When you pay more tax than you made profits a year ago, you have certainly done a pretty good job. And Askari Bank Limited (AKBL) has continued the impressive turnaround in the 2QCY15 as well, with after-tax profits growing 42 percent year-on-year. What is even better is that the turnaround is led by the top line, signalling AKBL is ticking the right boxes.

The ADR has surprisingly improved by 176 bps over December 2014 - a rarity these days, when all what the banks are doing is parking all surpluses in government papers. Advances in absolute terms increased by 13 percent over December 2014, whereas investment grew by little over 6 percent in the same period. The tilt towards more advances makes all the common sense, as the interest rates recede and macroeconomic situation improves. AKBL could have easily taken the other route, which almost all its peers have taken, and invested heavily in government papers - but it chose to keep a good balance.

The net mark-up income also improved substantially as AKBL continues to work on deposit rationalization The cost of deposit is gradually coming down, evident from near 500 bps improvement in gross spreads ratio. AKBLs NPLs had been a problem in the past, but they too have been coming down of late and are well provided for with the coverage ratio touching 90 percent.

In times of thin spreads, the non mark-up income plays a vital role and AKBL did not disappoint on that front. Gain on sale of securities almost more than doubles, offering a more than decent hand to the bottom line. AKBL, unlike others, is also adding fresh deposits while maintaining a good deposit mix. As rates go down further, the banks asset mix strategy would be interesting to observe. Till then, all seems well for AKBL.