The National Bank of Pakistan (NBP) will open its first branch in Saudi Arabia in May. This was stated by NBP President Syed Ali Raza, while talking to newsmen after the annual general meeting (AGM) of the bank here on Monday.
Syed Ali Raza said that the bank was expanding its operations abroad and it would also open two branches in Dhaka and Sylhet in Bangladesh soon. Besides, the NBP would also open two branches in Mazar Sharif, Herat or Kandhar in Afghanistan.
To a query, he said that the issue introducing NBP's global depository receipts (GDRs) would be decided by the new government and it was expected that the decision would be announced very soon.
Earlier, Syed Ali Raza, while speaking at the AGM, informed the shareholders that the NBP continued its journey to success, based on its strategy of serving clients better, capitalising on the largest balance-sheet and customer base in Pakistan with high potential.
He said the bank's stand-alone "AAA" rating, which was the highest in the Asian banking industry and a comfortable capital adequacy ratio, position in front of the competitors, for future growth. He said that during 2007, the bank's performance had been outstanding, recording the highest profit in its history. The pre-tax profit increased to Rs 28.1 billion, an increase of 6.6 percent over last year.
Earning per share jumped by over 11.7 percent from Rs 20.88 in 2006 to Rs 23.34 in 2007, he said, adding that pre-tax return on equity stood at 45.9 percent, whereas pre-tax return on assets stood at 4.1 percent and cost to income ratio of 0.30 percent remained one of the highest in the sector.
"These results were achieved despite the fact that the NBP had to make additional provision of over three billion rupees as a result of withdrawal of forced sales value (FSV)", he said.
He said increase in profit was achieved through strong growth in core banking income, adding that net interest income increased by Rs 3.5 billion (11.5 percent) due to better yields and volume driven growth spurred by increase in consumer loan portfolio. Dividend income and capital gains also made a healthy contribution.
Raza said while advances increased by Rs 25 billion due to impressive contribution by all business units, deposits increased by a healthy Rs 90 billion or 18 percent over last year. The bank's NPL provision coverage ratio also stood at an impressive 84 percent, he added.
He told the shareholders the bank's corporate and investment banking group achieved excellent results in 2007 with a number of landmark transactions in energy, fertiliser, telecommunication and cement sectors.
The bank's micro credit product "NBP Karobar" under the "President's Rozgar Scheme" recorded an excellent growth after its full launch in April 2007. The flagship NBP "Advance Salary" product continued to grow in 2007 and maintained its position as the single largest product in the country, he said.
The NBP's "Saiban", a home loan product, was available to Pakistani residents to finance the purchase, construction or renovation of a home, as well as for the purchase of land and the subsequent construction of a home thereon, he said, adding the "Saiban" had witnessed growth of 77 percent in 2007, one of the highest in the sector.
The NBP remained the largest lender in the banking sector in agriculture, with approximately 300,000 borrowers and gross disbursement of Rs 32 billion during the financial year 2006-07, he said.
The year 2007 marked the first year of Islamic banking operations. During the year under review, two more Islamic banking branches at Lahore and Peshawar started operations. He said the NBP also enjoyed the highest credit rating amongst Pakistani banks - JCR-VIS Credit Rating Company Limited - awarded highest stand-alone credit rating of "AAA" to NBP in June 2007.
Concluding, Syed Ali Raza said the development of alternate delivery channels, use of information technology and leveraging large customer base for cross selling were the key strategies of NBP for increasing its business.
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