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.
ISLAMABAD: The Pak Rupee ended down by 11 paisas against dollar in interbank foreign exchange market owing to high demand for import and corporate payments. (more…)
KARACHI: The profits of banking sector have declined by 7 percent to Rs149 billion in 2018 as compared with around Rs160 billion in the preceding year, according to analysis of Topline Research issued on Tuesday.
The analysts said that for 2018, despite 10 percent YoY increase in Net Interest Income (NII), profits were down 7 percent YoY (ex-HBL penalty) due to 1.8x higher provision charge, 64 percent lower capital gains and 14 percent higher administrative expenses.
They expect net interest income to expand further due to the lagged impact of policy rate hikes. The analysts anticipate State Bank of Pakistan (SBP) to increase interest rates by further 75 basis points to 11 percent by December 2019.
However, during 4Q2018, Pakistan Banking Sector profitability rose to Rs38.3 billion, up by 6 percent YoY. The increase in profitability is primarily owed to 16 percent YoY increase in net interest income as well as 7 percent increase in non-interest income.
The analysts have taken results of all listed banks that have announced 4Q2018 financial results.
Moreover, for 4Q2018 reversals in pension charge and Workers Welfare Fund (WWF) amounting to Rs4.2 billion and Rs6.7 billion, respectively, also supported the bottom-line we believe.
Net Interest Income (NII) of the banks improved by 16 percent YoY to Rs135 billion in 4Q2018 as a result of a cumulative 425 basis points hike in policy rate during 2018.
Similarly, on a sequential basis, NII is up 10 percent as the lagged impact of asset re-pricing kicked in.
To note, SBP has raised policy rate by 425 basis points in 2018, with 150 basis points coming in 4Q2018.
Comparing the big-5 (MCB, HBL, UBL, ABL, NBP; profits down 24 percent YoY) versus the rest under our coverage (MEBL, BAHL, BAFL, AKBL), the analysts see that mid tier banks have outperformed their larger peers due to better sensitivity to interest rates as well as absence of significant provision charge during the outgoing quarter.
Profits of Mid-tier banks are up 32 percent YoY (they excluded BOP from mid tier numbers due to substantial one off provisioning in 4Q2017).
Despite 16 percent YoY growth in net interest income, profitability growth was contained to 6 percent YoY primarily due to high provision charge specifically by the large banks including HBL, UBL and NBP.
Cumulatively, total provision charge by the said three banks for 4Q2018 was Rs15.7 billion (around 73 percent of total provision by the sector), with NBP, UBL and HBL charging Rs6.8 billion, Rs5.6 billion and R3.3 billion, respectively.
Overall, the sector booked provision charge of Rs21.5 billion compared to Rs13.3 billion in the same period last year.
To note, BOP booked significant provision charge of Rs12.7 billion during 4Q2017 compared to reversal of Rs137 million in 4Q2018.
NBP booked significant provision charges on its loan portfolio, specifically with regards to its exposure to Omni group, the analysts believe. Similarly, majority of UBLs charge was related to NPLs (Rs5.0 billion) mostly from its international loan book and most of HBLs booked charge was also on account of NPLs (Rs2.3 billion).
Despite lower capital gains and dividend income, Non-interest income of the banks rose by 7 percent YoY mainly due to 17 percent higher fee income and 86 percent higher income from dealing in foreign currencies.
They attribute higher non-interest income to rapidly growing loan book, higher trade volumes as well as rupee depreciation.
Admin expenses grew by 20 percent YoY while non-interest expense rose by 14 percent YoY. The growth in non-interest income was contained due to reversal in provision for Workers Welfare Fund (WWF) by select banks (Rs6.7 billion in total).
Cost to income of the sector increased by 3.1ppts YoY to 64.2 percent in 4Q2018.
KARACHI: The Pak Rupee ended down by 5 paisas against dollar on Tuesday owing to demand for import and corporate payments.
The foreign currency market ended at Rs138.73 to the dollar as compared with last Friday’s closing of Rs138.68.
The foreign exchange market was initiated in the range of Rs138.75 and Rs138.80. The market recorded a high of Rs138.80 and low of Rs138.68 and closed at Rs138.73.
Currency experts said that the market opened after two weekly holidays and the demand was higher for import and corporate payments.
The local currency however ended in the open market.
Buying and selling of dollar was recorded at Rs138.50/Rs139.00, the same previous day’s level, in cash ready market.
KARACHI: The Pak Rupee depreciated by 12 paisas against the US dollar in early trade on Tuesday owing to high demand for import and corporate payment.
The dollar is being traded at Rs138.80 in interbank foreign exchange market. The exchange rate was ended a day earlier at Rs138.68 in the foreign exchange market.
Currency dealer said that due to higher demand of dollar for import and corporate payment the rupee was witnessing decline.
