NBP employees' benefits increase Rs2.57bn in a year

ISLAMABAD: The National Bank of Pakistan's employee-related benefits surged to Rs2.574 billion in one year, according to the bank's financial statements for the period ended September 30, 2020.

As per details, the compensations (including salary and other benefits) of NBP employees increased from Rs27.779 billion in September 2019 to Rs30.353 billion in September 2020.

Sources said that the NBP management had hired a number of contractual employees on hefty salaries, which was why the expense in the 'employee benefits' head jumped over Rs2 billion. Overall, around 3,800 employees were currently working at NBP on three-year contracts.

Meanwhile, the bank's Inclusive Development Group (IDG) losses reached Rs5.945 billion from Rs1.6 billion in just one quarter. Sources said that the NBP president and board of directors had approved restructuring of the bank and in this regard created the IDG. This group managed loans including agricultural credit, SME financing, commercial financing and housing sector finance.

In addition, despite shifting the government business to corporate group, which handles more than 70pc of advances, the losses of this group increased from Rs4.563 billion to Rs10.332 billion in just three months.

On the other hand, international banking group profit was Rs455 million in June 2020, which dropped to Rs133 million in September 2020 despite the fact that profit earning home remittance function was added to this group.

Moreover, the bank's operational expenses with reference to September 2019 also reflected an unusual increase of Rs3.220 billion. In September 2019, the figure stood at Rs42.415 billion while in September 2020, it wwelled to Rs45.635 billion.

During the current management's tenure, the Bank’s penalties increased drastically from Rs124.557 million in September 2019 to Rs295.692 million in September 2020.

But the most alarming figure remained the increase in non-performing loans, which was Rs20 billion higher than the September 2019. Sources said that the main reason for this increase was the lack of monitoring of loans and seriousness shown by the head office.