National Bank of Pakistan (NBP) has made a profit of Rs. 15.19 billion in the first half of 2020 with an increase of Rs. 4.1 billion or 36.8% year-on-year growth.
This is the highest profit in the banking industry for H1 2020, just a bit above HBL which earned a profit of Rs. 15.18 billion in the same period.
During the period, the bank earned gross markup/interest income amounting to Rs. 145.3 billion which is 49% higher than Rs. 97.7 billion it earned in H1 2019.
The total earning assets averaged at Rs. 2.428.1 trillion of which investments amounted to Rs. 1.403 billion and generated interest/mark-up income of Rs 85.4 billion, 92.2% higher than that of H1 2019. Net advances averaged Rs. 971.1 billion, 6.6% higher than Rs. 911.3 billion earned in the first half of 2019, and recorded 18.7% growth in mark-up income that closed at Rs. 57.6 billion.
Despite high inflationary pressures, the bank did well at keeping a lid on the administrative expenses that clocked at Rs. 29.5 billion, 5.9% higher YoY, translating into a cost-to-Income ratio of 44.2% compared to 51.7% for H1 2019.
On the financial position, the total asset base of the bank on an unconsolidated basis amounted to Rs. 3.163.4 trillion. On the asset front, investments continued to constitute the bulk of asset-mix and increased by Rs. 203.8 billion to Rs. 1.643 trillion, whereas net advances registered a decline of 7.2% over December 2019, clocking in at Rs. 935.6 billion.
On the liabilities side, the deposit base of the bank registered an increase of Rs. 141.2 billion i.e. 6.4% over December 2019, improving the current account mix to 55.1% and CASA ratio to 83.1%.
The bank is revalidating business assumptions with a focus on how the COVID-19 crisis may affect its asset quality and the adjustments needed to contain the impact on the overall business model of the bank.
A strategy under immediate consideration of the board and management of the bank is that of achieving greater financial inclusion through supporting the retail and consumer segment e.g. housing, agriculture, construction, and transport.
NBP is the state-owned bank having a mandate to collect government taxes, duties, and other income, which supports its overall financial flows and strengthens the balance sheet as well.