Bank Alfalah – profit before tax up by 16%. The Board of Directors of Bank Alfalah Limited in its meeting held on October 18, 2019, in Abu Dhabi, approved the Bank’s unaudited interim financial statements for the period ended September 30, 2019.
The Bank’s pre-tax profits grew by 16% from a year ago, amidst challenging operating environment.
The Bank earned post-tax profit of Rs 9.242 Bn or Rs. 5.20 per share, up from a profit of Rs. 8.629 Bn or Rs. 4.87 per share despite Super Tax charge levied for 2017 through the mini budget in 2019.
Revenue was up by 29% from a year earlier. Higher spreads along with improved average deposits, rising average advances and effective balance sheet management have contributed to a strong rise in net interest income. Fee and commission income stood 12% higher than same period last year. Gain realized on government securities last year and bearish stock market sentiments during the first half of 2019 are the reasons behind lower capital gains and impairment charge.
Administrative expenses increased by 21% against the corresponding reporting period. Main factors behind this are technology, marketing, deposit protection insurance which is a new levy, new initiatives like branch openings along with overall impact of inflationary adjustments and PKR devaluation. The cost to income ratio of the Bank has improved to 53% from 56% for the same period last year, as a testament to Bank’s focus on cost control.
The Bank continued its focus on increasing no cost deposits with CASA mix improved to 80% as at Sep 30, 2019 compared to 77% as at Dec 31, 2018.
Credit performance remained strong across businesses. The bank’s gross advances were reported at Rs. 490.664 billion, down by 5% being seasonal impact. Alongside, we continue to optimize our usage of capital and liquidity across the Bank.
At September end, the bank remains adequately capitalized with CAR at 16.87%. Commenting on the Bank’s performance over the quarter, Nauman Ansari, CEO, Bank Alfalah said, “Although, the importance of the branch in attracting and retaining customers would remain, however, the retail banking industry is fast embracing a mobile-centric customer experience. Bank Alfalah’s investment in both, branches and digital technologies, has increased meaningfully due to consumers’ constantly evolving demands.”