Karachi, February 1, 2024 – Bank Alfalah, a leading financial institution, announced an impressive 98% surge in annual profit after tax on Thursday.
The unconsolidated financial results submitted to the Pakistan Stock Exchange (PSX) revealed a substantial increase in profit, with the bank posting Rs 36.46 billion for the year 2023 compared to Rs 18.21 billion in the preceding year.
This remarkable growth translated into earnings per share (EPS) of Rs 23.12 for the year 2023, a significant rise from Rs 10.27 in the previous year. The board of directors convened on February 1, 2024, in Abu Dhabi, recommending a final cash dividend for the year ended December 31, 2023, at Rs 5 per share, constituting 50 percent. This is in addition to the interim cash dividend of Rs 3 per share, amounting to 30 percent, which had already been paid.
While Bank Alfalah celebrated this substantial growth, the fourth quarter results fell slightly below industry expectations, according to analysis by Topline Research. This discrepancy was primarily attributed to a higher-than-expected tax expense.
The effective tax rate for the bank in the fourth quarter of 2023 was reported at 66%, compared to 51% in the same quarter of 2022 and 49% in the third quarter of 2023. For the full year 2023, the effective tax rate stood at 54%.
Analysts from Topline Research suggested that the elevated tax expense in the fourth quarter of 2023 might be linked to the implementation of a 40% windfall levy tax on foreign exchange (FX) income for the years 2021 and 2022.
Bank Alfalah’s robust financial performance and significant profit growth underscore its resilience and adaptability in a dynamic economic environment. The bank’s commitment to shareholder value is evident in the generous dividend distribution, providing investors with a favorable return on their investment.
As Bank Alfalah continues to navigate through evolving market conditions, its focus on strategic financial management and prudent decision-making positions it as a key player in the banking sector. The financial community will be closely watching for the bank’s future initiatives and endeavors in light of its impressive annual performance.
