Askari Bank Limited (AKBL) announced its Financial Results where net profits for 2020 increased by 54% YoY to Rs 10.85 billion compared to the profits of Rs 7 billion in 2019. AKBL’s earnings per share grew from PKR 5.58/share to PKR 8.61/share.
Bank also announced an unexpected dividend of PKR 3/Share.
In 2020 Bank’s aggregate net markup income increased by 36% to PKR 30.27 billion, due to effective and timely asset and liability management decisions amidst a sharp decline in interest rates and jump in average earning assets.
Non-markup income increased by 32% YoY with a strong contribution from capital gains realized from sale of securities (PKR 2.5 billion) due to favorable movements in both money and stock markets.
Fee-based income increased by 9% due to increased volume of retail and branch transactions post Covid-19 lockdown, and income from FX dealing mounted by 6.6% YoY, supporting the Bank’s profitability.
Non-markup expenses increased by 11% YoY while the cost to income ratio improved from 62% to 51% in CY20. Bank was successful during the year in reducing its over head costs.
AKBL also recognized net provisions of PKR 1.97 billion, which increased by from PKR 773.27 million recorded in 2019, However, despite higher provisionings, Bank was able to post record Profit.
| PKR in ‘000 | Dec-20 | Dec-19 | % Change |
| Mark-up/return/interest earned | 77,335,131 | 71,712,211 | 7.84% |
| Mark-up/return/interest expensed | 47,059,350 | 49,568,032 | -5.06% |
| Net mark-up/interest income | 30,275,781 | 22,144,179 | 36.72% |
| Fee and commission income | 3,991,285 | 3,654,417 | 9.22% |
| Dividend income | 273,524 | 276,572 | -1.10% |
| Foreign exchange income | 2,673,493 | 2,507,707 | 6.61% |
| Income / (loss) from derivatives | – | – | – |
| Gain on securities | 2,555,400 | 739,918 | 245.36% |
| Other income | 349,438 | 266,102 | 31.32% |
| Total non-mark-up/interest income | 9,843,140 | 7,444,716 | 32.22% |
| Total Income | 40,118,921 | 29,588,895 | 35.59% |
| Operating expenses | 20,217,974 | 18,272,591 | 10.65% |
| Workers’ Welfare Fund | 42,982 | 42,117 | 2.05% |
| Other charges | 48,149 | 99,947 | -51.83% |
| Total non-mark-up/interest expenses | 20,309,105 | 18,414,655 | 10.29% |
| Profit before provisions | 19,809,816 | 11,174,240 | 77.28% |
| Provisions and write offs – net | 1,974,747 | 773,275 | 155.37% |
| Profit before taxation | 17,835,069 | 10,400,965 | 71.48% |
| Taxation | (6,978,072) | (3,368,395) | 107.16% |
| Total profit after taxation | 10,856,997 | 7,032,570 | 54.30% |
| Basic and diluted earnings per share | 8.61 | 5.58 | 54.30% |
Askari Bank Ltd has been witnessing record profitability ever since Mr. Abid Sattar took charge of CEO of the bank in 2018. While Banking book of the bank has also grown significantly. Keeping in view low leverage ratio of the bank, dividend payout was not expected by analysts. However, keeping in vew increased cash requirements of Fauji group, AKBL announced higher dividends.
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