BOP BAGS LCCI ACHIEVEMENT AWARD SECOND TIME RUNNING

KHALID BUTT, Bureau Chief, Lahore
June 26 - July 02, 2006

Bank of Punjab last week was the recipient of repeat achievement award as Bank of Year form Lahore Chamber of Commerce and Industry for second year running.

The award was bestowed at a glittering ceremony in Lahore by Acting President Muhammadmian Soomro. This was on the basis of overall performance and upgradation of BOP to "A1+" (Short Term) and "AA" (long term). It is pertinent to mention that in short term A1+ is the highest rating benchmark. The bank has consistently perform well and shown steady improvement in its overall performance.

The dynamic President of BOP, Hamesh Khan, told PAGE, in an exclusive interview that the bank in past- 3 year as been completely turned around through a continued and sustained paining by its professional management. The particularly sentiment its pioneering and innovative scheme in consumer banking, crop insurance and constant product improvement. Its various innovative scheme including the consume halving have been successful showing healthily terms and recovery. He was hopeful of BOP continuing its march on the road to progress in future with firm determination to carve a niche for itself as a leading modern bank.

In a wide ranging chat on the performance of BOP, Hamash said, The financial soundness indicators of the Bank of Punjab reveals an all round improvement particularly in the areas of capital adequacy, asset quality, liquidity and profitability. Various past managements conducted the Bank's operations in a directionless manner marred with adhocism and unguided actions. No effort was made to develop self-sustainable system and procedure. No systems & controls were introduced through regimented policy ambit to create direction, objectivity & transparency in the organization. Employee's morale was at its lowest ebb.

The situation has been reversed by the turnaround vision of the new management and since then has brought several qualitative as well as quantitative changes. Last two and a half years have been very exhilarating and satisfying period for the present management because the strategy that it had devised and started implementing in May 2003 has completely transformed our Bank into a viable, proactive, progressive and a very prosperous institution.

The present management team has turned around the Bank following a holistic approach with focus on growth of balance sheet, I.T. development and human resource management. The Management has succeeded in bringing about a change in the strategic focus of the Bank's long term policy objectives by capitalizing on BOP's potential strengths and eliminating some of its inherent organizational weaknesses.

The overall performance of the Bank's Management has been categorized into following parts to have a fair view and assessment of the Board:

A. Key Financial Indicators
B. Awards/External Image Enhancements
C. Improvement in Management Function
D. Concludes

KEY FINANCIAL INDICATORS:

The success of these initiatives is demonstrated below in the bank's impressive performance indicators:

Rupees in Million

Particulars

December 2002

December 2003

December 2004

December 2005

Growth 2005 Over 2002 (%)

Deposits

23,767

34,938

54,724

88,465

272%

Advances

6,621

18,344

39,439

63,624

861%

Shareholder's Equity

2,363

3,052

4,420

6,777

187%

Capital Employed

3,313

5,208

7,839

13,670

313%

Profit Before Tax

432

1,002

1,736

3,165

633%

Profit After Tax

284

689

1,368

2,353

729%

Total Assets

29,553

43,421

66,320

111,154

276%

 


 

Particulars

December 2002

December 2003

December 2004

December 2005 (Provisional)

Growth 2005 Over 2002 (%)

Return on Avg. Assets (Pre-Tax)

1.59%

2.74%

3.16%

3.57%

124%

Return on Avg. Equity (Pre-Tax)

18.71%

37.01%

46.47%

56.53%

202%

Earning Per Share (Pre-Tax) (Rs.)

1.84

4.27

7.39

13.47

632%

Return on Avg. Assets (After-Tax)

1.05%

1.88%

2.49%

2.65%

154%

Return on Avg. Equity (After-Tax)

12.30%

25.45%

36.62%

42.03%

242%

Earning Per Share (After-Tax)

1.20

2.93

5.82

10.01

734%

Dividend (%)

17.50%

25.00%

40.00%

52.00%

197%

Stock Price (Rs.)

15.80

34.95

65.90

102.45

548%

%age of NPLs to Gross Advances

18.82%

6.46%

2.92%

2.11%

-89%

%age of Net NPLs to Gross Advances

11.97%

3.89%

1.63%

0.82%

-93%

* The above figures show that our Bank has managed to achieve significant performance on the back of sustainable core operations.

* The Bank of Punjab has strengthened its overall risk management function. The Bank's assets quality, with a reduction in NPLs both in absolute terms as well as percentage of total advances, has improved. Moreover, the emphasis on strengthening systems and controls is expected to limit fresh impairment.

