Karachi, March 1, 2021: The bank is following a flow deposit strategy, where the prime focus will be on acquiring Current Accounts and Savings Accounts, in order to improve overall deposit mix. In 2020, the bank was able to post 21 percent YoY increase in total deposits.
The bank is planning aggressive branch expansion over the next 3 years, keeping in light that the 5 year target of the bank is to compete with the top 5 banks in the country.
IT infrastructure of the bank has gone through a major revamp, which has seen the bank upgrade its core banking system known as ‘Flexcube’. Going forward, digital banking is expected to be the cornerstone in driving growth.
The management apprised that some government term deposits were booked at a high rate in 2018, which again were re-priced at a higher rate last year. As a result, deposit cost has not decreased in the same quantum as we have seen for other banks this year.
Total asset base of the bank has improved by 26 percent YoY, crossing the Rs1trn mark in the process. The asset base are dominated by investments, having an IDR of ~70 percent.
Regarding recoveries from 3-4 big ticket parties, the management apprised that recovery process will be taking a different route, where prime strategy will be towards restructuring. Over the year, the bank was able to reverse Rs2.1 billion out of a total exposure of Rs2.4 billion.
The bank has started subjective classification, while general provisions have also been taken. This is in light of the possible scenario once the SBP deferment time frame finishes. Total provision charge for the year was at Rs6.8 billion, out of which Rs3.3 billion is in the general category.
The bank feels that they have adequate buffer in order to take impact of IFRS-9 and TSA with a healthy CAR of 16.23 percent as of Dec-2020.
