Balance sheet grows to Rs2.37tr
Our Special Correspondent
National Bank of Pakistan has posted an amount of Rs23.03 billion after-tax profit or 1.2 percent higher as compared with Rs22.75 billion for 2016.
A meeting of the Board of Directors of National Bank of Pakistan (Bank) was held at the NBP Head Office here on Tuesday. The BoD approved the financial statements of the Bank for the year ended December 31, 2017.
Maintaining its position in the industry, the Bank reported highest ever profit after tax numbers in its 69 years history. Despite a generally difficult year for the banking industry, NBP recorded an overall positive performance. Operating income of the Bank for the year amounted to Rs85.3 billion (2016, Rs84.8 billion). While net interest, markup income amounted to Rs54.3 billion (2016: Rs. 54.8 billion); a 3.7 percent growth was observed in non-interest, markup income which amounted to Rs31.1 billion.
The after-tax profit amounted to Rs23.03 billion i.e. 1.2 percent higher against Rs22.75 billion for 2016. This translates into highest ever earnings per share of Rs10.82 (2016: Rs10.69 per share). Bank’s pre-tax profit amounted to Rs35.6 billion, 4.1 percent lower against Rs. 37.14 billion for the prior year. Pre-tax and after-tax return on average equity was 29.0 percent and 18.7 percent (2016: 31.5 percent and 19.3 percent) respectively.
Healthy growth in balance sheet size was also recorded as the same reached to Rs2,370 billion depicting a 20 percent growth YoY. Banks’ gross loans & advances increased by Rs75.5 billion reaching to Rs857 billion. A nominal growth of 1.16 percent only was observed in non-performing loans. Investment also increased by Rs72.4 billion and reached to Rs1,296 billion. Similarly, Bank’s deposits also increased by Rs69.8 billion and reached to Rs1,727 billion.
The Board deliberated at length whether or not cash dividend and or bonus shares should be recommended. However, the likely impact of pension case, despite some positive signals, still remains a cause for concern. The first priority of Board of Directors is to maintain continuity of Bank’s business which is very much dependent upon the capital base of the Bank.
The Board is conscious of the fact that the shareholders look forward to receiving the dividend. However, eventually it was considered more prudent to retain the profits for the time being and once the position becomes clearer and positive, the Bank may consider declaration of dividend at a later stage. Accordingly, the Board does not recommend any dividend for the year 2017.
The Bank has filed a review petition against the judgment of the Supreme Court of Pakistan in the pension case and has also moved an application for constitution of a larger bench which has been accepted. Pending the decision of review petition, the financial impact of the subject case has not been included in the financial statements as the Bank looks forward to a favourable outcome of the case.
NBP is continuously expanding its market outreach through adding to its product range, restructuring its business model, and adopting the modern-day delivery strategies. Provision of services through Alternate Delivery Channels and Customer Service Quality are now among top priorities of the Bank. During the year, Islamic Banking branches of the Bank increased from 118 to 169. With “AAA” credit rating, the Bank is a driving force in the financial industry with its large distribution network domestic and international branches and a wide range of products & services.
In order to address structural issues of the field management of the Bank, the Board has approved the restructuring of Commercial and Retail Banking Group set-up in the field by adopting a flat reporting system empowering the region & field management team and giving them distinct business targets to achieve better results. This has been in an area which needed attention for some time.