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Karachi: Askari Bank Ltd (AKBL) reported a mixed set of financial results for the first nine months of the calendar year 2024, with a slight decrease in net profit after tax (NPAT) but significant growth in assets and equity. The bank also highlighted its strategic expansion efforts and improvements in key operational metrics during an analyst briefing.
According to AKD Securities Limited, the bank’s NPAT for the period stood at PkR14.0 billion, reflecting a 4% year-on-year decline, while the total asset and equity base saw a considerable increase, reaching PkR2.29 trillion and PkR116 billion, respectively. The briefing highlighted a 7% year-on-year rise in net mark-up income, attributed to a 29% growth in earning assets. The bank’s cost-to-income ratio increased to 46.6% from 42.2% in the same period last year, as a result of aggressive branch network expansion.
The management has projected stabilization of the cost-to-income ratio, stating that growth in operating costs may decelerate. The bank added 60 new branches during the year, bringing the total to 720, with 28% of these being Islamic branches.
The bank’s CASA deposits grew by 14% year-to-date, comprising a significant portion of the deposit mix, despite a marginal 0.5% quarter-on-quarter decline in total deposits due to tax adjustments. Advances decreased by 34% quarter-on-quarter, primarily due to the retirement of a major short-term financing facility, resulting in an increase in the infection ratio to 6.7%.
In terms of asset quality, the bank improved its provision coverage to 118.5% by the third quarter, up from 96.9% at the end of the previous year. The investment portfolio benefited from declining interest rates, recording a mark-to-market revaluation surplus of PkR517 million.
The bank reported growth in its digital banking segment, with internet and mobile users now making up 46% of its active customer base. The total customer base grew by 31% year-on-year, and the average transaction value surged by 44%.
The management stated that the bank is well-capitalized, with a capital adequacy ratio of 21.2%, indicating a 3% improvement since December 2023. While the capacity to increase dividend payouts has been acknowledged, no decision has been made yet.
Looking ahead, the bank anticipates interest rates to remain in single digits in 2025, supported by declining inflation. Following a recent reduction in the policy rate, AKBL’s earnings spread has improved compared to December 2023 levels.
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