banking survey - jsa.com.pkjsa.com.pk/pdf/banking-survey-2015.pdf · banking survey 2015 1 ......
TRANSCRIPT
BANKING SURVEY 2015
1 Junaidy Shoaib Asad Chartered Accountants
2015
BANKING SURVEY
BANKING SURVEY 2015
2 Junaidy Shoaib Asad Chartered Accountants
Table of Contents Purpose of the Banking survey 4
Structure of the survey 5
About Us 6
Liability Disclaimer 7
Income Streams 10
Markup vs. Non Markup Income (PK in m illions) 10
Non Markup Income Composition 16
Expenses 19
Composition of Markup Income and Markup Expenses 22
Profitability 25
Private Sectors (Profit Before Taxation) 27
Public Sector (Profit Before Taxation) 29
Islamic Sector (Profit Before Taxation) 31
Value Addition 32
Gross Advances 35
Net Advances 39
Non Performing Assets 40
Non performing asset to Gross advances comparison 44
Deposits 45
Deposit composition sector wise 47
Advances to Deposits 51
Capital Adequacy Ratio 54
BANKING SURVEY 2015
3 Junaidy Shoaib Asad Chartered Accountants
Earning per share 57
Performing asset vs. Non performing assets 59
Deposits per branch 65
Administration expenses per branch 67
Markup expense over Markup earned 69
Net Markup Income per branch 71
Fee, commission and brokerage income per branch 73
BASEL III 85
CREDIT RATINGS 95
Glossary 97
BANKING SURVEY 2015
4 Junaidy Shoaib Asad Chartered Accountants
Purpose of the Banking survey
The purpose of this survey is to give an overview of the financial performance of the banking industry of Pakistan during the year 2015 and compare
the performance of different banks with the preceding year. For this 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 cover the broad classifications of 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.
BANKING SURVEY 2015
5 Junaidy Shoaib Asad Chartered Accountants
Structure of the survey
The three categories, on which the banks are being classified as mentioned above, are from the perspective of Profitability, Assets and Liability.
Under these perspectives, the banks are individually analyzed and compared with their peers. The Profitability perspective provides the revenue
streams of the banks with more emphasis on mark-up income and non-mark-up income. While under the Assets 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. 8.
This list also contain list of some microfinance banks operating in the country but they have not been analyzed in this survey.
We feel that the performance could be analyzed in more detail however given the availability of limited information and time we have restricted 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]
BANKING SURVEY 2015
6 Junaidy Shoaib Asad Chartered Accountants
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.
BANKING SURVEY 2015
7 Junaidy Shoaib Asad Chartered Accountants
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.
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.
This survey provides general information in a summarized form on banking industry performance for the year 2015 and 2014. The contents do not
compose suggestions 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
BANKING SURVEY 2015
8 Junaidy Shoaib Asad Chartered Accountants
PUBLIC BANKS
National Bank of Pakistan (NBP);
Sindh Bank Limited(SBL);
First Women Bank Limited (FWBL);
The Bank of Punjab(BOP)
The Bank of Khyber (BOK)
ISLAMIC BANKS
AL Baraka Bank (Pakistan) Limited (AB);
Bank Islami Pakistan Limited (BIP);
Burj Bank Limited(BB);
Dubai Islamic Bank Pakistan Limited (DIB);
Meezan Bank Limited (MB)
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
PRIVATE BANKS
Allied Bank Limited (ABL);
Askari Bank Limited (AKBL);
Bank Alfalah Limited (BAFL);
Bank Al Habib Limited (BAHL);
Faysal Bank Limited (FABL);
Habib Bank Limited (HBL) ;
Habib Metropolitan Bank Limited (HMB);
JS Bank Limited (JS);
MCB Bank Limited (MCB);
NIB Bank Limited (NIB);
SAMBA Bank Limited (SAMBA);
SILK Bank Limited (SILK)
Soneri Bank Limited (SONERI);
Standard Chartered Bank (SCB);
Summit Bank Limited (SUMMIT);
United Bank Limited (UBL).
BANKING SURVEY 2015
9 Junaidy Shoaib Asad Chartered Accountants
Banking Activities
BANKING SURVEY 2015
10 Junaidy Shoaib Asad Chartered Accountants
Income Streams
The major source of banks’ income is markup, which they derive through lending activities. Apart from this, they do earn non mark-up income
generated through provision of other services to their clients. The following graphical statistics segregate banks income into markup and non-markup
income. The statistics shows that around 80% of banks’ income is driven through lending activities.
Ma r ku p vs . N on M ar ku p I nc o me ( P K i n m illions)
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
private public islamic
719,472
114,38648,109
150,534
30,203
6,529
Markup Non Markup
Markup vs Non Markup Income (PKR in millions)
BANKING SURVEY 2015
11 Junaidy Shoaib Asad Chartered Accountants
Private banks - Markup vs Non Markup Income (PKR in millions)
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
ABL HBL MCB UBL Askari BAF BAH Faysal HMB JS NIB SAMBA SILK Soneri SCB Summit
Private banks - Markup vs Non Markup Income (PKR in millions)
Markup Non Markup
BANKING SURVEY 2015
12 Junaidy Shoaib Asad Chartered Accountants
Islamic banks - Markup vs. Non Markup (PKR in millions)
0%
20%
40%
60%
80%
100%
FWBL SBL BOP BOK NBP
1,516 114,386 10,129 10,869 31,263
409 35,102 3,492 1,799 7,636
Public banks - Markup vs Non Markup (PKR in millions)
Markup Non Markup
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
Non Markup 9,755 36,583 17,639 23,687 6,780 9,102 4,486 5,564 9,247 4,298 6,004 805 1,895 3,153 7,117 4,419
Markup 72,116 144,23 80,532 97,574 36,594 61,425 50,310 32,313 36,860 15,465 14,737 5,468 8,933 18,320 33,883 10,710
Private banks - Markup vs Non Markup Income (PKR in millions)
BANKING SURVEY 2015
13 Junaidy Shoaib Asad Chartered Accountants
Islamic banks - Markup vs. Non Markup (PKR in millions)
75%
80%
85%
90%
95%
100%
AB BB DIB MBL
6,269 2,528 8,726 33,114
657
458 1,275 4,597
Islamic banks - Markup vs Non Markup (PKR in millions)
Markup Non Markup
BANKING SURVEY 2015
14 Junaidy Shoaib Asad Chartered Accountants
Private banks - Markup compositions (PKR in millions)
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
24,959
65,668
26,262
35,409
15,755
25,459
14,576
17,497
9,565
6,021
8,451
1,690
6,797
8,562
12,670
5,696
23,750
73,853
53,290
35,207
19,750
22,521
20,743
11,395
23,850
8,473
5,007
2,053
1,766
9,066
20,498
4,888
22,399
14,099
571
24,128
243
9,105
14,635
2,896
2,731
1,248
289
Private banks - Markup compositions (PKR in millions)
on loans and advance to customers on loans and advance to financial institution On investment in securities available for sale
On investment in securities held to maturity On investment in securities held for trading On deposits with financial institutions
On securities purchased under resale agreement On certificates of Investment On call money lending
BANKING SURVEY 2015
15 Junaidy Shoaib Asad Chartered Accountants
0%
20%
40%
60%
80%
100%
DIP AB MB BB
6,063 4,115
13,751
2,041
1,432 1,226
6,599
416 1,194
182
12,762
Islamic bank - Markup compositions (PKR in millions)
On call money lending
On certificates of Investment
On securities purchased under resale agreement
On deposits with financial institutions
On investment in securities held for trading
On investment in securities held to maturity
On investment in securities available for sale
on loans and advance to financial institution
on loans and advance to customers
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
FWBL SB BOP BOK NBP
718 4,064
15,560
3,285
57,023
730 4,749
12,806
6,560 38,925
47 1,009 1,810 587 16,360
On call money lending
On certificates of Investment
On securities purchased under resale agreement
On deposits with financial institutions
On investment in securities held for trading
On investment in securities held to maturity
On investment in securities available for sale
on loans and advance to financial institution
on loans and advance to customers
Public bank - Markup income composition (PKR in milions)
BANKING SURVEY 2015
16 Junaidy Shoaib Asad Chartered Accountants
Non Markup Income Composition
Total non-markup income of the banking industry has been booked at PKR 197.865 billion (2014: PKR 167.933 billion). Private sector’s share amounted
to PKR150.534 billion (2014: PKR 123.933 billion). Whereas Public sector contributes about PKR 40.802 billion (2014: PKR 36.304 billion) and Islamic
banks had a share of PKR 6.529 billion (2014: PKR 7.696 billion). The statistics highlights that majority of banks reported growth in non-markup income
except Islamic banks where growth being negative.
