SBP report highlights growth in private sector
KARACHI (Zamir Sheikh): State Bank of Pakistan (SBP), in its Quarterly Performance Review (QPR) of the Banking sector for the quarter ended December 31, 2016 (Q4CY16), has highlighted the impressive growth in advances to private sector, which is highest 4th quarter growth in the last 10 years. The solvency profile of the banking sector remains robust as Capital Adequacy Ratio (CAR) of 16.17 percent is well above the minimum required level of 10.65 percent. Deposit growth has remained on steady path while 4th quarter’s profit has improved over last years’ though entire year’s profit slightly narrowed owing to low interest rate environment. The report highlights that the asset base of the banking sector has expanded by 4.6 percent in Q4CY16. The key contribution has come from demand for credit from private sector; thanks to lag impact of monetary easing, better economic conditions and improved liquidity. Positively, a bounce back in the advances flow has been observed in the textile sector, which is the largest borrower of the banking sector.
Besides, sugar, energy, agribusiness and cement are some other sectors which have availed major financing from the banking sector in Q4CY16. However, Banks’ investments have fallen by 1.5 percent during Q4CY16 mainly on account of decline in investments in the government securities.
Deposits – the key funding source of the banking sector - have observed growth of 6.4 percent in Q4CY16 (13.6 percent growth in the Calendar Year 2016). The addition in the overall deposits has been contributed by non-remunerative current deposits followed by fixed deposits and saving deposits.
The report highlights that the high deposit growth in the 4th quarter as well in the entire year is a welcome sign considering deceleration in deposit growth observed in the last couple of years.
The asset quality of the banking sector has improved with decline in non-performing loans (NPLs) and corresponding ratios. Particularly, NPLs to loans ratio receded to 10.1 percent, the lowest level in eight years. Importantly, besides pick up in advances, recoveries in NPLs have played a pivotal role in bringing the ratio down. The coverage ratio (provisions to NPLs) has jumped up to 85.0 percent in Q4CY16 (82.7 percent in Q3CY16).
The dip in interest margins and reduced quantum of investment has narrowed the Year-to-Date profitability of the Banking sector. As a result, return on assets (RoA) has declined to 2.1 percent as compared to 2.5 percent in Q4CY15. However, strong solvency remains intact as CAR of 16.17 percent as of December 31, 2016 is well above the minimum required level of 10.65 percent.
NA body endorses all budgetary proposals of textile ministry
ISLAMABAD (Staff Reporter): The Standing Committee on Textiles has endorsed all the budgetary proposals of the ministry for the current financial year 2017-18. The committee, presided over by MNA Haji Akram Ansari, appreciated the efforts of the ministry for encouraging the growth of cotton by using modern techniques and methods. However, the committee recommended that awareness should be given to the cotton growers and farmers through electronic and press media which could be helpful to increase the cotton growth in the country. The committee also recommended that the government should ban the establishment of sugar mills especially in cotton growing areas so that the growth of cotton could not be affected. The committee further recommended that incentives should also be given to the cotton industry to develop the interest of farmers in cotton growing so that the huge revenue could be added to the national exchequer.
SPFC, BOI discuss steps to promote investments in forestry sector
LAHORE (Staff Reporter): The officials of South Punjab Forest Company (SPFC) and Board of Investment (BOI) met here on Friday to promote investments in the forestry sector of Punjab. During the meeting, SPFC CEO Tahir Rasheed briefed BOI Chairman Dr Miftah Ismail regarding the investment opportunities in the forestry sector and discussed how it can bring a socio-economic revolution in the provincve. Tahir said, “Fast growing species, which are environmentally friendly, will be promoted through this initiative, this will benefit investors in the long-run. The government of Punjab has notified 134,995 acres of blank forest land to SPFC in six districts across South Punjab, which will be offered to the private investors for 15 years lease, for tree plantation under Public Private Partnership (PPP) mode. The lease period shall be further extendable to another 15 years term subject to satisfactory performance of the investors.”
Lucky Cement bags Corporate Excellence Award 2016
LAKKI MARWAT (Staff Reporter): Lucky Cement Limited has won the “Amir S Chinoy Corporate Excellence Award 2016” in the Industrial category amongst all corporate sector organisations in Pakistan. The company was competing for the award amongst 198 top corporates in the country in the first round, and after multiple phases of screening, Lucky Cement emerged as the top company in the country, said a statement issued here on Friday. It said that Muhammad Faisal, Executive Director and Chief Strategy, Finance and Investment officer of Lucky Cement Limited received the award at the 32nd MAP Annual Corporate Excellence Award Ceremony, which was also attended by the Chief Operating Officer and company secretary of Lucky Cement. The Corporate Excellence Awards were instituted by MAP in 1982 with the sole aim to recognise and honour the companies showing outstanding performance and demonstrating progress and enlightened management practices.
The statement said that Lucky Cement received the award based on having the best corporate practices and governance in the industrial sector. “The primary criteria for this award emanates from best corporate and management practices reflected by leadership, corporate governance, customer and market focus, HR, strategic planning and communication, social responsibility, risk management, IT infrastructure, service delivery and security”, it added.
According to the statement, Lucky Cement Limited (LCL) is the flagship company of the Yunus Brothers Group, which has a solid history of exceptional growth performance since its inception in 1993. “LCL is one of the largest producers and leading exporters of quality cement in Pakistan, with a domestic production capacity of 7.75 million tons per annum. The company is listed on the Pakistan and London stock exchange”, it further said.
The statement said that LCL’s manufacturing plants are strategically located in Northern and Southern regions of the country and that it is the only cement company to have its own loose cement export terminal at Karachi port with storage capacity of 24,000 tons. It said that Lucky Cement is an ISO 9001:2008 and 14001:2004 certified company and possesses many other international certifications including Bureau of Indian Standards, Sri Lankan Standard Institute, Standards Organisation of Nigeria, Kenya Bureau of Standards and South African Bureau of Standards.