Faysal Bank reports 25% YoY growth in profitability owing to higher NII and capital gains

October 22, 2020 (MLN): Faysal Bank Limited (FABL)’s  net income for the nine months period ended on September 2020 has clocked in at Rs 9 billion compared to the earnings of Rs 7.4 billion reported in the corresponding period last year, depicting a growth of 25% YoY.

This caused the Bank’s earnings per share to settle at Rs 3.64 as opposed to Rs 2.90 in the same period last year.

The growth in bank’s profitability was attributed to healthy 25.6% YoY growth in net interest income (NII). The YoY jump in NII was primarily owing to 3.26% YoY reduction in the bank’s interest expense.

The earnings further strengthened due to capital gains of Rs 1.7 billion this year against the loss of Rs 630 million last year, offsetting some of bank’s net provisioning expenses of Rs 2 billion during the period. As a result, FABL’s total non-interest income surged by 21% YoY.

On the other hand, the bank witnessed a notable decline in Fee Income, dividend income, FX income, income from derivative and Other income by 9.6%, 12%, 28.5%, 40% and 81% YoY respectively, which put a limit to bank’s profitability.

On the expense side, operating costs were up by 16% YoY and provisioning expense have soared over 186% YoY to Rs 2 billion against Rs 727.4 million reported in the same period last year. Moreover, the bank’s cost to income ratio for 9MCY20 settled at 56%.

Lastly, the bank witnessed 2ppts decline in affective tax rate from 41% to 39% during 9MCY20 which further supported bank’s earnings.

Consolidated Profit and Loss account for the nine months ended September 30th, 2020 ('000 Rupees)

 

Sep-20

Sep-19

% Change

Mark-up/return/interest earned

                             44,300,287

          41,268,289

7.35%

Mark-up/return/interest expenses

                             25,274,019

          26,126,239

-3.26%

Net mark-up/interest income

                             19,026,268

          15,142,050

25.65%

Non mark-up/interest income

 

 

 

Fee and commission income

                                2,727,888

             3,018,383

-9.62%

Dividend income

                                   283,825

                322,998

-12.13%

Foreign exchange income

                                1,559,427

             2,181,212

-28.51%

Income from derivatives

                                      79,693

                132,306

-39.77%

(Loss)/Gain on sale of securities – net

                                1,713,102

              (630,136)

 

Other income

                                      50,045

                268,671

-81.37%

Total non-mark-up/interest income

                                6,413,980

             5,293,434

21.17%

Total income

                             25,440,248

          20,435,484

24.49%

Non mark-up/interest expenses

 

 

 

operating expenses

                             13,967,341

          12,062,758

15.79%

Workers welfare fund

                                   195,891

                166,247

17.83%

Other charges

                                   106,223

                   29,902

255.24%

Total non-mark-up/interest expenses

                             14,269,455

          12,258,907

16.40%

Profit before provisions

                             11,170,793

             8,176,577

36.62%

Provision and write-offs -net

                                2,081,759

                727,425

186.18%

Extraordinary/unusual items

                                               –  

                            –  

 

Profit before taxation

                                9,089,034

             7,449,152

22.01%

Taxation

                                3,566,235

             3,046,735

17.05%

Profit after taxation

                                5,522,799

             4,402,417

25.45%

Basic and diluted earnings per share (Rupees)

                                          3.64

                       2.90

25.52%

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Posted on: 2020-10-22T15:04:00+05:00

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