ANL 19.29 Decreased By ▼ -1.56 (-7.48%)
ASC 13.45 Decreased By ▼ -0.09 (-0.66%)
ASL 22.20 Decreased By ▼ -0.80 (-3.48%)
BOP 8.18 Decreased By ▼ -0.02 (-0.24%)
BYCO 7.55 Decreased By ▼ -0.26 (-3.33%)
FCCL 17.45 Decreased By ▼ -0.35 (-1.97%)
FFBL 22.10 Decreased By ▼ -0.65 (-2.86%)
FFL 15.20 Decreased By ▼ -0.30 (-1.94%)
FNEL 7.40 Increased By ▲ 0.05 (0.68%)
GGGL 17.00 Decreased By ▼ -0.83 (-4.66%)
GGL 39.30 Decreased By ▼ -0.71 (-1.77%)
HUMNL 5.76 Decreased By ▼ -0.26 (-4.32%)
JSCL 18.00 Decreased By ▼ -0.30 (-1.64%)
KAPCO 35.95 Decreased By ▼ -0.40 (-1.1%)
KEL 3.29 Decreased By ▼ -0.11 (-3.24%)
MDTL 2.50 Decreased By ▼ -0.15 (-5.66%)
MLCF 34.24 Decreased By ▼ -0.86 (-2.45%)
NETSOL 119.85 Decreased By ▼ -9.55 (-7.38%)
PACE 4.94 Increased By ▲ 0.19 (4%)
PAEL 26.53 Decreased By ▼ -0.47 (-1.74%)
PIBTL 8.71 Decreased By ▼ -0.14 (-1.58%)
POWER 7.25 Decreased By ▼ -0.20 (-2.68%)
PRL 16.97 Decreased By ▼ -0.18 (-1.05%)
PTC 9.65 Decreased By ▼ -0.36 (-3.6%)
SILK 1.50 No Change ▼ 0.00 (0%)
SNGP 45.10 Increased By ▲ 0.10 (0.22%)
TELE 17.48 Decreased By ▼ -1.41 (-7.46%)
TRG 161.00 Decreased By ▼ -1.70 (-1.04%)
UNITY 31.80 Decreased By ▼ -1.15 (-3.49%)
WTL 2.85 Decreased By ▼ -0.09 (-3.06%)
BR100 4,718 Decreased By ▼ -14.65 (-0.31%)
BR30 22,320 Decreased By ▼ -482.1 (-2.11%)
KSE100 45,074 Decreased By ▼ -223.36 (-0.49%)
KSE30 17,742 Decreased By ▼ -68.18 (-0.38%)

Coronavirus
VERY HIGH Source: covid.gov.pk
Pakistan Deaths
27,524
4224hr
Pakistan Cases
1,236,888
2,06024hr
4.58% positivity
Sindh
454,510
Punjab
427,583
Balochistan
32,837
Islamabad
104,913
KPK
172,766

Allied Bank Limited (ABL) had another stellar quarter, as the after-tax profits soared by 35 percent year-on-year. The balance sheet did not expand a great deal, much in line with the stagnancy observed across the industry. Much of the quarter was business as usual, as Covid-19 related impact was felt very late in March – and business activities were shut only for the last ten days of the quarter.

The considerably high average policy rate over previous year by 300 basis points, growth in low cost deposits, effective repricing management, and volumetric growth in average earning assets – all played a part in keeping the topline going. The net interest income increased well in double digits, with improved spreads.

The interest rate scenario during the quarter and expectations thereof demanded asset reprofiling, and the bank had started to focus on short term government securities. Slowdown in business activities across the country persisted, leading to stagnant advances growth, as genuine appetite for fresh credit from the private sector was not there. The low advances growth led ABL divert excess liquidity towards other asset avenues, as treasury bills were the favored instrument as at December end 2019. The changing interest rate scenario demanded continuous monitoring and change in the duration of portfolio, and the overall investment portfolio recued closing down at Rs674 billion.

On the non-markup income front, gain on securities led the way to an overall double digit increase over the same period last year. The fee income also remained strong growing by over 11 percent year-on-year, which the bank puts down to a variety of factors including rising customer confidence, diversification of revenue streams, improved branch banking services, among others.

Allied Bank proudly owns of the cleanest loan book in the industry with an infection ratio of only 3.3 percent, very adequately provided for at 96 percent. Prudent and robust risk management framework enable ABL to further lower its NPLs from the same period last year. On the liabilities front, the deposit growth was rather muted, but the quality of deposit went in the right direction, with the share of low and no cost deposits going up, from previous year.

The interest rates have come down crashing since the end of 1QCY20. The ground realities have significantly altered. There is no doubt that ABL and similar sized peers are well capitalized carrying sound indicators, but the sheer volume of business is likely to face a big decline. Granted that the central bank has announced various relief measures to businesses, the economic activity will take some time to come out of the rough, and ABL will have to share the burden. All said, ABL’s balance sheet strength should enable it sail smoothly even in the upcoming tough times.

Comments

Comments are closed.