Bank Alfalah bags yearly profit of Rs3.5 billion in 2011
Sunday, March 4th, 2012 5:59:54 by Wajahat Javed
Bank Alfalah bags yearly profit of Rs3.5 billion in 2011
Saturday, March 3, 2012: Bank Alfalah has announced its yearly profits for the year 2011. The profits have reached a new peak in the 12-year history of the Bank with the amounts almost tripling than those registered in 2010.
As per the recent announcement, Bank Alfalah has bagged a profit of Rs3.5 billion in 2011 this amount is the highest the bank has ever earned. The prime reason for the sudden jump in the profits was the unexpected rise in the net
interest margin. Net interest margin is the difference between the interests what the bank charges from its borrowers and what it pays out to its depositors.
Bank Alfalah’s net interest margin for the aforementioned year rose by about 36% to Rs18.6 billion on the back of higher interest rates as well as a sharp rise in the bank’s deposit base, which has allowed it to increase lending.
A portfolio manager who chooses to stay anonymous said, “Bank Alfalah is fundamentally a growth story. They open around 20 to 30 branches every year to keep expanding their deposit base.”
Bilal Qamar, a research analyst at JS Global Capital, said “Provisions for non-performing loans have been lower across the banking sector this year. In addition, remittances have been very high, which helps the banks with their
fee income, raising their non-interest revenues.”
Qamar further said that the Karachi Interbank Offered Rate (Kibor) was higher by an average of 60 basis points in 2011 compared to 2010.
Bank Alfalah appears to be the recipient of overall favourable outcomes in the market, the bank has also harvested the rewards of its own strategy of persistent growth. Despite the rapid growth in revenues, Bank Alfalah has been
able to keep the increase in its operational costs relatively low. Total operational costs rose by about 11.5%, on par with inflation during the past year. This is despite the fact that the bank continued to add branches, with at least four new branches opening
in 2011, taking Bank Alfalah’s nationwide network tally to 390.
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Posted by Wajahat Javed
on Mar 4 2012. Filed under Business, Pakistan.
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