Bank Alfalah announces 21% growth in half year profit

Bank Alfalah announces 21% growth in half year profit

KARACHI: Bank Alfalah Limited on Wednesday announced 21 per cent growth in earnings for the half year ended June 30, 2021.

The net profit of the bank was at Rs7.02 billion for the first half as compared with net profit of Rs5.78 billion in the same half of the last year.

The bank declared Rs3.94 as earnings per share (EPS) for the first half of 2021 as compared with the EPS of Rs3.25 in the same half of the last year.

Analysts at Arif Habib Limited said that massive reductions in provisioning and quarterly rise in interest earned contributed to the profitability during the quarter.

The bank announced a dividend of PKR 2.00/share.

Net Interest Income of the bank settled at PKR 21.9 billion, decreasing 6 per cent YoY during 1HCY21 while rising 13 per cent QoQ. This quarterly growth could be attributed to volumetric growth.

NFI increased 15 per cent YoY mainly on the back of Fee income which rose by 35 per cent YoY and Dividend income which increased by 79 per cent YoY. Quarterly jump was on account of 12 per cent jump in fee income and 50 per cent uptick in FX/derivatives income.

Provisioning expenses for the bank came in at PKR 934 million during 2QCY21 taking total provisioning expenses to PKR 1.15bn during 1HCY21. Overall there has been a 76 per cent YoY reduction in provisioning, which could be due to improved outlook on the asset quality following the rebound in economic activity across the country leading to reversal in general provisioning. However this quarter saw a 4x jump QoQ which was on account of a provisioning charge against an Oil Marketing Company’s exposure as per management.

Operating expenses rose 11 per cent YoY taking CIR to 58 per cent for 1HCY21 against 52 per cent same period last year (SPLY).

Effective tax rate clocked in at 39 per cent for 1HCY21 vis-à-vis 42 per cent SPLY.