A N N U A L R E P O R T 2 0 2 4
TABLE OF CONTENTS
- Vision & Mission
- Corporate Information
- Chairman's Review
- Statement of Compliance with the Public Sector Companies (Corporate Governance) Rules, 2013 and Listed Companies (Code of Corporate Governance) Regulations, 2019
- Review Report to the Members on Statement of Compliance with Code of Corporate Governance
- Statement of Internal Controls
- Shariah Board's Annual Report NBP Aitemaad
- Notice for 76th Annual General Meeting
- Unconsolidated Financial Statements Directors' Report to the Shareholders Independent Auditor's Report Unconsolidated Financial Statements
- Consolidated Financial Statements Directors' Report to the Shareholders Independent Auditor's Report Consolidated Financial Statements
- Pattern of Shareholding
- Form of Proxy
Vision
To be the Nation's leading bank enabling sustainable growth and inclusive development.
Mission
We will achieve our Vision by subscribing to the qualities captured by the word 'IMAGINE'
Integrity is the cornerstone of everything we do
Market leadership is what we aim across all our target sectors
Agility and strategic nimbleness will help us adapt to changing market conditions
Good governance and transparency
Innovation to provide for the customer needs of tomorrow Nation building remains our priority
Employee engagement through a merit‐based culture
CORPORATE INFORMATION | |
Board of Directors | |
Chairman | Mr. Ashraf Mahmood Wathra |
Directors | Mr. Farid Malik, CFA |
Mr. Amjad Mahmood | |
Mr. Ali Syed | |
Mr. Nasim Ahmad | |
President & CEO | Mr. Rehmat Ali Hasnie |
Audit Committee | |
Chairman | Mr. Nasim Ahmad |
Mr. Farid Malik, CFA | |
Mr. Ali Syed | |
Mr. Amjad Mahmood | |
Chief Financial Officer | Mr. Abdul Wahid Sethi |
Company Secretary | Syed Muhammad Ali Zamin |
Auditors | A.F. Ferguson & Co. |
Chartered Accountants | |
BDO Ebrahim & Co | |
Chartered Accountants | |
Legal Advisors | Khalid Anwar & Co. |
Advocates & Legal Consultants | |
Registered & Head Office | NBP Building |
I.I. Chundrigar Road, Karachi, Pakistan. | |
Phone: 92‐21‐99220100 (30 lines), | |
92‐21‐99062000 (60 lines) | |
NBP Call Center: 111‐627‐627 | |
Registrar & Share Registration Office | CDC Share Registrar Services Limited |
CDC House, 99‐B, Block‐B, | |
S.M.C.H.S., Main Shahrah‐e‐Faisal, | |
Karachi‐74400, Pakistan. | |
111‐111‐500 | |
Website | www.nbp.com.pk |
Chairman's Review
Dear Shareholders,
It is a privilege for me to present my third Annual Review on the Board's effectiveness in guiding the Bank towards its strategic objectives. The Board remains steadfast in upholding strong governance principles, ensuring that the Bank stays on course to fulfil its Vision of enabling sustainable growth and the all important inclusive development of all its stakeholders.
The Board continues to prioritize the best interests of the Bank's shareholders through various Board Committees, each with clearly defined mandates. These Committees play a crucial role in overseeing key areas of governance, risk management and strategic decision‐making, ensuring the Bank's long term stability and sustainable growth.
The year 2024 has been a defining chapter in National Bank of Pakistan's history wherein:
- Pursuant to the Honourable Supreme Court ruling on the long‐standing pensions case, the Bank had to absorb an unprecedented cost of PKR 68 billion. This has been an extra ordinary challenge that would have tested the financial strength of any institution. In the face of this challenge, we have achieved remarkable financial stability which is a testament to the prudent governance, strong risk management and strategic foresight of the Board. Our ability to withstand such an impact while still delivering value, ensuring sustainable returns and resuming dividend payments after seven years speaks volumes about NBP's financial resilience and long‐term sustainability.
- After a gap of several years, we are pleased to announce the resumption of dividend payment to our shareholders (subject to approvals required under the law). This milestone is a reflection of our strengthened financial position and unwavering commitment of the Board and management towards creating sustainable value for our shareholders.
