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.
KARACHI: United Bank Limited (UBL) on Thursday declared 46 percent growth in its net profit for the quarter ended March 31, 2021 due to significant decline in provisioning and write-offs.
The bank declared Rs7.4 billion profit after tax for the first quarter (January – March) of calendar year 2021 as compared with Rs5.06 billion in the corresponding period of the last year.
The bank also declared Rs6.05 as earnings per share (EPS) for the quarter ended March 31, 2021 as compared with Rs4.13 in the corresponding quarter of the last year.
According to the financial results submitted to the Pakistan Stock Exchange (PSX) the provisions/write-offs of the banks was at Rs354 million during the first quarter of 2021 as compared with Rs3.7 billion in the corresponding quarter of the last year.
Net Markup / Interest Income of the bank, however, fell to Rs16.85 billion for the quarter under review as compared with Rs17.34 billion in the corresponding quarter of the last year.
Non mark-up/interest income of the bank increased to Rs5.78 billion for the quarter ended March 31, 2021 as compared with Rs4.66 billion in the corresponding quarter of the last year.
The bank also made considerable income through gain on securities to Rs1.86 billion during the first quarter of 2021 as compared with Rs342 million in the same quarter of the last year.
Total income of the bank during the quarter increased nominally to Rs22.64 billion during first quarter of 2021 as compared with Rs22 billion in the corresponding period of the last year.
Operating expenses of the bank remained flat at Rs9.85 billion as compared with Rs9.47 billion. Total expenses of UBL rose to Rs10.12 billion during the first quarter of 2020 as compared with Rs9.87 billion in the corresponding quarter of the last year.
KARACHI: The State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP) have amended the Terms of Reference (ToRs) of their Joint Task Force (JTF) on Financial Conglomerates to further strengthen the supervisory cooperation, inter alia, in AML/CFT/CPF supervision at financial-group level. Dr, Reza Baqir, Governor, SBP and Aamir Khan, Chairman, SECP have signed the Letter of Understanding (LoU) for amendments in the ToRs, according to a statement issued on Thursday.
The interagency cooperation between financial sector regulators is a crucial element for the effective supervision of financial groups, which comprise various types of financial institutions.
Accordingly, the SBP and SECP established the JTF in March 2009 to proactively identify and tackle the risks posed by conglomeration in the financial sector.
The ToRs of the JTF envisage the supervisory cooperation, holding periodic meetings and information sharing between both the regulators in respect of the financial groups. The ToRs have been revised from time to time to align with the developments in the regulatory sphere and dynamics of the financial market.
Keeping in view the importance of the group-level AML/CFT/CPF supervision, both SBP and SECP jointly agreed to specifically cover this area in the ToRs of the JTF in a more explicit manner.
These improvements in the ToRs will allow the regulators to effectively implement group-level AML/CFT/CPF supervision in line with the international standards, and strengthen cooperation and information sharing in a more systematic manner. Revised TORs will further the overall policy objectives of soundness, integrity and fair conduct in the financial system.
KARACHI: The Pak Rupee fell by 24 paisas against the dollar on Wednesday owing to high demand for import and corporate payments.
The rupee ended Rs153.23 to the dollar from previous day’s closing of Rs152.99 in the interbank foreign exchange market.
The dealers said that the rupee was remained under pressure due to corporate demand for dollars during the day. They said that the corporate buyers were active as multinational companies and foreign companies usually repatriate profit and dividends on close of every quarter.
They further said that the demand for import payment was also seen rising.
KARACHI: Habib Bank Limited (HBL) has paid monetary penalty of Rs42.2 million to State Bank of Pakistan (SBP) for violation of various regulatory provisions.
According to HBL it paid Rs42.2 million during first quarter (January – March) of 2021 against penalties imposed by the SBP. The bank had paid around Rs231.6 million as monetary penalties to SBP in the same quarter of the last year.
A total amount of Rs42.23 million was paid by the bank as penalties, including those imposed by other regulatory bodies. The bank had paid around 232.19 million as total penalty for the same quarter of the last year.
