April 30, 2020 (MLN): BankIslami Pakistan Limited (BIPL) continued its momentum of growth in 2020 as its net profits during 1QCY20 has surged by 55.76% YoY to Rs 311.64 million against the profits of Rs 200 million in the similar quarter of last year.
The earning per share of the bank also rose from Rs 0.199 to Rs 0.286, depicting a growth of 433% YoY.
The quarterly report of the bank reveals that during the quarter, the bank’s Assets and Deposits rose by 32% and 31% as compared to its position in March 2019. Increase in Deposits mainly ensued on the back of aggressive deposit mobilization strategy adopted by the Bank, while Asset base of the BIPL thrived through effective channelizing of funds towards Islamic Financing and Shariah Compliant Treasury Placements.
There was an increase in NPFs in March 2020 as opposed to March 2019 due to which the infection ratio of the Bank inched up to 10.9% at the end of March 2020 as compared to 10.0% in March 2019. The Bank made accelerated provisioning during the quarter under review due to which the coverage ratio (including general provisions) of the Bank improved to 86.6% as of March 31, 2020, despite an increase in NPFs, the report stated.
The Net spread earned during the quarter improved by 47% as a result of an increase in a Balance Sheet size of the Bank and repricing impact of rise in benchmark rates during the latter half of 2019. However, it is pertinent to mention that, post 1st Quarter of 2020, the top line of the Bank is expected to witness compression on account of strategy adapted by the apex authority to gradually decline benchmark rates to enable the country to sustain prevailing economic challenges posed by COVID-19.
During the period, the bank also witnessed an increase in Bank’s other income by 113% owing to improved FX income, increase in fee, commission and brokerage income by 50% and booking of capital gains on sale of securities, all of which further helped in uplifting BIPL’s profitability.
Furthermore, despite witnessing a rise in operating expenses of the bank by 22.83%, the cost to income ratio reduced significantly from 67% in IQCY19 to 54% in 1QCY20.
|
Profit and loss account for the Quarter ended March 31st, 2020 ('000 Rupees) |
|||
|---|---|---|---|
|
|
Mar-20 |
Mar-19 |
% Change |
|
Profit/return earned |
7,971,768 |
4,637,336 |
71.90% |
|
Profit/return expensed |
4,619,047 |
2,357,081 |
95.96% |
|
Net Profit/return |
3,352,721 |
2,280,255 |
47.03% |
|
OTHER INCOME |
|
|
|
|
Fee, commission and brokerage income |
271,906 |
181,048 |
50.18% |
|
Dividend income |
2,350 |
2,989 |
-21.38% |
|
Foreign exchange income |
114,127 |
25,948 |
339.83% |
|
Income from shariah compliant forward and future contracts |
– |
– |
|
|
Gain on sale of securities |
105,286 |
(4,145) |
|
|
Other income |
18,282 |
34,089 |
-46.37% |
|
Total other income |
511,951 |
239,929 |
113.38% |
|
Total income |
3,864,672 |
2,520,184 |
53.35% |
|
OTHER EXPENSES |
|
|
|
|
Operating expenses |
2,088,584 |
1,700,391 |
22.83% |
|
Workers Welfare Fund |
12,213 |
8,057 |
51.58% |
|
Other charges |
137 |
36,150 |
-99.62% |
|
Total other expenses |
2,100,934 |
1,744,598 |
20.43% |
|
|
|
|
|
|
Profit before provisions |
1,763,738 |
775,586 |
127.41% |
|
Provision/ (reversal of provision) and write offs-net |
1,126,928 |
441,312 |
155.36% |
|
(Loss)/profit for the period from BIPL Securities Limited – net of tax |
– |
(9,121) |
-100.00% |
|
Share of profit from associate before taxation |
(60,653) |
– |
|
|
Profit before taxation |
576,157 |
325,153 |
77.20% |
|
Taxation |
264,508 |
125,070 |
111.49% |
|
Profit after taxation |
311,649 |
200,083 |
55.76% |
|
Basic and diluted earnings per share (Rupees) |
0.2859 |
0.1995 |
43.31% |
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