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KARACHI: Amidst challenging operating environment marked by macro-economic bottlenecks and the ongoing digital transformation, Allied Bank Limited (ABL) diligently focused on enhancing all facets of its banking operations.

This included improvements in customer offerings, enrichment of technological platforms and proactive transition towards digital enhancements.

Markup income of ABL reached at Rs. 264,341 million during the nine months ended September 30, 2023 against Rs. 147,552 million in corresponding period ended September 30, 2022 showing 79% growth on the basis of higher volumetric growth and positive rate variance. The positive rate variance is mainly due to higher yield on Investments, Advances and Bank placements.

Similarly, Markup expense of The Bank increased by 80% to reach at Rs. 183,356 million during the captioned period, as compared to Rs. 102,110 million in corresponding period, mainly attributable to higher cost of deposit and borrowing expense. Resultantly, Net Interest income increased by 78% and stood at Rs. 80,985 million during the current period as compared to Rs. 45,442 million in corresponding period last year.

With regard to Non-Markup income, upward trend has been observed in Fee & Commission income and Dividend income, which increased by Rs. 1,738 million or 20% and Rs. 591 million or 30% respectively, during the nine months ended September 30, 2023.

Foreign exchange income declined by 19% to Rs. 5,781 million during the nine months ended September 30, 2023 as compared to Rs. 7,142 million in the corresponding period last year.

Gain on securities and other income showed a downward movement with the decrease of 99% and 9% to stand at Rs.10 million and Rs. 93 million respectively during the nine months ended September 30, 2023.

Resultantly, total non-Markup income declined by 1% to reach at Rs. 16,171 million during the nine months ended September 30, 2023 as compared to Rs. 16,328 million in the corresponding period last year.

Non markup expenses of Allied Bank increased by 25% to be recorded at Rs. 36,799 million during the nine months ended September 30, 2023 as compared to Rs. 29,442 million in the corresponding period last year.

Branch expansion, investment in human resource, US$-PKR parity and higher inflation were the main contributors in increase in administrative expenses. Worker’s Welfare fund increased by 73% to reach at Rs. 1,196 million in the current period as compared to Rs. 692 million in the same period last year.

Profitability indicators witnessed improvements mainly on the back of growth in net interest income. Therefore, Profit before tax reached Rs. 57,827 million during the nine months ended September 30, 2023 comparing with Rs. 33,024 million during the same period last year.

Profit after tax (PAT) made a significant growth of Rs. 16,033 million or 127% during the nine months ended September 30, 2023 as compared to the same period last year.

Allied Bank closed its nine months profit at Rs. 28,662 million as compared to Rs. 12,628 million in the corresponding period last year.

In line with PAT, earnings per share (EPS) of The Bank also increased by 127% to stand at Rs. 25.03 for the nine months ended September 30, 2023 as against Rs. 11.03 during the same period ended September 30, 2022.

Allied Bank’s outreach stood at 1,474 branches including 1,345 conventional, 122 Islamic and 7 Digital branches as of September 30, 2023. ATM network reached at 1,569 machines consisting of 1,316 on-site, 248 off-site and 5 Mobile Banking Units (MBU). Average ATM uptime was registered at 95.47% for the nine-months ended September 30, 2023.

Total Asset base of ABL reached at Rs. 2,263billion as on September 30, 2023 as against Rs. 2,251 billion as on December 31, 2022, depicting a growth of1%. This was achieved mainly on the back of increase of 251% in Lending to financial institutions, 46% in Cash and balances and 39% in other assets. While investments declined by 7% to record at Rs. 1,047billion as on September 30, 2023 as against Rs. 1,123 billion as on December 31, 2022.

Total Advances of ABL showed decline of 10% due to tight economic conditions and rising interest rate scenario and reached at Rs. 757 billion as on September 30, 2023 as compared to Rs. 846 billion as on December 31, 2022.Non-Performing Loans (NPL) remained relatively muted and closed at Rs.13.3 billion as on September 30, 2023 as against 13.1 billion as on December 31, 2022, increasing by 2%.

On the funding side, total Deposits of The Bank increased by 12% to reach at Rs. 1,704 billion as on September 30, 2023 as compared to Rs. 1,522 billion as on December 31, 2022. Allied Bank focused its concentration on low-cost deposits which can be witnessed from 15% increase in current deposits during the period under review. Whereas, current deposit to total deposits (CA) and current deposits saving deposits to total deposits (CASA) maintained at 41% and 81% respectively as on September 30, 2023.

Total Equity of ABL stood at Rs. 151 billion as on September 30, 2023 as compared to Rs. 128 billion as on December 31, 2022 showing a healthy growth of 18%.

Return on Assets (ROA) and return on Equity (ROE) of The Bank were recorded at 1.7% and 28.6% as on September 30, 2023 respectively as against 1.0% and 18.4% as on December 31, 2022. Capital Adequacy Ratio (CAR) of Allied Bank remained resilient at 22.61% as on September 30, 2023 much higher than the statuary requirement of 11.5%.

Copyright Business Recorder, 2023

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