The bank had paid an amount of Rs320.79 million as penalty for various regulatory violations during the year ended December 31, 2020.
For the year ended December 31, 2020, the bank paid the amount of Rs320.79 million as penalties for violation of various regulations.
However, the payment of penal amount reduced by 33 percent when compared with Rs480.56 million paid in the preceding year.
The bank paid an amount of Rs296 million against fine imposed by the SBP for the year ended December 31, 2020. The latest amount of monetary penalty has been reduced when compared with Rs476 million that was imposed by the SBP on the bank during the preceding year.
KARACHI: Meezan Bank Limited, which is providing Sharia compliant banking and financing in Pakistan, on Tuesday declared Rs6.1 billion after tax profit for the quarter ended March 31, 2021.
The net profit of the bank increased by 11 percent during the first quarter (January – March) 2021 when compared with the net profit of Rs5.5 billion in the corresponding period of the last fiscal year.
According to the financial results of the bank, the profit/return earned on Islamic financing and related assets, investment and placements fell to Rs24.23 billion during first three months of the calendar year 2021 as compared with Rs29.83 billion in the corresponding months of the last year.
Similarly, profit on deposits and other dues expensed also reduced to Rs9.17 billion during the period under review as compared with Rs15.11 billion in the corresponding period of the last year.
However, the bank recorded 61 percent growth in fee and commission income to Rs2.06 billion for the quarter ended March 31, 2021 as compared with Rs1.28 billion in the same quarter of the last year.
Total income of the income for the quarter under review increased to Rs18.61 billion as compared with Rs17.91 billion in the corresponding quarter of the last year.
The operating expenses of the bank increased to Rs7.83 billion during January – March of 2021 as compared with Rs6.8 billion in the same period of the last year.
Meezan Bank declared Rs4.31 as earnings per share (EPS) for the quarter ended March 31, 2021 as compared with Rs3.89 in the same quarter of the last year.
KARACHI: Habib Bank Limited (HBL) on Tuesday announced 108 percent increase in profit for the quarter ended March 31, 2021. The profit after tax of the bank increased to Rs8.56 billion during the first quarter (January – March) 2021 from Rs4.11 billion in the same quarter of the last year.
Analysts at Insight Research said that the results of the bank were above expectation.
“The result is above our expectation of Rs4.3/share as net interest income and non-markup income came in higher from our expectations. The result is also accompanied by a cash dividend of Rs1.75/share,” they said.
Net interest income (NII) increased by 16 percent/4 percent YoY/QoQ to clocked-in Rs32.4 billion, possibly due to lagged impact of repricing and balance sheet expansion. However, we await detailed account for further clarity in this regard.
Non-Markup income increased by 42 percent/26 percent YoY/QoQ to clocked-in at Rs8.2 billion. This is primarily led by a higher fee income which increased by 25 percent YoY, while recovery of income in FX operations and derivatives further fueled non-markup income.
Bank has booked provision of Rs1.9 billion against a provision of Rs0.62 billion booked in SPLY. To note, HBL has booked hefty provisioning in both general and specific categories during CY20 (Rs12.2 billion).
Operating expenses witnessed a contraction of 7 percent YoY, to clocked-in at Rs24.2 billion, attributable to a reduction in business transformation cost.
Effective taxation remained at 41 percent during the quarter as compared to 42 percent in SPLY.
KARACHI: The Pak Rupee weakened by six paisas against dollar on Tuesday owing to demand for import and corporate payments.
The rupee ended Rs152.99 to the dollar from previous day’s closing of Rs152.93 in the interbank foreign exchange market.
Currency dealers said that the market witnessed demand from corporate buyers as foreign companies were sending their profit and dividends to their parent companies abroad.
Further, seasonal demand for import payments is also seen during the day.
The dealers said that the local currency likely to make gain against the dollar in coming days due to substantial inflows of foreign currency in shape of export receipts and workers’ remittances.
KARACHI: State Bank of Pakistan (SBP) on Monday issued mechanism for payment of markup subsidy for housing finance and issued instructions to banks and development financial institutions (DFIs) for the facility.
