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NBP posts 12.1pc growth in 6 months with increase in Islamic Financing

During the six months period ended June 30, 2018 the National Bank of Pakistan’s (NBP) balance sheet posted 12.1 percent growth and stood to Rs 2,657.79 billion in June 2018 as compared to Rs 2,369.88 billion as of December 31, 2017. No doubt the Bank is the largest commercial bank in Pakistan and has been pursuing a strategy of enhancing its loan book through quality lending and effective post-disbursement managing to keep the NPL (Non performing loan) accretion at a minimal level.

Kibor In Pakistan (September 7, 2018) (Rs)
TENOR BID OFFER
1 – Week 7.43 7.93
2 – Week 7.48 7.98
1 – Month 7.52 8.02
3 – Month 7.72 7.97
6 – Month 7.85 8.1
9 – Month 7.98 8.48
1 – Year 8.07 8.57
2 – Year 8.57 9.07
3- Year 8.96 9.46

The financial experts of the bank mentioned in the financial statement of the bank that as of June, 30, 2018, bank’s gross advances amounted to Rs 912.64 billion, being 6.5 percent higher against that of December 31, 2017. Growth was chiefly believed in domestic loan book. Islamic financing and related assets amounted to Rs 23.13 billion, explaining a 20.9 percent growth over that of December 31, 2017. As of June 30, 2018, Bank’s NPLs amounted to Rs 122.31 billion, were slightly higher by 1.25 percent against NPL of Rs 120.80 billion as of December, 2017. Increase is chiefly because of exchange rate impact of overseas NPL and a seasonal trend in certain local industrial sectors which is predicted to regularize in the upcoming period. NPL to Gross Advances ratio, however, enhanced from 14.10 percent as of December 31, 2017 to 13.4 percent as of June 30, 2018. NPLs are adequately covered through the required specific provision of Rs 113.39 billion and a general provision of Rs 8.84 billion.

The financial statement of the bank also showed that the growth in deposits during the six months period amounted to Rs 183.57 billion. Cost of funds however stayed at 3.9 percent (H1 ’17:3.8percent) as low cost CASA deposits increased from 78 percent in June 2017 to 81.5 percent in June 2018. Growth is also attained in their Islamic banking branches network which increased from 169 branches as of December 31, 2017 to 173 branches as of June 30, 2018. Satisfactory growth is observed in Islamic banking deposits as well as advances during the period under review.

Despite of all economic challenges in Pakistan, the management also registered unconsolidated pre-tax profit of Rs 17.16 billion which is 26 percent larger than Rs 13.61 billion for the same period previous year. Pre-provision profit for the period amounted to Rs 19.98 billion; whereas after-tax profit for the period amounted to Rs 12.49 billion which is 46 percent higher than Rs 8.55 billion for the same period last year. This translates into pre-tax and after-tax return on equity of 25.9 percent and 18.9 percent respectively; and Earnings per share (EPS) of Rs. 5.87 (H1 2017:Rs. 4.02). NBP has earned mark-up/interest income amounting to Rs 66.41 billion, being 17.48 percent higher than Rs 56.53 billion earned during the same period last year. This growth is attained chiefly through volumetric growth in both advances and investment portfolio coupled with the impact of rise in policy rate.

 

Furthermore, financial statement of NBP also showed that the administrative expenses stayed well controlled within the approved budget and the periodic growth observed is in line with the industry norms. Major costs incurred during the period related to salaries & allowances, branch uplift & renovation and IT infrastructure development & maintenance. The Bank offers its Remittance Customers the facility to receive their remittances from a vast network of 1470+ branches across Pakistan.

The Bank has also invested to enhance its customer service quality, corporate image and market visibility through advertisements and social services. Statistics also showed that administrative expenses for H1 ‘2018 amounted to Rs 25.41 billion being slightly higher by 2.7 percent as against to Rs 24.75 billion for the same period previous year.

NBP, being presently designated as a systemically Important Bank, has developed effective plans to comply with the improved regulatory and supervisory requirements set by SBP and Basel framework. For the period under review, Tier-I capital of the Bank has grown from Rres1nbps 101.3 billion as of December 31, 2017 to Rs 114.60 billion as of June 30, 2018. Bank’s total capital & reserves amounted to Rs 188.0 billion as against Rs 175.38 billion as of December 31, 2017.

Bank’s capital adequacy ratio has enhanced from 15.95 percent in December 2017 to 17.79 percent as of June 30, 2018. The National Bank has been no doubt quality of services and CSR is an integral part of NBP’s corporate policy. It has institutionalized through creating a separate Division and running a full-fledged CSR Program to bring positive change and enhancing quality of life in Pakistan. The prime area of focus for CSR initiatives are education, health, woman & child, special persons, culture & relief for affectees of natural disasters.

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