A.P. Moller – Maersk reports solid q1 results
A.P. Moller – Maersk (Maersk) reports a first quarter of 2023 in line with expectations. Continued destocking and easing of congestions implied lower volumes across all segments. Revenue declined by 26% to USD 14.2bn from USD 19.3bn. EBITDA decreased to USD 4.0bn from USD 9.1bn, and EBIT to USD 2.3bn from USD 7.3bn. The full-year guidance remains unchanged, with Q1 expected to be the strongest quarter of the year.
“We delivered a solid financial performance in a challenging market with lower demand caused by a continued destocking. Visibility remains low for the remainder of the year and moving through this market normalisation, we remain focused on proactively managing costs. As we adjust to a radically changed business environment, we continue to support our customers in addressing their supply chain challenges. We are pleased to note that customers continue to value the integrated logistics solutions and close partnership we provide,” says Vincent Clerc, CEO of Maersk.
Ocean revenue decreased by USD 5.7bn to USD 9.9bn. Profitability for the quarter was significantly lower compared to Q1 2022, primarily due to lower freight rates and volumes, as demand softened. However, proactive cost containment measures have been successful, and the Ocean contract negotiation season is proceeding in line with expectations.
In Logistics & Services, revenue grew 21% to USD 3.5bn driven by the consolidation of acquisitions. Organically, Q1 was affected by lower volumes caused by inventory corrections, especially with North American and European retailers, which was partially offset by new commercial wins. Additionally, underlying business performance was impacted by lower rates in Air Freight and weaker demand in eCommerce.
In Terminals, the top line was affected by lower volumes and storage income, both a factor of lower demand and the release of port congestion. Revenue in Terminals decreased to USD 876m from USD 1.1bn, but strong cost control contributed to continued solid financial performance in Terminals.
Q1 was marked by continued destocking in Europe and especially North America. While it is difficult to predict the exact timing, Maersk expects volumes to gradually pick up in the second half of the year.
Guidance for 2023
Guidance remains unchanged and is still based on the expectation that inventory correction will be complete by the end of H1, leading to a more balanced demand environment, that 2023 global GDP growth remains muted, and that the global ocean container market will grow in a range of -2.5% to +0.5%. Ocean expects to grow in line with market.
In Q1 2023, A.P. Moller – Maersk recognised USD 374m of the previously communicated USD 450m impairment and restructuring charge for the A.P. Moller – Maersk brands.
Cash distribution to shareholders
A total distribution of cash to shareholders of USD 10.1bn took place during Q1 2023 through dividends paid of USD 9.4bn and share buy-backs of USD 718m.
Financial highlights
IBA Karachi and synapse to foster compassion and tolerance
Institute of Business Administration (IBA), Karachi and Synapse, Pakistan Neuroscience Institute launched Tabeer – (IBA x Synapse) Program for the IBA students, staff, and faculty. Tabeer aims to foster a culture of compassion, effective communication, and creative leadership (3Cs) within the IBA community. The first large assembly to inaugurate this program was held on Friday at IBA, Main Campus.
Speakers included, Founder and CEO Synapse, Dr. Ayesha Mian; Educationist, Human Rights Activist and Social Nationalist, Dr. Arfa Sayeda Zehra; and IBA alumnus and Radio Presenter, Mr. Adeel Azhar, who participated in a fireside chat.
Dean Student Affairs IBA, Maheen Ghauri commenced the session and said that through this initiative, the management hopes to bring a positive change at IBA, aspiring for an empathetic and a kinder IBA community.
Executive Director IBA, Dr. S Akbar Zaidi welcomed the esteemed speakers and attendees. He introduced Synapse, Pakistan and said that these conversations at IBA were an effective way of focusing on mental health and teaching individuals on how to communicate and interact with each other. Dr. Zaidi added that more such initiatives would take place at IBA to inculcate tolerance and a congenial environment. He said that we need to acknowledge that the world is changing and to make IBA more accepting and tolerant of the evolving practices.
Highlighting the objectives of Tabeer, Dr. Mian said that a decline in mental wellbeing in youth is a major issue in institutes of higher education, world over. She said that it was a step in the right direction for IBA to focus on the mental wellbeing of its students. She added that IBA has a strong culture of learning and resilience and needs to consolidate this legacy for the next 50 years and contribute towards the progression of the country. She emphasized practicing self-reflection as individuals and as an institute and evaluating our contributions towards bringing a change in society.
Dr. Zehra spoke about the components that make a society. She said that identity is not just associated with individuals but also with society. She added that religious values and ethics are integral for a community to thrive. She also emphasized practicing compassion and tolerance. Dr. Zehra congratulated Dr. Zaidi on initiating this initiative and Synapse for ensuring it.
Mr. Azhar appreciated IBA for focusing on the mental health of its students. He said it was a great initiative and urged the students to make the most of this opportunity.
A Q&A session followed the discussion.
