Higher effective tax rate drags down ABL's net profits by 20%

MG News | April 25, 2019 at 01:06 PM GMT+05:00

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April 25, 2019 (MLN): Allied Bank Limited (ABL) has reported net earnings of Rs.3 billion (EPS: Rs. 2.7) for the quarter ended March 31, 2019, which is about 19.5% lower than the earnings of Rs. 3.8 billion recorded in the same quarter last year.

During 1QCY19, ABL's net interest income grew by 19.6% primarily due to increase in key policy rates between March 2018 to March 2019. Whereas, net non-interest income dropped by 22% on account of lower capital gains.

Despite 12% increase in operating expenses, the company's profits before tax locked in at Rs 6.4 billion, which was 3.3% higher compared to same quarter last year.

The increase in tax payments due to additional super tax imposed played a major role in dragging down bank's profitability.

Moreover, the Board of Directors of the bank announced an interim cash dividend for the quarter at Rs. 2 per share i.e. 20%.

Profit and Loss Account for the Quarter ended on March 31st 2019 (Rupees in '000)
	Mar-19	Mar-18	% Change
Mark-up/return/interest earned	24,344,612	15,674,572	55.31%
Mark-up/return/interest expensed	14,758,771	7,661,576	92.63%
Net mark-up/interest income	9,585,841	8,012,996	19.63%
NON MARK-UP/INTEREST INCOME
Fee, commission and brokerage income	1,532,528	1,306,130	17.33%
Dividend income	429,389	549,576	-21.87%
Income from dealing in foreign currencies	630,434	271,769	131.97%
Gain/(loss) on sale of securities - net	77,373	1,400,499	-94.48%
Other income	94,046	31,253	200.92%
Total non mark-up/interest income	2,763,770	3,559,227	-22.35%
Total Income	12,349,611	11,572,223	6.72%
NON MARK-UP/INTEREST EXPENSES
Operating expenses	6,007,698	5,337,024	12.57%
Workers welfare fund	134,726	131,219	2.67%
Other charges	30,044	94,195	-68.10%
Total non mark-up/interest expenses	6,172,468	5,562,438	10.97%
Profit before provisions	6,177,143	6,009,785	2.78%
Net reversal against provisions and write offs	203,754	429,875	-52.60%
Extra ordinary / Unusual items	-	265,226
Profit before taxation	6,380,897	6,174,434	3.34%
Taxation	3,286,923	2,330,192	41.06%
Profit after taxation	3,093,974	3,844,242	-19.52%
Earnings per share - Basic and Diluted (in Rupees)	2.70	3.36	-19.64%

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