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BANKING SURVEY

2014

Prepared by Junaidy Shoaib Asad Chartered Accountant

Banking Survey 2014

Junaidy Shoaib Asad Chartered Accountants

2

Table of Contents

Purpose of the survey .................................................................................................................................................................. 4

Structure of the survey ................................................................................................................................................................ 4

About Us ...................................................................................................................................................................................... 5

Liability Disclaimer ....................................................................................................................................................................... 5

Banking Activities ......................................................................................................................................................................... 9

Income Streams ........................................................................................................................................................................ 9

Expenses ................................................................................................................................................................................. 19

Profitability ............................................................................................................................................................................. 25

Value Addition ........................................................................................................................................................................ 29

Gross Advances ....................................................................................................................................................................... 32

Non-Performing Assets ........................................................................................................................................................... 35

Non-Performing Advances and Corresponding Provisions ...................................................................................................... 38

Banking Liabilities: Deposits ....................................................................................................................................................... 44

Deposits .................................................................................................................................................................................. 44

Deposits Composition ............................................................................................................................................................. 45

Growth in Deposits ................................................................................................................................................................. 47

Current and Savings Deposits ................................................................................................................................................. 52

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Ratio Analysis ............................................................................................................................................................................. 54

Advance to Deposit Ratio ........................................................................................................................................................ 54

Capital Adequacy Ratio ........................................................................................................................................................... 58

Earnings per Share (After Tax) ................................................................................................................................................ 60

Asset Quality: Non-Performing Assets over Performing Assets ............................................................................................... 62

Mark-up Spread ...................................................................................................................................................................... 65

Other Banking Ratios .............................................................................................................................................................. 67

Credit Rating .............................................................................................................................................................................. 87

Glossary ..................................................................................................................................................................................... 89

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Purpose of the survey

The purpose of this survey is to summarize the financial performance of the banking industry of Pakistan during the year 2014 and comparing the performance of different banks when compared with the year 2013. For this intended purpose, the banking sector is divided into following three categories, namely:

• Private Banks • Public Sector Banks • Islamic Banks

There are other classifications of the banking sector as well, but the selected categories provide the major insight into each sector. The information contained in this survey has been obtained from the published consolidated financial statements of the banks, statistical bulletins and quarterly / annual reports published by State Bank of Pakistan (“SBP”), analysts and research reports and information published in business magazines and newspapers.

To enhance the understanding of ratios and analysis of performance of a particular bank, reference should be made to the published financial statements of the banks and glossary included at the end of this survey. We have tried to provide relevant financial analysis of banks, which we thought would be useful for benchmarking and comparison purposes.

Structure of the survey

As mentioned earlier, the banking industry is broken into three sectors. These three sectors are evaluated under perspectives of Profitability, Asset Allocation and Liability. Under these perspectives, the banks are individually analyzed and compared with their peers. The Profitability perspective analysis the revenue streams of the banks with stress on mark-up income and non-mark-up income. While under the Assets Allocation perspective, the performing and non-performing assets are discussed on the basis of available information. The survey then discusses the liabilities of the respective banks with a focus on the composition and growth in deposits. At the end of this survey, some significant ratios are calculated for each bank and discussed in detail with the aim of highlighting the respective banks’ performance. A detailed list of banks operating in Pakistan is presented on the pg. 5.

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We feel that the performance could be analyzed in more detail however given the availability of limited information and time we have restrained the survey to the analysis as desired in this survey. We would however encourage readers to provide further insight for making the survey more meaningful and useful for banking regulators, banking sector and deposit holders. You can email your suggestion to [email protected]

About Us

The firm was established in 2007 and represent Morison International as its member in Pakistan.

The firm is delivering value added prompt professional services to its valued clients with strong professional team lead by its Partners and qualified staff through its offices in Karachi, Lahore and Islamabad.

Over the last nine years that the firm is operating, it has made its presence felt in the market and has built strong reputation as providers of quality services with almost respect for the Ethical & Moral Standards. The list of our clients to whom we provide professional services include Non Banking Financial Institutions, Public and Private Limited Companies operating in manufacturing, service and trading sectors.

JSA provides industry-focused services to its clients in order to build public trust and enhance value through the application of what we call Linked Ideas. Our service culture combined with our cumulative knowledge culminates into innovative solutions to help promote the growth of our client’s business. Before rendering innovative advice we minutely ensure that all the legal and ethical obligations are respected. This is what we call Innovative Solutions.

In brief our firm is in the profession of audit, accountancy, taxation, corporate finance and corporate advisory services which include professional services on other related laws like competition law, Foreign Exchange Regulations, etc.

Liability Disclaimer

Junaidy Shoaib Asad, Chartered Accountants makes no warranties or representations about this survey or any of its content. We are not responsible for any direct, indirect or consequential loss suffered in connection with the use of this survey. We exclude, to the extent permitted by law, any liability which may arise as a result of use of this survey.

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By using this survey on the Banking Industry of Pakistan, you agree to indemnify us for any loss or liability arising out of your use of this survey. This material is produced by Junaidy Shoaib Asad, Chartered Accountants under the voluntary capacity and is based on public information.

It is intended to provide general information in summary form on banking industry performance for the year 2013 and 2014. The contents do not constitute advice and should not be relied upon as such. However, formal advice may be sought in particular matters, if considered necessary.

To the extent possible we have avoided expressing opinion on the performance of banking companies analyzed in this survey. However if any analyses is purported to constitute our opinion the same could only be inadvertent.

We have also endeavored to carry out the analysis on uniform criterion which we consider necessary for establishing benchmarking criteria. Readers are therefore encouraged to enlighten us if they feel some additional criterion or further refinement in the criterion used is necessitated.

Date: April 2015 Karachi

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PRIVATE SECTOR BANKS

PUBLIC SECTOR BANKS

1- National Bank of Pakistan (NBP);

2- Sindh Bank Limited;

3- First Women Bank Limited (FWBL);

4- The Bank of Punjab(BOP); and

5- The Bank of Khyber (BOK)

1- Allied Bank Limited (ABL);

2- Askari Bank Limited;

3- Bank Alfalah Limited (BAF);

4- Bank Al Habib Limited (BAH);

5- Faysal Bank Limited;

6- Habib Bank Limited (HBL);

7- Habib Metropolitan Bank Limited (HMB);

8- JS Bank Limited;

9- KASB Bank Limited;

10- MCB Bank Limited;

11- NIB Bank Limited;

12- SAMBA Bank Limited;

13- SILK Bank Limited

14- Soneri Bank Limited;

15- Standard Chartered Bank (Pakistan) Limited (SCB);

16- Summit Bank Limited; and

17- United Bank Limited (UBL)

ISLAMIC BANKS

1- AlBaraka Bank (Pakistan) Limited (AB);

2- BankIslami Pakistan Limited (BI);

3- Burj Bank Limited;

4- Dubai Islamic Bank Pakistan Limited (DIB);

5- Meezan Bank Limited (MB)

FOREIGN BANKS

1- Barclays Bank PLC;

2- Citibank N.A.- Pakistan Operations;

3- HSBC Bank – Pakistan Operations;

4- Industrial and Commercial Bank of China Limited – Pakistan Branches; and

5- The Bank of Tokyo-Mitsubishi UFJ Limited – Pakistan Operations

MICROFINANCE BANKS

1- Khushhali Bank Limited;

2- APNA Microfinance Bank Limited;

3- NRSP Microfinance Bank Limited;

4- Pak Oman Microfinance Bank Limited;

5- Tameer Microfinance Bank Limited;

6- Waseela Microfinance Bank Limited; and

7- ADVANS Pakistan Microfinance Bank Limited

BANKING ACTIVITIES

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Banking Activities

Income Streams

Income is generated by banks through the mark-up it earns and non mark-up income generated through other avenues. The following graphical statistics are expected to help the reader understand the composition of the income streams of the banking industry of Pakistan.

