Allied Bank (ABL) has announced a remarkable profit-after-tax of Rs44.4 billion ($159.4 million) for the year 2024, reflecting a 7% growth compared to its earnings in the previous year. The announcement, made through a stock notice on Tuesday, showcases the bank’s steady financial performance in a year marked by challenges in the global and local economic environment. ABL’s earnings per share (EPS) for 2024 stood at Rs38.77, an increase from the Rs36.07 recorded in 2023, further reinforcing its strong position in the banking sector.
In a positive move for its shareholders, ABL’s board of directors declared a final cash dividend of Rs4 per share (40%) in addition to the interim dividends of Rs12 per share (120%) that had already been paid out. These dividend payouts reflect the bank’s commitment to delivering consistent value to its investors while maintaining a healthy payout ratio amidst market volatility.
A significant driver of Allied Bank’s performance in 2024 was its net interest income, which totaled Rs115.4 billion. This marked a slight increase of over 2% from the previous year, where net interest income stood at Rs112.9 billion. The increase in net interest income highlights ABL’s efficient management of its core operations, which helped the bank remain resilient despite an unpredictable macroeconomic environment.
The bank also experienced strong growth in its fee and commission income, which jumped by nearly 37% year-on-year, reaching Rs16.2 billion. This is up from Rs11.8 billion in 2023, demonstrating ABL’s strategic efforts to diversify its revenue streams and capitalize on non-interest-based services. This growth reflects the bank’s focus on building a more sustainable business model, reducing its reliance on traditional interest-based income.
In addition to the growth in fee income, ABL posted a significant increase in gains from securities, which surged by 308% to Rs3.4 billion in 2024, compared to a modest Rs844 million in 2023. This impressive growth in securities income showcases the bank’s ability to manage its investment portfolio effectively and capitalize on favorable market conditions. The surge in securities income was a key contributor to ABL’s strong performance during the year.
ABL’s non-markup income, which includes gains from investments and fee-based services, stood at Rs30.3 billion for 2024. This marked an increase of nearly 19% from the Rs25.6 billion posted in the previous year. This growth is indicative of the bank’s ongoing efforts to diversify its income sources and build a more robust revenue model that is less dependent on traditional banking operations.
However, the bank did experience an uptick in its non-interest expenses, which rose to Rs59.5 billion in 2024, compared to Rs49.7 billion in the preceding year. This 20% increase in expenses was primarily due to higher operational costs, which included investments in digital infrastructure and technology upgrades. These investments are crucial for ABL as it seeks to remain competitive in an increasingly digital banking environment.
Despite the increase in expenses, ABL managed to post a profit before tax (PBT) of Rs89.7 billion in 2024, reflecting a 3% rise from Rs87 billion in 2023. The growth in profit before tax underscores the bank’s ability to maintain profitability while managing the challenges of rising operational costs. Allied Bank’s 2024 performance highlights its ability to grow in a challenging landscape, driven by strategic investments in technology, diversification of income sources, and efficient operational management. With a solid financial foundation and a clear focus on innovation, ABL is well-positioned for future success in the evolving banking sector.