BANKING SECTOR WELL SET TO RETAIN GROWTH MOMENTUM IN 2006
Banking experts believe that all the banks will be able to meet the statutory requirement of minimum paid up capital of Rs. 2 billion
SHAMIM AHMED RIZVI, Bureau Chief, Islamabad
June 26 - July 02, 2006
Banking sector in Pakistan likely to retain its robust growth momentum during 2006 as well in continuation of its excellent performance in 2005. The banking sector will also be able to meet the paid up capital requirement of RS. 2 billion by the end of the year as set by the State of Pakistan.
Banking experts believe that all the banks will be able to meet the statutory requirement of minimum paid up capital of Rs. 2 billion easily as their profitability markedly increased during 2005. Apparently, there were two main reasons for this exceptional growth in profits, one; the spread between lending and deposits had increased to the banks benefit and two; there was tremendous credit growth especially in the field of consumer financing. Profitability of the commercial banks, on an average, rose by over 36 percent during 2005 mainly because of large gap between the rates of interest paid to depositors and charged from lenders. The gap is now narrowing down because of some measures taken by the government in view of hue and cry from depositors. Despite that banking sector growth momentum during the year 2006 as well and the profitability will still be over 25 percent, said the head of the research department of the Askari Commercial Bank.
The banking sector in Pakistan as a whole, sustained its growth momentum during the year 2005 but the performance of the Askari Commercial Bank has been outstanding by any standard. The growth momentum is still on and they are confident to maintain their position in the year 2006 as well.
Askari Bank has expanded into a nation wide presence of 99 branches, and an Offshore Banking Unit in Bahrain. As shared network of over 800 online ATMs covering all major cities in Pakistan supports the delivery channels for customer service. The bank had equity of Rs.8.5 billion and total assets of Rs. 107.168 billion, with over 475,000 banking customers, serviced by a total staff of 2,118.
Askari Commercial Bank Ltd was incorporated in Pakistan on October 09,1991, as a Public Limited Company. It commenced operations on April 1, 1992 and is principally engaged in the business of banking, as defined in the Banking Companies Ordinance, 1962. The bank is listed on the Karachi, Lahore & Islamabad Stock Exchanges and its shares are currently the highest quoted from the new private sector banks in Pakistan.
It is new planning to enter into the field of Islamic banking and intends to open over half a dozen new branches for this purpose. The first branch is to be opened in Rawalpindi by the end of this month.
How the bank has performed in various fields of its activities since its inception in 1999 is reflected in the following chart of financial results.
AS AT 31 MAR 99
AS AT 31 DEC 05
OVERALL GROWTH %AGE
1 Operating Profit
2 Profit After Tax
5 Foreign Trade
8 Earnings per share
9 No of Employees (regular)
10 No of Branches (incl. OBU)
** Entire increase from profits
***Compound Annual Growth Rate
The bank has won the following prestigious awards during 2005:
1. Corporate Excellence Award - by the Management Association of Pakistan.
2. The Best Presented annual accounts Award - by South Asian Federation of Accountants.
3. The Best Corporate Report Award - by a Joint Committee of the Institute of Chartered Accountants of Pakistan and the Institute of Cost and Management Accountants of Pakistan.
4. The Best Retail Bank in Pakistan Award - by the Asian Banker, Singapore.
5. The Corporate/Institutional Internet Bank in Pakistan - by the Global Finance.
6. The Best Under a Billion Award - by Forbes - the famous US Financial Journal (Asian Version).
7. 1st Consumers Choice Award - by Consumers Association of Pakistan.
8. Entity Rating - maintained long-term rating at "AA+" and short term rating at "A1+" the highest possible for this category.
Over the years, Askari Bank has proven its strength as a leading banking sector entity with ever increasing commitment to its clients, through a strategic investment in electronic technology. Askari Bank achieved the following firsts in Pakistani banking:
i) The first Pakistani bank to offer on line real time banking on a countrywide basis.
ii) The first Pakistani bank with nation wide network of ATMs.
iii) The first bank in Pakistan, foreign or local, to introduce Internet banking in the country.
iv) The first bank in Pakistan, together with ABN-Amro, to develop an inter bank switch for the ATMs
v) The first bank in Pakistan to launch Mobile ATM.
Askari Bank offers the following retail products to serve the needs of the consumer market:
* Askari Bank's Value Plus - Rupee Deposit Account.
* Askari Bank's Personal Finance - Loans Scheme
* ASKAR - Auto Loans
* Askari I-Net Banking - Credit Card facility
* Askari Master Card - Credit Card facility
* Askari Travellers Cheques - Rupee Travellers Cheques
* ASKCARD - Debit Card
* ASKPOWER - Prepaid Card
* Askari Bank's Mortgage Finance - Home Loans
* Askari Bank's Business Finance - Business Loans
* SmartCash - Running Finance Facility for Consumers
* Askari Kissan - Agri Finance Programme.
* Askari Bank's Mobile ATM.
Askari Bank has played a Commendable role as a corporate citizen. It has made generous contributions in the areas of sports, culture, poverty alleviation, women & childcare, health & medical sciences, education, human development and scientific research.
It has sponsored international squash tournaments where professionals from all over the world participated. Askari Bank has also sponsored various other sports tournaments, including Golf, Polo and swimming at both amateur and professional level. The bank has contributed towards social awareness programs for AIDS, water conservation and blindness, and has promoted the Country's cause on international forum by co-sponsoring the first interactive electronic encyclopedia on Pakistan.