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Bank of Khyber reports stellar profit surge in 2023, declares dividend & bonus shares

Bank of Khyber reports stellar profit surge in 2023
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March 09, 2024 (MLN): The Bank of Khyber (PSX: BOK) has experienced a robust boost in its earnings in 2023, reporting a profit after tax of Rs3.48 billion [EPS: Rs3.16], compared to Rs454.86 million [EPS: Rs0.41] profit recorded in the Same Period Last Year (SPLY).

To reward shareholders for this remarkable performance, the bank’s Board of Directors (BoD) has declared a final cash dividend of Rs1.5 per share.

The board has further recommended to issue Bonus Shares for the year ended 2023 in the proportion of 05 ordinary share(s) for every 100 ordinary shares held i.e. 5%.

Going by the income statement, the bank witnessed a spike of 94.34% in its net interest income (NII) to stand at Rs13.89bn, compared to Rs7.15bn in 2022.

The growth in NII is due to a jump in interest-earning (Rs59.07bn), up by 46.79% YoY on account of higher interest rates observed in 2023.

Similarly, the bank’s total non-markup income rose 52.32% YoY to Rs2.11bn, taking the total income to an all-time high of Rs16bn, against the Rs8.53bn recorded in 2022.

The non-markup income improved due to a higher foreign exchange income as the economic situation stabilized in the second half of 2023 under the caretaker setup.

With higher income flowing in through expanded banking operations, BOK also had to bear higher non-markup expenses, which clocked in at Rs8.59bn as compared to Rs6.71bn om 2023, depicting a rise of 28.07% YoY.

The rise in the overall provisioning stood at Rs705.09m in 2023, around 22% YoY lower than the provision expense recorded in 2022.

On the tax front, the BOK paid Rs3.22bn in 2023, massively higher than the tax expenditure of Rs465.02m reported in 2022.

Chairman’s Review

The year 2023 was marked by global economic challenges, including slow growth, inflationary pressures, and geopolitical tensions.

In Pakistan, the economic landscape was further complicated by political uncertainty, tight monetary policies, and elevated inflation rates, exacerbated by global economic conditions.

Despite these challenges, the Bank of Khyber remained steadfast in its commitment to delivering innovative and value-added financial products and services in both Conventional and Islamic banking sectors.

Future Outlook

The Bank being watchful of the economic conditions would focus on maintaining the growth momentum and asset quality.

The cornerstone of the Bank’s philosophy would remain on improving service quality standards and providing state-of-the-art banking services through leveraging technology and trained human resources.

Efforts are also underway to target new market segments and to improve efficiency and productivity in the Bank’s overall performance.

BOK further stated that emphasis will be placed on increasing advances in all segments of the economy with a special focus on salary loans to public sector employees, SME, and the agriculture sector to improve the Bank’s ADR and profitability.

On the asset side, the Bank intends to diversify its financing portfolio by focusing on lending to the good quality private sector for fresh loans with the potential of ancillary business and trade finance opportunities.

Profit and Loss Account for the year ended on December 31 2023 (Rupees in '000)
  Dec-23 Dec-22 % Change
Mark-up/return/interest earned 59,070,281 40,242,025 46.79%
Mark-up/return/interest expensed 45,177,649 33,093,339 36.52%
Net mark-up/return/interest income 13,892,632 7,148,686 94.34%
NON-MARK-UP/INTEREST INCOME      
Fee and commission income 548,510 546,017  
Dividend income 11,101 13,427 -17.32%
Share of profit of associate 9 917 -99.02%
Foreign exchange income 1,457,933 660,339 120.79%
Income/(loss) from derivatives     #DIV/0!
(Loss)/ gain on securities (70,591) 7,530
Other income 161,989 156,336 3.62%
Total non-mark-up/interest income 2,108,951 1,384,566 52.32%
Total Income 16,001,583 8,533,252 87.52%
NON-MARK-UP/INTEREST EXPENSES      
Operating expenses 8,560,349 6,650,086 28.73%
Worker's welfare fund
Other charges 34,562 61,144 -43.47%
Total non mark-up/interest expenses 8,594,911 6,711,230 28.07%
Profit Before Provisions 7,406,672 1,822,022 306.51%
Provisions and write-offs- net 705,091 902,137 -21.84%
Extraordinary/ unusual items  
Profit before taxation 6,701,581 919,885 628.52%
Taxation (3,220,304) (465,021) 592.51%
Profit after taxation 3,481,277 454,864 665.34%
Earnings per share – Basic and Diluted (in Rupees) 3.16 0.41

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Posted on: 2024-03-09T13:39:47+05:00