Corporate results: NBP’s earnings jump 97.3%

Provisions for non-performing loans decline 72.6%.

KARACHI: National Bank of Pakistan (NBP) announced a consolidated profit of Rs11.7 billion for the first nine months of 2014, which is 97.3% higher than the earnings of Rs5.9 billion recorded over the same period last year.

NBP’s net interest income (NII) increased 5.8% in January-September on a year-on-year (YoY) basis to Rs30.6 billion. Although banking spreads averaged 6% in the first nine months of 2014 against the average of 6.3% in the same period of 2013, NII received support from a higher yield on increasing Pakistan Investment Bonds (PIBs) portfolio of banks and rising credit growth, according to Topline Securities.



Besides NII, provisions against non-performing loans (NPLs) declined 72.6% to Rs3.3 billion, while non-interest income increased 22.4% to Rs22.8 billion.

“Higher non-interest income is mainly linked to 83.2% higher capital gains to Rs6 billion and 16.7% higher foreign exchange gains to Rs4 billion,” said Topline Securities in a note.

In the July-September quarter alone, NBP’s profit remained Rs4 billion against the earnings of Rs4.4 billion in the preceding quarter. NII, which was down 5.4% to Rs10.5 billion, and non-interest income, which declined 28.6% to Rs6.9 billion, caused the dip in earnings.

On a YoY basis, NBP’s profit increased Rs4.1 billion from the loss of Rs94 million. In the third quarter of the year, significant improvement came from low provisions against NPLs that dropped to Rs1.3 billion from Rs5.6 billion in the same quarter of the last year.

NBP had recorded heavy provisions on its Bangladesh operations last year, which was a one-off event.

Bank Alfalah’s profit increaes 21%

The profit of Bank Alfalah for January-September increased to over Rs4 billion, which is up 21% from the earnings recorded over the same period of 2013.

Its net interest income after provisions for the nine-month period clocked up at Rs14.7 billion, which is 28.8% higher than the comparable figure recorded at the end of September 2013.

In the July-September quarter alone, net earnings of Bank Alfalah clocked up at Rs1.4 billion, slightly up by 2.2% from the same quarter of the preceding year.

Published in The Express Tribune, October 30^th, 2014.

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