Bank Alfalah posts Q1 profit growth of 23 percent
Bank Alfalah Limited declared a profit after tax of Rs3.471 billion for the quarter ended March 31, 2021 which is 23% per cent higher against Rs. 2.281 billion for the corresponding quarter last year - according to a press release issued by the bank.
The results reflect strong underlying performance across businesses, supported by the improving economy. Lower NPL charge also eased pressure on the profitability of the bank, the statement added.
Earnings Per Share (EPS) stood at Rs1.95 (Mar 2020: Rs1.59). Asset quality remained strong, denoted by non-performing loans ratio of 4.18pc at end March 2021, marginally lower than December end. Absolute non performing loans reduced by Rs506 million during the first three months.
Revenue was marginally down from last year. The key reason being sharp decline of 625 bps in the discount rate leading to 12.3pc drop in net markup income, however, increase in earning assets and deposits supported revenue.
Non-markup income stood at Rs3.833 billion, increasing by 41.5pc, with strong contribution from capital gains and fee income.
Non-markup expenses were 4.5pc higher compared to the same period last year, driven largely by higher compensation costs, the full year impact of new branches opened last year along with expenses attributable to new initiatives.
The bank said that it continues to invest in technology, people and businesses while maintaining credit discipline, to improve market share and to become the leading transactions bank. The cost to income ratio of the bank stood at 59.7.
The bank's focus remains on re-profiling its deposit base. Total deposits stood at Rs913.213 billion, 20.9pc up year on year and 3.6pc higher than December 2020. Current deposits are the main driver, up 25.1pc year on year and 5.9pc since December 2020. The Bank's CASA ratio of 79.7pc remains a leading indicator in the industry. Gross advances were reported at Rs. 606.838 billion, up by 16.6pc year on year and 1.0pc versus December 2020.
At quarter end, the bank's gross advances to deposits ratio stood at 66.5pc.
The shareholders' equity dropped mainly due to dividend payout and AFS gain realised during the quarter. At the close of the first quarter, Bank Alfalah remains adequately capitalised with CAR at 15.60pc.
AlfaMall, Bank Alfalah’s digital e-commerce marketplace for online shopping, on Saturday announced a strategic partnership of its business with Telemart with the aim of digitising cash transactions.
This agreement will enable instant delivery of products to Bank Alfalah customers on easy monthly installments, facilitating customers with easy returns and integrating venues of merchant business., a statement said.
Muhammad Yahya Khan, Digital Banking head of Bank Alfalah, said e-commerce marketplace aims to provide customers a complete shopping experience while allowing easy pre-payment options of account debit or payment through card. "This further expansion in business will help digitize transactions at Telemart’s phygital stores by enabling instant delivery of products to AlfaMall customers on easy installments.”
Bank Alfalah has partnered with Goldfin – a leading gold financing company – to introduce a new financing option for its Small and Medium Enterprise (SME) sector consumers.
Bank Alfalah recognized the growing demand for financing opportunities in the market in the post-covid environment, especially within the SME space.
This partnership establishes a channel for SMEs to avail market-competitive rates and secure their liquidity. It also aligns with the Bank’s vision to be a market leader and introduce innovative and efficient services for the benefit of its customers.
The agreement was signed at Bank Alfalah’s Head Office between Mr. Atif Bajwa, President and CEO of Bank Alfalah, and Mr. Nadeem Hussain, CEO and Founder of Goldfin. This partnership will allow the Bank to support its customers in raising finances and growing their business.
Goldfin has extensive expertise in originating loans backed by gold collateral, as well as in front-end and doorstep sales. Their available technology enables them to provide rapid and effective turnaround times.