NBP pensioners entitled to govt pension increases after court dismisses bank’s appeal

National Bank of Pakistan (NBP) pensioners have been declared entitled to government-announced pension increases after the Federal Constitutional Court (FCC) dismissed the bank’s appeal in a long-running pension case.

NBP Company Secretary (Acting) Mehnaz Salar, in a notice to the Pakistan Stock Exchange (PSX) on Thursday, said the FCC on September 16 announced its judgment in ‘Civil Appeal No. 1688/2021, National Bank of Pakistan & others vs. Khawaja Abdul Hameed Nasir & others’, and dismissed the bank’s appeal.

“The Federal Constitutional Court of Pakistan dismissed the Bank’s appeal, thereby entitling its pensioners to receive government increases in their pension,” the notice said, adding that the full text of the judgment is awaited.

Brokerage house Topline Securities said the ruling could lead NBP to make additional provisioning related to pension obligations, although the potential amount remains uncertain.

Topline said the latest ruling extends the benefit of government-announced pension increases to the NBP pensioners who were not parties to the earlier litigation.

The brokerage recalled that the Lahore High Court had ruled in favour of pensioners in 2016, directing NBP to extend government-announced pension increases to its pensioners. The Supreme Court subsequently suspended that order and, under the main pension case, directed payment of the increases only to pensioners who were parties to the litigation.

Topline Securities estimated that every Rs5 billion of additional pension provision could have an incremental after-tax impact of Rs1.1–1.3 per share on NBP’s earnings.

The brokerage noted that NBP had already booked Rs57.5 billion in 2024 on account of past service pension costs. It said management could record some additional provisioning following the latest judgment, although the quantum remains uncertain.

NBP’s pension-related costs had already risen sharply following earlier developments, with the bank recording a one-off charge of Rs57.5 billion in 2024, taking total pension-fund costs to Rs72.6 billion, compared with Rs4.4 billion in 2023, including the recurring impact.

The pension-fund cost subsequently declined to Rs8.7 billion in 2025, primarily reflecting changes in the discount rate, according to Topline.

Meanwhile, benefits paid by NBP increased to Rs20 billion in 2024, from a historical run rate of around Rs1.7–1.8 billion during 2021–2023.

As a result, the bank’s net payable pension liability rose to Rs75.6 billion in 2024, compared with Rs22.9 billion in 2023. Topline clarified that these figures relate to the pension fund only and exclude medical benefits, gratuity schemes and other obligations.