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NBP's pre-tax earning over Rs 6 billion highest-ever in financial sector

KARACHI (April 09 2003) : The National Bank of Pakistan has registered the highest ever earning for any financial institution in Pakistan's history with Rs 6.045 billion pre-tax profit for 2002–a 100 percent increase over Rs 3.016 billion earned in 2001.

The Board of Directors of 'the largest bank in the country', with total assets of Rs 432 billion, met on Monday under the chairmanship of NBP President, Syed Ali Raza, to approve the accounts for the year ending December 31, 2002, at the NBP Head Office in Karachi.

The Board recommended payment of cash dividend of Rs 1.25 per 10-rupee share (ie 12.5 percent) and a bonus issue of 10 percent.

According to analysts, NBP's pre-tax profit would have been 50 percent higher if the 'premier financial institution' did not have to absorb the cost of amalgamation of the defunct National Development Finance Corporation (NDFC) ie provisions for loss making loans and delayed payment by State Bank of Pakistan for Voluntary Handshake Scheme.

Further, say the analysts, it is interesting to note that unlike some other big banks, 80 percent of NBP's income in 2002 came from its core business and not as one-off capital gain or dropping provisioning in the year.

The improved profitability is said to be due to high interest revenue (Rs 12.8 billion), enhanced fee income (Rs 4.8 billion) and run-off amortisation.

Prudent addition to the loan reserve of Rs 1.95 billion has improved the bank's cash coverage for non-performing loans, they added. After-tax profit was up by 96 percent at Rs 2.253 billion as against Rs 1.149 billion in 2001.

All key financial and operating ratios demonstrate all-round improvement, say analyst.

Capital Adequacy Ratio is up by 38 percent (14.5 percent); return on equity has increased by 75 percent to 45.3 percent; return on assets is up 86 percent ie 1.43 percent, and earning per share has improved by 96 percent to Rs 6.04.

=====================================================================  NATIONAL BANK OF PAKISTAN HIGHLIGHTS  =====================================================================                                                        (Rs in Million)                                                              Variation  ---------------------------------------------------------------------  Particulars         2000     2001     2002     Absolute     (percent)  =====================================================================  - Pre-Tax Profit   1,032    3,016    6,045        3,029         100.4  - Income Tax   Provision          (571)  (1,867)  (3,791)       1,924         103.0  - After Tax Profit   461    1,149    2,253        1,104          96.0  - Total Assets   371,636  415,089  432,803       17,714           4.3  - Deposits       316,493  349,617  362,866       13,249           3.8  - Total Capital   16,983   17,510   23,936        6,426          36.7  =====================================================================  Ratios                        2000            2001               2002  =====================================================================  Return on Equity   (Pre-Tax Profit)         9.50 percent   25.85 percent  45.27 percent  Return on Assets -   (Pre-Tax Profit)         0.29 percent    0.77 percent   1.43 percent  Cost/Income Ratio         0.62            0.52                   0.51  Capital Adequacy Ratio   11.46 percent   10.52 percent  14.50 percent  =====================================================================

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