National Bank of Pakistan: Local Bank Global Outreach


By Syed Ibne Hassan

Karachi March 28, 2013:  National Bank of Pakistan (NBP) held its 64th Annual General Meeting. The point worth mentioning is that shareholders equity as on December 31, 2012 exceeded Rs116 billion, which may be termed the highest among all the banks listed at the local stock exchanges in Pakistan.  This amount comprises of Paid up Capital of Rs 18.5 billion, Reserves of Rs28.8 billion and Un-appropriated Profit of Rs68.7 billion.

Another feather in the cap is that now bank can be termed Pakistan’s first commercial bank to achieve ‘One Trillion’ status, with deposits exceeding one trillion rupees. Deposits are mainly deployed in Advances amounting to Rs343.5 billion and Investments exceeding Rs 657.4 billion.

International operations of the Bank deserve specific mention, with 29 overseas locations in 19 countries across the globe. While 2012 was not a good year due to global downturn, the bank consolidated its position in the regions it has presence.  Over the next 18 months the bank plans to open up branches in India, Sri Lanka and UAE.

Achieving this milestone would have not been possible without having an elaborate network of 1,317 branches, all of these enjoying the ‘online’ status. To further augment the outreach, the bank has lately introduced Core Banking Application (CBA) concept and within year 2013 the number of such braches will exceed 250.

The Bank is also playing a major role in the implementation of Pakistan Remittances Initiative (PRI) and working in collaboration with the central bank. As a result the Bank has posted considerable increase in remittances handling, the added advantage is that there is no fee charged.

One of the strengths of the bank is its hardworking and dedicated employees, now touching 16,500. Some critics say that the bank is over employed, which may be true, but it is the dedication workers that has helped the Bank in achieving ‘One Trillion’ milestone.

The evidence of hard working employees, especially field staff, is also evident from the size of lending to farmers. During 2012, the Bank disbursed over Rs43 billion among the farmers, that was above the indicative target fixed for the Bank by the central bank. Managing such a big portfolio, disbursed among more than 200,000 farmers has not been an easy task.

Even in this segment of business the Bank enjoys an enviable track record. While sector average of non-performing loans touches 12 per cent, NBP’s average is still below 4 per cent or one-third of the average. It became possible only because all the branches involved in lending to farmers are ‘online’, which makes it easier to keep receipts up-to-date.

To meet the growing needs of borrowers, the Bank focuses on deposit mobilization and the efforts have been successful. Banks deposits grew over Rs1,037 billion at end CY12 as compared to Rs927 billion. The bank continues to enjoy low cost of funds that enables it to earn relatively better spread.

While size of Investment grew to Rs343 billion from Rs319 billion on of the positive points is that investment in government securities came down to Rs 230 billion from Rs 252 billion. The point worth noting is that invest in Treasury Bills also came down to Rs 146 billion from Rs183 billion.

Banks owns portfolio as well as a subsidiary asset management company. Its investment in listed companies, including NAFA funds has witnessed nearly five times growth to Rs330 billion in CY12 from Rs6 billion in CY11.