Further non-markup income of the banking industry comprised fee, commission & brokerage income of 84.895 billion (2014: PKR 75.448 billion), that
amounts to 43.18% of total non-funded income (2014: 45.1%) during the year, whereas PKR 59.636 billion (2014: PKR 32.678 billion) was booked on
account of sale of securities, which makes up 30.34% (2014: 19.5%) of total non-funded income. The banks included in this survey had also reported
PKR 22.65 billion on account of income from dealing in foreign currency (2014: PKR 26.255 billion), that is 11.5% of total non funded income, and PKR
14.21 billion (2014: PKR 11.705 billion) as dividend income. Based on statistics given above we may conclude that fee, commission and brokerage are
main contributors in banks non-markup income.
BANKING SURVEY 2015
17 Junaidy Shoaib Asad Chartered Accountants
3,570
17,089
8,994
14,239
1,937
4,570
2,321
2,303
2,893
1,785
1,421
126
977
1,344
3,636
1,273
3,528
1,543
861
2,350
308
350
537
318
149
180
191
22
41
160
1
78
838
2,749
772
2,588
835
1,379
707
965
1,083
288
357
75
182
473
2,061
534
833
11,042
4,344
3,195
3,120
1,535
137
1,739
4,781
1,995
4,008
485
651
1,126
1,016
2,443
986
743
2,091
1,299
581
730
695
266
341
36
42
96
43
52
399
104
ABL
HBL
MCB
UBL
Askari
BAF
BAH
Faysal
HMB
JS
NIB
SAMBA
SILK
Soneri
SCB
Summit
Fees,Commission & Brokerage Dividend Income
Income from dealing in foreign currencies Gain on sale & redemption of securities
Unrealized gain on revaluation of investment held for trading Share of profit from joint ventures
Share of profit from associates other income
Private banks - Non Markup income compositions (PKR in millions)
BANKING SURVEY 2015
18 Junaidy Shoaib Asad Chartered Accountants
39
234
828
258
13,460
20
120
100
2,707
29
139
4,899
296
3,063
5,014
1,189
12,283
25
6
1,635
119
2,111
FWBL
SB
BOP
BOK
NBP
Public banks Non Markup Income Composition (PKR in millions) Fee,Commission & Brokerage Income Dividend Income
Income from dealing in foreign currencies Gain on sale & redemption of securities
Unrealized gain on revaluation of investment held for trading Share of profit from joint ventures
Share of profit from associates other income
-
22
629
75
7
161
1,471
26
16
13
342
182
2
19
167
25
1,250
439
1,987
152
Fee,Commission & Brokerage Income Dividend Income
Income from dealing in foreign currencies Gain on sale & redemption of securities
Unrealized gain on revaluation of investment held for trading Share of profit from joint ventures
Share of profit from associates other income
Islamic banks Non Markup Income Compositions (PKR in millions)
BANKING SURVEY 2015
19 Junaidy Shoaib Asad Chartered Accountants
Expenses
The following graph shows the expenses section of the three banking sectors, for the purposes of our analysis we have selected only selected one line item i.e. Administration expense.
Administration expenses for the year stood at PKR301.084 billion (2014: PKR 292.08 billion) which means absolute increase of 3.08% during the year. Staff costs remained one of the most significant components of administrative expenses for the banks, averaging approximately 50% (2014: 50.4%) of total Administration expenses.
Furthermore, provisions amounted to PKR 40.82 billion (2013: PKR 28.312 billion), which posted an increase of 44% during the year, out of which, PKR 34.59 billion was booked against NPL (2014: PKR 26.507 billion). The statistics shows that increased provision is mainly attributable to 30.5% growth in NPL.
The following graph below will provide better insight about the administration expenses with their compositions as well as their related comparisons.
BANKING SURVEY 2015
20 Junaidy Shoaib Asad Chartered Accountants
9,864
22,100
9,224
12,386
6,194
9,387
6,762
4,448
4,294
2,264
2,972
885
2,416
2,353
5,624
1,905
2,134
5,476
2,930
4,284
1,704
3,379
2,058
2,018
1,203
857
1,007
326
694
910
1,289
1,093
522
3,317
1,674
1,762
600
1,527
1,090
822
282
389
455
230
298
167
1,071
174
2,018
3,099
2,418
2,315
874
2,081
1,268
821
567
498
627
124
444
622
522
608
969
4,166
2,145
5,191
1,291
1,714
1,570
1,080
1,043
799
423
177
472
975
2,289
489
ABL
HBL
MCB
UBL
Askari
BAF
BAH
Faysal
HMB
JS
NIB
SAMBA
SILK
Soneri
SCB
Summit
Private Banks - Admin expenses (PKR in millions)
Salaries & Allowances Charge for define benefit plans Rent,taxes,insurance,electricity & Other utility
Legal & Professional charges Repair & maintenance Communication
Books,stationery,printing & other computer accessories Advertisement,sponsorship & publicity Depreciation & Amortization
Security services Outsourcing & janitorial services Auditor Remuneration
Others
BANKING SURVEY 2015
21 Junaidy Shoaib Asad Chartered Accountants
413
1,533
3,774
1,525
24,638
33
81
103
83
4,417
127
638
871
376
3,329
75
371
618
191
2,282
-
189
-
93
1,995
36
142
1,271
269
2,173
FWBL
SB
BOP
BOK
NBP
Salaries & Allowances Charge for define benefit plansRent,taxes,insurance,electricity & Other utility Legal & Professional chargesRepair & maintenance CommunicationBooks,stationery,printing & other computer accessories Advertisement,sponsorship & publicityDepreciation & Amortization Security servicesOutsourcing & janitorial services Auditor RemunerationOthers
Public banks - Admin Expenses composition (PKR in millions)
1,162
770
2,039
6,355
584
499
1,204
2,084
64
96
285
481
237
204
392
1145
425
278
496
1876
Albaraka
Burj
DIB
Meezan
Islamic banks - Admin Expenses composition (PKR in millions)Salaries & Allowances Charge for define benefit plansRent,taxes,insurance,electricity & Other utility Legal & Professional chargesRepair & maintenance CommunicationBooks,stationery,printing & other computer accessories Advertisement,sponsorship & publicityDepreciation & Amortization Security servicesOutsourcing & janitorial services Auditor RemunerationOthers
BANKING SURVEY 2015
22 Junaidy Shoaib Asad Chartered Accountants
Composition of Markup Income and Markup Expenses
72,116 144,232 80,532 97,574
36,594 61,425 50,310
32,313 36,860 15,465 14,737
5,468 8,933 18,320
33,883
10,710
35,977 66,064 31,210 39,715
21,688 32,810 25,476 18,358 22,461 9,681 10,087 3,326 5,834 10,722
11,117
7,654
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 (PKR in millions)
Markup income Markup Expenses
BANKING SURVEY 2015
23 Junaidy Shoaib Asad Chartered Accountants
1,516 10,129 31,263 10,869 114,386
819 5,648 20,199 6,441 59,999
First Women Bank Sindh Bank Bank of Punjab Bank of Khyber National Bank
Public banks - Markup Income vs Markup Expenses (PKR in millions)
Markup income Markup Expenses
8,726 6,269 33,114 2,528
4,091 3,791 14,897 1,395
DIP al baraka Meezan burj
Islamic Bank - Markup Income vs Markup Expenses (PKR in millions)Mark up Income Mark up Expense
BANKING SURVEY 2015
24 Junaidy Shoaib Asad Chartered Accountants
PROFITABILITY
BANKING SURVEY 2015
25 Junaidy Shoaib Asad Chartered Accountants
Profitability
The banks included in this survey have reported a total net Profit before Tax (“PBT”) for the year ended 31 December 2015 amounting to PKR 300.185
billion (2014: PKR 238.807 billion), whereas, total net Profit after Tax (“PAT”) was PKR 189.04 billion (2014: PKR 158.948 billion). The banks have
managed to earn total gross revenue of PKR 1,102.346 billion during the year (2014: PKR 1,052.508 billion); non-funded income amounted to around
PKR 197.865 billion (2014: PKR 167.465 billion), accounting for around 17.94% of total gross revenue for the year (2014: 15.9%). The following chart
shows the profit before tax (PBT) of the three banking sectors and their respective variations during the year.
