BankIslami Posts 880% Higher Profits

The Board of Directors of BankIslami Pakistan Limited announced its financial results for the nine months ended September 30, 2019.

The bank posted a profit after tax of Rs. 973 million for the nine months ended September 30, 2019, which is 8.8 times higher than the Rs. 99 Million recorded during the same period last year.

BankIslami recorded operating profit before provisions of Rs. 2.78 billion, which is 18.3 times higher than Rs. 144 million generated during the same period last year. A growth of 76.5% in net spreads earned, emanating from the increase in earning assets of the Bank and the rise in SBP policy rate were the main contributors. Improvements in cost to income ratio from 97.2% to 66.2% were registered during the period.

BankIslami’s balance sheet depicted impressive growth despite challenges arising from the prevailing economic environment. On the back of its effectively managed branch network, the bank’s deposit base grew by 15.4% to close at Rs. 213 billion.

In line with an increase in sources, the assets base of the Group also rose by 21.9% in comparison to the assets standing at the end of December 2018. Owing to pre-emptive measures taken on the recovery side, Bank’s NPL ratio decreased to 10.6% in September 2019 vis-à-vis NPL ratio of 11.9% as of December 2018.

As stated above, the Bank booked accelerated provisioning against its portfolio, due to which, the coverage ratio (including general provisions) improved to 82.4% by September 2019 as opposed to a coverage ratio of 72.5% at the end of December 2018.

BankIslami, to boost its capital base, is in the process of issuing Listed Additional Tier-1 Capital (Sukuk) of Rs. 2 billion [including a greenshoe option of Rs. 500 million] during the year 2019. The Bank has also announced the issuance of Right Shares amounting to Rs. 1 billion which will further fortify its net worth and capital adequacy.