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LAHORE: Under the challenging operating environment emanating from macro-economic bottlenecks; Allied Bank is guided by its vision “to become a dynamic and efficient bank providing integrated solutions in order to be the first choice Bank for the customers” and has diligently worked towards improvement and accelerated its efforts for value creation for all the stakeholders.

Positive volumetric growth in average earning assets supported by improving spreads and effective duration management of investments enabled the Bank to post higher markup income of Rs. 74,040 million for the quarter ended March 31, 2023; depicting a strong increase of 90% over the corresponding period last year.

Mark-up expense for the quarter ended March 31, 2023 increased by 102% compared with corresponding period last year to reach at Rs. 53,527 million owing to higher average volume and unfavorable rate variance in line with increase in policy rate.

Net markup and interest income registered a growth of 64% to stand at Rs. 20,513 million as at March 31, 2023.

Fee income for the quarter posted a growth of 20% and reached at Rs. 2,518 million. This was accomplished through diversified digital revenue streams, as well as a consistent focus on service enhancement and assuring maximum customer facilitation.

Foreign exchange income of Rs. 3,243 million for the quarter ended March 31, 2023 is higher by Rs. 2,491 million as compared to the corresponding period ended March 31, 2022. Dividend income stands at Rs. 879 million as on 31st March, 2023, decreased by 6%.

Resultantly, Non-markup and interest income increased by 68% to reach at Rs. 6,843 million as at March 31, 2023 as compared to Rs. 4,080 million as at March 31, 2022.

Despite of higher inflation and weakening of USD/PKR parity, increase in operating expenses was restricted to 31%. With an increase of Rs. 2,758 million compared to corresponding period, operating expenses for the first quarter 2023 reached at Rs. 11,621 million. The Bank’s continuous investment in branch expansion and technological transformation also led to a rise in total operating expenses.

Higher net markup income and higher non-markup income partially offset by higher operating expenses and higher provision and write-off resulted in profit before taxation of Rs. 13,426 million for the quarter ended March 31, 2023; displaying a significant growth of 68% as compared to Rs. 8,011 million in the corresponding period last year.

Profit after tax for the quarter ended March 31, 2023 is recorded at Rs. 7,589 million, increased by 57% as compared to Rs.4,828 million during the same period last year. Earnings per share (EPS) of the Bank stood at Rs. 6.63 during the quarter ended March 31, 2023 as against Rs. 4.22 in the corresponding period last year.

The Bank strives towards a hybrid expansion strategy involving combination of digital and “brick and mortar” banking operations, together with bringing more focus towards digital banking products and services.

The Bank has a large ATM network of 1,556 machines comprising of 1,297 on-site, 254 off-site and 05 Mobile Banking Units (MBU). At the quarter end, branch outreach closed at 1,453 including 1,329 conventional branches, 117 Islamic banking branches and 07 digital branches

Total assets of ABL are recorded at Rs. 2,270,085 million as on March 31, 2023 showing growth of 1% over total assets at December 31, 2022. Main increase is witnessed in cash and bank balances, other assets and deferred tax assets.

Net assets of the Bank decreased by 2% to record at Rs. 125,442 million as at March 31, 2023 as against Rs. 127,811 million as at December 31, 2022.

Gross advances and net advances reached at Rs. 796,160 million and Rs. 782,862 million respectively and non-performing advances portfolio stood at Rs. 13,590 million as on March 31, 2023. The Bank continued its momentum towards low infection ratio and high overall coverage ratio which stood at 1.71% and 97.9% respectively as on March 31, 2023. No FSV benefit was availed while determining the provision against non-performing loans, allowed under guidelines of SBP.

Deposits of the Bank stood at Rs. 1,529,648 million as on March 31, 2023 as compared to Rs.1,522,297 as on December 31, 2022 registering a growth of 0.5%. The Bank’s Current deposit increased by 12% thereby increasing current deposit to total deposit mix to 45% as on March 31, 2023 as compared to 40% as on December 31, 2022. Current and Saving Account (CASA) deposit mix stood at 81% as on March 31, 2023.

Amid evolving interest rate risk, investment portfolio duration was optimized. Total investments closed at Rs. 1,130,714 million as on March 31, 2023. The liquidity was primarily placed in Government securities; increasing the Pakistan Investment Bonds contribution in the total investment mix to 96.12% as at March 31, 2023 compared to 96.02% as at December 31, 2022.

Return on Assets, Return on Equity and Capital Adequacy Ratio of the Bank stood at 1.4%, 24.3% and 18.20% respectively as on March 31, 2023.

Copyright Business Recorder, 2023

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