As others thrive, Soneri Bank posts meagre profits

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KARACHI: The Board of Directors of Soneri Bank Limited on Thursday approved the annual audited accounts for the year ended 31 December 2019.

The board recommended a final cash dividend of 10pc which is the equivalent of Re1 per share for the financial year ended.

Soneri Bank Limited posted a profit before tax (PBT) of Rs3.246 billion and profit after tax (PAT) of Rs1.906 billion for the half-year ended 31st December 2019, as compared to Rs2.904 billion and Rs1.783 billion, respectively, in the same period last year. This marks a 11.78pc increase in PBT and 6.86pc increase in PAT.

The EPS for the period clocked in at Rs1.7289 as opposed to Rs1.6179 over the same period last year. If compared to other banks, Soneri’s performance has been underwhelming. Despite EPS increasing by 6.86pc, other banks have fared better with Askari Bank, Faysal Bank, and Meezan Bank providing an EPS of Rs5.58, Rs3.96, and Rs12 respectively.

Faizan Kamran, an investment analyst at Arif Habib Limited, said, “While earnings have clocked in approximately 7pc higher YoY, the bank has seen underperformance relative to the industry as a whole. Himalayan cost/income levels (71pc for CY19 compared to 55pc for the industry) have been the major culprit behind the stressed performance of the bank.”

He added, “High cost of funds due to low exposure to current accounts has also limited the bank’s expansion in net interest margins.”

Considering the change in policy rates, the interest earned increased by 19.59pc from Rs21.599 billion to Rs38.790 billion, while interest expense increased by 110.72pc to Rs30.864 billion from Rs14.646 billion, thus helping the net markup/interest income increase by 14pc to Rs7.926 billion.

As for non-markup/ interest income, the bank witnessed a 12.24pc decline. Overall, total income increased by 5.62pc to Rs10.787 billion compared to Rs110.213 billion in the same period last year.

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