Bank of Punjab: Annual Report 2016

Transcription

1. ANNUAL REPORT 2016 Better STRONGER Together
2. Better STRONGER Together TABLE of contents 02 Corporate Information 03 Vision , Mission Statement 05 Core Values 06 Management 10 Credit Rating 11 Six Years at a Glance 14 Corporate Social Responsibility (CSR) 18 President’s Message 22 Economic Review 24 Directors’ Report 45 Statement of Compliance with the Code of Corporate Governance Auditors’ Review Report to the members 48 on Code of Corporate Governance 49 Report of Shariah Board 54 Statement of Internal Controls 55 Notice of Annual General Meeting Unsolidated Financial Statements of The Bank of Punjab 59 155 03 Consolidated Financial Statements of The Bank of Punjab and its Subsidiary Punjab Modaraba Services (Pvt.) Limited 250 Pattern of Shareholding 256 Foreign Correspondents Form of Proxy ANNUAL REPORT 2016 01
3. CORPORATE information Board Of Directors Dr . Pervez Tahir Mr. Naeemuddin Khan Mr. Mohammad Jehanzeb Khan Mr. Hamed Yaqoob Sheikh Dr. Umar Saif Syed Maratib Ali Dr. Muhammad Amjad Saqib Mr. Mohammed Afzaal Bhatti Khawaja Farooq Saeed Mr. Saeed Anwar Mr. Omar Saeed Mr. Raza Saeed Chairman President / CEO Director Director Director Director Director Director Director Director Director Secretary to the Board Central Audit Committee (CAC) Khawaja Farooq Saeed Mr. Mohammed Afzaal Bhatti Mr. Saeed Anwar Mr. Omar Saeed Chairman Member Member Member Board Risk Management Committee (BRMC) Syed Maratib Ali Mr. Saeed Anwar Mr. Omar Saeed Chairman Member Member Human Resource & Remuneration Committee (HR&RC) Mr. Mohammad Jehanzeb Khan Syed Maratib Ali Mr. Mohammed Afzaal Bhatti Mr. Naeemuddin Khan Auditors Deloitte Yousuf Adil Chartered Accountants Registered Office BOP Tower, 10-B, Block-E-II, Main Boulevard, Gulberg-III, Lahore. Telephones: +92 - 042-35783700-10 Fax No. +92 - 042 - 35783975 UAN: 111-200-100 Website www.bop.com.pk Registrar M/s. Corplink (Pvt) Limited Wings Arcade, 1-K, Commercial, Model Town, Lahore. Telephones: +92 42 35916714, 35916719, 35839182 Fax No. +92 042 35869037 02 THE BANK OF PUNJAB Chairman Member Member Ex-officio Member
4. Better STRONGER Together moving forward VISION To be a customer focused bank with service excellence . MISSION To exceed the expectation of our stakeholders by leveraging our relationship with the Government of Punjab and delivering a complete range of professional solutions with a focus on programme driven products and services in the agriculture and middle tier markets through a motivated team. ANNUAL REPORT 2016 03
5. 453 Experience the service that makes BOP exceptional 04 THE BANK OF PUNJAB
6. Better STRONGER Together CORE values OUR CUSTOMERS as our first priority PROFITABILITY for the prosperity of our stakeholders that allows us to constantly invest , improve and succeed CORPORATE SOCIAL RESPONSIBILITY to enrich the lives of community where we operate RECOGNITION AND REWARD for the talented and high performing employees EXCELLENCE in everything we do INTEGRITY in all our dealings RESPECT for our customers and each other ANNUAL REPORT 2016 05
7. MANAGEMENT Naeemuddin Khan President / CEO 06 THE BANK OF PUNJAB
8. Better STRONGER Together Shahid Waqar Mahmood Group Head SAM & Legal Khalid S. Tirmizey Deputy CEO Ijaz ur Rehman Qureshi Chief Risk Officer Taimur Afzal Group Head Retail Finance Ahmed Shah Durrani Group Head Retail Banking, SME & Payment Services Moghis Bokhari Group Head Human Resource Asim Jahangir Seth Head Wholesale Banking-II Mustafa Hamdani Group Head IB & WB (South) Nadeem Amir Chief Financial Officer ANNUAL REPORT 2016 07
9. Khawar S . Ansari Group Head Treasury & FIs Javed Iqbal Chief Information Officer Asad Ullah Khan Head Audit & RAR 08 THE BANK OF PUNJAB Omer Iqbal Sheikh Head Islamic Banking Aamir Ali Siddiqui Head Operations Col (R) Tenwir ul Hassan Head Administrative Support Muhammad Babar Ayyaz Head Wholesale Banking-I Khalid Munir Head Compliance & Internal Control Aalya Mawaz Head Corporate Communication
