Ayesha Mudassar

The National Bank of Pakistan (NBP), one of the country's largest commercial banks, registered a profit-after-tax (PAT) of Rs10.7 billion during the quarter ending March 31, 2024, showing a nominal growth of 0.3% year-on-year, reports WealthPK. Despite a persistently challenging environment, the bank recorded a profit before tax (PBT) of Rs21.1 billion for 1QCY24 against a PBT of Rs18.1 billion in the same period of the previous year. Consequently, the earnings per share (EPS) closed at Rs5.04, up from Rs5.02 in 1QCY23.

During the period, the bank earned a net markup income of Rs28.9 billion against Rs32.5 billion for the corresponding period of 2023. The decline is mainly due to the volumetric growth in the mark-up interest expense. In addition, the non-markup income for the 1QCY24 reached Rs13.4 billion, representing an 80% year-on-year increase. The gigantic rise in the gains on securities was the prime reason behind this rise. Continuous focus on expediting the digital transformation journey, combined with delivering unparalleled services to customers, facilitated a robust fee and commission income growth of 23% to reach Rs5.5 billion during 1QCY24 as compared to Rs4.5 billion in the same period of the previous year.

Furthermore, the dividend income increased by 73% to reach Rs1.7 billion for the quarter ending March 31, 2024, as compared to Rs998 million for the quarter ending March 31, 2023. The bank’s foreign exchange income rose by nearly 62%, up from Rs1.05 billion in 1QCY23 to Rs1.7 billion in 1QCY24. Meanwhile, the bank recorded a massive gain of 1,110% on securities to the tune of Rs4.4 billion in 1QCY24, compared with a gain of only Rs364 million in 1QCY23. Amid the high inflationary pressures and rupee depreciation, the bank’s operating expenses for the quarter amounted to Rs21.9 billion, a 4% YoY increase compared to Rs21.1 billion in 1QCY23.

Performance over the last four years (2020-2023)

The historic analysis of the bank demonstrates a positive trend in key financial indicators, including markup earned, total income, profit after taxation, and EPS. These metrics suggest that the NBP experienced growth and improved financial performance in all the years under consideration. During the period under review, the bank earned the highest mark-up in 2023. This indicates that the bank had a strong performance in terms of interest income, which is a significant revenue source. However, the bank witnessed a single dip in the earned markup in 2021.

Concerning the total income, the NBP earned a total income of Rs140.2 billion in 2020, Rs134.5 billion in 2021, Rs153.5 billion in 2022, and Rs209.3 billion in 2023. The substantial increase in 2023 was mainly due to the enormous rise in the foreign exchange income, interest earnings, and other incomes. In terms of after-tax profit, the bank hit the highest four-year PAT in 2023, amounting to Rs51.8 billion. A higher PAT is likely driven by increased revenues in the period considered. The bank posted a net profit of Rs30.5 billion in 2020, Rs28 billion in 2021, and Rs30.4 billion in 2022. The trend of increasing EPS over the years, with the highest EPS in 2023, indicates that the NBP’s financial performance was generally improving primarily due to the income growth.

About the bank

The bank operates one of the largest branch networks with over 1,500 branches in Pakistan and is aggressively pursuing a significant organizational transformation program through digitalization and expanding its range of products and services.

Future Outlook

The bank will continue to play its vital role in creating sustainable value for stakeholders and supporting a robust economic momentum. In the foreseeable future, the bank's business strategy will remain focused on digitizing and extending financial solutions across all segments, with a particular focus on financial inclusion of the underserved sectors.

Credit: INP-WealthPk