Allied Limited Reports Decline in Profit Amid Rising Expenses

Karachi: Allied Limited (ABL) presented its 1HCY25 financial results during an analyst briefing, revealing a 26% year-on-year decrease in profits to PkR17.5 billion. The decline comes as a result of a contraction in net mark-up income and rising operating expenses.

The bank’s net mark-up income fell by 12% year-on-year, totaling PkR51.7 billion. Both interest income and expenses saw declines of 25% and 31%, respectively, during the period. Conversely, non-markup income grew by 6% to PkR14.1 billion, driven by an increase in fee income and capital gains.

Operating expenses rose by 13% to PkR32.1 billion, attributed largely to higher salaries and advertising costs. Gross advances decreased by 30% from December 2024, standing at PkR751 billion, compared to the industry’s average decline of 16%.

The bank’s non-performing loan ratio was at 1.64%, with overall infection coverage at 118%. ABL’s investment portfolio increased significantly by 84% from December 2024, reaching PkR2.1 trillion by June 2025. The portfolio includes PkR1.3 trillion in PIBs and PkR582 billion in T-bills.

Deposits grew by 11% over the same period, reaching PkR2.25 trillion, with the bank’s market share at 6%. Management aims to focus on low-cost deposits moving forward. Borrowings saw a substantial increase of 45%, totaling PkR669 billion.

Despite challenges, the bank’s Capital Adequacy Ratio improved to 29.9% by June 2025, up from 26.7% in December 2024. Management anticipates a potential decline in interest rates by 50-100 basis points by year-end, though risks remain due to fluctuating food and oil prices.