BAFL’s total revenue soared by 29 percent year-on-year, on the back of a number of reasons. The higher interest rates surely played a big part in augmenting the markup earned during the period, which surged by 55 percent year-on-year. Much of the growth in markup income was owing to higher interest rates, and less of it was due to volumetric expansion of the asset portfolio.

Balance sheet management remained effective, and the focus was rightly on managing the book prudently. The average advances raised during the period, although the overall advances at the end of the period, stayed down by 5 percent over December 2018.  The bank puts it down to the impact of low yielding loan, in an effort to optimize the usage of capital and liquidity across the bank.

The deposit growth was in check at only 1.2 percent over December 2018, but the no-cost deposits continued to grow at a much better pace. The bank has long been focusing on improving the CASA and reducing cost of deposits, and CASA saw further improvement during the period, reaching 80 percent, from 77 percent as at December 2018.

The non performing loans inched only slightly during the period, to Rs20.7 billion, but are adequately provided for at 81 percent coverage ratio. The bank sees no signs of broad based deterioration across the loan portfolio. The provisioning charges remained high, primarily on account of equity investments and advances, which dragged the profits a bit.

The administrative expenses could have been curtailed better than the reported year-on-year increase of 22 percent. The bank puts it down to technology, deposit protection, branch expansion, and overall inflationary adjustments. All said, the cost to income ratio still improved from 53 percent in the same period last year, to 56 percent in 9MCY19. The non funded income remained strong across categories, except for the reduced contribution from capital market gains.