* The Bank of Punjab has taken the fair share of the fast credit growth in the country with a hallmark of introducing diversity in loan portfolio. The above comparison reveals that advances touched Rs.64 billion in December 2005 which depict 814% growth from December 2002 figure of Rs.7 billion.

* The deposits grown upto Rs.88.4 billion showing a cumulative growth of Rs.64.7 billion as on December 31, 2005 over December 31, 2002.

AWARDS/ENHANCEMENT IN EXTERNAL IMAGE:

The Bank received following appreciations for the external organizations during the year 2005-06:

1. CREDIT RATING UP-GRADATION:

Credit rating of the bank has been upgraded by M/s Pakistan Credit Rating Agency (PCARA) which now stands at "A1+" (Short Term) & "AA "(Long Term). It is pertinent to mention that in short term mark A1+ is the highest rating benchmark. In the year 2002 the Bank's short-term and long-term ratings were "A1" and "A" respectively.

2. BEST CORPORATE REPORT AWARD:

The Joint Committee of the ICAP & ICMA selected the BOP as a winning company for the Best Corporate Reports for the year 2004. The competition included all the companies listed on all the three stock exchanges of the Pakistan.

3. MERIT AWARD OF SOUTH ASIAN FEDERATION OF ACCOUNTS (SAFA):

On the basis of evaluation of the annual report 2004, the South Asian Federation of Accountants (SAFA) adjudged the Bank of Punjab as the recipient of "Merit Award" under the "Banking Sector subject to Prudential Supervision" category for the year 2004. The Awards under different categories are conferred on the basis of evaluation, administered by SAFA's Centre of Excellence on Best Presented Accounts Award & Best Corporate Governance Award, of the published annual reports of entities from the South Asian countries.

4. 2nd KISSAN TIME AWARD:

The Bank was adjudged as Best Agri Loan Bank and has been awarded 2nd Kissan Time Award in the year 2005.

5. 15th BOLAN EXCELLENCE AWARD:

The Bank was the recipient of the Best Bank Award under 15th Bolan Excellence Awards distributed in 2005.

6. ACHIEVEMENT AWARD: The Lahore Chamber of Commerce & Industry rated the Bank as the Best Performing Bank in 2005 & 2006.

7. TAMGHA-E-IMTIAZ:

In recognition of the concrete contribution, the President of Pakistan conferred Tamgha-e-Imtiaz upon the President of the Bank Mr. Hamesh Khan for the year 2005.

8. BEST BANKER OF THE YEAR 2005 AWARD:

In recognition of his commendable performance the Lahore Chamber of Commerce & Industry President of the Bank Mr. Hamesh Khan was awarded Best Banker of the Year Award 2005.

IMPROVEMENT IN MANAGEMENT FUNCTION:

1. PRODUCT DEVELOPMENTS:

In order to increase the availability of credit, under reasonable terms and conditions, various new products have been introduced & old products have been remodeled to meet the needs of all segments of the market, they are as under:

* Agricultural Loans (12 multifarious schemes)
* Corporate Loans - New
* House Loans - New
* SME Loans - New
* Consumer Loans- New

2. INFORMATION TECHNOLOGY DEVELOPMENTS:

* Invested in technology (front end & back office) and computerized all the branches.
* Opened fifteen ATMs & several more to come on line this year (M-Net).
* 100% networking of branches on real time basis.
* MIS System thoroughly upgraded.
* Introduced Debit Card.
* Introduced E-banking.

3. HR DEVELOPMENTS:

* Provided training to the existing staff, to compete with the changing environment & update them with the market.

* Instituted mandatory 3 days regimented training for every staff member.

* Created & hired qualified team of more than 200 Relationship Managers for customer relationship with three months formal training.

* Recruited a team Agriculture Credit Officers, specialized in the field of Agriculture to meet & understand the needs of the farmers.

* Recruited a large number of Cash Officers to improve customer services and bring efficiency in the daily operations.

* Introduced an objective annual goal settings & appraisals system.

* Introduced teller system.

CONCLUSION

*The Management is continuing to invest in new business activities. The benefits from cost efficiencies across the enlarged business portfolio have started to accrue.

*The share of fee based income in total revenues is gradually increasing. Bank's financials for the forthcoming period shall amply display this diversification of core revenue streams.

*The Management will continue to leverage innovative business models that add value for our stakeholders. There are two more areas we will continue to focus upon, namely, building quality human resources and a thorough review of major work processes, aimed at rationalizing support systems, internal controls and automation", he added