NBP scores another year of strong financial results.

The Board of Directors of National Bank of Pakistan (NBP) recently approved the annual financial statements for the year ended December 31, 2022.

The Bank has delivered yet another year of strong financial results, and posted a pre-tax profit of PKR 62.7 billion, depicting an annual increase of 18.7%. With strong income momentum across its businesses segments, the Bank's fund-based net interest income was particularly strong. Amidst the challenging macro environment, the Bank has continued to provide support for its customers and clients in line with its Vision.

The 40% growth in average earning assets, coupled with margin expansion through higher policy rates, generated gross interest income of PKR 503.3 billion i.e. 117% higher than PKR 231.9 billion for 2021. Pursuant to an effective fund mobilisation, average interest bearing liabilities of the Bank reached PKR 3,871.9 billion (2021:PKR 2,692.9 billion). Consequently, in the backdrop of higher average interest rate, the Bank's cost of funds amounted to PKR 386.5 Bn. Accordingly, net interest income for the year closed at PKR 116.8 billion, depicting a YoY increase of 19.7%.

Despite a challenging business environment and lower trade activity, the Bank maintained its non-fund income stream that amounted to PKR 36.7 billion (2021:PKR 36.9 billion). Equity investments of the Bank generated dividend income of PKR 5.2 billion, 13.3% higher YoY. Fee and commission income earned through banking operations amounted to PKR 21.2 billion i.e. 18.8% higher YoY and are reflective of the Bank's widespread customer base and market outreach. As the Bank provides FX solutions to a large number of corporates, its forex income for the year amounted to PKR 7.4 billion which is 14.4% higher YoY. However, due to a lacklustre performance of the stock market, the Bank could generate capital gains of PKR 1.1 billion as compared to PKR 6.2 billion last year. Consequently, total income for the year amounted to PKR 153.5 billion, i.e. PKR 18.95 billion or 14.1% higher, YoY.

Reflecting the inflationary impacts, ad hoc allowance allowed to the employees and the Bank's investment into its IT systems and upgrade of business premises, operating expenses for the year amounted to PKR 78.2 billion (2021: PKR 60.0 billion). Pursuant to a prudent strategy to strengthen the capital base, a provision charge of PKR 12.6 billion was created during the year. This is particularly important in the backdrop that IFRS 9 stands...