Review petition: NBP challenges ruling to pay minimum Rs8,000 pension

Bank has avoided paying dividend to shareholders in case decision comes against expectations

Salman Siddiqui February 21, 2018
Bank has avoided paying dividend to shareholders in case decision comes against expectations PHOTO: ONLINE

KARACHI: National Bank of Pakistan (NBP) has decided to file a review petition against the Supreme Court’s ruling binding the state-owned bank to pay minimum Rs8,000 as pension to its retired employees.

“The bank has filed a review petition against the judgment of the Supreme Court of Pakistan in the pension case and has also moved an application for constitution of a larger bench which has been accepted,” NBP President Saeed Ahmad said at a briefing on Tuesday.

“Pending the decision of review petition, financial impact of the subject case has not been included in the financial statements as the bank looks forward to a favourable outcome of the case,” he said.

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Besides the legal battle, the bank was also in contact with high officials in Islamabad to gain support.

The bank, however, avoided paying dividend to its shareholders in a bid to remain on the safe side as in case the pending decision of the review petition comes against its expectation then it would be having sufficient money in reserves to pay higher pensions.

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In the recent past, the bank has already increased minimum pension to Rs6,000 from less than Rs1,000. “The decision, if it is against the expectations, would not erode its (bank) capital base,” he said.

Consolidated profit

The bank posted a consolidated profit of Rs23.34 billion for the year ended on December 31, 2017. This was 1% higher than Rs23.08 billion reported in the preceding year.

Earnings per share improved to Rs10.90 compared to Rs10.83 last year.

NBP branch in China

Ahmad said the higher non-performing loan was not allowing the bank to open its branch in China.

On the other hand, the bank cannot remove the non-performing loan from the balance-sheet. “Considering removing the last five-year non-performing loan, the bank is performing better than any foreign bank at world level,” he said.

Published in The Express Tribune, February 21st, 2018.

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