49,005

294,437

21,980

36,304

123,933

7,228

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

Public Sector Private Sector Islamic Banks

Mark-up & Non Mark-up Income (PKR Million)

Mark-up Income Non Mark-up Income

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FWBL NBP Sindh BOK BOP

37

34,4

50

3,41

4

3,30

6

7,79

8

83

31,3

99

956

1,06

6

2,80

0

Public Sector: Income Compsition (PKR Million)

Mark-Up Income Non Mark-up Income

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

ABL HBL MCB UBL Askari BAF BAH FAYSAL HMB JS NIB SAMBA SILK SONERI SCB SUMMIT

26,9

18

67,3

08

45,0

14

45,3

01

11,5

41

19,9

45

18,5

07

11,5

61

9,13

2

3,62

4

2,15

9

1,85

7

3,13

1

5,69

6

20,9

12

1,83

1

13,1

85

23,5

13

14,3

34

21,3

56

5,52

6

9,03

6 3,94

9

4,37

4

5,76

6

3,57

7

4,12

9

218

1,72

0

2,64

5

7,40

0

3,20

5

Private Sector: Income Compsition (PKR Million)

Mark-up Income Non Mark-Up Income

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

AlBaraka Islami DIB Meezan

726

631 1,11

7

4,75

4

2,06

6

3,31

3

3,80

1

12,8

00

Islamic Banks: Income Compsition (PKR Million)

Non Mark-Up Income Mark-up Income

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

BOK

BOP

FWBL

NBP

Sindh

0

14,761,929

978,390

4,170,261

0

36,523

22,195

621,258

5,266,354

12,105,586

453,565

33,251,478

3,675,290

160,678

1,365,808

332,036

9,947,062

708,600

3,312,174

68,623,830

126,795

Mark-up Income Composition: Public Banks (PKR Million)

on loans & advances from customers on loans & advances from financial institutions on investments in securities available for sale

on investments in securities held to maturity on investments in securities held for trading on deposits with financial institutions

on securities purchased under resale agreement Others

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

ABL

Askari

BAF

BAH

Faysal

HBL

HMBL

JS Bank

MCB

NIB

Samba

Silk

Soneri

SCB

Summit

UBL

30,044,307

17,653,400

27,497,999

15,090,563

21,041,398

52,890,270

11,157,916

4,957,184

28,921,508

9,215,769

1,981,172

7,834,980

9,706,279

15,473,675

5,855,532

37,157,993

19,925,295

15,777,191

17,826,937

16,446,465

8,645,104

64,785,406

17,756,220

4,033,390

47,052,221

4,719,368

881,739

1,327,841

6,235,462

17,591,049

3,588,239

28,102,249

16,009,049

120,918

6,219,695

11,970,285

1,643,252

8,227,545

2,470,273

781,608

36,078

1,016,155

0

346,974

0

195,594

16,990,543

84,839

0

992,063

1,472,409

254,428

121,306

301,894

1,598,121

Mark-up Income Composition: Private Banks (PKR Million)




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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Albaraka

BankIslami

DIB

Meezan

3,860,305

12,343,431

0

916,154

1,769,160

2,987,215

1,891,841

10,209,350

51,452

55,762

80,167

578,083

1,002,612

6,170,111

4,284,279

42,310

4,573,056

Mark-up Income Composition: Islamic Banks (PKR Millions)




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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

BOK

BOP

FWBL

NBP

Sindh

233,055

909,596

34,676

12,931,130

184,366

83,629

39,918

9,241

2,076,669

180,603

179,002

183,830

10,986

4,735,988

66,217

469,586

667,322

6,938

8,660,224

521,365

70,836

1,000,173

20,943

3,608,540

3,914

Non Mark-up Income Composition: Public Banks (PKR Million)

Fee, commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of securities Other Income

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-20% 0% 20% 40% 60% 80% 100%

ABL

Askari

BAF

BAH

Faysal

HBL

HMBL

JS Bank

MCB

NIB

Samba

Silk

Soneri

SCB

Summit

UBL

3,301,188

1,435,180

3,120,035

1,984,114

2,075,945

12,119,283

2,458,011

834,931

7,225,093

1,616,869

104,664

868,263

1,326,122

3,300,165

1,120,425

13,044,855

3,512,429

348,726

492,348

328,596

182,435

1,132,493

51,889

134,976

1,060,729

1,126,012

3,673

47,168

170,002

84,204

35,284

1,819,136

456,592

985,323

2,042,957

854,437

1,072,939

2,846,844

1,039,545

271,827

1,443,180

587,181

48,221

196,672

613,175

2,908,748

506,237

3,091,592

4,167,097

1,803,844

1,058,167

22,560

460,477

2,048,674

1,875,712

1,173,579

2,141,840

509,014

37,193

346,592

364,867

727,267

1,330,012

2,063,436

1,127,832

744,134

2,162,836

636,131

550,898

2,865,353

341,063

1,566,475

89,578

9,831

92,615

161,101

318,029

89,821

1,365,821

Non Mark-up Income Composition: Private Banks (PKR Million)


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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Albaraka

BankIslami

DIB

Meezan

401,845

387,333

806,451

1,569,327

7,862

283,633

194,963

172,356

122,501

1,626,363

135,759

32,173

197,190

1,148,499

5,242

40,074

309

127,062

Non Mark-up Income Composition: Islamic Banks (PKR Million)


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Expenses

The following graphical statistics are expected to be helpful in understanding the respective composition of the administrative expenses of the banks from the three sectors under survey.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

BOK BOP FWBL NBP Sindh Bank

1,309,858 3,214,300 375,00223,412,089

1,221,050

343,037406,003 120,766

2,723,267554,195

443,5882,073,892

154,423 10,873,895 626,933

Admin Expenses Composition: Public Banks (PKR Million)

