National Bank Of Pakistan: Quarterly Financial Statements - 31 March

Transcription

1. Quarterly Financial Statements March 31 , 2017
2. UNCONSOLIDATED FINANCIAL STATEMENTS
3. Directors ’ Report to the Shareholders On behalf of the Board of Directors, I am pleased to present the financial statements of National Bank of Pakistan for the three months period ended March 31, 2017. Three months profitability The Bank recorded unconsolidated pre-tax profit of Rs. 6.7 billion i.e.7.8% up against Rs. 6.2 billion of corresponding period last year. After-tax profit increased by 4% to Rs. 4.2 billion against Rs. 4.0 billion for the corresponding 3 months period last year. EPS for the period under review increased to Rs. 1.98, 4% up against Rs. 1.90 for the corresponding three months period of 2016. Net mark-up/interest income for the period was Rs. 12.3 billion i.e. 0.3 billion higher against Rs. 12.0 billion for the corresponding three months period. Growth in net mark-up/interest income faced pressure on account of multiple reasons including reduction in policy rates and maturities of high yield investment of Pakistan Investment Bonds (PIBs) in second half of last year. Our efforts of generating low cost deposits coupled with reduction in discount rate resulted into improving cost of funds for the period. First quarter net mark-up / interest income was impacted in line with historical trends by seasonal increase in agriculture non-performing loans( NPLs) which are expected to be regularised in the short run. Non mark-up/interest income for the period under review was at Rs. 7.4 billion, i.e. 13% higher as compared to Rs. 6.5 billion for the corresponding period of 2016. During the period, income generated through dividends and capital gains amounted to Rs. 2.9 billion i.e. higher by 23% against the corresponding period. Fee /commission income increased by 13% to Rs. 3.2 billion against Rs. 2.8 billion for three months period of 2016. Growth has been observed in key areas of agency services and trade business. Administration expenses for the period under review increased to Rs. 12.4 billion against Rs. 11.4 billion of the corresponding three months period 2016, which mainly represents the HR costs that increased due to annual increments and other inflation and business related increases. Balance Sheet Growth The balance sheet footing amounted to Rs. 1.94 trillion with slight decrease of 2% over Rs. 1.98 trillion as of December 2016. Bank’s gross advances increased to Rs.762.6 billion i.e. 13.7% higher than Rs. 670.7 billion as of March 2016.We are continually progressing to enhance our advances portfolio by tapping in the business opportunities in corporate as well as SME sectors. Gross non-performing loans (NPLs) to total advances ratio slightly increased to 16.6% as against 15.3% of December 2016. Net addition to NPL during the three months period under review is mainly due to seasonal impact of agriculture financing. Seasonal impact is expected to reverse in next quarter. Provision charge against NPL for Q-1 2017 was lower by 36% at Rs. 0.7 billion as against Rs. 1.1 billion charge for the corresponding Q1-2016. Deposits of the Bank marginally reduced by 4% at Rs. 1,588 billion compared to Rs. 1,657 billion as of December 2016. Compared to that of March, 2016, deposits have recorded a 25% growth.
4. Our Islamic Banking branches have now increased to 129 (Dec ’16:118). A positive trend has been observed in the deposits at our Islamic Banking branches as the same have increased to Rs. 25.1 billion i.e. 99% up YoY against Rs. 12.6 billion as of March 31, 2016. Future Outlook We are looking forward to serve as a proxy for Pakistan’s growth story in the coming years through expansion in demand for credit in all sectors of growth. We will continue to capitalize on our core areas of strength through expanding our network reach across Pakistan, investing in technology and providing quality service to our vast customer base. We continue to set ourselves challenging targets to increase market share in advances, deposits and introducing new products across Corporate, SME and consumer sectors. Appropriation of Profits The Profit for the three months period ended March 31, 2017 after carry forward of accumulated profit of 2016 is proposed to be appropriated as follows: Pre-tax profit for three months period ended March 31, 2017 Taxation Current Prior Year Deferred After tax profit for three months period ended March 31, 2017 Un-appropriated profit brought forward Other comprehensive income - net of tax Transfer from surplus on revaluation of fixed assets – net of tax Profit available for appropriations Transfer to Statutory Reserve (10% of after tax profit) Cash dividend – 2016 Un-appropriated profit carried forward Earnings per Share For and on behalf of the Board of Directors, Saeed Ahmed President Dated: April 21, 2017 (Rs. Million) 6,651 1,745 98 606 2,449 4,202 51,939 (303) 27 55,865 (420) (15,956) 39,488 Rs. 1.98
