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NBP President stresses for strong industry-academia linkages

“Strong linkage between the financial services sector and academia is an important tool for boosting intellectual capital in the financial services industry and in finding better solutions for the current economic challenges of Pakistan”. These thoughts were expressed by President National Bank of Pakistan (NBP) Mr. Saeed Ahmad during his visit to University of Karachi (UoK). Professor Dr. M. Ajmal Khan S.I., Vice Chancellor of UoK welcomed Saeed Ahmad and his team at the university and expressed his gratitude to NBP for considering the UoK for its Corporate Social Responsibility (CSR) spending.

NBP will plant over 1,000 trees at various sites of UoK to beautify the campus and improve environment. Saeed Ahmad said that NBP, under its CSR program “Green Initiative”, has also started tree plantation drive at various parts of the city and will carry this initiative to other cities as well. Tree plantation in a large scale is essential to avert pollution and to counter negative impact of climate change, he added.

In Pakistan, Saeed Ahmad said, the industry-academia linkages are not as well developed as they are in other countries. Pakistani universities rarely tap into their alumni network or engage with industry, and neither has industry made any serious effort to generate more practical interest in universities. It is high time to make some serious attempts to reduce the gap between industry and academia, he said. He emphasized that NBP plans to remain engaged with universities more regularly. This partnership can play a helping role in student recruitment, retention, and workforce development from within the local economy. He also mentioned that a number of graduates from the UoK’s Business School have built successful careers at NBP and are contributing to the bank’s growing success.

He also mentioned his other engagements with IBA, Karachi, LUMS, Institute of Management Sciences (IMS Peshawar), Karachi Business School and other institutions as Deputy Governor, SBP for the introduction of syllabus of Islamic Finance and research relating to issues faced by Islamic banking.

Saeed Ahmad said that he was delighted to visit University of Karachi, unarguably one of the most renowned academic institutions of Pakistan and having the honor of meeting Professor Dr. M. Ajmal Khan S.I., Vice Chancellor of UoK.

Professor Dr. M. Ajmal Khan highlighted the contributions of UoK since its establishment in 1951 and highlighted the fact that UoK’s graduates have been providing services in various national institutions. He said that the contributions of UoK’s graduates are recognized in all fields and particularly in the areas of finance and industry.

Dr. M. Ajmal also talked about the challenges being faced by the UoK in carrying out educational activities, mainly the ever increasing resource gap. He said that the UoK is providing higher education particularly to lower income groups of the society who could not afford hefty fee at other educational institutions. He further mentioned that the university was facing an annual budget deficit of PKR 3 – 4 billion. Dr. M. Ajmal desired to plug the deficit and said that NBP and other leading financial institutions and businesses in Karachi should play their role to strengthen the UoK’s financial position.

At the occasion, Mehmood Arshad, the UoK’s Alumni representative, acknowledged the highly effective role Mr. Saeed Ahmad had played for the promotion of Islamic Banking system in Pakistan. He requested him to introduce NBP’s ’Aitemaad Islamic Banking Services’ at UoK.

Mr. Mehmood Arshad, UoK Alumni representative, Dr. Salman Gulzar and Mr. Omer Javed of ’Green Better’ also present at the occasion. Other team members from NBP included Syed Jamal Baquar, SEVP/Group Chief, Corporate Banking Group, Mr. Shaukat Mahmood, EVP/Group Head, Service Quality Group and Syed Ibne Hassan, VP/Media-Service Quality Group.

With developing regional trade, Pakistan can overcome its trade deficit: Mian Zahid Hussain

President Pakistan Businessmen and Intellectuals Forum (PBIF), All Karachi Industrial Alliance (AKIA), Senior Vice Chairman of the Businessmen Panel of FPCCI and Former Provincial Minister Mian Zahid Hussain last Friday said the portion of regional trade is 3.57 percent which is just $29 billion in the total global trade of $815 billion in 2016 four neighbouring countries including Pakistan, Iran, Afghanistan and India, which is thought provoking. Despite trade preferential agreement with Iran and trade agreements with India and Afghanistan the total regional trade as of 2016 stood at mere 6 percent.

