Bank Alfalah Records Rs7B Earnings in 1Q2025
Staff Report:
Bank Alfalah (BAFL) announced its 1Q2025 result on Thursday, where the bank recorded consolidated earnings of Rs7.1bn (EPS of Rs4.49), down 29% YoY while up 53% QoQ.
Alongside the results, the bank also announced a first interim cash dividend of Rs2.5/share, which came in higher than expectations.
Net Interest Income (NII) for 1Q2025 settled at Rs33.6bn, up 6% YoY and 5% QoQ, driven by (1) higher asset yields and (2) an increase in the zero-cost current account mix from 38% in 4Q2024 to 42% in 1Q2025.
Non interest income increased by 14% YoY to Rs9.5bn, driven by higher income from derivatives and gain on securities. While same is down by 21% QoQ, amid lower gain on securities.Bank Alfalah Non-Performing Loans Increased in 2Q2024
Non-interest expenses increased by 38% YoY and 3% QoQ to Rs27.6bn in 1Q2025. The significant YoY jump is primarily due to a rise in marketing, advertisement, and publicity expenses, which surged from Rs514mn in 1Q2024 to Rs3.8bn in 1Q2025. As per channel checks, this expense is related to certain initiatives taken for remittances and is one-off.
BAFL recorded a provision reversal of Rs468mn in 1Q2025 compared to reversal of Rs207mn in 1Q2024 and provision expense of Rs63mn in 4Q2024.
Effective tax rate of bank clocked in at 55% in 1Q2025 vs. 50% in 1Q2024 and 72% in 4Q2024.
We maintain a buy stance on BAFL, with the stock currently trading at a 2025E PE ratio of 3.2x and a PBV ratio of 0.6x,” Topline Research said.
