February 14, 2020 (MLN): Bank Alfalah Limited (BAFL) has announced its financial results for the year ended December 31, 2019. As per results, the bank has posted its consolidated net earnings of Rs 13.03 billion (EPS: 7.35) i.e. 18.6% higher than the same period of last year.
The key reason for the bank’s profitability was higher net interest income, up by 40.52% YoY.
During the period under review, bank’ interest income surged by 55% YoY, whereas, interest expenses also increased by roughly 72% YoY, thereby restricting growth in bank’s net interest income (NII) to 40.52% YoY during CY19.
On the other hand, Non-funded income (NFI) of the bank dropped by 3%YoY due to a massive decline in capital gains (down by 91%YoY). Moreover, operating expenses rose by 18% YoY to stand at RS 29.20 billion whereas tax expense increased 37% YoY in CY19.
Alongside financial results, the board of directors has announced a final cash dividend for the year ended Dec 31, 2019, at Rs 2 per share i.e. 20%. This is in addition to interim cash dividend already paid at Rs 2 per share i.e. 20%.
Other than this, the board of directors, in a meeting, has discussed a prospective opportunity to expand and develop its merchant acquiring business (comprising, inter alia, its POS and online acquiring division) by potentially entering into a joint venture arrangement with, inter alias, Wemsol (Private) Limited.
Consequently, the Board of Directors authorized the Bank to explore the feasibility/viability of entering into a joint venture/arrangement/collaboration with a third party(ies), including approving a draft Memorandum of Understanding to be entered into with Wemsol in this respect.
Furthermore, the Bank has also been authorized to liaise with regulatory authorities, appoint advisors, evaluators and consultants for evaluating the feasibility, including due diligence and valuation, finalizing the structure, along with preparing necessary documents/drafts for the consideration of the Board of Directors.
Consolidated Financial Results for the year ended December 31, 2019 ('000 Rupees) | |||
|---|---|---|---|
| Dec-19 | Dec-18 | % Change |
Mark-up/return/interest earned | 92,489,828 | 59,677,459 | 54.98% |
Mark-up/return/interest expensed | 47,627,878 | 27,751,714 | 71.62% |
Net mark-up/interest income | 44,861,950 | 31,925,745 | 40.52% |
Non mark-up/interest income |
|
|
|
Fee and commission income | 7,153,220 | 6,984,004 | 2.42% |
Dividend income | 339,149 | 357,296 | -5.08% |
Foreign exchange income | 2,826,363 | 2,183,186 | 29.46% |
Gain/(loss) from derivatives | (68,293) | 28,095 | – |
Gain on sale of securities | 84,611 | 949,749 | -91.09% |
Share of profit from associates | 547,198 | 646,093 | -15.31% |
Other income | 180,209 | 216,358 | -16.71% |
Total non-mark-up/interest income | 11,062,457 | 11,364,781 | -2.66% |
Total income | 55,924,407 | 43,290,526 | 29.18% |
Non mark-up/interest expenses |
|
|
|
Operating expenses | 29,203,218 | 24,718,983 | 18.14% |
Workers welfare fund | 507,668 | 396,390 | 28.07% |
Other charges | 269,503 | 7,693 | 3403.22% |
Total non-mark-up/interest expenses | 29,980,389 | 25,123,066 | 19.33% |
Profit before provisions | 25,944,018 | 18,167,460 | 42.80% |
Provisions and write offs – net | 3,028,585 | (16,442) | – |
Extra-ordinary/ unusual items | – | – | – |
Profit before taxation | 22,915,433 | 18,183,902 | 26.02% |
Taxation | 9,883,626 | 7,192,627 | 37.41% |
Profit after taxation | 13,031,807 | 10,991,275 | 18.57% |
Earnings per share – basic (rupees) – Restated | 7.35 | 6.14 | 19.71% |
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