Despite the persistently challenging environment during the period, the National Bank of Pakistan reported a profit of over Rs. 26 billion, depicting a massive increase of 114.3 percent compared to Rs. 12.1 billion in H1 last year.
According to the bank’s unconsolidated results, Earnings Per Share closed at Rs. 12.23 as against Rs. 5.71 for H1’22. This excellent performance was driven through an efficient portfolio mix, maturity profiling, effective risk management, and maintaining a stable funding pool that is delivering sustainable and improved operating performance.
In the increasing interest rate environment, gross interest income recorded a 141 percent increase YoY to close at Rs. 432.3 billion being Rs 252.9 billion higher than Rs. 179.4 billion for the same period of 2022. Similarly, the bank’s cost of funds also recorded an increase of 184 percent YoY to close at Rs. 359.2 billion.
Net interest income closed at Rs. 73.1 billion, depicting a YoY increase of 38 percent. Despite the challenging business environment and lackluster performance of the stock market during most of the period, the bank generated total non-fund income amounting to Rs. 19.0 billion which is 4 percent higher YoY.
Amidst the high inflationary pressures and depreciation in Rupee, operating expenses of the Bank for the half-year period under review amounted to Rs. 43.9 billion which is 22.6 percent higher YoY as compared to Rs. 35.8 billion for a similar period last year. However, proactive cost management efforts contained expense growth to 19.2 percent over Q2’22, improving the cost/income ratio from 50.1 percent in H1’22 to 47.6 percent in H1’23. The Bank is currently investing significantly in a major upgrade of its IT systems and infrastructure.
As the Bank is following a prudent risk-profiling strategy, the loan infection ratio stood at 14.5 percent slightly above the 14.3 percent as of Dec’22. Accordingly, the net provision charge amounted to Rs. 0.4 billion i.e. significantly lower by 76.2 percent or Rs. 1.3 billion as compared to Rs. 1.7 billion for H1’22. The key contributor to this drop was the loans and advances that recorded a net reversal of Rs. 0.95 billion.
The bank is operating one of the largest branch networks with more than 1,500 branches in Pakistan and is aggressively pursuing a major organizational transformation program through IT upgrades, digital product enhancement, and initiatives for promoting financial inclusion with a focus on commercial and rural segments. In parallel with its business growth initiatives, the Bank has continued to progress via the remediation of legacy issues in the area of international franchise, risk management, asset quality, operational effectiveness, and HR.
Source: ProPakistani