Bank of Punjab’s board approves financial results

Also gives approval to unaudited accounts of first quarter of 2018

A meeting of the board of directors of The Bank of Punjab (BOP) was held on April 25, 2018 wherein annual audited financial statements for the year ended December 31, 2017 and unaudited financial statements for first quarter of 2018 ended March 31, 2018 were approved.

For year ended December 31, 2017

In a statement, the bank said financial viability created through capital management measures and superb performance in the past few years has enabled it 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.



“All stakeholders are well aware of the fact that financial mess created by imprudent lending decisions of the previous management forced the bank to agree upon a way forward with the regulator and sponsors which included certain NPLs provisioning relaxations,” stated the bank.  “And while the bank has been continuously posting phenomenal financial results in past few years, benefit 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.”

During the year 2017, Net Interest Margin (NIM) improved significantly to Rs15.6 billion as against Rs12.2 billion last year, reflecting a healthy growth of 28%. The bank earned operational profit of Rs8.7 billion during 2017.

However, the bank charged additional provision of Rs12.3 billion against loans covered under LOCs and registered after tax loss of Rs3.3 billion for the year 2017. Had said provision not been charged, the bank’s profit after tax would have been Rs4.7 billion. Despite huge provisioning, the book value per share remained above par.



As on December 31, 2017, the deposits stood at the level of Rs556.3 billion as against Rs453.2 billion last year. The gross advances and investments stood at Rs341.7 billion and Rs242.5 billion, respectively. The bank’s total assets as on December 31, 2017 stood at Rs649.5 billion as against Rs545.2 billion as on December 31, 2016.

For quarter ended March 31, 2018

Net Interest Margin (NIM) improved to Rs4.7 billion as against Rs3.3 billion during the corresponding period of last year. Non mark-up/interest income and non mark-up/interest expenses remained at Rs0.9 billion and Rs2.8 billion, respectively. Accordingly, the bank was able to post a pre-tax profit of Rs3 billion as against Rs2.4 billion for corresponding period last year.

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.

The Board appreciated the efforts of the management team, led by bank’s President and CEO Naeemuddin Khan. The board lauded the successful execution of strategic business plan, which helped in the remarkable historical financial turnaround and cleaning of balance sheet.

Published in The Express Tribune, April 27^th, 2018.

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