LAHORE - The National Bank of Pakistan (NBP) announced surprisingly and significantly weak 3Q2013 result, posting a profit after tax of Rs225 million, down 95pc YoY and 92pc QoQ. Consequently 9M2013 earnings clocked in at Rs6.2 billion. The result came in well below 9M2013 EPS expectation of Rs5.18 on account of sharply higher provisions and write offs.

As anticipated the bank’s net interest income (NII) remained under pressure and declined by 15pc YoY and 26%QoQ in 3Q2013. Similar to 2Q2013, NBP booked higher provisions and write off of Rs4.5b in 3Q which put an additional dent on the bottom line. Further pressure came in from lower non interest income (down 4%YoY and 30%QoQ) and higher operating expenses (up 22%YoY and 3%QoQ).

At current levels the stock is trading at 2013E PE and PBV of 8.3x and 0.8x, respectively. According to experts, the Bank’s 9M2013 results with a 49%YoY decline in the bottom-line stand at Rs6.2bn compared to Rs12.57bn (EPS: PKR5.91) on unconsolidated basis. Moreover the bank’s earnings during outgoing quarter fell to Rs225.3mn (EPS: PKR0.11) compared to Rs4,371.6m (EPS: PKR2.05).

They said that the earnings were below the broad consensus on account of a general provision worth Rs4.0bn (EPS impact of Rs1.90) realized in the outgoing quarter which is over and above Rs3.0b provided in 2Q2013. This made 9M2013 total provision against NPL to stand at Rs11.97b.