Salaries Rents, Taxes, Insurance and Electricity Legal & Professional Charges

Communications Repairs & Maintenance Stationary & Printing

Advertisment & Publicity Auditor's Remuneration Travelling & Entertainment

Donation Others

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

ABL Askari BAF BAH Faysal Bank

HBL HMBL JS Bank MCB NIB Samba Silk Bank

Soneri Bank

SCB Summit UBL

9,21

5,68

5

5,16

1,72

7

8,77

6,22

6

5,38

0,01

7

5,47

4,02

2

20,4

15,7

71

3,52

8,03

9

1,47

4,76

8

8,75

5,22

7

2,92

7,50

6

704,

350

2,17

6,93

2

2,13

3,96

2

5,23

8,43

2

1,71

9,47

6

11,1

94,1

09

3,93

7,76

9

2,31

9,64

0

3,91

5,42

4

2,99

6,83

5

2,71

9,91

1

8,41

1,30

2

1,76

8,91

3

989,

577

4,98

2,19

5

1,16

2,29

4

367,

074

899,

466

1,83

1,64

7

3,14

5,14

2

1,07

8,57

2

10,8

48,3

45

Admin Expenses Composition: Private Banks (PKR Million)




Donation Others

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Albaraka BankIslami DIB Meezan

1,03

6,35

8

1,43

3,36

6

1,61

0,13

4

4,75

6,34

1

522,

674

721,

183

969,

272

1,57

4,43

3

656,

949

914,

838

753,

621

2,84

7,66

5

Admin Expenses Composition: Islamic Banks (PKR Million)




Donation Others

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

BOK BOP FWBL NBP Sindh

9,750,676 29,517,673 1,798,495 115,251,748 8,932,332

6,210,111 20,525,783 1,117,808 70,099,505 5,496,985

Public Banks: Mark-Up Income Vs Expense (PKR Million)

Mark-up Income Mark-up Expense

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

ABL Askari BAF BAH Faysal HBL HMBL JS Bank MCB NIB Samba Silk Soneri SCB Summit UBL

67,0

01,4

97

34,6

04,2

10

55,3

78,4

77

44,0

07,1

24

32,3

12,6

33

137,

842,

428

32,2

88,2

59

11,1

13,3

80

77,2

68,9

88

15,0

71,4

57

4,61

8,56

8

9,42

9,21

6

16,8

71,4

75

34,1

05,7

89

9,82

6,87

7

85,7

60,6

46

38,8

15,3

42

22,7

10,9

24

33,5

05,0

03

24,9

33,1

72

18,4

80,1

91

68,7

55,5

74

21,0

78,6

26

7,25

9,34

0

33,7

56,6

85

11,2

54,6

31

2,80

5,88

9

5,96

9,09

9

10,6

26,3

95

13,2

42,5

63

7,40

0,63

2

38,8

46,8

68

Private Banks: Mark-up Income Vs. Expense (PKR Million)

Mark-up Income Mark-up Expense

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


6,68

2,97

4

7,81

2,30

2

7,52

3,27

1

28,8

03,0

59

4,51

3,25

0

4,45

9,07

0

3,43

3,96

9

15,4

40,2

50

Islamic Banks: Mark-Up Earned over Expensed (PKR Million)

Interest Earned Interest Expensed

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Profitability

The banks included in this survey have reported a total net Profit before Tax (“PBT”) for the year ended 31 December 2014 amounting to PKR 238.807 billion (2013: PKR 161.267 billion), whereas, total net Profit after Tax (“PAT”) was PKR 158.948 billion (2013: PKR 112.507 billion). The banks have managed to earn total gross revenue of PKR 1,052.508 billion during the year (2013: PKR 888.454 billion); non-funded income contributed to around PKR 167.465 billion (2013: PKR 140.859 billion), accounting for around 15.9% of total gross revenue for the year (2013: 15.8%).

Fee, commission & brokerage income of PKR 75.448 billion (2013: PKR 67.304 billion), comprising around 45.1% of total non-funded income (2013: 47.8%) was recorded during the year, whereas PKR 32.678 billion (2013: PKR 23.340 billion) was booked on account of gain on sale of securities, which comprises around 19.5% (2013: 16.6%) of total non-funded income. The banks under the survey had also generated PKR 26.255 billion (2013: PKR 19.693 billion) on account of income from dealing in foreign currency and PKR 11.705 billion (2013: PKR 12.483 billion) as dividend income.

Operating expenses for the year stood at PKR 292.080 billion (2013: PKR 256.819 billion). Staff costs remained one of the most significant costs for the banks, averaging approximately 50.4% (2013: 51.6%) of total operating expenses. Furthermore, provisions amounting to PKR 28.312 billion (2013: PKR 39.074 billion) had been booked by the banks during the year, out of which, PKR 26.507 billion was booked against NPL (2013: PKR 33.735 billion).

The following chart lists the PBT of each sector in the years 2013-14. It also contains the change in the two years and variance accordingly.

PBT 2014 2013 Increase / (decrease) Variance %

Private Sector 199.956 144.467 55.489 38.4% Public Sector 30.343 12.407 17.936 144.6% Islamic Banks 8.508 4.393 4.115 93.7%

238.807 161.267 77.540 48.1%

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83.7%

12.7% 3.6%

Profit before tax

Private Sector Public Sector Islamic Banks

PAT 2014 2013 Increase / (decrease) Variance %

Private 132.520 100.568 31.952 31.8% Public 20.801 8.836 11.965 135.4% Islamic 5.628 3.103 2.525 81.4%

158.948 112.507 46.442 41.3%

Private Sector Banks have registered net PBT of PKR 199.956 billion (2013: PKR 144.467 billion) during the year, i.e. around 83.7% (2013: 89.6%) of total net PBT booked by the banks in this survey. Net PAT for the sector stood at PKR 132.520 billion for the year (2013: PKR 100.568 billion). Contribution of total gross revenue had been of PKR 792.904 billion (2013: PKR 666.292 billion), whereas PKR 360.013 billion (2013: PKR 314.564 billion) had been incurred on account of interest / mark-up / return expense. The overall net provision booked in this sector was PKR 14.521 billion

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ABL HBL MCB UBL Askari BAF BAH Faysal HMB JS NIB SAMBA SILK Soneri SCB Summit

2014 22,432 48,515 37,235 35,617 5,869 8,514 10,003 3,551 7,336 2,589 (108) 426 132 2,442 15,368 35

2013 14,931 36,134 32,857 28,964 (8,323) 6,807 7,552 2,172 5,117 1,078 2,112 82 (1,529) 1,530 16,368 (1,386)

(20,000)

(10,000)

-

10,000

20,000

30,000

40,000

50,000

60,000

Private Sector: Profit before taxation (PKR Million)

(2013: PKR 17.106 billion), out of which, PKR 12.492 billion (2013: PKR 15.047 billion) was booked against NPL. Total operating cost in this sector was PKR 218.414 billion (2013: PKR 190.156 billion).

