Allied Bank Limited (PSX: ABL) released its earnings report for the first quarter of CY24 today, revealing a Profit After Tax (PAT) of Rs. 11.6 billion. This marks a substantial increase of 51 percent compared to the same period last year. However, the earnings showed a slight decline of 5 percent Quarter-over-Quarter (QoQ).
The decline in earnings QoQ was primarily attributed to reduced markup and non-markup income, as reported by Arif Habib Limited (AHL). Nevertheless, on a Year-over-Year (YoY) basis, higher income and provisioning reversals contributed significantly to the overall increase in profitability.
Alongside the earnings announcement, ABL declared a cash dividend of Rs. 4.0 per share for the quarter.
In terms of financial performance, ABL reported a Net Interest Income of Rs. 29.2 billion for 1QCY24, reflecting a substantial 43 percent rise from the previous year. However, this figure represents a 10 percent decline from the previous quarter. Interest earned increased by 28 percent YoY and showed a modest 1 percent increase QoQ, while interest expenses witnessed a 22 percent YoY increase and a 7 percent QoQ uptick.
Non-markup income experienced a 4 percent YoY decline and a more significant 16 percent QoQ decrease, primarily due to a substantial drop in FX income by 61 percent YoY and 62 percent QoQ. However, Fee Income demonstrated robust growth, surging by 45 percent YoY and 20 percent QoQ to reach Rs. 4 billion in 1QCY24.
The bank reported a reversal in provisioning of Rs. 163 million, a significant turnaround from the provisioning charge of Rs. 2.3 billion in the same period last year.
Operating expenses stood at Rs. 13.6 billion in 1QCY24, marking a 16 percent YoY and 10 percent QoQ increase. The Cost/Income ratio for 1QCY24 was 39.9 percent, down from 42.9 percent in the same period last year.
The effective tax rate for ABL during 1QCY24 was 49 percent, showing an increase from 43 percent in the same period last year. The bank’s earnings per share (EPS) for Q1 2024 was Rs. 4, compared to Rs. 2.5 in the same period last year.