BankIslami Posts 244% Growth in Profit in Q1

BankIslami Pakistan Limited announced its financial results for the quarter ended March 31, 2023, registering a notable increase of 262 percent in profit before tax i.e. Rs. 3.16 billion compared to Rs. 0.87 billion for the corresponding period of last year.

The profit after tax closed at Rs. 1.79 billion in Q1 2023 compared to Rs. 0.52 billion during the same period last year i.e. growth of 244 percent.

From the beginning of the year, BankIslami focused on the deployment of its surplus liquidity in profitable Shariah-compliant avenues due to which its financing book increased by 19.6 percent in the first three months of 2023, improving the Advance to Deposit ratio (gross) from 53 percent in Dec 2022 to 63 percent at the end of Mar 2023.

Likewise, the investment portfolio also grew by 11.9 percent during the first quarter of 2023. Owing to growth in credit book and persistent recovery efforts against delinquent exposures, the infection ratio reduced from 9.0 percent to 8.0 percent during the first quarter of 2023. With the increase in general provision, the overall coverage ratio has been maintained at a desirable level of 95.6 percent. With the improvement in earnings of the bank, the cost-to-income ratio has improved from 49.8 percent for the year 2022 to 47.9 percent for the quarter ended Mar 2023.

The deposit book of the bank observed contraction by 1.2 percent, however, the bank is poised to grow its deposit book during the remaining part of the year on the back of an improved CASA mix. With the rise in profitability and improved credit risk profile of the bank, the Capital Adequacy Ratio (CAR) of the bank was recorded at 17.9 percent, well above the regulatory threshold of 11.50 percent.

To reinforce its capital base and fortify its asset base, the bank is in the process of listing its Additional Tier-1 Sukuk (Ehad Sukuk 2) to the tune of Rs. 1 billion, out of which Rs. 850 million worth of Pre-IPO phase has already been completed.

Going forward, in order to continue its growth trajectory, the bank will focus on increasing its branch network, growing its deposit book, and improving the overall customer experience through leveraging technology and expanding its digital footprint.