Earlier, Office of Student Affairs, IBA, signed an MoU with Synapse, Pakistan to launch the Tabeer – (IBA x Synapse) Program. This program includes a series of community-based projects which will be counted towards students’ Social Internship requirement at IBA. They will work in teams on social projects during their summer break, with faculty and staff mentors as part of their group project. These projects will range from hands-on-work to online virtual classrooms. The initiative consists of several components. The first component is a series of workshops and trainings, which will educate the IBA fraternity on the importance of the 3Cs. These sessions will be facilitated by experts in the fields of psychology, communication, and leadership.
The event concluded with Ms. Ghauri presenting mementos to the panelists.
Shan Shares Launches Innovative Snapchat Filter to Help Combat Hunger
Shan Shares, the corporate entity of Shan Foods, extending its partnership with Saylani Welfare International Trust in a bid to combat world hunger, has launched a Snapchat filter that lets users help feed less privileged individuals.
Shan Shares is the CSR identity of Shan Foods that personifies the brand’s corporate citizenship and is rooted in the United Nations Sustainable Development Goals (SDGs). Zero hunger, SDG # 2, is one of the main pillars of its objectives. Through this latest initiative, Shan Shares and Saylani Welfare International Trust have made it simple for people to support one another and contribute to ending world hunger using the Snapchat filter. Users can open Snapchat, take a photo with the Shan Shares filter, and share it. For each snap of a meal taken using the Shan Shares lens, Shan Shares will share food with one person through Saylani Welfare Trust.
The partnership between Shan Shares and Saylani Welfare Trust was forged earlier last year, under which, thousands of people have been provided with meals through food trucks and free meal setups, to date. Taking it a step further with the release of the innovative Snapchat filter, Shan Shares aims to give back to the society and support fellow citizens of the country during the ongoing difficult economic situation while also fostering the sentiment of sharing among people.
This is in line with the mutual mission of Shan Shares and Saylani Welfare International Trust which is committed to making life better for individuals in Pakistan and creating a better, more nourished planet.
Silkbank attracts merger interest from UBL
Silkbank Limited, a key player in Pakistan’s Consumer Banking market has attracted merger interest from UBL, one of the leading financial institutions in the country. This potential merger signifies the importance of Silkbank’s strong business portfolio and impressive growth prospects.
Silkbank has consistently demonstrated a robust performance in recent years in the Consumer Banking category with one of the top performing businesses of the industry. Silkbank’s Branch Banking network is also strategically located across 29 major cities. The bank has also been developing its Digital infrastructure and capabilities enabling it to offer innovative and convenient Digital solutions to its customers. The Bank is known for its personalized and responsive service to its customers that fosters long-term relationships.
Silkbank has also recently formed a REIT with M/s Arif Habib Dolmen REIT Company on Bank owned real estate which is expected to generate substantial profits in the coming years.
The potential merger with UBL will provide a boost to the combined entity to further expand the operations into flagship Retail & Consumer portfolios and will help accelerate the growth.
UBL and AKS IQ to implement advanced anti-money laundering solution.
United Bank Limited (UBL) has partnered with AKS iQ, a leading Reg Tech company, to implement an advanced trade-based anti-money laundering (TBML) solution in line with the Bank’s commitment to innovation and digitization.
This high-tech solution will enable UBL to execute import and export transactions in a highly automated environment while conducting Anti-Money Laundering (AML) checks with greater flexibility, mitigate operational and compliance issues and facilitate data-driven decision-making across key departments, improving service standards, customer experience and reducing risk levels.
The partnership agreement was signed at UBL’s Head Office in Karachi by Mr. Shazad G. Dada, President & CEO, UBL and Mr. Yahya Ghaznavi, CEO, AKS iQ. Senior executives from both companies, including Mr. Sajid Hussain, Group Executive – Operations, Mr. Irfan Farooq Memon, Group Executive – Compliance, Mr. Muhammad Faisal Anwar, CIO, from UBL, and Mr. Omer Manya, CDO and Dr. Asim Imdad, CIO from AKS iQ, were also present at the signing ceremony.
At the event, Mr. Shazad G. Dada, President & CEO UBL said “As Pakistan’s most progressive and innovative bank, UBL is committed to implementing state-of-the-art technology systems to enhance customer experience and improve operations. This key partnership will enable the Bank to enhance the management of its existing risk portfolio, mitigate operational and compliance issues and facilitate data-driven decision-making across key departments.”
Mr. Yahya Ghaznavi, CEO of AKS iQ, shared his enthusiasm for the collaboration, saying, “We are proud to partner with UBL, a bank committed to innovation and automation. Our fully automated, AI-enabled trade-based AML solution will enhance efficiency and help achieve a paperless environment, contributing to a safer and sustainable financial ecosystem in the country. This partnership underscores AKS iQ’s dedication to offering cutting-edge trade automation and compliance solutions that enable financial institutions to efficiently navigate the evolving operational complexities and regulatory landscape.”
Bank Alfalah partners with TPL to offer tailor-made complementary insurance solutions to its Employee Banking Customers.
