During the six months ended June 30, 2018, the financial experts of Askari Bank Limited mentioned that the bank’s profit before provisions and taxation for the half year ended June 30, 2018 was registered at Rs.4.07 billion, as compared to Rs. 3.82 billion, for the same period last year, reflecting a rise of 7 percent. Profit after taxation (PAT) declined by 17 percent, to Rs. 2.52 billion chiefly because of fall in aggregate provision reversals as against to the same period last year. Resultantly, earnings per share (EPS) for thehalf year were posted at Rs. 2.00 as compared to Rs. 2.40 for the same period previous year.
Since inception, Askari Bank has concentrated on growth through enhancing service quality, investment in technology and people, utilizing its extensive branch network which includes Islamic and agricultural banking. The management attempts to promote public interest by encouraging community growth and development through sponsoring social service events, supporting education, sports and environment and also contribute in socio-cultural activities. The financial experts of the bank also mentioned in the financial statement that the net mark-up income grew by 14 percent despite the adverse impact of maturities of high yielding government bonds on core revenues. Non fund incomes fell by 16 percent because of a 91 percent reduction in gain from sale of securities, primarily PIBs. However, contribution from business NFIs remained strong and grew by 49 percent driven by a 21 percent improvement in fee, commission and brokerage revenue, and income from dealing in foreign currencies which grew to Rs. 944 million against Rs. 404 million for the corresponding period last year.
Askari Bank has been playing an important role in the development of the SME sector by providing customers with the opportunity to access credit through strategically located Regional Credit Hubs as well as the bank’s branches in the whole country. The Administrative expenses were kept in check, growing by 4 percent as compared to the same period last year.
Customer deposits also grew by 9 percent during the six months under review, ending at Rs. 573 billion as against to Rs. 526 billion at year end 2017. The Bank sustained focus on re-profiling of deposits reflected by a 13 percent rise in aggregate current deposits. Gross advances were posted at Rs. 338 billion during June 30, 2018 explaining a rise of 19 percent. Consequently, the Bank’s ADR also enhanced from 54.1 percent to 58.9 percent at June 30, 2018.
Askari Bank, in participation with EFU Life, brings Education and Marriage Plan that would assist the customers secure the financial future of their children. This plan offers a disciplined way of accumulating an endowment fund that could be used at a later date for a particular purpose, be it to pay for their children’s college or university fee, or to meet their marriage expenses. The plan not only offers high value savings, but also guarantees life assurance protection along with the flexibility to customize the benefits according to individual requirements.
The financial report of Askari Bank also reported that during the current half year, the management issued its first ever additional Tier 1 capital in the form of listed, perpetual, unsecured, subordinated and non-cumulative debt instrument amounting to Rs. 6.0 billion. The issue was fruitfully closed subsequently to the half year end and the proceeds from this issue will contribute towards the additional Tier 1 capital and are aimed at supporting Bank’s future growth of business.
Askari Bank Limited opened its doors for Shariah-compliant banking solutions in the year 2006 by organizing a dedicated Islamic Banking Services Division (IBSD). In a short period of time, Askari Ikhlas Islamic Banking has grown considerably, and now offers a comprehensive range of products and services in personal banking, corporate banking, Islamic treasury, trade services and Banca-Takaful solutions. The Bank’s objective is to put in place an efficient banking system supportive to economic justice and welfare of society in line with the Shariah rules. The management of Askari also mentioned that the Askari Ikhlas Islamic Banking serves the banking needs of the valued customers through its 94 dedicated Islamic Banking branches (including 3 sub-branches) in the major cities of the country. The Bank, under its new sponsors and the new management is actively pursuing the growth of Shariah compliant banking in Pakistan.
Banking sector profitability declined
The banking experts recorded in 2018 that the banking sector’s profitability declined 3 percent year-on-year (YoY) to Rs 39 billion during the April-June quarter primarily because of pension and compliance related expenditures in Pakistan. Total provisioning expense of the sector was up 5 percent as banks continued to see major recoveries in NPLs as banks booked provision reversals. Non-markup expense of the banking sector was up 14 percent to Rs102 billion as big banks. Non-markup income was down 5 percent YoY to Rs48 billion, driven by lower capital gains recorded by banks on account of lower gains on equities and Pakistan Investment Bonds. In April-June, effective tax rate of the banking sector fell to 41 percent as against to 44 percent in the same period a year earlier after the abolishing of super taxation. On the other hand, Islamic banking industry recorded gross profit of Rs 15 billion in the second quarter of 2018, as against to Rs 12 billion in the same period a year earlier. State Bank of Pakistan (SBP), in its Islamic banking bulletin for April-June, mentioned that profitability ratios like return on assets and return on equity of the Islamic banks were posted at 1.3 percent and 20.9 percent, respectively at the end of June. During the period under review, operating expense to gross income ratio fell by 3 percent and reached at 64.5 percent.