The profit of National Bank of Pakistan (NBP) for 2014 increased to Rs16.1 billion, which is three times the bank’s earnings of Rs5.3 billion recorded in the preceding year.
Its annual results sent to the Karachi Stock Exchange (KSE) on Thursday said the earnings per share increased to Rs7.5 from Rs2.4 in 2013. NBP also announced a final cash dividend of Rs5.5 per share.
Speaking to The Banker Pakistan, Shajar Capital investment analyst Hamza Kamal said the year showed a decline of 52% in provision charges on a year-on-year basis, as the bank provided for bad advances rolled out in Bangladesh.
“Going forward, we do not foresee any major charge impacting the bank’s profit-and-loss statement, as NBP cashed in on the opportunity of higher capital gains and recoveries from Ittehad Foundries to provide for the bad portfolio,” he added.
Provisions against non-performing loans (NPLs) declined Rs10.2 billion, or 52.4%, to Rs9.3 billion on an annual basis.
Net interest income (NII) for the year increased 15% on a year-on-year basis to Rs45.1 billion. Kamal said the expansion in NBP’s core income was led by a hefty investment in Pakistan Investment Bonds (PIBs) and asset mismatch in the Oct-Dec quarter.
Interest income increased 15% on a year-on-year basis, which was roughly equal to the rise in interest expense during the year. In contrast, NBP’s non-interest income went up 21% to Rs31.3 billion in 2014.
Kamal said the rise in non-interest income was driven by a two-time jump in gains on equity and treasury securities and 21% increase in income from dealing in foreign currencies.
Compared with the preceding year, the cost-to-income ratio remained flat at 58% in 2014.