SBP’s profit soars by 53% YoY to Rs1.14tr in FY23

October 24, 2023

October 24, 2023 (MLN): The State Bank of Pakistan (SBP) has revealed its financial results for the fiscal year ended June 30, 2023 (FY23) as per which the central bank posted a profit of 1.143 trillion, compared to a profit of Rs749.43 billion reported in the Same Period Last Year (SPLY), depicting a surge of 52.51% YoY.

Going by the results, the central bank’s net profit earned on financial assets surged by 2.2x YoY to Rs2.04tr in FY23, compared to Rs935.72bn earned in FY22.

This increase is attributed to the share of profit earned on financial assets measured at amortized cost, which the central bank reported at Rs2.19tr in FY23, showing a massive jump of 2.23x YoY.

Moreover, the net gains on the financial assets were further supported by the massive decrease in markup expense as it fell by 2.44x YoY.

The SBP saw a significant shift in its Fair Valuation Adjustment for COVID-related loans (net). In FY22, the adjustment for these loans stood at a negative Rs63.22bn.

However, during the current review period, this adjustment turned positive, amounting to Rs230.89 million.

Conversely, the central bank recorded a massive exchange loss of Rs875.02bn in FY23, compared to the Rs62bn loss reported in SPLY.

The incomes generated through dividends and associates went down by 4.89% YoY and 4.81% YoY to Rs605m and Rs729.56m respectively during the review period.

While the commission and other income soared to Rs9.19bn and 37.47bn in FY23.

It is worth mentioning that the regulator successfully managed to reduce its operating loss by 94% YoY to just Rs525.48m.

On the expense side, the operating expenses increased by 12.85% YoY to Rs72.15bn in FY23, compared to running costs of Rs64.44bn incurred in the SPLY.

The increase in expenses is linked to a surge in general administrative expenses and printing charges for banknotes and prize bonds, which amounted to Rs42.74bn and Rs17.78bn, respectively. These figures reflect a year-on-year rise of 13.87% and 14.86%.

The profit and loss statement reveals that the SBP experienced a significant increase in total provisions, amounting to 2.38x the previous year, reaching Rs896.56bn in FY23.

Furthermore, the net charge for credit loss allowance on financial instruments reported by the SBP significantly increased to Rs213.33m during the review period.

In terms of taxation, the central bank paid a higher tax of Rs1.88bn compared to the Rs1.43bn incurred in FY22.

Consolidated Profit and Loss account for the fiscal year ended June 30, 2023 (Rupees in '000)
	FY2023	FY2022	% Change
Discount, interest/mark-up and /or profit earned on financial assets measured at:
Amortized cost	2,189,229,399	980,552,790	123%
Fair value through profit or loss	3,298,807	15,764,901	-79%
Interest/mark-up expense	(147,668,480)	(60,596,149)	144%
	2,044,859,726	935,721,542	119%
Fair valuation adjustment on COVID loans – net	230,894	(63,223,220)	–
Commission income	9,194,308	6,689,594	37.44%
Exchange loss- net	(875,024,851)	(62,023,082)	–
Dividend income	605,000	636,129	-4.89%
Share of profit from associates	725,955	762,677	-4.81%
Other operating loss- net	(527,475)	(8,762,076)	-93.98%
Other income – net	37,474,478	5,489,838	–
	(827,321,691)	(120,430,140)	–
Operating expenses
Banknotes and prize bond printing charges	17,775,046	15,475,543	14.86%
Agency commission	11,088,067	11,047,024	0.37%
General administrative and other expenses	42,741,499	37,535,472	13.87%
Provision / (reversal of provision) against			–
Other doubtful assets	896,123	376,377	138.09%
Others	439	(363)	–
Charge of credit loss allowance on financial instruments – net	213,328	1,886	–
Total operating expenses	72,714,502	64,435,939	12.85%
Profit before taxation	1,144,823,533	750,855,463	52.47%
Taxation	1,878,150	1,430,915	31.26%
Profit after taxation	1,142,945,383	749,424,548	52.51%