13%
84%
3%Public Banks(34,271)
Private Banks(251,098)
Islamic Banks(9277)
Profit before tax 2015
PBT 2015 2014 Increase/(Decrease) Variation
Public Banks 39,339 30,343 8,995 30%
Private Banks 251,098 199,965 51,133 26%
Islamic Banks 9,990 8,508 1,482 17%
BANKING SURVEY 2015
26 Junaidy Shoaib Asad Chartered Accountants
The following chart shows the profit after tax (PAT) of the three banking sectors and their respective variations during the year. The chart given below
reflects all three sectors of banks have reported significant growth in profit after tax (PAT).
12%
84%
4%
Profit After Tax 2015
Public Banks
Private Banks
Islamic Banks
PAT 2015 2014 Increase/Decrease Variation
Public Banks 23,263 15,626 7,637 49%
Private Banks 158,991 132,529 26,463 20%
Islamic Banks 6,790 5,157 1,633 32%
BANKING SURVEY 2015
27 Junaidy Shoaib Asad Chartered Accountants
Private Sectors (Profit Before Taxation)
Private Sector Banks have registered Net PBT of PKR 251.098 billion (2014: PKR 199.956 billion) during the year which amounts to 83.64% (2014:
83.7%) of total net PBT reported by the banks under review.
Net PAT for the private sector stood at PKR 158.991 billion for the year (2014: PKR 132.52 billion). Total gross revenue contributed PKR 870.006 billion
(2014: PKR 792.904 billion), whereas PKR 352.18 billion (2014: PKR 360.013 billion) had been earned on account of interest/mark-up/return income.
The overall net provision booked in this sector was PKR 25.491 billion (2014: PKR 14.521 billion), out of which, PKR 19.97 billion (2014: PKR 12.492
billion) was booked against NPL. Total operating cost in this sector was PKR 241.237 billion (2014: PKR 218.414 billion).
During the current year, HBL had posted the highest PBT of PKR 60.532 billion and PAT of PKR 35.347 billion. However, the highest total provisions of
PKR 4.507 billion was also booked by HBL, out of which, PKR 4.853 billion was provided against NPL. The graph given below reflects that all the private
sector banks under review-experienced growth in profit before tax (PBT).
BANKING SURVEY 2015
28 Junaidy Shoaib Asad Chartered Accountants
(10,000) - 10,000 20,000 30,000 40,000 50,000 60,000 70,000
ABL
HBL
MCB
UBL
Askari
BAF
BAH
Faysal
HMB
JS
NIB
SAMBA
SILK
Soneri
SCB
Summit
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 10,012 3,551 7,336 2,589 (108) 426 132 2,442 15,368 35
2015 25,504 60,532 42,337 43,449 8,337 12,657 12,265 6,920 12,564 3,768 3,858 907 (1,839) 3,585 15,566 689
Private Sector - Profit Before tax (PKR in millions)
BANKING SURVEY 2015
29 Junaidy Shoaib Asad Chartered Accountants
Public Sector (Profit Before Taxation)
Public Sector Banks have registered net PBT of PKR 39.339 billion (2014: PKR 25.168 billion) during the year, i.e. around 13.1% (2014: 8.38%) of total
net PBT booked by the banks in this survey.
Net PAT for the sector stood at PKR 23.263 billion for the year (2014: PKR 15.626 billion). Contribution of total gross revenue had been of PKR 177.702
billion (2014: PKR 196.380 billion), whereas PKR 72.907 billion (2014: PKR 103.45 billion) had been earned on account of interest/mark-up/return
income.
The overall net provision booked in this sector was PKR 14.644 billion (2014: PKR 12.796 billion), out of which, PKR 14.111 billion (2014: PKR 13.178
billion) was booked against NPL. Total operating cost in this sector was PKR 50.812 billion (2014: PKR 54.966 billion).
During the current year, NBP had posted the highest PBT of PKR 34.271 billion and PAT of PKR 20.176 billion. However, highest total provisions of PKR
11.319 billion was also booked by NBP, out of which, PKR 10.864 billion was booked against NPL. The graph given below shows that except first women
bank limited all public sector banks reported growth in profit before tax (PBT).
BANKING SURVEY 2015
30 Junaidy Shoaib Asad Chartered Accountants
(5,000) - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000
FWBL
SB
BOP
BOK
NBP
FWBL SB BOP BOK NBP
2014 (666) 4,361 1,901 1,611 23,136
2015 33 - 2,959 2,076 34,271
Public Sector Profit Before Tax (PKR in millions)
BANKING SURVEY 2015
31 Junaidy Shoaib Asad Chartered Accountants
Islamic Sector (Profit Before Taxation)
Islamic Sector Banks have registered net PBT of PKR 9.748 billion (2014: PKR 7.894 billion) during the year, i.e. around 3.25% (2014: 2.63%) of total
net PBT booked by the banks included in this survey. The highlights the fact that Islamic banking industry is still in its developing phase.
Net PAT for the sector stood at PKR 23.263 billion for the year (2014: PKR 15.626 billion). Contribution of total gross revenue had been of PKR 177.702
billion (2014: PKR 196.380 billion), whereas PKR 72.907 billion (2014: PKR 103.45 billion) had been incurred on account of interest/mark-up/return
income.
The overall net provision booked in this sector was PKR 14.644 billion (2014: PKR 12.796 billion), out of which, PKR 14.111 billion (2014: PKR 13.178
billion) was booked against NPL. Total operating cost in this sector was PKR 50.812 billion (2014: PKR 54.966 billion).
During the current year, Meezan had posted the highest PBT of PKR 8.87 billion and PAT of PKR 20.176 billion. Highest total provisions of PKR 11.319
billion was booked by NBP, out of which, PKR 10.864 billion was booked against NPL. The graph has been provided below:
(2,000) - 2,000 4,000 6,000 8,000 10,000
DIP
al baraka
Meezan
burj
DIP al baraka Meezan burj
2014 925 216 6,898 (614)
2015 713 407 8,870 (481)
Islamic Sector Profit Before Tax (PKR in millions)
BANKING SURVEY 2015
32 Junaidy Shoaib Asad Chartered Accountants
Value Addition
During the year ended 31 December 2015, total value added by the banks under survey amounted to PKR 493.180 billion (2014: 408.085 billion), after
taking into account the Service Cost of PKR 120.477 billion (2014: PKR 124.802 billion). Out of the said value addition, PKR 150.089 billion (2014: PKR
1146.270 billion) was allocated to Employees, while PKR 69.049 billion (2014: PKR 91.231 billion) and PKR 41.806 billion (2014: PKR 23.018 billion) was
allocated to Shareholders and for Growth & Expansion by the banks respectively.
PARTICULARS PRIVATE PUBLIC ISLAMIC TOTAL
Income from banking services 516,785 89,474 25,888 632,147
Cost of services (95,910) (12,534) (7,021) (115,465)
Value added by banking services 420,875 76,940 18,867 516,682
Non-banking income 1,041 15 61 1,117
Provisions against non-performing assets (25,491) (11,319) (501) (37,311)
Total value added / (lost) 396,425 65,636 18,427 480,488
Value allocated to: Employees 107,122 29,081 8,009 144,212
Government 90,456 14,095 3,596 108,147
Growth & expansion 37,117 2,283 1,383 40,783
Society 1,088 1 - 1,089
Shareholders 49,835 15,956 3,258 69,049
Retained / (absorbed) in business 110,902 4,220 2,012 117,134
The pie chart given below highlights that all sectors of banks reported increase in value added services as compare to last year.
