LAHORE: The Bank of Punjab deposits recorded huge growth of 117 per cent and reached Rs356.6 billion during the last six years.
This was stated by BoP President Naeemuddin Khan while addressing a press conference which was arranged with a view to take public into confidence with regard to affairs of the Bank by highlighting the milestones achieved by the bank in last few years and its future strategy.
Naeemuddin Khan highlighted that currently the NPLs of banking industry are about Rs 630 billion. Resultantly, banking industry is currently facing opportunity loss of Rs 41 billion per annum and Rs 3.4 billion per month.
Further, the bank was able to curtail the cost of deposits which declined to 5.32% from 10.89%. During said period, the bank’s investments witnessed tremendous growth of 731% with major concentration in government securities to improve upon overall assets’ risk profile.
The bank has filed 2,538 recovery suits in courts of law during last 6/7 years. Besides 38 cases worth Rs 44.8 billion have been forwarded to NAB under sections 9 & 31-D of NAO 1999 and notices to 24 defaulters for recovery of Rs 13.5 billion have also been sent.
However, in 64 cases amounting to Rs 52 billion, courts have restrained NAB, SBP and BOP from taking coercive action against the borrowers for last 5/6 years.
All these cases are pending decisions due to the restraint orders and NAB & SBP are reluctant to proceed with such cases. This interpretation regarding the orders is misinterpreted and the public money is stuck for last 7 years. No recoveries can be affected in such scenario and economy is also suffering. He said that management will continue to aggressively pursue recovery and is hopeful of achieving further substantial reduction.
However, recovery from defaulters can be further expedited with active support of NAB and FIA.
The management of the Bank urged that a mechanism be developed whereby instant justice is provided and the matters are decided.
The bank had a very weak capital structure and it took about 2 ½ years to agree a way forward with regulator.
With a prudent lending to top notch business groups of the country and SME sector, advances portfolio was steadily built to Rs 231.7 billion as on September 30, 2015 showing a rise of 54% over the year 2008 with a very nominal 1.2% infection ratio in fresh relations.
With due efforts, the Bank was able to achieve 29% reduction in NPLs portfolio which now stands at Rs 57.5 billion. During the period, the Bank’s total assets grew to Rs 455.7 billion, registering a growth of 145% over the year 2008, while the Bank also successfully achieved compliance with minimum capital requirements.
Further, capital adequacy ratio improved to 11.33%. Similarly, the bank’s net interest margin (NIM) witnessed a growth of 615% over the year 2008 and has touched the level of Rs 8.1 billion by September 2015.
The management is making all out efforts to grow the “Good Bank” and is successful in achieving the set goals. While substantial NPLs reduction has been achieved from Rs 80.6 billion to Rs 57.5 billion, the net NPLs (un-provisioned) now stand at Rs 20.7 billion.
