LAHORE: Bank Alfalah on Friday announced its earnings today for nine months of the current year 2018 posting a profit of Rs8.8 billion.
On a year-on-year basis, an improvement of 21% was witnessed but on a sequential basis, a quarter-on-quarter (QoQ) downturn of 8% was recorded.
The improvement in profitability was due to improvement in net interest income (NII) and because of improving cost/income whilst lower capital gains and net reversals impacted profitability on a sequential basis, said Arif Habib Research.
The NII of Bank Alfalah was recorded at Rs23.2 billion, growing 5% YoY as the bank’s increase in mark-up income of 2% YoY was accompanied by a fall in interest expense of 1% YoY.
But NII growth on a quarter-on-quarter (QoQ) basis was 1%, which was impressive considering recent rate increases and repricing lag between loans and deposits, noted Arif Habib Research.
Net financial income (NFI) grew by 9% YoY during nine months of the current year because of a healthy rise in foreign income.
However, the NFI plunged 18% QoQ led by 73% lower capital gains and it booked a lower net reversal during the 3rd quarter worth Rs45 million vis-à-vis Rs400 million SPLY owing to lower reversals against NPLs.
However, operating expenses growth remained under control as it fell by 2% YoY during nine months of the current year to touch Rs18 billion compared to Rs18.4 billion in the same period of last year (SPLY).
The operating expenses were controlled courtesy of a fall in admin costs and a reversal booked worth Rs182 million during nine months of current year.
Cost/Income clocked in at 56% for nine months of the current year as opposed to 61% SPLY.
Bank Alfalah announced no dividend for the quarter and recorded earnings per share of Rs4.99 per share.