SIR MOHAMMED ANWAR PERVEZ, OBE,
HPk first hit the headlines in 1992 when he became the proud
recipient of the Order of the British Empire. He was also awarded a
Knights Bachelor in the Queen’s Birthday Honours list for services to
business and the world of charity in the UK and internationally. The
highest civil award of Pakistan "Hilal-e-Pakistan" was
conferred on him by the President of Pakistan in March 2000.
The Bestway group of which he is the Chairman was
widely known as the owner of twenty eight cash and carry stores
throughout England and Wales. In 1998, the group started its investments
in Pakistan with the opening of Bestway Cement manufacturing plant in
Haripur. United Bank Limited is the latest acquisition which they
purchased on its privatization after forming a consortium of Abu Dhabi
& Bestway Groups.
During his visit to Karachi last week, in an
exclusive interview Sir Mohammed Anwar Pervez, Vice Chairman, UBL shared
with us his experience and successes in the world of business. He
explained the rationale of making huge investment in Pakistan and
specially buying out the United Bank Limited.
prompted you to invest in Pakistan and specially in the equity of UBL?
UBL was the largest privatization attempted by the Government of
Pakistan, launched in June 2001, with 21 interested parties. It was
impacted by the adverse developments of the September 11, 2001 and was
finally concluded in October 2002 by which stage only three bidders were
left. The consortium comprising Bestway Group (BG), out of the UK and
Abu Dhabi Group (ADG) from the UAE were finally the winners at a record
price. This signaled the strong confidence reposed by these investor
groups, in the improved governance of the country, the economic
potential, the banking opportunity and the existing management of the
Both BG and ADG, like other overseas investors were
aware of the short-term sluggishness of the economy, a resource starved
government and the need for improvement in infrastructure, security and
regulatory environment. However, we also saw the opportunity of a large,
absolute educated workforce which is English speaking, IT enabled,
untapped and underdeveloped resources, greater discipline in governance,
improving reserves, a large local savings pool and low interest rates.
With a competent management, a talented workforce and
uncompromising standards of merit and adequately scaled production
capacity not only focussed on domestic but also international demand, we
are confident such investments can overcome the challenges of Pakistan
and exploit both Pakistan and international opportunities to create
commercial successes, both for ourselves and for the country. We believe
we can achieve commercial success without depending on unsustainable
privileges, subsidies and tariffs.
Both investors groups are expecting UBL to surface
other investment opportunities in Pakistan and the region. Such
opportunities will also be associated with investments by other
investors groups. In our acquisition of UBL, our aim is to illustrate
how through a privatization a showcase institution of the highest
international standards can be created using the best indigenous talent
available in the region. This is to engender confidence into other
potential investors to pursue other similar opportunities.
What has been the performance of UBL at the year end 2002?
quick glance over the year end achievements and their comparison with
the financial results of the previous year reinforces our conviction
about investment in UBL.
UBL’s profits before taxation showed an increase of
88% over the previous year and touched the high level of Rs 2.8 billion.
The profit after taxation increased by 635%, total assets by 14%,
Shareholders Equity by 407% and home remittances by 112%. The total
deposits of the Bank showed an increase of 15% over the previous year
and stood at Rs 162 billion. Major increase in our deposits was of low
interest bearing type which reduces our financial costs. The bank
handled over Rs 134 billion of import and export business which reflects
an increase of 17% over the figures of the previous year.
The non-performing loans decreased by another Rs 6
billion and have now come down to the low level of Rs 5.7 billion. I
think it is in the area of large scale decrease in the volume of
non-performing loans that the bank management has performed
exceptionally well during the last three years. UBL’s investment
port-folio has shown an increase of 136% in just one year. In a period
when lending is not growing in proportion with the growth in deposits,
the surplus funds deposited in securities are earning attractive returns
for the bank.
you satisfied with these results which hardly cover full year as a
Yes, the figures at the end of the very first financial year are better
than what we had expected. Nothing proves the soundness of our judgment
better than the results that have already been achieved and are here
new products the bank has launched since privatization?
It may please your readers to know that since privatization (during the
last 3 months) we have launched 3 new products:
A) UNITED MONEY MARKET FUND:
The first open-ended
Fixed Income Fund in Pakistan. The benefits are:
• backed by investment in Blue Chip Companies
• attractive daily return over 8% p.a. (last three
• no penalty on sale and encashment
• encashment in just three days
• buy and sell at any UBL branch — nation wide
It has been heralded by Chairman, Securities &
Exchange Commission of Pakistan (SECP - Regulator) as the most
professionally structured fund of international standards ever offered
to investors in Pakistan.
B) BRAND NAME — UBONLINE:
a web/internet based account enquiry service to all UBL customers
throughout the country. Customers can access info on accounts across the
country and worldwide round the clock from the comfort of their home or
offices using their PC or mobile phone. Further enhancement is underway
enabling customers to transfer, pay utility bills and make investment
from their own home and offices.
