Clichéd as it may sound, when there's a will there's a way. And that is precisely what Askari Bank Limited (AKBL) has achieved ever since Fauji Foundation took over the Rawalpindi-based bank's reins last year. From the depth of losses running in billions, AKBL has started yielding the fruits, sooner than most had expected, and the 1H CY14 financials are a testament to that.
Yes, the game changer remained the reversal in provisioning expense--but the betterment in performance was not restricted to just that. The bank had shown signs of attaining cleaner books last quarter with a much-improved infection ratio around 16 percent, compared to as high as 20 percent in CY13. The bank, in a rigorous drive to get rid of the bad loans, made heavy bookings earlier and is now reaping gains.
What is also surprisingly refreshing; it is the impressive top line growth and an even more impressive net mark-up income. Detailed accounts are not available yet to comment, but 1Q CY14 had shown signs of better asset-liability management, with an unusually high ADR in today's banking environment. The deposit growth had slowed, but that was also a reflection on the bank's drive to rationalise deposit-base and mobilise core deposits.
The gross spread ratio has improved drastically despite the adverse impact of minimum rate on monthly deposits. The CASA ratio was on its way up, and is likely to have further improved, as the numbers suggest. Non-core income continues to provide a good hand to the bottom line, with the growth increasing every passing quarter.
The bank's strategy is pretty evident from its initial steps. AKBL is looking towards a rationalised deposit-base, improved ADR, good coverage of NPL's--bettered bottom line would just be the outcome.

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Askari Bank Limited (Unconsolidated P&L)
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Rs (mn)                             1HCY14    1HCY13     chg
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Markup Earned                       15,899    13,618     17%
Markup Expenses                     10,379     9,767      6%
Net Markup Income                    5,520     3,851     43%
Provisioning/(Reversal)              (135)     7,147
Net Markup Income after provisions   5,654   (3,296)
Non Mark-up/Interest Income          2,849     1,701     67%
Operating Revenues                   8,503   (1,595)
Non Mark-up/Interest Expenses        5,484     4,740     16%
Profit Before Taxation               3,019   (6,335)
Taxation                               879   (2,228)
Profit After Taxation                2,140   (4,107)
(Loss)/earnings per share             1.70    (3.26)
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Source: KSE Notice