Unilever, Standard Chartered sign agreement

our correspondent
Thursday, September 25, 2014
From Print Edition
Karachi: Unilever Pakistan Limited will now collect payments from its dealers living in
remote areas using Standard Chartereds virtual account technology. The consumer goods
giant and the largest international bank in Pakistan signed an agreement in this regard on
Tuesday, a press statement said
A significant portion of Unilever Pakistans dealers make payments via demand draft instruments
which are vulnerable to time lags. Delays in payments often hinder the supply chain and reduce
availability of supplies for shops and stores in far flung areas.
In the statement issued by the bank, it said that Standard Chartered stepped in with unparalleled
product capability and unique solution structuring using a combination of Real-Time Gross Settlement
(RTGS) & ATM payment modes, channeled through Virtual Accounts technology to effectively transfer
payments to Unilever on the same day.
Majid Aziz, head of Transaction Banking said, Consistent with our brand promise [we are] offering
banking solutions that greatly enhance our clients operational efficiency in line with the dynamics of
Pakistans business environment.
He said with simple, widely available online payments mechanisms RTGS and ATM - transfers virtual
account technology will allow funds to be transferred between banks and reach the beneficiary on the
same day, with complete payer identification. We believe that this product will go a long way and help
enhance Unilevers business operations and outreach to remote areas through efficient and secure
cash management solutions.
Asiya Zaidi, corporate finance director, Unilever Pakistan Ltd, said a technology like Virtual Accounts
brings flexibility not only to improve cash flows but also to minimize our credit exposure.
This is indeed a big leap forward in how businesses can manage their operations more effectively,
especially in volatile market situations.
Unilever is proud of its partnership with Standard Chartered Bank on this breakthrough initiative, she
added.

Banks
PAT
-Growth
EPS
Dep inc
CASA
B.S.Size
Core Inc
Non core

ABL
1H 14
7.1
28.4%
6.2

1H 13
5.5
4.8

1H 14
14.6
39%
9.8
3.5%
(1.45Tn)
76.7%
1.741 tr

HBL
1H 13
10.5
7.07
(1.401 Tn)

PRESS RELEASE
HBL Posts 39% Growth in Profitability

NBP
1H 14
10.5
27.4

UBL
1H 13
8.3
8.6

MCB

Others

July 22, 2014: The Board of Directors of HBL reviewed performance of the HBL Group (the Group) and
have approved financial statements for the six months ended June 30, 2014.
The Group has continued to deliver during 2014 with another strong performance. The fundamentals
of the Group remain very strong with growth in balance sheet size, improving core CASA deposits,
healthy contribution from both mark-up and non mark-up income, effective risk management and
strong capitalization.
Pre-tax and after-tax profits were at Rs. 22.1 billion and Rs. 14.6 billion respectively for the six
months ended June 30, 2014 as against Rs. 15.9 billion and Rs. 10.5 billion respectively in
corresponding period last year. The profit after tax rose by 39 percent, resulting in earnings per share
of Rs. 9.88 for the six months ended June 30, 2014 (Rs. 7.07 last year).
The Groups deposits increased by 3.5% to Rs. 1.450 trillion as on June 30, 2014 from Rs. 1.401
trillion on December 31, 2013. The Bank was successful in delivering an impressive improvement in
the deposit mix, with Current Accounts showing a growth of 22.5% to Rs. 504 billion improving CASA
ratio to 76.7% as on June 30, 2014 as against 73% as on December 31, 2013. Overall deposit growth
remained strong despite a well managed reduction of high cost deposits. Overall the balance sheet
size grew by 1.5% to
Rs. 1.741 trillion.
Operating income in all areas has shown impressive growth. Net mark up Income increased by 21.8
percent to Rs. 31.9 billion (Rs. 26.2 billion last year). Improvement in net mark up income can be
attributed to change in deposit mix resulting in lower cost of deposits and higher earning on its
investment. Non mark up income increased by 41 percent to Rs. 11.3 billion for the six months ended
June 30, 2014 contributed by increase in all areas including fee & commission, capital gains, income
from dealing in foreign currencies and investment income. Provisioning expenses have reduced from
Rs. 1.1 billion to only Rs. 0.2 billion this period. NPLs have declined by 7.5% to Rs. 51.3 billion as on
June 30,
2014.
The Board has declared second interim cash dividend of Rs. 2.25 per share for the year ending
December 31, 2014.
ABL earnings stand at Rs7.1 billion
KARACHI: Allied Bank Limited (ABL) reported earnings of Rs7.1 billion (earnings per share of Rs6.2)
for the first half of 2014, depicting a growth of 28.4 percent on year-on-year basis from Rs5.5 billion
(EPS of Rs4.8) in the same period of CY13, a statement said on Tuesday.
It also announced second interim cash dividend of Rs1.50 per share, bringing the total dividend to
Rs2.75 per share for the first half of CY14.
The result came in line with our estimated EPS of Rs6 per share, Iqbal Dinani, an analyst at BMA
Capital, said.
The banks core income reported an increase of 24.1 percent Y-o-Y to Rs12.9 billion as compared to
Rs10.4 billion in the first half of CY13.
The increase is primarily attributed to 67bps higher KIBOR and higher PIB accretion during the first
quarter of CY14, Dinani said.
The banks non-interest income remained impressive during the period under review, posting an
increase of 25.8 percent Y-o-Y to Rs6.2 billion on account of higher capital gains of Rs1.6 billion
against Rs786.1 million in the corresponding period of CY13.
UBL profits surge 27.4pc to Rs10.5 billion
KARACHI: United Bank Limited (UBL), on Wednesday reported its first half profits up by 27.4 percent
to Rs10.5 billion on the back of higher reutrn from landings and lower expenses.
In its an unconsolidated results issued to Karachi Stock Exchange, the bank also announced a second
interim cash dividend of Rs2.5/share bringing the cumulative 1HCY14 dividend to Rs5.0/ share.

