Higher effective tax rate drags down ABL's net profits by 20%
By MG News | April 25, 2019 at 01:06 PM GMT+05:00
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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