5. ‫ﺣﺼﺺ ﯾﺎﻓﺘﮕﺎن ﮐﮯ ﻟﯿﮯ ڈاﺋﺮﯾﮑﮣﺮز ﮐﯽ رﭘﻮرٹ‬ ‫میں نیشنل بینک آف پاکستان کے بورڈ آف ڈائریکٹرز کی جانب سے‪ 31‬مارچ ‪ 2017‬کو ختم ہونے والی سہ ماہی پر نیشنل‬ ‫بینک آف پاکستان کی مالی دستاویزات پیش کرتے ہوئے خوشی محسوس کر تا ہوں۔‬ ‫سہ ماہی کی منافع بخشی‬ ‫بینک نے زیر جائزہ سہ ماہی میں ‪ 6.7‬ارب کا قبل ازمحصوالت انضمام شدہ نفع کمایا جو کہ گزشتہ سال کی پہلی سہ ماہی‬ ‫کے ‪ 6.2‬ارب کے مقابلے میں ‪ 7.8‬فیصد زیادہ ہے ۔ جبکہ منافع بعد از محصول‪ 4‬فیصد اضافے کے ساتھ ‪ 4.2‬ارب روپے‬ ‫رہا۔ زیر جائزہ مدت میں فی حصص آمدن ‪ 4‬فیصد اضافے کے ساتھ بڑھ کر ‪ 1.98‬روپے ہو گئی جو ‪ 2016‬کی اس سہ ماہی‬ ‫میں ‪ 1.90‬روپے تھی۔‬ ‫خالص مارک اپ‪/‬سودی آمدنی گذشتہ سال اسی سہ ماہی میں ‪ 12‬بلین روپے کے مقابلے میں بڑھ کر اس سہ ماہی میں ‪ 0.3‬ارب‬ ‫کے اضافے کے ساتھ ‪ 12.3‬ارب روپے رہی۔ خالص مارک اپ‪/‬سودی آمدنی کی نمو کو کثیر العوامل وجوہات‪ ،‬بشمول‬ ‫پالیسی نرخ میں کمی کے ساتھ گذشتہ سال کے دوسرے نصف میں زیادہ منافع دینے والے پاکستان انوسٹمنٹ بونڈ )‪(PIB‬‬ ‫کی تکمیل مدت‪ ،‬کی بناء پر دباؤ کا سامنا کرنا پڑا۔ اس مدت میں ہماری کم قیمت ڈپازٹس کے حصول کی کاوشوں کے ساتھ‬ ‫ساتھ اعانتی نرخ )‪ (discount rate‬میں کمی کے نتائج فنڈز کی الگتوں میں کمی کی صورت میں نظر آئے۔ پہلی سہ ماہی کا‬ ‫مارک اپ‪ /‬سودی آمدنی تاریخی طور موسمی غیر فعال زرعئی قرضہ جات )‪ (NPLs‬میں اضافے سے متاثر ہوئی جن کی‬ ‫امید ہے جلد ہی انہیں با ضابطہ کرا لیا جائے گا۔‬ ‫غیر مارک اپ‪/‬سودی آمدنی سال ‪ 2016‬کی اسی مدت کے ‪ 6.5‬ارب کے مقابلہ میں زیر جائزہ مدت میں ‪ 13‬فیصد اضافے کے‬ ‫ساتھ ‪ 7.4‬ارب روپے رہی۔ اس مدت کے دوران حصص کے منقسمہ سے پیدا ہونے والی آمدنی اور سرمایہ کاری کی قدر‬ ‫میں اضافہ گذشتہ سال کی اسی مدت کی مالیت سے‪ 23‬فیصد اضافے کے ساتھ بڑھ کر ‪ 2.9‬ارب روپے رہی۔ فیس ‪ /‬کمیشن کی‬ ‫مد میں آمدنی سال ‪ 2016‬کی اسی سہ ماہی کے ‪ 2.8‬ارب روپے کے مقابلے میں ‪ 13‬فیصد اضافے کے ساتھ ‪ 3.2‬ارب روپے‬ ‫رہی۔ یہ نمو بنیادی ایجنسی کی خدمات اور تجارتی کاروبار کے شعبوں میں دیکھی گئی۔‬ ‫انتظامی اخراجات گذشتہ سال ‪ 2016‬کی پہلی سہ ماہی میں ‪ 11.4‬ارب روپے کے مقابلہ میں زیر جائزہ مدت کے دوران بڑھ‬ ‫کر‪ 12.4‬ارب روپے رہے جس کی بنیادی وجہ انسانی وسائل سے متعلق الگتیں ہیں جو نتخواہوں میں ساالنہ اضافہ‪ ،‬افراطِ زر‬ ‫اور دیگر کاروباری اخراجات سے متعلق ہیں۔‬ ‫بیلنس شیٹ کی نمو‬ ‫بیلنس شیٹ کا حاصل جمع مالیت دسمبر ‪ 2016‬کے ‪ 1.98‬کھرب کے مقابلے میں ‪ 2‬فیصد معمولی کمی کے ساتھ ‪ 1.94‬کھرب‬ ‫روپے رہا۔ بینک کے کل قرضہ جات مارچ ‪ 2016‬کے مجموعی ایڈوانسز کا حجم ‪ 670.7‬ارب روپےکے مقابلے میں ‪13.7‬‬ ‫فیصد اضافے کے ساتھ ‪ 762.6‬ارب روپے رہا۔ ہم اپنے ایڈوانس پورٹ فولیو کو اداراتی کے ساتھ ساتھ چھوٹے درمیانی‬ ‫)‪ (SMEs‬اداروں میں موجود کاروباری مواقعوں کا فائدہ اٹھا کر مسلسل ترقی کر ر ہے ہیں۔ مجموعی غیر فعال )‪(NPLs‬‬ ‫اور کل قرضہ جات کا تناسب دسمبر ‪ 2016‬کے‪ 15.3‬فیصد کے مقابلے میں معمولی اضافے کے ساتھ ‪ 16.6‬فیصد رہا۔ زیر‬ ‫جائزہ سہ ماہی مدت میں خالص غیر فعال قرضہ جات میں اضافے کی بنیادی وجہ موسمی زرعئی سرمایہ کاری کے اثرات‬ ‫ہیں۔ اس بات کی توقع ہے کہ موسمی سرمایہ کاری کے اثرات کا رخ اگلی سہ ماہی میں پلٹ جائے گا۔ سال ‪ 2017‬کی پہلی سہ‬ ‫ماہی میں غیر فعال قرضہ جات کے لیےمختص چارج ‪ 36‬فیصد کی کمی کے ساتھ ‪ 0.7‬ارب روپے رہا جبکہ سال ‪ 2016‬کی‬ ‫پہلی سہ ماہی یہ چارج ‪ 1.1‬ارب روپے تھا۔‬ ‫بینک کے کل ڈپازٹ گذشتہ سال کےاختتام پر ‪ 1,657‬ارب روپے سے ‪ 4‬فیصد معمولی کمی کے ساتھ‬ ‫رہے تاہم مارچ ‪ 2016‬کے مقابلے میں ‪ 25‬فیصد کا اضافہ حاصل کیا گیا ہے۔‬ ‫‪1،588‬ارب روپے‬ ‫ہماری اسالمی بینکاری کی شاخیں اب بڑھ کر ‪ 129‬ہو گئیں ہیں جو کہ دسمبر ‪ 2016‬میں ‪ 118‬تھیں۔ اسالمی بینکاری کے‬ ‫ڈپازٹز میں ایک مثبت رجحان دیکھا گیا ہے جو سال بہ سال ‪ 31‬مارچ ‪ 2016‬کے ‪ 12.6‬ارب روپے کے مقابلے میں ‪ 99‬فیصد‬ ‫اضافے کے ساتھ ‪ 25.1‬ارب روپے رہے۔‬ ‫مستقبل کا منظرنامہ‬ ‫ہم آنے والے سالوں میں ترقی کے تمام شعبہ جات میں قرضہ جات کی طلب میں اضافے کے ذریعے سےپاکستان کی ترقی کی‬ ‫داستان میں خود کوخدمت کرتا ہوا دیکھ رہے ہیں۔ ہم بنیادی شعبہ جات میں اپنے پاکستان بھر میں نیٹ ورک کی توسیع‪،‬‬ ‫ٹیکنالوجی میں سرمایہ کاری اور اپنی وسیع گاہکوں کی بنیاد کو معیاری خدمات کی فراہمی کے ذریعے سے مسلسل فائدہ‬
6. ‫اٹھاتے رہیں گے۔ ہم اپنے لیے ایڈوانسزاور ڈپازٹس کا منڈی میں زیادہ حصہ اور اپنے تمام گاہکوں‪ SMEs ،‬اور بڑے اداروں‬ ‫کے لیے نئی مالیاتی مصنوعات متعارف کروانے جیسے جرات مندانہ اہداف مقرر کرتے رہیں گے۔‬ ‫منافع جات کی تخصیص‬ ‫‪ 2016‬کے جمع شدہ منافع کو آگے الئے جانے کے بعد ‪ 31‬مارچ ‪ 2017‬کو ختم ہونے والی سہ ماہی مدت کا تجویز کردہ‬ ‫مختص شدہ منافع کی تفصیالت درج ذیل ہیں؛‬ ‫(روپے ملین میں)‬ ‫‪ 31‬مارچ ‪ 2017‬کو اختتام پذیر سہ ماہی پر منافع قبل از محصوالت‬ ‫‪6،651‬‬ ‫محصوالت‬ ‫‪-‬‬ ‫حالیہ سال‬ ‫‪1،745‬‬ ‫‪-‬‬ ‫گذشتہ سال‬ ‫‪95‬‬ ‫‪-‬‬ ‫ملتوی شدہ‬ ‫‪606‬‬ ‫‪2،449‬‬ ‫‪ 31‬مارچ ‪ 2017‬کو اختتام پذیر تین ماہ پرمنافع بعداز محصول‬ ‫‪4،202‬‬ ‫‪51،939‬‬ ‫دیگر جامع آمدنی‪ -‬محصول کی خالص‬ ‫(‪)303‬‬ ‫غیر منقولہ اثاثہ جات کی قدر پیمائی سے زائد از ضرورت کی منتقلی ‪ -‬محصول‬ ‫کی خالص‬ ‫مختصات کے لیے دستیاب کل منافع‬ ‫‪27‬‬ ‫‪55،865‬‬ ‫دستوری ذخائر کو منتقلی (‪10‬بعد از محصول کا ‪ 10‬فیصد)‬ ‫(‪)420‬‬ ‫‪ 2016‬کاادا کردہ نقد منقسمہ منافع‬ ‫(‪)15،956‬‬ ‫غیر مختص شدہ منافع جو آگے بڑھایا‬ ‫‪39،488‬‬ ‫کمائی فی حصص‬ ‫‪ 1.98‬روپے‬ ‫غیر مختص شدہ منافع جو آگے الیا گیا‬ ‫بورڈ آف ڈائریکٹرزکی جانب سے اور ان کےلیے‬ ‫سعید احمد‬ ‫صدر‬ ‫بتاریخ ‪ 21‬اپریل ‪2017‬‬
7. National Bank of Pakistan Condensed Interim Unconsolidated Statement of Financial Position As at March 31 , 2017 (Un-Audited) March 31 2017 Note ASSETS Cash & balances with Treasury Banks Balances with Other Banks Lendings to Financial Institutions Investments - net Advances - net Operating Fixed Assets - net Deferred Tax Assets - net Other Assets LIABILITIES Bills Payable Borrowings Deposits & Other Accounts Sub-ordinated Loans Liabilities against Assets subject to Finance Lease Deferred Tax Liabilities Other Liabilities 7 8 9 10 11 NET ASSETS REPRESENTED BY Share Capital Reserves Unappropriated Profit Surplus on revaluation of assets 12 CONTINGENCIES AND COMMITMENTS 13 (Audited) December 31 2016 ---------- (Rupees in '000') -------116,465,798 19,630,394 67,901,861 973,545,739 648,061,379 32,734,226 3,816,152 73,603,676 1,935,759,225 159,836,139 13,828,477 121,709,399 897,130,749 667,389,455 32,900,778 5,135,645 77,775,122 1,975,705,764 10,341,969 65,437,551 1,588,385,916 22,959 104,550,441 1,768,738,836 167,020,389 10,187,250 44,863,930 1,657,312,093 25,652 86,584,063 1,798,972,988 176,732,776 21,275,130 47,620,158 39,488,193 108,383,482 21,275,130 46,800,341 51,939,152 120,014,623 58,636,907 167,020,389 0 0 56,718,153 176,732,776 0.10 ############## The annexed notes 1 to 19 form an integral part of these condensed interim unconsolidated financial statements. President Director Director Director
