National Bank of Pakistan (NBP) has maintained its growth in profitability which surged to over Rs. 30.4 billion in 2022.
According to the financial results, the bank reported an unconsolidated profit of Rs. 30.4 billion in 2022, up 9 percent from Rs. 28 billion in 2021. This is the second-highest profit reported by the bank in its history. Previously, the bank reported the highest-ever profit of Rs. 30.5 billion in 2020.
The bank has delivered yet another year of strong financial results, and posted a pre-tax profit of Rs. 62.7 billion, depicting an annual increase of 18.7 percent.
With strong income momentum across its business segments, the bank’s fund-based net interest income was particularly strong. Amidst the challenging macro environment, the bank has continued to provide support for its customers and clients in line with its vision.
The 40 percent growth in average earning assets, coupled with margin expansion through higher policy rates, generated gross interest income of Rs. 503.3 billion, up 117 percent compared to Rs. 231.9 billion for 2021.
Despite a challenging business environment and lower trade activity, the bank maintained its non-fund income stream which amounted to Rs. 36.7 billion (2021: Rs 36.9 billion). Equity investments of the bank generated dividend income of Rs. 5.2 billion, 13.3 percent higher YoY.
Fee and commission income earned through banking operations amounted to Rs. 21.2 billion i.e. 18.8 percent higher YoY and are reflective of the bank’s widespread customer base and market outreach. As the bank provides FX solutions to a large number of corporates, its forex income for the year amounted to Rs. 7.4 billion which is 14.4 percent higher YoY.
Reflecting the inflationary impacts, ad hoc allowance allowed to the employees and the bank’s investment into its IT systems and upgrade of business premises, operating expenses for the year amounted to Rs. 78.2 billion.
This year, the bank achieved the Rs. 5 trillion milestone in its balance sheet which grew by 36.2 percent to reach Rs. 5.240 trillion from Rs. 3.846 trillion at the end of 2021. This makes NBP the largest bank in Pakistan in terms of total assets.
The bank’s advances-to-deposits ratio improved to 54 percent as compared to 43 percent at the end of 2021. With a widespread and well-diversified market outreach, the Bank maintains a strong funding and liquidity profile. At the year’s end, total deposits amounted to Rs. 2.666 trillion as compared to Rs. 3.019 trillion at the end of 2021. This drop in deposits is based on the bank’s focused strategy to reduce high-cost deposits so as to deliver higher after-tax profit to its shareholders.
The major share of the bank’s deposits comes from sticky customer deposits which contribute 98.1 percent of the total deposits. With current deposits amounting to Rs. 1.310 trillion or 49.1 percent of the total deposits, the Bank maintains a strong liquidity profile.
Commenting on the annual performance, the Bank’s President/CEO(A), Rehmat Ali Hasnie, said that the excellent strategic delivery and financial results were a testament to the efforts and dedication demonstrated by the Bank’s employees in serving the nation through these challenging times. The Bank is pursuing a major organizational and technological transformation, product enhancement, digitalization, and initiatives for promoting financial inclusion with a focus on commercial and rural segments.
In parallel with its business growth initiatives, the bank has also continued to progress via the remediation of legacy issues. Going forward, NBP’s strategy focuses on enhancing its service quality levels, diversifying its outreach through digitalization, and increasing its products and services suite
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