Marking an annual growth of 23 percent in its bottom-line, Allied Bank Limited (ABL), the countrys fifth largest commercial bank, clocked in a net profit of Rs.10 billion during CY11. ABL posted impressive growth in profitability during CY11, given that the Banks bottom line had increased by 15 percent in CY10. This is largely due to expansion in operating revenues, coupled with lower provisioning expenses. With mark-up revenues up by 15 percent in CY11 compared to the previous year, the Bank benefited from expansion in its asset base. The banks asset base stood at around Rs.516 billion at the end of December 2011, registering a growth of 15 percent compared to the same period the last year. The Bank has massively tilted its asset portfolio towards investments, lifting its Investment to Deposit Ratio (IDR) by 16 percentage points to 49 percent at the end of December 2011, when the industrys ratio increased by around 10 percentage points to 51 percent. Hence, revenues from investments accounted for 33 percent of the total mark-up revenues in CY11, as opposed to its share of 26 percent in CY10. At the same time expansion in the deposit base lifted the Banks mark-up expenses. Its deposit base grew at a slower pace compared to the industry. ABLs deposit base increased by 8 percent in CY11 to Rs.400 billion as on December 31, 2011, when the combined deposit base of all scheduled banks increased by 15 percent. However, the best part is that the Bank managed to improve its CASA ratio by around 180 bps point to 72 percent at the end of CY11. Although net interest income accrued a gain of 12 percent; the Bank gross spread ratio eased down by around 160 bps to 48.6 percent in CY11 compared to the previous year. The banking industrys average spread stood at 7.63 percent in CY11, nearly 18 bps higher than CY10. Thanks to higher income from investment banking activities, dividends and dealing in foreign currencies, the Banks non-mark-up income improved by 23 percent in CY11. In keeping with high inflationary pressures, increasing expenditure on infrastructure strengthening and technological upgradation, administrative expenses grew by 17 percent to around Rs.13 billion in CY11. The Bank added 31 new branches to its existing infrastructure in CY11, bringing the total branch network to 837 branches. ABL witnessed a 9 percent jump in NPLs during CY11 to Rs.20 billion at the end of December 2011. The growth in non-performing loans has slowed down compared to the past few years, given that the Bank had witnessed 15 percent and 18 percent jump in NPLs in CY10 and CY09, respectively. However, the Banks income to expense ratio inched down to 2.3 in CY11, from 2.4 in CY10. ABL has largely outperformed the KSE-100 index since the start of CY12, with its share price up by 13 percent, as opposed to 8 percent gain registered by the benchmark index.
============================================================ Allied Bank Ltd ============================================================ (Rs mn) CY11 CY10 chg ============================================================ Markup Earned 51,814 44,993 15% Markup Expensed (26,643) (22,428) 19% Net Markup Income 25,171 22,565 12% Provisioning (3,009) (4,083) -26% Net Markup income after provision 22,162 18,482 20% Other income 6,950 5,672 23% Operating revenues 32,121 28,237 14% Other expenses (14,003) (11,810) 19% Profit before taxation 15,108 12,343 22% Profit after taxation 10,140 8,225 23% EPS (Rs) 11.79 9.56 ============================================================
Source: Company Accounts
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