During the current year, HBL had posted the highest PBT of PKR 48.515 billion and PAT of PKR 31.819 billion. Highest total provisions of PKR 2.272 billion was booked by Faysal, out of which, PKR 2.089 billion was booked against NPL. MCB has recognized the highest reversal of NPL provision of PKR 1.094 billion during the year.

Public Sector Banks have contributed up to PKR 13.115 billion and PKR 9.544 billion on account of net PBT and net PAT respectively during the year. Although the total revenue, net of mark-up expense, earned by banks in this sector was PKR 80.526 billion, the operating expenses incurred were PKR 47.935 billion.

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28

Net provision booked in this sector was PKR 19.475 billion, out of which, provision against NPL was PKR 17.095 billion, the highest of all the sectors in this survey. NBP has been the major contributor to NPL provision for the year, recording provision hit of PKR 17.459 billion, still managed to register the highest PBT and PAT for the year of PKR 7.737 billion and PKR 6.015 billion respectively. FWBL is the only bank in this sector to post a loss before tax and loss after tax of PKR 0.222 billion and PKR 0.206 billion respectively.

Islamic Banks have posted net PBT and net PAT of PKR 8.508 billion (2013: PKR 4.393 billion) and PKR 5.528 billion (2013: PKR 3.103 billion) respectively. Total gross revenue earned during the year was PKR 58.049 billion (2013: PKR 50.970 billion) and return expense was PKR 27.846 billion (2013: PKR 26.065 billion). This sector has also recognized a total provision of PKR 0.995 billion (2013: PKR 1.785 billion) out of which, NPL provision of PKR 0.837 billion (2013: PKR 1.593 billion) was recorded. Further, operating expenses amounting to PKR 20.700 billion (2013: PKR 18.728 billion) was also recognized during the current year.


2014 (666) 23,136 1,611 1,901 4,361

2013 (222) 7,029 953 1,669 2,978

(5,000)

-

5,000

10,000

15,000

20,000

25,000

Public Sector: Profit before taxation (PKR Million)

Banking Survey 2014


29

AlBaraka Islami Burj DIB Meezan

2014 216 469 - 925 6,898

2013 (34) 308 (1,739) 212 5,646

(3,000)(2,000)(1,000)

-1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000

Islamic Banks: Profit before taxation (PKR Million)

During the current year, Meezan has registered the highest PBT and PAT of PKR 6.898 billion and PKR 4.570 billion respectively. Further, the highest total provisions of PKR 0.563 billion was also booked by Meezan, out of which, PKR 0.546 billion was booked against NPL.

Value Addition

During the year ended 31 December 2014, total value added by the banks under survey amounted to PKR 408.085 billion (2013: 313.249 billion), after taking into account the Service Cost of PKR 124.802 billion (2013: PKR 104.837 billion). Out of the said value addition, PKR 145.340 billion (2013: PKR 131.001 billion) was allocated to Employees, PKR 91.231 billion (2013: PKR 66.194 billion) was allocated to Shareholders and PKR 23.018 billion (2013: PKR 20.284 billion) was allocated Growth & Expansion by the banks.

Banking Survey 2014


30

78.2%

16.9%

4.9%

Value Added

2014

80.2%

15.2%

4.6%

2013


Private Sector

Public Sector Islamic Total

Income from banking services 431.333 98.047 30.148 559.528

Cost of services (99.157)

(16.262) (9.383)

(124.802)

Value added by banking services 332.176 81.785 20.765 434.726

Non-banking income 1.558 0.058 0.055 1.671

Provisions against non-performing assets (14.521)

(12.796) (0.995) (28.312)

Total value added 319.213 69.047 19.825 408.085

Value allocated to:

Employees 101.133 34.827 9.380 145.340 Government 67.437 9.542 2.880 79.859 Growth & expansion 17.217 3.865 1.936 23.018 Society 0.907 0.012 0.001 0.920 Shareholders 76.773 11.701 2.757 91.231 Retained / (absorbed) in business 55.747 9.100 2.871 67.717

319.213 69.047 19.825 408.085

BANKING ASSETS

Banking Survey 2014


32

Gross Advances

Total gross loans, advances, Islamic financing and related assets (“Advances”) of banks under review stood at PKR 4,835.117 billion as at 31 December 2014 (2013: PKR 4,443.709 billion). Sector wise break-up of Advances is as under:

Gross Advances 2014 2013 Increase / (decrease) Variance %

Private Sector 3,477.038 3,194.219 282.819 8.9%

Public Sector 1,022.911 970.530 52.381 5.4%

Islamic Banks 335.168 278.961 56.207 20.1%

4,835.117 4,443.709 391.408

8.8%

Net Advances 2014 2013 Increase / (decrease) Variance %

Private Sector 3,162.857

2,888.204 274.653 9.5%

Public Sector 890.090

848.681 41.409 4.9%

Islamic Banks 322.672

266.947 55.725 20.9%

4,375.619

4,003.832 371.787 9.3%

71.9%

21.2%

6.9%

2014

71.9%

21.8%

6.3%

2013


Banking Survey 2014


33


2014 325,86 661,47 322,75 514,28 198,67 304,84 187,97 204,67 150,16 58,775 117,65 23,916 64,417 113,72 150,02 77,804

2013 285,41 630,42 268,47 461,67 192,17 273,82 173,65 204,34 144,14 35,170 104,58 20,562 61,470 104,31 168,42 65,569

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

Private Sector: Gross Advances (PKR Million)

2014 2013

Banking Survey 2014


34


2014 49,835 41,698 - 60,350 183,285

2013 39,314 38,932 30,481 36,759 133,475

-20,000 40,000 60,000 80,000

100,000 120,000 140,000 160,000 180,000 200,000

Islamic Banks: Gross Advances (PKR Million)

2014 2013


2014 9,401 731,980 41,204 43,243 197,083

2013 9,669 713,042 26,565 38,339 182,915

-100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000

Public Sector: Gross Advance (PKR Million)

2014 2013

Banking Survey 2014


35

Non-Performing Assets Gross Advances include PKR 574.319 billion (2013: PKR 571.034 billion), which had been placed under non-performing status, against which, provision of PKR 459.498 billion (2013: PKR 439.877 billion) had been booked by the banks under survey. Aggregate provision to NPL ratio stood at 80.01% (2013: 77.03%)

2014 2013

NPL Provision NPL Provision Private Sector 376.247 314.181 374.800 306.015 Public Sector 183.552 132.821 180.676 121.849 Islamic Banks 14.520 12.496 15.558 12.013

574.319 459.498 571.034 439.877

65.5%

32.0%

2.5%

2014

65.6%

31.6%

2.7%

2013


Banking Survey 2014


36


2014 22,922 79,527 21,908 57,105 31,376 19,412 5,025 29,293 19,325 2,813 29,017 2,144 8,222 10,224 23,096 14,838

2013 19,424 79,868 23,268 54,835 33,120 17,947 3,700 27,619 16,974 2,758 29,905 2,341 9,872 10,424 24,938 17,809

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

Private Sector: Non-Performing Loans (PKR Million)

2014 2013

Banking Survey 2014


37


2014 4,177 1,062 - 2,369 6,912

2013 5,248 1,109 1,758 2,603 4,841

-1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000

Islamic Banks: Non-Performing Loans (PKR Million)

2014 2013


2014 1,411 121,680 340 4,509 55,611

2013 763 116,098 43 3,857 59,915

-20,000 40,000 60,000 80,000

100,000 120,000 140,000

Public Sector: Non-Performing Loans (PKR Million)

2014 2013

Banking Survey 2014


38

Non-Performing Advances and Corresponding Provisions

Overall NPL to gross advances has slightly improved by around 1% during the year ended 31 December 2014. The same stood at 11.9% as at year end (2013: 12.9%). Major contribution to NPL to Gross Advances ratio was made by Public Sector Banks of 17.9% during the year (2013: 18.6%).

