BankIslami Records a Remarkable 262% Rise in Profit Before Tax in Q1 of 2023

Business Pakistan

BankIslami Pakistan Limited has announced its financial results for the quarter ended March 31, 2023. The bank reported a significant increase in profit before tax, which stood at Rs. 3.16 billion, a growth of 262% compared to the corresponding period of the previous year. Profit after tax also showed substantial growth, closing at Rs. 1.79 billion, a growth of 244% over the same period last year.

During the first three months of 2023, BankIslami focused on deploying its surplus liquidity in profitable Shariah-compliant avenues, resulting in a 19.6% increase in its financing book. This improved the Advance to Deposit ratio (gross) from 53% in December 2022 to 63% at the end of March 2023. The investment portfolio also grew by 11.9% during the first quarter of 2023. Additionally, the infection ratio decreased from 9.0% to 8.0% due to growth in the credit book and persistent recovery efforts against delinquent exposures. The overall coverage ratio has been maintained at a desirable level of 95.6% with the increase in general provision.

With the improvement in earnings of the Bank, the cost to income ratio has improved from 49.8% for the year 2022 to 47.9% for the quarter ended March 2023. Despite the deposit book of the Bank contracting by 1.2%, the Bank is poised to grow its deposit book during the remaining part of the year on the back of improved CASA mix. Capital Adequacy Ratio (CAR) of the Bank recorded at 17.9%, well above the regulatory threshold of 11.50%, due to the rise in profitability and improved credit risk profile of the Bank.

To reinforce its capital base and fortify its asset base, the Bank is in the process of listing its Additional Tier-1 Sukuk (Ehad Sukuk 2) worth Rs. 1 billion. The Pre-IPO phase of Rs. 850 million has already been completed. Going forward, the Bank will focus on increasing its branch network, growing its deposit book, and improving the overall customer experience by leveraging technology and expanding its digital footprint in order to continue its growth trajectory.

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