Bank Alfalah has signed a Memorandum of Understanding (MOU) with TPL Life and TPL Insurance to provide customized insurance solutions for its Employee Banking Customers. This partnership aims to offer free telehealth, accidental death coverage, and financial security to Bank Alfalah’s Employee Banking customers.
These customized insurance solutions offered by TPL Life & TPL Insurance will cover a range of areas including health, life, and cash withdrawal insurance. These solutions are designed to safeguard the financial future of Bank Alfalah’s employee banking customers and protect them against any unforeseen circumstances that may arise.
Speaking at the occasion, Mr. Ali Jameel, CEO of TPL Corp said, “This collaboration is a testament to our commitment to supporting banking institutions in delivering dynamic value propositions to their customers. This is the first step to building a long-term partnership between Bank Alfalah and TPL Group and we look forward to expanding our efforts into various other consumer segments and creating further avenues for sustainable business growth.”
In addition, Mr. Atif Bajwa, Bank Alfalah’s President, and CEO said, “We are excited to partner with TPL Life and TPL Insurance to offer our Employee Banking Customers customized insurance solutions that cater to their unique needs. This partnership reflects our commitment to providing innovative solutions that add value to our customer’s lives.”
The ceremony was held at Bank Alfalah’s head office in Karachi and was witnessed by the senior management of both entities, including Mr. Saad Nissar (CEO, TPL Life), Mr. Muhammad Aminuddin (CEO, TPL Insurance), along with Mr. Humayoon Asghar (Chief Strategy and Retail Officer, TPL Life), Ms. Mehreen Ahmed (Group Head Retail Banking, Bank Alfalah), Mr. Amaar Naveed Ikhlas (Head – Payment Solutions, Bank Alfalah) and Mr. Ibtisam Saleem (Head – Employee Banking, Bank Alfalah).
This partnership between Bank Alfalah and TPL is a solid step forward toward achieving the bank’s strategic objective of becoming the preferred financial partner for its customers.
Standard Chartered Pakistan delivered a strong financial performance in Q1
Standard Chartered Bank (Pakistan) Limited delivered a strong profit before tax of PKR 16.1 billion for Q1’23, registering an increase of 37 per cent year on year. Performance was driven by strong income growth, as well as continued cost and risk discipline.
Overall revenue grew by 43 per cent to deliver highest ever quarterly top-line of PKR 20.4 billion, with positive contributions from all segments. Operating expenses were well managed through efficiencies and disciplined spending with an increase of 25 per cent from comparative period, in line with inflation. Moreover, prudent risk approach coupled with recoveries of bad debts led to a low net charge of PKR 0.2 billion in Q1’23.
With a diversified product base, the Bank stands well positioned to cater for the needs of its clients. On the liabilities side, the Bank’s total deposits stand at PKR 729 billion, up by PKR 10.3 billion, whereas current and saving accounts grew by PKR 28 billion (up 4 per cent) since the start of 2023 and comprise 98 per cent of the deposit base. On assets side, net advances increased by 6% and the Bank continues to follow a prudent lending approach. With a strong Return on Equity (ROE) of 42.3% for the period and a Capital Adequacy Ratio (CAR) of 16.8%, the Bank remains well positioned for future growth.
Standard Chartered continues to make good progress against its strategic priorities. The global network differentiates the Bank for its clients, bringing forth innovative solutions, product specialisation and structured offshore offerings. At all times the Bank strives to maximise the contribution to State Bank’s initiatives. In line with the State Bank’s efforts on financial inclusion, with enhanced digital offering, Standard Chartered is now able to reach more clients across the country and provide them with convenience of opening accounts as well as subscribing to products and banking services online. Overall, the Bank’s transformation journey stands well-curated, closely aligned with the Pakistan’s landscape and helping lift participation through digitization. Sustainable finance along with digital solutions for clients and their ecosystem stay as areas of keen focus. The Bank continues with its efforts under the initiative ‘Futuremakers by Standard Chartered’ to tackle inequality and promote greater economic inclusion for young people in the community.
Commenting on the results, Mr. Rehan Shaikh, Chief Executive Officer, Standard Chartered Bank (Pakistan) Limited said, “Our results for the first quarter of 2023 amid a tough external environment have set a strong and optimistic tone for the year and we plan to build on this momentum going forward. The results demonstrate solid foundations and a clear path towards delivering on our strategic priorities. They are also reflective of our commitment to the country and our desire to capture opportunities in the market whilst providing best in class banking services to our clients. We continue to become more efficient and innovative operationally while investing in technologies and capabilities of the future. Our pivot to digital continues based on adopting best practices, leveraging the network’s expertise and incorporating feedback of our clients in our offerings.
We are thankful to our clients and business partners for their ongoing trust in our capabilities and to our associates and colleagues for their commitment, passion and hard work in supporting the Bank in its journey.”
