Revenue crosses Rs. 2 billion with a significant reduction in loss
Highlights:
- Total revenue increased by 43% to Rs. 2.4 billion
- Net interest income increased by 51%
- Non-interest income increased by 34%
- Administrative expenses increased only by 9%
- Pre-tax loss of only Rs. 154 million (down from Rs.3.7 billion a year ago)
NIB Bank announced Financial Results for the Half Year ended 30 June 2012 (H1 2012). These results indicate improving performance at operating level through growth in revenues and disciplined cost management. Importantly, there has been a significant reduction of Rs. 3.7 billion in pre-tax losses when compared with the same period a year ago.
During H1 2012, there has been an increased focus on low cost deposit generation and transactional banking solutions for its growing customer base in 59 cities and towns through 179 branches. Consequently, current and low cost savings deposits have grown consistently month on month leading to an increase of Rs. 7.5 billion in the first half of this year. At the same time the Bank was also able to shed Rs. 7.3 billion of high cost deposits during this period.
The Bank also realized profit from sale of fixed income securities and equities. The ensuing capital gains aided by higher income from Fees and Commissions drove the Bank’s non-interest income higher by 34% in H1 2012 over the same period last year.
By revamping the organizational structure of the Remedial Group, devoting more senior resources and instituting rigorous follow up procedures the Bank has proactively managed its Non Performing Loans (NPLs) resulting in the Bank booking only Rs. 170 million of net credit provisioning in H1 2012 compared to Rs. 3.1 billion in the same period last year.
To ensure it builds sustainable revenue streams in the future, the Bank in the last six months has also been working on building a sustainable growth model for each of its key Businesses.
Commenting on the results Mr. Badar Kazmi, President & Chief Executive Officer, NIB Bank, said, “These results indicate that the fundamentals of the business are showing a healthy trend with revenue growth far stronger than the growth in expenses. Key drivers behind this performance are building the Bank’s liquidity by mobilizing low cost deposits, controlling delinquencies from existing portfolio through proactive risk management and accelerated bad debt recovery efforts. We are confident that with continued focus and discipline, the Bank’s recovery will be sustainable”