The veteran Business Leader while talking to the business community said that Pakistan’s trade relations with neighbouring countries are weak which need to strengthen. Due to disturbed relations with India, the two leading economies of the SAARC countries have a weak trade relation. Pakistan share friendly relations with Iran and has actively defended Iran’s interests in the days of US ban on Iran but this too could not develop active trade ties between the two countries. Afghanistan is highly dependent on Pakistani ports with respect to international trade and is a major export destination for Pakistan but the cross boarder terrorism largely affects the regional trade between the countries.

The Former Minister said that Pakistan exports limited items to Indian including scrap iron, steel, dates and mineral but if the Kashmir dispute is being resolved, there lies huge trade and agriculture cooperation potential between the countries. Pak-Iran trade has been reduced post 2010, though Iran cannot provide much of Pakistan’s industrial imports due to weak industrial sector but crude oil trade can be increased. Pakistan’s exports to Iran include rice and textile made-up.

Mian Zahid Hussain said that Afghanistan is the Country with lowest economy in the World and the most war affective one. There is preferential trade agreement between the countries but Pakistan’s exports to Afghanistan have been gradually replaced by Iran and India. The total trade between the countries in 2016 stood at mere $1.74 billion which was just 26.7 percent of Afghanistan total imports within the period. The newly elected Government of Pakistan should form long lasting revolutionary policies to bring strength to the regional trade between the neighbouring countries and the Country can attain the economic stability.

MCB Bank announces financial results for the half year ended June 30, 2018

The Board of Directors of MCB Bank Limited, met under the Chairmanship of Mian Mohammad Mansha, on August 01, 2018 to review the performance of the Bank and approve the financial statements for the half year ended June 30, 2018.

During the six months period ended June 30, 2018, MCB Bank Limited reported Profit Before Tax (PBT) of Rs. 16.00 billion (-9.74%) and Profit After Tax (PAT) of Rs. 9.76 billion (-28.68%). The significant decrease in PAT was on account of a tax provision reversal amounting to Rs. 3.59 billion recorded in June 2017 results.

Net interest income of the Bank improved significantly by 12.49% over corresponding period last year and was reported at Rs. 22.55 billion. Analysis of the interest earning assets highlights that income on advances increased by Rs 4.8 billion, primarily on account of significant increase in average advances volume of Rs. 118 billion with improved yield of 39bps. On the investment side, the average volume dropped by Rs. 88 billion with decrease in yield of 9bps, resulting in a decrease of Rs. 3.4 billion in investment income. On the interest expense side, the Bank registered a decrease of Rs. 756 million (-4.75%) in comparison with the same period last year. The decrease in cost was on account of improved current account concentration level and constant reduction in high cost deposits. Resultantly, the spread of the Bank improved to 3.69% from 3.48% of same period last year.

The non-markup income block of the Bank was reported at Rs 8.26 billion reflecting a decrease of 14.63% when compared with corresponding period last year. The Bank continued with its focus on core non-fund based income stream which was reflected in 11% growth in the fee, commission and brokerage line. Income from dealing in foreign currencies reflected an increase of Rs. 225 million (+32%) when compared with corresponding period last year. Capital gains and dividend income went down by Rs. 2.09 billion and Rs. 242 million respectively, due to the lackluster performance of the capital market during the period.

On the administrative expenses side, the Bank reported an increase of 18.87% (excluding pension fund) over corresponding period last year with major increase in personnel cost, rent, depreciation and repairs, primarily on account of cost associated with Ex-NIB operational activity. Administrative expenses include one-off expense of Rs. 1.90 billion on account of past service cost based on actuarial valuation of pension cost payable as per Honourable Supreme Court’s order. On the provision against advances front, the Bank continued with its recovery trajectory and posted a reversal of Rs. 1.43 billion, with Rs. 220 million reversals in provision against investments.

