Corporate results: Askari Bank posts Rs157m profit for third quarter

KARACHI: Askari Bank posted a loss after tax of Rs3.9 billion for the nine-month period ending September 30, according to a notice sent to the Karachi Stock Exchange on Monday.

The bank made a profit of Rs1.4 billion in the corresponding nine-month period in 2012.

The financial result of the bank shows the much-anticipated loss incurred in the nine months is mainly because of the extraordinarily high provisions against loans and advances recorded in the second quarter of 2013. In the latest quarter, however, these provisions came down to Rs809 million, down a massive 87% compared to the preceding quarter when they hovered around Rs6.3 billion.

Therefore, while the bank posted a loss for the nine-month period, its profit for the third quarter alone was Rs157 million.

Speaking to The Express Tribune, Alternate Research analyst Umesh Kumar said the result is better than market expectations despite the loss per share of Rs4.8. “I think the better-than-expected result is based on a higher interest income and non-interest income,” Kumar noted.

Askari Bank’s interest income increased 11% on a quarterly basis to Rs7 billion as opposed to Rs6.3 billion in the preceding quarter. Kumar added that the increase in interest income should be attributed to a rise in advances for the bank that, according to the Alternate Research estimates, have gone up 3-4% over the three-month period.

The quarter-on-quarter increase in non-interest income of Askari Bank was recorded at 21%. The profit and loss account of the bank shows non-interest income played a key role in improving overall earnings of the bank on the back of increased dividend income along with higher income derived from foreign currencies.

“We expect Askari Bank’s earnings to improve further in the upcoming years,” he noted.

Published in The Express Tribune, October 22^nd, 2013.

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