The document summarizes an interview with Dr. Asif A. Brohi, President of the National Bank of Pakistan. Some key points: 1) National Bank of Pakistan started as an agent of the State Bank of Pakistan to handle treasury functions and has since diversified into commercial banking. It has taken over troubled banks like Eastern Mercantile Bank. 2) Under Dr. Brohi's leadership, the bank has focused on financing energy projects, agriculture, and consumer loans. Its loan portfolio has grown significantly in recent years. 3) The bank aims to further expand its conventional and Islamic banking services both domestically and abroad to better serve overseas Pakistanis and drive future revenue growth.

1. June2013
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National Bank of Pakistan
LeadingthebankingsectorAn exclusive interview with
Dr. Asif A. Brohi, President, National Bank of Pakistan

2. June 201310 June 2013 11
What is the history of the National Bank
of Pakistan?
In 1949, soon after Pakistan came into
existence, we were asked by the State Bank of
Pakistan to set up treasury offices where the
State Bank was not present, such as at district
and tehsil headquarters for the purpose of
money collection and disbursement of salaries
to government employees, etc. We then got
into lending to agriculture and to SMEs but
there were no mega projects that we took up in
those days.
When did NBP really take off?
It all started after 1974. After nationalization,
it was accepted that all banks were government
banks. We continued to be the treasury of
the State or the standard arm of the State
Bank. The mid-80s was the climax of banking.
The textile boom came and large projects
were started. The NDFC was created and
project financing commenced. The Industrial
Development Bank (IDBP) and ICP were
created and they gave allocations to all the
banks, so we had to create a lot of mass for
project financing. Then the sky was the limit.
National Bank has since then behind growth of
all entrepreneurship – we never withdrew our
support or discouraged growth.
There is a common perception that the
NBP is just a government bank.
The perception that this is a government
bank was dissipated a long time back. The
Banking Ordinance of 2002 made us totally
independent. We have our own laws that
govern us. We have our own Board of Directors
which is all independent - it has only one
nominee from the Government of Pakistan, the
rest are all chosen. One director represents the
small shareholders and the rest are all from the
private sector. We are totally independent and
it is absolutely not correct that we operate on
state money though our hardcore state deposits
until the end of last month were Rs. 38 billion.
What about so many banks that have
been merged with the National Bank of
Pakistan?
Whenever a bank is in trouble, it is merged
with the National Bank of Pakistan. Eastern
Mercantile Bank, the Bank of Bahawalpur –
that was merged with the Bank of China and
the two were later merged with NBP. Then
Mehran Bank, NDFC and of course CIRC - this
was created when the dead portfolios of all
the failed banks was parked in one place in
National Bank of Pakistan
Leading the banking sectorAn exclusive interview with
Dr. Asif A. Brohi, Chairman of the Board and President, National Bank of Pakistan
Lahore. They ran it for 10 years
and when nothing more could be
done, it was dumped on us – lock
stock and barrel, with staff. Our
bank is so well-embedded in the
ground that we survived through
all this. They all came to us with
absolutely flushed portfolios
and huge staff. No doubt these
mergers were a serious drag on
our performance; otherwise we
would have been way ahead. But
National Bank has stayed behind
the growth of entrepreneurship.
We never borrowed a penny from
the state. Habib Bank and UBL
took money from the state but we
never did. Habib Bank took Rs. 9
billion while UBL took Rs. 7 billion
and we are talking of 1999, when
this was a lot of money. We could
have taken industry loans under
the Financial Reforms Act but we
still didn’t take any money. Some
wizard decided one day that we will not take
this money. Why not? We could have put the
money to work and earned profits. We did not
take the money and took all the hits ourselves.
What about downsizing?
We have had two golden handshakes in
this bank. We reduced our branches by more
than 300 – and those were not our losing
branches. We were asked to close branches
where there was clustering though these were
profitable branches in oder to facilitate other
banks so that they could become viable for
privatization. It was always at the cost of the
National Bank - losing propositions always
came in our lap. There were 7 profitable
branches of the NBP in the UK, while 3
branches of UBL - all in loss There was a
merger, with 55 % shares going to the UBL
and 45% to NBP – the controlling shares went
to UBL – 3 branches with negative equity and
7 branches all profitable, but they wanted to
make UBL viable for sale. NBP always acted
as a cushion otherwise the whole financial
sector would have been dented by these
collapses one after the other.
