Board of Directors of National Bank of Pakistan (NBP) in their meeting held on Tuesday at the bank’s head office here approved the financial statements of the bank for the year ended December 31, 2011 and announced a payout of 10 per cent bonus shares and 75 per cent (Rs7.50 per share) cash dividend to the shareholder as final dividend for the year 2011 which translates into payout ratio of 81.18 per cent.
Pakistan’s economy is still facing challenges of rising inflation, shortage of energy and power, law and order situation, increasing fiscal deficit and impact of international economic crisis. The central bank reduced its policy rate by 200 bps from 14.0 per cent to 12.0 per cent, aimed at supporting the private credit investment and also to help in reducing the rising non performing loans, but this will also impact the net interest margins of the banking industry.
Total assets of the bank increased to Rs1.15 trillion at the year end, up by 10.8 per cent from year the end 2010, an appreciable growth, especially in view of lower growth in the banking system deposits. Pre- tax profit increased by 7 per cent from Rs24.4 billion to Rs26.0 billion, owing to higher core revenues.Net interest income increased by 8.3 per cent from last year, while non interest mark up income was up by 9.7 per cent on account of higher dividend and exchange income. After tax profit, however, remained at last year level of Rs.17.6 billion due to prior year’s tax reversal of Rs.939 million in 2010.
Pre- tax return on equity stood at 24.3 per cent, pre-tax return on assets at 2.5 per cent with capital adequacy ratio at 16 per cent. The top line (operating revenue) increased by 8.7 per cent from Rs60.9 billion in 2010 to Rs66.1 billion in 2011. The bank’s total deposits increased by Rs95 billion or 11.5 per cent. Net advances also showed an increase of Rs48 billion or 10.0 per cent. During 2011, several major IT initiatives were undertaken, including expansion of ATM network, establishment of full fledge 24/7 call center and conversion of more than 1,000 branches onto the online network, remaining branches will also be converted on the online network in first quarter of 2012. The benefits of the said IT initiative coupled with ongoing IT upgradation will also be further explored in 2012 in the form of further market penetration and product development.
Going forward, the bank shall have renewed focus on reprofiling its liability portfolio with emphasis on increasing Current and Saving (CASA) deposit ratio. Reduction in NPLs and recoveries, increase in trade business and further IT upgradation and expense management will be area of focus.
