KARACHI: Bank Alfalah Limited has reported a significant 19.58 percent increase in its annual profit for the calendar year 2019, driven by a substantial rise in mark-up income. According to the financial results released on Friday, the bank declared an after-tax profit of PKR 12.7 billion, compared to PKR 10.62 billion in the preceding year.
The growth in profitability is primarily attributed to a robust increase in interest income. Bank Alfalah’s interest income surged by 55 percent, reaching PKR 92.48 billion in 2019, up from PKR 59.67 billion in the previous year. This impressive rise in interest income was a key factor behind the bank’s strong financial performance, reflecting effective management of its interest-earning assets and an improved interest rate environment.
Despite the significant growth in interest income, the bank’s net markup income also showed a notable increase. Net markup income, which represents the difference between the interest earned on loans and the interest paid on deposits, rose to PKR 44.85 billion in 2019, compared to PKR 31.92 billion in the previous year. This 40.5 percent increase indicates enhanced profitability from the bank’s core lending activities.
The bank’s earnings per share (EPS) also saw an upward trajectory, with a reported EPS of PKR 7.15 for 2019, compared to PKR 5.98 in the previous year. The improved EPS reflects the bank’s ability to generate higher returns for its shareholders, underscoring the effectiveness of its growth strategy and prudent risk management practices.
However, not all income streams experienced growth. The bank’s total non-markup income remained relatively flat at PKR 10.39 billion in 2019, slightly down from PKR 10.43 billion in the previous year. This category includes fees, commissions, and other non-interest-related income, which did not see significant variation year-on-year.
Overall, the total income of the bank rose to PKR 55.25 billion in 2019, up from PKR 42.35 billion in the preceding year, reflecting a robust overall financial performance. Nevertheless, the bank’s operating expenses increased to PKR 29 billion in 2019, compared to PKR 24.31 billion in the previous year. This rise in expenses could be attributed to various factors, including investments in technology, branch expansion, and regulatory compliance.
In terms of taxation, Bank Alfalah contributed PKR 9.68 billion in income tax in 2019, up from PKR 6.99 billion in the previous year. The higher tax contribution reflects the increase in taxable profits, aligning with the bank’s overall growth in financial performance.
The substantial growth in profit and interest income, alongside the rise in operating expenses and tax contributions, highlights Bank Alfalah’s strong position in the financial sector, driven by effective management and a favorable economic environment.