Soneri Bank's stronger interest based income leads to a 20% jump in bottom line profits
MG News | August 28, 2018 at 02:47 PM GMT+05:00
Soneri Bank Limited’s profits for the half-year ended on June 30, 2018 have increased by 20.2% as the company reported a profit of close to Rs 965 million, compared to profits of Rs 812 million a year ago as on June 30, 2017.
Interest earned by the bank improved by 8.88% over the year, while the expenses incurred to generate that interest outpaced the growth in interest earned, having grown by close to 12%, thereby generating a net interest income growth of about 3.8% over the year. After taking into account the reversal of provisions, that growth goes up to 6.7%.
Non-interest income, on the other hand, fell for the bank as the company reported a negative growth of 12.48% under this head. While the bank’s income from fees, commissions and brokerage income grew, along with income from dividends and that from its dealings in foreign currencies, the bank’s gains from the sale of securities fell by a significant 65%, causing the bank’s non-interest income to fall from what it earned a year ago. Non-interest expenses, on the other hand, grew by 5.35%.
As a result of the growth in interest income, the bank was able to post a pre-tax profit of Rs 1.624 billion, a 12% growth over the pre-tax profits posted a year ago.
Similarly, profit after taxation grew by 20.22%, leading the company to declare an Earnings per share (EPS) of Rs 0.8853 compared to an EPS of Rs 0.7364 declared last year.
| Profit and Loss account for the half year ended June 30th 2018 ('000 Rupees) | |||
|---|---|---|---|
|
| Jun-18 | Jun-17 | % Change |
| Mark-up/return/interest earned | 9,471,968 | 8,699,378 | 8.88% |
| Mark-up/return/interest expensed | 6,091,594 | 5,442,409 | 11.93% |
| Net mark-up/return/interest income | 3,380,374 | 3,256,969 | 3.79% |
| (Reversal of Provision)/provision against loans and advances - net | (233,616) | 130,141 |
|
| Reversal of provision against diminution in the value of investments - net | - | - |
|
| Bad debts written off directly | - | 12 |
|
| Net mark-up/return/interest income after provisions | 3,613,990 | 3,387,122 | 6.70% |
| Non mark-up/interest income |
|
|
|
| Fee, commission and brokerage income | 778,561 | 693,509 | 12.26% |
| Dividend income | 91,060 | 83,970 | 8.44% |
| Income from dealing in foreign currencies - net | 387,241 | 143,852 | 169.19% |
| Unrealized loss on revaluation of investments classified as held-for-trading - net | (1,568) | (11,774) | -86.68% |
| Gain on sale of securities - net | 298,678 | 868,917 | -65.63% |
| Other income | 15,254 | 14,556 | 4.80% |
| Total non-mark-up/interest income | 1,569,226 | 1,793,030 | -12.48% |
| Non mark-up/interest expense | 5,183,216 | 4,919,846 | 5.35% |
| Administrative expenses | 3,504,898 | 3,414,130 | 2.66% |
| Provision against other assets - net | - | - |
|
| Other charges | 54,053 | 55,742 | -3.03% |
| Total non-mark-up/interest expenses | 3,558,951 | 3,469,872 | 2.57% |
| Profit before taxation | 1,624,265 | 1,449,974 | 12.02% |
| Taxation | 648,283 | 638,119 | 1.59% |
| Profit after taxation | 975,982 | 811,855 | 20.22% |
| Earnings per share - basic and diluted (rupees) | 0.8853 | 0.7364 | 20.22% |
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