BANKING SURVEY 2015
33 Junaidy Shoaib Asad Chartered Accountants
78.2%
16.9%
4.9%
Value Added Services 2014
82%
14%
4%
Value Added Services 2015
BANKING SURVEY 2015
34 Junaidy Shoaib Asad Chartered Accountants
BANKING ASSETS
BANKING SURVEY 2015
35 Junaidy Shoaib Asad Chartered Accountants
Gross Advances
Total advances during the year stood at PKR 4.849 billion (2014: PKR 4.856 billion) which is 34.32% (2014: 41.48%) of the total asset base of the
banking industry. Sector wise breakup of the advances is as under:
Gross Advances
Sectors 2015 2014 Increase/Decrease Variation
Public Banks 790,440 1,022,911 (232,471) -23%
Private Banks 3,686,088 3,477,038 209,050 6%
Islamic Banks 372,974 356,777 16,197 5%
The above table reflects that public sector banks have reported significant decline in total advances, however situation is reversed in case of private and Islamic
sectors.
BANKING SURVEY 2015
36 Junaidy Shoaib Asad Chartered Accountants
All private sectors experienced mixed result but HBL reported significant increase in advances. In public sector banks the decline in advances attributable to significant decline in NBP advances, apart from NBP majority of banks reported increase. In case of Islamic Sector Meezan and DIP reported significant growth in advances.
16%
76%
8%
Gross Advances 2015
Public Banks Private Banks Islamic Banks
21%
72%
7%
Gross Advances 2014
Public Banks Private Banks Islamic Banks
BANKING SURVEY 2015
37 Junaidy Shoaib Asad Chartered Accountants
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
ABL HBL MCB UBL Askari BAF BAH Faysal HMB JS NIB SAMBA SILK Soneri SCB Summit
2015 340,76 702,56 333,81 529,91 228,41 343,49 214,27 202,54 150,73 79,402 135,02 26,260 67,045 120,61 128,11 83100
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 77804
Private Sector Gross Advances (PKR in millions)
BANKING SURVEY 2015
38 Junaidy Shoaib Asad Chartered Accountants
-
200,000
400,000
600,000
800,000
First Women Bank Sindh Bank Bank of Punjab Bank of Khyber National Bank
2015 9,253 46,665 250,342 40,137 694,385
2014 9,401 41,204 197,083 43,243 731,980
Public Sector Gross Advances (PKR In millions)
-
50,000
100,000
150,000
200,000
250,000
DIP al baraka Meezan burj
2015 106,651 50,548 215,775 19,567
2014 60,350 49,835 183,285 21,609
Islamic Sector Gross Advances (PKR in millions)
BANKING SURVEY 2015
39 Junaidy Shoaib Asad Chartered Accountants
Net Advances
Net advances during the year dialed in at PKR 4.390 billion (2014: PKR 4.395 billion) which is 34.32% (2014: 41.48%) of the total asset of the banking
industry. Sector wise breakup of the advances is as under:
Net Advances
Sectors 2015 2014 Increase/Decrease Variation
Public Banks 668,687 890,090 (221,403) -25%
Private Banks 3,361,901 3,162,857 199,044 6%
Islamic Banks 360,168 342,632 17,536 5%
15%
77%
8%
Net Advances 2015
Public Banks Private Banks Islamic Banks
20%
76%
4%
Net Advances 2014
Public Banks Private Banks Islamic Banks
BANKING SURVEY 2015
40 Junaidy Shoaib Asad Chartered Accountants
Non Performing Assets
Gross Advances include PKR 515.766 billion (2014: PKR 574.319 billion) non-performing assets against which, provision of PKR 456.869 billion (2014:
PKR 459.498 billion) had been booked by the banks under review of this survey. Aggregate provision to NPL ratio stood at 88.58% (2014: 80.01%).
BANKING SURVEY 2015
41 Junaidy Shoaib Asad Chartered Accountants
Banking Sectors 2015 2014
NPL Provision NPL Provision
Private Sector 366,161 322,266 376,247 314,181
Public Sector 135,595 121,797 183,552 132,821
Islamic Sector 14,010 12,806 16,333 14,144
The composition of non-performing assets within the various banks were as follows The highest amount of nonperforming asset (NPA) has been booked by HBL among private banking sector which is PKR 76.792 billion (2014: PKR 79.527 billion) with a total gross advances of PKR 3,686.088 billion (2014: PKR 3,477.038 billion). Whereas NBP among public banking sector, which is PKR 128.277 billion (2014: PKR 121.680 billion), have posted the highest figures against NPA with a total gross advances of PKR 790.440 billion (2014: PKR 1,022.911 billion). Moreover MBL have highest amount of NPA among Islamic sector, which is PKR 7.064 billion (2014: PKR 6.912 billion), with a total gross advances of PKR 372.974 billion (2014: PKR 356.777 billion).
71%
26%3%
Non performing asset 2015
Private Sector Public Sector Islamic Sector
65%
32%
3%
Non performing asset 2014
Private Sector Public Sector Islamic Sector
BANKING SURVEY 2015
42 Junaidy Shoaib Asad Chartered Accountants
ABL HBL MCB UBL Askari BAF BAH Faysal HMB JS NIB SAMBA SILK Soneri SCB Summit
2015 21,904 76,792 20,369 48,072 31,484 18,455 5,874 30,289 18,487 2,983 28,173 1,974 8,520 11,584 24,018 17,183
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
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
Private Sector Non Performing Assets (PKR in millions)
BANKING SURVEY 2015
43 Junaidy Shoaib Asad Chartered Accountants
First Women Bank Sindh Bank Bank of Punjab Bank of Khyber National Bank
2015 1,895 290 60,165 5,133 128,277
2014 1,411 340 55,611 4,509 121,680
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Public Sector Non Performing Assets (PKR in millions)
DIP AB MBL BB
2015 2,904 4,042 7,064 1,477
2014 2,369 4,177 6,912 1,813
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Islamic Sector Non Performing Assets (PKR in millions)
BANKING SURVEY 2015
44 Junaidy Shoaib Asad Chartered Accountants
Non performing asset to Gross advances comparison
Total Gross advances for banking sector totaled PKR 4848 billion (2014:4855 billion) of which PKR 515.766 billion (2014: PKR 574.319 billion) has been
booked as non-performing assets.
Public sector banks reported highest NPA to Gross Advance ratio, which remained 17% for both the years; whereas Islamic banking sector reported
lowest NPA to gross advance ratio, which remained around 4% for both the years.
Banking sectors
2015 2014
Non Performing loans Gross Advances Non Performing loans Gross Advances
Public Bank 135,595 790,440 183,552 1,022,911
Private Bank 366,161 3,686,088 376,247 3,477,038
Islamic Bank 14,010 372,974 16,333 356,777
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
Public Bank Private Bank Islamic Bank
183,552 376,247
16,333
1,022,911
3,477,038
356,777
2014Non Performing loans Gross Advances
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
Public Bank Private Bank Islamic Bank
135,595 366,161
14,010
790,440
3,686,088
372,974
2015Non Performing loans Gross Advances
BANKING SURVEY 2015
45 Junaidy Shoaib Asad Chartered Accountants
Deposits
Total deposits of the banking industry during the year stood at PKR 9,618.427 billion (2014: PKR 9,166.319 billion) which includes fixed deposits i.e. PKR 2,210.348 billion (2014: PKR 2,299.958billion), saving deposits PKR 3,521.586 billion (2014: PKR 3,394.651 billion) and financial institution deposits PKR 521.586 billion (2014: PKR 356.907 billion). Further breakup of the deposits has been provided below:
DEPOSITS
Deposits 2015 2014 Increase/(Decrease) Variance %
Fixed Deposits 2,210,348 2,299,958 (89,610) -4%
Saving Deposits 3,521,586 3,394,651 126,935 4%
Current Deposits - remunerative 340,795 336,047 4,748 1%
Current Deposits - non remunerative 2,976,606 2,724,364 252,242 9%
Other Deposits 47,506 54,393 (6,887) -13%
Financial Institutions 521,586 356,907 164,679 46%
There are mixed results reported for various types of deposits however, the significant growth was experienced in Financial Institution deposits.
