Bank Alfalah’s net profits decline by 9% YoY due to hefty provisions

August 26, 2020 (MLN): Bank Alfalah Limited (BAFL) has announced its financial results for the half-year ended on June 30, 2020 wherein the bank has reported a profit after tax of Rs 5.778 billion i.e. around 9 % lower than net profits of Rs 6.316 billion in the same period last year.

This has translated into earnings per share which clocked in at Rs 3.25 against Rs 3.56 reported in the aforementioned period.

The decline in the bank’s profitability was mainly attributable to hefty provisioning charges.

The bank’s net interest income went up by 7.81% YoY to stand at Rs 23 billion in 1HCY20 on a back of compression in deposits cost in response to policy rate decline, as per the research of Aba Ali Habib.

During the period under review, despite the decline in fee income due to lower trade activities, non-funded income showed a stellar growth of 40% YoY on an account of a substantial increase of 59% in FX income capital gains of Rs 1.73 billion in 1HCY20 along with a two-fold increase in the share of profits from associates.

The major highlight is colossal provisioning charges which increased by around 4.88x YoY from Rs 979 million to Rs 4.788 billion when compared to the prior year, hurting the financial stability of the bank. 

Consolidated Financial Results for the half-year ended June 30, 2020 ('000 Rupees)

 

Jun-20

Jun-19

% Change

Mark-up/return/interest earned

 49,952,669

 41,646,036

19.95%

Mark-up/return/interest expensed

 26,595,634

 19,980,873

33.11%

Net mark-up/interest income

 23,357,035

 21,665,163

7.81%

Non-mark-up/interest income

 

 

 

Fee and commission income

 3,042,353

 3,549,097

-14.28%

Dividend income

 151,903

 169,777

-10.53%

Foreign exchange income

 2,008,614

 1,263,768

58.94%

Gain/(loss) from derivatives

 (61,228)

 (12,892)

374.93%

Gain /(loss) on sale of securities

 1,732,773

 (63,094)

Share of profit from associates

 343,649

 159,068

116.04%

Other income

 45,556

 133,281

-65.82%

Total non-mark-up/interest income

 7,263,620

 5,199,005

39.71%

Total income

 30,620,655

 26,864,168

13.98%

Non-mark-up/interest expenses

 

 

 

Operating expenses

 15,614,254

 13,940,596

12.01%

Workers welfare fund

 275,775

 255,384

7.98%

Other charges

 42,503

 109,292

-61.11%

Total non-mark-up/interest expenses

 15,932,532

 14,305,272

11.38%

Profit before provisions

 14,688,123

 12,558,896

16.95%

Provisions and write offs – net

 4,788,451

 979,828

388.70%

Extra-ordinary/ unusual items

 –  

 –   

 

Profit before taxation

 9,899,672

 11,579,068

-14.50%

Taxation

 4,121,385

 5,262,665

-21.69%

Profit after taxation

 5,778,287

 6,316,403

-8.52%

Earnings per share – basic (rupees) – Restated

 3.25

 3.56

-8.71%

 

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Posted on: 2020-08-26T10:24:00+05:00

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