8. National Bank of Pakistan Condensed Interim Unconsolidated Profit & Loss Account - (Un-Audited) For the Three Months Period Ended March 31, 2017 Quarter Ended March 31 2017 Note Quarter Ended March 31 2016 ---------- (Rupees in '000') ------- Mark-up / Return / Interest Earned Mark-up / Return / Interest Expensed Net mark-up / Interest Income 27,340,282 15,051,818 12,288,464 26,970,459 14,945,023 12,025,436 Provision against Non-Performing Loans & Advances Provision for Diminution in Value of Investments Provision against off balance sheet obligations Bad Debts Written Off Directly 675,137 (601,939) 73,198 12,215,266 1,062,293 (59,293) 1,003,000 11,022,436 3,188,021 510,301 969,709 2,342,039 35,448 352,969 7,398,487 19,613,753 2,818,744 851,709 994,736 1,466,658 6,186 401,238 6,539,271 17,561,707 12,432,104 520,351 10,686 12,963,141 6,650,612 6,650,612 11,359,619 29,173 2,222 11,391,014 6,170,693 6,170,693 1,744,500 98,179 605,948 2,448,627 4,201,985 2,516,810 (382,942) 2,133,868 4,036,825 Net Mark-up / Interest Income after Provisions NON MARK-UP/ INTEREST INCOME Fee, Commission & Brokerage Income Dividend Income Income from Dealing in Foreign Currencies Gain on Sale of Securities Unrealized Gain / (Loss) on Revaluation of Investments classified as Held-for-Trading Other Income Total Non-Mark-up / Interest Income NON MARK-UP/ INTEREST EXPENSES Administrative Expenses Other Provisions / Write Offs Other Charges Total Non-Mark-up / Interest Expenses Extra Ordinary Items PROFIT BEFORE TAXATION Taxation - Current - Prior Year(s) - Deferred PROFIT AFTER TAXATION Basic & Diluted Earnings per Share 14 ------------Rupees------------1.90 1.98 The annexed notes 1 to 19 form an integral part of these condensed interim unconsolidated financial statements. President Director Director Director
9. National Bank of Pakistan Condensed Interim Unconsolidated Statement of Changes in Equity - (Un-Audited) For the Three Months Period Ended March 31, 2017 Reserves Capital Revenue Exchange Statutory General Loan General Unappropriated Total Share capital Translation profit Loss Reserve ---------------------------------------------------------- (Rupees in '000) ---------------------------------------------------------- Balance as at January 1, 2016 21,275,130 Comprehensive income Profit after tax for the three months period ended March 31, 2016 - Other comprehensive income - net of tax 8,148,085 - 24,911,289 12,000,000 521,338 49,155,590 116,011,432 - - 4,036,825 4,036,825 - 210,370 - - (1,786,884) (1,576,514) - 210,370 - - 2,249,941 2,460,311 - - 28,481 28,481 - (403,683) - - (15,956,348) (15,956,348) Transferred from surplus on revaluation of fixed assets - - Transfer to statutory reserve - - - - 403,683 Transactions with Owners Cash dividend (Rs. 7.5 per share) - Balance as at March 31, 2016 21,275,130 8,358,455 25,314,972 12,000,000 521,338 35,073,982 102,543,876 Balance as at April 1, 2016 21,275,130 8,358,455 25,314,972 12,000,000 521,338 35,073,982 102,543,876 18,715,460 18,715,460 Comprehensive income Profit after tax for the nine months period ended December 31, 2016 - Other comprehensive income - net of tax - - - - (1,265,970) - - - (1,265,970) - - 18,651,260 17,385,290 - - 85,456 85,456 Transferred from surplus on revaluation of fixed assets - - Transfer to statutory reserve - - 1,871,547 - (64,200) (1,871,547) (1,330,170) - Balance as at December 31, 2016 21,275,130 7,092,485 27,186,518 12,000,000 521,338 51,939,152 120,014,623 Balance as at January 1, 2017 21,275,130 7,092,485 27,186,518 12,000,000 521,338 51,939,152 120,014,623 4,201,985 4,201,985 Comprehensive income Profit after tax for the three months period ended March 31, 2017 - Other comprehensive income - net of tax - - - 399,618 - - - - 399,618 - - 3,898,528 4,298,146 - - 27,060 27,060 - (420,199) - - (15,956,348) (15,956,348) 39,488,193 108,383,482 Transferred from surplus on revaluation of fixed assets - - Transfer to statutory reserve - - - - 420,199 (303,457) 96,161 Transactions with Owners Cash dividend (Rs. 7.5 per share) Balance as at March 31, 2017 21,275,130 7,492,103 27,606,717 12,000,000 521,338 The annexed notes 1 to 19 form an integral part of these condensed interim unconsolidated financial statements. President Director Director Director
10. National Bank of Pakistan Condensed Interim Unconsolidated Statement of Comprehensive Income - Unaudited For the Three Months Period Ended March 31 , 2017 Quarter Ended March 31 2017 Quarter Ended March 31 2016 ---------- (Rupees in '000') -------Profit after taxation for the quarter 4,201,985 4,036,825 399,618 210,370 Other comprehensive income: Items to be reclassified to profit or loss in subsequent periods: Exchange gain on translation of net assets of foreign branches Items not to be reclassified to profit or loss in subsequent periods: Remeasurements of defined benefit liability (466,857) (2,749,053) Related tax effects 163,400 (303,457) 962,169 (1,786,884) 96,161 (1,576,514) Other comprehensive income - net of tax 4,298,146 2,460,311 Surplus on revaluation of available-for-sale securities 2,893,043 (1,750,667) Related tax impact (876,945) 2,016,098 447,597 (1,303,070) Total comprehensive income transferred to equity Components of comprehensive income not reflected in equity: Items to be reclassified to profit or loss in subsequent periods: The annexed notes 1 to 19 form an integral part of these condensed interim unconsolidated financial statements. President Director Director Director
