BankIslami Reports its Highest-Ever Profitability during 2020
KARACHI: BankIslami has reported its highest-ever profitability during the financial year 2020. Profit after tax closed at Rs. 1.70 billion, up by 56% compared with the profitability of Rs. 1.09 billion during the financial year 2019. Despite downward adjustment in the policy rate, net spreads of the Bank increased by 16% on account of 21% growth in earning assets and improvement in CASA deposit mix to 64% from 60% in Dec’19. Total deposits and current account deposits of the Bank rose by 23% and 33% respectively despite all challenges due to the spread of the COVID-19 pandemic. To remain resilient against ensuing credit risk from the economic slowdown and to counter potential delinquencies, the Bank also booked additional provisioning on a prudent basis during the outgoing year.
During the year 2020, the Bank was also successful in completing the IPO of Pakistan’s First Shariah Compliant and Listed Additional Tier-1 Sukuk, carrying the brand of ‘Ehad Sukuk’. The total size of the Ehad Sukuk is Rs. 2 billion. The issuance of this capital instrument has paved the way for BankIslami to enhance its financing portfolio and deposit base.
Timely support measures are taken by the Government of Pakistan (GoP) and State Bank of Pakistan (SBP) effectively addressed the pressures emanating from pandemics on various businesses and households. Considering the gradual improvement in market appetite on the back of endeavors being made by the Government and SBP to enhance private sector financing, the Bank is working on efficiently increasing its exposure towards rated Corporate clients, Government-backed avenues, Auto Finance, Low-Cost Housing Schemes, Agri Finance, and FI placements. Furthermore, the Bank will continue with its current strategy to capture low-cost CASA deposits which will, in turn, provide stable returns during the prevailing low benchmark rate regime.