A meeting of the Board of Directors of The Bank of Punjab (BOP) was held on April 25, 2018 wherein Annual Audited Financial Statements of the Bank for the year ended December 31, 2017 and un-audited financial statements for 1st quarter of year 2018 ended March 31, 2018 were approved by the Board.
Approval of Annual Audited Financial Statements for the year ended December 31, 2017: The financial viability created through capital management measures and superb performance of the Bank in the past few years has enabled the Bank to take an important step of fully providing for the legacy non-performing loans portfolio (NPLs), covered through Letters of Comfort (LOCs) issued by the Government of Punjab, as of December 31, 2017 ie well before the expiry date of December 31, 2018.
All stakeholders are well aware of the fact that financial mess created by imprudent lending decisions of previous management forced the Bank to agree upon a way forward with the Regulator and Sponsors which included certain NPLs provisioning relaxations. And while the Bank has been continuously posting phenomenal financial results in past few years, benefit of Bank's performance could not be fully passed on to the shareholders due to said relaxations constraining payouts under the applicable Prudential Regulations. Therefore, the BOD took the historic step of making full provision and that too full one year prior to the expiry of the LOCs to make good the provisioning shortfall thereby meeting the SBP's provisioning requirements and also paving way to meet Capital Adequacy Ratio (CAR) requirement through a comprehensive Capital Management Plan. As such, major impediment hindering Dividend payouts to shareholders now stands removed.
It is pertinent to mention that providing legacy NPLs is no way adversely affecting Bank's resolve to recover the same through all available legal means. The Bank would continue to make vigorous efforts as before for recovery of these NPLs and future recovery would provide additional boost to Bank's profitability.
During the year 2017, Net Interest Margin (NIM) of the Bank improved significantly to Rs 15.6 billion as against Rs 12.2 billion during last year thereby reflecting a healthy growth of 28 percent. The Bank earned operational profit of Rs 8.7 billion during the year 2017. However, the Bank charged additional provision of Rs 12.3 billion against loans covered under LOCs and registered after tax loss of Rs (3.3) billion for the year 2017. Had said provision not been charged, Bank's profit after tax would have been Rs 4.7 billion. Despite huge provisioning, the book value per share remained above par.
As on December 31, 2017, the Deposits of the Bank stood at the level of Rs 556.3 billion as against Rs 453.2 billion last year, thereby showing a healthy growth of 23 percent. The gross advances and investments stood at Rs 341.7 billion and Rs 242.5 billion, respectively. The Bank's total assets as on December 31, 2017 stood at Rs 649.5 billion as against Rs 545.2 billion as on December 31, 2016.
Approval of Un-audited Financial Statements for Quarter ended March 31, 2018: Maintaining the pace of growth and operating performance of last years, during the 1st quarter of year 2018, Net Interest Margin (NIM) of the Bank improved to Rs 4.7 billion as against Rs 3.3 billion during corresponding period of last year. Non Mark-up/Interest Income and Non Mark-up/Interest Expenses remained at Rs0.9 billion and Rs 2.8 billion, respectively.
Accordingly, the Bank was able to post a pre-tax profit of Rs 3.0 billion as against Rs 2.4 billion for corresponding period last year thereby registering a rise of 25 percent. Similarly, the earnings per share (EPS) for the first quarter of the year 2018 remained at the level of Rs0.73 per share.
As on March 31, 2018, Bank's Total Assets stood at Rs 655.3 billion. The deposits of the bank touched the level of Rs 569.6 billion, while the gross Advances and Investments were recorded at Rs 357.2 billion and Rs 213.3 billion, respectively. The Tier-I Equity also improved to Rs 28.8 billion as against Rs 26.8 billion as on December 31, 2017.
Pursuing an aggressive expansion plan, the Bank is rapidly expanding its outreach to unbanked areas of the country. The Bank now has a network of 540 online branches, including 70 Islamic Banking Branches, strategically located across the country. Further, Bank also has a vast network of 406 ATMs providing 24/7 banking services to the customers.
The Board appreciated the efforts of Management team led by Bank's President/CEO, Naeemuddin Khan. The BOD lauded the successful execution of strategic business plan which helped in above narrated remarkable historical financial turnaround and cleaning of Balance Sheet.
The Bank's strategy of restructuring, expansion and consolidation has enabled it to attain new heights and, in post LOCs era, the shareholders shall reap the benefits of their persistent and enduring support.-PR
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