MCB posts profit before tax of Rs23.02bn (+54%) for Q1
The Board of Directors of MCB Bank Limited (MCB) in its meeting held under the Chairmanship of Mian Mohammad Mansha on April 27, 2023, reviewed the performance of the Bank and approved the condensed interim financial statements for the first quarter ended March 31, 2023. The Board of Directors has declared first interim cash dividend of Rs. 6.0 per share i.e. 60% for the quarter ended March 31, 2023.
With a strong build up in core earnings, MCB’s Profit Before Tax (PBT) for the first quarter of 2023 increased to Rs. 23 billion with an impressive growth of 54%. Profit After Tax (PAT) posted a growth of 46% to reach Rs. 13 billion; translating into an Earning Per Share (EPS) of Rs. 11.02 compared to EPS of Rs. 7.52 reported in corresponding period last year.
On the back of strong volumetric growth in current account and timely repositioning within the asset book, net interest income for 1Q’23 increased by 66% over corresponding period last year. YoY average current deposits of the Bank registered a remarkable growth of Rs. 178 billion (+31%).
Non-markup income increased to Rs. 5.9 billion (+3%) against Rs. 5.7 billion in the corresponding period last year with major contributions coming in from fee commission income. The Bank registered a growth of 27% in fee commission with income from trade and guarantee business up by 59%, cards related income up by 42% and income from home remittances up by 39%.
The Bank continues to manage an efficient operating expense base and manage costs prudently. Amidst an exceptionally persistent high-inflation, impact of sharp currency devaluation and rapidly escalating fuel and utility costs, the operating expenses of the Bank reported at Rs. 11.8 billion (+25%). The cost to income ratio of the Bank improved significantly to 32.77% from 39.65% reported in corresponding period last year.
Proactive monitoring and recovery efforts led to a net provision reversal of Rs. 293 million against non-performing loans (NPLs) for the period under review. Persistent focus on maintaining a robust risk management framework encompassing structured assessment models, effective pre-disbursement evaluation tools and an array of post disbursement monitoring systems has enabled MCB to effectively manage its credit risk. The Non-performing loan (NPLs) base of the Bank was reported at Rs. 55.3 billion. The Bank has not taken FSV benefit in calculation of specific provision against its non-performing loans (NPLs) base. The coverage and infection ratios of the Bank were reported at 81.88% and 7.87%, respectively.
On the financial position side, the total asset base of the Bank grew by 1.39% to Rs. 2.11 trillion. Analysis of the assets mix highlights that net investments and gross advances have decreased by Rs. 33 billion (-3%) and Rs. 95 billion (-12%) over December 31, 2022 respectively, whereas Lending to Financial Institutions increased by Rs. 71 billion (+140%).
The Bank continued its focus on building no cost deposits, leading to a robust growth of Rs. 178 billion (YoY: +31%) in average current deposits. The average current to total deposits ratio improved to 51.2% in Q1-2023 from 40.1% in Q1-2022. The domestic cost of deposits was 7.15% as compared to 4.91% in the corresponding period of last year due to the exceptional increase in interest rates during the period.
Return on Assets and Return on Equity significantly improved to 2.49% and 29.63% respectively, whereas the book value per share was reported at Rs. 153.29.
During the period under review, MCB attracted home remittance inflows of USD 786 million to further consolidate its position as an active participant in SBP’s cause for improving flow of remittances into the country through banking channels; with market share improving to 12.3% compared to 11.4% in the corresponding period of last year.
While complying with the regulatory capital requirements, the Bank’s total Capital Adequacy Ratio (CAR) is 18.01% against the requirement of 11.5% (including capital conservation buffer of 1.50% as reduced under the BPRD Circular Letter No. 12 of 2020). Quality of the capital is evident from Bank’s Common Equity Tier-1 (CET1) to total risk weighted assets ratio which comes to 15.94% against the requirement of 6%. Bank’s capitalization also resulted in a Leverage Ratio of 6.15% which is well above the regulatory limit of 3.0%. The Bank reported Liquidity Coverage Ratio (LCR) of 245.14% and Net Stable Funding Ratio (NSFR) of 138.35% against requirement of 100%.
Pakistan Credit Rating Agency re-affirmed credit ratings of MCB at “AAA” and “A1+” for long term and short term respectively, through its notification dated June 23, 2022.
The Bank, on a consolidated basis, is operating the 2nd largest network of more than 1,600 branches in Pakistan. The Bank remains one of the prime stocks traded in the Pakistani equity market with 2nd highest market capitalization in the industry.
Standard Chartered and BII sign $40m risk-participation accord
- The programme aims to create a long-term, sustainable local currency lender in Pakistan
Standard Chartered Bank Pakistan Limited recently signed an unfunded Risk-Participation Agreement with British International Investment (BII), the UK’s development finance institution and impact investor, to provide support to the microfinance sector in Pakistan. Subject to authorisation from the State Bank of Pakistan, the two institutions will enter into a USD40 million programme, under which BII will cover 50 per cent of Standard Chartered’s risk on local currency loans to the target sector.
