KARACHI (March 19 2009): The Board of Directors of National Bank of Pakistan (NBP) has announced 65 percent final cash dividend and 20 percent bonus shares for the year ended December 31, 2008. The Board of Directors of the bank held its 179th meeting on Wednesday and approved the financial statements of the bank for the year 2008.
“The bank announced better than expected financial results and record payout to shareholders for the year 2008,” analysts said. According to the financial results, NBPs top line (operating revenue) increased by 13 percent from Rs 47.1 billion in 2007 to Rs 53.5 billion in 2008. Pre-tax profit has reduced to Rs 23.0 billion, a decrease of 18 percent over last year mainly on account of higher provision charge which increased due to the banks policy of prudently providing for against non-performing loans.
The banks profit after tax stood at Rs 15.458 billion in the period under review as compared to Rs 19.033 billion in 2007. The banks earnings per share reduced by 18.9 percent to Rs 17.23 in 2008 as compared to previous weeks earnings per share of Rs 21.22. Pre tax return on equity stood at 30.5 percent, whereas pre tax return on assets stands at 3.0 percent while cost to income ratio at 0.35 remained on the highest amongst the Pakistani banks.
Net interest income increased by 10.2 percent to Rs 37.1 billion in 2008 from Rs 33.6 billion in the corresponding period last year owing mainly to volume growth. Non interest income showed growth of 21.2 percent mainly in fee, commission, exchange and other income.
This growth is impressive despite the unprecedented fall in value of stock market and decline in banks capital gains on sale of securities from Rs 2.3 billion in 2007 to Rs 0.4 billion in 2008.
The year 2007 capital gains includes one off gain of Rs 1.7 billion on redemption of 10 percent of NIT units holding under Letter of Comfort (LoC). Despite major withdrawal of government/public sector deposits, NBP still managed to close higher in terms of deposits showing an increase of Rs 33 billion or 5.6 percent. Advances also have increased by Rs 72.2 billion or 21.3 percent in this period.
The year 2008 had been an exceptionally challenging year from a number of perspectives wherein the world saw the highest record prices of commodities. The year also witnessed extreme volatility in the commodity prices and the worst form of recession in the first world countries after World War-II.
What started as a sub prime loan crisis blew up into recession which consumed several large banks and financial institutions of the world. Domestically, Pakistans economy faced several challenges which included law and order, energy and power shortages, record high inflation, liquidity in the banking system, steep rise in interest rates, increase in government borrowing from SBP, rising import bill and resulting increase in fiscal deficit.
The significant turmoil in the global financial markets and the marked slowdown of the domestic economy posed many challenges to the Pakistans banking landscape including steep rise in non-performing loans. “In this backdrop, NBP announced better than expectations financial results and payout to shareholders for the calendar year 2008,” analysts said.
The Board and the Management of NBP are confident that with focus on recovery efforts, deposit mobilisation and expense management, the bank will continue to grow and overcome the challenges posed by the current environment.
========================================================================= FINANCIAL HIGHLIGHTS (STANDALONE) ACTUAL ACTUAL VARIANCE AGAINST DEC-07 DEC-08 ACTUAL DEC 2007 HEADS AMOUNT % ========================================================================= Key Figures - Balance Sheet (Rs Billion) ------------------------------------------------------------------------- Deposit 591.9 624.9 33.0 6% Advances 340.3 413.0 72.7 21% Pre-Tax Profit 28.1 23.0 -5.1 -18% After-Tax Profit 19.0 15.5 -3.6 -19% ------------------------------------------------------------------------- Ratios ------------------------------------------------------------------------- Return on Assets (Pre-Tax) 4.1% 2.9% -1.2% -29% Return on Equity (Pre-Tax) 45.9% 30.5% -15.3% -33% Earning Per Share 21.2 17.2 -4.0 -19% Expense/Revenue 0.30 0.35 -0.05 -16% Advances to Deposit 57.6% 66.1% 8.5% 15% =========================================================================