- Amidst an evolving financial landscape, we have delivered a robust performance, staying true to our strategic vision and reinforcing our position as Pakistan's premier financial institution. This underscores our strength, resilience and commitment to value creation and accordingly, the Bank retains its position as the highest capitalised Domestic Systemically Important Bank (DSIB) in the country.
A Conducive Operating Environment
This year we operated in a more conducive and easing environment. Globally, the economy displayed resilience, with reportedly growth stabilizing at 3.2% and inflation moderating to 5.8% allowing central banks to ease monetary tightening. However, long‐term structural challenges persist, particularly in developing economies, where debt, investment constraints, and geopolitical risks continue to weigh in on growth.
Domestically, Pakistan's macroeconomic stability strengthened, with GDP growth at 0.92% in July‐Sep FY'25, inflation falling significantly to 2.4% in Jan' 25, and the policy rate declining from 22% to the expected 12% by early 2025.
External support, including a $7.0 Bn IMF program and a $20.0 Bn World Bank commitment has reinforced economic reforms. The banking sector displayed strong capital buffers, and a smooth IFRS 9 transition along with robust profitability. Looking ahead, sustained policy discipline, political stability, and structural reforms will be key to maintaining this positive trajectory and fostering long‐term financial resilience.
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Maintaining Strong Financial Delivery
I am pleased to inform that the management has delivered yet another round of solid financial performance in 2024, reaffirming its position as one of the highest value‐generating banks in the country. Despite navigating a complex operating environment, the Bank successfully absorbed an extraordinary pension expense without compromising its capital strength, maintaining robust buffers and a steady growth trajectory.
Net interest income grew to PKR 170.9 Bn, supported by a stable net spread of 2.37%, while non‐fund income rising by over 61% to PKR 65.4 Bn. Total revenue grew by 12.9% YoY to PKR 236.3 Bn, showcasing NBP's strong core banking operations and revenue diversification strategy. While a one‐ time pension charge of impacted the bottom line, the Bank remained operationally resilient, closing the year with after‐tax profits of PKR 26.9 Bn and maintaining a strong balance sheet.
The Bank's total assets grew to PKR 6,744.1 Bn, with shareholder's assets rising by 19.4% to PKR 457 Bn, translating into book value per share of PKR 214.8 i.e. a YoY growth of 19.4%. Deposits increased by 5.2% to PKR 3,865.6 Bn with a high CASA ratio of 79.4%, enabling a low‐cost funding base.
The Bank continued its strategic focus on Islamic banking, achieving a remarkable 137.9% YoY asset growth in NBP Aitemaad‐the Banks Shariah complaint business, reaching PKR 333.4 Bn while deposits soaring by 171.9% to PKR 309.4 Bn. NBP's financial foundation remains solid, enabling the Bank to drive long term value creation while maintaining strong governance and risk management practices.
Implementation of IFRS 9 was a major transition for banks in the country. NBP successfully transitioned to IFRS 9, ensuring compliance with SBP regulations. Despite a significant PKR 12.0 Bn (net of taxes) impact on its opening equity, the Bank achieved significant improvements in its financial soundness indictors. The Bank's Total eligible capital increased 27.4% to close at PKR 479.8 Bn. CET 1 and total CAR stood at 20.51% and 27.80%, respectively. While leverage ratio stood at 3.88% LCR and NSFR also improved to 206% (2023:176%) and 174% (2023:159%), respectively.
Strengthening Risk & Compliance
We are taking a more proactive and structured approach to strengthening risk & compliance by enhancing credit management frameworks, inculcating a culture of accountability, and setting clear roles of risk‐takers and risk‐managers. The Board continued its strategy of exiting low‐yielding international markets to enhance capital efficiency, minimize compliance risks, and improve returns aligned with the Board's long‐term capital allocation strategy.
We closed the NBP Paris and New York branches in 2024. and Bishkek, Baku and Almaty closures expected by March 2025. The decision to close the New York Branch followed full compliance with regulatory directives, ensuring a structured exit.
Strengthening NBP for the Future
In 2025, the Board's strategic direction continues to reinforce our resilience and adaptability in an ever‐ evolving landscape enabling the Bank to deliver positive outcomes for all its stakeholders.
Building on the strong foundation laid in the prior years, we remain focused on efficient capital allocation, fortifying our compliance culture, risk management framework and governance structures. The Board and management are committed to steering the Bank towards long‐term stability and sustainable growth, ensuring that NBP remains a pillar of financial strength for its stakeholders, We will continue to uphold our commitment to fairness, transparency, and meritocracy, ensuring a work environment where talent is recognized, rewarded and nurtured.
