National Bank announces 28% fall in net profit for 1HCY22

National Bank announces 28% fall in net profit for 1HCY22

KARACHI: National Bank of Pakistan (NBP) on Wednesday announced a sharp decline of 28 per cent in net profit for half year ended June 30, 2022.

According to financial results submitted to Pakistan Stock Exchange (PSX), the bank announced Rs12.24 billion as profit after tax during the first half (January – June) of calendar year 2022 as compared with Rs17.05 billion in the same half of the last year.

The bank announced earnings per share (EPS) at Rs5.74 for the half year under review as compared with EPS Rs7.98 in the same half of the last year.

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The massive decline in net profitability may be attributed to significant increase in payment of tax. NBP paid an amount of Rs21.87 billion for the half year ended June 30, 2022 as compared with Rs11.13 billion in the same half of the last year, showing about 97 per cent growth.

The bank recorded an amount of Rs34.12 profit before tax (PBT) during the first half of CY 2022 as compared with Rs28.17 billion in the same half of the last year, showing a growth of 21.12 per cent.

The profit after tax of the bank for the second quarter of calendar year 2022 ended June 30, 2022 recorded at Rs2.5 billion, depicting a decrease of 73 per cent Year on Year (YoY).

Higher taxes dragged the profitability in the second quarter.

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Net Interest Income of the bank settled at Rs27 billion during 2QCY22, increasing 6 per cent YoY and Quarter on Quarter (QoQ), both. With this, the total Net Interest Income (NII) for the half year ended June 30, 2022 went up to Rs53 billion, marking a 12 per cent YoY jump. Interest expense registered a significant increase of 116 per cent YoY while interest income was up 68 per cent YoY on the back of policy rate hikes, in the out-going quarter.

Non-Interest income too was up during the quarter, 7 per cent YoY | 24 per cent QoQ, taking 1HCY22’s total to Rs19.5 billion.

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Foreign exchange , Fee and Dividend incomes fueled the Net Fee Income (NFI), posting an increase of 33 per cent, 9 per cent and 37 per cent on YoY basis, respectively.

In addition, the bank recorded Rs145 million in share of profit from joint venture, marking a 110 per cent YoY increase.

During 2QCY22, provisioning significantly declined 85 per cent YoY | 59 per cent QoQ. This takes the overall provisioning of the bank to Rs2 billion in 1HCY22, -71 per cent YoY.

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The bank’s operating expenses increased 16 per cent YoY in 2QCY22 clocking-in at Rs19.4 billion (1HCY22: Rs36.5 billion, 16 per cent YoY). With this, Cost/Income stood at 50.92 per cent in 2QCY22 against 46.38 per cent same period last year.

Effective tax rate was significantly up during 2QCY22 at 86.05 per cent compared to 39.26 per cent last quarter. This higher taxation was on account of revised taxes including corporate and super tax.

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