Shares of National Bank of Pakistan (PSX: NBP) came under heavy selling pressure on Thursday after the market reacted to news that the next hearing in the bank’s long-running pension case has been scheduled for February 13, 2026. The development revived near-term uncertainty among investors, despite the matter having been largely settled in earlier court rulings.
At the time of reporting, NBP’s stock was trading at Rs262.89, reflecting a decline of Rs23.53 or 8.21 percent compared to the previous session’s close. The selling pressure emerged early in the session, with the stock touching an intraday low of Rs257.77 around 9:43 am, before recovering modestly. The sharp intraday move placed NBP among the weakest performers in the banking segment of the Pakistan Stock Exchange during morning trade.
The case in question pertains to pension payments mandated for retired employees of the bank. The issue has remained a significant overhang for NBP for several years, periodically resurfacing in market discussions whenever there is movement in court proceedings. On March 20, 2024, the Supreme Court ruled in favour of approximately 11,500 retirees, directing the bank to disburse nearly Rs60 billion in pension-related payments. The verdict was viewed as a decisive conclusion to the dispute at the time.
Subsequently, National Bank of Pakistan filed a review petition seeking reconsideration of the ruling. That petition was dismissed by the court, effectively upholding the original decision and closing the door on further legal relief for the bank. Following the conclusion of the long-standing litigation in June 2024, NBP moved to reflect the financial impact of the ruling in its books.
As part of this adjustment, the bank recognised a one-off charge of Rs49 billion, along with recurring annual charges of approximately Rs8.5 billion from 2024 onwards. This accounting treatment was aimed at fully absorbing the pension liability and removing a major source of uncertainty from the bank’s financial outlook. At the time, analysts broadly viewed the move as clearing a structural risk that had weighed on the bank’s valuation and investor sentiment for an extended period.
NBP’s management has consistently maintained that the pension liability, calculated on the basis of updated and fresh actuarial assessments, remains manageable within the bank’s financial capacity. According to the bank, the recognised charges do not threaten its capital adequacy or overall financial stability and allow management to continue focusing on balance sheet restructuring, asset quality improvement, and operational reforms.
Despite these assurances, the scheduling of a fresh hearing has prompted a cautious response from the market. Investors appear concerned about the possibility of incremental developments, clarifications, or procedural outcomes that could have short-term implications, even if the core financial exposure has already been recognised. The reaction highlights the sensitivity of banking stocks to legal and regulatory developments, particularly when they relate to employee benefits and long-term liabilities.
Market participants are now closely watching the February 13 hearing for any updates that could influence near-term trading sentiment in NBP shares. While no reversal of the Supreme Court’s earlier ruling is expected, even limited commentary or procedural directions could affect investor positioning in the short run. For longer-term investors, attention remains focused on how effectively NBP continues to execute its restructuring strategy while managing legacy obligations within a regulated banking environment.
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