Local currency lending to microfinance institutions in Pakistan is relatively low and the sector relies on foreign currency lending which accounts for approximately 50 per cent of microfinance funding. Through this programme, BII will help Standard Chartered expand its outreach across the microfinance sector by establishing a long-term local currency lender in the market, in line with the bank’s vision for broader financial inclusion.
The Risk-Participation Agreement between Standard Chartered and BII reflects the companies’ joint vision to create a long-term, sustainable local currency lender in Pakistan and will also allow the Bank to support the policy goals of the State Bank of Pakistan and prioritise lending to sectors such as agriculture, agri-adjacent businesses, SMEs, and women entrepreneurs. It also helps contribute to the UN’s Sustainable Development Goals on enhancing resilience to economic shocks (SDG1), ensuring economic opportunities for women (SDG 5) and increasing the formalisation and growth of SMEs (SDG8).
The programme will focus on ‘Wholesale Microfinance Lending’ offering loans to microfinance providers so they can maintain and extend more credit to customers. This will also enable them to better manage cashflow, maintain, and grow their businesses. Through such partnerships, Standard Chartered will be able to drive financial inclusion across traditionally underbanked sectors and ensure access to financing while creating opportunities for sustainable growth.
The agreement was marked by a signing ceremony in Karachi to mark BII’s 75th anniversary. The DFI also celebrated 35 years and over $350 million worth of investment in Pakistan as well as a renewed commitment to financial inclusion.
Present at the signing, Sarmad Lone, Regional Head, Client Coverage Corporate, Commercial & Institutional Banking Africa & Middle East, Standard Chartered Bank said: “We strive to expand the reach and scale of financial services; expanding accessible banking and connecting clients to opportunities that promote access to finance and economic inclusion. This collaboration allows us to develop capacity to support ventures that are focusing on SME and agri-adjacent sectors. It will also help us build our capacity to support innovation in financial services”.
Sarah Mooney, British Deputy High Commissioner to Karachi and Director of Trade Pakistan, said: “I am delighted that BII continues to provide strategic investment to Pakistan’s economy. Innovative financial products such as this are key to empowering small businesses, creating jobs, and increasing sustainable economic growth and cooperation. This agreement evidences UK’s commitment to achieve sustainable development goals and working together with all Commonwealth members for prosperity and trade.”
Habib Yousuf, Regional Director, South Asia at British International Investment, added: “This facility represents an opportunity to deepen our relationship with Standard Chartered Bank and establish a credible banking partnership in the country to support the long-term development of the microfinance sector. At BII a key part of our mandate is to support inclusive economic growth and this investment will increase access to finance for SMEs across Pakistan, with a focus on those in the most challenging contexts.”
NBP’s strong performance continues
- The Bank earns Pre Tax Profit of PKR 18.2 Billion, 13.2% up YoY
The Board of Directors of National Bank of Pakistan recently approved the interim condensed financial statements for the quarter ended March 31, 2023.
For Q1’23, the Bank generated gross interest income of PKR 192.4 Bn i.e. more than double the PKR 79.2 Bn for the similar period of 2022. The Bank’s investments portfolio averaged PKR 3,519.2 Bn (Mar’22:PKR 1,984.6 Bn) and generated mark-up/interest income of PKR 146.2 Bn. Whereas, the placements averaged PKR 66.2 Bn (Mar’22:PKR 110.6 Bn) and generated mark-up income of PKR 2.7 Bn (Mar’22: PKR 2.7 Bn). During the quarter, the Bank’s loan book averaged PKR 1,411.4 Bn and generated mark-up income of PKR 43.5 Bn i.e. PKR 17.3 Bn or 66.2% higher than PKR 26.2 Bn for Q1’2022. This significant growth in earnings was achieved through both, a volumetric growth, as well as the favourable YoY rate variance.
Likewise, cost of funds for the period also recorded a significant YoY increase and amounted to PKR 159.9 Bn as against PKR 53.4 Bn for the corresponding period of 2022. Consequently, net interest income for the period closed at PKR 32.5 Bn, depicting a 26.1% increase against PKR 25.8 Bn of Q1’’22. Non-fund income for the period stood at PKR 7.5 Bn which is PKR 0.6 Bn or 7.3% lower than PKR 8.1 Bn of Mar’22. Reflecting the inflationary pressures and the Bank’s continued investment into its IT systems & infrastructure, operating expenses amounted to PKR 21.2 Bn which is 26.3% higher YoY.
The Bank is investing significantly to improve & strengthen its IT infrastructure & systems for creating synergies in business processes, rationalising operating costs and achieving higher efficiency. Overall, operating costs translate into a cost-to-income ratio at 52.9% which is in line with the industry norms. Positively, provision charge amounted to PKR 0.68 Bn as compared to PKR 1.1 Bn a charge for Q1’ 2022. As taxation charge amounted to PKR 7.5 Bn, profit after-tax stood at PKR 10.7 Bn i.e. PKR 0.85 Bn or 8.7% higher than PKR 9.8 Bn for Mar’22. This translates into Earnings per Share of Rs. 5.02 as compared to Rs. 4.62 for Mar’22.
