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Category: Money & Banking

Money and banking drive economic activity by facilitating transactions, savings, and investments. Banks manage financial resources, offer credit, and regulate money supply, ensuring stability and growth in Pakistan’s financial sector.

  • Meezan Bank lends Rs1 billion under youth scheme

    Meezan Bank lends Rs1 billion under youth scheme

    KARACHI: Meezan Bank Limited has disbursed Rs. 1 billion under Prime Minister’s Kamyab Jawan – Youth Entrepreneurship Scheme (PMKJ-YES) for Small and Medium Enterprises (SMEs), a statement said on Friday

    Usman Dar, Special Assistant to the Prime Minister on Youth Affairs and Haleem Adil Sheikh, Member of the Provincial Assembly of Sindh graced the ceremony hosted by Irfan Siddiqui, Founding President & CEO – Meezan Bank and Ariful Islam, Deputy CEO – Meezan Bank at the Bank’s Head Office located in Karachi. The event was also attended by the PMKJ-YES teams and senior management of the Bank.

    READ MORE: Meezan Bank announces 26% growth in annual profit

    PMKJ – YES will allow access to Islamic finance to those SMEs who, despite being credit-worthy, are unable to avail financing due to various documentary and collateral related issues. Under this scheme, Meezan Bank will extend Shariah-compliant financing facilities of up to PKR 25 million to eligible customers at subsidized rates.

    READ MORE: Meezan Bank, Suzuki Motors sign MoU for car financing

    Irfan Siddiqui reiterated that Meezan Bank, following its Vision of establishing ‘Islamic banking as banking of first choice…’ stands committed to the Government of Pakistan and State Bank of Pakistan in playing a key role in the success of Prime Minister’s Kamyab Jawan Youth Entrepreneurship Scheme and other schemes to promote financial inclusion, by providing Shariah-compliant financing products and solutions.

    READ MORE: Meezan Bank starts Islamic financing scheme for SMEs

  • Habib Bank posts Rs35.51 billion annual profit

    Habib Bank posts Rs35.51 billion annual profit

    Habib Bank Limited (HBL) held its conference call on Friday to discuss financial performance and provide its future outlook onwards. HBL posted a profit after tax of Rs 35.51 billion (EPS: Rs 23.9) in 2021 as opposed to Rs 30.91 billion (EPS: Rs 21.1) in the same period last year, up by 15 per centYoY. It was the best ever result in the history of HBL.

    Along with the result, the bank announced a final cash dividend of Rs 2.25 per share taking the full payout to Rs 7.5 per share.

    Analysts at KASB Research have an outperform rating on HBL based on Justified P/B with a target price of Rs 175 per share. The stock offers a dividend yield of 7.4 per cent and is currently trading at a one year forward P/Bv of 0.57x.

    READ MORE: Habib Bank declares Rs26.44 billion 9-month profit

    As per the management, three key pillars of mid to long term strategy include accelerating Pakistan’s growth and development, shaping financial industry and improving agriculture sector’s productivity. The bank also aims to step up SMEs, branchless banking and CPEC based infrastructure growth in country.

    The bank’s digital footprint is increasing day by day, the highest in the industry. Konnect accounts are up by 1.3x 7.1 million.

    The bank crossed Rs 100.0 billion in consumer loans. Consumer financing grew by 31 per cent reaching Rs 102.8 billion driven by growth in auto and personal loans.

    READ MORE: Habib Bank, Meezan Bank directed to pay fraud victims

    Home remittances for the bank also increased by 29 per cent YoY in 2021 to USD 2.74 billion and the market share clocked in at 8.8 per cent. The bank aims to take the market share to double digits in 2022.

    Domestic deposits noted a growth of 19 per cent over December 2021 and the banks’ market share improved to 14.4 per cent. Meanwhile, international deposits increased by 16 per cent to USD 1.9 billion. CA crossed Rs 1.0 trillion.

    Domestic advances expanded by 20 per cent over December 2020 to Rs 1.2 trillion and international loans increased by 24 per cent.

    READ MORE: Habib Bank pays penalty of Rs42.2 million to SBP

    Infection ratio clocked in at 5.1 per cent as opposed to 6.3 per cent in December 2020 and the bank’s coverage stood at 104 per cent.

    ROE came at 14.4 per cent and ROA stayed at 0.9 per cent in December 2021.