Is National Bank is a national
institution that takes all the hits and still
continues to survive?
We have been taking these hits and
still showing good performance. The hits
have never been highlighted. But we make
ourselves so strong and resilient that we can
keep taking these shocks.
We have never seen any attractive
looking branches of the National Bank.
The kind of customers we have is
unique – pensioners, salaried class, year-
round government collections, and not only
government but also EOBI payments that
were thrust on us. The EOBI pensioner is
a labourer. Given the choice, one wouldn’t
like to go to a branch where ten labourers
are standing at the counter. Why shouldn’t
you go next door where you find a decent
crowd standing in a proper queue? Please
understand our problems. We pay against 34
different challans, accepttraffic violation fines,
etc. With all that, talk about resilience. The
first seven or eight days of the month, we are
actually dysfunctional – disbursing salaries
to government employees, etc. So now we
have created Customer Facilitation Centres
– which are standalone centres. We already
have some 28 of them – and we incorporate
this facility in all those branches that are being
renovated all over Pakistan so that we are not
hampered in regular, commercial business.
But we don’t have this luxury in the congested
areas and towns. By the way, all our branches
are connected online.
What are the priority areas for National
Bank of Pakistan?
Our top priority is financing energy-related
projects as the entire country is facing such a
serious energy crisis. So far some 10 energy
projects have been initiated, of which seven
have been financed by the NBP and five of
them have already commenced operations.
We have extended some Rs.125 billion to
the energy sector and besides regular power
projects, we are funding wind power as well.
We would like to support coal and solar energy
when that comes along. Then agriculture is
another area that we would like to focus on
since Pakistan is primarily an agricultural
country. Besides that, the bank is planning to
offset the impact of the low interest rate by
expanding its investment in high yield and low
risk products, low cost deposit mobilization,
branch expansion and a reduction in non-
performing loans. Loans against advance
salary for government servants and consumer
loans against gold are our other main priority
areas. The idea is to facilitate the masses,
particularly in the rural areas, who had
previously been deprived of
banking facilities. That is why
there has been a significant
growth in our agriculture and
consumer loans. In fact, after
the Agriculture Bank, we are
the biggest lenders in the
agriculture sector and this has
been particularly significant over
the past few years. The same
is the case in consumer loans,
especially against gold.
How would you rate the
National Bank’s progress over
the last few years?
With an increase of 25%,
our total advances had grown
to Rs. 657 billion by the end of
December last year - from Rs.
525 billion in December 2011.
The total size of agriculture
and consumer loans disbursed
by the NBP stood at Rs. 131
billion at the end of December
last year. We achieved massive increase in
terms of loans to farmers and gave Rs. 55
billion in agriculture credits. NBP’s farming
sector disbursements witnessed a massive
increase of 68 percent over the past two
years. We also opened more branches in
the less developed areas. We are expanding
our foreign branch network in such regions
as Central Asia, Sri Lanka, Russia and
Afghanistan and in those markets where we
can better serve overseas Pakistanis, such
as the Middle East and Gulf, Europe and
America. We are also working aggressively
on remittance facilities to overseas
Pakistanis. NBP has signed agreements with
30 overseas remittance partners and has
created a separate independent group known
as the Global Home Remittance Management
Group to promote overseas remittances. The
Bank is today the leader in home remittances.
What is the NBP’s progress in the
Islamic Banking sector?
This is an area where we expect
aggressive growth in the coming years. The
Islamic Banking unit has shown 92% growth
as compared to last year. We will open
more dedicated Islamic Banking branches
in all parts of the country to facilitate more
customers.
What is the Bank’s future outlook?
We will emphasize on reducing manpower
and administrative costs, improvie Current
and Savings deposits ratio, reduce non-
performing loans, further increase our lending
to agriculture, SMEs and general consumers,
focus more on trade business, further expand
our conventional and Islamic Banking branch
networks, both at home and abroad, and
further improve our IT infrastructure. All this
should facilitate us greatly in increasing our
revenues in the coming times. u
Dr. Asif A. Brohi – A profile
Dr. Asif Brohi is a Chief Executive who works 14 hours a day. He
has rich experience in all disciplines of contemporary banking. His
dynamism and professional insight proactively promotes NBP and has
improved its present position in the domestic banking industry.
