US central bank removes sanctions on National Bank of Pakistan
The US Federal Reserve has officially lifted the sanctions imposed on the National Bank of Pakistan (NBP) and its New York branch.
In a letter to the Pakistan Stock Exchange (PSX), NBP's management confirmed that the "Cease and Desist Order" issued on February 22, 2022, was rescinded on December 2, 2024. Additionally, the written agreement made with the US authorities on March 14, 2016, was also concluded on December 17, 2024.
This announcement was made under Section 96 and 131 of the Securities Act, 2015, and has been shared with stakeholders through the PSX. The removal of sanctions marks a positive development for NBP, likely enhancing global confidence in the bank's operations.
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Despite this breakthrough, NBP reported a significant financial setback for the quarter ending June 30, 2024. The bank recorded a consolidated loss of Rs. 8.98 billion, a sharp contrast to the profit after tax of Rs. 15.85 billion reported in the same period the previous year.
According to the notice sent to PSX, the bank's loss per share (LPS) for Q2 2024 stood at Rs. 4.28, compared to earnings per share (EPS) of Rs. 7.42 in the same quarter in 2023. The loss was primarily attributed to a Rs. 49 billion pension expense incurred during the quarter.
However, NBP did experience positive growth in some areas. The bank’s mark-up/return earned increased by nearly 20%, from Rs. 240.05 billion in Q2 2023 to Rs. 287.7 billion in 2024. Net mark-up/return also grew by 5%, reaching Rs. 42.9 billion. Fee and commission income rose by 13%, reaching Rs. 7.3 billion, although foreign exchange income decreased by 23%, totaling Rs. 2.4 billion.
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On a positive note, NBP saw a 152% increase in gains from securities, rising to Rs. 1.4 billion, compared to Rs. 563 million in the same period last year. Additionally, the bank’s share of profit from joint ventures and associations increased by 33%, totaling Rs. 446.6 million.
Operating expenses for the bank grew by 19%, reaching Rs. 27.7 billion. The loss before tax for the quarter was Rs. 18.9 billion, a stark contrast to the profit before tax of Rs. 15.8 billion reported in the same period the previous year.
Source: Minute Mirror