National Bank of Pakistan's net profit declines 41.5pc
Tuesday, 1 September 2009
ISLAMABAD, Aug. 31 (Bloomberg): National Bank of Pakistan, the nation's biggest lender by assets, said second-quarter profit declined 41.5 per cent after it paid a higher rate of interest on savings accounts.
Net income fell to 2.03 billion rupees ($24 million), or 1.88 rupees a share, from 3.47 billion, or 3.22 rupees a share, a year earlier, the Karachi-based lender said in a statement to the stock exchange today. Revenue fell to 8.92 billion rupees from 10.04 billion.
Profit fell because the bank had to pay more on savings accounts, which make up 28 per cent of the bank's total deposits, said Kamran Rehmani, research analyst at Karachi-based First Capital Equities Ltd., who has a "buy" recommendation on the stock.
State Bank of Pakistan, the nation's central bank, directed banks in May 2008 to pay a minimum return of 5 per cent on all savings accounts, irrespective of the balance.
National Bank shares rose 5 per cent to 71.15 rupees at the 3:30 p.m. local time close on the Karachi Stock Exchange, after falling 2.2 per cent earlier. The stock has advanced 79 per cent this year.
"Shares rose because the stock price was lagging behind other banks such as MCB Bank," said Khalid Iqbal Siddiqui, head of research at Invest & Finance Securities Ltd. in Karachi. "Our fair value for National Bank is 83 rupees and the fall in profit was expected." MCB Bank, the biggest by market value, rise 3.9 per cent to 204.91 rupees.
Moody's Investors Service on Aug. 17 raised the outlook on the long-term foreign currency deposit ratings on National Bank to stable from negative, citing an increase in the nation's bailout by the International Monetary Fund.
The lender's profit in fiscal first half declined to 6.32 billion rupees, or 5.87 rupees a share, from 8.1 billion, or 7.52 rupees a share, according to the statement.
Net income fell to 2.03 billion rupees ($24 million), or 1.88 rupees a share, from 3.47 billion, or 3.22 rupees a share, a year earlier, the Karachi-based lender said in a statement to the stock exchange today. Revenue fell to 8.92 billion rupees from 10.04 billion.
Profit fell because the bank had to pay more on savings accounts, which make up 28 per cent of the bank's total deposits, said Kamran Rehmani, research analyst at Karachi-based First Capital Equities Ltd., who has a "buy" recommendation on the stock.
State Bank of Pakistan, the nation's central bank, directed banks in May 2008 to pay a minimum return of 5 per cent on all savings accounts, irrespective of the balance.
National Bank shares rose 5 per cent to 71.15 rupees at the 3:30 p.m. local time close on the Karachi Stock Exchange, after falling 2.2 per cent earlier. The stock has advanced 79 per cent this year.
"Shares rose because the stock price was lagging behind other banks such as MCB Bank," said Khalid Iqbal Siddiqui, head of research at Invest & Finance Securities Ltd. in Karachi. "Our fair value for National Bank is 83 rupees and the fall in profit was expected." MCB Bank, the biggest by market value, rise 3.9 per cent to 204.91 rupees.
Moody's Investors Service on Aug. 17 raised the outlook on the long-term foreign currency deposit ratings on National Bank to stable from negative, citing an increase in the nation's bailout by the International Monetary Fund.
The lender's profit in fiscal first half declined to 6.32 billion rupees, or 5.87 rupees a share, from 8.1 billion, or 7.52 rupees a share, according to the statement.