Pakistan's NBP 2006 profit boosted by banking spreads

KARACHI, Feb 26 (Reuters) Pakistan's largest bank, National Bank of Pakistan (NBP) , reported a 35.5 percent rise in net profit for the full year 2006 on Monday as higher interest rates brought greater returns on lending.

State-run NBP reported a net profit of 17.22 billion rupees (3.2 million) for the year to Dec. 31, 2006, up from 12.71 billion rupees last year.

The result was below a range of 17.90 billion rupees to 19.50 billion rupees (5 million-1 million), forecast by five analysts surveyed by Reuters.

In a statement to the Karachi Stock Exchange, NBP also announced an final cash dividend of 4 rupees per share along with a 15 percent bonus share issue.

''Net interest margins rose due to an increase in lending rates in the wake of a tighter monetary policy but stagnant deposit rates,'' said Atif Malik, analyst at brokers JS Global Capital.

The company's earning per share for the period stood at 24.01 rupees, compared with 21.51 rupees in 2005.

Pakistan's central bank has followed a tight monetary policy in recent years, pushing interest rates higher to counter inflation.

This has resulted in an increase in banks' profits, especially as banks have not increased deposit rates to reduce spreads against lending rates.

NBP is the country's biggest bank with a market capitalisation of