Bank Alfalah Limited reported consolidated earnings per share of PKR 17.63 in CY25, down 30% from PKR 25.27 in CY24. This translates into profit after tax of PKR 27.8 Bn compared to PKR 39.9 Bn in SPLY. The bank declared a dividend of PKR 10.50 per share in CY25, up 24% from PKR 8.50 in CY24. Total income in CY25 reached PKR 183.3 Bn against PKR 172.6 Bn in CY24, an increase of 6%.
This was primarily driven by a 7% increase in net mark-up income from PKR 126.9 Bn in CY24 to PKR 135.9 Bn in CY25. The bank saw its total deposits rise from PKR 2.1 Trn at the end of CY24 to PKR 2.5 Trn at the end of CY25, an increase of 17%. Current accounts saw 17% growth during the year.
Management expects CY25 deposit growth to continue while they focus on mobilizing current deposits. Investments stood at PKR 2.18 Trn at the end of CY25, up 9% from PKR 2.0 Trn at the end of CY24. Management highlighted that out of its portfolio, 27% is in fixed rate instruments with yields ranging between 13% and 15%, 33% in T-Bills with yields close to 11% and floating rate instruments forming the remaining 40% of the portfolio with a yield of about 11.75%.
As a result, the bank is uniquely positioned in this changing rate environment with its fixed rate exposures on the lower side. The bank’s cost to income ratio for CY25 stood at 63% compared to 49% in CY24. This was driven by branch network expansion and marketing expenses related to remittances. The management highlighted that for a retail bank of its size with its products a normalized cost to income ratio is in the range of 50-60%. Capital Adequacy Ratio stood at 15.9% at end Dec-25, up from 18.0% at the end of CY24. With regards to its exposure in the Middle East the management apprised that it is primarily in investment grade bonds which have adequate coverage and have not seen a lot of movement so far.
In response to a question regarding the dividend policy it was clarified that the bank plans to continue its policy of maintaining a consistent dividend for the first 3 quarters of the year with any excess payouts to be given in the last quarter if the board deems it appropriate.
With regard to the planned stock split, it has been approved and book closure is expected in April. Moving forward, the management believes that the policy rate has bottomed out and it is likely that SBP will hike the rate in its upcoming MPC meeting
Important Disclosures
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