Askari Bank Reports 21% Decline in Q1 2024 Profit

Askari Bank Limited (PSX: AKBL) unveiled its earnings report for the first quarter of 2024 (1QCY24) today, showcasing a net profit after tax (PAT) of Rs. 3.7 billion. This figure represents a decline of 21 percent year-on-year (YoY) and a significant 46 percent decrease quarter-on-quarter (QoQ).

Arif Habib Limited (AHL) attributes this decline in profitability primarily to increased provisioning compared to reversals recorded in the corresponding period last year. The sequential decline in markup income, coupled with higher provisioning, contributed to the overall earnings decrease.

In terms of financial performance, the bank recorded a Net Interest Income of Rs. 12.9 billion during 1QCY24, marking an 8 percent rise YoY but a notable 32 percent decrease QoQ. Interest earned witnessed a substantial surge of 76 percent YoY and a 13 percent increase QoQ, while interest expenses saw a significant 94 percent YoY increase and a 25 percent QoQ rise.

Non-Markup income experienced a 23 percent YoY growth and a 19 percent QoQ increase, driven by a 9 percent growth in Fee Income, a 13 percent rise in FX income, and gains on the sale of securities amounting to Rs. 274 million. However, Fee income decreased by 10 percent QoQ, and gains on the sale of securities decreased by 51 percent.

Provisioning in 1QCY24 amounted to Rs. 1.17 billion, compared to a provisioning reversal of Rs. 58 million in the same period last year, marking a substantial increase of 325 percent QoQ.

Operating expenses during 1QCY24 totaled Rs. 8.2 billion, reflecting a 21 percent increase YoY and a 1 percent increase QoQ. The Cost/Income ratio stood at 49 percent for 1QCY24, up from 45 percent YoY.

The effective tax rate for the bank was set at 49 percent during 1QCY24, showing an increase from 44 percent in the same period last year.

AKBL reported earnings per share (EPS) of Rs. 2.6 for 1QCY24, down from Rs. 3.2 in 1QCY23.

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