Bank Alfalah’s net profits deteriorate by 8.6% due to rise in provisions

MG News | April 27, 2020 at 10:30 AM GMT+05:00

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April 27, 2020 (MLN): Bank Alfalah Limited has announced the results for the quarter ended March 31, 2020, which show a Profit after Tax figure of Rs. 2.89 billion (EPS: 1.63), i.e. around 8.6% lower than the figures recorded in the same period of last year.

The Bank’s Net Interest Income showed a mere growth of 5.5%, whereas the total Non-Interest Income depicted a rise of 21%. The substantial rise in the latter was a result of aggressive growth in FX income by 1.2x, as well as an increase in the share of profit from associates by 1.45x.

On the contrary, the total non-interest expenses grew by 19.6% due to the increase in operating expenses by 19.7% and non-core expenses by 27.7x.

The most notable change in value was seen in provisions and write-offs, which depicted a 2.4x increase. According to a report by Arif Habib, this increase was a result of higher credit provisioning as well as impairment charges arising on the bank’s equity portfolio.

Financial Results for the quarter ended March 31, 2020 ('000 Rupees)
	Mar-20	Mar-19	% Change
Mark-up/return/interest earned	25,907,916	20,760,594	24.79%
Mark-up/return/interest expensed	14,127,997	9,597,169	47.21%
Net mark-up/interest income	11,779,919	11,163,425	5.52%
Non-mark-up/interest income
Fee and commission income	1,697,809	1,708,242	-0.61%
Dividend income	87,056	75,786	14.87%
Foreign exchange income	1,055,601	477,970	120.85%
Gain/(loss) from derivatives	(61,236)	3,403
Gain / (loss) on sale of securities	(47,484)	(25,384)	87.06%
Share of profit from associates	107,710	43,933	145.17%
Other income	22,066	82,160	-73.14%
Total non-mark-up/interest income	2,861,522	2,366,110	20.94%
Total income	14,641,441	13,529,535	8.22%
Non-mark-up/interest expenses
Operating expenses	8,094,266	6,759,316	19.75%
Workers welfare fund	110,122	131,022	-15.95%
Other charges	41,090	1,427	2779.47%
Total non-mark-up/interest expenses	8,245,478	6,891,765	19.64%
Profit before provisions	6,395,963	6,637,770	-3.64%
Provisions and write offs - net	1,527,594	446,076	242.45%
Extra-ordinary/ unusual items	-	-
Profit before taxation	4,868,369	6,191,694	-21.37%
Taxation	1,975,606	3,027,502	-34.74%
Profit after taxation	2,892,763	3,164,192	-8.58%
Earnings per share - basic (rupees) - Restated	1.63	1.79	-8.94%

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