National Bank Becomes the Largest Bank of Pakistan

Karachi October 30 2022: National Bank of Pakistan is now become the largest bank in Pakistan in terms of book size, which closed above PKR 5 trillion at September 2022 – up by 34.3 percent from December 2021.

In terms of total assets, National Bank of Pakistan is now become the largest bank of Pakistan followed by Habib Bank Limited, United Bank of Pakistan, Meezan Bank Limited, MCB Bank Limited, Bank Alfalah Limited and Allied Bank .

Ranking of Banks by Total Assets PKR Billion

During the nine months period ended September 30, 2022 National Bank of Pakistan (NBP) profit stood at PKR 19.2 billion i.e. PKR 5.0 billion or 20.6% lower than PKR 24.1 billion for 9M’21. This translates into Earnings per Share of Rs. 9.01 as compared to Rs. 11.35 for 9M’21.

At September 30, 2022, NBP gross loans & advances of the Bank amounted to PKR 1,415.4 billion depicting a modest increase of 8.4% or PKR 110.2 billion against PKR 1,305.2 billion at end of the year 2021. Whereas, net advances stood at PKR 1,214.0 billion i.e. 9.0% up from PKR 1,113.4 billion level at the end of 2021. Growth in advances was achieved in most of the products including corporate, commodity and Islamic. Given the robust YoY increase in deposits and limited growth opportunities in quality loan book, the Bank’s Advance-to-Deposit Ratio (gross) stood at 47.0% at September 30. 2022.

Pursuant to an effective risk and liquidity management strategy, the NBP is maintaining a diversified investment portfolio across zero risk weighted GoP instruments, high dividend yielding equities and other interest-bearing financial instruments. As at September 30, 2022, the Bank’s investments (at cost) amounted to PKR 3,360.3 billion (2021: PKR 1,924.2 billion) with a carrying value of PKR 3,356.6 billion (2021:PKR 1,938.2 billion). During the nine months under review, PKR 1,436.2 billion or 74.6% increase in the investments (at cost) mostly came in the  available-for-sale securities that stood at PKR 2,780.4 billion (2021:PKR 1,423.1 billion) as of Sep’30, 2022. Given the limited quality loan growth demand, and a steady growth in customer deposits, excess liquidity with the Bank is mostly placed in shorter-term GoP securities to capitalize on price volatility in the currently hiking policy rate environment.

At September 30, 2022, total deposits with the NBP amounted to PKR 3,010.8 billion i.e. similar to PKR 3,019.2 billion of December 31, 2021. Major share of the Bank’s funding comes from customer sticky deposits that contribute PKR 2,622.2 billion or 87.1% of the total deposits. Non-remunerative current deposits increased by 5.9% during the 9M period under review to close at PKR 659.2 billion making 25.1% of the total customer deposits; whereas remunerative but low cost current accounts deposits were reduced by 3% to close at PKR 629.6 billion, making 24% of the customer deposits.

With current deposits at PKR 1,627.7 billion or 54.1% of the total deposits at September 30, 2022, NBP maintains a strong liquidity profile. In addition, the CASA ratio stood high at 81.7%. Liquidity Coverage Ratio and Net Stable Funding Ratio remained over the regulatory requirements as the same stood at 137% (Dec’21:164%) and 255% (Dec’21:278%), respectively vis-à-vis regulatory requirement of 100% for each.

NBP Capital Strength and Adequacy

The Bank has been designated as a Domestic Systemically Important Bank “D-SIB” by the SBP. Accordingly, the Bank seeks to maintain strong levels of capitalization to build resilience and maintain adequate buffers over regulatory requirements.

Net Assets amount to PKR 301.9 billion i.e. 5.5% higher than PKR 286.2 billion at the end of 2021. These translate into a break-up value of PKR 142.0 per share (YE’21: PKR 134.5). During 9M’22, the Bank’s Eligible Tier 1 capital increased by PKR 25.2 billion or 12.6% to PKR 225.0 billion from PKR 199.8 billion at YE’21. Likewise, Eligible Tier 2 capital also increased by PKR 9.5 billion or 14.7% to reach PKR 73.8 billion. Tier 2 capital mainly increased corresponding to the increase in Tier-1 capital. As the Bank is following a risk-prudent asset growth strategy, total RWAs increased marginally by PKR 72.3 billion or 5.6% from PKR 1,295.1 billion at YE’21 to PKR 1,367.4 billion at September 30, 2022.

Consequently, the Total Capital Adequacy Ratio (CAR) has improved to 21.85% with Tier-1 capital adequacy ratio at 16.45%; as compared to 20.39% and 15.42%, respectively, at YE’21. The Tier 1 leverage ratio of 3.0% was introduced in response to the Basel Ill accord. At Sep’30, 2022, the Bank’s leverage ratio stood at 3.24%. Other financial soundness ratios are well compliant with applicable regulatory requirements.