The total asset base of the Bank on a standalone basis was reported at Rs. 1.42 trillion reflecting an increase of 7.11% over December 31, 2017. Analysis of the assets mix highlights that net investments have increased by Rs. 32.15 billion (+4.89%) with net advances increasing by Rs. 41.38 billion (+8.82%) over December 31, 2017. The coverage and infection ratios of the Bank improved to 94.07% (Dec 2017: 93.74%) and 8.49% (Dec 2017: 9.47%) respectively.

On the liabilities side, the deposit base of the Bank registered a significant increase of Rs. 50.26 billion (+5.19%) over December 2017 which resulted in the Bank crossing One Trillion Deposit benchmark. The increase of Rs. 50.26 billion is net of the deposits transferred to MCB’ wholly owned subsidiary MCB Islamic Bank Limited to the tune Rs. 21.92 billion. MCB Bank Limited continued to enjoy one of the highest CASA mixes in the banking industry of 92.90% with current deposits increasing by 6% and savings deposits by 5% over December 2017. The concentration level of the current accounts stands improved to 39.23% of the total deposit size as at June 30, 2018.

Earnings per share (EPS) for the half year was Rs. 8.24 as compared to Rs. 12.30 during the same period last year. Return on Assets and Return on Equity were reported at 1.42% and 14.29% respectively, whereas book value per share was reported at Rs. 115.40.

While complying with the regulatory capital requirements, the Bank has the highest cash dividend per share in the industry with regular interim dividends and remains one of the prime stocks traded in the Pakistani equity markets. Bank’s total Capital Adequacy Ratio is 16.56% against the requirement of 11.275% (including capital conservation buffer of 1.275%). Quality of the capital is evident from Bank’s Common Equity Tier-1 (CET1) to total risk weighted assets ratio which comes to 14.82% against the requirement of 6.00%. Bank’s capitalization also resulted in a leverage ratio of 7.38% which is well above the regulatory limit of 3.0%. The Bank reported Liquidity Coverage Ratio (LCR) of 180.53% and Net Stable Funding Ratio (NSFR) of 123.72% against requirement of 90% and 100% respectively.

The Bank enjoys highest local credit ratings of AAA / A1+ categories for long term and short term respectively, based on PACRA notification dated June 27, 2018. Moreover, PACRA has maintained TFC rating of MCB Bank Limited at AAA, through its notification dated June 27, 2018.

During the second Quarter, the Bank has successfully completed the transfer of business of 90 branches from MCB Bank Limited to wholly owned subsidiary MCB Islamic Bank Limited.

The Board of Directors declared 2nd interim cash dividend of Rs. 4.0 per share for the half year ended June 30, 2018, which is in addition to Rs. 4.0 per share interim dividend already paid to shareholders.

Indus Motor Company wins environment excellence award

Indus Motor Company (IMC) has been awarded the 15th Annual Environment Excellence Award (AEEA) at the Annual Conference on Environment 2018 held in Karachi recently.

The conference was organized by the National Forum for Environment and Health (NFEH), a non-profit organization focused on creating public awareness on environmental, healthcare and educational issues in Pakistan.

Recognized among the top 10 organizations of Pakistan for leading efforts to protect the environment, the award secured by IMC underlined the company’s vision, contribution to environment conservation, as well as its robust corporate social responsibility program. Coupled with this achievement, IMC also received the accolade Special Recognition Award for Best Presentation of AEEA 2018 Nomination.

CEO of Indus Motor Company, Mr. Ali Asghar Jamali said, “It is an honor for us to be recognized by NFEH. The achievement not only brings us joy but also empowers and motivates us to forge ahead with our environmentally-focused efforts with increased might. It reaffirms our commitment to incorporating best practices across our operations and allows us to serve as a role model for others to emulate.”

The awards were presented after the assessment and unanimous agreement of a panel of esteemed judges including government officials and corporate dignitaries.

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