NBP chief vows to re­duce non-per­form­ing loans

The Pak Banker - - FRONT PAGE -

Staff Re­porter

Karachi: The 65th An­nual Gen­eral Meet­ing of Na­tional Bank of Pak­istan was held here at a lo­cal ho­tel to re­view bank's per­for­mance in the fi­nan­cial year 2013 which was at­tended by the share­hold­ers. NBP Chair­man, Muneer Ka­mal and Pres­i­dent Syed Ahmed Iqbal Ashraf also at­tended the meet­ing.

The share­hold­ers were in­formed that Cen­tral bank re­duced its pol­icy rate by aver­age 200 bps from 2012 be­sides link­ing min­i­mum profit rate on de­posit with SBP repo rate thereby in­creas­ing the min­i­mum de­posit rate to 7% from 6 % last year. Cal­cu­la­tion mech­a­nism for profit pay­ment was also changed.

Due to these fac­tors the bank's in­ter­est mar­gin like other banks re­mained un­der pres­sure. The im­pact on net in­ter­est mar­gin was par­tially off­set through vol­ume in­crease es­pe­cially in high yield­ing ad­vance salary, agri­cul­ture fi­nanc­ing and gold loans

The bank posted op­er­a­tional profit (pre-pro­vi­sion profit) of Rs. 27.5 bil­lion com­pared to Rs. 32.4 bil­lion (re­stated) last year reg­is­ter­ing a de­cline of Rs. 4.9 bil­lion mainly due to the above-men­tioned fac­tors. The bank's pre-tax prof­itabil­ity de­creased to Rs. 7.1 bil­lion com­pared to Rs. 21.4 bil­lion (re­stated) due to higher pro­vi­sion charge in over­seas branches and lower net in­ter­est mar­gins.

Pro­vi­sion cov­er­age is around 80%, which will strengthen the bal­ance sheet and ben­e­fit the bank once re­cov­ery ef­forts yield re­sults in years ahead. Ad­min­is­tra­tive ex­penses were kept un­der strict check which in­creased by just 4 %.

The bank's growth in bal­ance sheet re­mained healthy. The bank's do­mes­tic de­posits in­creased by over 10% in 2013 with CASA de­posits con­sti­tut­ing 69% of the to­tal de­posits. The bank is well cap­i­tal­ized with cap­i­tal and re­serves of Rs. 156.3 bil­lion and cap­i­tal ad­e­quacy ra­tio of 15.24%.

The Pres­i­dent also high­lighted the ini­tia­tives that the bank is tak­ing in terms of tech­nol­ogy up gra­da­tion and the progress for im­ple­men­ta­tion of ' Core bank­ing ap­pli­ca­tion. NBP achieved a num­ber of I.T. mile­stones like the en­tire branch net­work com­ing on­line, ex­pan­sion of ATM net­work to 375 and en­hanced fea­tures at call cen­ter etc.

The Pres­i­dent ex­plained the bank's strat­egy and stated that the bank will give top pri­or­ity to re­cov­er­ies to re­duce non-per­form­ing loans and write back of pro­vi­sions. Low cost de­posit mo­bi­liza­tion, lev­er­ag­ing largest cus­tomer base in Pak­istan, port­fo­lio con­sol­i­da­tion, cost man­age­ment and ca­pac­ity build­ing through IT en­hance­ment will be the other ar­eas of fo­cus.

The share­hold­ers ap­proved div­i­dend pay­out of 20% cash div­i­dend (Rs. 2.00/- per share) as rec­om­mended in the Board of Di­rec­tor's meet­ing held on March 3, 2014.

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