C) BRAND NAME — UNIREMOTE:
is introduced to conduct Inter-branch banking at all activated hubs
throughout the country, add-on to UBLonLine. It ultimately enables
customers to transact from any online bank (200 branches countrywide).
Brand name — TezRaftsar is 24 hours delivery of
remittances service to Pakistan by overseas Pakistanis. The volumes have
trebled since last year.
Master (Credit) Card has been launched for customers
in the Gulf along with the supporting 24 hours call centre.
We are also upgrading/improving ATM network and
e-commerce across the bank.
Other innovative products are also in hand to be
kind of challenges do you foresee and how do you plan to convert these
Due to general conditions in the money market, lending is not
commensurate with deposits. Thus the major challenge before any
financial institution today is to find attractive avenues for investing
its surplus funds. The fall in interest rates effects the profitability
of financial institutions, but it can have a positive impact if the off
take of advances and the total volumes of performing loans can be
increased in proportion to the growth deposits. Our focus will be on
SMEs, Agricultural and related industry advances and Housing Sector
loans. These sectors of our society are in dire need of bank credits.
These are the largest employment generators and offer major potential
for the country.
As you know Pakistan offers the opportunity of
creating an agricultural surplus (potentially for export) of three times
what it consumes. To achieve these integrated solutions are warranted
that will improve farmer yield, productivity and profitability as well
storage, grading and marketing services. UBL is committed to promoting
all of these. The first such project that UBL is supporting is the
UBL’s Agrimall project comprises franchised shops
in all major agricultural union councils that will provide essential
farm services ranging from supplies of all farm inputs, leasing of
sophisticated farm machinery and farming advice to farmers intending to
improve the productivity and output under one roof. UBL’s own
contribution will be in the shape of branches, at or in close proximity
to each Agrimall, which we extend credit to these shops and to their
OTHER PROJECTS WILL BE ANNOUNCED IN DUE COURSE.
There is a paucity of good investment opportunity for
large part of the country’s local savings pool. UBL intend to address
this by channeling most of the equity investment opportunities to local
savings and saving institutions. This will encourage local capital
formation. A smaller portion will be retained for overseas investors
specifically for those who offers clients value addition by creating
access to overseas market and technology which will create products for
the most sophisticated markets and not just for the domestic market.
This will help avoiding deterioration of the country’s future Balance
major deals your bank has finalized in the recent past?
We have jointly Lead Managed — for a major Customer issuance of Term
Finance Certificate (TFCs) of US$ 260 million (the largest ever TFC
issue in Pakistan).
We have developed Listed Asset Backed Securitization
of the future receivables for Mobile Phone Co. worth US$ 17 million —
First ever deal of its kind in Pakistan.
For purchase of Boeing 777 for our National Flag
Carrier (PIA), we have advised and arranged short-term financing of US$
85 million. We are also advising and arranging of a long-term financing
of US$ 150 million to them.
For a major textile group, we advised and arranged
the issuance of TFCs of US$ 17 million the largest TFC issue in
the Textile Sector.
For a major national corporate, we advised and
arranged a 5 year syndicated offshore morabaha financing worth US$ 70
the bank plan to close down its loss making branches?
Well, it is easy to close down loss making branches and increase the
overall profits. But the challenge before a dynamic and forward looking
professional management is to convert the loss making branches into
profit making units. The new strategies being followed by UBL are
basically customer focused. Our aim is to provide banking services to
larger segments of our society, even to those sections which have not
even been introduced to banking services as yet. We will realign
branches to positions where the business potential is greater.
order to meet the Human Resource requirements for the kind of
initiatives that UBL wants to undertake and is already undertaking, do
you feel that the bank has the required manpower and that too of the
level that may be needed?
As a service organization, Human Resources are our most significant
assets. Their development is a continuous process. It is very satisfying
to note that during the turnaround years UBL’s management had laid the
greatest emphasis on raising the levels and skills of the bank’s human
resource. The level of technology is continuously rising. UBL cannot
afford to be left behind. Our new HR policy is to make substantial
investments in improving our most productive asset and upgrade their
professional skills. Our strategy will be to have accountability at all
levels. We have also recently made some structural changes in the
organization chart at the mid-management level.
will be the new pillars of corporate culture of UBL?
With our powerful drive and determination to excel, the following will
be the pillars of our corporate culture:
MANAGEMENT OF HUMAN RESOURCE — OUR GREATEST ASSET
• Accountability at all levels
• Benchmarking positions
• No transfers, instead all open positions to be
subjected to internal and external competition
• Raising professional standards through continuous
training (we will nurture those who are non performers or slow
FOCUS ON CUSTOMERS & CUSTOMER SOLUTIONS
• Innovation, customer sensitivity and service.
• Scientific and objective analysis of Need Gaps
for new products introduction
do you visualize the future of UBL?
believe in optimism and my focus has always been on the bright side of
the canvas. Our teams appear to be highly motivated. We will be shortly
launching some innovative and customer-friendly products. Our regions
are further intensifying their relationship with customers. With the
support of our customers and hard work of our teams, I foresee that UBL
has a very bright future.