Since inception, Askari Bank has been mainly engaged in the business of banking and concentrating on growth through improving service quality, investment in technology and people, utilizing its extensive branch network which includes Islamic and agricultural banking. It is expected that the Bank will continue to focus on building a low cost deposit base, investing in efficient risk weighted asset, optimally managing the loan book with prudent risk management given the risk of credit headwinds because of significant increase in interest rates. It is the priority of the management to invest in technology to build its digital capabilities to re-define customer experience and to enhance digital penetration in their product and service offerings for its existing and prospective customers.
On the other hand, the financial experts of the bank recorded that during the third quarter and nine months ended September 30, 2019, the Bank recorded profit after tax (PAT) amounting to Rs.4.38 billion as against to Rs.3.62 billion for the same period of 2018, a year on year increase of 21 percent. The Bank’s profit before provisions and taxation was increased by 20 percent to Rs.7.94 billion from Rs.6.62 billion previous year. The financial experts of the Bank also recorded that the earnings per share (EPS) for the current period are registered at Rs.3.48 billion against Rs.2.88 billion for the same period last year. Aggregate net revenues for the current nine months grew to Rs.21.3 billion from Rs.17.9 billion, enhancing by 18 percent. The growth in revenues was led by 18 percent rise in net mark-up income as the Bank positioned itself in growing interest rate environment; higher interest rates, rising average deposits and effective balance sheet management contributed to the rise in net interest income.
During the current period, the Bank’s rating was maintained at ‘AA+’ (Double A Plus) for the long term and ‘A1+’ (A One Plus) for the short term by PACRA. The ratings reflect relative position of the Bank, driven by AKBL’s strong sponsors and brand, continued growth trajectory, improvement in net spreads and volumetric increase in earning assets.
The Bank officials also recorded that Askari Bank’s Agriculture and Rural Business Division (ARBD) has gained more strength with enhanced and efficient delivery and control mechanism for meeting an increased demand for credit by the farmers in an easy, accessible and affordable manner. With an innovative product range, rated best in the market, the Bank continues to surpass its allocated targets for agriculture financing. While focusing on business development, this unit also attained more refinement in back-office processing, counting credit initiation, operations, risk management, in line with the business dynamics and regulatory framework. ARBD has enlarged to 89 branches in Pakistan, and remains proactively engaged with its stakeholders for the aggregation of services and enhancing life standard of farmers through its distribution network. Furthermore, the experts of the bank also recorded that trade and transactions related fee commission and foreign exchange revenues grew by 30 percent during the period under review mainly driven by income from foreign exchange, branch banking, home remittance, trade commission and card related fees.
Operating expenses grew by 10 percent chiefly reflecting the inflationary upsurge and impact of regulatory levy of depositors’ protection premium. Customer deposits grew by 13 percent and recorded at Rs.648 billion at September 30, 2019, while gross advances grew by 8 percent and are recorded at Rs.400 billion as on that date.
The Askari Bank registered a net provision of Rs. 731 million chiefly because of a higher provision on the portfolio of stock market investments as the fall in stock market index continued during the period under review; the Bank preferred to hold the portfolio of equity shares instead of liquidating at depressed levels as better exit points will accrue once economic and political clarity emerges. Recoveries from non-performing loans contributed a net reversal of Rs. 356 million during the period under review.
Cash Management Services
Askari Cash Management Services aims to effectively manage the accounts receivable portfolio of medium and large corporate entities. This service helps corporate entities to improve their liquidity, due to its well-diversified branch network. The service primarily aims at providing clearing, collection and cash/transfer facility to corporate clients under one resource center, which will handle the process through the branches and provide adequate reporting to corporate clients, on various aspects of their accounts receivable portfolio every month.
The officials also recorded that Askari China desk was created with the sole intent of facilitating Chinese businesses working for various projects in Pakistan, and has been immensely successful in terms of fostering rich financial prospects and bringing in valuable Chinese deposits and trade. With a growing number of Chinese investors entering Pakistan, the Bank is well-placed to cater to the needs of all existing and new customers. Askari Bank fosters the spirit of small/medium enterprises (SE/ME) and Commercial Banking by financial deepening and extension of credit towards the grassroots of small and medium traders, manufacturers and businessmen.
Ask Sona Card
Ask Sona Card is a joint venture of Askari Bank Limited (AKBL) & Fauji Fertilizer Company Limited (FFCL), specially designed to create convenience and cater to the business needs of FFCL and its dealers. It is an innovative, high-tech electronic cash management solution that replaces the existing conventional collections system. The payment/transaction specific debit card is proprietary technology, with plastic money features which will revolutionize the concept of transfer of funds. Askari Bank has become the market leader in cash management solutions with the launch of Ask Sona Card.