Across the globe, COVID-19 pandemic has created disruption and uncertainty for the common man and business community. BankIslami Pakistan Limited being a responsible institution in the banking sector, to inhibit the impact of this pandemic situation, took a number of precautionary initiatives based on World Health Organization (WHO) health principles to ensure safe work environment for employees as well as customers. Furthermore, BankIslami, in light of relief packages proclaimed through State Bank of Pakistan (SBP), is closely working with its financing clients, who have been affected by COVID-19, through advising them on restructuring.
|Percentage Growth In March 2020 Compared To March 2019|
|Profit After Tax||91.7|
|Basic Earnings per share (Rs)||75.1|
Keeping in view the ensuing economic problems because of this pandemic, BankIslami on conservative basis has registered additional provisioning to the tune of Rs. 700 million during the quarter ended March 31, 2020 against potential losses in asset portfolio. The experts further recorded in the financial report that despite the pandemic outbreak, the bank was able to post a profit after tax of Rs. 368 million for the quarter ended March 31, 2020 which is 92 percent higher than profit after tax of Rs. 192 million generated during the corresponding period last year. No doubt, BankIslami envisioned to focus mainly on Wealth Management as the core area of business in addition to Shariah-compliant retail banking products, proprietary and third party products, and Integrated financial planning services. Moreover, In the financial results of BankIslami Pakistan Limited for quarter ended March 31, 2020, experts recorded that BankIslami continued its momentum of growth in 2020 whereby its Assets and Deposits grew by 32 percent and 31 percent as against to its position in March 2019. Rise in Deposits chiefly ensued on the back of aggressive deposit mobilization strategy adapted through the bank, while asset base of the bank thrived by effectual channelizing of funds towards Islamic Financing and Shariah Compliant Treasury Placements. There was a rise in NPFs in March 2020 as opposed to March 2019 because of which the infection ratio of the Bank inched up to 10.9 percent at the end of March 2020 as against to 10.0 percent in March 2019.
Statistics of the report also revealed that BankIslami made accelerated provisioning during the quarter under review because of which the coverage ratio of the bank enhanced to 86.6 percent as of March 31, 2020 despite rise in NPFs. Net spread earned during the quarter enhanced through 47 percent as a consequence of rise in Balance Sheet size of the bank and repricing impact of increase in benchmark rates during latter half of 2019.
However, it is pertinent to mention that, post 1st Quarter of 2020, the top line of the Bank is expected to witness compression on account of strategy adapted by the apex authority to gradually decline benchmark rates to enable the country to sustain prevailing economic challenges posed by COVID-19. The Financial report of the bank also revealed that the group registered satisfactory consequences for the quarter ended March 31, 2020. Total Assets and Deposits of the group grew by 32 percent and 30 percent, respectively, when compared with financial position of March 2019. With improvement in net spreads and cost to income ratio, the group generated profit after tax of Rs. 320 million for the period ended March 31, 2020, which is 60 percent higher than the profit after tax of Rs. 200 million recorded during the corresponding period previous year.
During 1st Quarter 2020, BankIslami Pakistan achieved a total trade business of greater than Rs. 50 billion, showing a growth of 11 percent as against to same quarter last year. Statistics published in the banks’ financial report showed that agri finance department disbursed greater than Rs. 96 million to 32 farmers, out of which 49 percent was disbursed under the umbrella of warehouse receipt financing, which is an innovative product that is being offered only by the bank in the country. It is also showed that investment banking arm of BankIslami generated fee income of Rs. 80.4 million mostly from syndicate-structured finance transaction in which the bank assumed lead roles.
The officials of the bank registered that during 1st Quarter 2020, BankIslami fruitfully inked joint mandate with other banks for NTDC syndicated term finance facility amounting to Rs. 6.4 billion and also secured joint mandate with another bank to increase Rs. 22 billion for K-Electric by series of ICP. No doubt, the bank’s Shariah department acted as joint Shariah structuring advisor in issuance of ICPs. On the marketing side, the bank sponsored and participated in various events to establish its brand equity and create awareness of its Shariah-compliant products and One Touch Banking solution amongst masses. In 2020, the bank received four accolades in categories, namely bio diversity, green energy initiative, education sponsorship and collective contribution towards Edhi (NGO) CSR Campaign. The Management of the bank also won three precious awards for its CSR initiatives and activities at 9th Annual CSR Summit and Awards 2020 for its attempts made in the areas of sustainability initiative, environmental stewardship and social impact.