Karachi, February 13, 2024 – Allied Bank Limited (ABL) announced a remarkable surge of 94% in its annual profit for the calendar year 2023, demonstrating robust financial performance amidst dynamic market conditions.
The bank’s annual financial results, shared with the Pakistan Stock Exchange (PSX) on Tuesday, revealed an after-tax profit of Rs 40.68 billion for 2023, compared to Rs 21 billion in the previous year.
This substantial profitability translated into an impressive earnings per share (EPS) of Rs 35.53 for the year, a significant leap from Rs 18.51 in the preceding year. The positive financial outcome reflects the bank’s strategic initiatives and effective management in navigating the evolving banking landscape.
The board of directors convened on February 13, 2024, and recommended a final cash dividend for the year ended December 31, 2023, at Rs 4 per share, constituting 40 percent. This is in addition to the interim dividends already paid at Rs 8 per share, equivalent to 80 percent, further rewarding the shareholders for the bank’s robust performance.
Analysts at Arif Habib Limited attributed the substantial growth in overall earnings primarily to the expansion of total income. The Net Interest Income (NII) of the bank reached Rs 32.3 billion during the fourth quarter of calendar year 2023 (4QCY23), marking a 52 percent YoY increase and a 7 percent QoQ rise. The total NII for CY23 witnessed a remarkable 69 percent YoY surge, reaching Rs 112.9 billion. This growth was fueled by a 66 percent increase in interest earned, while interest expenses rose by 64 percent during CY23.
The Non-Funded Income (NFI) exhibited a robust increase of 73 percent YoY and 47 percent QoQ during 4QCY23, contributing to a total of Rs 25.6 billion for CY23, marking a 19 percent YoY increase. This significant uptick in CY23 can be attributed to higher fee income, foreign exchange (FX) income, and dividend income, which rose by 32 percent, 15 percent, and 15 percent YoY, respectively. However, gains on securities declined by 40 percent YoY during the same period, amounting to Rs 845 million.
Provisioning for the bank stood at Rs 445 million during 4QCY23, depicting a 2 percent YoY increase. This brought the total provisioning to approximately Rs 3 billion during CY23, compared to reversals of Rs 261 million in CY22.
The bank’s operating expenses (OPEX) increased by 6 percent YoY in 4QCY23, reaching Rs 12.4 billion, contributing to a Cost/Income ratio of 30.8 percent in 4QCY23, a significant improvement from 45.3 percent in the same period last year.
The effective tax rate for 4QCY23 was set at 57 percent, a slight increase from the previous quarter’s 50 percent. The effective tax rate for CY23 stood at 52 percent, compared to 55 percent in CY22.
Allied Bank’s stellar financial performance reflects its resilience and agility in navigating the complexities of the banking industry. As the financial landscape continues to evolve, Allied Bank’s strategic focus on income diversification and prudent financial management positions it as a key player in Pakistan’s banking sector. The recommended dividends further underscore the bank’s commitment to delivering value to its shareholders amidst a challenging economic environment.