With an increasingly dynamic financial sector, NBP is proactively evolving leveraging technology, refining its business model and expanding its strategic initiatives in Agriculture, SMEs, and Trade. Our
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unwavering commitment to operational excellence, risk vigilance and regulatory compliance will be key drivers in shaping the Bank's trajectory in the years to come.
Commitment to our National Role
NBP remains pivotal in supporting public sector entities, recognizing their strategic importance to the national economy. However, challenges persist in ensuring disciplined debt servicing and financial sustainability within this segment. While the Bank has made significant efforts to engage with these entities, the pace of recoveries remains below expectations, exerting pressure on our financial resources.
Additionally, we are advocating for structural reforms within public sector financing, encouraging sustainable business models and improved governance to mitigate future credit risks. By adopting a more strategic and data‐driven approach, NBP aims to reinforce its role as a responsible lender while safeguarding the interests of its shareholders and the broader financial system.
Appreciation
I extend my sincere gratitude to my fellow Board members. Their collective wisdom and steadfast commitment have been instrumental in steering the Bank through an evolving financial landscape.
I also extend my deep appreciation to the Government of Pakistan, the State Bank of Pakistan, and other regulatory bodies both domestic and international for their continued oversight and support. To our millions of customers and business partners, your trust and loyalty are the foundation of our success. We remain committed to serving your financial needs with innovation, efficiency and integrity. Most importantly, I acknowledge and greatly appreciate the dedication, resilience and hard work of our employees which drives the Bank's continued growth.
As we move forward, I am confident that NBP will continue to play a pivotal role in the nation's economic development further strengthening its position as a trusted financial institution and a major force for positive change.
Ashraf Mahmood Wathra
Chairman
February 28, 2025
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Statement of Compliance with the Public Sector Companies (Corporate Governance) Rules, 2013 and Listed Companies (Code of Corporate Governance) Regulations, 2019
Name of Bank: | National Bank of Pakistan |
Name of the line Ministry: | Ministry of Finance |
For the year ended: | December 31, 2024 |
- This statement is being presented to comply with the Public Sector Companies (Corporate Governance) Rules, 2013 (the Rules) and Listed Companies (Code of Corporate Governance) Regulations, 2019 (the Regulations) (both herein referred to as 'Codes') issued for the purpose of establishing a framework of good governance, whereby a public sector bank is managed in compliance with the best practices of public sector governance. In case where there is inconsistency with the Regulations, the provisions of the Rules shall prevail and in case of any conflict between the Codes and the Banks (Nationalization) Act, 1974, the provisions of the Banks (Nationalization) Act, 1974 have been followed.
- The Bank has complied with the provisions of the Rules in the following manner:
S.No.
Provision of the Rules
Y | N |
Rule No. Tick the relevant box
1.
2.
The independent directors meet the criteria of independence, as defined under the Rules.
The Board has the requisite percentage of independent directors. As at December 31, 2024, the Board includes :
2(d)
3(2)
√
√
Category
Independent Directors
Executive Directors
Non-Executive
Directors
Names
- Mr. Ashraf Mahmood Wathra
- Mr. Ali Syed
- Mr. Nasim Ahmad
- Mr. Rehmat Ali Hasnie President/CEO
- Mr. Farid Malik
- Mr. Amjad Mahmood
Date of
appointment
18-1-2023
18-1-2023
18-1-2023
07-08-2023
27-8-2023
18-1-2023
3.
4.
5.
6.
7.
A casual vacancy occurring on the board was filled up by the directors within ninety days.
The directors have confirmed that none of them is serving as a director on more than five public sector companies and listed companies simultaneously, except their subsidiaries.
The appointing authorities have applied the fit and proper criteria given in the Annexure in making nominations of the persons for election as Board members under the provisions of the Ordinance.
The Chairman of the Board is working separately from the Chief Executive of the Bank.
The Chairman has been elected from amongst the independent Directors, except where the Chairman of the Board has been appointed by the Government.
3(4)
3(5)
3(7)
4(1)
4(4)
N/A
√
N/A
√
√
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8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
The Board has evaluated the candidates for the position of the Chief Executive on the basis of the fit and proper criteria as well as the guidelines specified by the Commission.
