BankIslami Limited has reported a profit after tax (PAT) amounting to Rs. 1.436 billion for the half year ended June 2022, 24 percent higher than the PAT of Rs. 1.162 billion generated during the half year ended June 2021.
For the half year ended June 2022, the bank achieved a 155 percent increase in its operating profit before provisions and reported operating profit of Rs. 4.1 billion as compared to Rs. 1.6 billion in the same period last year. This achievement is predominately attributable to an increase of 56 percent in net spread earned on the back of rising profit yields on asset portfolio, growth in current account deposits, and an increase in earning asset base of the bank.
The operating profits also got support from an increase in other income which grew by 62 percent, mainly because of growth in fees from digital channels & trade services, FX income, and sale of non-banking assets.
BankIslami’s balance sheet remained robust with its deposit and net Islamic financing witnessing year-on-year (YoY) growth of 22 percent and 46 percent respectively, demonstrating the confidence of customers and other stakeholders in the bank’s service levels.
Operating expenses of the bank rose by 22.9 percent which was mainly attributable to the abnormal rise in inflation and BankIslami’s continuous investment in human capital and technology to foster growth in business volumes and customer base. Despite an increase in administrative expenses, the efficiency ratio of the bank for the half year ended June 2022 has improved to 57.9 percent from 76.1 percent in the same period last year.
Provisioning against credit losses of the bank for the half year ended June 30, 2022, reported at Rs. 1,356 million. Included in provisioning, the bank has recorded a general provision of Rs. 650 million which has enabled the bank to improve its coverage ratio against its existing non-performing financing portfolio, as well as withstand any risk associated with deterioration in the economic outlook in spite of additional provisioning,
Moving ahead, the bank will continue with its strategy to enhance its overall deposit base, particularly CA, through expanding its branch network, offering competitive Shariah-compliant products for both retail and corporate segments, and growing its trade-based clientele with a specific focus on small and medium-sized enterprises.
Moreover, considering the current macroeconomic scenario and rising trends in policy and inflation rates, the bank is prudently assessing its credit risk profile and will diligently expand its credit exposures based on its sound risk management framework. Additionally, to strengthen its Capital Adequacy and support prospective growth in earning assets, the bank has also planned further issue of an Additional Tier-1 Sukuk of Rs. 1 billion.
