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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