National Bank of Pakistan (NBP) recorded a tough year as its profits dropped massively to Rs. 15.8 billion in 2019 as compared to a profit of Rs. 20 billion last year, showing a massive decline of Rs. 4.2 billion year-on-year. The bank’s net mark-up/interest income closed 18.5% higher YoY at Rs. 71.9 billion as compared to 2018’s Rs. 60.7 billion. NBP maintained its non-mark-up/interest-earning at Rs. 36.20 billion. Accordingly, the total income of the bank closed at Rs. 108.11 billion i.e. 11.5% higher than Rs. 96.92 billion of the prior year. Total expenses for the year amounted to Rs. 65.70 billion against Rs. 55.69 billion for the year 2018. This amount includes Rs. 7.3 billion related to extraordinary items. The increase in operating expenses was only 5.0% and YoY growth in profit excluding extraordinary items and before provisions improved to 21%. Reflecting on the trend of asset quality deterioration observed across the industry this year, the bank experienced an 11.4% increase in non-performing loans. During the year, the bank provided against NPLs, diminution in investments and certain financial improprieties. Based on the above, the provision charge amounted to Rs. 14.2 billion, and profit before tax stood at Rs. 28.00 billion, being 5.7% lower than Rs. 29.68 billion for the prior year. NBP has consequently focused on strengthening its balance sheet through this provisioning and through building contingency buffers for a total of Rs. 21.5 billion. Due to the retrospective applicability of super tax, this year, the bank’s tax burden amounted to Rs. 12.35 billion, resulting in the profit after tax closing at Rs. 15.8 billion, 21% lower YoY. This translates into earnings per share of Rs. 7.43. Total assets closed at Rs. 3,124.39 billion, depicting an 11.6% growth from Rs. 2,798.56 billion a year before. Gross advances increased by 8.7% to Rs. 1,151.31 billion, investment closed 12.1% up at Rs. 1,417.65 billion, and deposits grew by 9.3% to Rs. 2,198.05 billion. The bank’s business strategy is evolving to ensure a focus on inclusive development through reaching and supporting underserved sectors including SME, Microfinance, Agriculture Finance, and finance for Micro-Housing on a priority basis. The bank is facing contingencies related to pensionary benefits of its retired employees and has filed a review petition. Pending the decision for a review petition, the financial impact of the subject case has not been included in the instant financial statements as it looks forward to a favorable outcome of the case.