11. National Bank of Pakistan Condensed Interim Cash Flow Statement - (Un-Audited) For the Three Months Period Ended March 31, 2017 March 31 2017 March 31 2016 ---------- (Rupees in '000') -------CASH FLOWS FROM OPERATING ACTIVITIES Profit Before Taxation Less: Dividend Income Adjustments Depreciation Provision against Non-Performing Loans & Advances Provision for Diminution in Value of Investments Provision against off balance sheet obligations Other Provision / Write Off Financial Charges on Leased Assets (Increase) / Decrease in Operating Assets Lendings to Financial Institutions Held-for-Trading Securities Advances Other Assets Increase / (Decrease) in Operating Liabilities Bills Payable Borrowings Deposits & Other Accounts Other Liabilities (excluding Current Taxation) Income Tax Paid Financial Charges Paid Net Cash Flow from Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES Net Investments in / proceeds from Available-for-Sale Securities Net Investments in Held-to-Maturity Securities Dividend Received Investments in Operating Fixed Assets Net Cash Used in Investing Activities CASH FLOWS FROM FINANCING ACTIVITIES Payments of Lease Obligations Net Cash used in Financing Activities 6,650,612 510,301 6,140,311 6,170,693 851,709 5,318,984 686,418 675,137 (601,939) 520,351 473 1,280,440 7,420,751 682,168 1,062,293 (59,293) 29,173 625 1,714,966 7,033,950 54,868,738 (22,528,348) 18,652,939 3,449,721 54,443,050 (1,228,512) (9,532,929) 21,058,090 3,380,960 13,677,609 154,719 33,790,470 (68,926,177) 1,049,699 (33,931,290) (1,605,508) 110,338,721 (157,125,889) (336,201) (48,728,877) (1,384,908) (473) (1,385,381) 26,547,131 (2,073,669) (625) (2,074,294) (30,091,612) (50,018,582) (234,725) 510,301 (491,425) (50,234,431) 10,022,691 (23,584,664) 851,709 (997,072) (13,707,336) (2,693) (2,693) (2,447) (2,447) Effects of exchange rate changes on cash and cash equivalents Net (decrease) / increase in Cash & Cash Equivalents Cash & Cash Equivalents at Beginning of the period Cash & Cash Equivalents at the End of the period 399,618 210,370 (23,290,375) (43,591,025) 146,453,389 170,386,744 123,163,014 126,795,719 123,163,014 126,795,719 The annexed notes 1 to 19 form an integral part of these condensed interim unconsolidated financial statements. President Director Director Director
12. National Bank of Pakistan Notes To The Condensed Interim Unconsolidated Financial Statements (Un-Audited) For the Three Months Period Ended March 31, 2017 1. STATUS AND NATURE OF BUSINESS 1.1 National Bank of Pakistan (the bank) was incorporated in Pakistan under the National Bank of Pakistan Ordinance, 1949 and is listed on all the stock exchanges in Pakistan. It's registered and head office is situated at I.I. Chundrigar Road, Karachi. The bank is engaged in providing commercial banking and related services in Pakistan and overseas. The bank also handles treasury transactions for the Government of Pakistan (GoP) as an agent to the State Bank of Pakistan (SBP). The bank operates 1,450 (2016: 1,448) branches in Pakistan and 21 (2016: 21) overseas branches (including the Export Processing Zone branch, Karachi). The Bank also provides services as trustee to Long-Term Credit Fund (LTCF) and Endowment Fund for student loans scheme. 2. STATEMENT OF COMPLIANCE 3. 2.1 These condensed interim unconsolidated financial statements of the Bank for the quarter ended March 31, 2017 have been prepared in accordance with the requirements of the International Accounting Standards 34 - Interim Financial Reporting (IFRS) issued by the International Accounting Standards Board and Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan as are notified under the Companies Ordinance, 1984, provisions of the Companies Ordinance, 1984, the Banking Companies Ordinance, 1962 and directives issued by the Securities and Exchange Commission of Pakistan and the State Bank of Pakistan. Wherever the requirements of the Companies Ordinance, 1984, the Banking Companies Ordinance, 1962 or directives issued by the Securities and Exchange Commission of Pakistan and the State Bank of Pakistan. In case where the requirements differ with the requirements of IFRS or IFAS, the requirements of the Companies Ordinance, 1984, the Banking Companies Ordinance, 1962 or the requirements of the said directives shall prevail. 2.2 SBP has deferred the applicability of International Accounting Standard (IAS) 39, 'Financial Instruments: Recognition and Measurement' and IAS 40, 'Investment Property' for Banking Companies through BSD Circular Letter No. 10 dated August 26, 2002. Further, according to the notification of SECP dated April 28, 2008, the IFRS - 7 "Financial Instruments: Disclosures" has not been made applicable for banks. Accordingly, the requirements of these standards have not been considered in the preparation of these financial statements. However, investments have been classified and valued in accordance with the requirements of various circulars issued by the SBP. 2.3 The disclosures made in these condensed interim unconsolidated financial statements have been limited based on the format prescribed by the SBP vide BSD Circular No. 2, dated May 12, 2004 and International Accounting Standard (IAS) 34, 'Interim Financial Reporting' and do not include all the information requirerd in the annual financial statements. Accordingly, these interim condensed unconsolidated financial statements should be read in conjunction with the annual financial statements of the bank for the year ended December 31, 2016. 