Allied Bank Suffers Massive 31% Decline in Profits in H1 17

Allied Bank of Pakistan (ABL) witnessed a tough year as its profits declined by a massive 31% (Rs. 2 billion) during the first half of 2017 compared with a similar period last year.

According to its financial statement (consolidated), the bank posted a profit of Rs. 6.595 billion during January to June 2017 as compared to Rs. 8.67 billion reported in the same period last year. In the first quarter of 2017, ABL reported a profit decline of Rs. 1 billion.

ABL is placed at No. 5 in the league of five major banks in Pakistan, however, it has been facing more pressure of low interest rates compared to other players like Habib Bank Limited and United Bank Limited, which also posted a slight decline in profitability of 1.9 percent and 7 percent, respectively.

The bank made an amount of Rs. 16.2 billion through interest income during the first half of 2017 compared to Rs. 17.7 billion in the same period last year – a decline of 7.8 percent.

ABL suffered a Rs. 2 billion loss from its non-interest sources of income. Its non-interest income decreased to Rs. 4.67 billion in the first half 2017 as compared to Rs. 7.23 billion during H1 2016.

The bank’s earnings from non-interest heads dropped significantly including gain on securities, income of dealing in foreign currencies, dividend and other income. ABL’s expenses also grew to Rs. 10.39 billion this year from Rs. 9.8 billion last year. However, the bank paid out a generous dividend of Rs 1.75 per share to its shareholders in the second quarter as well in addition to the same dividend payout in the first quarter.

The overall revenue stood at Rs 21.7 billion in H1 2017 as compared to Rs. 24.7 billion last year. The bank’s earning per share stands at 5.76, down from 7.58 from in 2016. At present, the bank has been very aggressive to build its marketing and advertisement campaigns on media especially when it comes to new products and services in order to attract customers.

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