Total assets of the Bank amounted to PKR 6,055.6 Bn, depicting a 15.6% increase from PKR 5,240.4 Bn levels of December 31, 2022. In the prevailing high interest rate scenario, the Bank is pursuing a prudent loan growth strategy for better credit risk management. Accordingly, the loans & advances of the Bank amounted to PKR 1,452.9 Bn i.e. slightly above the PKR 1,438.6 Bn at end of the year 2022. Given the limited quality loan growth market and a steady growth in customer deposits, excess liquidity with the Bank is mostly placed in shorter-term government securities to capitalize on price volatility in the currently hiking policy rate environment. The Bank is maintaining a diversified investment portfolio across zero risk weighted GoP instruments, high dividend yielding equities and other interest-bearing financial instruments.
As at March 31, 2023, the Bank’s investments amounted to PKR 3,799.7 Bn. The Bank achieved approx. 12% growth in deposits that stood at PKR 2,976.2 Bn as compared to PKR 2,666.2 Bn of December 31, 2022. Major share of the Bank’s funding comes from customer sticky deposits that contribute PKR 2,706.5 Bn or 90.9% of the total deposits with CASA ratio at 79.4%. Liquidity Coverage Ratio and Net Stable Funding Ratio remained over the regulatory requirements as the same stood at 166% (Dec’22:147%) and 273% (Dec’22:251%), respectively vis-à-vis regulatory requirement of 100% for each.
Net Assets amounted to PKR 304.95 Bn translating into a break-up value of PKR 143.3 per share (YE’22: PKR 141.4). Total Capital Adequacy Ratio stood at 20.06% with Tier-1 capital adequacy ratio at 15.37%; as compared to 21.59% and 16.30%, respectively, at YE’22. Other financial soundness ratios are well compliant with applicable regulatory requirements. The Bank enjoys highest credit ratings of AAA / A1+ for both long term and short term respectively as reaffirmed separately by both PACRA as well as VIS Credit Rating Company.
Commenting on the quarterly performance, the Bank’s President/CEO(A), Mr. Rehmat Ali Hasnie, appreciated that the strategic delivery and financial results were testament to the efforts & dedication demonstrated by the Bank’s employees. The Bank is pursuing a major organizational and technological transformation, product enhancement, digitalization and initiatives for promoting financial inclusion with a focus on commercial and rural segments. In parallel with its business growth initiatives, the Bank has also continued to progress via remediation of legacy issues.
As the Nation’s Bank, going forward, NBP’s strategy focuses on enhancing its service quality levels, diversifying its outreach through digitalization, and increasing its products and services suite.
UBL remains at the forefront with Q1 pbt of Rs24.4bn
- Bank records strong growth of 49% in top line revenues and increased vigilance on costs
UBL continues its momentum with solid results with Profit After Tax of Rs. 13.9 billion for Q1’23 as against Rs. 9.5 billion for Q1’22, with a growth of 46% year on year. Earnings per share (EPS) stood at Rs. 11.36 for Q1’23 compared to Rs. 7.78 for Q1’22. The Board of Directors, in their meeting held in Islamabad on April 28, 2023, declared a consistently strong dividend payout of Rs. 11.0 per share for Q1’23. UBL maintains healthy capital levels as the Capital Adequacy Ratio (CAR) stood at 17.6% as at Mar’23, an excess of 5.6% over regulatory minimum requirements and ROE of 28% (Mar’22: 23%).
The Bank’s gross revenues stood at Rs. 42.0 billion, growing by 49%, driven by the buildup in the deposit base and a well-positioned investment portfolio. The Bank earned net markup income of Rs. 33.3 billion in Q1’23, up 55% year on year due to a robust growth in average earning assets and improvement in Net interest margins (NIMs) from 4.3% to 5.2% in Q1’23.
Non-Fund Income (NFI) was reported at Rs. 8.8 billion for Q1’23, contributing 21% to total gross revenues. Fee and commission income of Rs. 4.3 billion was earned in Q1’23, an increase of 11% primarily from fees from branch banking operations, income from debit and credit card fees and doubling of income from trade and guarantee business. The Bank earned foreign exchange income of Rs. 4.3 billion for Q1’23 as against Rs. 1.3 billion last year, due to proactive balance sheet positioning and active trading.
UBL remains the preferred partner to overseas Pakistanis who continue to place their trust in UBL. As a result, the Bank recorded a market share of over 21% within the home remittances space with a net commission income of Rs. 503 million earned in Q1’23.
Despite significant inflationary pressures, UBL improved its cost to income ratio to 35% from 42% last year with a tight control on expenses and continued to focus on cost saving initiatives.
Largest customer base
UBL continues to serve its expanding customer base with a footprint of 1,343 branches (Pakistan: 1,335), deposits of over Rs. 2.1 trillion and net advances of Rs. 711 billion as at Mar’23. In 2023, the bank’s focus remained on building its core deposits with a robust growth of 12% in average current deposits. As a result, the average current to total deposits ratio improved to 47.1% in Q1’23 (up from 45%) and strong CASA ratio of 90%.
