April 9, 2003	Wednesday	Safar 6, 1424

KARACHI, April 8: The National Bank of Pakistan (NBP) announced profit after tax of Rs2.25 billion for the year ended December 31, 2002, which represented 96 per cent jump from taxed profit amounting to Rs1.15 billion the year ago.

The bank’s board of directors, which had met a day earlier declared the results on Tuesday. A final cash dividend at Rs1.25 per share, i.e. 12.5 per cent tied to a bonus issue at 10 per cent for the year ended December 31, 2002, subject to GoP and Regulatory approvals was also recommended by the board.

The results — delayed by nearly five weeks — were in line with analysts’ expectations, who had forecast a sharp rise in profit to over Rs2 billion for the year. Cash dividend fell short of expectations of upwards of Rs2 per share, but that was more than compensated by the bonus issue, one-for-10. The payout is the second since the company shares were offloaded at the stock exchanges. The stock market greeted the results with 95 paisa increase in price of the share, which closed at Rs27.95, from the previous day’s closing price of Rs27 with more than 16 million shares coming up for trading on Tuesday.

Analysts had based their forecast of “an all time high profit”, mainly due to the absence of “amortization of deferred cost” for the year 2002: “A larger chunk of the increase in profit could come from the absence of Rs2.70 billion non-cash charge that the company has been providing for the last three years”, said analysts at brokerage firm, KASB & Co. The charge was on account of employees’ downsizing costs: the amount that the bank had paid to the outgoing employees on voluntary handshake scheme. That amount stood fully amortized in 2001.

Total revenue of NBP grew 4.3 per cent to Rs17.64 billion for the year ended December 31, 2002, from Rs16.91 billion the previous year. These included net mark-up/interest income of Rs12.82 billion, up from Rs12.41 billion last year and non mark-up/interest income at Rs4.82 billion, up from Rs4.50 billion in 2001. “With interest rates on advances and government paper continuing their downward journey in 2002, most banks focused on volume growth while improving their non interest income (NIM) in percentage terms”, said Kashif Artani, analyst at InvestCap in his forecast, adding that few banks had booked huge capital gains on investments in 2002 to support their bottom line. The same, he said, was expected in case of NBP.

Iffat Zehra Mankani, head of research at IP Securities pointed out that the non interest income of NBP had increased by 15 per cent in the nine months period ended September 30, 2002 on account of improved earnings from dividend and dealing in foreign currencies.