Ayesha Mudassar

The National Bank of Pakistan (NBP), the country's leading commercial bank, has posted profit-after-tax (PAT) of Rs51.8 billion for the year ending December 31, 2023, with an inspiring growth of 70.5% over the earlier calendar year, reports WealthPK. As per the annual report, the bank recorded a profit-before-tax (PBT) of Rs101.2 billion for CY23 versus a PBT of Rs62.7 billion in CY22. The bank's strong financial results demonstrate its resilient business model and effective management strategies. In addition, it has maintained a stable funding pool, which contributed to an improved and sustainable operating performance. Moreover, the earnings per share (EPS) for the year 2023 was Rs24.37.

The bank earned a net markup income of Rs168.7 billion in CY23 against Rs116.8 billion for the calendar year 2022. This increase is achieved through a volumetric growth in average interest-bearing assets coupled with the favorable impact of the policy rate. In addition, the bank’s non-markup income for the CY23 reached Rs40.6 billion, representing a 10.7% year-on-year (YoY) increase. This is mainly due to a rise in fee and commission income during the period under review. Continuous focus on expediting the digital transformation journey, combined with delivering unparalleled services to the customers, facilitated a robust growth of 4.2% in fee income, which reached Rs22.03 billion during calendar year 2023 as compared to Rs21.1 billion in the earlier year.

Furthermore, the dividend income increased by 1% to Rs5,257 million for the year ending December 31, 2023, as compared to Rs5,206 million for the year ending December 31, 2022. Amid the high inflationary pressures and Rupee depreciation, the Bank’s operating expenses for the year amounted to Rs93.3 billion, a 19.5 % YoY increase compared to Rs78.09 billion in the last year. The deposits were reported at Rs3,674 at the end of December 2023 with a YoY growth of 37.8%. This reflects the bank’s well-thought and applied strategy of increasing its market share. Overall, the bank pursued its approach of consistent growth through a robust risk management framework and improved customer experience through technologically driven automation and digitization.

Performance over the last four years (2020-2023)

The historical analysis of NBP demonstrates a positive trend in key financial indicators, including markup earned, total income, profit after taxation, and EPS. These metrics suggest that the NBP experienced growth and improved financial performance in all the years under consideration. During the period under review, the bank earned the highest mark-up in 2023. This indicates that the bank had a strong performance in terms of interest income, which is a significant revenue source. However, the bank has witnessed a single dip regarding earned markup in 2021.

Concerning total income, NBP earned a total income of Rs140.2 billion in 2020, Rs134.5 billion in 2021, Rs153.5 billion in 2022, and Rs209.3 billion in 2023. The substantial increase in 2023 was mainly due to an enormous rise in foreign exchange income, interest earnings, and other income. In terms of after-tax profit, the bank hit the highest four-year PAT in 2023 amounting to Rs51.8 billion. A higher PAT is likely driven by increased revenues in the period considered. The bank posted a net profit of Rs30.5 billion in 2020, Rs28 billion in 2021, and Rs30.4 billion in 2022. The trend of increasing EPS over the years, with the highest EPS in 2023, indicates that the bank’s financial performance was generally improving primarily due to income growth.

Future outlook

The bank will continue to play its vital role in creating sustainable value for stakeholders and supporting a robust economic momentum in the country. In the foreseeable future, the bank's business strategy will remain focused on digitizing and extending financial solutions across all segments, with a particular focus on the financial inclusion of the underserved sectors.

INPCredit: INP-WealthPk