Staff Reporter
KARACHI: The Board of Directors of National Bank of Pakistan “NBP” “the Bank” met on Tuesday to review the financial performance of the Bank and approve the audited financial statements of the Bank for the year ended December 31, 2021.
The Board observed that during 2021 the Bank has delivered strong performance in pursuit of its vision to be the Nation’s leading bank enabling sustainable growth and inclusive development. Despite a civil penalty of PKR 9.8 Bn imposed on the US operations, the Bank reported profit before-tax of PKR 52.9 Bn and after tax profit closed at PKR 28.0 Bn.
With net interest income of PKR 97.6 Bn and non-fund income of PKR 36.9 Bn, total revenue for the year 2021 closed at PKR 134.6 Bn. Despite high inflationary pressures, total administrative expenses dropped by 5% during 2021 to close at PKR 60.0 Bn. Also, loan loss and other provision charges reduced by 61% to close at PKR 11.9 Bn. Despite a civil penalty of PKR 9.8 Bn imposed on the Bank’s US operations, profit before tax amounted to PKR 52.9 Bn – highest ever in the history of the Bank. As the Bank is observing effective cost controls, operating expenses (excluding the penalties) for the year 2021 amounted to PKR 59.7 Bn which is 5% lower YoY as compared to PKR 62.8 Bn for the year 2020. Thus cost-to-income ratio (excluding extraordinary item) reduced to 44.6% in 2021. Total provision charge for the year 2021 amounted to PKR 11.92 Bn, significantly lower by PKR 19.0 Bn or 62% vs PKR 30.9 Bn for 2020. Profit after tax closed at PKR 28.0 Bn reflecting a YoY drop of 8.3%. With PKR 74.4 Bn in after-tax profits during the last three years, the Bank’s net assets stand increased from PKR 206.9 Bn at end 2021 to PKR 286.2 Bn translating into PKR 135 per share against PKR 97.2 at the beginning of 2019. Strengthening its balance sheet, the Bank created loan loss provisions of PKR 48.9 Bn over the last three years. These results have been delivered despite multiple challenges and headwinds amidst the Covid-19 pandemic and a significant drag due to non-payment of mark-up in certain legacy public-sector non-performing loans and the Covid-19 related flexibility and repayment relief provided to customers in need.
The balance sheet of the Bank reached PKR 3.85 Trillion compared to PKR 2.80 Trillion in early 2019. Only in 2021, YoY growth was high at 27.9% as the Bank achieved the PKR 3.0 Trillion milestone in deposits which increased PKR 600 Bn, of which 80% or PKR 477.4 Bn were customer deposits. CASA ratio stood high at 82%. As the Bank pursued a prudent and selective loan growth strategy, net advances recorded a 13.2% growth YoY to reach PKR 1.1 Trillion at the end of 2021. The Bank maintained strong funding and liquidity levels through a diversified funding portfolio. At the end of 2021, the Bank’s liquidity coverage ratio stood at 164% (2020:180%), and the Net Stable Funding Ratio stood at 278% (2020:256%) well above the statutory minimums of 100%. At the end of 2021, CET-1 ratio and Total CAR stood at 15.42% and 20.39%, respectively – the highest capitalisation level in the Bank’s history. The Bank enjoys highest local credit ratings of AAA / A1+ categories for long term and short term respectively as reaffirmed by both PACRA and VIS Credit Rating Company.
NBP’s Islamic Banking is operating a network of 189 branches throughout the country. Islamic Banking continues to focus on Commercial and SME businesses by expanding trade hubs to provide ease of service to these segments. While end of year deposits grew by 13% YoY to PKR. 84.8 Bn as of Dec ‘21 from PKR 75.3 Bn as of Dec ‘20. Average, CASA deposits increased by 26% to close at PKR 67.4 Bn
The Bank has made significant progress during 2021 in organizational transformation, product digitalization and initiatives for promoting financial inclusion with a focus on commercial and rural segments. In parallel with business growth initiatives, the Bank has continued to progress with the remediation of legacy issues in the area of Risk, Asset Quality, Operational Effectiveness, International Franchise and HR.