MAJOR BANKS EARNING PROFITS DESPITE CHALLENGES

KANWAL SALEEM
(feedback@pgeconomist.com)

Nov 19 - 25, 2012

Despite difficult economic situation in the country, major banks are showing resilience and registering profits posing strong outlook.

The Board of Directors of the MCB had approved the financial statements for the nine months ending on September 30, 2012, which shows that MCB has registered outstanding results by posting profit before tax of Rs25.459 billion and profit after tax of Rs16.673 billion, with 5 percent and 7 percent increase registered in PBT and PAT respectively. The statement said that net markup income of the Bank was reported at Rs31.241 billion whereas non-markup income increased by 14 percent to Rs6.935 billion.

Administrative expenses (before pension fund reversal) witnessed a controlled increase of 6 percent over the corresponding period last year. Due to effective risk management policies adopted by the Bank, the provisioning charge significantly decreased by 98 percent to Rs54 million. Financial position of the Bank strengthened with Rs108 billion rise in asset base over December 2011 and was reported at Rs761.282 billion as at September 30, 2012. Net investments increased by Rs98.6 billion to Rs415.212 billion. Gross advances also increased by 1 percent to Rs250.722 billion while the infection ratio came improved to 10.4 percent (Dec 2011: 10.75 percent). Deposits increased by Rs50.4 billion to Rs541.613 billion, with 18 percent growth in savings accounts, 11 percent increase in current accounts and 9 percent decrease in term deposits. This improved the CASA ratio to 84 percent compared to 81 percent as of December 31, 2011.

Earnings per share (EPS) for the period came to Rs18.13 compared to Rs16.87 for September 30, 2011. Return on assets came to 3.14 percent, return on equity was recorded at 26.87 percent and book value per share improved to 94.07.

The Board of Directors declared 3rd interim cash dividend of Rs3.0 per share _ (September 30, 2011: cash dividend Rs3.0 per share) for the period ended September 30, 2012, in addition to interim cash dividends of Rs7 already paid.

On the other hand, the profit after tax of National Bank of Pakistan (NBP) has increased to Rs 11.810 billion in the nine month period ended September 30, 2012 as compared to Rs 11.402 billion earned in the corresponding period in 2011.

The board of directors of the NBP declared that the bank's earning per share has increased to Rs 6.38 in the period under review against Rs 6.16 in the same period last year.

According to the financial results sent to Stock Exchange, the bank's mark-up/return/interest earning increased to Rs 75.241 billion in the nine-month period this year against Rs 69.487 billion in the same period last year.

The bank's mark-up/return/interest expenses increased to Rs 44.327 billion against Rs 36.311 billion. The bank's total non-markup and interest income increased to Rs 15.879 billion against Rs 13.175 billion while total non-markup / interest expenses increased to Rs 25.064 billion against Rs 22.374 billion.

The bank's profit before taxation increased to Rs 16.802 billion in this period against Rs 16.750 billion in the same period last year. On quarterly basis, the bank's profit after taxation increased to Rs 3.508 billion translating into earning per share of Rs 1.95 in the quarter ended September 30, 2012 as compared to after tax profit of Rs 3.311 billion with per share earning of Rs 1.79 in the same quarter last year.

The smaller banks are facing difficult situation as they are registering losses. NIB Bank has posted Rs 628.219 million as after tax loss in the nine month period ended September 30, as compared to after tax profit of Rs 195.704 million earned in the corresponding period in 2011.

The board of directors of the bank had declared that the bank has posted Re 0.06 as per share loss in the period under review against earning per share of Re 0.04 in the same period last year.

According to the financial results sent to Stock Exchange, the bank's mark-up/return/interest earning reduced to Rs 10.365 billion in this period against Rs 10.418 billion in the same period last year. The bank's mark-up/return/interest expenses decreased to Rs 8.318 billion against Rs 8.911 billion.

The bank's total non-mark-up/interest income increased to Rs 1.773 billion against Rs 1.627 billion in the same period last year while total non-mark-up/interest expenses increased to Rs 3.885 billion against Rs 3.665 billion. The bank posted Rs 552.524 million as loss before taxation in this period against after tax loss of Rs 1412.96 million posted in the same period last year.

On quarterly basis, the bank posted Rs 433.74 million as after tax loss translating into per share loss of Re 0.04 in the quarter ended September 30, as compared to after tax profit of Rs 1,564.52 million earned in the same quarter last year.