NBP announced earnings today for 1HCY21 at PKR 16.9bn (EPS: PKR 7.98), depicting a YoY increase of 13% and QoQ rise of 17%. Quarterly jump in NII and healthy fee income fueled earnings this quarter. There was no dividend announced.

Result Highlights

·        NII of the bank settled at PKR 47.5bn during 1HCY21, decreasing by 2% YoY, and increasing by 19% QoQ.

·        NFI of the bank increased by a meagre 1% YoY as the rise in dividend income (+44% YoY) was offset by a decrease in other income (60%). On a sequential basis NFI increased 13% QoQ as the bank reported strong fee income (+32% QoQ) and healthy surge in FX income (+91% QoQ).

·        Provisioning expenses for the bank came in at PKR 3.9bn during 2QCY21 taking total provisioning expenses to PKR 6.9bn during 1HCY21. Overall there has been a 55% YoY reduction in provisioning, which could be due to improved outlook on the asset quality following the rebound in economic activity across the country leading to reversal in general provisioning.

·        OPEX clocked in 4% higher YoY and 14% higher QoQ. Cost/Income ratio settled at 47% during 1HCY21 against 44% SPLY.

·        The bank booked an effective tax rate this quarter of 40% and 39% during 1HCY21.

Courtesy – AHL Research