NBP & BoP Record a Drop in Profitability During in Q1 2020

National Bank of Pakistan (NBP) and Bank of Punjab (BoP), the two public sector banks, could not sustain growth in profitability which declined during the first quarter of 2020.

The profit of the banks was down due to the provisioning of loans in the economic slowdown in the prevailing situation.

The two banks maintained various accounts of the government departments including the Federal Board of Revenue (FBR) which also received low receipts during the pandemic related lockdown enforced across the country.

National Bank of Pakistan

NBP recorded a mild 3% drop in profitability in the first quarter.

Its profit stood at Rs. 4.138 billion as compared to Rs. 4.27 billion profit recorded in the same period of last year. The bank’s earnings per share (EPS) stood at Rs. 1.94.

The bank maintained slight growth in interest income which surged to Rs. 16.6 billion whereas it also maintained a non-mark-up income of Rs. 8.2 billion during the period.

High provision charges of Rs. 4 billion have taken a toll on profit growth. The non-performing loans (NPLs) increased by Rs 7.91 billion during the quarter.

Bank of Punjab

Bank of Punjab posted a profit of Rs 1.5 billion as against Rs 1.9 billion earned during the 1st quarter of the year, showing a difference of 21 percent.

Earnings per Share (EPS) for the 1st quarter of the year 2020 remained at the level of Rs 0.57 per share.

The bank’s Non- Markup/Interest Income increased to Rs 2.0 billion as against Rs 0.8 billion showing a substantial increase of 150 percent. Keeping in view the prevailing economic situation, the bank opted to create provisions against certain loans & advances on a prudent basis.

During the 1st quarter of year 2020, the bank’s Net Interest Margin (NIM) remained a little subdued at Rs 5.9 billion as against Rs 6.3 billion last year, due to the strategy of the bank to focus on avenues of investments other than the traditional interest income of loans & advances.

The bank’s total assets as on March 31, 2020 improved to Rs 899.1 billion as against Rs 868.9 billion as of December 31, 2019.

The deposits of the bank touched the level of Rs 716.1 billion, while Investments and gross advances were recorded at Rs 387.9 billion and Rs 417.5 billion, respectively.

The bank currently has a network of 624 online branches, including 100 Taqwa Islamic Banking Branches, strategically located across the country.