NBP Profits Down By 36% in Q2 2017

National Bank of Pakistan (NBP) posted a double digit decline in profits by 36.4 percent in the second quarter of 2017. This is the first formal quarter under the new President and CEO Saeed Ahmed who assumed charge of NBP in March.

According to the balance sheet, the bank’s profits declined by Rs. 1.6 billion or 36 percent year on-on-year to reach Rs. 4.443 billion in the second quarter of 2017 as compared with Rs. 6.061 billion last year.

The bank recorded a profit for a six months period, which amounted to Rs. 8.6 billion as compared with Rs. 9.5 billion recorded in the last year. This translates into earnings per share of Rs 4.02.

Half yearly operating income of the Bank amounted to Rs. 41.7 billion as against of Rs. 41.8 billion recorded in the last year. The bank’s net interest / mark-up income for the half year amounted to Rs. 26.4 billion due to lower yield on Government securities. Non-interest / mark-up income for the half year recorded growth as it amounted to Rs. 15.3 billion.

The bank maintained interest/mark-up earnings for the period by managing an efficient asset-mix of loans and investments.

Profitability of the bank remained under pressure during the period on account of lower interest rates and maturity of high-yielding Pakistan Investment Bonds (PIBs).

During this period, the Bank achieved a growth milestone as its balance sheet size increased to Rs. 2.32 trillion i.e. 18% up against Rs. 1.98 trillion on December 2016. As of June 30, 2017, the bank’s deposits amounted to Rs. 1,740 billion, going 5% up against that of December 2016; whereas gross advances also increased to Rs. 836 billion i.e. 7% up as compared to December 2016.

It is hoped that Saeed Ahmed, appointed by the government at an annual salary of Rs. 400 million, will bring the bank towards profitability with new measures and reforms under his chair.