Askari Bank records 56pc increase in profit after tax

RECORDER REPORT

KARACHI: The profit before taxation of Askari Bank Limited has increased by 48 percent to Rs 1,576.014 million in the half year period ended June 30, 2012 as compared to Rs 1,066.317 million in the same period in 2011.

The bank’s profit after taxation has registered an increase of 56 percent to Rs 1,098.765 million in the period under review against Rs 703.578 million in the same period last year.

The board of directors of the bank in its meeting on Tuesday declared that the bank’s earning per share has increased to Rs 1.35 in the half year period ended June 30, 2012 against Re 0.87 in the same period last year.

The growth is mainly attributable to the decline in provision against non-performing assets by 39 percent over the same period last year.

“During the period under review, net mark-up income declined by 3 percent, however, this decline was largely offset by 31 percent increase in non-markup income — also reflecting change in revenue streams due to certain re-composition of our investment portfolio made during the period under review”, the bank in a statement issued on Tuesday said.

Administrative expenses increased by 7 percent mainly due to additional expenses incurred on expansion of branch network that reached 245 at the close of the half year from 235 as on June 30, 2011, besides inflationary upsurge.

At half year end 2012, customer deposits stood at Rs 294.5 billion against Rs 291.5 billion at year end 2011. On the asset side, net advances increased by 3 percent, to Rs 155.3 billion compared with Rs 150.7 billion as at December 31, 2011 while net investments at Rs 133.7 billion remained almost unchanged from the position at the year end 2011. The non-performing loans (NPLs) decreased by 2 percent while provisions there-against increased by 5 percent, thereby improving the coverage ratio to 75 percent at June 30, 2012, from 70 percent as at December 31, 2011.

Out of the total reserves of the Bank amounting to Rs 8,506 million as at June 30, 2012, an amount of Rs 3,265 million (December 31, 2011: Rs. 3,478 million) represents after tax benefit of forced sale values of eligible collaterals held against non-performing advances, as allowed under State Bank of Pakistan’s BSD Circular No. 1 of 2011 dated October 21, 2011 — also referred in note 13.1 of the annexed financial information. Reserves to that extent are not available for payment of cash or stock dividend in terms of above referred circular.

“Our branch network has reached 245, including 31 Islamic Banking branches, 21 sub-branches and a whole sale bank branch in Bahrain. Through this branch network, we are well positioned to offer wide range of products and services to our valued customers”, the statement said.

Given the current economic conditions, the Bank would be placing greater emphasis on consolidation of recent expansion while further expansion will be gradual and incremental, it added.