Bank Alfalah Limited announced its financial results for the first quarter ended March 31, 2021.
The Bank posted a profit after taxation of Rs. 3.471 billion, which is 23 percent higher than Rs. 2.281 billion profit made during the same period last year.
The results reflect the strong underlying performance across businesses, supported by the improving economy. Lower NPL charge also eased pressure on the profitability of the Bank.
Earnings Per Share (EPS) stood at Rs. 1.95 (Mar 2020: Rs. 1.59).
Asset quality remained strong, denoted by a non-performing loans ratio of 4.18 percent at end-March 2021, marginally lower than December-end. Absolute non-performing loans reduced by Rs. 506 million during the first three months.
Revenue was marginally down from last year, with the key reason being a sharp decline of 625 bps in the discount rate leading to a 12.3 percent drop in net markup income. However, an increase in earning assets and deposits supported the revenue.
Non-markup income stood at Rs. 3.833 billion, increasing by 41.5 percent, with a strong contribution from capital gains and fee income.
Non-markup expenses were 4.5 percent higher compared to the same period last year, driven largely by higher compensation costs, and the full-year impact of new branches opened last year along with expenses attributable to new initiatives.
The Bank continues to invest in technology, people, and businesses while maintaining credit discipline, improving market share, and becoming the leading transactions bank.
The cost to income ratio of the Bank stood at 59.7 percent.
The Bank’s focus remains on re-profiling its deposit base. Total deposits stood at Rs. 913.213 billion, 20.9 percent up year on year and 3.6 percent higher than December 2020.
Current deposits are the main driver, up 25.1 percent year on year and 5.9 percent since December 2020. The Bank’s CASA ratio of 79.7 percent remains a leading indicator in the industry.
Gross advances were reported at Rs. 606.838 billion, up by 16.6 percent year on year and 1.0 percent versus December 2020. At quarter-end, the Bank’s gross advances to deposits ratio stood at 66.5 percent.
The shareholders’ equity of the Bank dropped mainly due to dividend payout and AFS gain realized during the quarter. At the close of the first quarter, the Bank remains adequately capitalized with CAR at 15.60 percent.
BAFL’s scrip at the bourse was closed at Rs. 30.70, up by Rs. 0.69 or 2.30 percent, with a turnover of 1.48 million shares on Thursday.