Islamabad: Bank Alfalah Limited (BAFL) today announced a profit of PKR 20.6 billion for the first half of 2024, marking an 11% increase year-over-year, fueled by significant growth in non-interest income and net interest income (NII). The bank also reported a dividend payout increase and plans for substantial branch expansion.

According to AKD Securities Limited, the performance boost was primarily due to a 53% increase in non-interest income, driven by higher fee and commission income and capital gains on government securities. The net interest income rose by 4% despite a contraction in net interest margins from 5.5% last year to 4.4% this year, affected by an increased cost of funds. Administrative costs were up 25% to PKR 37.9 billion, attributed to the opening of 130 new branches since January 2023 amid inflationary pressures.

The bank’s provisioning expenses decreased by 74%, benefitting from recoveries and reversals. Total deposits reached PKR 2.1 trillion, up 18.3% from last year, with a notable deterioration in the Current and Savings Account (CASA) mix due to higher interest rates. Advances growth was modest at 2.7% year-over-year, with the textile sector making up 23% of the bank’s advances.

Bank Alfalah plans to open an additional 150 branches in 2024, 100 of which will be Islamic, to further strengthen deposit growth and improve the CASA mix. The bank remains well-capitalized with a Capital Adequacy Ratio (CAR) of 17.1% and is targeting an Advance to Deposit Ratio (ADR) of 50% by year-end to mitigate additional taxation.