The SBP advised banks to submit their claims to Development Finance Support Department (DFSD), SBP BSC, Karachi as per instructions contained in the attached payment mechanism within 15 working days from the end of each Quarter.
However, the banks shall submit their claim within 15 working days for the quarter ending December 2020 and March 2021 from the date of issuance of this circular.
According to markup subsidy payment mechanism (MSPM), the SBP said that the government had issued markup subsidy scheme to provide concessional housing finance for promoting home ownership.
The SBP issued necessary instructions to all commercial banks, microfinance banks and HBFCL through a circular no. 03 dated March 25, 2021 and revised instructions issued from time to time.
All loans disbursed under the scheme shall be reported to SBP under housing finance.
Under the Scheme, loans are segregated into four tiers:
i. Tier 0 (T0) – (a) House up to125 sq yds (5 Marla) and (b) flat/apartment with maximum covered area of 1,250 sq ft.
ii. Tier 1 (T1) – (a) House up to125 sq yds(5 Marla) with maximum covered area of 850 sq ft and (b) Flat/apartment with maximum covered area of 850 sq ft.
iii. Tier 2 (T2) – (a) House up to125 sq yds (5 Marla) and (b) flat/apartment with maximum covered area of 1,250 sq ft.
iv. Tier 3 (T3) – (a) House up to250 sq yds (10 Marla) and (b) flat/apartment with maximum covered area of 2,000 sq ft.
Pricing for Housing Loans
Loan Tiers
Customer Pricing
Bank Pricing
Tier 0
5% for first 5 years & 7% for next 5 years
1 Year KIBOR + 700 BPS
Tier 1
3% for first 5 years & 5% for next 5 years
1 Year KIBOR + 250 BPS
Tier 2
5% for first 5 years & 7% for next 5 years
1 Year KIBOR + 400 BPS (Spread may vary)
Tier 3
7% for first 5 years & 9% for next 5 years
1 Year KIBOR + 400 BPS (Spread may vary)
For loan tenors exceeding 10 years, market rate i.e. bank pricing will be applicable for the period exceeding 10 years.
Procedure for loans disbursements and availing markup subsidy:
EAs shall evaluate financing applications of customers as per parameters of Markup Subsidy Scheme for Housing Finance approved by the Federal Cabinet and circulated by the State Bank of Pakistan to all banks/DFIs vide IH&SMEFD Circular No. 03 dated March 25, 2021 and revised from time to time. The financing facility for a borrower shall be sanctioned and disbursed by the EA after completion of documentation formalities. These financing shall be entitled for markup subsidy as prescribed above. No further evaluation on eligibility of borrowers would be conducted by the State Bank of Pakistan.
Calculation of Equally Monthly Installment (EMI) for Borrower
For first five years EMI, amortization schedule would be prepared for full tenor of financing at markup rate i.e. 3 percent, 5 percent or 7 percent depending upon the financing tier.
EMI for next five years i.e. 6th year to 10th year would be on the basis of amortization schedule prepared at the applicable subsidized markup rate (i.e. 5 percent, 7 percent or 9 percent depending upon the financing tier) on outstanding principal for remaining financing tenor.
After 10th year of financing, EMI would be calculated on the basis of amortization schedule at applicable markup rate.
Calculation of Markup Subsidy for Banks
After calculating the EMI for end user, the EAs will calculate the difference to be paid by Government of Pakistan by applying the difference between 1-Year KIBOR + spread and end user markup rate on the outstanding principal.
The banks will calculate the subsidy for the period of markup subsidy i.e. 10 years.
Mechanism for Payment of Markup Subsidies: Payment of subsidy to EAs will be made through SBP’s operational arm viz. Development Finance Support Department (DFSD), SBP BSC, Head Office, Karachi.
