Meeting of the Board of Directors (BoD) of National Bank of Pakistan (NBP) was held on Friday. The BoD approved the financial statements of the Bank for the year ended December 31, 2018.
Maintaining its position in the industry, this year too, the Bank recorded solid growth in terms of both balance sheet size and the total revenues. Despite a generally difficult year for the banking industry, the Bank has achieved the highest ever total revenue in its history of seven decades. Total revenue of the Bank amounted to Rs. 96.9 billion which is 13.6% higher than Rs. 85.3 billion of previous year. While net interest/mark-up income increased by 11.8% to Rs. 60.7 billion (2017 : Rs. 54.3 billion); a 16.7% growth was also achieved in non-interest / mark-up income which stood at Rs. 36.2 billion.
Profit before provisions amounted to Rs. 41.0 billion which is 11.4% higher than Rs. 36.8 billion for the year 2017. During the year, the Bank recognised significant increase in loan-loss & other provisions which amounted to Rs. 11.3 billion as against Rs. 1.2 billion in the prior year. This is mainly due to default by a single borrower group which has been fully provided for. Therefore, the after-tax profit for the year is lower by 13.1% against previous year and amounted to Rs. 20.0 billion (2017: Rs. 23.0 billion). This translates into earnings per share of Rs. 9.41 (2017: Rs. 10.82). Pre-tax and after-tax return on average equity stood at 21.8% and 14.7% (2017: 29.8% and 18.7%) respectively.
Healthy growth in balance sheet size was also recorded as total assets of the Bank stood at Rs. 2.8 Trillion depicting a 11.7 % growth YoY. Banks’s gross loans & advances crossed the 1 Trillion mark and increased by Rs. 202.5 billion. The Bank’s deposits also crossed Rs. 2 Trillion mark as the same increased by Rs. 284.3 billion during the year. For better liquidity and rate-risk management, the Bank maintains a healthy portfolio of investment in low risk securities.
The Bank has filed a review petition against the judgement 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, 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 BoD is conscious of the fact that the shareholders look forward to receiving dividend. The Board deliberated at length whether or not cash dividend should be recommended. Keeping in view the significance of the amount involved in the pensions related case, the BoD considered it prudent to retain the profits for the time being to maintain & further strengthen capital base of the Bank. Accordingly, the BoD did not recommend any dividend for the year 2018.
2019 marks the Bank’s 70th year of service to the Nation. NBP is continuously expanding its market outreach through adding to its product range, restructuring its business model, and adopting modern-day delivery strategies. The Bank has special focus on promoting Home Remittances into Pakistan through the banking channel. Building on its extensive and ever growing network of correspondents, particularly in the Middle East, the Bank is offering hassle free remittances service across Pakistan. Provision of services through Alternate Delivery Channels and Customer Service Quality are also key focus areas of the Bank.
The Bank has just launched its Debit Card product and is realigning itself with the emerging e-banking dynamics to exploit every digital channel to maximise its market outreach for fulfilling customer expectations. During the year, the Bank added 23 more branches to its network of Aitemaad Islamic Banking. With “AAA” credit rating by the two Credit Rating agencies in Pakistan, 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.