The National Bank of Pakistan (NBP), one of the largest commercial bank of Pakistan has recorded 10% year on year growth in its first quarter profit due to significant amount of reversals in provision in diminution of investment and also due to decline in provisions against loans and advances.

The lender asset base of the bank stood at the end of first quarter at around PKR 1,130 billion as on March 31, 2012 which is approximately 14% higher than the relative same period of last year.

At this level, the bank is holding almost 14% of the total asset base of banking industry at its balance sheet. Despite of the conservative approach of banks towards lending, the bank has managed to close its loan book on around PKR 543 billion as at March, 2012. This is about 12% more than the same period in last year.

The bank has also remained active on investment front and managed to grow its investment portfolio by 14% during the period under review. The investments have reached at the level of around PKR 308 billion.

While considering the expansion in earning assets of the bank, 7% growth is being observed in 1Q2012. Whereas keeping in view of growth in deposit base of the bank, interest expense has also increased by 15%. The deposit base of the bank has reached to the level of around PKR 875 billion as at March, 2012.

The decline in KIBOR rate is one of the major reasons of shortening the spreads of the banking industry on the whole. The NBP has also recorded a decline of around 6% in current year as compare to the same period of last year.

The improvement has come from the decline in provisions and also due to the better control over non- performing loans which kept the provisioning cost at a considerably lower level.

Overall a growth of only 4% is being observed over the first quarter of 2012. The bank’s non-interest income has also grown by 7% as compared to the same quarter of last year. Keeping in view the high inflationary pressure the banks non-markup expenses remained at higher side.

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