Staff Reporter
Karachi
NBP announced earnings on Friday for CY19 at PKR 16.6bn (EPS: PKR 7.79), depicting a YoY decline of 17% while posting a loss of PKR 19mn (PKR 0.01/share) in 4Q owing to 80% higher OPEX QoQ. NII growth for the bank has been impressive during the year while hefty provisioning expenses have continued to stress earnings. No dividend was announced.
NII of the bank settled at PKR 72bn during CY19, increasing by an impressive 18% YoY, while contracting 1% QoQ. NFI of the bank is stagnant YoY as higher dividend income (24% YoY) was countered by lower capital gains (-45% YoY) and lower FX income (-28% YoY). On a sequential basis the bank booked a significant capital gain of PKR 1.6bn (+6.1x QoQ) on the back of impressive equity performance, we view. Fee income and FX income are up 23% and 105% QoQ respectively.
The bank continued to book heavy provisioning expenses – PKR 4.9bn during 4QCY19 (+43% QoQ), higher than expectations. Total provisioning for the bank is up 21% YoY. OPEX clocked-in at PKR 67.4bn during CY19, increasing 17% YoY.
During 4Q the bank booked a massive charge of PKR 24.8bn (+80% QoQ) which was a surprise element. The additional OPEX compared to our expectations has eroded PKR 2.5/share from the bank’s earnings. As per management, this drastic surge relates to an HR contingency cost. Effective tax rate for CY19 was 43% compared to 33% in SPLY.
