PACRA Maintains the Entity Ratings of National Bank of Pakistan

The assigned ratings of National Bank of Pakistan (“NBP” or “the Bank”) reflect its preeminent position within Pakistan’s financial system, underpinned by sovereign ownership, systemic importance, and a strong franchise base. The Bank’s credit profile is supported by stable deposit mobilization, improving financial resilience, and sustained operating performance. NBP’s deposit franchise remained a key strength, with total deposits increasing by 14.6% YoY to PKR 4,429.3bln (CY24: PKR 3,865.6bln), reflecting sustained momentum in funding base expansion. Within this, CASA ratio improved slightly to 80.7% (CY24: 79.5%), indicating continued strength in low-cost deposits. Current deposits increased by 11.0% to PKR 2,163bln (CY24: PKR 1,948bln) and represented approximately 48.8% of total deposits (CY25). Customer deposits accounted for 88.5% of total funding base (CY24: 94%), indicating a moderate shift in funding mix while maintaining overall stability. Cost of funds declined sharply to 8.9% (CY24: 15.7%), supporting margin expansion. Net advances decreased to PKR 1,338bln (CY24: PKR 1,405bln), reflecting a contraction across lending portfolios amid prudent risk positioning. Consequently, the ADR remained low at 30.21%, underscoring a highly conservative lending stance and strong liquidity discipline. Asset quality improved during the period, with non-performing loans declining by 17.2% to PKR 223bln (CY24: PKR 269bln), indicating a strengthening credit profile. The NPL coverage ratio improved significantly to 106.4% (CY24: 83.9%), supported by credit loss allowances of PKR 219.7bln, reflecting a strong buffer against potential credit impairments and enhanced resilience in asset quality. The investment portfolio increased by approximately 6.7% to PKR 4,922bln (CY24: PKR 4,612bln), predominantly invested in government securities. The portfolio continues to provide liquidity support, stable income generation, and interest rate risk management benefits. Profitability improved significantly in CY25, driven by strong balance sheet positioning and cost efficiency gains. Net interest income increased to PKR 248.5bln (+45.5% YoY), supported by lower funding costs and a stable deposit base. Capitalization indicators remained sound.
The easing interest rate environment during CY25 resulted in revaluation gains; however, the subsequent 100bps increase in the policy rate during 1QCY26 led to revaluation losses. The impact on capitalization remained manageable, comfortably absorbed within the Bank’s well-established capital buffers and supported by consistent internal capital generation. Shareholders’ equity, excluding revaluation surplus, increased by 19.8% to PKR 405.9bln (CY24: PKR 338.7bln), while total equity stood at PKR 531.4bln. The Capital Adequacy Ratio moderated to 21.70% (CY25: 26.21%; CY24: 27.8%), while CET-1 stood at 19.65%, providing adequate buffers against market volatility. Liquidity remained strong, with the Liquidity Coverage Ratio at 215%, supported by a stable deposit base and a highly liquid sovereign investment portfolio. NBP continued its digital transformation through upgrades to its core banking system, strengthened cybersecurity across 6,000+ network nodes, and expansion of its digital ecosystem, including mobile banking (conventional and Islamic), EMV/contactless cards, Roshan Digital Accounts, Huawei Pay, API integrations, and merchant acquiring solutions. Overall, profitability improved, supported by a strong funding base and enhanced cost efficiency.
Bank demonstrated significant revenue growth through effective management of its assets, maintaining or improving profit margins will be crucial for sustainable financial health in the future.

About the Entity
National Bank of Pakistan, established in 1949, is majority-owned by the Government of Pakistan through the Ministry of Finance. As a Domestic Systemically Important Bank (D-SIB) and the country's agent bank, NBP operates 1,503 domestic and 14 international branches, employing over 15,000 staff. The Bank offers diversified services spanning retail, corporate, and investment banking, treasury, trade finance, remittances, SME banking, and Islamic banking, supported by subsidiaries in asset management, exchange services, and securities brokerage. Mr. Rehmat Ali Hasnie, with over 27 years in Investment Banking and Risk Management, is the CEO/President since May 2022.