Karachi, March 30, 2022 (PPI-OT): NBP: Annual General Meeting key takeaways

National Bank of Pakistan (NBP) held its Annual General Meeting (AGM) today, where the management apprised of the bank’s financial performance and outlook. Highlight of the CY21 results were the cash payout announcement, albeit, Re1/share, which resumed after a pause of four years of no dividends. Nonetheless, approval for dividend payout is currently pending at the State Bank of Pakistan (SBP).

As at CY21 end, BV reached up to Rs135/share, reflecting a trailing P/B of 0.2x. The one-time pending Pension expense liability in case of an unfavourable decision has reached to Rs74bn (Rs35/share, 26% of BV), while the recurring expense in the same scenario would be Rs8bn (Rs2.3/share after tax, 17% of CY21 EPS). While there is no significant progress on the pension case, the management continues to explore out of the court settlement options.

Going forward, the management will continue to focus on SME, commercial and development borrowers. With a low ADR, the bank does not comply for usual tax rate of 39% (including Super Tax) and is liable to pay higher taxes. Implication of Treasury Single Account (TSA) is a key moving part to the bank’s strategy of increasing ADR.