2.4 These condensed interim unconsolidated financial statements are separate financial statements of the bank in which the investments in subsidiaries, associates and joint ventures are stated at cost and have not been accounted for on the basis of reported results and net assets of the investees. BASIS OF MEASUREMENT These condensed interim unconsolidated financial statements have been prepared under the historical cost convention except that certain fixed assets and non-banking assets are stated at revalued amount, certain investments, commitments in respect of certain forward foreign exchange contracts and derivatives financial insturements had been marked to market and are carried at fair value. These condensed interim unconsolidated financial statements are presented in Pak rupees which is the bank's functional and presentation currency. 4. ACCOUNTING POLICIES The accounting policies adopted for presentation of these condensed interim unconsolidated financial statements are the same as those followed in the preparation of the annual financial statements of the Bank for the year ended December 31, 2016. Standards, interpretations and amendments to published approved accounting standards that are effective in the current period There are certain new and amended standards and interpretations that are mandatory for the Bank's accounting periods beginning on or after January 1, 2017 but are considered not to be relevant or do not have any significant effect on the Bank's operations and therefore not detailed in this condensed interim unconsolidated financial information. 5. ACCOUNTING ESTIMATES AND JUDGEMENTS The estimates/judgments and associated assumptions used in the preparation of these interim condensed unconsolidated financial statements are consistent with those applied in the preparation of the annual financial statements of the bank for the year ended December 31, 2016. 6. FINANCIAL RISK MANAGEMENT The financial risk management objectives and policies applied during the period are consistent with those disclosed in the annual financial statements of the bank for the year ended December 31, 2016.
13. 7 . INVESTMENTS (Un-Audited) March 31, 2017 Held by Given as Total Bank Collateral ---------- (Rupees in '000') -------- 7.1 (Audited) December 31, 2016 Held by Given as Total Bank Collateral ---------- (Rupees in '000') -------- Investments by type: Held-for-trading securities Market Treasury Bills Pakistan Investment Bonds Ordinary Shares of Listed companies Available- for- sale securities Ordinary Shares of Listed companies Ordinary Shares of Un-Listed companies Investments in Mutual Funds Ordinary shares of a bank outside Pakistan Preference Shares Market Treasury Bills Pakistan Investment Bonds Gop Foreign Curency Bonds Foreign Currency Debt Securities Foreign Government Securities Term Finance Certificates / Musharika and Sukuk Bonds Total Available- for- sale securities Held-to-maturity securities Pakistan Investment Bonds Market Treasury Bills GoP Foreign Currency Bonds Foreign Government Securities Foreign Currency Debt Securities Debentures, Bonds, Participation Term Certificates & Term Finance Certificates Total Held-to-Maturity Securities Investments in Associates Investments in Joint Ventures Investments in Subsidiaries Investment at cost Less: Provision for Diminution in Value of Investments (note 7.2) Investments (net of Provisions) Surplus / (Deficit) on Revaluation of Held-for-trading securities Surplus on Revaluation of Available-for-Sale Securities (note 12) Total Investments at Market Value 25,436,532 7,105,477 69,297 32,611,306 - 25,436,532 7,105,477 69,297 32,611,306 9,984,590 62,920 10,047,510 - 9,984,590 62,920 10,047,510 22,272,804 2,146,712 694,646 463,294 692,961 385,919,493 124,845,208 9,380,384 2,521,347 520,651 32,898,918 4,450,000 - 22,272,804 2,146,712 694,646 463,294 692,961 418,818,411 129,295,208 9,380,384 2,521,347 520,651 22,456,457 2,119,982 1,212,740 463,295 633,660 368,848,153 125,111,867 8,685,558 2,732,943 519,287 4,032,484 - 22,456,457 2,119,982 1,212,740 463,295 633,660 368,848,153 129,144,351 8,685,558 2,732,943 519,287 64,352,952 64,324,362 651,159,370 597,108,304 178,328,918 29,131,619 7,889,583 25,106,982 405 - 178,328,918 29,131,619 7,889,583 25,106,982 405 - 792,933 241,250,440 64,352,952 613,810,452 37,348,918 177,935,276 29,545,444 8,891,709 24,321,471 405 - 177,935,276 29,545,444 8,891,709 24,321,471 405 790,860 241,485,165 - 790,860 241,485,165 792,933 241,250,440 4,032,484 - 64,324,362 601,140,788 4,362,391 2,362,433 4,406,750 899,038,497 37,348,918 4,362,391 2,362,433 4,406,750 936,387,415 4,362,391 2,362,433 4,406,750 859,537,828 4,032,484 4,362,391 2,362,433 4,406,750 863,570,312 (16,803,045) 882,235,452 37,348,918 (16,803,045) 919,584,370 (17,404,984) 842,132,844 4,032,484 (17,404,984) 846,165,328 35,448 53,487,116 935,758,016 438,805 37,787,723 35,448 53,925,921 973,545,739 (67,457) 50,671,839 892,737,226 361,039 4,393,523 (67,457) 51,032,878 897,130,749
