National Bank of Pakistan

With an asset base of Rs.1,153 billion as on 31st December 2011 National Bank of Pakistan (NBP) managed to keep its position intact as the largest bank in the country. This marks 11 percent growth in its asset base relative to the same period of last year. Aided by growth in its earning assets, NBPs mark-up revenues grew by 8 percent in CY11 compared to the previous year. Going against the grain, the lender expanded its advances portfolio by around 10 percent to Rs.527 billion at the end of CY11, relative to the same period of last year, when the industrys advances portfolio fell by 1 percent. Hence, the Banks Advances to Deposit Ratio (ADR) stood at around 57 percent at the end of CY11, nearly 4 percentage points higher than the industrys average ADR. At the same time, NBPs investments portfolio grew marginally by 6 percent to Rs.319.5 billion, when the industrys investment portfolio expanded by a whopping 41 percent Having a deposit base of around Rs.927 billion at the end of CY11, up by 11 percent compared to the same period of last year, NBP is holding roughly 16 percent of the industrys total deposit base. The Banks net interest income accrued a gain of 8 percent, but the growth in net interest income pales in comparison to the other peer banks, given that combined net interest income of the remaining giant banks HBL, UBL, MCB, and ABL grew by 18 percent in CY11 compared to the previous year. However, the good part is that the Banks gross spread ratio inched up by 23bps to around 49.3 percent in CY11, relative to the previous year. While provisioning expenses took a breather, fell by 7 percent in CY11 compared to the last year, owing to decline in provisioning expenses against non-performing advances. This is likely due to enhanced FSV benefits. On the heels of higher dividend income, income from dealing in foreign currencies and other income, the Banks non-core income registered growth. As the Banks non-mark-up expenses increased by 16 percent -at a higher rate compared to growth in net interest income and non-mark-up income-operating revenues to expense ratio deteriorated slightly to 2.13 in CY11 from 2.28 in CY10. Hammered by higher non-mark-up expenses, the growth in operating revenues amid decline in provisioning expenses didn translate into bottom-line growth, given that the Banks profit before tax increased by 6 percent in CY11 compared to the previous year. While taking taxes into account, the Banks bottom line stayed flat in CY11 compared to the last year, given that the Bank had witnessed lower effective tax rate last year.

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National Bank of Pakistan
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(Rs mn)                                   CY11        CY10     chg
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Mark-up Earned                         95,690      88,681       8%
Mark-up Expensed                      (48,517)    (45,170)      7%
Net Markup Income                      47,173      43,512       8%
Provisioning                           (9,358)    (10,009)     -7%
Net Mark-up income after provisions    37,815      33,502      13%
Other  income                          19,754      18,151       9%
Operating revenues                     66,928      61,663       9%
Other  expenses                       (31,453)    (27,031)     16%
Profit before taxation                 26,116      24,622       6%
Profit after taxation                  17,709      17,738       0%
EPS (Rs)                                10.53       10.59
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Source: Company Accounts