Q U A RT E R LY R E P O RT - S E P T E M B E R 3 0, 2 02 3
( U N - A U D I T E D )
The Way Forward
Contents
Company Information | 2 |
Directors' Review - English | 6 |
Directors' Review - Urdu | 11 |
Unconsolidated Condensed Interim Financial Statements | 12 |
Unconsolidated Condensed Interim Statement of Financial Position | 13 |
Unconsolidated Condensed Interim Prot and Loss Account (Un-audited) | 14 |
Unconsolidated Condensed Interim Statement of Comprehensive Income (Un-audited) | 15 |
Unconsolidated Condensed Interim Statement of Changes in Equity | 16 |
Unconsolidated Condensed Interim Cash Flow Statement (Un-audited) | 17 |
Notes to and Forming Part of the Unconsolidated Condensed Interim Financial | |
Statements (Un-audited) | 18 |
Consolidated Condensed Interim Financial Statements | 51 |
Consolidated Condensed Interim Statement of Financial Position | 52 |
Consolidated Condensed Interim Prot and Loss Account (Un-audited) | 53 |
Consolidated Condensed Interim Statement of Comprehensive Income (Un-audited) | 54 |
Consolidated Condensed Interim Statement of Changes in Equity | 55 |
Consolidated Condensed Interim Cash Flow Statement (Un-audited) | 56 |
Notes to and Forming Part of the Consolidated Condensed Interim Financial | |
Statements (Un-audited) | 57 |
QUARTERLY REPORT SEPTEMBER 30, 2023 | 01 |
Company Information
Board of Directors
- Sheikh Nahayan Mabarak Al Nahayan Chairman/Director
Abdulla Nasser Hawaileel Al Mansoori
Director
Abdulla Khalil Al Mutawa
Director
Khalid Mana Saeed Al Otaiba
Director
Khalid Qurashi
Director
Dr. Gyorgy Tamas Ladics
Director
Dr. Ayesha Khan
Director
Atif Aslam Bajwa
President/CEO and Director
02 BANK ALFALAH
Senior Management Team
Atif Aslam Bajwa
President and Chief Executive Ofcer
Aasim Wajid Jawad
Group Head, Strategy, Transformation and Customer Experience
Anjum Hai
Chief Financial Ofcer
Faisal Farooq Khan
Chief Human Resource Ofcer
Faisal Rabbani
Chief Risk Ofcer
Farooq Ahmed Khan
Group Head, Corporate, Investment Banking and
International Business
Haroon Khalid
Group Head, Compliance and Control
Khawaja Muhammad Ahmad
Group Head, Operations and Corporate Services
Mehreen Ahmed
Group Head, Retail Banking
Mohib Hasan Khan
Chief Information Ofcer
Muhammad Akram Sawleh
Company Secretary and Group Head, Legal and Corporate Affairs
Dr. Muhammad Imran
Group Head, Islamic Banking
Muhammad Yahya Khan
Group Head, Digital Banking
Pervez Shahbaz Khan
Group Head, Treasury and Financial Markets
Tahir Khurshid
Group Head, Audit and Inspection
Zahid Anjum
Group Head, Special Assets Management
Chief Financial Ofcer
Anjum Hai
Company Secretary
Muhammad Akram Sawleh
Chief Internal Auditor
Tahir Khurshid
Auditors
A. F. Ferguson & Co.
Chartered Accountants
Registered/Head Ofce
B. A. Building
I. I. Chundrigar Road Karachi, Pakistan bankalfalah.com
Share Registrar
F. D. Registrar Services (Pvt.) Limited
1705, 17th Floor, Saima Trade Tower-A
I. I. Chundrigar Road
Karachi, Pakistan.
