BANK ALFALAH LIMITED Bank Alfalah Limited
Corporate Briefing
2023 - Performance Review & Outlook
21 March 2024
Bank Alfalah Limited
Overview
Major Sponsor | Credit Rating | Domestic Coverage | Global Presence | |||
Dhabi Group (56.1%) | Rated AA+ (Long Term) and | Presence in over 225 cities | 10 International Branches and 1 | |||
A1+ (Short Term) | across Pakistan | offshore banking unit | ||||
in 4 countries |
Our Customers | Profits | Market Share | Branches | |||
Serving around | Profitability remains robust, | Deposits (6.9%), Advances (5.9%), | 1,024 Branches including: | |||
~6.8 million customers | benefitting from interest rate | Trade (8.5%), | 350+ Islamic and | |||
hikes and volumetric growth | Remittances (14.2%) | 1 Digital Lifestyle Branch |
Touchpoints | Capital Adequacy Ratio | Staff Strength | ATMs/ CDMs | |||
85K+ touchpoints in | CAR stands at 16.74% | Staff strength of 14,728 | 1,132 ATMS | |||
addition to Alfa/IB | as of 31 Dec 2023 | as of 31 Dec 2023 | 398 CDMs/ CCDMs | |||
across Pakistan |
Note: Some numbers / calculations are based on the top Banks Dec'23 data collated from informal sources. | 2 |
Bank Alfalah Limited
Dominant Player Across Our Integrated Business Functions
Deposits | Current deposits | Home Finance | ||
Highest growth | Growth | 2nd Largest ENR | ||
of 40% YOY, | of 19.5% YOY. | (Mkt share: 14.9%) | ||
(Mkt Share: 6.9%) | (est. Mkt Share: 7.2%) | Highest acquisitions | ||
(Mkt share: 20.6%) |
Primary Dealer | Trade | Advances | ||
Ranked as no.1 | Market Share: | Market share: | ||
Primary Dealer by | 8.5% | 5.9% | ||
SBP for FY 2022-23 | Imports: 10.0% | |||
Exports: 6.0% |
Note: Some numbers / calculations are based on the top Banks Dec'23 data collated from informal sources.
Credit Cards
2nd Largest ENR
(Mkt share: 25.9%)
2nd Highest acquisitions
(23.2% share)
Remittance
Market share:
14.2%
Auto Finance
3rd Largest ENR
(Mkt share: 14.2%)
2nd Highest acquisitions
(Mkt share: 15.0%)
Digital Banking
Throughput around
PKR 4.0 tn
Ranking on Growth
Ranking on Size
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Financial Results - 2023
4
Financial Results - 2023
Balance Sheet Snapshot
Amount PKR mn | Dec-22 | Sep-23 | Dec-23 | YoY | QoQ |
Cash | 140,613 | 198,021 | 202,692 | 44% | 2% |
Bal with banks | 9,485 | 17,412 | 16,618 | 75% | -5% |
Lending to FI | 115,354 | 60,246 | 119,554 | 4% | 98% |
Advances (net) | 732,375 | 665,596 | 735,052 | 0% | 10% |
Investments (net) | 1,114,407 | 1,506,084 | 2,067,263 | 86% | 37% |
Fixed & Others | 140,963 | 228,231 | 204,738 | 45% | -10% |
Total Assets | 2,253,197 | 2,675,589 | 3,345,917 | 48% | 25% |
Deposits | 1,486,845 | 1,821,313 | 2,084,997 | 40% | 14% |
Sub Loans/ADT1 | 14,000 | 14,000 | 14,000 | 0% | 0% |
Borrowings | 491,180 | 505,793 | 909,543 | 85% | 80% |
Other Liabilities | 161,157 | 214,741 | 199,453 | 24% | -7% |
Total Liabilities | 2,153,182 | 2,555,847 | 3,207,994 | 49% | 26% |
Paid up Capital | 15,772 | 15,772 | 15,772 | 0% | 0% |
Reserves | 79,384 | 102,344 | 110,883 | 40% | 8% |
Reval Surplus | 4,859 | 1,626 | 11,268 | 132% | 593% |
Total Equity | 100,015 | 119,742 | 137,923 | 38% | 15% |
Book Value per Share | 63.41 | 75.92 | 87.45 | 38% | 15% |
- Deposits crossed PKR 2trn mark, with 40% YoY growth, resulting in improved market share. This was backed by branch network expansion, improved staff productivity and effectively executed strategy.