Provision to NPL ratio has further deteriorated to 80% during the current year (2013: 77%), majorly due to deteriorated ratio in Islamic Bank under survey to 86.1% during the current year (2013: 77.2%).

2014 2013

NPL to Gross

Advances Provision

to NPL NPL to Gross

Advances Provision

to NPL

2014 2014 2013 2013 Private Sector 10.8% 83.5% 11.7% 81.6% Public Sector 17.9% 72.4% 18.6% 67.4% Islamic Banks 4.3% 86.1% 5.6% 77.2%

11.9% 80.0% 12.9% 77.0%

Banking Survey 2014


39

10.8%11.7%

17.9% 18.6%

4.3%5.6%

0.0%2.0%4.0%6.0%8.0%

10.0%12.0%14.0%16.0%18.0%20.0%

2014 2013

NPL to Gross Advances

83.5% 81.6%72.4%

67.4%

86.1%77.2%

0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%90.0%

100.0%

2014 2013

Provision to NPL


Banking Survey 2014


40

In the private banking sector, highest NPL stood with HBL, amounting to PKR 79.527 billion, against which, provision of PKR 66.181 billion was held. Samba has the lowest NPL of PKR 2.144 billion and PKR 2.104 billion had been booked there against. However, NIB has the highest NPL to gross advances of 24.66% and BAH enjoys the lowest percentage of 2.67%.

7.0%

12.0

%

6.8%

11.1

% 15.8

%

6.4% 2.

7%

14.3

%

12.9

%

4.8%

24.7

%

9.0% 12

.8%

9.0%

15.4

% 19.1

%

6.8%

12.7

%

8.7% 11

.9% 17

.2%

6.6% 2.1%

13.5

%

11.8

%

7.8%

28.6

%

11.4

% 16.1

%

10.0

% 14.8

%

27.2

%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%


Private Sector

2014 2013

Banking Survey 2014


41

In the public banking sector, NBP held the highest NPL of PKR 121.680 billion and had booked provision of PKR 101.751 billion there against. Sindh had the lowest NPL of PKR 0.340 billion. Maximum NPL to gross advances percentage is held by BOP of 28.22%.

15.0

%

16.6

%

0.8% 10

.4%

28.2

%

7.9%

16.3

%

0.2%

10.1

%

32.8

%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%


Public Sector

2014 2013

Banking Survey 2014


42

In the Islamic banking sector, Bank Islami had managed to maintain the lowest NPL of PKR 14.520 billion (2013: PKR 14.520 billion), with the provision of PKR 12.496 billion (2013: PKR 12.013 billion) there against. Lowest NPL is held by Islami of PKR 1.062 billion, whereas the highest is held by Meezan of PKR 6.912 billion.

8.4%

2.5%0.0%

3.9% 3.8%

13.3%

2.8%

5.8%7.1%

3.6%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%


Islamic Banks

2014 2013

BANKING

LIABILITIES

Banking Survey 2014


44

Banking Liabilities: Deposits

Deposits

Total deposits of banks included in this survey stood at PKR 9,140.510 billion (2013: PKR 8,219.871 billion), including PKR 354.206 billion from financial institutions (2013: PKR 334.265 billion).

2014 2013 Increase / (decrease) Variance %

Fixed Deposits 2,291.537 2,232.782 58.755 2.6% Saving Deposits 3,383.537 3,027.600 355.937 11.8% Current Deposits - remunerative 336.047 255.364 80.683 31.6% Current Deposits - non remunerative 2,720.861 2,326.991 393.870 16.9% Other Deposits 54.323 42.870 11.454 26.7% Financial institution deposits 354.206 334.265 19.940 6.0%

9,140.510 8,219.871 920.639 11.2%

74.0%

19.1%

6.9%

2014

74.4%

18.9%

6.7%

2013

Private Sector

Public Sector

Islamic Banks

Banking Survey 2014


45

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2014

2013

2,291.537

2,232.782

3,383.537

3,027.600

336.047

255.364

2,720.861

2,326.991

354.206

334.265

Banking Industry (PKR Million)

Fixed Deposits Saving Deposits Current Deposits - remunerativeCurrent Deposits - non remunerative Other Deposits Financial institution deposits

Deposits Composition

Banking Survey 2014


46

Major contribution towards this deposit base had been from Private Sector Banks of PKR 6,761.399 billion (2013: PKR 6,119.133 billion).

Private Sector Public Sector Islamic Total

Fixed Deposits 1,629.129 463.543 198.864 2,291.537 Saving Deposits 2,590.772 546.875 245.889 3,383.537 Current Deposits - remunerative 174.394 161.653 - 336.047 Current Deposits - non remunerative 2,165.146 384.025 171.690 2,720.861 Other Deposits 40.619 11.740 1.964 54.323 Financial institution deposits 161.338 176.456 16.412 354.206

6,761.399 1,744.292 634.819 9,140.510

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Private Sector

Public Sector

Islamic

1,629.129

463.543

198.864

2,590.772

546.875

245.889

174.394

161.653

2,165.146

384.025

171.690

161.338

176.456

16.412

Sectoral Deposit Composition (PKR Million)

Fixed Deposits Saving Deposits Current Deposits - remunerativeCurrent Deposits - non remunerative Other Deposits Financial institution deposits

Banking Survey 2014


47

-

1,000.000

2,000.000

3,000.000

4,000.000

5,000.000

6,000.000

7,000.000

2014 2013

6,761.399

6,119.133

1,744.292 1,549.718

634.819 551.021

Deposits Comparison (PKR Million)

Private Banks Public Banks Islamic Banks

Growth in Deposits

Deposits for banks included in this survey increased by 11.2% as compared to 2013. Major increase in deposit was registered by Islamic Banks of 15.2% during the current year.

Among all the private banks, HBL had the highest deposit base of PKR 1,524.538 billion as at the year end, contributing to around 22.5% to the total deposit base of Private Sector Banks under survey. The major deposit base from financial institution is held by BAF of PKR 34.136 billion. ABL had the highest current deposit (remunerative) base of PKR 106.834 billion, whereas the highest current deposits (non-remunerative) were held by HBL amounting to PKR 496.599 billion.

