Corporate results: NBP posts Rs3.2 billion profit

Amount 4.2% higher than comparable period last year.

KARACHI: National Bank of Pakistan (NBP) posted a net profit of Rs3.2 billion for January-March, which is 4.2% higher than the earnings recorded in the comparable period of 2014.

According to a notice sent to the Karachi Stock Exchange (KSE) on Wednesday, NBP’s net interest income for the period in 2015 clocked up at Rs10.4 billion. Although it was 21.5% higher than the same period of 2014, net interest income recorded a decline of 8% on a quarter-on-quarter basis.

The decrease was because of a 0.5% cut in the key interest rate, which affected the interest earned on advances, according to Shajar Capital investment analyst Hamza Kamal. “The bank’s advances-to-deposit ratio stands at 51% as opposed to 25% PIB-to-deposit ratio – a strategy opposite to its peers,” Kamal said.

NBP’s provisions against non-performing loans and advances amounted to Rs3 billion in January-March. This was 3.8 times higher than the provisioning of Rs802 million in the same period of the last year, which hurt the bank’s bottom line.

The bank continued realising gains on its equity and bond portfolios in the first quarter, which resulted in capital gains of Rs3.5 billion. As opposed to the comparable figure of Rs2.7 billion in the last quarter of 2014, capital gains recorded an increase of about 29% on a quarterly basis.

Non-funded income, however, decreased 10% to Rs2.6 billion on a quarterly basis due to a decrease in the fee and brokerage income in the quarter.

“The absence of penalties in the current quarter has reduced administrative expenses by 12% quarter-on-quarter to Rs10.6 billion,” Kamal added.

Published in The Express Tribune, April 30^th, 2015.

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