Allied Bank Limited (ABL) announces Q1 financial results

TSL Research has just released an update on Allied Bank Limited (ABL) recent quarterly results. Here are the important points from the ABL earnings announcement.

Strong Growth in Profit

In the first quarter of CY24, TSL Research reported a significant increase in its Profit After Tax (PAT), which rose by 51% compared to the same period last year. Earnings Per Share (EPS) stood at PKR 10.14 for the quarter, indicating robust performance.

Dividend Announcement

In addition to the impressive earnings, the company declared an interim dividend of PKR 4 per share, adding value for its shareholders.

Key Financial Highlights

Net Interest Income (NII)

• Year-on-Year Growth: Net Interest Income saw a substantial increase of 43% compared to the first quarter of the previous year.
• Sequential Performance: However, NII experienced a decline of 10% on a sequential basis. This drop was primarily attributed to stagnant interest income and rising interest expenses due to leverage.

Non-Markup Income (NMI)

• Year-on-Year and Quarter-on-Quarter Comparison: Non-Markup Income witnessed a decrease of 4% YoY and 23% QoQ. This decline was mainly due to the absence of significant income from foreign exchange activities during the quarter. However, fee and commission income, as well as dividend income, showed improvement compared to the previous quarter.

Operating Expenses

• Increase in Costs: Operating expenses rose by 16% YoY and 10% QoQ. This increase was attributed to annual escalations, leading to a higher cost-to-income ratio of 38%.

Credit Loss Allowance

• Effect of IFRS-9 Implementation: Following the implementation of IFRS-9, the company booked a net reversal of approximately PKR 163 million in expected credit loss allowance. This marks a significant decrease compared to the net provisions of PKR 445 million booked in the previous quarter.

Taxation

• Effective Tax Rate: The effective tax rate for the quarter stood at 49%, indicating that the company did not accrue any charge for ADR tax.

Income Statement Overview

Summary of the income statement for the first quarter of CY24 compared to the same period last year and the previous quarter:

Income Statement (PKR Mn)	1QCY24A	1QCY23A	YoY	4QCY23A	QoQ
Interest Income	94,327	73,971	28%	92,963	1%
Interest Expenses	65,177	53,534	22%	60,712	7%
Net Interest Income	29,150	20,438	43%	32,251	-10%
Non-Markup Income	6,931	7,215	-4%	8,952	-23%
Operating Expenses	13,648	11,765	16%	12,407	10%
Credit Loss Allowance – Net	(163)	2,310	-1.1x	445	-1.4x
Provisions for Tax	10,989	5,894	86%	16,082	-32%
Profit After Tax	11,607	7,684	51%	12,270	-5%
EPS	10.14	6.71	N/A	10.72	N/A
DPS	4.00	2.50	N/A	4.00	N/A

Disclaimer:

The information in this article is based on research by TSL Research. All efforts have been made to ensure the data represented in this article is as per the research report. This report should not be considered investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.