NBP Reports Rs. 24 Billion Profit in 9 Months

National Bank of Pakistan (NBP) has reported a profit after tax of Rs 24.1 billion for the nine-month period ending September 30, 2021, as against a profit after tax of Rs. 26.1 billion in the same period as last year.

The earning per share of the bank stood at Rs. 11.35 per share, on total revenue of Rs 99.5 billion as against Rs. 12.28 per share, on total revenues of Rs. 107.6 billion for the corresponding nine-month period of 2020. This impact was seen after the substantial additional provisions of about Rs. 12.2 billion taken in 2021.

In line with the industry-wide margin compressions, revenues of the bank decreased 7.5% to close at Rs. 99.5 billion (Sep’20: Rs 107.6 billion), primarily reflecting the impact of the drop in the policy rate and normalization of yield on investment.

The bank recorded a net interest income of Rs. 72.4 billion, driven by an Rs. 240 billion growth in the average earning portfolio. While gross mark-up/interest income of the bank closed at Rs. 166.5 billion (19.2% down YoY), the interest/mark-up expense also dropped significantly by 25.4% to Rs. 94.1 billion. Despite the subdued trade activity during most of the period under review, non-mark-up/non-interest earning of the bank remained high at Rs. 27.1 billion.

Despite inflationary pressures and higher operating costs as the Bank continues uninterrupted delivery of services during the pandemic contributing to Pakistan’s economic growth and development, administrative expenses remained well controlled and recorded a marginal increase of 4.5% YoY to close at Rs. 47.0 billion. This translates into a cost-to-income ratio of 47.3%, slightly up from 41.8% in 9M’20. During the period, NPLs of the bank increased by 17.7% to close at Rs. 201.7 billion (Dec’20: Rs. 171.3 billion). To make its balance sheet more resilient in the prevailing circumstances, the Bank created a provision charge of Rs. 12.2 billion during the period.

On the balance sheet side, NBP has one of the industry’s largest balance sheets which further increased by 27.1% to Rs. 3.8 trillion, in the nine months of 2021 from Rs. 3.0 trillion level at the beginning of 2021. The bank’s Balance Sheet has grown on the back of stable deposit base expansion, leveraged with money market borrowings. Gross loans and advances of the Bank amounted to Rs. 1,207.7 billion depicting a 4.1% increase from the year-end 2020 levels.

The major share of the bank’s total funding comes from core customer deposits that contribute 87.2% (Rs. 2,224.6 billion) of the bank’s total deposits that stood at Rs. 2,551.6 billion. Compared to Dec 31, 2020 level, customer deposits have increased by 10.1% or Rs. 204.0 billion.

NBP’s Islamic Banking is operating a network of over 200 dedicated branches throughout the country. Islamic Banking continues to focus on Commercial and SME businesses by expanding trade hubs to provide ease of service to these segments. The bank has made considerable progress on its strategy across its consumer and institutional businesses and for playing its systemically important role in the economy while maintaining a strong and resilient balance sheet to deliver performance for shareholders.

The management is committed to modernizing the Bank to achieve excellence in risk and control environment, business processes, and service quality to clients. The Bank’s business strategy will increase its focus on financing and supporting underserved sectors including SME, Microfinance, Agriculture Finance, and the PM’s Low-Cost Housing initiative on a priority basis.

Source: Pro Pakistani