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

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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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Posted on: 2020-04-27T10:30:00+05:00

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