KARACHI (September 16 2003): The National Bank of Pakistan Ltd, country's largest bank, said on Monday that its profit rose 71 percent in the first half of 2003, boosted by returns on stock market investments and new loans to consumers.
Profit for the six months ended on June 30, 2003, rose to Rs 1.93 billion, or Rs 4.71 a share, from Rs 1.13 billion , or Rs 2.76 a share of the previous year, the company said in a statement to Karachi Stock Exchange.
Earnings rose after the bank sold shares as the benchmark Karachi Stock Exchange Index of 100 shares rose to a record, analysts said.
They said that despite decline in interest rates the revenues from net mark-up and interest rose by 19 percent to Rs 6.152 billion.
The earnings from non-mark-up, mostly constituted of capital gains and income from dividend, denoted an increase of 36 percent to Rs 2.985 billion.
The results surprised market players and analysts as they were expecting profit in the range of Rs 1.2 billion to Rs 1.4 billion for the half year ended on June 30.
The Privatisation Commission, the authority in charge of asset sales, wants to sell 3.25 percent of its shares in National Bank through Karachi Stock Exchange by next month. It sold 20 percent of the lender's shares last year.
The National Bank's share price, following the result, touched its highest level and was quoted at Rs 50.20, but profit selling towards the end clipped most of the gains.
Its share price closed at Rs 49.15, showing an increase of Rs 1.15 from Friday's ending level.
According to the release of the bank, deposits increased by over Rs 20 billion from December 31, 2002.
Despite substantial reduction in commodity loans and repayment of some large public sector loans, the bank, in an extremely competitive market, booked fresh loans mainly in top tier corporate, which partially compensated reduction in advances.
The drastic drop in treasury bills rates will have a negative impact on net interest revenue in the next six months.
The bank achieved a number of recognitions during the period. The bank was declared Number One in Asia and world's 8th bank in terms of return on capital by the 'The Banker' London, and was rated among the top banks in the emerging markets by 'Global Finance', USA.
These are in addition to the 'Bank of the Year' in the Pakistan awards by the 'The Banker' London, for two consecutive years.
The following statement shows the company's first half year earnings, in millions of rupees.
============================================= 2003 2002 Change Jan-June Jan-June (%) ============================================= Revenue 9,138 7,349 +24 Admin Expenses 4,340 3,971 +9 Profit before tax 3,518 2,288 +54 Net profit 1,931 1,130 +71 =============================================