    The bank intends to expand Islamic banking by adding 30/40 new branches in different new cities taking the tally to 250-260 by December 2022.

  • National Bank under grip of regulatory violations

    National Bank under grip of regulatory violations

    National Bank of Pakistan in a notice sent to Pakistan Stock Exchange (PSX) disclosed that it reached an agreement with US regulators of NBP’s New York branch with fines of $55 million arising due to historical compliance weakness and delays in making compliance related enhancements.

    However, there were no findings of improper transactions or willful conduct as per the notice.

    Latest press release by U.S Department of Financial Services stated: “The National Bank of Pakistan allowed serious compliance deficiencies in its New York branch to persist for years despite repeated regulatory warnings. Foreign banks that enjoy the privilege of operating in New York have an obligation to maintain effective controls, and the Department will continue to promote financial transparency and take action to protect the global financial system when those obligations are not met”.

    READ MORE: US central bank imposes $20.4 million penalty on NBP

    Following examinations conducted by the Department and the Federal Reserve Bank of New York in 2014 and 2015, NBP’s New York branch was found to have inadequate Bank Secrecy/Anti-money compliance programs.

    As a result, enforcement action against NBP was taken in 2016 where NBP agreed to improve compliance deficiencies which later on it failed to do so. As a result, the bank will now be subject to $35 million penalty in addition to certain deliverables for the improvement in its compliance program.

    READ MORE: NBP lends Rs18.8bn in Hascol’s Rs54bn scam

    In addition to the fine by U.S Department of Financial Services, Federal Reserve Board also imposed $20.4million penalty against NBP on anti-money laundering violations totaling penalty to $55million which translates into Rs9.7billion (Rs4.6/share). In 9M2021, the bank has so far reported earnings of Rs25billion.

    Analysts at Topline Securities said that previously HBL also faced a similar fine in 2017 where the U.S regulators initially imposed a penalty of US$630million on HBL on non-compliance of Anti-money laundering laws, which was later revised down to US$225million.

    NBP is also faced with a pending pension liability case with potential liabilities of over Rs70 billion under which the company had filed a review petition in Supreme Court of Pakistan where further judgement is still awaited. The bank due to the aforementioned reason has skipped dividends since 2017, we believe.

  • Rupee plunges 72 paisas to dollar on Russia War

    Rupee plunges 72 paisas to dollar on Russia War

    KARACHI: The Pak Rupee (PKR) plunged by 72 paisas against the dollar on Friday as war between Russia and Ukraine intensified.

    The rupee ended Rs177.11 to the dollar from previous day’s closing of Rs176.39 in the interbank foreign exchange market.

    READ MORE: PKR slides 23 paisas to dollar on Russia-Ukraine war

    Currency experts said that the rupee remained under pressure during the day due to rising oil prices in international markets after war intensified between Russia and Ukraine. Further, the last trading day and advance dollar buying also deteriorated the rupee value.

    The experts said that Pakistan is dependent upon the import of petroleum products to meet domestic demand.

    READ MORE: PKR gains seven paisas to dollar in interbank

    The oil bill of the country surged by 107 per cent to $11.7 billion during the first seven months (July – January) of the current fiscal year as compared with $5.64 billion in the corresponding months of the last fiscal year.

    The experts said that scheduled repayments of the government for foreign debt had also pressured the rupee.

    READ MORE: Rupee plummets 48 paisas to dollar

    The liquid foreign exchange reserves of Pakistan declined by $264 million to $23.226 billion by week ended February 18, 2022, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country were $23.49 billion by week ended February 11, 2022.

    The official reserves of the State Bank fell by $289 million to $16.807 billion by week ended February 18, 2022 as compared with $17.096 billion a week ago.

    READ MORE: Dollar falls 11 paisas to PKR

  • US central bank imposes $20.4 million penalty on NBP

    US central bank imposes $20.4 million penalty on NBP

    KARACHI: The central bank of the United States on Thursday imposed a monetary penalty of $20.4 million on New York branch of Pakistan’s largest public sector bank for violating anti-money laundering laws.

    (more…)
  • PKR slides 23 paisas to dollar on Russia-Ukraine war

    PKR slides 23 paisas to dollar on Russia-Ukraine war

    KARACHI: The Pakistan Rupee (PKR) witnessed a decline of 23 paisas against the US Dollar on Thursday, succumbing to the pressures of soaring international oil prices triggered by Russia’s military actions in Ukraine.

