Bank Alfalah Posts Massive Improvement in Profits for 2021

Bank Alfalah Limited (BAFL) announced its financial result for the year ended 31 December 2021, where the bank posted a profit after tax of Rs. 14.217 billion (Earning Per Share Rs. 8.00) for the year compared to Rs. 10.475 billion (EPS Rs. 5.89) reported the last year, an improvement of 35.8 percent year on year (YoY).

According to the financial results, the bank recorded a profit of Rs. 14.21 billion in 2021 as compared with Rs. 10.47 billion reported in the previous financial year of 2020, showing an increase of Rs. 3.74 billion in profit.

Last year, the bank’s annual profit showed a negative growth of 17.5 percent due to general provision against advances which affected its position among the competing banks. The bank ranking fell to 11th from 8th position. With the improvement in the balance sheet, it is expected that the bank will maintain its ranking in the top ten most profitable banks of the country.

Revenue increased by 9 percent YoY in net earning assets backed by solid deposit growth, which offset compression in spreads due to interest rate cuts last year. An increase in market share and robust growth in consumer portfolio, higher credit and debit card spend, the phenomenal increase in home remittances and trade flows helped achieve better results.

The bank continues to keep a check on expenses and manage costs prudently while focusing on building revenue momentum through expansion and without compromising on investments in new ventures. During the year, the bank added 60 new branches to the network.

The bank’s advances book grew by 16.3 percent YoY compared to Dec 2021. Part of this growth is due to government-backed schemes for economic relief. At period end, the bank’s gross advances to deposits ratio stood at 61.4 percent. The bank’s non-performing loans ratio improved to 3.5 percent as compared to 4.3 percent as at last year-end, while the non-performing loans remain fully covered through provisions.

Bank Alfalah has persistently demonstrated its commitment to the construction and export segments of Pakistan in line with the Government’s vision to improve business environments for these sectors, respectively. The State Bank of Pakistan launched numerous schemes to support these efforts for economic development and prosperity, in collaboration with local banks and DFIs, out of which Bank Alfalah’s contributions have been acknowledged on multiple forums.

Bank Alfalah disbursed Rs. 3.369 billion in loans under the Mera Pakistan Mera Ghar scheme, the highest in the industry, and was awarded the Best Bank in the country for house loans under the Mera Pakistan Mera Ghar scheme. In a recent achievement, Bank Alfalah was named one of the top three banks in terms of Naya Pakistan Certificate investment and was honored by the Prime Minister of Pakistan for reaching the milestone of $2 billion in RDA deposits. As of 31 December 2021, the Bank remains adequately capitalized with CAR at 14.43 percent.

The exceptional efforts of the network, a diversified product suite, and a well-executed strategic plan resulted in Bank Alfalah achieving an impressive deposit growth of 29.2 percent in 2021. The bank’s deposits closed at Rs. 1.139 trillion at the end of the year. The increase is mainly due to the strong growth of 26.9 percent in current accounts, which stood at Rs. 500.753 billion as of Dec 31, 2021. CA mix was recorded at 44.0 percent.

The bank’s interest-based income surged to Rs. 46 billion in 2021 from Rs. 44 billion of 2020. Its income from non-markup avenues improved significantly which increased to Rs. 16.4 billion in the closing year as compared to Rs. 12.7 billion reported in its yesteryear.

The bank’s expenses also grew to Rs. 36.8 billion in 2021 from Rs. 32 billion reported in 2020. Its share value increased to 8 from 5.89. The board announced the dividend of Rs. 2 per share for the shareholders, which is excluding the Rs. 2 per share dividends announced earlier in the last year.



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