14. Note 7 .2 Opening balance 17,404,984 19,432,226 Charge for the period Reversals 1,071 (603,010) (601,940) 16,803,045 1,447,000 (2,833,314) (1,386,314) 214,444 (284,000) 99,769 (671,140) 17,404,984 2,522,433 398,923 2,737,167 398,923 8,893,554 433,444 9,281,816 433,444 604,979 604,979 2,939,526 1,010,186 16,803,045 2,938,469 1,010,186 17,404,984 2,885,355 3,090,081 9,498,533 469,445 2,939,526 1,010,186 16,803,045 9,886,795 479,453 2,938,469 1,010,186 17,404,984 Particulars of provision in respect of type Available-for-sale securities Ordinary shares of listed companies and mutual funds Ordinary shares of unlisted companies Debentures, Bonds, Participation Term Certificates, Term Finance Certificates and Sukuk Bonds Preference shares Held-to-maturity securities Debentures, Bonds, Participation Term Certificates, and Term Finance Certificates Investments in associates Investments in subsidiaries 7.4 December 31 2016 (Audited) Particulars of provision for diminution in value of investments Transfer from advances Transfer to Advances Other transfer Adjustment due to settlement of put option in respect of shares of Agritech Limited (an associate) Closing balance 7.3 March 31 2017 (Un-audited) Particulars of provision in respect of segments Fully Paid up Ordinary Shares Debentures, Bonds, Participation Term Certificates, Term Finance Certificates and Sukuk Bonds Other investments Investments in associates Investments in subsidiaries Note 8. ADVANCES Loans, cash credits, running finances, etc. In Pakistan Outside Pakistan Islamic financing and related assets December 31 March 31 2016 2017 (Audited) (Un-audited) ---------- (Rupees in '000') -------- 688,059,964 53,375,939 709,791,527 51,196,906 741,435,903 760,988,433 4,200,761 3,199,129 9,555,687 7,443,126 16,998,813 8,850,657 8,437,549 17,288,206 762,635,477 (114,574,098) 648,061,379 781,475,768 (114,086,313) 667,389,455 Bills discounted and purchased (excluding Government treasury bills) Payable in Pakistan Payable outside Pakistan Advances - gross Less: Provision against non-performing loans Advances - net of provision 8.1 8.2 Advances include Rs.126,939 million (2016: Rs.119,416 million) which have been placed under the non-performing status as detailed below: March 31, 2017 Category of Classification Other Assets Especially Mentioned Substandard Doubtful Provision Provision Domestic Overseas Total Required Held -------------------------------- (Rupees in '000') -------------------------------4,752,112 4,752,112 68,924 68,924 8,889,345 46,565 8,935,910 1,805,343 1,805,343 3,502,951 49,561 3,552,512 1,629,095 1,629,095
15. Loss 79 ,177,083 96,321,491 30,521,856 30,617,982 109,698,939 126,939,473 106,797,158 110,300,520 106,797,158 110,300,520 December 31, 2016 Provision Provision Domestic Overseas Total Required Held -------------------------------- (Rupees in '000') -------------------------------- Category of Classification Other Assets Especially Mentioned Substandard Doubtful Loss 8.2 1,076,998 4,788,734 3,538,789 79,165,638 88,570,159 1,076,998 4,841,097 3,582,554 109,915,522 119,416,171 31,804 1,130,098 1,616,428 106,876,776 109,655,106 31,804 1,130,098 1,616,428 106,876,776 109,655,106 Particulars of provision against non-performing advances Specific Opening balance Foreign exchange adjustments Charge for the period Reversals Transfer (out) / in Other transfer Amount charged off Amount written off Closing balance 9. 52,363 43,765 30,749,884 30,846,012 March 31, 2017 December 31, 2016 General Total Specific General -------------------------------------- (Rupees in '000') -------------------------------------- 109,655,106 (189,193) 1,774,743 (939,666) 835,077 (470) 110,300,520 4,431,206 2,312 17,320 (177,260) (159,940) 4,273,578 114,086,313 (186,881) 1,792,063 (1,116,926) 675,137 (470) 114,574,098 110,765,591 (286,882) 8,911,394 (9,704,563) (793,169) 69,556 263,938 (97,256) (266,672) 109,655,106 2,964,361 (11,381) 1,522,050 (43,824) 1,478,226 4,431,206 Total 113,729,952 (298,263) 10,433,444 (9,748,387) 685,057 69,556 263,938 (97,256) (266,672) 114,086,313 8.3 General provision against consumer and SME loans represents provision maintained at an amount ranging from 1% to 7% of the performing portfolio as required by the Prudential Regulations issued by the SBP. 8.4 The SBP has allowed specific relaxation to the Bank for non-classification of overdue loans of certain Public Sector Entities (PSEs) which are guaranteed by Government of Pakistan. 8.5 The SBP has allowed specific relaxation to the Bank for non-classification of overdue loans of ASG Metals Private Limited and its associated companies till September 30, 2017. Had that relaxation not provided, the amount of non-performing loans would have been higher by Rs. 2,005 million (2016: Rs. 2,005 million) and provision would be higher by Rs.1,090 million (2016: Rs. 1,090 million). December 31 March 31 2016 2017 (Audited) (Un-audited) ---------- (Rupees in '000') -------- OPERATING FIXED ASSETS Capital work-in-progress Property and equipment Intangible assets 9.1 1,559,896 30,492,243 682,087 32,734,226 1,545,405 30,471,432 883,941 32,900,778 Additions and disposals during the period amounted to Rs 462 million (March 31, 2016: Rs. 920 million) and Rs.2.5 milllion (March 31, 2016: Rs. Nil million) respectively. 10. DEFERRED TAX ASSETS - net Note March 31 2017 (Un-Audited) December 31 2016 (Audited) -------- (Rupees in '000) -----Deferred tax assets arising in respect of Provision for diminution in the value of investments Provision against non-performing advances Other provisions Charge against defined benefits plans Unrealised loss on derivatives Provision against off-balance sheet obligations 3,402,420 2,349,859 2,845,494 13,211,768 691,907 116,622 22,618,070 3,613,099 3,310,630 2,663,371 12,755,946 691,907 116,622 23,151,575
