National Bank of Pakistan (NBP) posted unconsolidated earnings of Rs7.5 billion in January-June, down 7.2% from the same period of the previous year.
The year-on-year decline was more pronounced in the case of NBP’s profit in the second quarter of 2015. Net profit of the bank remained Rs4.2 billion in April-June, which is down 14.4% from a year ago.
The one-off super tax along with a uniform rate of tax on sources of banking income hurt the profitability of NBP in the second quarter. According to Shajar Capital, the one-off impact of the super tax and the uniform tax rate is around Rs2.3 billion. It means the bank’s net profit would have been Rs6.5 billion (up two times on a quarter-on-quarter basis and 23% on a year-on-year basis) had it not been subjected to new rates.
“The bank expanded its core income by 25% year-on-year, as interest expense declined 17%. Non-fund income was recorded at Rs10.7 billion, contributing 44% to the bank’s total income,” Shajar Capital said.
All income heads witnessed sequential growth, except foreign exchange income that declined due to stability in the exchange rate during the second quarter of 2015.