KARACHI: The Pak Rupee ended down by 15 paisas against dollar on Monday owing to demand for import and corporate payments.
The foreign currency market ended at Rs138.68 to the dollar as compared with last Friday’s closing of Rs138.53.
The interbank foreign exchange market was initiated in the range of Rs138.70 and Rs138.85. The market recorded day high of Rs138.95 and low of Rs138.65 and closed at Rs138.68.
Currency experts said that the market opened after two weekly holidays and the demand was higher for import and corporate payments.
The local currency however gained in the open market.
Buying and selling of dollar was recorded at Rs138.50/Rs139.00 from last Saturday’s closing of Rs138.70/Rs139.20 in cash ready market.
KARACHI: The Pak Rupee has lost 12 paisas against the US dollar in early trade on Monday owing to demand for import and corporate payments.
The dollar is being traded at Rs138.65 in foreign currency market.
The exchange rate was ended at Rs138.53 to the dollar in interbank foreign exchange market.
Currency experts said that market was opened after two weekly holidays, which increased dollar demand for import and corporate payments.
KARACHI: The Pak Rupee ended firmer against US dollar in cash ready market on Saturday. The buying and selling of dollar was recorded at Rs138.70/Rs139.20, the same previous day’s level, in open market.
The rupee made significant recovery in the interbank market during the outgoing week.
The Pak Rupee gained 29 paisas against dollar on Friday owing to positive sentiments prevailed in currency market.
The rupee ended Rs138.53 to the dollar as compared with previous day’s close of Rs138.82 in interbank foreign exchange market.
Currency dealers said that good-will gesture shown by Pakistan for releasing captured Indian pilot for normalization the situation resulted in prevalence of positive sentiments in the market.
The rupee also made a sharp recovery of 44 paisas against dollar on Thursday.
The exchange rate went up to Rs139.26 to the dollar after Indian aggression on February 27.
However, during the past two days, the local unit made significant recovery.
KARACHI: The Pak Rupee gained another 29 paisas against dollar on Friday owing to positive sentiments prevailed in currency market.
The rupee ended Rs138.53 to the dollar as compared with previous day’s close of Rs138.82 in interbank foreign exchange market.
Currency dealers said that good-will gesture shown by Pakistan for releasing captured Indian pilot for normalization the situation resulted in prevalence of positive sentiments in the market.
The rupee also made a sharp recovery of 44 paisas against dollar a day earlier.
The exchange rate went up to Rs139.26 to the dollar after Indian aggression on February 27.
However, during the past two days, the local unit made significant recovery.
The interbank foreign exchange market was initiated in the range of Rs138.65 and Rs138.75.
The market recorded a high of Rs138.65 and low of Rs138.50 and closed at Rs138.53.
The exchange rate was unchaged in open market.
The buying and selling of dollar was recorded at Rs138.70/Rs139.20, same previous day’s level, in cash ready market.
KARACHI: The Pak Rupee maintained its recovery against dollar in early trade on Friday owing to positive sentiments.
The rupee gained 17 paisas to the dollar in the early trade as dollar is being traded at Rs138.65 in interbank foreign exchange market.
Currency dealers said that good-will gesture shown by Pakistan for releasing captured Indian pilot for normalization the situation resulted in prevalence of positive sentiments in the market.
The rupee also made a sharp recovery of 44 paisas against dollar on Thursday.
The rupee ended Rs138.82 to the dollar as compared with last day’s closing of Rs139.25 in interbank foreign exchange market.
The rupee was depreciated massively last day against dollar.
However, yesterday Pakistan shot down two Indian fighter jets in response to Indian violation of Pakistan airspace a day earlier.
Dealers said that the sentiments were positive in foreign currency market as economic indictors showing improvement.
KARACHI: State Bank of Pakistan (SBP) has issued instructions for banks regarding opening of bank accounts by Afghan refugees.
In a circular issued on Thursday, the SBP said that National Database and Registration Authority (NADRA) had informed that biometric verification for opening bank accounts of Afghan refugees holding Proof of Registration (PoR) Card has been made live w.e.f February 26, 2019 over the existing established linkage of CNIC verification.
The biometric verification service for Afghan refugees holding PoR Card would work similar to the CNIC biometric verification system.
Accordingly, for opening accounts of Afghan refugees holding PoR Card, banks/DFIs may accept the valid Proof of Registration (PoR) Card issued by NADRA as identity document. In this regard, banks/DFIs shall verify the identity of the Afghan refugees holding PoR Card through NADRA biometric verification system for opening of account.
Moreover, for services offered by banks to their account holders, where CNIC and biometric verification is required under AML/CFT Regulations, valid biometrically verified PoR Card is acceptable as identity document.
However, banks/DFIs are advised to ensure compliance of all relevant legal and regulatory requirements including AML / CFT preventive measures instructed by SBP for account opening from time to time.