    (more…)
  • MMBL lauded for women empowerment initiative

    MMBL lauded for women empowerment initiative

    ISLAMABAD: Mobilink Microfinance Bank (MMBL) showcased its digital banking initiatives and women’s access to financial services at the ongoing Dubai Expo 2020.

    President and CEO MMBL, Ghazanfar Azzam shared MMBL’s efforts in promoting financial inclusion in an integral event at the Pakistan Pavilion, “Women of Pakistan: Leading a Change”, organized by the Employers Federation of Pakistan (EFP), an apex body of employers in Pakistan that spearheads the private sector in matters of employment, industrial relations, social and economic policy.

    With a strong focus on facilitating SMEs and women through the provisioning of micro-loans and skill development opportunities, MMBL has been enabling entrepreneurs and business owners to generate sustainable income and substantiate their earnings.

    MMBL’s CEO briefed the participants about their customized women-focused financial products and services, financial literacy training offerings, and the impact they have created so far across the country, especially among rural-based low-income groups. MMBL’s initiatives, Women Inspirational Network (WIN), and Humqadam for inclusion and enablement of persons with disabilities were particularly praised by the audience. 

    Speaking at the event, President & CEO MMBL, Ghazanfar Azzam thanked EFP for the opportunity to showcase MMBL’s work at such a prestigious platform. “Women empowerment remains an important strategic component of our overall business model because we believe we can amplify our impact through equal participation of women at all tiers. MMBL is committed to furthering the sustainable transformation of Pakistan’s economy through its digital banking services, which we believe cannot be achieved by excluding half of the population. Therefore, we will continue to empower, engage, train, and equip women to catalyze a well-grounded economic change at the grassroots level”, he added.

    Ghazanfar Azzam also called for broad-based collaborative efforts at public and private sector levels to further promote the cause of women empowerment.

  • United Bank posts Rs30.62 billion net profit for 2021

    United Bank posts Rs30.62 billion net profit for 2021

    KARACHI: United Bank Limited (UBL) on Wednesday posted Rs30.62 billion profit after tax for the year ended December 31, 2021, according to financial results submitted to Pakistan Stock Exchange (PSX)

    The bank registered 47 per cent growth in profit after tax for the year under review as compared with Rs20.78 billion in the preceding year.

    The bank announced earnings per share at Rs24.84 for the year ended December 31, 2021 as compared with Rs17.10 in the preceding year.

    READ MORE: UBL gets DD approval to acquire Telenor Microfinance Bank

    Analysts at Arif Habib Limited said that the earnings jumped mainly on the back of reversals in provisioning and a surge in net fee income (NFI).

    The bank announced a dividend of Rs6.00 per share for the quarter taking total payout to PKR 18.00 per share for the year ended December 31, 2021.

    Net Interest Income (NII) of the bank settled at Rs74.7bn during the year under review, decreasing 3 per cent Year on Year YoY/ 2 per cent Quarter on Quarter (QoQ) attributable to significant rate hikes during the previous year leading to sharp increase in interest expense.

    READ MORE: UBL declares 42% growth in net profit in nine months

    NFI depicted a rise of 29 per cent YoY mainly due to massive jump in capital gains (469 per cent YoY) followed by higher dividend income (80 per cent YoY) and foreign exchange income (8 per cent YoY). On a sequential basis, NFI was up 19 per cent QoQ mainly due to a 23 per cent QoQ jump in Fee income.

    The bank booked a net reversal of Rs1.5 billion in the year ended December 31, 2021 compared to huge provisioning of Rs17.2 billion during the preceding year. This could be on the back of stronger economic activity and improved asset quality helping the bank to book reversals against Non-Performing Loans (NPLs).

    The bank’s operating expenses rose 9 per cent YoY/16 per cent QoQ. Cost/Income clocked-in at 49 per cent during the year under review compared to 46 per cent same period last year.

    Effective tax rate was set at 41 per cent during the year ended December 31, 2021 compared to 39 per cent in the preceding year.

  • PKR gains seven paisas to dollar in interbank

    PKR gains seven paisas to dollar in interbank

    KARACHI: The Pak Rupee (PKR) made a gain of 7 paisas to the dollar on Wednesday as easing prices of international oil.

    The rupee ended Rs176.16 to the dollar from previous day’s closing of Rs176.23 in the interbank foreign exchange market.