10. PUNJAB ’S ONLY BANK WITH EASY ACCESS TO E-STAMP ANNUAL REPORT 2016 09
11. Credit Rating upgraded to Short Term Rating CREDIT rating Entity Ratings by PACRA Long Term : AA Short Term: A1+ Rating Definition Long Term Rating AA: Very High Credit Quality. AA Ratings denote a very low expectation of credit risk. They indicate very strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable for foreseeable events. Short Term Rating A1+: Obligations supported by the highest capacity for timely repayment. 10 THE BANK OF PUNJAB
12. Better STRONGER Together SIX YEARS at a glance Criteria 2016 2015 2014 2013 2012 2011 BALANCE SHEET Total Assets Advances (net) Investments (net) Shareholders’ Equity Revaluation Reserves Deposits Borrowings Rs in m Rs in m Rs in m Rs in m Rs in m Rs in m Rs in m 545,214 262,068 199,742 24,248 3,607 453,220 39,829 472,284 219,399 176,043 19,397 3,282 374,961 55,236 420,370 170,313 154,875 15,256 4,071 342,291 44,743 352,698 157,286 123,956 12,577 905 306,561 22,802 332,111 149,605 129,519 10,733 1,638 266,056 44,684 280,998 127,130 92,581 10,135 638 237,897 24,964 OPERATING RESULTS Markup/ return/ interest earned Markup/ return/ interest expensed Net markup income Non-markup based income Non-markup based expenses Provision against NPLs Net profit/(loss) before tax Net profit/(loss) after tax Rs in m Rs in m Rs in m Rs in m Rs in m Rs in m Rs in m Rs in m 29,674 17,430 12,244 5,294 8,464 922 8,050 4,858 31,266 20,199 11,068 7,624 7,666 3,431 7,529 4,748 29,522 20,526 8,996 2,790 6,250 1,119 4,307 2,787 24,228 20,209 4,019 3,596 5,280 (673) 3,001 1,938 24,666 22,523 2,143 3,191 4,558 (965) 1,404 1,634 20,685 21,073 (388) 1,990 3,711 (3,164) 523 348 Rs. per share % % % No. No. Rs. per share 3.12 453 7,388 10.75 3.05 406 6,739 8.60 1.94 364 6,180 6.77 2.34 334 6,092 5.58 2.63 306 5,491 4.82 0.66 284 4,999 4.55 OTHER INFORMATION EPS (Non dilutive) Dividend - Cash Dividend - Bonus issue-Interim - Bonus issue-Final No. of Branches Staff Strength Break up value per share* *including impact of share deposit money at par value. ANNUAL REPORT 2016 11
13. GROWTH trends Deposits CASA (Rs. in million) (Rs. in million) 2016 453,220 2016 322,445 2015 374,961 2015 247,915 2014 342,291 2014 222,079 2013 306,561 2013 179,671 2012 266,056 2012 154,746 2011 237,897 2011 129,867 Advances Investments (Rs. in million) 12 (Rs. in million) 2016 293,922 2016 201,516 2015 250,342 2015 177,213 2014 197,122 2014 155,069 2013 182,961 2013 127,213 2012 175,919 2012 132,192 2011 152,551 2011 96,706 THE BANK OF PUNJAB
14. Better STRONGER Together GROWTH trends Assets Shareholders ’ Fund (Rs. in million) (Rs. in million) 2016 545,214 2016 24,248 2015 472,284 2015 19,397 2014 420,370 2014 15,256 2013 352,698 2013 12,577 2012 332,111 2012 10,733 2011 280,998 2011 10,135 Net Interest Margin Profit Before Tax (Rs. in million) (Rs. in million) 2016 12,244 2016 8,050 2015 11,068 2015 7,529 2014 8,996 2014 4,307 2013 4,019 2013 3,001 2012 2,143 2012 1,404 2011 (388) 2011 523 ANNUAL REPORT 2016 13
15. CORPORATE SOCIAL RESPONSIBILITY (CSR) 14 THE BANK OF PUNJAB The Bank of Punjab, as a vibrant modern corporate entity, is fully cognizant of the fact that in current era Bank is not only responsible to shareholders alone but there are certain social, environmental and financial obligations that are required to be discharged through implementation of different social activities under Corporate Social Responsibility (CSR) initiatives. The Bank’s CSR initiatives are directed to attain a balance or integration of economic, environmental and social imperatives while at the same time addressing shareholders’ expectations.