UBL remains committed to playing its intermediation role within the economy, with average performing advances growing by 31% to Rs. 826 billion mainly due to strong build up across the Corporate segments. The Bank continued its build up in business scale across the Islamic banking space as the segment loan book averaged Rs. 84 billion for Q1’23, growing by 36%.
Islamic business scaling up
Islamic banking remains a key priority and UBL continues to expand within this fast-growing segment. UBL Ameen’s branch network stands at 150 branches and is further supported by over 500 Islamic Banking Windows (IBWs) within commercial branches (219 IBWs in Dec’22). This has led to a 15.7% year on year growth in UBL Ameen average deposit base of Rs. 169 billion as at Mar’23. The bank sees the Islamic segment as a tremendous growth opportunity and will continue to aggressively expand UBL Ameen’s footprint.
Digital Banking continues to earn accolades
The Bank maintains its focus on building its award-winning digital banking services which have been acknowledged as one of the best in Pakistan. UBL’s digital services envision a word class service proposition for its banking customers, with ease and convenience across all digital channels. The bank has been recognized by national and international institutions for its Mobile banking, Payment initiatives, Augmented and Virtual Reality financial services.
In 2023, the number of financial transactions has increased by 76% accounting for almost 20 million transactions while the value of financial transactions has grown by 91% to over Rs. 1.0 trillion YTD Mar’23. In addition, 50% of the active customers of the bank have shifted towards digital channels which is a clear indication of where the future for banking services lies.
Commenting on the results, Mr. Shazad G. Dada, President & CEO of UBL said: “Our results are a testament of the focus we place on delivering strong shareholder value to our investors and world class service to our customers. We have performed solidly across all core segments and continued to build on our technology platforms and award-winning digital banking capabilities. Our competitive edge remains in establishing ourselves as a reliable business partner to our valued clients, leveraging our network to identify growth opportunities and on our continued investment in our human resources. In these challenging times, we have been fiscally prudent and increased our vigilance on controlling costs which are reflected in the strong improvement in our cost to income ratios. However, none of this could have been achieved without the extraordinary efforts of our 13,500+ staff. I am proud of their resilience, commitment and dedication which remains at the heart of our success.”
Taxable income limit should be increased by 100pc: Zahid Hussain
Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain on April 28 said the limit of taxable income should be increased by at least one hundred percent.
Inflation is at 35 percent while food inflation has hit the mark of 47 percent therefore taxable income should be increased from one hundred thousand rupees to two hundred thousand rupees, he said.
Expanses of people have increased many folds, inflation and currency erosion has become uncontrollable, therefore limit of taxable income should be increased, he added.
Mian Zahid Hussain said that the salaried class plays a very important role in the country’s economy, but now the same class is currently suffering due to inflation, which should be given some relief.
Talking to the business community, the veteran business leader said that there are lobbies to protect the interests of traders, industrialists, producers and farmers, but there is no voice for the salaried class that pay a lot of direct taxes.
Mian Zahid Hussain said that in a country where no one likes to pay taxes, heavy taxes are being collected from the salaried class, while some salaried people are being taxed up to thirty-five percent.
Professionals are taxed at 25 to 30 percent, while if general sales tax, petroleum levy and other expenses are added, this tax exceeds to over 50 percent, he observed.
He noted that businessmen transfer the burden of increased expenses to the public or fire employees, while salaried employees have no such facility to reduce their expenses.
The business leader said that skilled people and professionals get up to six times more salary than Pakistan in the Arab countries, therefore people are fleeing the country in record numbers.
This is an irreparable loss for the country, but our policymakers are not ready to understand the implications of this matter.
In addition, the exodus can lead to reduced taxes and the problem of non-availability of manpower for industries and other business sectors, which will be a serious blow to the economy.
He said that all the rich countries, including Arab countries, have developed by understanding the importance of developing human resources, while Pakistan does not pay any attention to this important sector.
Dawlance wins ISO/IEC 17025 certification for energy performance standards
Dawlance is the leading technological enterprise in Pakistan’s Home-Appliances industry. Recently, Dawlance Testing & Verification Lab in Landhi, Karachi has won the ISO/IEC 17025 certification for “Energy Performance Testing” of its Refrigerators. Dawlance is the first manufacturer of Refrigerators in Pakistan to get this international accreditation, for strict compliance with global standards. The certification has been granted by the ‘Pakistan National Accreditation Council’.
This endorsement of Dawlance’s technological competence will increase its export business as well. The company pursues continuous innovations to promise unmatched convenience, saving time and money for consumers. With this prestigious ISO accreditation, Dawlance Labs can also provide testing services to other industries now, as many other companies need certifications and authentication of their products’ performance.
