KARACHI: Allied Bank Limited (ABL), one of the leading commercial banks in Pakistan, announced its financial results for the second quarter of the year 2023 (2QCY23), showing a consolidated profit after tax of PKR 9.95bn (EPS: PKR 8.69), up by 404% YoY and 30% QoQ.
The bank also declared a cash dividend of PKR 2.5/share in 2QCY23, taking the total dividend payout to PKR 5.0/share in 1HCY23.
The remarkable performance of ABL was driven by the higher net interest income (NII), which increased by 102% YoY and 48% QoQ to PKR 30.2bn in 2QCY23, owing to the hike in interest rates and the growth in advances and deposits. The bank’s NII for 1HCY23 reached PKR 50.6bn, up by 84% YoY. However, the bank’s interest expense also surged by 93% YoY in the outgoing quarter.
The bank’s non-interest income (NFI) also supported the overall profitability, as it grew by 11% YoY to PKR 12.2bn in 1HCY23, mainly due to higher fee and commission income of PKR 5.5bn (30% YoY) from improved trade related activities. The bank also recorded higher dividend income of PKR 1.7bn (24% YoY) in 1HCY23. However, the bank witnessed a decline in gain on securities of PKR 541mn (47% YoY) in 1HCY23.
The bank booked provisioning of PKR 434mn in 2QCY23, compared to a reversal of PKR 497mn in the same period last year. The total provisioning for 1HCY23 stood at PKR 2.7bn.
The bank’s operating expenses increased by 26% YoY to PKR 12.8bn in 2QCY23, taking the total operating expenses for 1HCY23 to PKR 24.6bn (28% YoY). The cost/income ratio improved to 36.4% in 2QCY23 from 46.8% in SPLY.
The effective tax rate was lower at 54.6% in 2QCY23 compared to 83.6% in SPLY. The taxation during the quarter includes an additional 6% super tax levied on the profit before tax of CY22 and 1HCY23, respectively.
ABL is one of the oldest and largest banks in Pakistan, with a network of over 1,300 branches and 1,500 ATMs across the country. The bank offers a range of products and services to cater to the needs of its diverse customer base, including corporate, SMEs, agriculture, and retail segments. ABL’s share price closed at PKR 180 on Thursday, August 17, 2023.