BankIslami Posts Profit After Tax of Over Rs. 1 Billion in H1 2020 - Android

BankIslami Pakistan Ltd announced its financial results for H1 2020. The bank posted a profit after tax of Rs. 1.074… Read More

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BankIslami Pakistan Ltd announced its financial results for H1 2020.

The bank posted a profit after tax of Rs. 1.074 billion for the period, which is 85% higher than profit after tax of Rs. 581 million recorded during the same period last year.

It generated operating profits (before provisions and tax) of Rs. 3.38 million, registering a growth of 89% from last year. Growth in operating profits was driven by higher spreads, enhancement in core earning assets on the back of an increase in deposits, and improvement in cost to income ratio of the bank.

Provision against credit losses increased by around Rs. 670 million as the bank, on a prudent basis, booked subjective charges against potential impairments.

The COVID-19 pandemic resulted in uncertainty and disruption at the social and economic levels across the globe. BankIslami being a responsible institution, took various countermeasures based on guidelines issued by WHO, SBP, and Govt. of Pakistan to ensure the provision of a safe and healthy environment for its employees and valued customers.

Furthermore, pursuant to the deferment related relief packages announced by SBP, the bank engaged with its customers so that they can inhibit the financial challenges ensuing from COVID – 19. It also approached existing and new customers to extend credit facilities under specialized re-financing schemes introduced by the apex authority.

In order to cement its risk absorption capacity and strengthen its capital adequacy, the bank successfully issued Pakistan’s first-ever Listed Islamic Additional Tier-I Capital Sukuk (ADT-1 Sukuk’) during the current year. The total issue size of ADT-1 Sukuk is Rs. 2 billion, of which Rs. 1.7 billion was raised by the bank during the Pre-IPO phase in 2019, while the remaining Rs. 300 million was collected via a successful IPO which was oversubscribed by 1.07 times.

The second quarter of 2020 was influenced by economic challenges escalated due to COVID-19, resulting in a policy rate cut of 625 bps to facilitate the leveraged segments of the economy.

In line with this, moving forward, banking spreads are expected to decline, as the asset portfolio will be repriced largely during the latter half of the year 2020. The risk-averse strategy towards credit offtake, re-profiling of deposits with a greater focus towards accumulating low-cost CASA deposits, and controlled growth in operating expenses will be bank’s focal areas going forward.

Earnings per share of the bank were reported at Rs. 0.9683 as compared with Rs. 0.5732.

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