NBP announced earnings (PAT) today for 1QCY24 at PKR 9.7bn (EPS: PKR 4.56), which depicted a decrease of 14% and 30%, respectively, on both a YoY and QoQ basis (1QCY23 EPS: PKR 5.29). The drop in overall profitability was primarily driven by a decrease in markup income compared to the previous year. QoQ, both markup and non-markup income declines contributed to the decrease in overall earnings.

In 1QCY24, the bank reported a Net Interest Income of PKR 29.1bn, marking an 11% decline compared to the same period in the previous year and a 40% decrease QoQ.

The interest earned surged by 43% compared to the previous year but decreased by 7% from the previous quarter. However, interest expenses witnessed a 54% increase compared to last year’s period. while down 1% QoQ.

During the outgoing quarter, a significant factor contributing to the bank’s overall earnings compared to the previous year was a 69% increase in Non-Funded Income. This surge was primarily driven by a 27% YoY growth in Fee Income, a 73% YoY increase in dividend income, a 31% YoY rise in FX income, and a nearly twelvefold increase in gains from the sale of securities amounting to PKR 4.4bn, which was substantially higher than the PKR 369mn gain recorded in the corresponding period last year.

In the first quarter of CY24, the bank reported a total provisioning of PKR 727mn, slightly lower than the PKR 734mn recorded in the same period last year. Furthermore, on a QoQ basis, the provisioning saw a significant decrease of 87%.

The bank’s operating expenses during 1QCY24 totalled PKR 22.5bn, reflecting a 4% increase compared to the same period last year while experiencing a substantial 22% decrease from the previous quarter. With this, the Cost/Income ratio stood at 51.5% for 1QCY24, down from 52.4% in the same period last year.

The bank’s effective tax rate was 52% during 1QCY24, an increase from 40% in the same period last year.

Courtesy- AHL Research