Allied Bank Limited (PSX: ABL) has once again demonstrated its robust financial performance, announcing an impressive profit of Rs. 12.5 billion for the second quarter of the calendar year 2024 (2QCY24). This figure represents a significant increase of 25% year-over-year (YoY) and 7% quarter-over-quarter (QoQ), making it the highest-ever quarterly profit after tax in the bank’s history, as reported by Arif Habib Limited.
This remarkable achievement in 2QCY24 highlights the bank’s resilience and strategic acumen, as it continues to navigate the complex financial landscape. For the first half of the calendar year 2024 (1HCY24), Allied Bank’s total earnings reached an impressive Rs. 24.1 billion, marking a 37% YoY increase. This growth has been driven by a combination of factors, including a rise in total income and the reversal of provisions, both of which have played a crucial role in bolstering the bank’s profitability.
One of the key highlights of Allied Bank’s financial performance in 2QCY24 is the cash dividend announcement of Rs. 4 per share, which, when combined with the earlier dividend, brings the total payout for 1HCY24 to Rs. 8 per share. This consistent dividend policy underscores the bank’s commitment to delivering value to its shareholders while maintaining a solid financial foundation.
Digging deeper into the bank’s financial metrics, the Net Interest Income (NII) for 2QCY24 stood at Rs. 29.4 billion, reflecting a 3% YoY decline. However, on a QoQ basis, the NII showed a modest increase of 1%, indicating the bank’s ability to manage its core interest margins despite facing challenges such as rising interest expenses. Specifically, interest expenses rose by 6% YoY and 5% QoQ, while interest income managed to grow by 3% YoY and 4% QoQ. This delicate balance between income and expenses demonstrates Allied Bank’s adeptness in navigating a dynamic interest rate environment.
In addition to its core interest income, Allied Bank saw a significant surge in its Non-Funded Income (NFI), which increased by 59% YoY during 2QCY24. For the first half of the year, the total NFI amounted to Rs. 14.2 billion, a 21% YoY increase. This surge in NFI has been largely driven by gains from the sale of securities, which reached Rs. 838 million, up from Rs. 211 million in the same period last year. Such gains highlight the bank’s strategic investment decisions and its ability to capitalize on market opportunities.
Moreover, Allied Bank’s fee and commission income saw a substantial increase, rising by 33% YoY to Rs. 7.4 billion in 1HCY24. This growth is indicative of the bank’s expanding customer base and its ability to generate revenue through various financial services. However, not all areas experienced growth; the bank’s foreign exchange income faced a 7% YoY decline, amounting to Rs. 4.1 billion during 1HCY24. This decline reflects the challenges in the foreign exchange market, which has been affected by global economic uncertainties and currency fluctuations.
Allied Bank’s earnings per share (EPS) for 2QCY24 came in at Rs. 10.89, contributing to an EPS of Rs. 21.03 for the first half of 2024. These figures not only underscore the bank’s strong profitability but also its consistent ability to generate returns for its shareholders.
On the stock market front, Allied Bank’s share price closed at Rs. 112.62, marking a 0.46% or Rs. 0.52 increase, with a total of 257,629 shares traded on Wednesday. This performance reflects investor confidence in the bank’s financial health and its future growth prospects.
In conclusion, Allied Bank’s record-breaking profit for 2QCY24 is a testament to its strategic foresight, operational efficiency, and commitment to delivering value to its stakeholders. As the bank continues to build on this momentum, it is well-positioned to navigate the challenges and opportunities that lie ahead in the evolving financial landscape.
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