ISLAMABAD: Meeting of the Board of Directors of National Bank of Pakistan was held on February 19, 2016 at Bank’s Head Office in Karachi to approve the Financial Statements of the bank for the year ended December 31, 2015.
The bank achieved profit of Rs. 33.2 billion in 2015 that is an increase of 51% from 2014. This is a complete turnaround from 2013 profit of Rs.7.1 billion (368 % increase). After tax profit growth was impacted by Rs.2.3 billion additional tax charge due to last year’s Federal Budget changes. However, despite this additional burden of increase of tax of Rs. 2.3 billion, after tax profit is Rs. 19.2 billion which is 28% higher than previous year.
These results were achieved through an effective execution of strategy which encompassed improving deposits mix for higher net interest income, portfolio optimisation and re-profiling, cost controls, automation of entire branch network, expansion of footprint through ATMs and branch network and focused strategy towards recoveries against non-performing loans.
With this performance all key ratios have improved significantly. For example after tax return on equity and assets stands as 17.0% and 1.2% respectively, key ratio of cost to income is in top bracket at 0.48,an improvement from 0.55 of last year. Bank’s key ratios are also solid with provision coverage at over 89 % and capital adequacy ratio at 17.6%.Testament to the above-stated outstanding performance is the fact that NBP has been recently awarded “Bank of Year Award – 2015” by the prestigious “The Bankers-UK”, a subsidiary of Financial Times Group.
The bank made significant infrastructural growth through adding 48 branches and making technological advancements. During the year 500+ new ATM points were added and the entire branch network has now been made functional on Core Banking Application. The entire branch network of 1,400 plus, including those in remote and outlying areas are Online branches now. This has not only significantly improved the bank’s operational efficiency but will also enable it to launch technology based products.
The bank is a pioneer in lending program for small business entrepreneurs. Since the launch of Prime Ministers Youth Business Loan product (PMYBL), the bank has made significant progress towards enabling youth to improve their earning capacity with a positive multiplier effect on the economy through financial inclusion of the youth. The bank is expanding and investing in alternate delivery channels including alliance with Telco’s for greater outreach and improved customer services.
On YoY basis, core net interest income increased by 17% from Rs. 45.8 billion to Rs. 53.7 billion, while non-interest income increased by 15% from Rs. 30.4 billion to Rs.35.0 billion in 2015. Administrative expenses were kept under control and increased marginally by 5%.The bank is aggressively endeavouring to increase its market share. Deposits are at Rs.1. 43 trillion, increasing by 16% in 2015 YoY, higher than the sector growth and low cost CASA deposits constituting 77% of the domestic deposits. Total assets of the bank have crossed Rs.1.7 trillion mark.
The Board of Directors have proposed final cash dividend of Rs. 7.5 per share (75%) for the year ended December 31, 2015 which is 36% higher than last year. This translates into 92% dividend pay-out of the bank’s distributable profit for the year 2015 (after statutory reserve allocation) and is the highest in the banking industry. NNI