- Net Interest Income declined, while additional provisioning took a toll on Net Profit
Bank of Khyber (BoK) announced its Half Year 2019 Financial Result where it posted Net Profit of Rs. 492 million marking a 36% decline as compared to Rs. 776 million profit earned in the same period last year. The EPS stood at Rs. 0.5.
On a quarterly basis, Net Interest Income (NII) witnessed a decline of 8% as compared to last quarter due to decline in Gross Yield which diminished to just 22%, from 39% in the same quarter of last year. Moreover, the effective tax rate for IHCY19 stood at 21% as compared to 39% tax rate charged in the last year.
Poor Operational Performance
Bank of Khyber Net Interest Income has declined drastically in 2019 as Bank booked expansive Deposits, a phenomenon totally opposite to the banking sector trend.
Over the period, banks in Pakistan have reduced their cost of deposits and have increased their Current Deposits/Low-Cost deposits.
BoK also booked additional provisioning of Rs. 145 million during the half-year which resulted in a reduction in net profit.
During the half-year period, the bank experienced a 3% increase in Administrative expenses which led to pressure on Profit After Tax.
The PTI-Led Government of Khyber Pakhtunkhwa (GoKP) has major shareholding in BoK (70%), whereas, Ismail Industries led by Miftah Ismail has 24.2% shareholding.
|Rupees in Million||1HCY19||1HCY18||%Change|
|Net Interest Income||2,461||2,790||-12%|
|Profit before Tax||638||1,267||-50%|
|Profit After Tax||498||776||-36%|