Allied Bank results beat estimates

The bank earned dividend income from stocks like Fauji Fertiliser Company, PSO and Hubco.

KARACHI: Allied Bank Limited, the first major bank to declare its results for the first nine months of 2010, registered an increase of 17 per cent in its net profit which reached Rs5.84 billion beating market expectations.

The bank’s strategy of controlling high-cost deposits boded well in terms of containing interest expense during January to September which supported the profit growth, said Elixir Securities analyst Hifza Zia.

The consensus of three research firms missed the target by 4.29 per cent as they expected the net profit to stand at Rs5.6 billion.

Net interest income rose by 21.4 per cent to Rs16.6 billion on a yearly basis followed by improving asset yields.

Lower interest expense during the third quarter supported the surge in profit, the analyst said.

Non-interest income recovered 10 per cent to Rs8.3 billion as dividend income from high-yielding stocks Hub Power Company (Hubco), Fauji Fertiliser Company and Pakistan State Oil increased.

Provision against non-performing loans came in at Rs2.83 billion compared with last year’s Rs2.6 billion. Net profit translated into earnings per share of Rs7.63 against Rs6.98 posted in the same period last year.

Published in The Express Tribune, October 19^th, 2010.