Foreign operations to start soon
An interview with Kalim-ur-Rehman, President and
Chief Executive of Askari Commercial Bank
May 21 - Jun 03, 2001
ASKARI Commercial Bank (ACB) is all set to start its
foreign operations and joint ventures so as to expand its activities
"We are considering foreign operations but it is
not easy to get a license from the central banks of the foreign
countries as we are relatively a new bank by international
standards," said the President and Chief Executive of Askari
Commercial Bank, Kalim-ur-Rehman in an interview.
"One of the first areas that we would like to
cover is the Gulf region, especially the UAE, Muscat and Oman," he
Kalim talked about various aspects of the banks with
special reference to making it a unique and a bank of an international
He said ACB was one of the largest and most
profitable of the new private sector banks. 'We have diversified into
the corporate and retail markets as well," Kalim said adding that
the large domestic banks differed on accounts of their large overheads
and substantial non-performing loans despite significant improvements
over past years.
"We certainly have the advantage of being
smaller and hence more efficient," informed Kalim. "We also
enjoy a distinct advantage in terms of technology in which we are far
ahead," he added.
Kalim said that the bank had worked hard to reach its
present status despite the depressed economic conditions. "The last
two years have been particularly difficult for banks due to the
shrinking margins—both in loaning operations and foreign exchange
transactions," he said adding that ACB had expanded its credit
portfolio by over 80 per cent during the last two years thus sustaining
Kalim said that the bank's total assets exceeded Rs37
billion and there were plans to continue expanding.
He said competition was tougher but it will be a few
years before the existing nationalised banks are able to effectively
implement their new strategies as private banks.
Presently, the bank had 29 branches in Pakistan and
planned to open two more by April this year. "We are working on
opening at least another 10 branches by 2002. Closure of loss causing
and insolvent branches by other banks has effected ACB," he said.
Kalim ruled the possibility of the Army Welfare Trust
— the major sponsor of ACB — from disinvesting in the bank saying
that this is the most successful and profitable venture. He said,
however, collaboration with a foreign bank can always be considered
provided it is mutually beneficial.
About the latest audited financial results of the
bank, he said we have shown good growth during 2000. As compared to
1999, our deposits grew by 25 per cent to reach to Rs30.4 billion, the
loans and advances increased by 37 per cent to touch Rs17.9 billion, our
total balance sheet registered a growth of 20 per cent to reach Rs37
billion, the imports business handled by us grew by 50 per cent to reach
Rs26.2 billion and the export business increased by 37 per cent to
However, despite the very substantial increases in
our business volume, the after tax profits grew by only 12 per cent
mainly because of the shrinking margins due to the highly competitive
The domestic banking industry has a great opportunity
to step into the shoes of the foreign banks who are reducing their
operations in Pakistan, and thereby improve the volume and type of
business they have been handling so far.
Commenting on the performance of the bank and the
challenges from its competitors like Habib and United Banks, he said
"in terms of capital adequacy, return on assets, quality of assets
customer services, and the use of modern technology, we are way ahead of
the much larger players like Habib and United Banks. Their size
certainly matter as their larger branch network enables them to reach
all segments of the population.
Chief Executive, Askari