Research Analyst
Dec 5 - 11, 2011

The Bank of Punjab (BOP) Limited is engaged in commercial banking. The bank deals in deposits in local currency and foreign currency, remittances, and advances to agriculture sector and industries.

The bank has five segments including trading and sales that includes fixed income, equity, foreign exchanges, commodities, credit, funding, own position securities, lending and repos, and brokerage debt; retail banking like retail lending and deposits, private lending and deposits, and trust and estates investment advice; commercial banking that is project finance, real estate, export finance, trade finance, lending, guarantees, bills of exchange and deposits; payment and settlement comprised of payments and collections, funds transfer, clearing and settlement; and agency serviced from depository receipts, securities lending, and issuer to paying agents.

The BOP was established in 1989 in pursuance of the Bank of Punjab Act 1989 and given the status of scheduled bank in 1994.

It has a network of 277 branches at all major business centers in the country. A wholly owned subsidiary of BOP, First Punjab Modaraba (FPM) was established in 1992 and is managed by Punjab modaraba services (Pvt) Ltd.

Being the major stakeholder in the bank, the government of Punjab has full faith in the new management and operations of the bank. The government has pledged its unequivocal support to the bank and firmly believes that the affairs of the bank are sound and its financial health robust.




Rs. 0 up to 200,000 5
Rs200,001 up to 400,000 7
Above Rs400,001 8

Senior bank accounts are for senior citizens: 55 years and above. They are eligible to open saving accounts as per bank's criteria.

The account can be opened singly or jointly (husband and wife) provided either of them is of 55 years or above.


Rs. 0 up to 400,000 Normal PLS SB rate
Rs400,001 up to 500,000 7.5
Over Rs500,000 Normal PLS SB rate

This is also a saving bank product available for general public. The account can be opened singly or jointly. This product is designed to attract deposit/savings from public particularly salaried and small investors.

The account can be opened with a minimum initial deposit of Rs10,000. However, in case average deposit during the month falls below Rs10,000, account maintaining charges shall be levied as per the bank's schedule of charges. This product is governed under PLS rule of profit and loss sharing system. Maximum profit at 7.5 per cent per annum as per different slabs shall be paid on minimum monthly deposit up to Rs500,000. Deposit can exceed Rs500,000. However, profit will be paid at normal PLS-SB-account rate on amount over and above Rs500,000.


This account has been introduced for corporate clients. This is an operating account. Profit on the account is calculated on daily product basis by determining the slab on the basis of average balance maintained in the account. The deduction of Zakat and withholding tax is applicable as per law of the land, profit payable on monthly basis.


The banking sector is still reluctant to extend finances to the private sector due to the rising default cases; the non-performing loans (NPLs) are still on the upper side.

Due to accumulation of bad assets from private sector, the financial sector prefers to invest in the government papers. As of September 2011, the NPLs of the banking sector were estimated to touch a new high level Rs629 billion reflecting the poor performance of the economy. NPLs of banks and development finance institutions continued to grow and registered a hefty increase of 6.48 per cent in the third quarter (June-September) of FY 2011.

Further, the total NPLs crossed Rs600 billion marks in the third quarter of FY11 and climbed to Rs629.555 billion as on September 30, 2011 compared with Rs591.226 billion as on June 30, 2011, depicting a surge of Rs38.329 billion or 6.48 per cent in July-Sep of FY11.

The increase was much higher than second quarter of FY11, as an increment of Rs5.54 billion was registered.

The increase during the July-Sep 2011 was even higher than first quarter, in which NPLs rose Rs22 billion.

NPLs of banks recorded increase Rs37.371 billion, and reached Rs613.219 billion in September against Rs 575.848 billion of June this year.

During this period, NPLs of DFIs rose Rs958 million to Rs16.336 billion from Rs15.378 billion.

NPLs of public sector banks also went up Rs26.299 billion to Rs193.214 billion from Rs166.915 billion during the period.

Local private banks had the largest share in total NPLs, as NPLs of private banks reached Rs377.334 billion in Sep 2011 from Rs368.561 billion in June 2011, up Rs8.773 billion.

NPLs of specialized banks posted an increase of Rs1.77 billion to Rs35.441 billion from Rs33.671 billion. With an increase of Rs529 million, NPLs of foreign banks notched up Rs7.23 billion from Rs6.701 billion.

Net NPLs to net loans were also on higher side and reached 6.53 per cent by end of third quarter from 5.48 per cent in second quarter, depicting an increase of 1.05 per cent in three months.