- Advances remained flat YoY on the back of cautious lending. Bank maintained a strong credit discipline amid challenging market fundamentals. Further, Bank has continued with its prudent provisioning.
- Investments up 86% YoY; portfolio remained skewed towards floater PIBs & T-bills.
- Reval. Surplus growth QoQ is mainly due to PKR yield curve movement, as well as recovery in Pak Euro Bonds.
- Book value per share improved to PKR 87.45/sh.
*n.m. denotes not meaningful | 5 |
Financial Results - 2023
Profit & Loss Snapshot
Amount PKR mn | 2022 | 2023 | YoY | 4Q 2022 | 3Q 2023 | 4Q 2023 | YoY | QoQ |
Interest Income | 214,054 | 411,948 | 92% | 69,873 | 109,776 | 125,715 | 80% | 15% |
Interest Expenses | 136,812 | 285,877 | 109% | 46,642 | 77,982 | 90,630 | 94% | 16% |
Net Int Income | 77,242 | 126,070 | 63% | 23,230 | 31,794 | 35,085 | 51% | 10% |
Non Int Income | 21,883 | 28,064 | 28% | 4,428 | 5,531 | 9,545 | 116% | 73% |
Total Income | 99,126 | 154,134 | 55% | 27,658 | 37,325 | 44,630 | 61% | 20% |
Admin expenses | 49,562 | 64,503 | 30% | 14,552 | 15,895 | 18,245 | 25% | 15% |
Other charges | 907 | 1,715 | 89% | 257 | 379 | 665 | 159% | 75% |
Non int expense | 50,497 | 66,497 | 32% | 14,809 | 16,274 | 18,910 | 28% | 16% |
Profit before prov | 48,629 | 87,637 | 80% | 12,849 | 21,050 | 25,720 | 100% | 22% |
Provisions | 12,468 | 9,462 | -24% | 4,332 | 4,162 | 298 | -93% | -93% |
Profit before tax | 36,160 | 78,175 | 116% | 8,517 | 16,888 | 25,422 | 198% | 51% |
Taxation | 17,954 | 41,719 | 132% | 4,401 | 8,256 | 16,218 | 269% | 96% |
Profit after tax | 18,206 | 36,456 | 100% | 4,117 | 8,632 | 9,205 | 124% | 7% |
Diluted EPS (Rupees) * | 11.54 | 23.12 | 100% | 2.61 | 5.47 | 5.84 | 124% | 7% |
DPS (Rupees) | 5.00 | 8.00 | 60% | 2.50 | 0.00 | 5.00 | 100% |
* EPS is calculated using current number of the shares
- NII grew by 63% YoY; which was a function of growth in balance sheet size and improved spreads after re-pricing of the well positioned asset book.
- Non-interestincome +28% YoY
- Fee and Commission Income is up 37%, mainly led by Cards, ADC, and Trade.
- Higher derivatives income.
- Capital gains on shares and foreign securities
- Increase in admin cost mainly due to branch expansion, technology costs, flood donations/CSR initiatives, marketing activities, inflation and PKR volatility.
- Provisions mainly relate to additional charge on the back of prudent provisioning including subjective downgrades and increase in GP; partly offset by investment provision reversal and recovery against written off debts.
- Higher tax rate was mainly on account of prudent windfall tax booked on FX income.