Banking Survey 2014


48


ABL 667.864 608.407 59.457 9.8% HBL 1,524.538 1,401.230 123.308 8.8% MCB 688.270 632.309 55.961 8.9% UBL 951.902 889.526 62.376 7.0% Askari 387.535 335.173 52.362 15.6% BAF 605.963 525.526 80.437 15.3% BAH 446.311 386.099 60.213 15.6% Faysal 283.346 271.134 12.211 4.5% HMB 319.948 247.508 72.440 29.3% JS 107.430 80.055 27.375 34.2% NIB 105.103 104.888 0.215 0.2% SAMBA 31.642 24.633 7.010 28.5% SILK 68.770 69.433 (0.664) -1.0% Soneri 163.250 140.580 22.670 16.1% SCB 304.305 296.377 7.928 2.7% Summit 105.222 106.256 (1.034) -1.0%

6,761.399 6,119.133 642.266 10.5%

Banking Survey 2014


49


2014 667.86 1,524. 688.27 951.90 387.53 605.96 446.31 283.34 319.94 107.43 105.10 31.642 68.770 163.25 304.30 105.22

2013 608.40 1,401. 632.30 889.52 335.17 525.52 386.09 271.13 247.50 80.055 104.88 24.633 69.433 140.58 296.37 106.25

-

200.000

400.000

600.000

800.000

1,000.000

1,200.000

1,400.000

1,600.000

1,800.000

Private Sector: Deposits Growth (PKR Million)

2014 2013

Banking Survey 2014


50

2014 2013 Increase / (decrease) Varaince %

FWBL 13.449 18.338 (4.889) -26.7% NBP 1,234.405 1,101.845 132.560 12.0% Sindh 61.884 45.756 16.128 35.2% BOK 92.264 77.218 15.046 19.5% BOP 342.291 306.561 35.730 11.7%

1,744.292 1,549.718 194.574 12.6%


2014 13.449 1,234.405 61.884 92.264 342.291 1,744.292

2013 18.338 1,101.845 45.756 77.218 306.561 1,549.718

-200.000 400.000 600.000 800.000

1,000.000 1,200.000 1,400.000 1,600.000 1,800.000 2,000.000

Public Sector: Deposits Growth (PKR Million)

2014 2013

Banking Survey 2014


51


AlBaraka 80.222 75.647 4.575 6.0% Islami 90.331 75.226 15.105 20.1% Burj - 42.698 (42.698) -100.0% DIB 83.844 67.639 16.205 24.0% Meezan 380.422 289.811 90.611 31.3%

634.819 551.021 83.798 15.2%


2014 80.222 90.331 - 83.844 380.422

2013 75.647 75.226 42.698 67.639 289.811

-

50.000

100.000

150.000

200.000

250.000

300.000

350.000

400.000

Islamic Banks: Deposits Growth (PKR Million)

2014 2013

Banking Survey 2014


52

72.9

%

62.6

%

65.8

%

71.3

%

59.3

%

59.8

%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Private Public Islamic

CASA to Deposits

2014 2013

Current and Savings Deposits

Overall Current & Saving Deposits (“CASA”) for the current year was slightly increased to 70.46% (2013: 68.25%), the highest held by Private Sector Banks of 72.92% (2013: 71.27%).

2014 2013 Increase / (decrease) Variance

Private 72.9% 71.3% 1.6% 2.3% Public 62.6% 59.3% 3.3% 5.6% Islamic 65.8% 59.8% 6.0% 10.0%

201.3% 190.4% 11.0% 5.8%

RATIO ANALYSIS

Banking Survey 2014


54

Ratio Analysis

Advance to Deposit Ratio

Overall Advances (gross) to Deposits Ratio (“ADR”) stood at 52.9% as at 31 December 2014 (2013: 54.1%). Public Sector Banks had the highest ADR of 58.6% (2013: 62.6%).

Private sector banks have registered ADR of 51.4% (2013: 52.2%). Highest ADR was achieved by NIB of 111.9%, whereas lowest was booked by BAH of 42.12%.

51.4

% 58.6

%

52.8

%

52.2

% 62.6

%

50.6

%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Private Public Islamic

2014 2013

Banking Survey 2014


55

Public sector banks have registered ADR of 58.6% (2013: 62.6%). Highest ADR was achieved by FWBL of 69.9%, whereas lowest was booked by BOK of 46.9%.


2014 48.8% 43.4% 46.9% 54.0% 51.3% 50.3% 42.1% 72.2% 46.9% 54.7% 111.9% 75.6% 93.7% 69.7% 49.3% 73.9%

2013 46.9% 45.0% 42.5% 51.9% 57.3% 52.1% 45.0% 75.4% 58.2% 43.9% 99.7% 83.5% 88.5% 74.2% 56.8% 61.7%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

Private Sector

2014 2013

Banking Survey 2014


56

Islamic banks have registered ADR of 52.8% (2013: 50.6%). Highest ADR was achieved by DIB of 71.9%, whereas lowest was booked by Bank Islami of 46.2%.


2014 69.9% 59.3% 66.6% 46.9% 57.6%

2013 52.7% 64.7% 58.1% 49.7% 59.7%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Public Sector

2014 2013

Banking Survey 2014


57


2014 62.1% 46.2% 0.0% 72.0% 48.2%

2013 52.0% 51.8% 71.4% 54.3% 46.1%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Islamic Banks

2014 2013

Banking Survey 2014


58


2014 29.1% 18.2% 22.6% 22.7% 10.2%

2013 20.1% 16.1% 24.0% 24.0% 9.0%

0.0%5.0%

10.0%15.0%20.0%25.0%30.0%35.0%

Public Sector

2014 2013

Capital Adequacy Ratio


2014 19.88% 16.21% 20.41% 14.30% 13.18% 12.75% 14.97% 12.22% 17.39% 16.73% 11.98% 37.08% 9.14% 12.50% 18.91% 12.22%

2013 18.00% 15.39% 22.25% 13.30% 10.53% 12.06% 14.51% 11.29% 16.29% 18.97% 11.94% 46.74% 7.65% 11.93% 16.87% 4.40%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

Private Sector

2014 2013

Banking Survey 2014


59


2014 14.24% 16.70% 0.00% 17.08% 11.88%

2013 11.97% 15.37% 20.76% 14.59% 12.31%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

Islamic Banks

2014 2013

Banking Survey 2014


60

Earnings per Share (After Tax)


2014 13.28 21.63 22.15 19.32 3.19 4.08 5.79 2.37 4.72 1.35 (0.07) 0.24 0.03 1.44 2.49 0.16

2013 12.91 15.59 19.65 15.75 (5.90) 3.41 4.67 1.77 3.37 0.44 0.15 0.10 (0.43) 0.94 2.73 1.51