Dr. Brohi joined NBP in 1984 and has held numerous senior
management positions. Prior to becoming President of the Bank, he
served as Chief Operating Officer and Head of Commercial & Retail
Banking Group. Dr. Brohi has also served on the Board of Directors
of NBP Leasing Limited, The Hub Power Company, Fauji Oil Terminal
& Distribution Co. Ltd, First Credit & Investment Bank Limited (FCIB),
NBP Fullerton Asset Management Company Limited, NBP Modarba
Management Co. Ltd, National Asset Insurance Company Limited and
Close Joint Stock Subsidiary, Almaty Kazakhstan.
Prior to joining NBP, he was Assistant Professor of Management,
having taught at various universities in the USA. He holds a Bachelor’s
Degree in Law, a Master’s Degree in Literature from the University of
Sindh, a Masters Degree in Business Administration from USA and a
Doctorate in Public Administration from Karachi University.
interview

3. June 201312 June 2013 13
T
he National Bank of Pakistan is one of the largest
commercial banks operating in Pakistan. It has
redefined its role and has moved from a public sector
organization into a modern commercial bank. The Bank’s
services are available to individuals, corporate entities and
government. It continues to act as a trustee of public funds
and as the agent to the State Bank of Pakistan (in places
where SBP does not have presence). It has diversified its
business portfolio and is today a ead player in the debt equity
market, corporate investment banking, retail and consumer
banking, agricultural financing, and treasury services and is
showing growing interest in promoting and developing the
country’s small and medium enterprises and at the same time
fulfilling its social responsibilities as a responsible corporate
citizen.
causes whenever the need arose.
The bank has taken various measures
to facilitate overseas Pakistanis to send
their remittances in a convenient and
efficient manner. In 2002 the Bank signed
an agreement with Western Union for
expanding the base for documented
remittances. More recently it has started
the Electronic Home Remittances Project.
This introduces a technology-based system
to handle inward remittances efficiently, by
ensuring that the Bank’s branches keep
a track of the remittances received from
abroad till its final receipt. The Bank has
been signing different agreements with
other leading players in the remittance field
for ensuring that remittance services are
available to most overseas Pakistanis.
A number of initiatives have been taken,
in terms of institutional restructuring,
changes in the field structure, in policies
and procedures, in internal control systems
with special emphasis on corporate
governance, adoption of Capital Adequacy
Standards under Basel II framework, in the
up-gradation of the IT infrastructure and
developing human resources.
NBP is proud to expand its range of
products and services by including Shariah-
compliant banking products, available
through dedicated Islamic Banking
branches. Each Islamic Banking branch
is fully equipped to cover all aspects of
Islamic financial transactions.
National Bank of Pakistan has built an
extensive branch network with over 1297
branches in Pakistan and operates in major
business centres abroad. The domestic
branch network has been automated and is
online.
The Bank has representative offices in
Beijing, Tashkent, Chicago and Toronto. It
has agency arrangements with more than
3000 correspondent banks worldwide.
In today’s competitive
business environment, NBP
needed to redefine its role and
shed the public sector bank
image in exchange for that of a
modern commercial bank. It has
offloaded 23.2 percent share in
the stock market and while it has
not been completely privatized
like the other three public sector
banks, partial privatization has
taken place. It is now listed on the
Karachi, Islamabad and Lahore
Stock Exchanges.
The National Bank of Pakistan
is a progressive, efficient, and
customer focused institution. It
has developed a wide range of
consumer products to enhance
business and cater to the
different segments of society.
Some schemes have been
specifically designed for the low
to middle income segments such
as NBP Advance Salary, NBP
Saiban, NBP Kisan Dost and NBP
Cash n Gold.
The bank has implemented
special credit schemes for
agriculture, business and
industries, it offers to Qarz-e-
Hasna loans to students and
has in place a self employment
scheme for unemployed persons
plus a public transport scheme.
The Bank has also expanded its
range of products and services
to include Shariah-compliant
Islamic Banking products. For
the promotion of literature, NBP
recently initiated the Annual
Awards for Excellence in
Literature. NBP will extend annual
awards to the best books in Urdu
and in all prominent regional
languages published during the
defined period. Patronage from
NBP would help creative work in
the field of literature. The Bank
is also the largest sponsor of
sports in Pakistan. It has provided
generously to philanthropic
Focus on economic growth
National Bank of Pakistan
10 Years Financial Highlights
cover story