Corporate results: Bank Alfalah records Rs3.3 billion profit

Earnings edge down on low interest income, high cost.


Our Correspondent October 28, 2013
According to an analyst, the bank’s lower earnings are mainly because of a 9.8% decline in net interest income to Rs12.5 billion and an 8.7% increase in administration costs. PHOTO: FILE

KARACHI: Bank Alfalah earned an after-tax profit of Rs3.3 billion in the first nine months of 2013, down 2.4% compared to the corresponding period last year, said a notice sent to the Karachi Stock Exchange on Monday.

According to Topline Securities research analyst Zeeshan Afzal, the bank’s lower earnings are mainly because of a 9.8% decline in net interest income to Rs12.5 billion and an 8.7% increase in administration costs.

“We attribute the decline in NII to low banking spread scenario, which averaged 6.26% in the first nine months of 2013 versus 7.14% in the corresponding period in 2012,” he said.

However, he added, a 44% decline in provisions to Rs1.1 billion as opposed to Rs1.9 billion a year earlier supported the falling earnings of Bank Alfalah.

Provisions against loan and advances were down 27% year-on-year and 63% quarter-on-quarter due to the declining trend in the infection ratio, according to Alternate Research analyst Umesh Kumar.

As for non-interest income, it improved 2% on a quarterly basis because the commission and brokerage income declined 11% quarter-on-quarter, dragging down the gains accrued from foreign currency operations and dividend income, he added.

Published in The Express Tribune, October 29th, 2013.

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