16. Better STRONGER Together a long way in promoting economic activities in underprivileged areas through uplifting agriculture and SME sectors . The Bank takes pride in improving the social lives of millions of peoples across the country by addressing their financial woes through its vast network of branches. In order to make every segment of the society more effective, with an equal opportunity to excel and contribute towards national economy, the Bank has been making a conscious effort to empower women. Besides offering equal opportunity to women in all dealings of the Bank, specially designed products and services are also being offered to encourage women empowerment. Accordingly, the Bank has been taking keen interest in development of specially designed programs, products and services to meet the requirements of under privileged communities across the country. Besides focusing the areas of human development, education, sports, art & culture and social welfare under its CSR initiative, the Bank has been making calculated and conscious efforts for upllifting of under privileged communities of society. Key CSR initiatives taken by the Bank: Social Development through Banking Services: The Bank has been making concentrated efforts to expand its outreach to every corner of the country with special emphasis on under developed and unbanked areas of the country to promote financial inclusion. During the year 2016, the Bank introduced a new concept of smart branches and 45 such new branches were opened in the remote areas of the country, taking the overall tally of branch network to 453. Besides offering easy access to state of the art banking products and services to the residents of remote areas, new branches are also equipped with latest technologies, dual online connectivity and 24/7 banking services through a vast network of ATMs. Availability of top notch banking services at the door steps of the residents of under privileged areas, with easy access to specially designed credit lines; shall go The Bank has been whole heartedly supporting the Government’s Pakistan Remittance initiative (PRI). With long established relationship with top exchange companies, the Bank is providing personalized services to the beneficiaries of the home remittances. Further, Bank has been playing instrumental role in Government of the Punjab (GOPb) Wheat procurement initiative for last several years, helping GOPb on one hand and ensuring quickest disbursement of funds to the farmers through its vast network of branches on the other hand. Facilitating Government to People contacting: The Bank’s Alternative Delivery Channels (ADCs) have played pivotal role in disbursement of financial assistance to the IDPs, farmers and other needy persons under Khidmat Card scheme. Further, the Bank has been partnering with the GOPb in its various initiatives such as e-stamping which has completely revolutionized and replaced the old manual system of sale/ purchase of stamp-papers. Now, people can generate e-stamp paper through a web portal and get it printed from their selected branch of The Bank of Punjab. The Bank has also been supporting the GOPb in disbursement of scholarship to thousands of students under Punjab Education Endowment Fund scheme. Culture, Sports and Heritage: The Bank makes every possible effort to encourage promotion of culture, sports and local heritage in the ANNUAL REPORT 2016 15
17. country . Accordingly, Bank generously participates in activities promoting the culture, sports and local heritage. Besides organizing and sponsoring different sports events across the country, the Bank also extends financial support to the cultural events at the Regional levels to help promote local culture. The Bank has also introduced a new concept of marketing through hiring services of a street theater company to market its products through stage performance in remote areas of the country which will also help reviving street theater. Environment protection and energy conservation: The persistent energy crisis in the country has made it obligatory for every individual and organization to play its due role in preserving energy. Accordingly, every effort is being made to keep energy consumption at barest minimum level and ensure effective utilization of day light in offices and branches of the Bank. Further, the generators are being used rationally to avoid pollution and help curtail fuel consumption. The Bank also realizes the financing needs to help produce alternative energy. Besides facilitating and financing large scale projects for production of environment friendly energy, the Bank has also 16 THE BANK OF PUNJAB introduced Solar Penal financing scheme with an objective to reduce energy woes of common man and help produce low cost environment friendly energy. Human Resource Development/ Employees Relations: The Bank takes pride in creating jobs for educated youth of the country. While jobs are awarded through a completely transparent and merit based system, the Bank also acts as an equal opportunity employer to help promote women empowerment. The Bank also takes due care of its lower cadre staff through award of concessional staff finance facilities, award of scholarship to their children and lending helping hand at dire need through its benevolent fund scheme. The Bank has also established a state of the art learning and development center to meet ongoing training requirements of the staff members. Care for Elderly and Special Persons: Besides offering personalized and priority services to the senior citizens, the Bank ensures hazard free services to the special persons visiting the Bank. Senior citizens, pensioners and disabled persons are duly taken care of in line with the directives of Government of Pakistan and State Bank of Pakistan.