16. Deferred tax (liabilities) arising in respect of Excess of accounting book value of leased assets over lease liabilities Revaluation of securities Non- Banking Assets Operating fixed assets 12 Net deferred tax assets 1,870 (17,971,070) (36,273) (796,445) (18,801,918) (80) (17,094,125) (36,273) (885,452) (18,015,930) 3,816,152 5,135,645 December 31 March 31 2016 2017 (Audited) (Un-audited) ---------- (Rupees in '000') -------11. DEPOSITS AND OTHER ACCOUNTS Customers Fixed deposits Savings deposits Current accounts - remunerative Current accounts - non-remunerative Financial Institutions Remunerative deposits Non-remunerative deposits 411,062,520 434,361,350 247,567,212 315,053,095 1,408,044,177 438,982,984 429,057,844 220,938,478 338,862,834 1,427,842,140 61,183,233 119,158,506 180,341,739 1,588,385,916 51,762,798 177,707,155 229,469,953 1,657,312,093 March 31 December 31 2017 2016 (Un-audited) (Audited) ---------- (Rupees in '000') -------12. SURPLUS ON REVALUATION OF ASSETS - net Surplus on revaluation of fixed assets - net of tax Surplus on revaluation of Non Banking Assets - net of tax Surplus / (deficit) on revaluation of Available-for-sale securities - net of tax Federal Government Securities Term Finance Certificates and Sucks Shares and mutual funds GoP Foreign Currency Bonds Foreign Currency Debt Securities Investment outside Pakistan Deferred tax liability 21,555,200 1,126,856 21,652,544 1,126,856 4,947,583 163,035 38,072,270 319,952 103,052 10,320,029 53,925,921 (17,971,070) 58,636,907 4,311,723 281,349 37,308,676 306,362 54,677 8,770,091 51,032,878 (17,094,125) 56,718,153 13. CONTINGENCIES AND COMMITMENTS 13.1 Direct credit substitutes December 31 March 31 2016 2017 (Audited) (Un-audited) ---------- (Rupees in '000') -------- Includes general guarantee of indebtedness, bank acceptance guarantees and standby letters of credit serving as financial guarantees for loans and securities issued in favour of: - Government - Financial institutions - Others 12,892,890 16,959,171 23,916,783 53,768,844 12,013,689 6,075,143 21,866,018 39,954,850 15,677,760 9,593,403 18,253,480 43,524,643 15,625,100 19,015,609 17,593,612 52,234,321 293,681,582 82,926 77,488,854 371,253,362 330,993,013 2,421,680 47,295,687 380,710,380 13.2 Transaction-related contingent liabilities Includes performance bonds, bid bonds, warranties, advance payment guarantees, shipping guarantees and standby letters of credits related to particular transactions issued in favour of: - Government - Financial institutions - Others 13.3 Trade-related contingent liabilities Letters of credit issued in favour of - Government - Financial institutions - Others
17. 13 .4 Other contingencies 13.4.1 Claims against the Bank not acknowledged as debts [including SBP liabilities on Bangladesh borrowing and interest thereon amounting to Rs. 224 million (2016: Rs. 224 million), claims relating to former Mehran Bank Limited amounting to Rs. 1,597 million (2016: Rs. 1,597 million)]. 14,412,596 14,238,035 13.4.2 Taxation The current status of tax contingencies is same as disclosed in the annual financial statements of the bank for the year ended December 31, 2016. 13.4.3 Barter Trade Agreements The current status of these contingencies is same as disclosed in the annual financial statements of the bank for the year ended December 31, 2016. 13.4.5 Golden Handshake / Pensionary Benefits to Retired Employees / Encashment of Unavailed Leaves The current status of these contingencies is same as disclosed in the annual financial statements of the bank for the year ended December 31, 2016, except for that in case of Pensionary benefits to retired employees, the bank has filed a review petition and stay order against the subject order of the Lahore High Court, Lahore before the honourable Supreme Court of Pakistan. The petition has not yet been fixed for hearing. Further in case of encashment of un-availed leaves, the Intra Court Appeals filed by the petitioners ( ex - employees ) against the order of the Single Bench of Lahore High Court, Lahore were dismissed vide order dated 23.02.2017
18. 7 NATIONAL BANK OF PAKISTAN December 31 March 31 2016 2017 (Audited) (Un-Audited) ---------- (Rupees in '000') -------13.5 Commitments in respect of forward exchange contracts Purchase Sale 13.6. 159,658,195 137,621,820 145,531,852 90,986,181 33,415 12,670 938,337 1,094,029 Other Commitments Professional services to be received 13.7 Commitments for the acquisition of operating fixed assets 14. BASIC AND DILUTED EARNINGS PER SHARE Quarter Ended March 31 2017 (Un-Audited) Profit after taxation (Rupees in '000) 4,201,985 4,036,825 Weighted average number of ordinary shares (in '000) 2,127,513 2,127,513 1.98 1.90 Basic and diluted earnings per share (Rupees) 15. Quarter Ended March 31 2016 (Un-Audited) SEGMENT DETAILS WITH RESPECT TO BUSINESS ACTIVITIES The segment analysis with respect to business activity is as follows:Corporate Trading & Retail Commercial Payment & Agency Total Finance Sales Banking Banking Settlement Services ---------------------------------------------------------------- Rupees in '000 ---------------------------------------------------------------March 31, 2017 - Unaudited Total income Inter segment revenue Total expenses Net income 78,678 6,381 72,298 Segment assets - gross of NPLs provision 495,283 (346,010) 149,273 32,611,306 2,445,635 6,300,467 4,152,200 4,593,902 14,710,678 (5,886,621) 7,161,885 1,662,172 617,139 501,003 116,136 216,393,431 1,670,360,017 - 1,339,538 (67,836) 1,214,870 56,832 16,394,471 19,686,951 13,036,339 6,650,612 1,935,759,225 Segment non performing loans - - 16,566,441 110,373,032 - - 126,939,473 Segment total provision - - 7,772,821 106,801,277 - - 114,574,098 515,463,041 1,253,275,795 1,768,738,836 Segment liabilities - - - - Segment return on assets (ROA) (%) 0.00% 2.51% 