Being a wholly-owned subsidiary of Arcelik – the 2nd largest manufacturer in Europe, Dawlance has extensive resources and financial strength, to invest in research and innovation for improving the quality of life for everyone. It has already developed the most advanced Inverter-Technology that operates on low-voltage, even from alternative energy like Solar-power, or other sources, like; UPS or generators. Dawlance refrigerators are well-reputed for promising more than 55% energy conservation and reliable performance, to ensure environmental sustainability.
The Chief Executive Officer of Dawlance – Umar Ahsan Khan stated that: “For more than 40 years now, Dawlance has been providing unmatched quality, customer care and convenience for the masses. This ISO certification is another proof of the operational excellence of our Lab, as we are focused on energy conservation while enriching our products with revolutionary features to meet the evolving needs, preferences and lifestyles of the consumers.”
Over the years, Arcelik has already invested over 50 Million Euros in Dawlance, to enable more research, innovations and expansions. Our wide range of pioneering products are built on our deep insights into the evolution of technologies and markets. As a responsible corporate citizen, Dawlance is also contributing generously towards broad-based initiatives, for ensuring long-term environmental sustainability and the socio-economic well-being of the masses.
Report on the collapse of Pakistan in 2024 worrying: Mian Zahid
Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain on May 1 said the report of the reputed British publication The Economist that Pakistan will go bankrupt at the beginning of 2024 is very worrying.
This report sheds light on the state of affairs in Pakistan and the perception of Islamabad in the West, he said.
Mian Zahid Hussain said that the analysis of The Economist is considered very important globally. The organization has published a 43-page report on Pakistan which is enough to open the eyes of everyone including politicians, judiciary and elites.
Talking to the business community, the veteran business leader said that the report states that protests over inflation and scarcity of basic necessities of life will continue while political instability will also last.
The report also states that the intervention in the policy-making process will continue while the government will continue its efforts to obtain loans from various sources.
The government will also increase the price of gas and electricity to increase its revenue. The income of the government will be low and the deficit will be high, while it will also have to spend heavily on the rehabilitation of the flood victims, he said.
According to The Economist, inflation will not go away, and the central bank will have to hike interest rates at least twice, which will break all previous records.
The economic and strategic partnership between China and Pakistan will continue, but the loans from China will decrease. China will also ask Pakistan to start a new IMF program to avoid financial insolvency.
The tension between Pakistan and India will continue while relations with the US will not improve because Pakistan’s stand on the Ukraine war is not what the US wants.
Similarly, problems will continue to arise in relations with Afghanistan. The report states that Pakistan will try improved relations with Saudi Arabia, Qatar and the United Arab Emirates so that it can take loans to overcome the problems and shore up its foreign exchange reserves.
Mian Zahid Hussain added that this report shows that further delay in economic reforms in Pakistan could prove to be extremely dangerous. The world is not ready to give more loans to Pakistan.
In order to survive, privatization of failed government institutions, elimination of losses in the electricity and gas sector, finding alternatives to imports, agricultural reforms and an increase in exports have become inevitable for Pakistan.
If political anarchism is not eradicated, the people will have to suffer and we will have to regret inaction forever.
UAE investor acquires majority shareholding and management control of Summit Bank
Prominent UAE national, investor, and a longstanding friend of Pakistan, H.E. Nasser Abdulla Hussain Lootah (the “Investor“), has acquired a controlling stake in Summit Bank, a move that was recently approved by the State Bank of Pakistan, Securities and Exchange Commission of Pakistan, and Competition Commission of Pakistan. The Investor’s vision for the Bank is to transform it into a full-fledged Islamic bank, providing exceptional services, innovative products, and a commitment to the principles of Islamic finance.
To demonstrate his unwavering commitment to the Bank’s success and positive vision for Pakistan (despite the current economic situation), the Investor subscribed to 3.98 billion new shares of the Bank at PKR 2.51 per share, giving him a majority equity stake. In this regard PKR 10 billion has already been injected into the Bank in January 2023 through an advance payment for the proposed share issuance.
With the Investor’s acquisition and renewed focus on Islamic finance principles, Summit Bank is well-positioned to become a market leader in the banking industry. The Bank’s leadership and staff are enthusiastic about the future of the Bank and committed to providing ethical and transparent financial services to its clients.
The President of Summit Bank, Jawad Majid Khan, emphasized that the Bank’s revival involves more than just new equity injection and Islamic banking. In addition to the acquisition, Summit Bank shall undergo a complete overhaul of its operations and digitalization in accordance with modern banking practices. This shall also include rebranding of Summit Bank, allowing it for a fresh start and a new identity. The Investor, with the assistance of A.F. Ferguson & Co. (a member firm of PricewaterhouseCoopers) and Haidermota & Co. (Legal Consultants) is in the process of devising a medium and long-term strategic and restructuring plan for Summit Bank. The Bank’s renewed commitment to its clients and principles will be a fundamental aspect of its success. The Bank will also benefit from the Investor’s relationships in the Middle Eastern banking industry.
With the Investor’s acquisition of the majority stake in Summit Bank, renewed focus on Islamic finance, and a dedicated leadership and staff, the Bank’s overall future looks bright, and it is poised for success.