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Financial Results - 2023
Key Ratios
2022 | 1Q 23 | 2Q 23 | 3Q 23 | 4Q 23 | 2023 | |
Yield on Advances | 10.8% | 14.2% | 16.2% | 16.1% | 16.6% | 15.8% |
Yield on Investments | 12.7% | 15.9% | 18.6% | 19.4% | 20.2% | 18.8% |
Cost of Deposits | 6.3% | 8.0% | 9.9% | 10.9% | 11.8% | 10.3% |
Cost of Funds | 7.6% | 9.6% | 12.1% | 13.0% | 13.8% | 12.3% |
NIM | 4.2% | 5.6% | 5.4% | 5.3% | 5.3% | 5.4% |
ROA | 0.9% | 1.9% | 1.2% | 1.3% | 1.3% | 1.4% |
ROE exc. Surplus | 19.5% | 43.3% | 28.6% | 29.5% | 29.8% | 32.5% |
Admin Cost : income | 50.0% | 42.3% | 41.9% | 42.5% | 40.9% | 41.8% |
Gross ADR | 51.5% | 47.1% | 44.9% | 38.9% | 37.3% | 37.3% |
CASA | 71.7% | 68.0% | 71.3% | 70.6% | 69.3% | 69.3% |
CA | 44.5% | 43.7% | 42.8% | 41.0% | 37.9% | 37.9% |
Net Loans (YoY ) | 8.7% | 1.7% | 4.5% | -10.6% | 0.4% | 0.4% |
Deposits (YoY) | 30.5% | 31.9% | 34.7% | 31.5% | 40.2% | 40.2% |
NPL ratio | 4.0% | 4.5% | 4.7% | 5.4% | 4.8% | 4.8% |
Coverage | 107.6% | 103.2% | 102.2% | 112.5% | 112.2% | 112.2% |
CAR | 13.8% | 14.7% | 14.5% | 15.5% | 16.7% | 16.7% |
- NIMs expanded owing to deposits growth and higher interest rates.
- Cost to income ratio decreased to 41.8% as revenue growth outpaced expenses growth.
- ROE jumped on a YoY basis with improved profitability and shares buyback.
-
CA reported around 38%, due to shift from Current to Savings and Term Deposits to
capitalize on market opportunities. - Declining trend in ADR due to cautious lending in view of prevailing economic / business conditions and strong deposits base.
-
NPL ratio increased to 4.8% mainly due to subjective classification/downgrading.
The coverage is sufficient at 112.2%. - CAR comfortably above the regulatory requirement.
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Other Initiatives
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Awards and Recognition during the Year 2023
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Awards
Awards
Pakistan Banking Association
Winner: Best Digital Banking 2023
Annual CFA Pakistan
Excellence Awards
- Winner: Gender Diversity in FI's
-
Winner: Best Investor Relations in FI's
(won for the 10th consecutive time) - Winner: Best Reporting in Environment, Social and Governance
- Runner up: Best Bank of the Year (Large)
- Runner up: Best Digital Banking Services
National Forum for Environment & Health
Recognition for Remarkable Efforts and Initiatives under Corporate Social Responsibility
Future Banking Summit
1st prize in Best Digitization Initiative of Banking Channels
United Nations Global Compact
2nd Prize: Sustainability Efforts
Pakistan Society of Human Resource Management
Recognised as Best Place to Work for Women
Institute of Chartered Accountants
of Pakistan
- 1st Prize: Best Annual Report in Banking Sector
- Merit Certificate for Sustainability Reporting
- 2nd Prize: Use of Technology in Auditing
Pakistan Remittance Initiative
- Highest Remittance Growth Bank of Pakistan
- Leading Remittance Mobilizing Bank of Pakistan
Cambridge IFA - Islamic Retail
Banking Awards
- Most Innovative Islamic Retail Banking Window in Pakistan
- Excellence Award: Premier Banking in Pakistan
Pakistan Digital Award
- Best Digital Advertiser of the Year
- Best SEO Campaign for Roshan Digital Account
- Best e-commerce website for AlfaMall
Rising Women Pakistan
(Women Business Network)
Recognised by the President of Pakistan for facilitating women entrepreneurs in the SME sector through Financial Inclusion
MAP - Corporate Excellence Award
1st prize in Corporate Excellence (Commercial Banking Sector)
Pakistan Stock Exchange (PSX)
Recognised in Top 25 Companies
(Elevated to 10th position from 16th position last year)
South Asian Federation of Accountants
Joint Second Position for Best Presented Annual Report across South Asia
Pakistan Business Council (PBC) &
International Finance Corporation (IFC)
Winner for Top 10 Employer of Choice Awards for Gender Diversity
Mastercard
- Payment Gateway Innovation Award: Recognition for enabling used case for freelancers to receive payments from their customers digitally
- Mastercard MENA East Business Forum: Best Youth Credit Card Proposition Award
Global Diversity, Equity and Inclusion
Benchmark (GDEIB) Awards
Won awards in 15 categories
Professional Network - CSR Summit & Awards
Award for Sustainability Initiatives
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Bank Alfalah Ltd. published this content on 20 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 March 2024 07:53:01 UTC.
