KARACHI: Bank Alfalah Limited on Monday declared Rs10.48 billion as after tax profit for nine months period ended September 30, 2021 as compared with Rs8.33 billion in the corresponding period of the last year, showing an increase of 26 per cent.
The bank declared earnings per share of Rs5.9 for the period under review as compared with Rs4.69 EPS in the same period of the last year.
Net interest income (NII) remained flat on YoY basis in January – September 2021 with solid deposit growth offsetting the impact of reduction in the benchmark rate by the Central Bank to support businesses during the pandemic.
Non-markup income stood at Rs11.589 billion, up by 15.6 per cent. This is mainly attributable to the increase in fee income (25 per cent YoY), dividend income (65 per cent YoY) and gain on derivatives.
Growth in fee income was on the back of exceptional home remittance and trade flows, combined credit and debit card spending, and strong growth in auto and home lending.
Administrative expense during the nine months increased by 13.7 per cent YoY. Branch network expansion, with the addition of 19 branches during the year, marketing campaigns to support RDA and home remittance, and investment in technology led to an increase in costs.
It is worth highlighting Bank Alfalah ranks amongst the top 5 banks in the Roshan Digital Account (RDA) space, with more than 10 per cent market share, also it is among the top three home remittance processing banks in the country under PRI initiative. Resultantly, cost to income ratio of the Bank surge to 58.5 per cent in the nine-month period ended September 30, 2021 from 52.6 per cent in the same period of the last year.
During the first nine months of the current financial year, the bank booked provisions of Rs1.419 billion which include subjective downgrades. The Bank’s non-performing loans ratio improved to 3.7 per cent as compared to 4.3 per cent as at December 31, 2020, while the Non-Performing Loan (NPL) coverage ratio is 101 per cent.
The Bank’s deposits closed at Rs 1.036 trillion at the end of Q3CY21, with YoY growth of 26.3 per cent compared to Q3’20. The increase was mainly due to the strong growth of 23.3 per cent in current accounts, which clocked in at Rs464.980 billion at quarter end. CA mix was recorded at 44.9 per cent.
The bank’s advances book grew by 28.9 per cent YoY compared to September 2020. Part of this growth is government backed schemes for economic relief. At period end, the Bank’s gross advances to deposits ratio stood at 64.8 per cent, above the 50 per cent mark on which higher income tax rate becomes applicable.