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National Bank of Pakistan posts profit in December 2017

National Bank of Pakistan (NBP) always brings superior technology, products and services to their customers in the whole country, counting the northern, rural and suburb sectors. In 2017, NBP installed the world’s highest ATM at Khunjerab Pass, near Pakistan-China border at an altitude of 15,397 feet above the sea level. This initiative shows that the bank supports their customer at every step of the way and cover vast distances to be there and offer convenience to them. Furthermore, the management always focuses on the balance sheet items and also makes its performance best in the banking sector of Pakistan.

In the annual report of 2017, the financial experts of NBP have revealed that the Bank also performed well during 2017 despite the all-time narrow policy rates, stiff market competition and a decade-low presentation by the Pakistan Stock Exchange (PSX). While the profitability was sustained, an important growth was attained in the balance sheet growth as the same crossed Rs2 trillion landmark for the first time. Furthermore, they have also mentioned that after-tax-profit rose by 1.0 percent to Rs23,028 million as against to Rs22,752 million during last year. This translates into a return on average assets (RoA) of 1.1 percent as against to RoA of 1.2 percent during 2016.

As the largest public sector bank in Pakistan, the management of the NBP remains committed towards completing its role in our country’s economic development; be it through financing large scale infrastructure projects (including those which are part of CPEC) or offering business loans to Pakistan’s youth or enlarging financing to farmers and new home owners. At the same time, the Bank is also committed in focusing on reducing its cost of funds by a concerted policy of mobilizing current and saving deposits accounts enabling the Bank to enhance its competitiveness in the loan market.

The financial statement of the bank also shows that pre-tax and after-tax return on average equity was recorded to 29.0 percent and 18.7 percent respectively. Pre-provisions profit amounted to Rs36,791 million as compared to Rs37,539 million of 2016, recording a YoY decline of 2 percent. Before-tax profit amounted to Rs35,599 million as compared to Rs37,141 million of 2016, recording a fall of 4.15 percent. (EPS) earnings per share were also registered to Rs10.82 in 2017 as compared to Rs10.69 during 2016.
National Bank of Pakistan’s operating expenses for the year worth Rs48,528 million i.e. 3 percent higher as against to Rs47,253 million during previous year. This translates into cost-to-income ratio of 57 percent, slightly up as compared to 56 percent of previous year. YoY deposits also rose by Rs69,790 million to Rs1,727,102 million.


It is said that NBP has devised and implemented a policy within this broad macro-economic viewpoint and is focusing on both qualitative and quantitative improvements in main sections of its operations in Pakistan. The strategic goals include the continuation of the bank’s leading role in Pakistan by adopting latest technical developments, growth of alternative delivery channels and improvement in service quality. Recently the management has organized service quality group and payment services & digital banking group to promote service culture and to bring innovation, e-payment & handle remittance/cash management & government business highlighting Bank’s focus towards digital financial services and to promote financial inclusion.

Despite challenging market conditions, during 2017 the National Bank continued to enlarge credit to high quality borrowers from all sectors across the economy. In the annual statement 2017, it is also mentioned that the growth was chiefly registered in agriculture and commodity operations, SME and infrastructure project of economic importance, mainly related to water and power sector. At the end of 2017, financial experts of the Bank mentioned that Bank’s net advances amounted to Rs739,772 million which is 10.8 percent higher than Rs667,389 million at the end of same period previous year. Rupees denominated loans amounted to Rs778,778 million (gross), showing 90.9 percent of the total loan book. The Bank’s corporate loan book was raised by 6.8 percent to 430,565 million, being one of the highest in the banking sector in Pakistan.

Despite limited opportunities and tough market situations in the overseas markets, bank’s international loan book increased by 31 percent during the year to Rs75,175 million. For the period under review, non performing loans (NPLs) amounted to Rs120,798 million representing a net accretion of Rs1,382 million i.e. 1.2 percent over the last year. Growth is mainly observed in seasonal financing, which is usually declassified/regularized by the end of Q1 this year 2018. The experts also identified that NPLs have been prudently and adequately offered for as per SBP regulatory requirements.

Bank’s coverage ratio as of December 31, 2017 was registered 92 percent. Despite a considerably high growth in deposits, the Bank’s ADR (gross) as at December 31, 2017 reached at 49.6 percent, up against 47.2 percent of prior year. Reversal in specific provision for the year was Rs 1,000 million, with a ending balance of Rs110,651 million, slightly up against Rs109,655 million as of December 31, 2016. As of December 31, 2017, general provisions amounted to 6,515 million with a net accretion of Rs2,068 million from prior year’s Rs4,431 million. Furthermore, financial statement of NBP also revealed that general loan loss provisions are created prudently against certain loans, which are not yet classified, and as well as against consumer and SME loans at rate ranging from 1.0 to 7.0 percent of the performing portfolio as required by the central bank.

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