National Bank of Pakistan (NBP) failed to maintain its profit growth in 2021, which declined by 6 percent from last year due to a drop in interest income.
According to the bank’s financial results, the bank reported a profit of Rs. 28.6 billion in 2021 as compared to the profit of Rs. 30.5 billion recorded in 2020 — the highest ever profit made by the bank.
According to details, the bank’s interest income declined to Rs. 97 billion in the calendar year 2021 from Rs. 104 billion reported in 2020 despite higher markup rates in line with the policy rate set by the banking regulator.
The bank’s non-markup income surged to Rs. 38.8 billion in 2021 from Rs. 37.3 billion reported in 2020. The increase in this stream of revenues was mainly driven by foreign exchange gains.
NBP’s earnings per share declined to Rs. 13.44 from Rs. 14.33 by the end of 2021. The board of directors announced a dividend income of Rs. 1 per share.
Future Outlook
The bank’s profitability is likely to further decline as it was handed a fine to the tune of $55 million (Rs. 9.78 billion) by US authorities over non-compliance with regulations. It bears mentioning that the bank’s management agreed to pay the penalty to the foreign regulator.
On the other hand, the bank is working towards curtailing the operation of loss-making branches mainly in foreign countries, which may help reduce its recurring losses.
