BankIslami posts profit Rs581m after tax

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Staff Reporter

Karachi

The Board of Directors of BankIslami Pakistan Limited has approved the Bank’s financial results for the half year ended June 30, 2019 in their meeting held in Karachi on Thursday.
During half year ended June 30, 2019, the Bank generated operating profit before provisions to the tune of Rs. 1,789 Mn which is 13.7 times higher than numbers reported for the same period last year. The surge in operating profits was mainly attributable to overall increase in net revenue of the Bank by 63.6% as compared to HY2018. The cost to income ratio has reduced to 66.8% during HY2019 as compared to 96.3% in HY2018. Adopting a conservative approach, the Bank has booked accelerated provisions against Islamic Financing and other assets and posted a profit after tax of Rs. 531 Mn for HY 2019 which is over 8 times higher than profit after tax of Rs. 65 Mn for HY2018.
During half year ended June 30, 2019, BankIslami’s balance sheet demonstrated a robust growth on the strength of its extensive branch banking business and its recently rejuvenated sales structure, enabling the Bank to increase its deposit base by 15.8% at the end of June 2019 vis-à-vis December 2018 and closed at Rs. 214 Bn; while the Bank’s asset base grew by 17.8% in comparison to the numbers reported at December 2018 end. Moreover, on the back of effective measures taken by the Bank on the recovery front, the BankIslami’s overall infection ratio has declined from 11.9% as at December 31, 2018 to 9.9% as at June 30, 2019, while the coverage ratio (including general provisions) rose from 72.4% as at December 31, 2018 to 89.4% at the end of June 30, 2019.
In order to strengthen the capital base, BankIslami is in process of issuing its listed Additional Tier-1 Capital (Sukuk) of Rs2b [including greenshoe option of Rs. 500 Mn] during the year 2019. In addition to this, the Bank has also decided in-principle to increase its share capital during the current year by way of issuing right shares amounting to Rs1 billion.