BANKING SURVEY 2015
46 Junaidy Shoaib Asad Chartered Accountants
23%
37%4%
31%
5%
Deposits (2015)
Fixed Deposits
Saving Deposits
Current Deposits -remunerative
Current Deposits -non remunerative
Other Deposits
25%
37%4%
30%
4%
Deposits (2014)
Fixed Deposits
Saving Deposits
Current Deposits -remunerative
Current Deposits -non remunerative
Other Deposits
BANKING SURVEY 2015
47 Junaidy Shoaib Asad Chartered Accountants
Deposit composition sector wise
private sector posted highest deposits among banking sector i.e. PKR 7,506.688 billion (2014: PKR 6,761.399 billion) which makes up approximately 80% of total banking industry deposits; whereas the share of public sector and Islamic banking sector is 17.6% and 2.4% respectively
Deposits
Deposit composition Private Public Islamic
Fixed Deposits 1,685,158 408,202 194,638
Saving Deposits 2,871,131 459,012 268,200
Current Deposits - remunerative 157,463 187,563 -
Current Deposits - non remunerative 2,449,351 382,434 195,029
Other Deposits 45,625 4,517 1,881
Financial Institutions 297,960 206,184 20,456
Deposits Growth Comparison
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Private
Public
Islamic
1,685,158
408,202
194,638
2,871,131
459,012
268,200
157,463
187,563
-
2,449,351
382,434
195,029
297,960
206,184
20,456
Deposit composition 2015Fixed Deposits Saving Deposits Current Deposits - remunerative Current Deposits - non remunerative Other Deposits Financial Institutions
BANKING SURVEY 2015
48 Junaidy Shoaib Asad Chartered Accountants
-
2,000,000
4,000,000
6,000,000
8,000,000
2015 2014 2015 2014 2015 2014
Private Islamic Public
7,506,688 6,761,399
680,204 660,628 1,647,912 1,744,292
Deposits PKR in millionsDeposits Total
- 200,000 400,000 600,000 800,000
1,000,000 1,200,000 1,400,000 1,600,000
FWBL SBL BOP BOK NBP
2015 15,163 83,922 374,961 117,292 1,431,535
2014 13,449 61,884 342,291 92,264 1,234,405
Public banks - Total deposits (PKR in million)
BANKING SURVEY 2015
49 Junaidy Shoaib Asad Chartered Accountants
-
100,000
200,000
300,000
400,000
500,000
DIP al baraka Meezan burj
2015 136,742 71,644 471,818 25,637
2014 83,844 80,222 380,422 25,809
Islamic banks - Total deposits (PKR in million)
BANKING SURVEY 2015
50 Junaidy Shoaib Asad Chartered Accountants
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
ABL HBL MCB UBL Askari BAF BAH Faysal HMB JS NIB SAMBA SILK Soneri SCB Summit
2015 734,597 1,634,9 708,091 1,119,9 433,166 640,137 516,199 292,130 403,208 141,840 130,399 38,844 81,098 185,222 327,121 119,741
2014 667,864 1,524,5 688,270 951,902 387,535 605,963 446,311 26,303 319,948 107,430 105,103 31,642 68,770 163,250 304,305 105,222
Private banks - Total deposits comparision (PKR in million)
BANKING SURVEY 2015
51 Junaidy Shoaib Asad Chartered Accountants
Advances to Deposits
Advance to deposits ratio measures how much advances lent by banks is done through deposits. The outcome of this ratio reflects the ability of banks to make optimal use of deposits.
Total gross advances to deposit (ADR) ratio is approximately decreased to 49.31% in 2015 from 52.9% in 2014 As the growth rate of deposits being higher than growth rate in advances.
The bar chart given above reflects that both private and public sector experienced overall decline in ADR however, the Islamic banking sector being exception and reported minor increase in ADR.
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
Private Public Islamic
49.10% 47.97%54.83%51.42%
58.64%54.01%
2015 2014
Advances to deposits ratio (PKR in millions)
BANKING SURVEY 2015
52 Junaidy Shoaib Asad Chartered Accountants
ABL
HBL
MCB
UBL
Askari
BAF
BAH
Faysal
HMB
JS
NIB
SAMBA
SILK
Soneri
SCB
Summit
46.39%
42.97%
47.14%
47.32%
52.73%
53.66%
41.51%
69.33%
37.38%
55.98%
103.55%
67.60%
82.67%
65.12%
39.16%
69.40%
48.79%
43.39%
46.89%
54.03%
51.27%
50.31%
42.12%
72.24%
46.93%
54.71%
111.94%
75.58%
93.67%
69.67%
49.30%
73.94%
Private Banks - Advances to deposits (PKR in millions)
2015 2014
BANKING SURVEY 2015
53 Junaidy Shoaib Asad Chartered Accountants
FWBL
NBP
Sindh
BOK
BOP
61.02%
48.51%
55.61%
34.22%
66.76%
69.90%
59.30%
66.58%
46.87%
57.58%
2015 2014
Public banks -Advances to deposits (PKR in millions)
Al abaraka
Burj
DIB
Meezan
70.55%
76.32%
77.99%
45.73%
62.12%
83.73%
71.98%
48.18%
Islamic banks -Advances to deposits (PKR in millions)2015 2014
BANKING SURVEY 2015
54 Junaidy Shoaib Asad Chartered Accountants
Capital Adequacy Ratio
Banks capital adequacy ratio is the ratio of bank qualifying capital to risk adjusted assets. The higher capital adequacy ratio shows that banks are adequately capitalized to expand its operations.
The graph given below reflects that mixed results were experienced by private sectors banks however samba bank reported highest capital adequacy ratio. i.e. 30.30% (2014: 37.08%) whereas silk bank reported lowest ratio i.e. 10.00% (2014: 9.14%). Moreover, First women bank i.e. 41.23% (2014: 29.12%) and Al Baraka 18.2% (2014:14.24%) being the leading public sector and Islamic sector banks respectively.
BANKING SURVEY 2015
55 Junaidy Shoaib Asad Chartered Accountants
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
ABL HBL MCB UBL Askari BAF BAH Faysal HMB JS NIB SAMBA SILK Soneri SCB Summit
20.85%16.98% 19.00%
14.70% 12.50% 13.40% 13.87% 14.41%18.40%
15.23%10.00%
30.30%
10.00%15.39%
18.20%
10.05%
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%
Private Banks - Capital adequacy ratio (PKR in millions)
2015 2014
BANKING SURVEY 2015
56 Junaidy Shoaib Asad Chartered Accountants
0.00%
20.00%
40.00%
60.00%
80.00%
FWBL NBP Sindh BOK BOP
41.23%
18.38% 20.41% 23.75%10.50%
29.12%
18.17%22.57% 22.65%
10.21%
Public Banks - Capital adequacy ratio (PKR in millions)2015 2014
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
Al abaraka Burj DIB Meezan
18.20% 18.06%11.13% 10.98%
14.24%18.64%
17.08%11.88%
Islamic Banks - Capital adequacy ratio (PKR in millions)2015 2014
BANKING SURVEY 2015
57 Junaidy Shoaib Asad Chartered Accountants
Earning per share
Earning per Share (EPS) is the key indicator of banks financial performance as it is linked to profitability of banks. Majority of banks included in this survey have either reported minor increase in EPS or the same results were obtained as in last year however, few exceptions were also reported.
