Karachi, February 02, 2023 (PPI-OT): BAFL: CY22 Result Review

Bank Alfalah Limited (BAFL) reported its CY22 earnings earlier today, posting earnings of PkR18.2bn (EPS: PkR10.24), higher by 28% as compared to CY21. The bank posted earnings of PkR4.1bn (EPS: PkR2.32) for 4QCY22, lower by 24%QoQ, while higher by 10% compared to the SPLY. The result was lower than our expectations of PkR3.08/sh for 4QCY22.

Net Interest income for 4QCY22 clocked in at PkR23.3bn for the quarter, higher by 7%QoQ and 92%YoY. The bank earned ~PkR69.7bn in interest, while expensed ~PkR46.4bn during the quarter.

Non-interest income clocked in lower than estimated at PkR4.3bn for 4QCY22, dragged down by lower FX income. To note, the FX income for the final quarter came in at PkR885mn, compared to PkR3.5bn in the earlier quarter. The lower FX income can be attributed to the slowdown in remittances during the quarter, along with generally low volumes in the FX markets.

Operating expenses for the quarter were recorded at PkR14.5bn, higher by 9%QoQ and 50%YoY. The higher costs during the period were attributable to the new branches opened by the bank during the tail end of the year along with salary adjustments for the bank’s staff.

Provisions for the final quarter clocked in at PkR4.3bn, higher by 6%QoQ and 3.85xYoY. This takes the full year provisioning expense for the bank to PkR12.5bn, higher by 4.39x compared to the SPLY.

In addition to its earnings, the bank also announced a PkR2.5/sh cash dividend. This is in addition to the PkR2.5/sh announced in 2QCY22. The bank paid out ~49% of its earnings in the form of dividends in CY22.