(10.00)(5.00)

-5.00

10.00 15.00 20.00 25.00

Private Sector

2014 2013


2014 (2.75) 7.56 1.08 1.31 1.97

2013 (1.38) 2.48 0.67 1.15 2.31

(4.00)(2.00)

-2.00 4.00 6.00 8.00

10.00

Public Sector

2014 2013

Banking Survey 2014


61


2014 0.16 0.58 - 0.86 4.56

2013 (0.05) 0.35 (1.49) 0.20 3.95

(2.00)

(1.00)

-

1.00

2.00

3.00

4.00

5.00

Islamic Banks

2014 2013

Banking Survey 2014


62

Asset Quality: Non-Performing Assets over Performing Assets

376.247

183.552

14.520

3,100.79

839.36

320.65

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Private

Public

Islamic

Asset Quality: Advances Composition (2014)

374.800

180.676

15.558

2,819.42

789.85

263.40

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Private

Public

Islamic

Asset Quality: Advances Composition (2013)

Non-Performing Loans Performing Loans

Banking Survey 2014


63

1,411

121,680

340

4,509

55,611

7,990

610,300

40,863

38,733

141,472

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

FWBL

NBP

Sindh

BOK

BOP

Public Banks: Asset Quality - Advances Composition

4,177

1,062

-

2,369

6,912

45,658

40,636

-

57,981

176,373

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

AlBaraka

Islami

Burj

DIB

Meezan

Islamic Banks: Asset Quality - Advances Composition (2013)


Banking Survey 2014


64

22,922

79,527

21,908

57,105

31,376

19,412

5,025

29,293

19,325

2,813

29,017

2,144

8,222

10,224

23,096

14,838

302,947

581,949

300,851

457,177

167,295

285,436

182,948

175,383

130,839

55,962

88,636

21,772

56,195

103,505

126,929

62,966

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

ABL

HBL

MCB

UBL

Askari

BAF

BAH

Faysal

HMB

JS

NIB

SAMBA

SILK

Soneri

SCB

Summit

Private Banks: Asset Quality - Advances Composition


Banking Survey 2014


65


2013 21,661 55,398 37,967 39,509 8,599 16,895 14,261 10,845 9,072 2,457 3,293 1,384 2,160 4,850 18,806 851

2014 28,173 69,086 43,641 46,914 11,910 21,873 19,074 13,833 11,209 4,069 3,826 1,813 3,460 6,245 21,396 2,436

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Private Banks (PKR Million)

Mark-up Spread

Banking Survey 2014


66

FWBL NBP SINDH BOK BOP

2013 649 39,298 2,258 3,071 4,015

2014 680 45,153 3,435 3,541 8,992

-5,000

10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000

Public Banks (PKR Million)

AlBaraka Islami Burj DubaiIslami Meezan

2013 1,791 2,500 952 3,114 10,645

2014 2,170 3,353 - 4,089 13,363

-2,000 4,000 6,000 8,000

10,000 12,000 14,000

Islamic Banks (PKR Million)

Banking Survey 2014


67

-20.00%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

ABL HBL MCb UBL Askari BAF BAH Faysal HMB JS NIB Samba Silk Soneri SCB Summit

Private Banks

Return on average equity (%) Return on average assets (%) Operating cost to net income ratio (%)

Gross Spread Ratio (%) Net interest margin (%) Profit margin (%)

Other Banking Ratios

Banking Survey 2014


68

-50.00%

0.00%

50.00%

100.00%

150.00%


Public Banks



0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%90.00%

100.00%

AlBaraka Islamic DIB Meezan

Islamic Banks



Banking Survey 2014

Junaidy Shoaib Asad Chartered Accountant

69

Commercial Banks

1.3

1.2 1.2 1.3 1.4

1.2

1.2 1.

6

1.4 1.

8

1.6

1.5

1.3

1.3 1.4

1.2


Assets over Deposits

669,216

1,207,435951,277 972,356 1,034,109 927,334

1,591,782

456,891 563,281 614,678

1,130,077781,480 663,619

2,625,032

560,157735,060

ABL (998) Askari (321)

BAF (637) BAH (459) Faysal Bank (274)

HBL (1644)

HMBL (201)

JS Bank (238)

MCB (1222)

NIB (171) Samba (28)

Silk Bank (88)

Soneri Bank (246)

SCB (116) Summit (188)

UBL (1296)

Deposits per Branch (PKR '000)

Banking Survey 2014


70

ABL (10121)

Askari (5913)

BAF (7785)

BAH (8122)

Faysal Bank

(5120)

HBL (14123)

HMBL (3934)

JS Bank (2442)

MCB (12113)

NIB (3096)

Samba (602)

Silk Bank (2906)

Soneri Bank

(3524)

SCB (4400)

Summit (2702)

UBL (13771)

Salaries per Employee 911 873 1,127 662 1,069 1,446 897 604 723 946 1,170 749 606 1,191 636 813

Travelling per Employee 16 20 67 13 26 41 35 10 26 21 38 50 48 57 70 28

Salaries & Travelling Expense Per Employee (PKR '000)

Banking Survey 2014


71

ABL (998)

Askari (321)

BAF (637)

BAH (459)

Faysal Bank (274)

HBL (1644)

HMBL (201)

JS Bank (238)

MCB (1222)

NIB (171)

Samba (28)

Silk Bank (88)

Soneri Bank (246)

SCB (116)

Summit (188)

UBL (1296)

Communications per Branch 350 1,237 950 496 1,126 696 1,160 276 790 952 3,572 2,166 336 4,066 908 924

Stationary per Branch 229 375 720 784 966 587 682 479 459 563 801 741 701 2,075 503 467

Repairs & Maintainance per Branch 448 3,021 1,820 1,825 2,849 1,261 1,235 1,823 1,227 2,849 3,033 2,740 542 9,847 889 1,333

Rents & Electricity per Branch 2,062 4,717 5,711 4,153 7,240 2,965 5,445 2,743 2,237 5,523 10,168 6,881 3,569 11,598 5,601 3,159

Legal Charges per Branch 73 424 509 265 1,062 479 618 267 231 1,143 775 2,624 188 901 1,009 218

Expenses Per Branch (PKR '000)

Banking Survey 2014


72

58%

66%61%

57% 57%

50%

65% 65%

44%

75%

61%63% 63%

39%

75%

45%


Interest Expensed over Interest Earned (%)

28,24337,051 34,338 41,555

50,48342,024

55,769

16,193

35,60722,321

64,739

39,32025,387

179,855

12,906

36,227


Net Interest Income Per Branch (PKR '000)

Banking Survey 2014


73

3,308 4,471 4,898 4,323

7,576 7,372

12,229

3,5085,913

9,455

3,738

9,867

5,391

28,450

5,960

10,073


Fee, Commission & Brokerage Income Per Branch (PKR '000)

4583,070 3,207

1,8623,916

1,732

5,172

1,142 1,1813,434

1,722 2,235 2,493

25,075

2,693 2,387


Income from dealing in foreign currencies Per Branch (PKR '000)

Banking Survey 2014


74

The following pie-charts are expected to help the reader understand the income streams of the commercial banks. The key to these charts is given on the next page.