(Not applicable where the Chief Executive has been nominated by the Government)
- The Bank has prepared a "Code of Conduct" to ensure that professional standards and corporate values are in place.
- The Board has ensured that appropriate steps have been taken to disseminate it throughout the Bank along with its supporting policies and procedures, including posting the same on the Bank's website www.nbp.com.pk.
- The Board has set in place adequate system and controls for the identification and redressal of grievances arising from unethical practices.
The Board has established a system of sound internal control, to ensure compliance with the fundamental principles of probity and propriety; objectivity, integrity and honesty; and relationship with the stakeholders, in the manner prescribed in the Rules.
The Board has developed and enforced an appropriate conflict of interest policy to lay down circumstance considerations when a person may be deemed to have actual or potential conflict of interests, and the procedure for disclosing such interest.
The Board has developed and implemented a policy on anti-corruption to minimize actual or perceived corruption in the Bank.
- The Board has ensured equality of opportunity by establishing open and fair procedures for making appointments and for determining terms and conditions of service.
- A committee has been formed to investigate deviations from the Bank's Code of Conduct.
The Board has ensured compliance with the law as well as the Bank's internal rules and procedures relating to public procurement, tender regulations, and purchasing and technical standards, when dealing with suppliers of goods and services in accordance with PPRA Rules.
The Board has developed a vision or mission statement, corporate strategy of the Bank.
The Board has developed significant policies of the Bank. A complete record of the particulars of the significant policies together with the date on which they were approved or amended has been maintained.
The Board has quantified the outlay of any action in respect of any service delivered or goods sold by the Bank as a public service obligation, and has submitted its request for appropriate compensation to the Government for consideration.
The Board has ensured compliance with policy directions requirements received from the Government.
- The Board has met at least four times during the year.
- Written notices of the Board meetings, along with agenda duly approved by the Chairman, were circulated at least seven days before the meetings.
5(2)
5(4)
5(5)
5(5)
(b)(ii)
5(5)
(b)(vi)
5(5)
(c)(ii)
5(5)(c)
(iii)
5(6)
5(7)
5(8)
5(11)
6(1)
6(2)
√
√
√
√
√
√
√
√
√
√
√
√
√
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2 | P a g e
- The minutes of the meetings were appropriately recorded and circulated.
- The Board has monitored and assessed the performance of senior management on annual basis and held them accountable for accomplishing objectives, goals and key performance indicators set for this purpose.
- The Board has reviewed and approved the related party transactions placed before it after recommendations of the Audit Committee. A party wise record of transactions entered into with the related parties during the year has been maintained.
- a) The Board has approved the profit and loss account for and balance sheet as at the end of first, second and third quarter of the year as well as the financial year end.
- The Board has ensured that half yearly accounts are prepared and reviewed by the external auditors.
- The Board has placed the annual financial statements on the Bank's website.
- All the Board members underwent an orientation course arranged by the Bank to apprise them of the material developments and information as specified in the Rules.
- a) The Board has formed the requisite committees, as specified in the Rules.
- The committees were provided with written term of reference defining their duties, authority and composition.
- The minutes of the meetings of the committees were circulated to all the Board members.
- The committees were chaired by the following non-executive directors:
Committees | No. of | Name of Chairman |
Members | ||
Board Audit Committee | 04 | Mr. Nasim Ahmad |
Board HR & Remuneration | 03 | Mr. Ashraf Mahmood |
Committee | Wathra | |
Board Inclusive Development | 04 | Mr. Amjad Mahmood |
Committee | ||
Board Risk & Compliance | 03 | Mr. Ali Syed |
Committee | ||
Board Strategy Committee | 04 | Mr. Farid Malik |
Board Technology & | 05 | Mr. Farid Malik |
Digitalization Committee |
6(3)
8(2)
9
10
11
12
√
√
√
√
√
√
√
√
√
√
√
- The Board has approved appointment of Chief Financial Officer, Company Secretary and Chief Internal Auditor, with their remuneration and terms and conditions of employment, and as per their prescribed qualifications.
- The Chief Financial Officer and the Company Secretary have requisite qualification prescribed in the Rules.
- The Bank has adopted International Financial Reporting Standards notified by the Commission in terms of sub- section (1) of section 225 of the Act.
- The directors' report for this year has been prepared in compliance with the requirements of the Act and the Rules and fully describes the salient matters required to be disclosed.
13
14
16
17
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