The executing agencies (EAs) / banks shall prepare and submit claims on quarterly basis to DFSD for receiving government markup subsidy on outstanding principal amount of their performing housing finance portfolio up to expiry of each individual loan. In case of a loan becoming non-performing, no markup subsidy will be paid after being classified as ‘Loss’ as per SBP PRs for Housing Finance. The EAs claims shall contain particulars of each individual loan along with calculations of subsidy based on relevant 1-year KIBOR used. For the sake of simplicity, EAs shall assign unique number to each loan i.e. “Bank Name—Loan Number” (ABC-12345678). The markup subsidy claim should be duly vetted by internal audit department of the EA. The audited claim along with a certificate from EA relating to eligibility of borrowers for the subject scheme and correctness of the subsidy amount shall be submitted to DFSD within 15 working days after the end of respective quarter for payment of subsidy. The claims shall be submitted to DFSD as per the format attached as Annexure B (Annexure B-1 for Banks/DFIs and Annexure B-2 for MFBS).
DFSD, SBP BSC shall scrutinize subsidy claim of EAs within 15 working days after receipt of complete information from EAs. DFSD shall ascertain that calculations of EAs subsidy claim are correct and applicable KIBOR has been used by the EAs. Thereafter, DFSD shall submit scrutinized claims to Accounts Department, SBP BSC for release of funds, through Karachi Office, to respective EA account maintained with SBP BSC, Karachi from Government account ‘Non-Food Account 1’.
Banking Inspection Department of State Bank during regular inspection of the EAs shall conduct inspection of their housing finance portfolio on sampling basis using its own sampling techniques. SBP inspectors shall randomly select credit files and review them from the perspective of eligibility of borrowers under the Program, status of loan (regular or NPL) and GOP subsidy claim. The BID inspection report section on ‘Markup Subsidy on Housing Finance’ shall be used as an important input for reviewing the Scheme and assessing its effectiveness in fulfilling the Government objective of promoting home ownership in the country.
KARACHI: The Pak Rupee weakened by 11 paisas against the dollar on Monday owing to demand for import and corporate payments, dealers said.
The rupee ended Rs152.93 to the dollar from last Friday’s closing of Rs152.82 in the interbank foreign exchange market.
The currency dealers said that the rupee was under pressure because the market was opened after two weekly holidays.
However, they said that the market had sufficient supply of the greenback to meet the demand in coming days.
They said that the inflows of export receipts and workers’ remittances would support the local currency. Further, the market would remain positive due to high stock of foreign exchange reserves of the country.
KARACHI: The office of Banking Mohtasib Pakistan has said that complaints against banking frauds, forgeries and other regularities were monthly highest received in March 2021 since the inception of Mohtasib office in 2005.
Complaints against banking frauds and forgeries registered massive increase of 135 percent during three months (January – March) of 2021 as compared with same period of the last year.
According to a statement issued on Friday, the office of the Banking Mohtasib Pakistan said that over 135 percent increase had been observed in the number of complaints lodged against alleged frauds, forgeries and other irregularities during the first quarter (January – March) of 2021 as compared to the same period of the last year 2020.
The office of the Banking Mohtasib Pakistan said that 11,732 complaints were received by the Banking Mohtasib Secretariat during the first quarter of 2021 as compared with 4,994 complaints received in the same period of the last year.
“These also include 7,595 complaints received on Prime Minister’s Portal relating to banking issues as compared to 1,411 complaints received during the first quarter of previous year.”
Out of total 11,732 complaints, 5,375 complaints were received in the month of March only, which is the highest figure of complaints recorded in a single month since the inception of Banking Mohtasib Pakistan Office in 2005.
“The increase in number of complaints indicates that the general public feels that their genuine grievances will be resolved amicably by the Banking Mohtasib office,” according to the statement.
The Banking Mohtasib Secretariat disposed of 4,672 complaints from January 01 to March 31, 2021 out of which only two percent of complaints were resolved through formal orders while remaining 98 percent of complaints were resolved amicably.
By disposing of these complaints, the Banking Mohtasib Office has provided monetary relief amounting to Rs132.62 million to the banking customers during the first quarter of 2021.
Banking Mohtasib Pakistan Muhammad Kamran Shehzad urged the general public not to disclose their personal and financial credential to any person in order to protect themselves from any fraud and forgeries.
