LAHORE: The National Bank of Pakistan has reported a higher than expected earnings during 4Q2016 mainly on the back of provision reversals of Rs2.2 billion in 4Q2016 and higher than anticipated capital gains of Rs2.6 billion.
NPL recoveries from international operations and absence of any new NPL accretion led to provision reversals of Rs2.2 billion. Net Interest Income (NII) in 4Q2016 was down 6 percent YoY but it still remained higher than estimates of Rs14.9 billion in 4Q2016. This is contrast to NII growth posted by HBL (0%), MCB (-19%) and UBL (-5%).
Experts believe that higher than expected NII is due to strong volumetric deposit and advances growth. Non-interest income was up 14 percent YoY on the back of higher capital gains and fee & commission income during the quarter. In 2016, earnings posted growth of 15 percent despite a tough year when major chunk of high yielding Pakistan Investment Bonds (PIBs) matured. NII of the bank posted growth of 2 percent as NBP managed to recover interest income on certain non-performing loans.
