Karachi: The National Bank Modaraba Management Company Limited (NBMMCL) recently reported a notable financial recovery for the First National Bank Modaraba (FNBM) for the fiscal year ended June 30, 2024. The FNBM demonstrated a significant improvement, achieving a net profit of Rs. 34.76 million, a considerable rise from the Rs. 4.10 million recorded in the previous fiscal year.
This fiscal year has been characterized by political uncertainties and economic challenges; however, the completion of general elections in February 2024 contributed to a semblance of stability across various sectors. According to the directors’ report presented by the NBMMCL Board, Pakistan's GDP growth showed moderate recovery at 2.38 percent, compared to a contraction of 0.21 percent in the prior year. This economic rebound is attributed to lowered policy rates by the State Bank of Pakistan and a relaxation in import and currency restrictions, facilitating a conducive environment for business and financial growth.
The financial results for FY 2024 reflected effective management strategies, particularly in recovering from a non-performing portfolio. The board highlighted recoveries totaling Rs. 73.918 million during the year, leading to a reversal of provisions amounting to Rs. 59.527 million. According to information available from the Pakistan Stock Exchange (PSX), the total income, inclusive of investment profits, was reported at Rs. 115.936 million.
Despite ongoing legal and regulatory challenges, including a winding-up petition under adjudication since June 2020, the NBMMCL remains optimistic. The ongoing legal efforts and negotiations are expected to significantly mitigate the accumulated losses from non-performing loans (NPLs), thereby aligning the FNBM with the necessary regulatory and Sharia'h compliance frameworks.
Looking ahead, the FNBM is actively pursuing strategies to recover its NPLs and explore various revival options, prioritizing the interests of stakeholders and certificate holders. The Board, under the leadership of independent directors and executive management, is evaluating potential courses of action that would enhance the overall operational and financial health of the Modaraba.
As the FNBM continues to navigate through these challenges, the support from its parent bank, the National Bank of Pakistan, and regulatory bodies remains crucial. The Board extends its gratitude to its shareholders, clients, and regulatory authorities for their continued support and guidance.