October 28, 2020 (MLN): Bank of Punjab (BOP) has disclosed a mere 6.5% YoY decline in nine months’ profits to Rs 5.7 billion compared to Rs 6 billion reaped in the same period last year.
This reflected in bank’s earnings per share which dropped by a same percent from Rs 2.33 to Rs 2.18.
The decline in profitability was attributed to lower Net Interest Income (NII) which dropped by 14% YoY to Rs 17 billion due to higher interest expense in low interest rate environment. However, 76.4x increase in capital gains to Rs 8.3 billion limited the downside.
The decline in earnings would have been significant without a notable increase in capital as its operating expenses surged by 15.7% YoY and other charges jumped by 186.5% YoY.
The total non-interest income of the bank posted a surge of 310% YoY during 9MCY20 primarily owing to hefty capital gains along with 7% and 22% YoY increase in Fee and commission income and dividend income respectively.
Moreover, the bank also booked hefty provisioning of Rs 5.8 billion, up by 302% YoY from Rs 1.45 billion in the same period last year.
As a result of 26.4% YoY higher total income, the bank’s cost to income ratio improved to 45% compared to 47% in 9MCY19.
Lastly, the bank’s effective tax rate stood at 42% compared to 41% in the same period of CY19.
Profit and Loss Account for the Nine months ended September 30th, 2020 (Rupees in '000) |
|||
---|---|---|---|
|
Sep-20 |
Sep-19 |
5% Change |
Mark-up/return/interest earned |
66,475,776 |
57,187,813 |
16.24% |
Mark-up/return/interest expensed |
49,358,427 |
37,302,709 |
32.32% |
Net mark-up/return/interest income |
17,117,349 |
19,885,104 |
-13.92% |
NON-MARK-UP/INTEREST INCOME |
|
|
|
Fee and commission income |
2,809,920 |
2,622,496 |
7.15% |
Dividend income |
92,007 |
75,221 |
22.32% |
Foreign exchange (loss) income |
237,370 |
(32,377) |
– |
Income/(loss) from derivatives |
– |
– |
|
Gain / (loss) on securities – net |
8,300,254 |
108,523 |
7548.38% |
Other income-net |
145,319 |
47,580 |
205.42% |
Total non-mark-up/interest income |
11,584,870 |
2,821,443 |
310.60% |
Total Income |
28,702,219 |
22,706,547 |
26.41% |
NON-MARK-UP/INTEREST EXPENSES |
|
|
|
Operating expenses |
12,314,041 |
10,636,686 |
15.77% |
Workers welfare fund |
268,981 |
– |
|
Other charges |
303,949 |
106,067 |
186.56% |
Total non-mark-up/interest expenses |
12,886,971 |
10,742,753 |
19.96% |
Profit before provisions |
15,815,248 |
11,963,794 |
32.19% |
Provisions and write offs – net |
5,862,016 |
1,455,918 |
302.63% |
Extra ordinary/unusual items |
– |
– |
– |
Profit before taxation |
9,953,232 |
10,507,876 |
-5.28% |
Taxation |
4,183,947 |
4,335,128 |
-3.49% |
Profit after taxation |
5,769,285 |
6,172,748 |
-6.54% |
Earnings per share – Basic and Diluted (in Rupees) |
2.18 |
2.33 |
-6.44% |
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