NBP posts 14pc decline in profits during 2018

KARACHI: National Bank of Pakistan (NBP) unveiled its 2018 consolidated net earnings at Rs 20.04 billion (EPS Rs9.36) versus Rs23.35 billion (EPS Rs10.90) recorded during last year, exhibiting a decline of 14 percent.

With respect to developments pertaining to pension case, the NBP has filed a review petition in the apex court. Moreover, the amount of pension charge has risen to Rs61 billionn at Dec’18.

The management is confident that the decision will be reversed. However, incase of an unfavorable outcome, the management conveyed that they expect assistance from the central bank which can include segmenting the whole charge over several years in order to assist bank in compliance with capital requirements.

NBP elected to avoid dividend payout for the second year in a row to supplement it’s capital base. Going forward, the management did not discount the possibility of a future dividend reduction/omission.

The bank achieved exceptional growth of 63 percent in its remittance business and consequently incremented its market share 4pps to 11 percent during 2018.

The management expects its market share in remittance business to improve by another 2pps to 13 percent in 2019.

National Bank of Pakistan (NBP) booked provisioning of Rs10.1 billion in 2018, with most of the charge relating to default by a single-borrower. The management conveyed that all provisioning relating to that single-borrower have now been charged and no further provisioning is expected in this regard.

 In terms of future outlook, the bank is focusing on less capital intensive products (cross-selling) along with investment in technology and infrastructure, notes a report issued by Pearl Securities.

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