Corporate results: NBP’s profits plummet to Rs5.5b

Provision for bad loans increases 77%.

KARACHI: National Bank of Pakistan (NBP) announced its financial results for calendar year 2013 (CY13) on Monday, showing a profit after tax of Rs5.5 billion, down from Rs14.94 billion in CY12.

Earnings per share (EPS) dropped by 63% to Rs2.59 in CY13 compared with Rs7.02 in CY12.

The decline can be mainly attributed to a massive increase in provision for non-performing loans (NPLs). According to the financials released, provisions for NPLs rose by 77% in CY13 to Rs17.38 billion compared with Rs9.84 billion in CY12. According to Topline Securites, though nothing is confirmed on new NPLs accretions, most of the provisions can be attributed to losses in overseas operations, reportedly in Bangladesh.



Due to the unusually high jump in provisions, the bank posted a loss of Rs746 million in the final quarter of 2013, according to Global Research. This resulted in a loss per share of Rs0.35 in the last quarter, compared with a profit per share of Rs0.11 in the preceding quarter which ended on September 2013, and Rs0.61 in the quarter ended December 2012.

Earnings were also affected by a 12% drop in net interest income (NII), down to to Rs38.2 billion in CY13, compared with Rs43.67 billion in CY12. According to the Topline Securities report, the drop is mainly because of banking spreads shrinking from 7.02% in 2012 to 6.24% in 2013. On a quarterly basis, however, NII increased by 18.6% to Rs9.86 billion. 

Published in The Express Tribune, March 4^th, 2014.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.