    READ MORE: Rupee plummets 48 paisas to dollar

    Currency experts said that the oil prices in the international market witnessed ease which helped the local currency to rebound against the dollar.

    The benchmark Brent crude fell to $76.25 per barrel after hitting $99.50 on Tuesday owing to Russia – Ukraine tensions.

    READ MORE: Dollar falls 11 paisas to PKR

    Pakistan is net importers of oil products to meet the local demand. The oil bill of the country surged by 107 per cent to $11.7 billion during the first seven months (July – January) of the current fiscal year as compared with $5.64 billion in the corresponding months of the last fiscal year.

    READ MORE: PKR slides 47 paisas to dollar on payment demand

    On the other hand, the scheduled repayment of foreign debt by the government was another reason for rupee depreciation.

    The liquid foreign exchange reserves of the country slipped by $231 million to $23.49 billion by the week ended February 11, 2022 as compared with $23.721 billion a week ago. Similarly, the official reserves of the State Bank of Pakistan (SBP) fell by $241 million to $17.096 billion by the week ended February 11, 2022 as compared with $17.337 billion a week ago.

    READ MORE: Rupee rallies 28 paisas to dollar as world oil prices slide

  • SBP launches electronic warehouse receipt financing

    SBP launches electronic warehouse receipt financing

    KARACHI: Dr. Reza Baqir, Governor State Bank of Pakistan (SBP), launched Electronic Warehouse Receipt Financing (EWRF) for Maize Crop on Tuesday at an event in Habibabad, District Kasur.

    During the event banks signed an agreement with a collateral management company to start operations under this newly developed system.

    READ MORE: SBP expands export finance scheme to improve inflows

    Congratulating the banks on initiation of EWRF for maize crop, Dr. Baqir said that banks must now extend credit to the farmers to its full potential and make it easier for them to avail financing as the farmers would now be able to offer banks adequate collateral to avail loans.

    He added that the system designed behind the EWRF is a win-win situation for all the three stakeholders including farmers, banks and the collateral companies as it offers a smooth and reliable process in terms of storage of the produce, receipts creation and provision of credit.

    READ MORE: Remittances increase to record $18 billion in 7 months

    He pointed out that last year only 59 percent of the credit needs of the farmers were met through banks, which must now increase substantially. He termed the farmers as the key beneficiary since they could now manage the risks emanating from price fluctuation in a better way. Farmers are often forced to sell their crops at lower prices during harvesting season due to unavailability of storage facilities and to meet their pressing cash requirements.

    With the availability of EWRF, they will now be able to meet their financing needs from banks. EWRF has also created an incentive for establishing modern storage facilities since it will create the demand for such facilities by farmers.

    Dr. Baqir highlighted that besides enhanced credit availability, EWRF will help to improve food security by minimizing post-harvest losses due to unavailability of modern storage spaces.

    It will also help in better price discovery that will increase farmers’ profitability and guide in better farming decisions. He also apprised that SBP has established a high level Taskforce for EWRF, comprising key stakeholders, to develop synergies and address bottlenecks and challenges in availing EWRF. This Taskforce will be responsible to steer the entire action plan, monitor performance, and provide strategic direction to boost EWRF in the country.

    At the launch event, key stakeholders including banks also shared their experiences of implementing the emerging EWRF regime, followed by a documentary video focused on creating awareness on EWRF. President & CEO Habib Bank Limited – the pioneer bank in launching EWR based financing in Pakistan, Mr. Muhammad Aurangzeb, said that launch of this initiative has created a great incentive for banks to extend financing to the farmers. It is the right step towards facilitating the farming community and will help in reaping the massive potential in the agricultural sector to contribute towards the growth of the country. Assuring continued support of Bank of Punjab (BOP) in facilitating farmers, its President & CEO, Mr. Zafar Masud opined that EWRF would not only assist the farmers in their economic well-being but also significantly help avoid post-harvest losses of various crops.

    The launch of EWRF is in line with SBP’s efforts to ensure availability of adequate credit for agriculture purposes. In this regard SBP has recently increased credit limits for farmers to meet their input requirements. Earlier, SBP set agriculture credit target for banks to an all-time high of Rs 1.7 trillion for FY22.

    The event was attended by various dignitaries from Federal and Provincial Governments, CEO Naymat Collateral Management Company Ltd., Presidents/CEOs of banks, warehouse operators, and farming community, among others.