BankIslami Limited posted its highest ever profit after tax of Rs. 2.13 billion in 2021, demonstrating growth of 25.1 percent from a profit of Rs. 1.703 billion posted during the year 2020, according to the financial results.
The year 2021 proved to be a successful year for the bank wherein the bank not only crossed the Rs. 300 billion landmark in deposits by closing its deposit book at Rs. 344.8 billion as of December 31, 2021, depicting a growth of 21.6 percent from last year, but it also crossed the deposit per branch benchmark of Rs. 1 billion at the end of the year 2021.
Vis-à -vis last year, BankIslami’s deposit base grew by 21 percent in 2021, which was mainly attributable to its aggressive deposit mobilization strategy to amplify its Current Account (CA) deposits. CA deposits of the bank went up by 36.9 percent and closed at Rs. 130.6 billion, which in turn also elevated the bank’s CA composition to 37.9 percent in December 2021 from the level of 33.6 percent in December 2020.
With improvement in its deposit base, earning assets of the bank also showed healthy growth, whereby funded exposure was increased by means of financing to the corporate and consumer segment and growth in the investment portfolio. Consequently, Islamic financing of the bank increased by 39.2 percent, whereas investments registered a growth of 31.1 percent.
On account of the increase in overall financing and endeavors made towards recoveries from the delinquent portfolio, the infection ratio of the bank was reduced to 8.7 percent with a coverage ratio of 85.1 percent at the end of December 2021 as compared to infection and coverage ratios of 12.1 percent and 82.7 percent respectively at the end of December 2020.
Despite a decline in spreads on account of time-lag in repricing of floating-rate assets, and increase in operating expenses of the bank attributable to growth in business volumes and inflationary impact; the bank registered an increase in profitability owing to growth in deposit volumes, improvement in service-based non-funded income and substantial recoveries from previously charged delinquencies.
Going forward, the bank remains committed towards growth in low-cost deposits, financing towards both corporate & retail segments, and customer base through aggressive marketing, process improvement by leveraging technology, expanding its digital footprint, acquiring trade business, and introduction of customer-centric and competitive Shariah-compliant products.
