KARACHI - The Board of Directors of National Bank of Pakistan met yesterday to review the financial performance of the bank and approved the condensed interim financial statements for the three months period ended March 31, 2022.

Despite the continued economic challenges and uncertainties, the bank has delivered excellent results for its shareholders. This demonstrates the effectiveness of management’s strategies, resilience of the bank’s business model and the efforts of staff during this period.

For the three months period, NBP recorded gross interest income of PKR 79.2b as against PKR 48.5b of the same period last year. Investment portfolio of the bank generated mark-up/interest income of PKR 50.4b being PKR 22.5b or 80.8% up against PKR 27.9b for Q1’21. Whereas, the loan book generated mark-up income of PKR 26.2b i.e. PKR 6.5b or 32.8% higher than PKR 19.7b of Q1’21. In line with YoY increase in average policy rates, cost of funds for Q1’22 amounted to PKR 53.4b for Q1’22 depicting a 100% increase from PKR 26.9b in Q1’21. Accordingly, net interest income for the period under review closed at PKR 25.8b, depicting a 19.4% increase against PKR 21.6b of Q1’21.

Non-fund income for the quarter closed at PKR 8.1b which is lower by PKR 0.4b or 4.7% YoY mainly due to lower capital gains on the back of lacklustre performance of the stock market. Management expects that, going forward, NFI will rebound as the stock market is showing signs of stability following the fading away of Covid-19 and some clarity on the political front. In line with inflationary pressures and industry norms, NBP incurred operating expenses of PKR 16.7b which are16.7% higher as compared to PKR 14.3b of Q1’22, translating into cost-to-income ratio at 49.4%.

During this period, asset quality also showed some improvement as non-performing loans increased marginally by 3.0% to reach PKR 203.9b translating into a loan infection ratio at 14.7% showing some improvement against 15.2% at the end of 2021 and 16.2% at March 31, 2021. Net provision charge for the quarter amounted to PKR 1.1b only i.e. 65.7% or PKR 2.0b lower than PKR 3.1b for Q1’21. With PKR 180.1b held as specific provisions against NPLs, coverage ratio stood high at 88.3%.

Accordingly, profit after-tax for the three months period amounted to PKR 9.84b being PKR 2.1b or 27.6% higher than PKR 7.7b for Q1’21, the highest ever quarterly profit in the history of NBP.

As of March 31, 2022, total assets of the bank amounted to PKR 3,740.9b, depicting a 2.7% drop against PKR 3,846.7b as of December 31, 2021. This decrease was mainly due to a drop in seasonal year-end institutional deposits, which is expected to reverse in the following quarters. Gross advances total amounted to PKR 1,382.7b depicting a YoY increase of 5.9%, whereas with a 3% YoY increase, investments amounted to PKR 1,981.0b.

The bank maintains strong funding and liquidity levels through a diversified funding portfolio. As of March 31, 2022, total deposits amounted to PKR 2,634.5b with major share coming from customer deposits that contributed 89.1% of total deposits. While CASA ratio stood high at 83%, Liquidity Coverage and Net Stable Funding also remained high at 141% and 246%, respectively.

Depicting financial soundness well above the minimum regulatory requirements, total CAR improved to 21.78% and Tier-1 Ratio at 16.40% as compared to 20.39% and 15.42%, respectively at YE’21. Leverage ratio was satisfactory at 3.88%. With net assets amounting to PKR 298.3b i.e. 4.2% higher than PKR 286.2b at the end of 2021, break-up value per share increased to PKR 140.2 as against PKR 134.5 at the end of 2021.