Corporate results: Bank Alfalah posts profit of Rs7.5 billion

Earnings in 2015 33% higher, but below market expectations.

KARACHI: Bank Alfalah has posted a consolidated profit of Rs7.5 billion in 2015, which is 33% higher than its earnings in the preceding year.

A stock notice on Tuesday reported earnings per share of Bank Alfalah at Rs4.73 as opposed to Rs4.09 in 2014, which was below market expectations.

The board of directors also announced a cash dividend of Rs1 per share.

“The result came below our expectations with the deviation coming from higher-than-expected provisions and non-interest income projections,” AKD Securities said in a report.

The net interest income of Bank Alfalah (post-provisions) amounted to Rs26.3 billion in 2015, up 30% from a year ago.

In contrast, the year-on-year increase in the non-interest income of the bank remained negligible. Non-interest income amounted Rs8.8 billion, as the increase of 73% in the net gains on the sale of securities was largely offset by the decrease (32%) in foreign exchange income.

In the fourth quarter of 2015 alone, Bank Alfalah made a profit of Rs1.5 billion, which reflects a 36% decrease over the earnings recorded in the preceding three-month period.

The tax expense of Bank Alfalah increased 77% year-on-year to Rs5 billion in 2015. According to AKD Securities, the effective tax rate increased to 40% from 34% in 2014 because of changes in the tax structure of banks.

With 5.2 million shares changing hands on Tuesday, the Bank Alfalah stock closed at Rs25.68 per share, down 4.9% from a day ago.

Published in The Express Tribune, March 2^nd, 2016.

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