LAHORE: Allied Bank Limited is guided by its vision ‘to become a dynamic and efficient bank providing integrated solutions in order to be the first choice Bank for the customers” and accelerating its efforts for value creation for all stakeholders.
Positive volumetric growth in average earning assets coupled with positive rate variance resulted in 74% of growth in mark-up income to reach at Rs. 147,552 million as against Rs. 84,696 million corresponding period last year. The positive rate variance is driven by higher yield on Investments, Advances and Bank Placements.
Likewise, mark-up expense increased by Rs. 52,096 million showing a growth of 104% to reach at Rs. 102,110 million as on 30th September 2022 as compared to Rs. 50,014 million in the corresponding period last year. This increase is on account of higher cost of deposits, borrowing expense and interest expense on Right of Use of Asset. Net Interest Income increased by 31% to reach at Rs. 45,442 million during the captioned period as compared to Rs. 34,682 million last year.
On Non-Markup income side, a growth of 39% has been observed bringing the non-interest income to reach at Rs. 16,328 million for the nine months ended on 30 September 2022 as compared to Rs. 11,729 million for the corresponding period last year. Fee income has reached at Rs. 5,938 million registering a growth of 20%, which was Rs. 4,950 million in the comparable period last year. This increase is attributable to higher card related fee, branch banking customer fee, and investment banking fee.
Foreign exchange income reached to Rs.7,142 million for the period under review as compared to Rs. 1,112 million for corresponding period last year mainly from higher trade volumes, volatility in spot & swaps and wider spreads.
Dividend Income increased by Rs. 172 million showing a growth of 9% to reach at Rs. 1,983 million for the nine months ended September 30, 2022 as against Rs. 1,811 million for corresponding period last year.
Despite hiked inflation, impact of currency devaluation and continued investment towards technological upgradation, operating expenses growth was restricted to 18% during the period under review.
Despite the challenging economic conditions and banking dynamics, Allied Bank Limited (ABL) registered remarkable growth of 50% in Profit before tax which stood at Rs. 33,024 million for the nine-month ended September 30, 2022 as against Rs. 21,973 million for comparative period last year.
Vide Finance Act, 2022, Corporate Tax Rate for Banking companies enhanced from 35% to 39%, Super Tax on high earning persons is levied for Tax Year 2023 (Income Year 2022) at 10% and subsequently at 4% and Tax Rate on attributable Income from Investments in Federal Government Securities increased (49% for ADR 40%-50%) retrospectively from Tax Year 2022 (Income Year 2021), which resulted in 62% average tax rate for nine months ended September 30, 2022 as compared to average tax rate of 41% for the corresponding period last year.
Profit after Tax was recorded at Rs. 12,628 million in the captioned period, lower by 3% from Rs.13,070 million in the corresponding period last year. In line with Profit after Tax, Earnings per share (EPS) of ABL also reduced to Rs.11.03 per share for the nine months period ended September 30, 2022, against Rs.11.41 per share in the corresponding period last year.
Allied Bank’s outreach stood at 1,432 branches including 1,308 conventional, 117 Islamic and 7 Digital branches as on September 30, 2022. ATM network reached at 1,569 machines consisting of 1,294 on-site, 270 off-site and 5 Mobile Banking Units (MBU). Average ATM uptime was registered at 96.41% for the nine-month ended 30th September 2022.
Total asset base of Allied Bank Limited increased by 3% to reach at Rs. 2,061 billion as on September 30, 2022 as compared to Rs. 2,010 billion in December 2021. Investments and Net Advances closed at Rs. 1,088,683 million and Rs. 673,687 million showing growth of 2% and 3% respectively.
Persistent focus on prudent risk management practices led to 4% decline in Non-Performing advances which stood at Rs. 13,015 million as on September 30, 2022 as compared to Rs. 13,601 million as on December 31, 2021. ABL continued its momentum towards lowering its infection ratio which stood at 1.90% as on September 30, 2022 as compared to industry average infection ratio of 7.5% as on June 30, 2022. No forced sale value (FSV) benefit was availed while determining the provision against Non-Performing Loans, allowed under SBP guidelines.
Allied Bank’s borrowings stood at Rs. 309,351 million as on September 30, 2022 decreased by 26% as compared to Rs. 420,006 million as on December 31, 2021.
Total Deposits of ABL registered a growth of 10% to stand at Rs. 1,551,230 million in the captioned period as against Rs. 1,413,295 million as on December 31, 2021. ABL pivoted its concentration towards low-cost deposits which is evident from a growth of 8% in non-remunerative current deposits. Whereas, current account to total deposit ratio and current account saving account (CASA) deposit mix stood at 42% and 80% respectively, as on September 2022.
Return on Assets and Return on Equity were recorded at 0.83% and 15.08% respectively as on September 30, 2022. Capital Adequacy Ratio (CAR) remained resilient at 20.40% against a statutory requirement of 11.5%.
Copyright Business Recorder, 2022
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