National Bank of Pakistan
National Bank of Pakistan (NBP), the countrys largest commercial bank, recorded a 10 percent, year on year, growth in its first quarter profit (unconsolidated) amid significant amount of reversal in provision for diminution in value of investments and decline in provision against loans and advances.
The lenders asset base stood at around Rs.1,130 billion as on March 31, 2012, nearly 14 percent higher relative to the same period of last year. At this level, the bank is holding roughly 14 percent of the industrys total asset base on its balance sheet.
Moving against the tide, given that the banking industry is conservative towards lending, NBPs advances portfolio expanded to Rs.543 billion as of end-March 2012 , marking a growth of 12 percent relative to the same period of last year.
The lender also remained active on investment front, with investment base up by 14 percent during the period under review to Rs.308 billion.
In the light of expansion in the size of earning assets, the Banks top-line registered, year on year, growth of 7 percent in 1QCY12. While on account of growth in deposit base, the lender saw growth in mark-up expenses. The lenders deposit base increased to Rs.875 billion as on March 31, 2012, registering a growth of 15 percent compared to the same period of last year.
Given that the decline in KIBOR has significantly hammered the industrys margin, the Bank also witnessed decline in net interest income. NBPs gross spread ratio stood around 41 percent in 1QCY12, nearly 6 percentage points lower than the same quarter of last year.
The improvement in the bottom line came from reversal in provision for diminution in value of investments, stemming from sale of equity securities which had been previously impaired on account of unrealised losses.
Moreover, decline in rate of growth in non-performing loans resulted in lower provisioning cost against loans and advances. The lenders NPL grew by 4 percent during the first three months of CY12 to Rs.92 billion as on March 31, 2012.
On the heels of higher dividend income, NBPs non-mark-up income grew by 7 percent in 1QCY12 as compared to the same quarter of last year. While in the wake of high inflationary pressure along with growth in salaries, the Banks non-mark-up expenses stayed on the higher side.
The operating revenues to expense ratio of NBP stood at 1.8 in 1QCY12, as opposed to 2.2 during the same quarter of last year.