From KHALID BUTT, Lahore
 Oct 31 - Nov 13, 2005

Bank of Punjab is set to end the current year showing historical results. This pragmatic optimism as expressed by the Chief of the Lahore-based bank, Hamesh Khan, stems from the just announced third quarterly financial results. BOP, which maintained the trend through 12 consecutive quarters, has been under the stewardship of a professional banker, bears testimony to this stellar performance and phenomenal growth.

The Board of Directors of the Bank of Punjab met on 25th October 2005 to review quarterly accounts of the Bank for the period ended September 30, 2005 that were considered and approved by the Board.

During the period ended September 30, the Bank maintained its pace of excellent performance and earned a pre-tax profit of Rs.2,662 million as against Rs.1,401 million for the corresponding period of the year 2004 reflecting an increase of 90%. After-tax profit was Rs.2,000 million as against comparative figure of Rs.1,055 million last year. The earning per share for the period before issuance of bonus shares works out to Rs.11.07 as against Rs.5.84 for the same period of last year. However, after taking into account interim announcement for issuance of 30% stock dividend in June 2005, the EPS comes to Rs.8.51 as against Rs.4.49 in September 2004.

Deposits and Advances of the Bank grew by 63% and 65% to Rs.70,836 million and Rs.50,011 million, respectively, over September 30, 2004. Equity of the Bank increased to Rs.11,547 million as against Rs.6,303 million on corresponding date of last year."

In an exclusive interview with PAGE, Hamesh Khan talked about the remarkable turnaround and the success story of the Bank, he had inherited in a state of utter stagnation and decay. With his progressive style and innovative approach he had changed the face of BOP beyond recognition. Its remarkable expansion, change of culture and other measures have brought the bank back into national reckoning with rapid growth across the country and the recent result was a true manifestation of its solid current state.

Hamesh has been quick to introduce massive training, progressive and innovative ideas and accountability to uplift the bank's entire image. The bank now appears comparable to any advanced western banks with the outlook, style and functioning of its spanking new look branches. So is the headquarter, staffed by hand-picked highly motivated and talented officials to follow the vision of their youthful leader.

It was therefore no surprise that on October 27, 2005, Punjab Assembly, through an Act raised the authorised capital of BOP from Rs 2 to 10 billion. The Board of Directors had already in acknowledgment of his fine track record, upgraded him from Managing Director to President and given him the powers to operate without any hitch to achieve the ambitious goals set by the management.

Hamesh said that one of the main thrusts of the bank has been rapid development of Consumer Financing. Asked to dilate on his thoughts on the subject, he said: "A brief look back at the evolution of the consumer finance market reveals that the financial services industry has long been competitive, innovative, and resilient. Especially in the past decade, technological advances have resulted in increased efficiency and scale within the financial services industry. Innovation has brought about a multitude of new products, such as subprime loans and niche credit programs for immigrants. Such developments are representative of the market responses that have driven the financial services industry throughout the history of our country.

"From colonial times through the early twentieth century, most people had quite limited access to credit, and even when credit was available, it was quite expensive. Only the affluent, such as prominent merchants or landowners, were able to obtain personal loans from commercial banks. Working-class people purchased goods with cash or through barter, since banks did not extend consumer loans to the general public.

"However, more-intense industrialization and urbanization during the late nineteenth and early twentieth centuries dramatically changed the market for small consumer loans. Urban wage earners used credit to help them purchase the vast array of durable goods being produced by the new industrial economy, such as automobiles, washing machines, and refrigerators. Naturally, this growth in demand fostered increased competition for consumer credit, and, most important, the development of new intermediaries to supply it. Early in the twentieth century, many new organizations that focused exclusively on the needs of consumers entered the field, and the structure of consumer finance began to change dramatically."

Hamesh said that BOP had been one of the pioneers in consumer financing in Pakistan. It had taken the lead much ahead of others with its scheme of zero per cent financing for the purchase of air-conditioners and other household appliances by the consumers. Currently, he said the bank has over half a dozen consumer finance schemes, being offered to the public. These include:

1. BOP Aasaiah Loan

2. 2. BOP Demand Finance Load (Clean)
a) Balance Transfer Facility (BTF)
b) Top Up Facility

3) BOP Quick Cash

4) BOP Car Loan

5) BOP Motorcycle Loan Scheme

6) BOP House Loan

According to him the bank had touched Rs 4 billion figure on these transactions. But, he added, the track record of the BOP on default was less than one per cent, with its fine-tuned and scrupulously careful policies in this regard, keeping the bank in fine fettle.