Legal Advisor
Mandviwalla & Zafar
Advocates and Legal Consultants
QUARTERLY REPORT SEPTEMBER 30, 2023 | 03 |
Board Committees
Board Audit Committee (BAC) | Board Risk Management Committee (BRMC) |
Khalid Qurashi | Khalid Mana Saeed Al Otaiba |
Chairman | Chairman |
Abdulla Khalil Al Mutawa | Abdulla Khalil Al Mutawa |
Member | Member |
Khalid Mana Saeed Al Otaiba | Khalid Qurashi |
Member | Member |
Dr. Ayesha Khan | Atif Aslam Bajwa |
Member | Member |
Mr. Tahir Khurshid | Mr. Farhan Ali |
Secretary | Secretary |
Board Human Resources, Remuneration & | Board Compensation Committee (BCC) |
Nominations Committee (BHR&NC) | |
Dr. Ayesha Khan | Dr. Ayesha Khan |
Chairperson | Chairperson |
Abdulla Khalil Al Mutawa | Abdulla Khalil Al Mutawa |
Member | Member |
Khalid Mana Saeed Al Otaiba | Khalid Mana Saeed Al Otaiba |
Member | Member |
Dr. Gyorgy Tamas Ladics | Mr. Muhammad Akram Sawleh |
Member | Secretary |
Khalid Qurashi | |
Member | |
Mr. Muhammad Akram Sawleh | |
Secretary |
04 BANK ALFALAH
Board Committees
Board Strategy and Finance Committee | Board Crisis Management Committee | |
(BS&FC) | (BCMC) | |
Abdulla Khalil Al Mutawa | Abdulla Khalil Al Mutawa | |
Chairman | Chairman | |
Khalid Mana Saeed Al Otaiba | Khalid Mana Saeed Al Otaiba | |
Member | Member | |
Dr. Gyorgy Tamas Ladics | Khalid Qurashi | |
Member | Member | |
Dr. Ayesha Khan | Dr. Ayesha Khan | |
Member | Member | |
Khalid Qurashi | Dr. Gyorgy Tamas Ladics | |
Member | Member | |
Atif Aslam Bajwa | Atif Aslam Bajwa | |
Member | Member | |
Mr. Aasim Wajid Jawad | Mr. Muhammad Akram Sawleh | |
Secretary | Secretary | |
Board Information Technology | Board Real Estate Committee (BREC) | |
Committee (BITC) | ||
Dr. Gyorgy Tamas Ladics | Mr. Abdulla Khalil Al Mutawa | |
Chairman | Chairman | |
Abdulla Khalil Al Mutawa | Mr. Khalid Mana Saeed Al Otaiba | |
Member | Member | |
Khalid Mana Saeed Al Otaiba | Mr. Atif Aslam Bajwa | |
Member | Member | |
Atif Aslam Bajwa | Mr. Muhammad Akram Sawleh | |
Member | Secretary | |
Mr. Aasim Wajid Jawad | ||
Secretary |
QUARTERLY REPORT SEPTEMBER 30, 2023 | 05 |
Directors' Review
On behalf of the Board of Directors, we are pleased to present the unconsolidated condensed interim nancial statements of Bank Alfalah Limited for the period ended September 30, 2023.
Economic Review
Pakistan's economy started showing positive signs after the IMF agreement towards the end of 1H'23. State Bank of Pakistan's (SBP) reserves went up signicantly, crossing the USD 8.0 billion mark by July 2023 against the critically low level of USD 4.47 billion a month earlier. During the period, the Rupee depreciated by approximately 36% against the greenback. However, due to key administrative measures taken by the caretaker government and gradually improving macro outlook, the Rupee improved in the third quarter against the USD and closed the quarter at around PKR 287.7 level.
Ination went down during Q3'23 after reaching a peak of 38% during 1H'23, due to the high-base effect and some improvements in food prices on a month-on-month basis. Overall, the average National CPI ination for the CY23 to date is 31.7%. Despite high ination readings and continued negative real interest rates, the SBP decided to maintain an unchanged policy rate of 22% in the last two monetary policy meetings with the expectation of a gradual decline in ination over the next few months.
During FY23, the Current Account Balance posted a decit of USD 2.4 billion compared to the same period last year when the decit clocked in at USD 17.5 billion, a substantial improvement of 86%. This jump came on the back of robust import controls by the administration as Pakistan faced dollar shortages due to debt servicing, delayed support from friendly countries, and a decline in exports and remittances. Domestic supply constraints due to import controls hampered industrial activity. However, post relaxation in import restrictions, economic activities revived. Accordingly, 2MFY24 current account decit reached USD 935 million as against USD 2.0 billion in the same period last year.
Pakistan posted a scal decit of PKR 6,521 billion (7.75% of GDP) which is higher than the budgeted estimate and
the previous year's decit. The Government eyes a decit of PKR 6,923 billion (6.5% of GDP) for FY 2023-24, which is an optimistic target considering that the economy is passing through a phase of slow growth with high ination and a stressed external account. The Government is also taking an optimistic view of GDP growth, projecting a growth rate of 3.5% in 2024 against 0.3% in 2023, emphasising the robust performance of the industrial sector, and targeting an industrial growth rate of 3.4% compared to the previous year's contraction of 2.1%.
