Nbp Financial Analysis

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CHAPTER NO: 1
Introduction of NBP
1.1 Introduction

National Bank of Pakistan (NBP) is one of the largest commercial bank operating in Pakistan. It has redefined its role and has moved from a public sector organization into a modern commercial bank. While it continues to act as trustee of public funds and as the agent to the State Bank of Pakistan (in places where SBP does not have a presence) it has diversified its business portfolio and is today a major lead player in the debt equity market, corporate investment banking, retail and consumer banking, agricultural financing, treasury services and is showing growing interest in promoting and developing the country's small and medium enterprises and at the same time fulfilling its social responsibilities, NBP headquarters in Karachi, Pakistan with over 1,280 branches country wide (in December 2012). The bank provides both commercial and public sector banking services. It has assets worth USD 12.293 billion in 2007.[1] The Bank's services are available to individuals, corporate entities and government. While it continues to act as trustee of public funds and as the agent to the State Bank of Pakistan (in places where SBP does not have a presence) it has diversified its business portfolio and is today a major lead player in the debt equity market, corporate investment banking, retail and consumer banking, agricultural financing, treasury services and is showing growing interest in promoting and developing the country's small and medium enterprises and at the same time fulfilling its social responsibilities, as a corporate citizen. In today's competitive business environment, NBP needed to redefine its role and shed the public sector bank image, for a modern commercial bank. It has offloaded 23.2 percent share in the stock market, and while it has not been completely privatized like the other three public sector banks, partial privatization has taken place. It is now listed on the Karachi Stock Exchange. National Bank of Pakistan has developed a wide range of consumer products, to enhance business and cater to the different segments of society. Some schemes have been specifically designed for the low to middle income segments of the population. These include NBP Kroeber, NBP Advance Salary, NBP Saiban, NBP Kisan Dost, NBP Cash n Gold. It has taken various measures to facilitate overseas Pakistanis to send their remittances in a convenient and efficient manner. In 2002 the Bank signed an agreement with Western Union for expanding the base for documented remittances. More recently it has started Electronic Home Remittances Project. This project introduces technology based system to handle inward remittances efficiently, by ensuring that the Bank's branches keep a track of the remittance received from abroad till its final receipt. A number of initiatives have been taken, in terms of institutional restructuring, changes in the field structure, in policies and procedures, in internal control systems with special emphasis on corporate governance, adoption of Capital Adequacy Standards under Basel II framework, in the up gradation of the IT infrastructure and developing the human resources. National Bank of Pakistan has built an extensive branch network with 1250 branches in Pakistan and operates in major business centre abroad. The Bank has representative offices in Beijing, Tashkent, Chicago and Toronto . It has agency arrangements with more than 3000 correspondent banks worldwide. The Bank's financial performance has been remarkable. In 2006, total assets are estimated at PKR 635 billion, while deposits have grown to nearly PKR 502 billion. Pre-tax profit rose to PKR 26 billion. Earnings per share have jumped to PKR 24.01 in 2006. The increase in profit was achieved through strong growth in core banking income. Interest income increased by PKR 10 billion through growth in the loan portfolio as well as increase...
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