The jump in earnings was driven by a drop of 50 per cent in bad loans, strong non-interest income growth and an uptick in the Karachi Inter-bank Offered Rate (Kibor), according to JS Global Capital.
Along with the result, the bank announced a final cash dividend of Rs3, taking the cumulative 2010 payout to Rs11.5, according to a notice sent to the Karachi Stock Exchange on Thursday.
Furthermore, owing to the fact that commercial banks are required to increase paid-up capital to Rs10 billion, the bank issued 10 per cent bonus shares.
Loan losses halved to Rs3.7 billion in 2010 compared with Rs7.47 billion last year. Net interest income rose by six per cent to Rs54.8 billion against Rs51.6 billion posted in 2009.
Monetary tightening in the second half of the year accompanied by a rising Kibor of 13.05 per cent in the second half from 12.33 per cent in the first half are the likely reasons for this trend, said JS Global Capital analyst Mustufa Bilwani.
Moreover, operating expenditure rise 21 per cent to Rs13 billion on account of high inflation and lower pension fund reversals.
Published in The Express Tribune, February 11th, 2011.
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