69%8%

9%

1%10% 3%

Allied

69%8%

2%

6%

11%4%

Askari

71%

10%

2%

7%3%

7%

Alfalah

83%

9%

1% 4% 3%

Al Habib

76%

11%

1%

6% 3% 3%

Faysal

77%

14%

1%

3%2% 3%

Habib

66%15%

6% 11%

2%

HMBL

60%13%2%

4%18%

JSBL

76%

13%

2%

2%4% 3%

MCB

49%

21%

14%

8%7% 1%

NIB

Banking Survey 2014


75

90%

5%2%

2% 1%

Samba

69%

17%

1%4% 7% 2%

Silk

70%

15%

2% 7% 4% 2%

Soneri

74%

12%

10%3%1%

SCB

44%

20%1%

9%

24%

2%

Summit

69%

19%

3%

4% 3% 2%

UBL

Banking Survey 2014


76

Islamic Banks

1.2

1.1

1.2

1.1



617,097

424,089479,111

888,835

Albaraka (130) BankIslami (213) DIB (175) Meezan (428)


Banking Survey 2014


77


Salaries per Employee 633 567 645 640

Travelling per Employee 12 9 16 9



Communications per Branch 719 605 1,036 550

Stationary per Branch 289 179 330 827

Repairs & Maintainance per Branch 413 409 1,335 723

Rents & Electricity per Branch 4,021 3,386 5,539 3,679

Legal Charges per Branch 267 83 365 40


Banking Survey 2014


78

68%

57%

46% 54

%


Interest Expensed over Interest Earned (%)16

,690

15,7

43 23,3

67 31,2

22



Banking Survey 2014


79

3,09

1

1,81

8

4,60

8

3,66

7



1,500

809 700

3,800



Banking Survey 2014


80

The following pie-charts are expected to help the reader understand the income stream of the Islamic banks.

74%

14%

0%

7%5% 0%

Albaraka

74%

9%

1% 9%

6% 1%

Meezan

78%

16%

2% 4% 0%

DubaiIslamic

84%

10%4% 1%1%

BankIslami

Banking Survey 2014


81

Public Banks

1.4

1.2 1.4

1.3

2.0



795,377

940,359

328,021

911,673

269,061

BOK (116) BOP (364) FWBL (41) NBP (1354) Sindh Bank (230)


Banking Survey 2014


82


Salaries per Employee 629 520 654 1,437 688

Travelling per Employee 23 11 19 42 0



Communications per Branch 756 321 837 650 380

Stationary per Branch 299 166 362 520 217

Repairs & Maintainance per Branch 219 368 595 655 464

Rents & Electricity per Branch 2,957 1,115 2,946 2,011 2,410

Legal Charges per Branch 372 116 677 112 49


Banking Survey 2014


83

64%

70%

62% 61% 62%


Interest Expensed over Interest Earned (%)

30,522

24,703

16,602

33,347

14,936



Banking Survey 2014


84

2,009 2,499

846

9,550

802



1,543

505268

3,498

288



Banking Survey 2014


85

The following pie-charts are expected to help the reader understand the income stream of the Public banks.

77%

5%

2% 4%10%

2%

BOK

76%

8%

0%2%

6%8%

BOP

89%

5%1%1%1%3%

FWBL

58%17%

3%6% 11%

5%

NBP

78%

4%

4%2%

12%

0%

Sindh

CREDIT RATING

Banking Survey 2014


87

C

Rating

Private Banks Credit Rating Long Term Short Term

ABL AA+ A1+ HBL AAA A1+ MCB AAA A1+ UBL AA+ A1+ Askari AA A1+ BAF AA A1+ BAH AA+ A1+ Faysal AA A1+ HMB AA+ A1+ JS A+ A1 NIB AA- A1+ SAMBA AA- A1 SILK A- A2 Soneri AA- A1+ SCB AAA A1+ Summit A A1

Banking Survey 2014


88

Public Banks Credit Rating Long Term Short Term

FWBL BBB+ A2 NBP AAA A1 + Sindh AA A1 + BOK A A1 BOP AA- A1+

Islamic Banks Credit Rating Long Term Short Term

AlBaraka A A1 Islami A+ A1 Burj A A1 DIB A+ A1 Meezan AA A1+

Banking Survey 2014


89

Glossary

Average Advances The average of opening and closing advances at two year ends.

Average Assets The average of opening and closing total assets at two year ends.

Average Deposits The average of opening and closing deposits at two year ends.

Average Earning Assets The average of opening and closing earning assets at two year ends.

Average Equity The average of opening and closing equity at two year ends.

Earning Assets Deposits with treasury & other banks, lending to financial institutions, investments and advances.

Equity Equity includes shares capital, reserves, unappropriated profit/accumulated loss, minority interest and surplus / deficit on revaluation of assets.

Gross Advances Loans, cash credits, overdrafts, ijaras, etc. and local & foreign bills discounted &purchased before provisions.

Gross Spread Ratio Net mark-up return as a percentage of total mark-up income earned.

Non-funded Income Non-funded income comprises of non mark-up based income, which consists of fee, commission & brokerage income, income from dealing in foreign currencies, realized and un-realized gain on sale of assets & securities, etc.

Net interest margin Mark-up / return / interest earned (before provisions) as a percentage of interest bearing assets less markup / return / interest expensed as a percentage of interest bearing liabilities.

Operating costs Includes all expenses charged to arrive at profit before tax excluding cost of funds and provisions.

Operating fixed assets Operating fixed assets include intangible assets.

Banking Survey 2014


90

Other assets Other assets include deferred tax assets.

Other liabilities Other liabilities include deferred tax liabilities and liabilities against assets subject to finance lease.

Provisions Total of specific and general provisions against gross advances, charge & reversal of provision against non-performing advances, for diminution in value of investments, bad debts directly written-off and recoveries of previously written-off debts.

Return on Average Assets Net Income as a percentage of average total assets.

Return on Average Equity Profit before tax as a percentage of average equity.

Staff Cost Salaries, allowances, etc., staff retirement benefits and cost of redundancy / voluntary retirement etc., excluding Workers’ Welfare Fund.

Taxations Charge for current (including prior) and deferred taxation in the profit and loss account.

Banking Survey 2014


91

Junaidy Shoaib Asad, Chartered Accountants, a Partnership firm registered in Pakistan, is an independent member firm of Morison International.

The firm is in the profession of audit, accountancy, taxation, corporate affairs management advisory services corporate and other related legal advisory services. The firm is poised to deliver value added prompt professional services to its valued clientele, with strong professional team lead by its Partners and professional staff with country wide reach through its offices in Karachi, Lahore and Islamabad.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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