Staff ReporterTuesday, July 12, 2011 - Lahore—KASB Bank is now serving through 104 branches in 42 cities of Pakistan, offering unique and innovative financial solutions to a large portfolio of investment, corporate and consumer banking customers KASB acting President Munir Saleem said.
Talking to reporters, Saleem said the Bank has been assigned medium to long term entity rating by PACRA of A- (Single A minus ) and short term rating of A2 (Single A Two). The Bank’s aim is to assist its customers in fulfilling their banking needs of today and realising ambitions for tomorrow by offering a comprehensive range of financial services while ensuring service excellence. “We provide our customers access to a broader range of funding sources, made possible by the Group’s strong network of local and international relationships. We plan to extend our branch network with increase in ATMs. Our products are getting massive public support, as we are determined to further improve the bank’s corporate image by increasing its visibility to customers and increasing deposits. KASB Bank’s future is bright and promising,” he said.
Munir Saleem said, “Our continuing collaboration with our international partners, Merrill Lynch, has provided us with unparalleled access to global resources and we are proud to highlight KASB’s leading role in attracting foreign interest in Pakistan.”
He said KASB has been very active in Pakistan and has concluded, among others, the last 6 consecutive cross-border transactions in Pakistan which have resulted in around US$ 2 billion inflow of foreign exchange from 2006. He claimed KASB has generated more private sector foreign inflow into Pakistan than anyone else and continues to highlight investment opportunities in Pakistan to international corporations and global private equity/hedge funds.
Terming Non-Performing Loans (NPLs) as a major challenge for the banking sector in Pakistan, Munir Saleem said NPLs posted a phenomenal surge of over Rs.100 billion to hit an all-time high of Rs.548 billion by the end of last calendar year (CY10), posing new challenges and credit risks to the growing banking industry.
According to him, the challenge of reversing the rising trend in NPLs is still not over and with Rs.53.7 billion of incremental NPLs in the last quarter of CY10, infection ratio (NPLs to loans) has further deteriorated to 14.7 percent in December 2010, as it stood at 14 percent in December 2009.
Quoting the SBP statistics, Munir Saleem said NPLs registered a massive increase of 23 percent or Rs.102 billion to Rs.548 billion as on December 31, 2010, compared with Rs.446 billion as on December 31, 2009. However, despite massive build-up of NPLs in the fourth quarter of CY10, year-on-year trend shows a marginal slowdown.
Specifically, banks experienced a relatively slower growth in NPLs during CY10, compared with 24.2 percent in CY09 and 64.8 percent in CY08. On a positive note, 77.6 percent of incremental NPLs during Q4 were confined to a handful of banks, with some banks even enjoying a YoY decline.
To a query, he is of the view that in testing times, relentless borrowings by the government have been a blessing for commercial banks, providing a convenient option to place bulk of their funds in risk-free securities. As per analysis, he said that NPLs of public sector commercial banks mounted by 39 percent or Rs.46 billion to Rs.164 billion in CY10. NPLs of local private banks grew by 17 percent or Rs.51 billion to 344 billion in December 2010 from Rs.293 billion in December 2009. With an increase of Rs.4 billion, NPLs of specialised banks stood at Rs.32 billion at the end of CY10 compared with Rs.28 billion in CY09. NPLs of foreign banks posted only Rs.1 billion surge and at the end of last calendar year it mounted to Rs.7 billion from Rs.6 billion.