Habib bank posted highest EPS among all private banks i.e. 23.93 (2014: 21.63).Moreover leading earning per share among public sector and Islamic sector being national bank i.e. 9.44 (2014: 7.56) and Meezan Bank of 5.01 (2014: 4.56) respectively
(10.00) - 10.00 20.00 30.00 40.00 50.00
ABL
HBL
MCB
UBL
Askari
BAF
BAH
Faysal
HMB
JS
NIB
SAMBA
SILK
Soneri
SCB
Summit
ABL HBL MCB UBL Askari BAF BAH Faysal HMB JS NIB SAMBA SILK Soneri SCB Summit
2015 13.20 23.93 22.38 21.36 4.00 4.72 6.60 3.52 7.32 1.95 0.24 0.43 0.58 2.01 2.39 0.16
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
Private Banks - Earning per share (PKR in rupees)
BANKING SURVEY 2015
58 Junaidy Shoaib Asad Chartered Accountants
(5.00) - 5.00 10.00 15.00 20.00
FWBL
NBP
Sindh
BOK
BOP
FWBL NBP Sindh BOK BOP
2015 0.21 9.44 - 1.79 3.03
2014 (2.75) 7.56 1.08 1.31 1.97
Public banks - Earning per share (PKR in Rupees)
- 2.00 4.00 6.00 8.00 10.00 12.00
AB
BB
DIB
MBL
AB BB DIB MBL
2015 0.27 0.48 0.62 5.01
2014 0.16 0.58 0.86 4.56
Islamic banks - Earning per share (PKR in Rupees)
BANKING SURVEY 2015
59 Junaidy Shoaib Asad Chartered Accountants
Performing asset vs. Non performing assets
318,865
625,769
313,446
481,843
196,935
325,035
208,399
172,254
132,252
76,419
106,855
24,286
58,525
109,033
104,094
65,917
21,904
76,792
20,369
48,072
31,484
18,455
5,874
30,289
18,487
2,983
28,173
1,974
8,520
11,584
24,018
17,183
ABL
HBL
MCB
UBL
Askari
BAF
BAH
Faysal
HMB
JS
NIB
SAMBA
SILK
Soneri
SCB
Summit
Private Banks - performing and non performing (PKR in millions)Non Performing Performing 2015
BANKING SURVEY 2015
60 Junaidy Shoaib Asad Chartered Accountants
7,358
46,375
190,177
35,004
566,108
1,895
290
60,165
5,133
128,277
FWBL
SB
BOP
BOK
NBP
Public banks - performing and non performing (PKR in millions)Non Performing Performing
103,747
46,506
208,711
18,090
2,904
4,042
7,064
1,477
DIP
ABL
MBL
BB
Islamic banks - performing and non performing (PKR in million)Non Performing Performing
BANKING SURVEY 2015
61 Junaidy Shoaib Asad Chartered Accountants
The non-performing to performing assets ratio indicates quality of banks loans. The bank with higher said ratio indicates lower profitability in future due to higher requirement for provision against non-performing assets.
Among large private sector banks, HBL has higher portion of non-performing assets, which is around 12% in relation to performing assets. While among public sector banks BOP has highest portfolio of non-performing assets that is approximately 31 %.Moreover, the Burj bank posted highest proportion of non-performing asset in Islamic banking sector.
BANKING SURVEY 2015
62 Junaidy Shoaib Asad Chartered Accountants
Asset over deposits
Asset over deposit ratio is used to assess the overall liquidity of banks. The higher assets to deposit ratio shows high liquidity.
The average assets to deposits ratio in private sector banks revolves around 1.35 times. Among private banks, SAMBA bank reported highest assets over deposits ratio i.e. 2.06.
Public sector banks also reported the similar result where the assets over deposits ratio revolves around 1.32 times however, the Sindh bank achieved highest assets to deposit ratio.
RATIO ANALYSIS
BANKING SURVEY 2015
63 Junaidy Shoaib Asad Chartered Accountants
Among Islamic banks the average assets over deposit ratio is around 1.15 times. However, the Burj bank reported highest assets over deposit ratio in sector i.e. 1.32 times.
1.35 1.36 1.44 1.33
1.24 1.41
1.24 1.47
1.21
1.56
1.88 2.06
1.64 1.37 1.39
1.57
-
0.50
1.00
1.50
2.00
2.50
ABL HBL MCB UBL Askari BAF BAH Faysal HMB JS NIB SAMBA SILK Soneri SCB Summit
Private banks - Asset Over Deposits
1.41 1.53
1.26 1.32
1.20
-
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
First Women Bank Sindh Bank Bank of Punjab Bank of Khyber National Bank
Public banks - Assets over Deposits
BANKING SURVEY 2015
64 Junaidy Shoaib Asad Chartered Accountants
1.1
1.2
1.1
1.3
1.1
1.1
1.2
1.2
1.3
1.3
DIP al baraka Meezan burj
Islamic banks - Asset Over Deposits
BANKING SURVEY 2015
65 Junaidy Shoaib Asad Chartered Accountants
Deposits per branch
700
958
568
842
1,256
980 978 1,043
1,701
512
763
1,142 922
696
2,820
624
-
500
1,000
1,500
2,000
2,500
3,000
ABL HBL MCB UBL Askari BAF BAH Faysal HMB JS NIB SAMBA SILK Soneri SCB Summit
Private banks - Deposits Per Branch (PKR in million)
BANKING SURVEY 2015
66 Junaidy Shoaib Asad Chartered Accountants
361.02 335.69
923.55 902.25
1,005.29
-
200.00
400.00
600.00
800.00
1,000.00
1,200.00
First Women Bank Sindh Bank Bank of Punjab Bank of Khyber National Bank
Public bank - Deposits per Branch (PKR in millions)
684
531
856
346
0
100
200
300
400
500
600
700
800
900
DIP(200) al baraka(135) Meezan(551) burj
Islamic banks - Deposits per branch (PKR in million)
BANKING SURVEY 2015
67 Junaidy Shoaib Asad Chartered Accountants
Administration expenses per branch
9.39
12.95 7.40 9.31
17.95
14.38 12.81
15.89
18.12
8.17 17.38 26.03
27.45 8.85 48.48
9.92
2.03
3.21
2.35 3.22
4.94
5.17
3.90
7.21
5.08
3.09 5.89
9.59 7.89
3.42
11.11 5.69
0.50
1.94
1.34 1.32
1.74 2.34 2.06 2.94
1.19 1.40 2.66
6.76
3.39
0.63
9.23 0.91
0.35 0.93 0.98 0.91 1.27 1.13 0.59 1.05 1.01 0.36 1.03
3.53 2.73 0.29
3.84 1.05
ABL HBL MCB UBL Askari BAF BAH Faysal HMB JS NIB SAMBA SILK Soneri SCB Summit
Private banks - Expenses per branch (PKR in million)Salary and allowances Rents and rates, electricity, insurance Legal and Professional Repair and Maintenance Communications
BANKING SURVEY 2015
68 Junaidy Shoaib Asad Chartered Accountants
0.86 0.40 0.32 0.75 0.66
0.86 0.60 0.40 0.29 0.75
3.02 2.55 2.15 2.89
2.34
0.33 0.04 0.12 0.38 0.22
First Women Bank Sindh Bank Bank of Punjab Bank of Khyber National Bank
Public banks - Expenses Per Branch (PKR in millions)Communication Stationery Repair & Maintenance Rents & Electricity Legal charges
0.73 0.96 1.07 0.67 0.34 0.24
0.56
4.33 6.74 6.02
3.78
0.47 1.30 1.42 0.87
0.27 0.46 0.44 0.03
Albaraka Burj DIB Meezan
Islamic banks - Expenses per branch (PKR in million)Communication stationary Rent and electricity Repair & maintenance Legal & Professional charges
BANKING SURVEY 2015
69 Junaidy Shoaib Asad Chartered Accountants
Markup expense over Markup earned
57.95
49.88
43.62
45.30
65.60
60.50
56.66
57.19
65.28
63.84
74.62
60.75
63.30
62.98
39.33
75.22
49.89
45.80
38.75
40.70
59.27
53.41
50.64
56.81
60.94
62.60
68.45
60.83
65.31
58.53
32.81
71.47
ABL
HBL
MCB
UBL
Askari
BAF
BAH
Faysal
HMB
JS
NIB
SAMBA
SILK
Soneri
SCB
Summit
Private banks - Markup expense over Markup earned (in %)
2014 2015
BANKING SURVEY 2015
70 Junaidy Shoaib Asad Chartered Accountants
54.02
55.76
64.61
59.26
52.45
62.18
61.54
69.54
63.69
60.82
First Women Bank
Sindh Bank
Bank of Punjab
Bank of Khyber
National Bank
Public banks - Markup expense over Markup earned (in %)2015 2014
46.88
60.47
44.99
55.18
45.65
67.53
53.61
69.19
DIB
ABL
MBL
BB
Islamic banks - Markup Expense over Markup earned (in %)
2015 2014
BANKING SURVEY 2015
71 Junaidy Shoaib Asad Chartered Accountants
Net Markup Income per branch
34.42
45.79
39.58
43.50
43.21
33.50
47.03
49.84
60.76
20.88
27.19
63.00
