August 25, 2021 (MLN): Bank Alfalah Limited (BAFL) has announced its financial results today for the half-year ended on June 2021, as per which the Bank witnessed a 21% YoY increase in net profits, clocking in at Rs7bn as against the profits of Rs5.8bn recorded in the same period last year.
This has been reflected in Bank’s earnings per share which moved up from Rs3.25/sh to Rs9.94/sh.
In conjunction with the results, the bank announced a cash dividend of Rs2 per share for the period mentioned above.
During the period, BAFL’s Net Interest Income (NII) declined by 6%YoY where both interest income and expenses decreased on both YoY, mainly due to interest rate cuts over the past year.
Whereas, non-interest income, on the other hand, increased by 15% YoY mainly on the back of Fee income which rose by 35% YoY, and Dividend income which
increased by 79% YoY.
Forex income, on the contrary, has worsened by 14% YoY despite improvement in trade volumes, remittances flow, and PKR volatility. The bank booked capital gains of Rs1.86bn, which emanated from a combination of equity and debt investments.
Provisioning expenses for the bank came in at Rs1.15bn during 1HCY21. Overall, there has been a 76% YoY reduction in provisioning, which could be due to
improved outlook on the asset quality following the rebound in economic activity across the country leading to a reversal in general provisioning, a report by Arif Habib Limited cited.
Operating expenses rose by 12% YoY to Rs17.5bn which may be attributable to aggressive business development activities, taking the Cost to Income ratio to 58% vs. 52% in the corresponding period the previous year.
Effective rate clocked in at 39% for 1HFY21 compared to 42% in SPLY.
Overall, despite lower revenues, significantly lower provisions charged, and lower effective tax rate resulted in the bottom-line growth of the bank.
|
Consolidated Financial Results for the half-year ended June 30, 2021 ('000 Rupees) |
|||
|---|---|---|---|
|
|
Jun-21 |
Jun-20 |
% Change |
|
Mark-up/return/interest earned |
45,916,896 |
49,952,669 |
-8.08% |
|
Mark-up/return/interest expensed |
23,935,373 |
26,595,634 |
-10.00% |
|
Net mark-up/interest income |
21,981,523 |
23,357,035 |
-5.89% |
|
Non-mark-up/interest income |
|
|
|
|
Fee and commission income |
4,109,496 |
3,042,353 |
35.08% |
|
Dividend income |
273,215 |
151,903 |
79.86% |
|
Foreign exchange income |
1,721,554 |
2,008,614 |
-14.29% |
|
Gain/(loss) from derivatives |
47,620 |
(61,228) |
-177.77% |
|
Gain / (loss) on sale of securities |
1,862,275 |
1,732,773 |
7.47% |
|
Share of profit from associates |
253,094 |
343,649 |
-26.35% |
|
Other income |
79,958 |
45,556 |
75.52% |
|
Total non-mark-up/interest income |
8,347,212 |
7,263,620 |
14.92% |
|
Total income |
30,328,735 |
30,620,655 |
-0.95% |
|
Non-mark-up/interest expenses |
|
|
|
|
Operating expenses |
17,492,239 |
15,614,254 |
12.03% |
|
Workers’ welfare fund |
229,352 |
275,775 |
-16.83% |
|
Other charges |
18,988 |
42,503 |
-55.33% |
|
Total non-mark-up/interest expenses |
17,740,579 |
15,932,532 |
11.35% |
|
Profit before provisions |
12,588,156 |
14,688,123 |
-14.30% |
|
Provisions and write offs – net |
1,150,382 |
4,788,451 |
-75.98% |
|
Extra-ordinary/ unusual items |
– |
– |
|
|
Profit before taxation |
11,437,774 |
9,899,672 |
15.54% |
|
Taxation |
4,419,720 |
4,121,385 |
7.24% |
|
Profit after taxation |
7,018,054 |
5,778,287 |
21.46% |
|
Earnings per share – basic (rupees) – Restated |
3.94 |
3.25 |
21.23% |
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