Profit before VAT & Income Tax rose to Rs 2.01 billion, as opposed to Rs 832 million (before the exceptional VRS costs), a 142 percent growth over the corresponding period last year, the bank said yesterday (07).
The bank’s strong performance was driven by growth in its core banking operations despite raising interest rates and controlled credit growth, it said.
Net Interest income increased by 15 percent to Rs 4,276 million in 1H 2012, arising from selective growth in quality advances and effective management of margins. The bank’s portfolio grew by 18% (annualised) in the 6-months of the year.
Non-interest income increased from Rs 1,171 million to Rs 1,237 million in the 6-months of 2012. The main contributor to this was the growth in foreign exchange income which increased by 20 percent over the corresponding period last year.
During the 6-months under review the bank focussed considerably on controlling its overhead costs. The efforts on improving cost efficiencies have resulted in the improvement of the cost to income ratio to 67 percent, a reduction of 6 percent from December’11.
The bank grew it’s deposit base by Rs 10.3 billion despite a fiercely competitive environment and due to sustained and effective recovery strategies was able to reduce the NPA ratio (net of IIS) from 14.2 percent to 12.3 percent.
Preparing for future growth, the Bank has planned for a Debenture issue via a private placement for early October 2012. The bank intends to invest on identified key areas which are in line with the banks future growth strategies including new product development, branch expansion, service quality improvement, staff training & development and IT infrastructure.
As a result of the strong half-yearly profits posted, Earnings per share was at Rs 6.04 (annualised), while return (profit before tax) on assets and return of equity was at 1.90 percent and 11.50 percent respectively.