Bank Alfalah posts impressive half-year results, with profit before tax at Rs10.008 billion

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KARACHI: The Board of Directors of Bank Alfalah in their meeting held in Abu Dhabi on
26 August 2018, approved the Bank’s unaudited condensed interim financial statements for the quarter and half year ended June 30, 2018.

The Bank’s Profit before Taxation for the six months period ended June 30, 2018 was recorded at Rs10.008 billion, as against Rs8.470 billion, for the corresponding period last year, improving by 18 per cent. Profit after taxation for the period was reported at Rs6.039 billion, improving by 24 per cent against the corresponding period last year, which resulted in earning per share being reported at Rs3.75 for the period.

Net Interest Income (NII) for the period was reported at Rs15.356 billion, improving by 2 per cent year on year. Volumetric growth in advances and average current account volumes and improvement in overall spreads has resulted in NII levels being maintained, despite a notable reduction of income from PIBs.

The Bank’s Non-Interest Income improved impressively by 8 per cent to end at Rs5.765 billion. Core Fee and Commission improved by 3 per cent year on year, whereas foreign exchange income, as well as dividend income, also contributed to the overall growth, improving by 89 per cent and 63 per cent respectively.

Administrative Expenses were recorded at Rs11.676 billion, ending 2per centt lower as compared to prior period, despite certain non-recurring expenses affecting both periods. The Bank focus remains on monitoring the key cost control initiatives. Total non-mark-up expenses reduced by 3 percent, mainly due to the reversal of provision booked in earlier years against funds blocked in the Bank’s Nostro Account in the US, with the case being successfully settled in favor of the Bank.

At June 30, 2018, the Bank’s coverage ratio stands at 91 percent, while the NPL ratio stands at 3.4 per cent. Net reversals against advances improved from Rs. 267 million for the half year ended June 2017 to Rs496 million for the current period, mainly on account of improved recoveries, which were reported at Rs1,355 million for June 2018, as against Rs1,136 million for the corresponding half year period.

With a strong focus on improving the deposit mix, the Bank’s CA has increased by Rs. 39 Billion to Rs307 Billion, representing an increase of 15 per cent.

The Bank’s first ever additional Tier-1 Capital was issued in the current period, in the form of listed, perpetual, unsecured, subordinated, non-cumulative and contingent convertible debt instruments. With this issue, the Bank’s additional Tier-1 capital has improved, and the proceeds from the issue are intended to be utilized towards further enhancement of the bank’s business operations.

The Board of Directors declared an interim cash dividend of 10 per cent as well as bonus shares in proportion of 10 shares for every 100 shares held.