National Bank of Pakistan reported net interest income for CY23 at PKR 169 Bn, an increase of 44% over PKR 117 Bn in CY22.
Total non-mark-up income grew by 11% to PKR 40.6 Bn in CY23 against PKR 36.7 Bn in CY22. This was driven by a 285% increase in income from gain on sale of securities which went from PKR 1.1 Bn in CY22 to PKR 4.4 Bn in CY23.
Total revenue for the bank increased to PKR 209 Bn in CY23 up 36% from PKR 154 Bn in CY22.
Total provisions went up by 15% from PKR 12.6 Bn in CY22 to PKR 14.5 Bn in CY23. As a result, profit before tax increased to PKR 101 Bn in CY23
from PKR 63 Bn in CY22 showing an increase of 61%.
NBP saw taxation expense rise to PKR 49.4 Bn in CY23 against PKR 32.3 Bn in CY22, an increase of 53%. Effective tax rate fell to 49% in CY23
from 52% in CY22.
Profit after tax saw an increase of 70% from PKR 30.4 Bn in CY22 to PKR 51.9 Bn in CY23. Similarly, earnings per share increased to PKR 24.37 in
CY23 from PKR 14.29 in CY22.
Total assets increased by 27% to PKR 6.65 Trn compared to CY22. Investments grew 27% against CY22 to PKR 4.4 Trn in CY23. Similarly,
advances grew 13% from CY22 to PKR 1.6 Trn in CY23.
The bank also witnessed a lower than industry net interest margin due to higher mark-up from the borrowings. NBP’s cost to income ratio also
improved from 50.9% in CY22 to 44.7% in CY23.
CET-1 stands at 19.16% as of 31st December 2023. Net stable funding is at 259% and leverage at 3.12%
The bank experienced a decrease in profitability in 4QCY23 due to advances to PIA.
Management of the bank expects a maximum liability of PKR 98 Bn with regard to the pension suit filed by the retired employees of the bank. With
the review petition outcome expected soon, it expects a maximum decrease in CAR to 19% from its current level at 25.47%.
The management expects moving to IFRS-9 will have a negative impact of about PKR 26 Bn on a pre-tax basis. With regards to the Treasury Single Account the management maintained that is unclear of the extent that it would apply to NBP due to its extensive banking with government and quasi-government entities. In CY23 the process began and PKR 170 Bn of govt-based deposits have been withdrawn in CY23.
Going forward, the management stated that conversion to an Islamic Bank is a top priority. It also stated that it hopes to resume dividends after ongoing contingencies are resolved. As such, it is cautious until then as it does not view raising capital through ADT-1 as a viable option.
Important Disclosures
Disclaimer: This report has been prepared by Chase Securities Pakistan (Private) Limited and is provided for information purposes only. Under no circumstances, this is to be used or considered as an offer to sell or solicitation or any offer to buy. While reasonable care has been taken to ensure that the information contained in this report is not untrue or misleading at the time of its publication, Chase Securities makes no representation as to its accuracy or completeness and it should not be relied upon as such. From time to time, Chase Securities and/or any of its officers or directors may, as permitted by applicable laws, have a position, or otherwise be interested in any transaction, in any securities directly or indirectly subject of this report Chase Securities as a firm may have business relationships, including investment banking relationships with the companies referred to in this report This report is provided only for the information of professional advisers who are expected to make their own investment decisions without undue reliance on this report and Chase Securities accepts no responsibility whatsoever for any direct or indirect consequential loss arising from any use of this report or its contents At the same time, it should be noted that investments in capital markets are also subject to market risks This report may not be reproduced, distributed or published by any recipient for any purpose.
