Allied Bank announces annual earnings at Rs17.5 billion

KARACHI: The earnings of Allied Bank Limited (ABL) declined 5 per cent on a year-on-year basis to Rs17.5 billion for the year ended December 31, 2021.

While growth in net fee income (NFI) and reversal in provisioning supported the overall earnings, profitability for the year was down in 2021 mainly due to lower net interest income (NII), recording a decline of 6 per cent on a year-on-year basis.

A final cash dividend of Rs2/share was announced in addition to Rs6/share paid in the first nine months of 2021 taking full dividends per share to Rs8.

The NII of the bank settled at Rs45.6 billion during the year, down 6 per cent on a year-on-year basis and 7 per cent on a quarter-on-quarter basis.

This was primarily on the back of higher interest expense which was up 18 per cent on a year-on-year basis and 17 per cent on a quarter-on-quarter basis owing to a steep rise in the interest rates during the last quarter of 2021.

The net fee income of the bank posted a surge of 25 per cent during 2021 primarily owing to about 23 per cent higher capital gains this year of Rs4.3 billion against a gain of Rs3.5 billion during the same period last year.

The fee income showed a growth of 23 per cent clock-in at Rs7.6 billion during the year, against Rs6.2 billion recorded during the same period last year.

The foreign exchange income of the company was up 16 per cent to Rs1.97 billion as international trade activities improved, while about 28 per cent increase was recorded in the dividend income to Rs2.3 billion against Rs1.8 billion during the same period last year.

The bank booked reversals of Rs811 million in provisioning expenses during 2021, against a charge of Rs844 million booked during 2020.

On a sequential basis, reversal of Rs250 million was recorded during the fourth quarter of 2021, which was recorded at Rs-1.6 billion during the same period last year.

The operating expenses for the bank witnessed a jump of 11 per cent clocking-in at Rs34.5 billion. With this, cost to income ratio jumped to 55 per cent in 2021, against 50 per cent recorded in 2020. The effective tax rate was set at 39 per cent for 2021, same as last year.