National Bank Posts Highest Ever Annual Profit in 2023

National Bank of Pakistan posted a profit after tax of Rs. 53 billion in the calendar year ended December 31, 2023, up 72 percent compared to Rs. 30.8 billion in the same period last year.

According to Arif Habib Limited, this is the highest-ever annual profit recorded by the bank. NBP announced a profit after tax for 4QCY23 at Rs. 13.8 billion, depicting an increase of 18 percent YoY and 12 percent QoQ. This jump in overall earnings was mainly on the back of growth in net interest income along with jump in gains on securities during the year.

Net Interest Income of the bank settled at Rs. 48.4 billion during 4QCY23, increasing 33 percent YoY and 2 percent on a QoQ basis. With this, the total NII for CY23 went up to Rs. 169 billion, marking a 45 percent percent YoY jump. Interest earned saw a jump of 104 percent during CY23 while interest expense was up by 121 percent.

NFI depicted an increase of 43 percent YoY and a whopping 152 percent QoQ during 4QCY23, taking CY23’s total to Rs. 44.8 billion (+14 percent YoY). This jump in CY23 is primarily due to a significant gain in securities clocking in at Rs. 4.4 billion, 294 percent YoY higher than the gains recorded last year.

Moreover, fee and dividend income too were up during the outgoing year, registering a 7 percent and 3 percent YoY jump. FX income, on the contrary, posted a decline of 7 percent YoY.

Provisioning for the bank clocked in at Rs. 5.7 billion during 4QCY23 (4QCY22: Rs. 9.5 billion) depicting a decline of 40 percent on a YoY basis. This takes total provisioning to Rs.  15.4 billion during CY23 (+17 percent YoY).

The bank’s OPEX increased 21 percent YoY in 4QCY23 clocking in at Rs. 28.8 billion (4QCY22: Rs. 23.9 billion).With this, Cost/Income stood at 44 percent in 4QCY23 against 49.4 percent in the same period last year.

The effective tax rate was set at 55 percent during 4QCY23 compared to 47 percent last quarter. With this, the effective tax for CY23 stood at 48 percent (CY22: 51 percent). Earnings per share of the bank clocked in at Rs. 24.96 in CY23 compared to Rs. 14.49 in CY22.

  • Higher the profit. Higher taxation earnings for National Exchequer/higher income for investors. Why banks profit are rising so significantly? Is this good for whom.

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