NBP’s income jumps 11.5pc to Rs108bn, AGM told

ISLAMABAD: The 71st annual general meeting of the National Bank of Pakistan was informed on Tuesday that total income of NBP closed at Rs108.1 billion, as against Rs96.9 billion in 2018, showing a yearly increase of 11.5pc.

According to a press statement, the meeting was initially scheduled to be held on April 24, 2020, but was suspended till Tuesday due to the COVID-19 lockdown. The meeting was attended by all the members of the NBP Board as well as its senior management and a large number of shareholders.

The shareholders were informed that in the year 2019, the bank recorded a solid growth in terms of both balance sheet size and income. Despite a generally difficult year for the economy, the bank’s net markup/interest income closed 18.5pc higher YoY at Rs71.9 billion (2018: Rs60.7 billion). The bank also earned non-markup/interest earning of Rs36.2 billion. Accordingly, total income of the Bank closed at Rs108.1 billion i.e. 11.5pc higher than Rs96.9 billion of 2018. In 2019, total expenses for the year amounted to Rs65.7 billion against Rs55.7 billion for the year 2018. This amount however included a total of Rs7.3 billion of provision related to extraordinary HR related costs.

Reflecting the general trend of deterioration in asset quality observed across the industry in 2019, NBP also experienced an 11.5pc increase in non-performing loans. While provision charge amounted to Rs14.3 billion, profit before tax closed at Rs28.0 billion, being 5.7pc lower YoY. The bank has consequently focused on strengthening its balance sheet through this provisioning and through building contingency buffers for a total of Rs21.6 billion.

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Due to retrospective applicability of supertax in 2019, the bank’s tax burden amounted to Rs12.2 billion, resulting in PAT of Rs15.8 billion.

During 2019, total assets of the bank increased by 11.6pc to Rs3,124.4 billion, from Rs2,798.6 billion a year before. Gross advances increased by 8.7pc to Rs1,151.3 billion, investment (at cost) closed 12.1pc up at Rs1,417.6 billion, and deposits grew by 9.3pc to Rs2,198.0 billion.

The bank is facing contingencies related to pension benefits of its retired employees, and has filed a review petition where a final decision is still awaited. The financial impact of the subject case has not been included in the instant financial statements as the Bank looks forward to a favourable outcome of the case.

The CEO apprised the shareholders that the bank is constantly monitoring the situation regarding the swift spread of the COVID-19. Amid the pandemic, the bank is taking all necessary steps to ensure the well-being of its employees and customers and at the same time prevent any potential business impact to the economy.

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