The Bank earned Rs8.3 billion in the corresponding period of last year. Earnings per share remained at
Rs8.6.
The board has also announced a second interim cash dividend of Rs2.5 per share
The banks core income reported an increase of 21.0 percent YoY to Rs20.2 billion compared to
Rs16.7 billion in 1HCY13, said BMA Capital Management in its post result report.
The increase in the earnings is attributed to higher interest earned by 13.9 percent YoY and a lower
provision expense of 15.4 percent YoY, it added.
The report said non-interest income remained strong during 1HCY14, posting an increase of 16.3
percent YoY to Rs10.0 billion on account of higher fees and commission income of Rs5.5 billion (up
20.2 percent YoY), higher dividend income of Rs1.0 billion (up 43.8 percent YoY) and a healthy income
from dealing in forex of Rs1.4 billion (up 80.4 percent YoY).

SBP maintains discount rate at 10 percent

Erum Zaidi
Sunday, July 20, 2014
From Print Edition

KARACHI: The State Bank of Pakistan (SBP) On Saturday maintained the discount rate at 10
percent for the months of July and August, restating its fear that slippages in prudent
policies and reforms implementation could depress growth.

The board has also decided to publish the summary of minutes of the monetary policy proceedings of
the board meeting in four weeks in order to make the proceedings of the central board of directors
meeting transparent.

Ashraf Mahmood Wathra, governor of the SBP, unveiled the monetary policy statement at a press
conference after the meeting of the SBPs central board of directors.

Wathra said economic conditions are definitely better than a year ago, but a detailed assessment of
the economy shows some uncertainties.

Despite challenging security conditions and the energy shortages, the GDP grew by 4.1 percent in
FY14, he said. However, investment expenditures as a percent of GDP have declined, which indicates
erosion in the economys future productive capacity.

But there are some silver linings in the clouds; more increase in foreign flows and foreign exchange
reserves and surge in export receipts, the economy could be on the sustainable path.

He emphasised on the need to carry on the reforms for achieving positive developments and
protracted stability.

The governor admitted that the agriculture sector underperformed over the last fiscal year. The central
bank has taken a number of policy measures to improve the performance of this most important
sector of the economy in a very short span of time, he said.

The central bank is offering different incentives to the farmers such as crop loan insurance. It has
increased the agricultural credit from more than Rs300 billion target in FY14 to Rs500 billion for the
current fiscal year, he said.

Pakistan will achieve a decent growth in the agriculture sector during FY15, he added.

According to the SBP governor, Pakistans population is growing at a faster pace and youth is adding to
it. Therefore, given the existing rate, the countrys economy needs to grow at six percent, but
unfortunately, we are still far away from it, he said.

The panel of governor and the monetary policy head rejected the IMF stance that there is a lack of
independence among the SBPs central board of directors in the formulation of the monetary policy.

The SBP act stipulates full autonomy and power to the central board of directors and executive
committee of the monetary policy in setting interest rates, the governor said.

Many commentators raised fingers on the SBPs independence of the formulating of the monetary
policy due the surge in the fiscal borrowings from the SBP. The real issue is not the policy formulation,
but to exercise it, said Hamza Ali Malik, head of monetary policy at the SBP.

Some economists said the central bank is running economy on ifs and buts and not in a hurry to cut
interest rates now.

Wathra told newsmen that the average CPI inflation in FY14, 8.6 percent, was in single-digit for the
second consecutive year. For FY15, the SBP expects average CPI inflation to remain in the range of 7.5
percent to 8.5 percent. However, international oil price uncertainty and unanticipated price shocks
owing to turmoil in the Middle East pose risks to the inflation outlook, he said.

The SBP governor said that the bank is effectively managing market sentiments by supplementing the
monetary policy stance with calibrated liquidity operations in the interbank market, adding that this
has contributed in achieving stability in the foreign exchange market and in building foreign exchange
reserves.

This has also facilitated the shift in banks investment from T-bills to PIBs, improving domestic debt
maturity profile of the government.

