Islamabad: Bank Alfalah (BAFL) anticipates robust expansion in current accounts, exceeding 15% overall deposit growth, according to senior management presentations at the Pakistan Day Conference 2025 organized by Topline Securities. The bank foresees interest rates nearing their lowest point and has strategically reduced its borrowing position from Rs1.1 trillion in December 2024 to Rs556 billion in June 2025 by divesting government securities and securing capital gains.

BAFL, the second-largest player in remittances, addressed elevated remittance expenditures, attributing them to a previous incentive structure that favored smaller financial institutions. To maintain market share and bolster import trade, the institution increased spending in this area.

The lender anticipates a significant repricing of floating-rate investments in the second half of 2025, potentially lowering investment yields by 75-100 basis points. Currently, yields on advances and investments stand at 12.2% and 12.4% respectively, as of June 2025, compared to 12.1% and 13.4% in March 2025 and 14.5% and 15.3% in December 2024.

Higher provisioning in the second quarter of 2025 was attributed to sector-specific adjustments, with management anticipating a positive credit outlook. The financial institution holds Rs3.8 billion in general provisions, accumulated during a high-interest-rate period, which may not be necessary given the economic recovery.

BAFL reported a non-performing loan (NPL) ratio of 4.1% in June 2025, down from 4.4% in March 2025 and 4.8% in December 2024. The coverage ratio is 108% as of June 2025, compared to 113% in March 2025 and 111% in December 2024. The bank maintains a strong Capital Adequacy Ratio (CAR) of 17.67%.

The institution holds significant market shares in various segments: 30% in credit cards, 21% in home loans, 19% in auto loans, and 6% in deposits. Current accounts now represent 41.5% of the total deposit mix as of June 2025, up from 38.2% in December 2024.