Bank Alfalahs (BAFL) healthy first-half CY11 result did not cause much of a stir among investors on Monday. The string of hale and hearty first-half results reported by other banks this season had raised hope of BAFLs investors. The bank declared a 77 percent rise in its half-year profits to Rs1.9 billion as against the same period a year earlier. Operating revenues contributed to the rise in earnings. The lenders mark-up revenues jumped by 16 percent to Rs21 billion in the first six months of CY11 over the same period a year earlier. As the growth in mark-up revenues outpaced that of mark-up expenses, the banks net mark-up income has ameliorated significantly. In the same breath, the banks gross spread ratio improved to 41 percent from 34 percent. In part, "the caring bank" has benefited from its growing asset size, stemming from expansion in its investment portfolio. Although the detailed accounts are not available at the moment, but in keeping with the industry-wide trend, it seems that the bank has drastically increased its investment base in the first-half. The data complied by SBP suggests that the investment base of all commercial bank grew by 21 percent to Rs2528 billion in the first six months of CY11. As mark-up expenses grew marginally, it is safe to assume that improvement in CASA ratio helped to fetter growth in expenses. The CASA ratio had improved to 61 percent in CY10 up from 53 over CY09. The main discordant note in the first half result was a 73 percent jump in net provisioning expense to Rs 1.6 billion over the same period a year ago. Four-fifths of the total net provisioning stemmed from dimunition in the value of investments; most likely from the banks subsidiary companies and associates. However, net provisions against loans and advances eased down to Rs 346 million in 1HCY11, from Rs 862 million in the corresponding period last year. This indicates that either the banks total non-performing loans remained in the same ballpark or declined in the first six months of CY11. The banks non mark-up income also came thick and fast, due to improvement in commission and brokerage income, income from dealing in foreign currencies and other incomes. The bank has managed to control growth in its non mark-up expenditure, which increased by 14 percent, year -on-year, close to the prevailing rate of inflation. Earnings per share stood at Rs1.41 during 1HCY11, up from Rs0.80, turned in during the first half od the previous calendar year. BAFL did not announce any dividend this time around.
==================================================== Bank Alfalah Limited ==================================================== Rs(mn) 1HCY11 1HCY10 chg ==================================================== Markup earned 21,377 18,497 16% Markup expensed (12,540) (12,176) 3% Net markup income 8,837 6,321 40% Provisioning (1,664) (963) 73% Net markup income 7,173 5,358 34% after provisions Other income 2,749 2,238 23% Operating revenues 11,585 8,559 35% Other expenses (6,847) (6,000) 14% Profit before taxation 3,074 1,596 93% Profit after taxation 1,908 1,079 77% EPS (Rs) 1.41 0.80 ====================================================
Source: Company Accounts
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