The stock market, which remained relatively lackluster during the earlier part of the year, showed a strong resurgence amid IMF program sign-off and macro improvement. KSE 100, the benchmark index of the Pakistan Stock Exchange (PSX), recorded an increase of 14.4% during 9MCY23 to close at 46,233 index points.
Going forward, continuation of the IMF program is crucial for economic policy-making during a volatile political period. Securing external nancing for the mammoth debt repayments during the current year and beyond, managing inationary pressures and stimulating growth while securing a larger and stable IMF program for long-term structural reforms would be critical challenges for the new government post-elections.
06 BANK ALFALAH
Review of the Bank's Performance
Highlights of the Bank's nancial results for the period ended September 30, 2023, are presented as follows:
Financial Position | September 30, 2023 | December 31, 2022 |
Rupees in Millions | ||
Shareholders' Equity | 119,742 | 100,015 |
Total Assets | 2,675,589 | 2,253,197 |
Deposits | 1,821,313 | 1,486,845 |
Advances - net | 665,596 | 732,375 |
Investments - net | 1,506,084 | 1,114,407 |
Financial Performance | Period ended | Period ended |
September 30, 2023 | September 30, 2022 | |
Rupees in Millions | ||
Net Interest Income and Non-Markup Income | 109,504 | 71,467 |
Non-Markup Expenses | 47,587 | 35,688 |
Provisions and write offs (net) | 9,164 | 8,137 |
Prot before tax | 52,753 | 27,643 |
Prot after tax | 27,252 | 14,090 |
Basic and Diluted earnings per share - Rupees | 17.28 | 7.93 |
Bank Alfalah continued its growth momentum during the third quarter, with prot after tax reaching 27.252 billion, which is 93.4% higher than the same period last year (SPLY). The Earning Per Share (EPS) for the nine-months period stands at Rs. 17.28 (Sept 2022: Rs. 7.93). The Bank also continued to make signicant investments in network, people and technology.
Revenue stood at Rs. 109.504 billion, showing an increase of 53.2% as compared to SPLY. Key contribution was from markup income which grew by 68.5% and closed at Rs. 90.985 billion. A combination of net earning assets growth and re-pricing of the asset book at higher rates led to the increase in markup income. Non-markup income is Rs. 18.519 billion, higher by 6.1% compared to SPLY. Higher fee and derivatives income were offset by lower FX and capital loss. The capital loss realised on government securities was due to rebalancing of the book in view of interest rate outlook.
Fee and commission income showed a robust growth of 32.8% year on year (YoY). Card (debit and credit) related fee is up due to higher customer spend by 50.4%.
Further, card acquiring income rose due to an increase in e-commerce spend and POS merchant sales by 46.0%. Branch banking, Trade, guarantees, credit-related fee
and remittance income also increased. Growth in digital transactions volume via Alfa / Internet Banking / ATMs & Cash Deposit Machines (CDMs) and upward revision in ATM withdrawal fee led to increase in alternate delivery channels income.
Expenses continue to be vigilantly monitored, and the Bank manages costs prudently while focusing on building momentum through expansion and investments in new ventures. The Bank's strategy to open new branches, invest in digital technologies and information technology platforms alongside ood relief efforts, marketing, PKR depreciation and ination related effects led to higher operating expenses. Since 2022, the Bank has opened over 160 new branches, which are helping us in customer acquisition, deposit mobilisation and hence revenue growth. Becoming an industry rst, the Bank has opened a state-of-the-art Digital Lifestyle branch, having innovative features including cash and cheque deposit machines, digital lockers and a Buy Now Pay Later (BNPL) store via AlfaMall along with lifestyle features such as dining and workspace sharing. The Bank's cost to income ratio improved to 42.2% as against 49.0% SPLY, taking support from strong revenue growth.
Deposits were reported at Rs. 1.821 trillion at the end of September '23, with YoY growth of 31.5%. The current
QUARTERLY REPORT SEPTEMBER 30, 2023 | 07 |
Atif Aslam Bajwa | Khalid Qurashi |
President and Chief Executive Ofcer | Director |
October 26, 2023 | |
Dubai |
08 BANK ALFALAH
QUARTERLY REPORT SEPTEMBER 30, 2023 | 09 |
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Bank Alfalah Ltd. published this content on 30 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 October 2023 04:26:39 UTC.