corporate results: ABL registers 4% increase in earnings

Clock in at Rs7.3b during Jan-Jun; profit for Apr-Jun dips 3%

KARACHI: In spite of a huge bump in its effective tax rate, Allied Bank (ABL) posted a respectable increase of 4% in its half-yearly unconsolidated earnings, which clocked up at Rs7.3 billion for Jan-Jun.

While the bank managed to increase its six-month profit on a year-on-year basis, its earnings for Apr-Jun quarter dipped 3% to Rs3.1 billion on an annual basis. The decline in the Apr-Jun earnings on a quarter-on-quarter basis (25%) was more pronounced because of higher tax incidence in the wake of the 2015-16 budget.

According to Shajar Capital Research Analyst Hamza Kamal, the bank’s provision against the ‘super tax’ and the application of a flat tax on different sources of income resulted in an effective tax rate of 56% in the Apr-Jun quarter as opposed to 35% in Jan-Mar.

ABL also announced a cash dividend of Rs1.75 per share, bringing the cumulative dividend so far in 2015 to Rs3.50 per share.

Owing to growth in earning assets and optimum asset mix, Kamal said ABL expanded its core income base by 5% on a quarterly basis and 55% on a yearly basis in the second quarter of 2015. However, net advances of ABL recorded a 1% decrease due to limited credit growth opportunities/seasonal adjustment, he said.

Deposits increased 7% in Jan-Jun while the share of current and savings accounts deposits in total deposits also increased to 75% from 73% recorded at the end of June 2014.

Published in The Express Tribune, August 6^th, 2015.

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