Karachi: Bank Alfalah Limited (BAFL) has reported a 26% year-on-year decline in profits for the first half of the calendar year 2025, according to a briefing by the bank's management. The reduction in profit, which stood at PkR15.3 billion, was primarily attributed to a significant 41% increase in administrative expenses, driven by branch expansions, higher staff compensation, and increased marketing expenditures.

Despite the decline in profits, Bank Alfalah witnessed an 8% year-on-year growth in net interest income, supported by strategic investments in fixed-rate instruments and growth in current accounts. Non-interest income also increased by 18% due to capital gains on government securities.

The bank's deposits reached PkR2.3 trillion as of June 2025, reflecting a 9% growth with an improved CASA mix. Looking ahead, the bank aims for a 15% growth in current account deposits, focusing on securing deposits with favorable spreads.

The bank's advances grew by 37% year-on-year, with a focus on low-risk corporate advances and consumer loans. However, the investment book shrunk by 20% due to the realization of gains from declining yields, resulting in a 33% decline in borrowings.

The bank's infection ratio improved to 4.1% with a healthy coverage ratio of 107.6%. In trade, the bank handled significant volumes of imports and exports, maintaining an overall trade market share of 9.5%.

In terms of remittances, Bank Alfalah ranks as the second-largest player, handling US$2.8 billion. The recent government amendment to the Remittance Incentive Scheme is expected to ease the bank's marketing expenditure.

Bank Alfalah remains adequately capitalized with a capital adequacy ratio of 17.7%. The bank's digital throughput rose significantly, marking an 80% increase, with a notable rise in digital lending.

The briefing concluded with a 'BUY' stance on BAFL due to its expanding deposit base and digitalization efforts.