Bank stocks drag Karachi index down 145 points

Karachi: Pakistan's Karachi Stock Exchange 100 Index fell from a record, losing 145.41 points, or one per cent, to close at 14,934.30.

National Bank of Pakistan, the nation's biggest lender by assets, fell Rs7.35, or 2.7 per cent, to Rs265.55. National Bank fell after investors judged its rise in the last five trading sessions as excessive, said Atif Malik, research analyst at JS Global Capital.

The stock rose 4.3 per cent in five days on expectations of higher earnings. The bank said yesterday full-year profit rose 12.5 per cent.

Net income rose to Rs19.4 billion ($310 million), or Rs23.78 a share, in the year ended December 31 from Rs17.25 billion, or Rs21.15, a year earlier, the Karachi- based lender said. That's higher than the Rs19.1 billion mean estimate of eight analysts surveyed.

National Bank increased loans that helped the company as it had to put aside more funds after the central bank stopped lenders from using collateral for loans as provisions.

"Despite higher provisioning, the bank managed to improve the bottom line'' from "interest and non-interest income,'' said Malik.

State Bank of Pakistan amended the regulation on provisions for loans on October 12 to cover increasing demand for credit in South Asia's second-biggest economy. National Bank's provisions against loans and writeoffs rose to Rs4.7 billion in 2007 from Rs3.1 billion a year ago, it said.

Bank of Punjab, Pakistan's biggest regional fin-ancial-services company, fell Rs5.25, or 4.9 per cent, to Rs100.25. The bank had to make higher provisions against non-performing loans in its 2007 full-year accounts.