35.22
28.56
196.26
15.92
ABL
HBL
MCB
UBL
Askari
BAF
BAH
Faysal
HMB
JS
NIB
SAMBA
SILK
Soneri
SCB
Summit
Private banks - Markup Income per branch (PKR in millions)
BANKING SURVEY 2015
72 Junaidy Shoaib Asad Chartered Accountants
16.60
17.92
27.25
34.06
38.19
FWBL
SB
BOP
BOK
NBP
Public banks - Net Markup Income Per Branch (PKR in millions)
23.18
18.36
33.06
15.31
DIB
ABL
MBL
BB
Net Markup Income Per Branch (PKR in millions)
BANKING SURVEY 2015
73 Junaidy Shoaib Asad Chartered Accountants
Fee, commission and brokerage income per branch
3.40
10.01
7.22
10.71
5.61
7.00
4.40
8.23
12.21
6.44
8.31
3.71
11.10
5.05
0.01
6.63
-
2.00
4.00
6.00
8.00
10.00
12.00
14.00
ABL HBL MCB UBL Askari BAF BAH Faysal HMB JS NIB SAMBA SILK Soneri SCB Summit
Private banks - Fees, commission, brokerage income per branch (PKR in millions)
BANKING SURVEY 2015
74 Junaidy Shoaib Asad Chartered Accountants
0.93 0.94
2.04 1.98
9.45
0.35
2.35
4.35
6.35
8.35
10.35
First Women Bank Sindh Bank Bank of Punjab Bank of Khyber National Bank
Public banks - Fee, Commission & Brokerage Income Per Branch (PKR in millions)
2015
6.25
3.25 3.61
2.05
0.35
1.35
2.35
3.35
4.35
5.35
6.35
7.35
DIP al baraka Meezan burj
Islamic banks - Fee, Commission & Brokerage Income Per Branch (PKR in millions)
2015
BANKING SURVEY 2015
75 Junaidy Shoaib Asad Chartered Accountants
Income from dealing in foreign currency per branch
0.80 1.61 0.62
1.95 2.42 2.11 1.34 3.45 4.57
1.04 2.09 2.21 2.07 1.78
17.77
2.78
-
5.00
10.00
15.00
20.00
ABL HBL MCB UBL Askari BAF BAH Faysal HMB JS NIB SAMBA SILK Soneri SCB Summit
Private banks - Income from dealing in foreign currencies (PKR in million)
0.69 1.07
3.44
0.35
0.85
1.35
1.85
2.35
2.85
3.35
3.85
First Women Bank Sindh Bank Bank of Punjab Bank of Khyber National Bank
Public banks - Income from dealing in foreign currencies Per Branch (PKR in million)
BANKING SURVEY 2015
76 Junaidy Shoaib Asad Chartered Accountants
1.19
2.67
0.350.35
0.85
1.35
1.85
2.35
2.85
DIB al baraka Meezan burj
Islamic Banks- Income from dealing in foreign currencies(PKR in millions)
BANKING SURVEY 2015
77 Junaidy Shoaib Asad Chartered Accountants
Income stream of Private Banks for the year ended 2015
Income Streams
Income Streams ABL HBL MCB UBL Askari BAF BAH Faysal HMB JS NIB SAMBA SILK SONERI SCB SUMMIT
Net Markup Income
36,139 78,168 49,322 57,859 14,906 28,615 24,834 13,955 14,399 5,784 4,650 2,142 3,099 7,598 22,766 3,056
Fees, commission and brokerage
income 3,570 17,089 8,994 14,239 1,937 4,570 2,321 2,303 2,893 1,785 1,421 126 977 1,344 3,636 1,273
Dividend income 3,528 1,543 861 2,350 308 350 537 318 149 180 191 22 41 160 1 78
Income from dealing in foreign
currency 838 2,749 772 2,588 835 1,379 707 965 1,083 288 357 75 182 473 2,061 534
Gain on sale of securities
833 11,042 4,344 3,195 3,120 1,535 137 1,739 4,781 1,995 4,008 485 651 1,126 1,016 2,443
Un-realized gain / (loss) on
revaluation of HFT portfolio
- 18 577 16 (1) 229 - (27) - 14 (15) 1 1 (2) 4 (13)
Share of profit from joint venture / associates
- 3,399 - - - 309 89 - - - - - - - - -
Other Income 986 743 2,091 1,299 581 730 695 266 341 36 42 96 43 52 399 104
BANKING SURVEY 2015
78 Junaidy Shoaib Asad Chartered Accountants
79%
8%
7%
ABL
68%
15%
10%3%
HBL
74%
13%
7%3%
MCB
71%
17%
3%3%
4%
UBL
57%18%
3%
20%
JS
69%
9%
4%
14%
3%
Askari
76%
12%
4%4%
BAF
85%
8%
2%2%
BAH
61%12%
5%
20%
HMB
71%
12%
2%
5%9%
Faysal
44%
13%2%
3%
38%
NIB
73%
4%3%
16%
3%
SAMBA
BANKING SURVEY 2015
79 Junaidy Shoaib Asad Chartered Accountants
KEY
Net markup income Gain on sale of securities
Fees, commission and brokerage income Unrealized gain/ (loss) on revaluation HFT portfolio
Dividend income Share of profit from joint venture/associates
Income from dealing in foreign currencies Other income
62%19%
4%13%
SILK
71%
13%
2%4%
10%
SONERI
76%
12%
7%
4%
SCB
41%
17%7%
33%
SUMMIT
BANKING SURVEY 2015
80 Junaidy Shoaib Asad Chartered Accountants
Income stream of Public Banks for the year ended 2015
Income Streams
Income Streams First Women Bank Sindh Bank Bank of Punjab Bank of Khyber National Bank
Net Markup Income 697 4,481 11,064
4,428 54,387
Fees, commission and brokerage income 39 234 828
258 13,460
Dividend income 20 120 58
120 2,707
Income from dealing in foreign currency 29 69 109
139 4,899
Gain on sale of securities 296 3,063 5,014
3,063 12,283
Un-realized gain / (loss) on revaluation of HFT portfolio - - (8)
(6) 5
Share of profit from joint venture / associates - - -
- (363)
Other Income 25 6 1,635
119 2,111
BANKING SURVEY 2015
81 Junaidy Shoaib Asad Chartered Accountants
Key
Net Markup income Gain on sale of securities
Fees, commission and brokerage income Unrealized gain/ (loss) on revaluation HFT portfolio
Dividend income Share of profit from joint venture/associates
Income from dealing in foreign currencies Other income
54%
3%
38%
Bank of Khyber
60%15%
3%6%
14%
National Bank
63%3%2%3%
27%
First Women Bank
56%
3%2%
38%
Sindh Bank
59%
4%
27%
9%
Bank of Punjab
BANKING SURVEY 2015
82 Junaidy Shoaib Asad Chartered Accountants
Income stream of Islamic banks for the year ended 2015
Income streams
INCOME STREAMS DIB Al Baraka Meezan Burj
Net Markup Income 4635 2478 18217 1133
Fees, commission and brokerage income 1250 439 1987 152
Dividend income 0 22 629 75
Income from dealing in foreign currency 7 161 1471 26
Gain on sale of securities 16 13 342 182
Un-realized gain / (loss) on revaluation of HFT portfolio 0 3 0 -2
Share of profit from joint venture / associates 0 0 0 0
Other Income 2 19 168 25
BANKING SURVEY 2015
83 Junaidy Shoaib Asad Chartered Accountants
Key
Net markup income Gain on sale of securities
Fees, commission and brokerage income Unrealized gain/ (loss) on revaluation HFT portfolio
Dividend income Share of profit from joint venture/associates
Income from dealing in foreign currencies other income Other Income
79%
21%
DIB
79%
14%
5%
Al Baraka
71%
9%
5%11%
Burj
80%
9%
3% 6%
Meezan
BANKING SURVEY 2015
84 Junaidy Shoaib Asad Chartered Accountants
BANKING SURVEY 2015
85 Junaidy Shoaib Asad Chartered Accountants
BASEL III
BASEL III is a comprehensive set of rules framed by the BASEL committee in order to strengthen financial regulations in banks so that banks are fully compliant
with the risk management principles in order to avoid financial losses.
BASEL III aims to improve the capability of banking sector to survive during financial and economic crisis, through improvement in governance structure, risk
management and further strengthening banks transparency.
BASEL III emphasizes on capital adequacy ratio and market liquidity, moreover these standards minimizes the deficiencies faced by the banking sector throughout
the world. BASEL III standards became effective as at 31 December 2013 with the intentions to fully implement it by December 31 2019.
In this survey, we have provided a bird eye view of different banks as per the requirements of BASEL III standards. We have discussed the standards of
Conventional, Islamic and Public banks respectively. This survey compared the BASEL III standard requirements with the actual results of Banks.
