FABL’s net income improves by 25% on lower provisioning

MG News | February 23, 2022 at 03:02 PM GMT+05:00

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February 23, 2022 (MLN): Faysal Bank Limited (FABL) has announced its CY21 result, posting consolidated profits of Rs8.35bn (EPS: Rs5.5), up by 25% YoY against the net profit of Rs6.68bn (EPS: Rs4.40) in the calendar year 2020, led by lower provision charges.

The financial result was accompanied by a final cash dividend of Rs10 per share for the year ended December 31, 2021,

During the period under review, the bank’s interest expenses dropped by 10.7% YoY, whereas, interest income came down by 3.7% YoY. As a result, the bank’s net interest income (NII) observed a marginal increase of 5.3% YoY to Rs25.84bn during CY21.

Meanwhile, non-funded income (NFI) of the bank witnessed an increase of around 6.8% YoY to clock in at Rs8.92bn due to a 37% increase in fee and commission income, 13.7% YoY upsurge in foreign exchange income coupled with a 96% YoY jump in other income. capital gains on securities of Rs3.46bn, up by 23.6% YoY during the said period. However, capital gains on securities fell by 83% YoY to Rs291mn, and loss of income derivatives of Rs 25mn during CY21 restricted the bank’s net income.

Notably, the bank witnessed a massive decline of 98% YoY in its provision charges, standing at Rs45mn against the provisions of Rs2.25bn in the last year due to the absence of general provision which the bank charged last year amid the COVID situation, supporting the bank’s financial health.

On the tax front, the effective tax rate stood at 39% from 38.7% in CY20.

Consolidated Profit and Loss account for the year ended December 31st, 2021 ('000 Rupees)
	Dec-21	Dec-20	% Change
Mark-up/return/interest earned	53,872,073	55,925,846	-3.67%
Mark-up/return/interest expenses	28,032,641	31,378,104	-10.66%
Net mark-up/interest income	25,839,432	24,547,742	5.26%
Non-mark-up/interest income
Fee and commission income	5,583,433	4,085,368	36.67%
Dividend income	435,437	281,864	54.48%
Foreign exchange income	2,379,113	2,093,354	13.65%
(loss)/Income from derivatives	(25,176)	48,201	-
Gain on sale of securities	291,070	1,714,254	-83.02%
Other income	252,163	128,865	95.68%
Total non-mark-up/interest income	8,916,040	8,351,906	6.75%
Total income	34,755,472	32,899,648	5.64%
Non-mark-up/interest expenses
operating expenses	20,794,981	19,569,580	6.26%
Worker’s welfare fund	273,650	227,031	20.53%
Other charges	7,682	114,170	-93.27%
Total non-mark-up/interest expenses	21,076,313	19,910,781	5.85%
Share of profit of associates	58,231	156,170	-62.71%
Profit before provisions	13,737,390	13,145,037	4.51%
Provision and write-offs -net	44,969	2,254,301	-98.01%
Extraordinary/unusual items	-	-
Profit before taxation	13,692,421	10,890,736	25.73%
Taxation	5,339,341	4,210,115	26.82%
Profit after taxation	8,353,080	6,680,621	25.03%

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