NBP: Higher NII offsets hefty provisioning expenses

MG News | September 02, 2020 at 11:14 AM GMT+05:00

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September 2, 2020 (MLN): National Bank of Pakistan (NBP) has reported 36.84% YoY growth in net profits for the half year ended June 30^th, 2020.

According to the bank’s unconsolidated financial statement, its net profits jumped from Rs 11.1 billion in the same period last year to Rs 15.19 billion.

This reflected in bank’s earnings per share which rose from Rs 5.22 to Rs 7.14.

The growth in earnings came at the back of increase in Net interest income (NII) by 36.2% YoY to Rs 48.4 billion and PIB accumulation at higher yields.

According to the report by Arif Habib Limited, NBP’s NII showed a very strong surge during 2Q and 4Q and is a trend witnessed continuously over the last few years. Aggressive rate cuts further stimulated the bank’s topline.

The profitability of the bank further elevated due to strong capital gains which grew by 875% YoY to Rs 3.3 billion, while Foreign exchange income and dividend income declined by 23% and 40% YoY respectively.

On the cost front, the bank witnessed a whopping 184.5% YoY increase in provisioning expense to Rs 15.6 billion from Rs 5.49 billion, however, it was offset by higher NII.

Moreover, the bank enjoyed 31% YoY reduction in tax expenses which provided further fuel to earnings.

Unconsolidated financial results for the Half Year ended June 30, 2020 ('000 Rupees)
	Jun-20	Jun-19	% Change
Mark-up/return/interest earned	145,258,636	97,689,973	48.69%
Mark-up/return/interest expensed	96,815,107	62,126,456	55.84%
Net mark-up/interest income	48,443,529	35,563,517	36.22%
NON-MARK-UP/INTEREST INCOME
Fee and commission income	8,723,923	9,835,961	-11.31%
Dividend income	1,032,328	1,728,716	-40.28%
Foreign Exchange income	2,698,964	3,517,884	-23.28%
Gain on securities - net	3,335,162	342,032	875.10%
Share of (loss)/profit from joint venture - net of tax	-	-
Share of(loss)/profit from associates - net of tax	-	-	#DIV/0!
Other income	2,550,548	2,779,125	-8.22%
Total non-mark-up/interest income	18,340,925	18,203,718	0.75%
Total Income	66,784,454	53,767,235	24.21%
NON-MARK-UP/INTEREST EXPENSES
Operating expenses	29,250,357	27,800,889	5.21%
Workers welfare fund	-	-
Other charges	293,238	91,171	221.64%
Total non-mark-up/interest expenses	29,543,595	27,892,060	5.92%
Profit before provisions	37,240,859	25,875,175	43.93%
Provisions and write offs - net	15,638,432	5,490,000	184.85%
Profit before taxation	21,602,427	20,385,175	5.97%
Taxation	6,412,058	9,284,161	-30.94%
Profit after taxation	15,190,369	11,101,014	36.84%
Basic and diluted earnings per share	7.14	5.22	36.78%

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