By Nasir Dehlvi
KARACHI: The National Bank of Pakistan (NBP) has reported a dramatic 99 percent decrease in net profit for the first half of the current calendar year, falling to Rs251 million from Rs26 billion in the same period last year. This significant drop is attributed to a Rs49 billion pension payment mandated by a court order.
In a corporate briefing held on Monday, NBP management revealed plans to launch credit cards in 2025, following a strong performance as one of the top debit card issuers from January to June 2024. However, the bank faces challenges with a low advance-to-deposit ratio (ADR) of 37.5 percent. Should the ADR remain below the required 50 percent threshold by December 31, 2024, the bank could incur an additional tax of up to 16 percent.
Topline Research analyst Sunny Kumar noted that NBP had transferred Rs100 billion from government accounts to the State Bank of Pakistan’s (SBP) centralized Treasury Single Account in the first phase. Additionally, NBP sold its 45 percent stake in United National Bank Limited, UK, realizing capital gains of around Rs6 billion.
The pension cost of Rs49 billion, incurred in the second quarter (April-June) of 2024, aligns with a Supreme Court decision. The bank anticipates recurring pension costs to be approximately Rs13 billion, though exact figures will be disclosed later. There is an outstanding pension case related to increases promised by the federal government under the Civil Services Act, but NBP is optimistic about a favorable outcome based on past rulings.
#NBP, #PensionPayments, #CourtOrders, #BankingSector, #PakistanEconomy, #CorporateBriefing, #CreditCards2025, #AdvanceToDepositRatio, #SBPTreasury, #SupremeCourtDecision, #BankingChallenges, #PakistanFinance, #EconomicImpact
