Bank Alfalah Profit before Tax up by 21 pct in First QuarterBank Alfalah Profit before Tax up by 21 pct in First Quarter

Bank Alfalah Profit before Tax up by 21 pct in First Quarter

ABU DHABI, 25 April 2019: The Board of Directors of Bank Alfalah in their meeting held in Abu Dhabi on 25 April 2019, approved the Bank’s unaudited interim financial statements for the period ended March 31, 2019.

Profit before taxation stands at Rs. 6.134 billion for the quarter ended March 31, up from Rs. 5.075 billion rupees a year ago, indicating an impressive growth of 21%. The Bank’s profit after taxation is Rs. 3.122 billion slightly lower due to higher taxation as a result of Super Tax charge for 2017 levied through the mini budget. The Earning Per Share (EPS) was recorded at Rs. 1.76 (Mar 2018: Rs. 1.85).

The Bank has strongly positioned itself in this rising interest rate environment. Total revenue for the quarter was reported at Rs. 13.450 billion compared to Rs. 10.364 billion from the corresponding period last year, improving by 30%. The growth in revenue was led primarily by higher spreads in line with policy rate increases as well as higher average volumes. Fee income went up by 11%, while there is a swing in capital gain line due to gain realised on government securities last year and bearish stock market sentiments during the first quarter of 2019. Consequently, overall non-fund based income is low versus last year.

Administrative expenses increased by 16% against the previous reporting period. Main factors behind this are deposit protection insurance which is a new levy, customer promotion costs to tap unbanked segment, overall impact on cost due to inflationary adjustments and PKR devaluation. The annual increment and performance bonus cycle as well as new hires over the year is one of the reasons attributable to increase. This is manifestation of Bank’s endorsement to invest in its human resource.

Asset quality was stable, with gross non-performing loans as a percentage of total loans at 3.9% by the end of March, marginally higher than December end due to decrease in the advances portfolio. Absolute non-performing loans are lower than December 2018 level.

The shareholders’ equity of the bank increased by 1.7%. This is post payment of dividend approved by the shareholder in the AGM held in March 2019. At close of first quarter, the bank remains very adequately capitalized with CAR at 16.18%.

The bank’s request for sale of Afghanistan operations had been turned down by the central bank in Afghanistan and resultantly results of the operations have been presented as ‘continuing operations’ in the financial statements as required under the accounting standards.

Commenting on the Bank’s performance over the quarter, Nauman Ansari, CEO, Bank Alfalah said, “Despite the challenging economic conditions, the bank’s strong customer centric model continue to deliver good results and outstanding experience for our customers.”

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