18. Better STRONGER Together ANNUAL REPORT 2016 17
19. PRESIDENT ’S message During the year 2016, your Bank continued to reap the benefits of reorganizing and restructuring initiatives taken in last few years which enormously helped the Bank in its unprecedented transformation to a vibrant and healthy corporate entity. 18 THE BANK OF PUNJAB While the revival of public sector enterprises has always remained a difficult and challenging task, your Bank has been able to exhibit an epic turnaround in last few years. The strategic decision of pursuing aggressive expansion along-with sustained remedial management has started paying off and your Bank has been able to post phenomenal financial results during the year 2016.
20. Better STRONGER Together Our performance in 2016 mirrored another year of solid results and a zenith of quality banking . We always act with integrity and transparency in everything we do which is the cornerstone of our business and the real goal. During the year 2016, your Bank has been able to enhance its branch network to over 450 and through introduction of new concept of smart branches; the Bank has been leading the way to achieve the objective of financial inclusion through its presence in remote areas of the country. The newly opened smart branches are equipped with online connectivity and offering state of the art modern banking services to the diverse clientele of remote areas. The Bank has planned to open 100 more branches during the year 2017 and by close of the year overall branch network will be expanded to over 550 branches across the country. While the Bank continued to clean up its balance sheet and take every possible available step to ensure recovery of legacy non-performing loans portfolio, tremendous business growth in last few years has paved the way for a new “Good Bank”. With solid balance sheet growth and robust financial results, the overall size of Bank’s balance sheet has now crossed the landmark figure of Rs. 500 billion. Similarly, Bank’s deposits have also crossed the level of Rs. 450 billion with substantial increase in low cost CASA to further improve Bank’s net interest margin. While growing the asset base, it has been ensured that new relationships are within the overall risk appetite of the Bank and credit lines are only allowed to credible borrowers. Accordingly, ratio of impaired relationships from among fresh lines remains at a very minimum level. It is evident from last few years’ performance of the Bank that the emerging “Good Bank” has outpaced the remains of a difficult past to a great extent. Despite low interest rates scenario, optimum utilization of available resources, procurement of low cost deposits and increase in the share of fee based income have enabled the Bank to improve its profitability position. It is heartening to note that the performance of the Bank has been duly acknowledged by all the stakeholders. The key players of financial market have also shown an enthusiastic and overwhelming support by subscribing first ever privately placed Term Finance Certificates of the Bank which would strengthen the capital structure of the Bank. The Bank has been contributing significantly towards the growth of the country by way of financing industrial sector and playing its due role in implementation of key initiatives of the Government. Duly recognizing energy woes of the country, the Bank has supported the initiatives taken for the development of alternative energy resources in the country. While the Bank takes pride being pioneer in extending loan to first and largest solar power project, the Bank is also part of major energy related projects being setup in the country. The marked improvement in financial well-being of the Bank is also demonstrated through the remarkable praise, appreciation and gratitude, it received from regulators and external agencies. During the year 2016, Pakistan Credit Rating Agency (PACRA) has upgraded long term entity rating of the Bank to “AA” with short term rating already being at highest scale of “A1+”. Besides being another laurel for the Bank, the said rating up-gradation is also an evidence of a great financial turnaround witnessed by the Bank. Besides improving upon its products and services, the Bank has also entered into several new business ventures to help improve fee based income and also to participate in the national economy. The Bank has established its footprint in the areas like Cash Management, Home Remittances and Branchless Banking. The Bank has taken a revolutionary initiative in collaboration with the Government of the Punjab for issuance of e-stamp papers through its network. A long and established relationship with several exchange companies is also being enjoyed for facilitating Pakistan Remittance Initiative of Government of Pakistan for disbursement of home remittances through its network. Also, Branchless Banking initiative has been successfully launched ANNUAL REPORT 2016 19