Karachi March 7 2022: During the year 2021, Askari Bank Limited (AKBL) customer deposits crossed PKR 1 trillion mark and registered a year on year growth of 28.4 percent despite lower interest rates, reflecting the trust associated with Askari brand.
Total assets of the Bank grew by 26.9 percent to PKR 1.259 trillion. CASA ratio was recorded at 80 percent at December 31, 2021. On the credit portfolio, the Bank was faced with managing elevated risks in an environment of volatility amidst pandemic.
As the Bank strengthened credit culture through enhanced process efficiencies in loan originations, appraisals and approvals that proved catalytic in proactive support to clients in their stressful times on the road to recovery. However, addition of a large account to the non-performing portfolio warranted full provision which was duly set aside. Non-performing advances increased by 8.5 percent during the year while aggregate provisions increased by 14.3 percent resultantly the coverage ratio improved from 92.0 percent to 97.0 percent.
Askari Bank posted an operating profit (profit before provisions and taxation) of PKR 20.59 billion for the current year, marginally higher than PKR 19.74 billion last year. Profit after tax is reported at PKR 9.70 billion against PKR 10.80 billion, a 10.2 percent decline since last year mainly due to higher provisions against non-performing assets; net provisions requirement increased to PKR 4.94 billion from PKR 1.97 billion last year reflecting prudent approach adopted by the Bank for provisioning against certain borrowers, Earnings per share of PKR 7.70 per share for the year under review compares with PKR 8.57 per share for last year.
At December 31, 2021, the Bank is fully compliant with the regulatory capital ratios. Capital Adequacy Ratio is reported at 13.38 percent against the regulatory requirement of 11.50 percent (including capital conservation buffer of 1.50 percent of the total Risk Weighted Assets (RWA). Leverage ratio is reported at 3.29 percent. The Bank is committed to maintain ample cushion in capital for increased risk absorption capacity.
Net aggregate revenues recorded an increase of 4.6 percent, to PKR 41.78 billion from PKR 39.96 billion last year. Net mark-up income increased by 7.1 percent as declining interest margins were offset by balance sheet growth and improved mix of assets and liabilities. Fee commission and brokerage income registered a growth of 19.7 percent while foreign exchange income increased by 16.8 percent reflecting resumption of trade and transactions to normality. The uptick in trade and transactional volumes was mostly during the second half of the year as the first half had witnessed a pandemic related slowdown. However, aggregate non-mark-up incomes declined by 3.3 percent over last year due to lesser opportunities for gains on investments; investment gains reduced by 68.1 percent. Overall operating expenses increased by 4.9 percent over last year mainly due to increase in compensation and other operating expense and additional provincial levy implemented during the year. Operating expenses to income ratio was maintained at 50 percent.
On a consolidated basis (i.e. with inclusion of share of profit from Bank’s wholly owned subsidiary, Askari Securities Limited) Askari Bank posted profit after tax (PAT) of PKR 9.72 billion for 2021 (2020: PKR 10.86 billion) translating into earnings per share (EPS) of PKR 7.71 per share (2020: PKR 8.61 per share).
AKBL branch network and other supportive elements enable us to increase banking penetration in pursuit of Bank’s inclusive banking policies. The Bank operates with 559 branches across the country; 458 conventional and 101 Islamic Banking branches, a wholesale bank branch in Bahrain and a representative office in Beijing, China. As the pandemic continued during 2021, our main concern remained the health and safety of staff, customers and outsourced service providers Health and safety protocols were implemented throughout branch network to minimise the spread of virus. In a few instances where our staff were diagnosed, prompt communication and actions were initiated including closure of certain branches to minimise the contagion.