Net Interest Income lifts Bank Alfalah’s bottom line by 18.6% YoY in CY19

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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Posted on: 2020-02-14T11:04:00+05:00

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