KARACHI: Bank Alfalah Limited (BAFL) posted profit-after-tax of Rs10.481 billion for the nine months period ended September 2021, compared with Rs8.33 billion, showing a growth of 26 per cent, an announcement made by the bank on Monday said.
The bank declared earnings per share of Rs5.9 for the period under review, compared with Rs4.69 EPS in the same period of the last year.
The net interest income (NII) remained flat on a year-on-year basis in the nine months of CY21, with solid deposit growth offsetting the impact of reduction in the benchmark rate by the central bank to support businesses during the pandemic.
The non-markup income stood at Rs11.589 billion, up 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 remittances and trade flows, combined credit and debit card spending, and strong growth in auto and home lending.
Administrative expenses during the nine months increased 13.7 per cent YoY. The branch network expansion, with the addition of 19 branches during the year, marketing campaigns to support the Roshan Digital Account (RDA) and home remittances, and investment in technology led to an increase in costs.
BAFL ranks among the top five banks in the RDA space, with more than 10 per cent market share. It is also among the top three home remittance processing banks in the country under the PRI initiative.
Resultantly, the cost to income ratio of the bank surged to 58.5 per cent during the period under review from 52.6 per cent in the same period of 2020.
During the nine months of CY21, BAFL booked provisions of Rs1.419 billion, which included subjective downgrades. The bank’s non-performing loans ratio improved to 3.7 per cent, compared with 4.3 per cent as of December 31, 2020, while the NPL coverage ratio is 101 per cent.
The bank’s deposits closed at Rs1.036 trillion at the end of the third quarter of CY21, with YoY growth of 26.3 per cent, compared with the same period of 2020. The increase was mainly due to the strong growth of 23.3 per cent in the current accounts, which clocked-in at Rs464.980 billion at the quarter-end. The CA mix was recorded at 44.9 per cent.
The bank’s advances grew 28.9 per cent YoY, compared with September 2020. Part of this growth is government-backed schemes for economic relief. At the 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.