Despite significant injections by the SBP, appetite for liquidity remained sufficiently high in the market,
he said, adding that it resulted in higher short-term interest rates, making the rupee liquidity more
expensive.

This reduced pressure on exchange rate as it discouraged speculative holdings of foreign exchange
and made trade financing through foreign currency deposits held by banks more attractive, said
Wathra.

He said that a significant reduction in government borrowings from the banking system is contributing
towards low inflationary expectations and has provided necessary space to the private sector to
borrow from the banking system. However, persistent energy shortages and deteriorating security
conditions hint towards some risks to credit demand.

The SBP governor maintained that sustainability of lower government borrowings from the banking
system, including SBP, is contingent upon further reduction in the fiscal deficit and continuation of
external financing, adding that government needs to watch the fiscal position of FY15 i.e. the revenue
side cautiously.

Wathra told the audience that the growth in domestic debt during FY14 had decelerated to 14.5
percent, which was significantly lower than the average growth of around 27 percent during the last
three years. This bodes well from the point of view of countrys risk perception and could help in
attracting investment in the economy.

He reminded the audience that the increase in external borrowings since February 2014 had provided
a much needed respite and short term stability to the balance of payments position.

These foreign inflows resulted in a capital and financial account surplus of $6.1 billion which
comfortably financed the current account deficit of $2.6 billion and led to a significant increase in
SBPs foreign exchange reserves. By 4th July, SBPs foreign exchange reserves have increased to $9.6
billion.

He said that the increase in SBPs foreign exchange reserves brought about a shift in sentiments in the
foreign exchange market and stabilized the exchange rate. Moodys Investors Service has revised the
outlook on Pakistans foreign currency government bond rating to stable from negative.

According to the SBP governor, the impetus of positive sentiments together with continuation of IMF
program and governments privatization plan is expected to result in further strengthening of the
external position in FY15. However, sustaining this trend in the medium-term, especially in the postIMF program years, would require additional efforts and reforms.

Banking sector continues to be profitable

Erum Zaidi
Sunday, July 13, 2014
From Print Edition

KARACHI: The International Monetary Fund revealed that the banking sector in Pakistan
would continue to be stable and profitable. However, four banks are operating below the
statutory minimum capital requirement of 10 percent fixed by the central bank for 2014.
In its recent countrys assessment, the IMF expressed optimism that these banks would soon to raise
their capital as some strategic foreign investors showed interest to inject sufficient amount in the said
banks by acquiring shares.
Moreover, the SBP is actively engaged in a merger transaction of a private sector bank and over the
coming months, there will possibly be a capital injection.

The IMF said four banks, including one state-owned and three private banks, dont have enough
capital to continue their business operations, as their financial strength is weak.
According to the report, the non-compliant banks comprise 6.4 percent of banking assets with the
total capital shortfall being less than 0.05 percent of gross domestic product.
The state-owned bankwhich represents around 3.7 percent of banking assetsis only 0.7
percentage points below the regulatory requirement.
The public sector banks capital adequacy ratio improved to 9.3 percent as of end-March 2014. Given
the current profitability trend, the bank will possibly meet the CAR requirement by end-December
2014.
A bank received an expression of interest from a strategic foreign investor for both capital injection
and acquisition of shares from existing major shareholders, said the Washington-based lender.
Another bank received Rs2.5 billion from major shareholders as advance against a subscription of
rights issue and offers from potential foreign investors as well as commitment from existing sponsors.
By definition, paid-up capital is the amount of a companys capital that has been funded by
shareholders. Paid-up capital can be less than a companys total capital because a company may not
issue all of the shares that it has been authorised to sell. Paid-up capital can also reflect how a
company depends on equity financing.
As of March 2014, overall capital adequacy remained around 15 percent well above the CAR, even
after the implementation of Basel III. Asset quality indicators are largely stable, with non performing
loans hovering around 13 percent and provision coverage at 78 percent.
The staff urged the SBP to continue monitoring the implementation of the time-bound action plan to
address the capital adequacy issues with a few problem banks. Plans to deal with undercapitalised
banks are advancing relatively well.
To avoid any perceived forbearance, the staff stressed the importance of taking regulatory measures
in case banks are unable to raise needed capital. The authorities indicated the SBP has sufficient legal
powers for resolution or restructuring of problem banks as in the past.
Deposits have grown at steady pace (13 percent year on year). In part because of higher yields, in the
first quarter of 2014, banks doubled their holdings of Pakistan Investment Bonds and long-term
government bonds, buying Rs1.4 trillion against a target of Rs280 billion. This may result in higher net
interest margins, and if continued could perhaps crowd out private sector credit. Profitability indicators
improved on the back of lower provision charges and interest income from the holdings of government
securities.
Moreover, the SBP made a preliminary assessment of its resolution framework and planned to perform
a detailed assessment in the context of a technical assistance from the IMF, which reiterated that
enhanced central bank independence was key to an improved monetary policy framework

Bank Al Falah 600 branches 02/10/14