Post tax profit of the Bank for the year amounted to Rs 4.914 bn, as compared to Rs 3.430 bn achieved in 2013, which represented a growth of Rs.1.484 Bn or 43.2%. This was achieved, despite extremely challenging external conditions of sluggish credit demand, excess liquidity and shrinking net interest margins (NIM). Nevertheless, improvements in all sources of income namely, other operating income (Rs 968 Mn), net fee & commission income (Rs 544 mn), net trading income (Rs 207 mn) and drop in impairment charge for loan and other losses (Rs 2,471 mn) contributed towards this growth in profit.
NII, which is the main source of income from the fund based operations and representing over 68% of the total operating income, increased from Rs 15.3 Bn in 2013 to Rs 15.7 Bn in 2014, recording a moderate growth of 2.5%, despite the continuous decrease in net interest margins (NIM).
Net interest margins dropped from 4.39% in 2013 to 3.95% in 2014. This was mainly due to downward pressure on interest rates, lower credit growth in customer advances and the Bank being compelled by the market factors to invest excess funds in low yielding fixed income securities.