NBP registers 28% drop in profits in 1HCY22

August 17, 2022 (MLN): National Bank of Pakistan (NBP) has observed a 28% YoY reduction in net profits to Rs12.24 billion (EPS: Rs5.74) during the first half of the calendar year ended June 30, 2022, mainly attributed to 97% increase in tax expenses.

NBP declared a profit before income tax at Rs34bn in 1HCY22 which is 21% higher than a pre-tax profit of Rs28bn in the same period of the last year.

The bank booked Rs22bn taxes during 1HCY22, showing a 97% YoY jump against Rs11bn taxes paid in SPLY, due to the imposition of super tax in large-scale industry.

Going by the financial results, despite the higher policy rate, the net interest income of the bank inched up by only 12% YoY to Rs53bn as soaring interest expenses by 2x YoY offset the impact of an increase in interest income earned by the bank during the said period.

While the non-interest income moved up by only 2.5% YoY to stand at Rs19.45bn on an account of a 14% jump in fee and commission income. In addition, foreign exchange income and share of profit from joint ventures surged by 69% YoY and 4.4 times YoY, respectively during 1HCY22.

On the expense side, the operating expense of the bank went up by 16.4% YoY to Rs36.5bn.

Notably, the decline in provisioning costs by 71% YoY to Rs2bn supported the financial health of the company.

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