Karachi (PR): The Board of Directors of National Bank of Pakistan in their meeting held on March 3, 2014 at the bank’s Head Office Karachi approved the financial statements of the bank for the year ended December 31, 2013 and announced cash dividend of 20% (Rs. 2.0 per share) to the shareholders as final dividend for the year 2013.
The bank posted operational profit (pre-provision profit) of Rs. 27.5 billion compared to Rs. 32.4 billion (restated) last year registering a decline of Rs. 4.9 billion mainly due to downward movement of discount rate till August 2013 and higher cost of funds on account of linking deposit rates with discount rate and change in calculation of profit from minimum balance to average balance. The bank’s pre-tax profitability decreased to Rs. 7.1 billion compared to Rs. 21.4 billion (restated) due to higher provision charge and lower net interest margins. The impact on net interest marginwas partially offset through volume increase especially in high yielding advance salary, agriculture financing and gold loans.
The bank’s growth in balance sheet remained healthy. The bank’s domestic deposits increased by over 10% in 2013 with CASA deposits constituting 69% of the total deposits. Advances declined by 3% due to reduction in corporate and commodity financing portfolio. Our “Advance Salary”, agriculture and gold loans financing product continued to perform well and are major contributor in terms of growth and earnings. The bank is well capitalized with capital and reserves of Rs. 156.3 billion and capital adequacy ratio of over 15%. During 2013, JCR-VIS Credit Rating Company has reaffirmed the entity ratings of the bank at ‘AAA/A-1+’ (Triple A/A-One Plus) with ‘stable’ outlook.
The Board emphasized on the objective loan assessment of the portfolio including international operations and advised the management to use prudent approach in identifying problematic loans and accordingly create adequate provision against loans. This exercise though resulted in highernon-performing loans and provision charge compared to the corresponding period December 31, 2012 but we believe, will strengthen the balance sheet and benefit the bank once recovery efforts yield results in years ahead. Administrative expenses were kept under strict check which increased by 4 % mainly due to defined benefit charge and inflation.
NBP achieved a number of I.T. milestones like the entire branch network coming online, expansion of ATM networkto 375and enhanced features at call center etc.
Going forward the bank will give top priority to recoveries to reduce non-performing loans and write back of provisions.Low cost deposit mobilization, leveraging largest customer base in Pakistan, portfolio consolidation and capacity building through I.T. enhancement will be theother areas of focus.