NBP bets big on digital future

April 24, 2026 (MLN): National Bank of Pakistan set a forward-looking tone at its CY25 corporate briefing, outlining an ambitious strategy built on digital acceleration, smarter cost control, and a stronger, low-cost deposit base.

As the briefing's defining theme emerged, management made it clear that the bank's future is digital, not physical.

With a network already spanning over 1,500 branches, including more than 300 Islamic outlets, NBP plans to slow down traditional branch expansion and instead channel capital into digital infrastructure.

This shift is already visible, with capital expenditure rising sharply from Rs2.3 billion in CY21 to Rs13.5 billion in CY25.

The strategy is simple but powerful: scale digitally and operate efficiently.

Management expects the cost-to-income ratio, currently at 40%, to improve further as expansion becomes more disciplined and cost structures leaner.

On the liability side, the bank aims to sustain double-digit deposit growth while continuing to optimize its mix toward low-cost current and savings accounts. The CASA ratio, already strengthened to 81%, remains central to this strategy.

Leveraging its Domestic Systemically Important Bank (D-SIB) status, NBP is positioning itself for long-term value creation through technology-led growth. The successful rollout of its Core Banking Application in April 2025 is expected to serve as a backbone for this transformation, alongside a sharper focus on fee-based and non-funded income streams.

CY25 Results in Brief

Backing its future ambitions with strong numbers, NBP delivered a standout financial performance in CY25.

Profit after tax surged 3.2x year-on-year to Rs85.9 billion (EPS: Rs40.38), compared to Rs26.9 billion (EPS: Rs12.63) in CY24. The growth was driven primarily by a 45% YoY jump in net interest income to Rs248.5 billion, coupled with a notable 30% reduction in non-interest expenses.

Total assets crossed Rs7.1 trillion, reinforcing NBP’s position as Pakistan’s second-largest bank with a market share of around 12%.

The bank also announced a final dividend of Rs35 per share, translating into an 88% payout ratio, the highest since 2012.

However, disbursement had remained pending federal cabinet approval due to the ongoing administrative situation in Islamabad linked to preparations for US-Iran peace negotiations; this was subsequently cleared after the Prime Minister approved the dividend in a high-level meeting yesterday.

Management reiterated that, under prevailing regulations, dividends can only be declared on fully audited annual accounts, ruling out interim or quarterly payouts.

NBP’s balance sheet remained robust and liquid.

Deposits crossed Rs4.4 trillion, marking a 14.6% YoY increase and reflecting a 6-year CAGR of 9.6%, largely driven by growth in low-cost deposits.

The investment portfolio rose 7% YoY to Rs4.9 trillion, with 63% allocated to PIBs and 27% to T-bills. The portfolio remains conservatively positioned, with a duration of just 0.76 years.

On the lending side, gross advances declined 3.5% YoY to Rs1.6 trillion amid weak credit demand, bringing the advance-to-deposit ratio down to 36.5%.

Despite this, NBP retained its position as the country’s largest agricultural lender, with its agri portfolio growing 23.9% to Rs133 billion.

Capital strength remained a key highlight, with a CAR of 26.21%, well above regulatory requirements, and a leverage ratio of 4.37%.

Islamic Banking on a Strong Growth Trajectory

NBP’s Islamic banking segment continued to gain momentum, emerging as a major growth driver.

Assets nearly doubled, rising 95% YoY to Rs652 billion, while deposits grew 81% to Rs559 billion. Financing and investments also saw strong growth of 71% and 97%, respectively.

The Islamic branch network expanded significantly to over 300 full-fledged branches, supported by an additional 350 hybrid branches, reflecting the bank’s aggressive push into Shariah-compliant banking.

Pension and TSA Matters

On the long-standing pension liability issue, management indicated that most financial impacts have already been absorbed into the bank’s accounts.

The approval from the State Bank of Pakistan for dividend distribution was cited as a signal of regulatory comfort regarding capital adequacy post-provisioning.

Meanwhile, the bank has largely reduced its reliance on Treasury Single Account (TSA)-related deposits and does not expect any material impact going forward.

Digital Metrics & Transformation Push

NBP’s digital strategy is already translating into measurable gains.

ATM transaction value climbed to Rs1.48 trillion, while card activations reached 2.9 million. Active digital users grew 32% YoY, and registered users increased by 21%, clear indicators that customers are steadily migrating toward digital channels.

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