National Bank\’s strong financial performance continues
61.4% increase in pre-tax profit on annual basis, 27% increase in total assets of the bank, reaching Rs.6.7 trillion.
Karachi: February 22, 2024
The Board of Directors of the National Bank held a meeting on Thursday to approve the annual financial results of the bank for the year ending December 31, 2023.
National Bank achieved another year of strong financial results with a pre-tax profit of Rs 101.3 billion, an increase of 64.4% from last year\’s Rs 62.7 billion. Continued to provide services and support to customers as per the vision.
This year saw a total value of Rs 1,065.3 billion to stakeholders, double the previous year\’s Rs 540.0 billion. 35.4% growth in average earning assets, margin expansion of Rs 1,027.7 billion due to increase in average policy rates. Gross interest revenue is up 103.6 percent from Rs 503.3 billion for 2022. All revenue generating sectors including advances (Rs 221.8 billion, up 57 percent), investments (Rs 774.0 billion,122% higher and stable growth was achieved in placements (Rs. 28.9 billion, 112% higher). Under the strategy of efficient utilization of funds, the bank\’s average interest liabilities reached Rs. 5,267.8 billion (2022: Rs. 3,871.9 billion). 855.9 billion in cost of funds paid to the fund provider due to increase in average interest rate. Similarly, the bank\’s net interest income for the year stood at Rs 168.7 billion, an increase of 44.4% on a year-on-year basis.
The Bank achieved non-fund income of Rs 40.6 billion (2022: Rs 36.7 billion) despite limited trading activity in a challenging and uncertain business environment. Equity investments of the bank generated disaggregated income of Rs 5.3 billion (2022: Rs 5.2 billion), fee and commission income of Rs 22.0 billion (2022: Rs 21.2 billion) reflecting the bank\’s wide customer base and market presence. Reflecting the slowdown in the stock market for most of the year, the bank achieved a capital gain of Rs 4.4 billion generated from a higher equity portfolio, a 285 percent increase from Rs 1.1 billion last year. happened As a result, the bank\’s total income for the year stood at Rs 209.4 billion, an increase of Rs 55.8 billion or 36.4 percent on a year-on-year basis.
The bank\’s operating expenses for the year stood at Rs 93.3 billion, up 19.5% on a year-on-year basis from Rs 78.2 billion in 2022 due to inflationary effects, compensation payments from HR and upgrading of IT systems and offices. In line with the Bank\’s policy of strengthening its capital base, provisions of Rs 14.5 billion were charged during the year, which is significant in the context of International Financial Reporting Standard 9 effective January 1, 2024. The implementation of this standard is likely to attract more provisioning as a result of reductions in banks\’ regulatory capital and lending capacity.Sticking to an active strategy of strengthening the capital base, the Bank maintains specific provisions of Rs.203 billion and general provisions of Rs.30.0 billion against the risky loan portfolio. The bank\’s pre-tax profit for the year stood at Rs 101.3 billion, up 61.4 percent from Rs 62.7 billion last year. The tax charge for the year stood at Rs 49.4 billion, which is 48.8% higher than 51.5% for the previous year. As a result, profit after tax for the year stood at Rs 51.8 billion, up 70.5% from Rs 30.4 billion for 2022.
This year, the bank maintained its leadership position in the market and crossed the milestone of Rs 6.5 trillion in its balance sheet as the bank\’s total assets increased by 27% to Rs 6,652.7 billion as against Rs 5,240.4 billion at the end of 2022. making National Bank the largest bank in Pakistan in terms of total assets. Investments increased by 25.2 percent to Rs 4,393.9 billion, while total advances grew by 13.4 percent to Rs 1,631.7 billion, which was driven by advances and Represents 44% ratio in deposits The Bank has maintained a strong funding and liquidity profile with a broad and diversified market mindset. The bank\’s total deposits at the end of the year stood at Rs 3,674.4 billion, up 37.8 percent from Rs 2,666 billion at the end of 2022. The bulk of bank deposits come from the customer base, which accounts for 86.2 percent of total deposits. 1,970 billion or 54 percent of total deposits, the bank maintained a strong liquidity profile. CASA ratio is 79%, Liquidity Coverage and Net Stable Funding are also 176% and 259% respectively as compared to the regulatory requirement of 100%.
The Board considered whether or not to pay the cash dividend, however, the possible impact of the pension case and other contingencies, is still a concern for the Board. Therefore, the Board considered it appropriate to retain the dividend for the time being, the bank may consider declaring dividend later after the situation becomes clear. While maintaining high profitability, the bank\’s total eligible capital stood at Rs 376.7 billion, an increase of Rs 70.5 billion or 23.0% on a year-on-year basis. As a result, the bank\’s capital advocacy ratio improved by 388 bps to 25.47% from 21.59% in FY22. .The Bank has the highest local credit ratings of AAA/A1+ categories for long term and short term respectively as confirmed by both PACRA and VIS Credit Rating Company in June 2023.
While informing about the annual performance of the bank, the president and CEO of the bank, Mr. Rehmat Ali Hosni, said that the excellent financial results obtained from the implementation of strategic policies are the best efforts of the bank\’s workforce to serve the nation in difficult circumstances. Demonstrate commitment and dedication. The Bank is actively engaged in institutional changes with a focus on SME, commercial and rural sectors and strives for technological advancements, product enhancements and digitization to promote financial inclusion. The Bank is committed to removing the old loopholes and defects in the system while at the same time accelerating the development efforts of the institution.
