FABL (Faysal Bank Limited) has reported earnings for the second quarter of 2023 (2QCY23) at PKR 4.4 billion, translating to an earnings per share (EPS) of PKR 2.87. This reflects a significant increase of 103% compared to the same period last year and a 32% rise from the previous quarter (1QCY23 EPS: PKR 2.18). The boost in year-on-year earnings is primarily attributed to a substantial increase in total income. Additionally, the bank has announced a dividend per share (DPS) of PKR 1.0 alongside these results.
Here are some key highlights from FABL’s performance:
The bank’s total assets surpassed PKR 1.2 trillion in the first half of 2023 (1HCY23).
The market share of bank deposits increased from 3.5% in December 2022 to 3.6% in June 2023.
The Current Account Savings Account (CASA) ratio declined from 80.0% in CY22 to 77.34% in 1HCY23.
The bank’s investment portfolio includes approximately 6-7% in Fixed Sukuks.
Around 80% of the bank’s books are set to be repriced by the end of September 2023.
During 1HCY23, a loss of PKR 1.5 billion was recorded from the sale of securities, compared to PKR 753 million in the same period last year. This was attributed to the volatile stock market and losses from selling conventional securities (PIBs). The bank is planning to invest in high dividend-yielding stocks going forward.
FABL made general provisions of PKR 1.1 billion during 1HCY23 as a prudent measure due to challenging economic conditions.
The infection ratio for 1HCY23 stood at 4.0%, down from 4.58% in CY22, with an improved coverage ratio of 95% in 1HCY23 (compared to 89% in CY22).
Despite high inflation, the bank’s cost-to-income ratio dropped significantly to 51% in 1HCY23, compared to 60% in June 2022. This reduction is attributed to higher revenue growth compared to operating expenses.
The bank achieved a return on equity (ROE) of 20.7% in 1HCY23, a notable increase from the 16.5% ROE in CY22.
The Capital Adequacy Ratio (CAR) of the bank was recorded at 17.5% as of June 2023.
FABL currently operates 700 branches and plans to open 55 new branches within the year.
In terms of the policy rate outlook, the management anticipates an interest rate increase to 25%.
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