Corporate Briefing Notes
Bank Alfalah Limited (BAFL) held its corporate briefing session today to discuss its financial results for CY22 and it future outlook.
Key Highlights
● BAFL announced its financial results for CY22 wherein the bank posted profit of PKR8.4bn (EPS: PKR10.38/sh), up by 27% YoY. The Net Interest Income improved by 67% YoY on the back of solid growth in earning assets and margins expansion after repricing of the well positioned asset book.
● The bank announced a cash dividend of PKR2.5/sh, taking full year DPS to PKR5.00/sh.
● Non-interest income reported at PKR21.7bn up by 34% YoY during CY22. The bank witnessed an increase in forex income due to stronger trade/remittances flows and market volatility.
● During the CY22, BAFL’s provisioning expense surged due to general provisions floods, provision on Eurobonds owing to downgrade by S&P 500, Specific provision for textile related client and provision on investment in Afghanistan. Management informed that bank has equity investment of PKR 3.5bn in Afghanistan, which is now fully provisioned. Furthermore, the management informed that any provision related to Eurobond would depend on S&P rating to Pakistan.
● Investment portfolio comprises of mostly floaters with 85% share, while the rest 15% is fixed PIBs. The average yield of the portfolio is 11.5% with an average duration of 3-3.5 years.
● Market share for trade, deposits, advances and remittances business hovers at 7.9%, 6.0%, 6.1%, and 19.2%, respectively.
● Net advances up by 9% YoY driven by Corporate & Islamic, mostly SBP refinance. Whereas, ADR of the bank clocked in at 51.5% during CY22, due to cautious lending, but still remained above the threshold.
● Banks coverage remained strong at 107.6%, during the period, whereas NPL ratio stayed at 4%.
● The bank’s CAR stood at 13.83% during the outgoing year which is also above the SBP requirement. BAFL issued ADT-I instrument of PKR7bn in CY22.
● The consolidated performance of the Company remained solid with revenue growth of 18%, gross profit by 43%, EBITDA by 41%. Net profit by 43% and EPS of 84%.
Future Outlook
● BAFL currently operates 894 branches, including 285 Islamic branches. The bank plans to add approximately 140 branches in 2023 to surpass 1,000 branches. Moreover, the bank is of the view that higher NIMs could be witnessed in the upcoming quarters, reflected by recent 300bps increase in interest rates.
Important Disclosures
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