BAHL: Higher NII, Provision reversal boost profitability

April 28, 2021 (MLN): Bank Al Habib Limited announced its financial results today for the 1QCY21, where it reported net profits of Rs4.63billion (EPS: Rs4.17), exhibiting a 63% YoY jump compared to the net profits of Rs2.84bn (EPS: Rs2.56) in the corresponding period last year.

The deviation in the profits came on the back of higher Net Interest Income (NII), provision reversals, and lower effective tax rate.

During the quarter Bank’s NII jumped by 16.5% YoY, mainly due to lower interest expenses. while non-markup income surged by 42% YoY mainly on the back of a recovery in Fee & Commission income, FX income, dividend income, and share of profits from associates by 40.5%, 73.5%, 28.9% and 4.6x YoY respectively.

Surprisingly, the Bank booked a Provisioning reversal of Rs245.55mn during 3MCY21 compared to the provisioning expense of Rs341.83mn in the corresponding quarter last year. The operating expenses of BAHL increased by 12.57% to Rs9.36bn. Meanwhile, worker’s welfare fund surged by 32.40% during 1QCY21.

On the tax front, the effective taxation of the Bank improved to 35% compared to 40% in SPLY, which further improved BAHL’s bottom line.

The cost to income ratio of the bank clocked in at 58% against 62% in 1QCY20.

Consolidated Profit and Loss Account for the three months period ended March 31, 2021 (Rupees in '000)

 

Mar-21

Mar-20

% Change

Mark-up/return/interest earned

25,942,248

32,368,221

-19.85%

Mark-up/return/interest expensed

 (12,829,815)

 (21,116,692)

-39.24%

Net mark-up/return/interest income

13,112,433

11,251,529

16.54%

NON MARK-UP/INTEREST INCOME

   

Fee and commision income

2,322,460

1,652,551

40.54%

Dividend income

61,183

47,478

28.87%

Foreign exchange income

649,786

374,322

73.59%

Income/(loss) from derivatives

                                      –  

                                      –  

 

Gain/ (Loss) on securities – net

3,930

17

23017.4%

Share of profit from associates

47,895

10,423

359.51%

Other income

163,477

204,208

-19.95%

Total non-mark-up/interest income

3,248,731

2,288,999

41.93%

Total Income

16,361,164

13,540,528

20.83%

NON-MARK-UP/INTEREST EXPENSES

   

Operating expenses

(9,360,216)

 (8,314,951)

12.57%

Workers welfare fund

(144,771)

(109,340)

32.40%

Other charges

(783)

(248)

215.73%

Total non mark-up/interest expenses

                     (9,505,770)

                     (8,424,539)

12.83%

Profit before provisions

 6,855,394

5,115,989

34.00%

Reversals (Provisions) and write offs – net

245,444

 (341,827)

 

Extra-ordinary / unusual items

                                      –  

                                      –  

 

Profit before taxation

7,100,838

4,774,162

48.73%

Taxation

(2,467,793)

(1,933,032)

27.66%

Profit after taxation

 4,633,045

2,841,130

63.07%

Earnings per share – Basic and Diluted (in Rupees)

4.17

2.56

62.89%

 

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Posted on: 2021-04-28T23:50:00+05:00

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