A very few commercial banks in Pakistan today have an Advance to Deposit Ratio (ADR) in excess of 50 percent. And the National Bank of Pakistan is amongst the chosen few, doing what banks are supposed to do. NBPs ADR rose remarkably from 57 percent as at December 31, 2011 to a reasonably high 66 percent as at September 30, 2011 - this comes at a time when its peers are merrily parking their assets in government papers.
The state-owned commercial bank announced its 9MCY12 results yesterday, with a satisfactory double-digit growth in bottom line. NBPs asset base grew by a meagre 1.6 percent over December 2011, and surprisingly the investments were down by 4.4 percent against the industry trend where investments have been on a rise of late. Also, in contrast to the industry, NBPs net advances grew by 11 percent over December end 2011.
The top line growth of nine percent year-on-year was satisfactory enough, given the low interest rate scenario. The NII expectedly declined as banking spreads have squeezed after sharp cut in interest rate and increased returns on saving deposits. The gross spread ratio also went down from 47.9 percent in the corresponding period last year to 41.4 percent during the period.
On a disappointing note, deposits witnessed a four percent year-on-year decline, defying the industry trend. NBPs CASA ratio however improved significantly to 63 percent, up from 57 percent as at December end 2011. The fixed deposits witnessed a massive 22 percent withdrawal, whereas saving deposits went up by 11 percent over December 2011.
Provisioning charges for the period were significantly lower than the corresponding period previous year, yet the infection ratio has stayed on the higher side at 14.5 percent. The coverage ratio too, at 74 percent, is pretty low when compared to its peer banks who have an adequate coverage ratio, well over 80 percent.
What boosted the bottom line more than anything else was a sharp rise in other income, which went up by a massive 26 percent, mainly on account of higher brokerage and commission income.
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NATIONAL BANK OF PAKISTAN
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(Rs mn) 9MCY12 9MCY11 chg
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Mark-up Earned 75,729 69,760 9%
Mark-up Expensed (44,378) (36,313) 22%
Net Markup Income 31,351 33,448 -6%
Provisioning (4,926) (7,216) -32%
Net Mark-up income 26,425 26,232 1%
after provisions
Other income 17,092 13,507 27%
Operating revenues 48,444 46,955 3%
Other expenses (25,762) (22,886) 13%
Profit before taxation 17,756 16,853 5%
Profit after taxation 12,718 11,517 10%
EPS (Rs) 6.87 6.23
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Source: Company Accounts
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