KARACHI: National Bank of Pakistan (NBP) has posted a consolidated profit of Rs20 billion in 2015, which is 25% higher than its earnings in the preceding year.
A stock notice on Friday reported earnings per share of NBP at Rs9.4 as opposed to Rs7.5 in 2014, which was above market expectations. The surprising increase in the bank’s profitability coupled with the dividend announcement of Rs7.5 per share resulted in the share price of NBP hitting its upper circuit during trading on the Pakistan Stock Exchange (PSX).
The net interest income of NBP (post-provisions) amounted to Rs44.4 billion in 2015, up 24% from a year ago. In contrast, the year-on-year increase in the non-interest income of the bank clocked up at 12%. Non-interest income amounted to Rs35.1 billion, as dividend income and net gains on the sale of securities rose 30% and 36%, respectively, over the year. In the fourth quarter of 2015 alone, NBP made a profit of Rs7.8 billion, which reflects a 75% rise over the earnings recorded in the preceding three-month period. According to Global Capital, the market was “taken by a surprise” when NBP’s net interest income surged by 40.1% on a quarterly basis despite shrinking banking spreads.
“The reported earnings can be justified through exceptional quarter-on-quarter growth in non-markup interest income by 31%,” it said.
According to AKD Securities, the effective tax rate increased to 41% from 31% in 2014 because of changes in the tax structure of banks.
With 4.6 million shares changing hands on Friday, the NBP stock closed at Rs57.5 per share, up 4.9% from a day ago.
Published in The Express Tribune, February 20th, 2016.