BANKING SURVEY 2015
86 Junaidy Shoaib Asad Chartered Accountants
Private Banks
Conventional Banks
0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00%
Required
Bank Al Habib
Allied Bank Limited
Askari Bank
Bank Alfalah
Faysal Bank
Habib Metro Bank
Habib Bank Limited
JS Bank
MCB Bank
NIB Bank
Samba Bank
SCB Bank
Silk Bank
Soneri Bank
Summit Bank
UBL Bank
RequiredBank AlHabib
AlliedBank
Limited
AskariBank
BankAlfalah
FaysalBank
HabibMetroBank
HabibBank
LimitedJS Bank
MCBBank
NIB BankSambaBank
SCB Bank Silk BankSoneriBank
SummitBank
UBL Bank
Leverage Ratio 3.00% 3.78% 5.02% 2.63% 3.41% 4.26% 5.48% 5.10% 5.03% 8.17% 3.80% 12.20% 6.73% 7.74% 5.10% 3.21% 5.13%
BASEL III Leverage Ratio
BANKING SURVEY 2015
87 Junaidy Shoaib Asad Chartered Accountants
0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00%
Required
Bank Al Habib
Allied Bank Limited
Askari Bank
Bank Alfalah
Faysal Bank
Habib Metro Bank
Habib Bank Limited
JS Bank
MCB Bank
NIB Bank
Samba Bank
SCB Bank
Silk Bank
Soneri Bank
Summit Bank
UBL Bank
RequiredBank AlHabib
AlliedBank
Limited
AskariBank
BankAlfalah
FaysalBank
HabibMetroBank
HabibBank
LimitedJS Bank MCB Bank NIB Bank
SambaBank
SCB Bank Silk BankSoneriBank
SummitBank
UBL Bank
Comon equity tier 1 to total Risk weighted Average requirement 6.00% 10.70% 17.08% 8.90% 9.83% 12.54% 16.72% 13.14% 12.16% 17.41% 19.15% 28.78% 17.35% 10.24% 11.66% 6.86% 10.44%
BASEL IIICommon equity tier 1
toTotal risk weighted assets requirement
BANKING SURVEY 2015
88 Junaidy Shoaib Asad Chartered Accountants
0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00%
Required
Bank Al Habib
Allied Bank Limited
Askari Bank
Bank Alfalah
Faysal Bank
Habib Metro Bank
Habib Bank Limited
JS Bank
MCB Bank
NIB Bank
Samba Bank
SCB Bank
Silk Bank
Soneri Bank
Summit Bank
UBL Bank
RequiredBank AlHabib
AlliedBank
Limited
AskariBank
BankAlfalah
FaysalBank
HabibMetroBank
HabibBank
LimitedJS Bank MCB Bank NIB Bank
SambaBank
SCB Bank Silk BankSoneriBank
SummitBank
UBL Bank
Tier 1 Capital to Risk weighted Average 7.50% 10.69% 17.08% 8.90% 9.83% 12.54% 16.72% 13.14% 13.25% 17.41% 19.15% 28.78% 17.36% 12.60% 11.66% 8.74% 10.44%
BASEL IIITier 1 Capital
toRisk weighted assets
BANKING SURVEY 2015
89 Junaidy Shoaib Asad Chartered Accountants
Islamic Banks
0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00%
Required
Albaraka Bank
Meezan Bank
Dubai Islamic Bank
Burj Bank
BASEL IIILeverage Ratio
Required
Albaraka Bank
Meezan Bank
Dubai Islamic Bank
Burj Bank
0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00%
Required
Bank Al Habib
Allied Bank Limited
Askari Bank
Bank Alfalah
Faysal Bank
Habib Metro Bank
Habib Bank Limited
JS Bank
MCB Bank
NIB Bank
Samba Bank
SCB Bank
Silk Bank
Soneri Bank
Summit Bank
UBL Bank
RequiredBank AlHabib
AlliedBank
Limited
AskariBank
BankAlfalah
FaysalBank
HabibMetroBank
HabibBank
LimitedJS Bank
MCBBank
NIB BankSambaBank
SCB Bank Silk BankSoneriBank
SummitBank
UBL Bank
Total capital to Risk weighted Average 10.25% 13.87% 20.85% 12.51% 13.54% 14.41% 18.45% 16.98% 15.23% 20.07% 12.52% 30.30% 20.72% 13.84% 15.39% 10.18% 14.68%
BASEL IIITotal capital
toRisk weighted assets
BANKING SURVEY 2015
90 Junaidy Shoaib Asad Chartered Accountants
Islamic Banks
0.00% 5.00% 10.00% 15.00% 20.00%
Required
Albaraka Bank
Meezan Bank
Dubai Islamic Bank
Burj Bank
BASEL III Tier 1 Capital to risk weighted average
Required
Albaraka Bank
Meezan Bank
Dubai Islamic Bank
Burj Bank
0.00% 5.00% 10.00% 15.00% 20.00%
Required
Albaraka Bank
Meezan Bank
Dubai Islamic Bank
Burj Bank
BASEL IIITotal capital to risk weighted average
Required
Albaraka Bank
Meezan Bank
Dubai Islamic Bank
Burj Bank
BANKING SURVEY 2015
91 Junaidy Shoaib Asad Chartered Accountants
0.00% 5.00% 10.00% 15.00% 20.00%
Required
Albaraka Bank
Meezan Bank
Dubai Islamic Bank
Burj Bank
BASEL IIIComon equity tier 1 to total Risk weighted average
requirement
Required
Albaraka Bank
Meezan Bank
Dubai Islamic Bank
Burj Bank
BANKING SURVEY 2015
92 Junaidy Shoaib Asad Chartered Accountants
Public Banks
0.00% 2.00% 4.00% 6.00% 8.00% 10.00%12.00%
Required
Bank of Khyber
First Women Bank Limited
National Bank of Pakistan
Sindh Bank
Bank of Punjab
BASEL IIILeverage Ratio
Required
Bank of Khyber
First Women Bank Limited
National Bank of Pakistan
Sindh Bank
Bank of Punjab
0.00% 10.00% 20.00% 30.00% 40.00% 50.00%
Required
Bank of Khyber
First Women Bank…
National Bank of…
Sindh Bank
Bank of Punjab
BASEL III Total capital to risk weighted average
Required
Bank of Khyber
First Women Bank Limited
National Bank of Pakistan
Sindh Bank
Bank of Punjab
BANKING SURVEY 2015
93 Junaidy Shoaib Asad Chartered Accountants
0.00% 10.00% 20.00% 30.00% 40.00%
Required
Bank of Khyber
First Women Bank Limited
National Bank of Pakistan
Sindh Bank
Bank of Punjab
BASEL IIITier 1 Capital to Risk weighted Average
Required
Bank of Khyber
First Women Bank Limited
National Bank of Pakistan
Sindh Bank
Bank of Punjab
0.00% 10.00% 20.00% 30.00% 40.00%
Required
Bank of Khyber
First Women Bank Limited
National Bank of Pakistan
Sindh Bank
Bank of Punjab
BASEL IIIComon equity tier 1 to total risk weighted average requirement
Required
Bank of Khyber
First Women Bank Limited
National Bank of Pakistan
Sindh Bank
Bank of Punjab
BANKING SURVEY 2015
94 Junaidy Shoaib Asad Chartered Accountants
BANKING SURVEY 2015
95 Junaidy Shoaib Asad Chartered Accountants
CREDIT RATINGS
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 AA A1+ NIB AA- A1+ SAMBA AA- A1
SILK A- A2
Soneri AA- A1+
SCB AAA A1+
Summit A A1
CREDIT RATINGS
BANKING SURVEY 2015
96 Junaidy Shoaib Asad Chartered Accountants
Public Banks
Credit Rating
Long Term Short Term
FWBL BBB+ A2
NBP AAA A1 +
Sindh AA A1 +
BOK A A1
Islamic Banks
Credit Rating
Long Term Short Term
AL Baraka A A1
DIB A+ A1
Meezan AA A1+
BANKING SURVEY 2015
97 Junaidy Shoaib Asad Chartered Accountants
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, inappropriate 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 markup 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.
Other assets other assets include deferred tax assets.
BANKING SURVEY 2015
98 Junaidy Shoaib Asad Chartered Accountants
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.