‘Prudent credit expansion’: Bank will continue strategy to grow, says Dada

Standard Chartered Pakistan CEO hopes to keep momentum going.

KARACHI: Standard Chartered Pakistan Chief Executive Officer (CEO) Shazad Dada has said the bank will continue to pursue a strategy of growth with ‘prudent credit expansion’ in years to come.

Speaking at a press briefing on Friday to mark the 10th anniversary of ‘Saadiq’ – the brand name under which Standard Chartered runs its Shariah-compliant operations globally – Dada said the bank aims to continue its growth momentum despite a challenging economic environment in Pakistan.



Standard Chartered Pakistan runs the largest Islamic banking window in the country after Bank Alfalah. It runs 10 dedicated Islamic banking branches in Pakistan although its Saadiq products are served at each of its 116 branches in 22 cities.

“Saadiq has shown exceptional growth. Islamic banking accounts for over 14% of Standard Chartered Pakistan’s overall revenues. Its market share in the Islamic banking industry is over 8%,” Dada said.

Speaking to The Express Tribune, Standard Chartered Pakistan Head of Islamic Banking Azhar Aslam said the commercial assets to deposits ratio (ADR) for the bank’s Saadiq business is currently over 75% as opposed to the industry-wide average of 35% to 38%.

In simple words, it means the Islamic banking arm of Standard Chartered Pakistan is more effective than its competitors when it comes to finding quality commercial assets.

The Islamic banking industry’s deposit base at the end of the third quarter of 2014 was Rs933.7 billion. Considering the industry-wide ADR of 38%, Aslam said Saadiq’s share in commercial assets of all Islamic banking institutions amounting to roughly Rs355 billion was 10% at the end of September.

“We try to bring clients to Islamic banking through our innovative and solution-oriented approach,” he said.

Standard Chartered was one of the lead advisers to the government in the recently-concluded international sovereign Sukuk transaction. It raised $1 billion for the country for five years at 6.75% per annum, which is 50 basis points less than the last conventional sovereign bond issue.

Standard Chartered Pakistan was the sixth most profitable bank of the country at the end of September. Its earnings for January-September clocked up at Rs7.4 billion, which makes it the most profitable bank after the ‘big five’ players.

An overwhelming majority of bank’s deposits come from current and savings accounts (CASA). In fact, its CASA deposits to total deposits ratio currently stands at 91.2%, which is the highest among all commercial banks. This means the bank is getting deposits at a very low cost.

According to the bank’s latest financial accounts, its gross loans and advances have gone down 0.83% since the beginning of 2014. However, its investments in government papers have risen by more than 21% over the same nine-month period.

Replying to a question, Dada said the bank is willing to extend credit to the private sector prudently despite economic challenges like electricity shortfall.

Published in The Express Tribune, November 29^th, 2014.

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