards, the impact of which is yet to fully reflect in the coming quarter.
On the provision side, the bank posted a 69.5% YoY decline in provision charges to Rs2.bn compared to Rs7.58bn worth of provisions CY20. The higher provision charges in CY20 were related to COVID related general provisions which were absent in CY21.
Going forward, the earnings of the bank are expected to improve as the impact of higher interest rates is yet to fully reflect on the asset side. Moreover, deposit growth has remained above peers (9MCY21: 26%), which would enhance the impact of margin expansion on future earnings, Ismail Iqbal Securities in its earnings report said.
|
Consolidated Financial Results for the year ended December 31, 2021 ('000 Rupees) |
|||
|---|---|---|---|
|
|
Dec-21 |
Dec-20 |
% Change |
|
Mark-up/return/interest earned |
100,192,331 |
92,623,231 |
8.17% |
|
Mark-up/return/interest expensed |
54,148,073 |
47,928,757 |
12.98% |
|
Net mark-up/interest income |
46,044,258 |
44,694,474 |
3.02% |
|
Non-mark-up/interest income |
|
|
|
|
Fee and commission income |
8,522,955 |
6,786,997 |
25.58% |
|
Dividend income |
492,297 |
313,526 |
57.02% |
|
Foreign exchange income |
4,127,984 |
3,398,242 |
21.47% |
|
Gain/(loss) from derivatives |
200,776 |
(21,366) |
-1039.70% |
|
Gain / (loss) on sale of securities |
3,143,609 |
2,285,043 |
37.57% |
|
Share of profit from associates |
573,254 |
612,617 |
-6.43% |
|
Other income |
175,973 |
170,731 |
3.07% |
|
Total non-mark-up/interest income |
17,236,848 |
13,545,790 |
27.25% |
|
Total income |
63,281,106 |
58,240,264 |
8.66% |
|
Non-mark-up/interest expenses |
|
|
|
|
Operating expenses |
36,538,606 |
31,618,668 |
15.56% |
|
Workers’ welfare fund |
498,436 |
494,432 |
0.81% |
|
Other charges |
25,520 |
94,741 |
-73.06% |
|
Total non-mark-up/interest expenses |
37,062,562 |
32,207,841 |
15.07% |
|
Profit before provisions |
26,218,544 |
26,032,423 |
0.71% |
|
Provisions and write offs – net |
2,311,856 |
7,589,269 |
-69.54% |
|
Extra-ordinary/ unusual items |
– |
– |
|
|
Profit before taxation |
23,906,688 |
18,443,154 |
29.62% |
|
Taxation |
9,446,220 |
7,599,914 |
24.29% |
|
Profit after taxation |
14,460,468 |
10,843,240 |
33.36% |
|
Earnings per share – basic (rupees) – Restated |
8.12 |
6.10 |
33.11% |
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