3.72% 0.43% 0.00% 2.19% 1.37% Segment cost of fund (%) 0.00% 0.00% 3.09% 4.28% 0.00% 0.00% 3.91% March 31, 2016 - Unaudited Total income Inter segment revenue Total expenses Net income 224,363 3,323 221,039 21,600 (14,531) 7,069 Segment assets - gross of NPLs provision - Segment non performing loans - 11,002,069 - Segment total provision - - Segment liabilities - - 2,627,278 6,494,572 4,476,887 4,644,963 13,831,326 (6,439,204) 6,234,318 1,157,803 452,891 346,760 106,131 1,407,249 (40,837) 1,332,724 33,688 21,709,258 18,564,707 12,394,014 6,170,693 209,038,000 1,439,028,548 - 19,372,048 115,224,498 - - 1,680,777,875 7,393,692 107,270,666 - - 114,664,358 458,809,864 1,068,415,647 - - 1,527,225,511 134,596,546 Segment return on assets (ROA) (%) 0.00% 2.80% 3.96% 0.28% 0.00% 1.49% 1.46% Segment cost of fund (%) 0.00% 0.00% 3.09% 4.67% 0.00% 0.00% 4.16%
19. 16 . RELATED PARTY TRANSACTIONS The Bank has related party relationship with its associated undertakings, subsidiary companies, employee benefit plans, and its key management personnel (including their associates). The details of investments in subsidiary companies and associated undertakings are stated in note 7. Transactions between the Bank and its related parties are carried out under normal course of business, except employees staff loans, employees sale of assets and provident fund, that are as per agreement. There are no transactions with key management personnel other than under advance salary. 2016 - Audited 2017 - Un audited At January Given Repaid At December Given Repaid At March 01, during the during the 31 during the during the 31, period period period period ---------------------------------------------------------------------- (Rupees in '000) -----------------------------------------------------------------------At January 01, Advances Key Management Executives Adjustments* Subsidiaries Associates Debts due by Company in which director is interested as director 186,528 (14,080) 186,528 494,147 3,297,168 - - Adjustments* - 3,977,843 - (14,080) (202,561) (216,641) 172,448 172,448 291,586 3,297,168 3,761,202 193,530 5,823 199,353 230,333 3,065,368 3,495,054 49,469 (62,294) 49,469 313,814 250,000 (62,294) (50,000) (18,200) 613,283 (130,494) 180,705 5,823 186,528 494,147 3,297,168 3,977,843 2016 - Audited 2017 - Unaudited At January Received Repaid At December Received Repaid At March 01, during the during the 31 during the during the 31, period period period period ---------------------------------------------------------------------- (Rupees in '000) -----------------------------------------------------------------------At January 01, Deposits Subsidiaries Key Management Executives Adjustments* Pension Fund (Current) Pension Fund (Fixed Deposit) Pension Fund (N.I.D.A A/c) Provident Fund 2,301,513 18,554 9,840 28,394 3,371 2,300,000 1,128,437 13,391,708 278,326 360,809 (1,301,507) (349,287) (253,538) (1,318,264) (19,500,000) (993,000) (574,568) 1,269,083 69,011 69,011 4,362 2,300,000 891,907 12,721,212 360,809 8,715,538 8,800,000 7,481,029 2,788,345 (349,287) (8,717,546) (2,300,000) (7,573,507) (3,043,008) 1,278,332 30,076 9,840 39,916 1,363 8,800,000 1,035,959 13,137,045 (22,734,337) 17,255,575 19,153,423 28,424,047 (23,284,855) 24,292,615 1,278,332 39,916 85,718 282,633 (94,967) (253,538) 39,916 1,363 8,800,000 1,035,959 13,137,045 282,633 1,321,263 13,000,000 848,948 158,735 24,292,615 15,697,297 * Adjustments due to changes in key management executives. December 31, March 31, 2016 2017 Audited Un-audited Rupees in '000 Placements with: Joint venture 11,358 49,541 76,751 49,649 195,848 260,862 2,064,167 2,071,751 93,050 92,663 8,777 8,726 - 25,245 Repo borrowing from: Joint venture Mark-up receivables from subsidiaries Mark-up receivables from associates Other receivables from subsidiaries Other payables to subsidiaries Off Balance Sheet Items - Joint Venture Lease finance liabilities paid to subsidiaries 2,693 March 31, 25,652 March 31,
20. 2016 2017 Un-audited Un-audited Rupees in '000 Income for the period On advances / placements with: Subsidiaries Joint Venture Debts Due by company in which director of the bank is interested as director 5,558 14 - 5,019 380 133,853 Financial charges paid on lease assets to subsidiaries 450 712 Dividend from Subsdiary - 11,813 Expenses for the period Remuneration to key management executives Charge for defined benefit plan 136,117 7,376 71,099 10,211 9,582 284,430 163,800 708 8,521 233,310 60,120 122 7 18 Mark-up on Deposits of: Subsidiaries Associates Provident fund Pension fund Commission paid to subsidiaries Mark-up on Borrowing / Deposits Joint Ventures 16.1 Transactions with Government-related entities The Federal Government through State Bank of Pakistan holds controlling interest (75.60% shareholding) in the Bank and therefore entities which are owned and / or controlled by the Federal Government, or where the Federal Government may exercise significant influence, are related parties of the Bank. The Bank in the ordinary course of business enters into transaction with Government–related entities. Such transactions include lending to, deposits from and provision of other banking service to Government–related entities. The Bank also earned commission on handling treasury transactions on behalf of the Government of Pakistan amounting to Rs. 1,741 million for the quarter ended March 31, 2017. As at the Statement of Financial Position date the loans and advances and deposits relating to Government–related entities amounted to Rs. 306,389 million and Rs. 600,098 million respectively.