Samba Bank profit shows hand­some growth of 45pc

The Pak Banker - - FRONT PAGE - Muham­mad Yasir

Samba Bank has wit­nessed an ag­gres­sive fi­nan­cial per­for­mance de­spite chal­lenges of low dis­count rates as its profit in­creased by 45 per­cent to cross Rs 102.289 mil­lion with profit car­ried for­ward stand at Rs 630.692 mil­lion by end of June 2015.

Ac­cord­ing to the fi­nan­cial re­sults an­nounced on Wed­nes­day by the board of di­rec­tors, the bank's earn­ings from in­ter­est and non­in­ter­est in­come im­proved sig­nif­i­cantly which recorded the over­all growth in the prof­its of bank­ing com­pany. The for­eign bank's in­come from in­ter­est re­sources in­creased to Rs 547 mil­lion by end of June 2015 as com­pared with Rs 440 mil­lion of the cor­re­spond­ing pe­riod of pre­vi­ous year. Sur­pris­ingly, the over­all non-markup in­come sur­passed its in­ter­est in­come stand­ing at Rs 796 mil­lion by June -end which grew to Rs 485 mil­lion from pre­vi­ous year.

The bank im­proved risk pro­file on a stand­alone ba­sis as un­der­pinned by strong cap­i­tal­iza­tion, liq­uid­ity and as­set qual­ity in­di­ca­tors. Man­age­ment has de­vel­oped a long term busi­ness plan which en­vis­ages strin­gent liq­uid­ity and cap­i­tal­iza­tion buf­fers. The bank has am­ple room to grow its risk weighted as­sets; cap­i­tal buf­fer is pro­jected to re­main strong. To ac­com­mo­date the ex­pan­sion plan, sig­nif­i­cant in­vest­ment in IT in­fra­struc­ture is pro­jected in fu­ture in­clud­ing the im­ple­men­ta­tion of a new core bank­ing sys­tem in 2016.

The prof­itabil­ity of the bank was im­pres­sive but its stands far be­hind its tar­get to be met by the end of next year as per plan sub­mit­ted to cen­tral bank.

In 2014, Samba Bank's board of di­rec­tors pro­jected a tar­get of Rs 801 mil­lion as profit with rev­enue earn­ing of Rs 2.319 bil­lion for 2016 through its var­i­ous in­ter­est and non-in­ter­est sources along with re­duc­tion in oper­a­tions.

They de­cided to ex­pand banks net­work and busi­nesses in next few years with con­tin­u­ous im­prove­ment in fi­nan­cial liq­uid­ity and ser­vices to the cus­tomers in line with ex­pected re­silience in na­tional econ­omy.

The di­rec­tors have planned to re­duce risk fac­tors in the bank's busi­ness growth whereas the ex­pan­sion will be con­tin­ued through tar­geted com­mer­cial strat­egy with a fo­cus to stand strong among the peers of bank­ing in­dus­try.

The bank's top brass de­cided to ex­pand branches net­work to 40 by 2016 from ex­ist­ing 28 branches while keep­ing its fo­cus on cor­po­rate lend­ing at 10 per­cent of the over­all.

They pro­jected that the bank will grow its bal­ance sheet by 20 per­cent grad­u­ally till 2016. The bank will main­tain its over­all de­posit growth by 26 per­cent if the dis­count rates are con­tained be­tween the range of 10 to 9 per­cent in next three years.

The board of di­rec­tors has de­cided to cur­tail the li­a­bil­i­ties of the bank to Rs 62 bil­lion from Rs 75 bil­lion in next three years whereas it asked the man­age­ment to en­hance the as­sets vol­ume of the bank to Rs 73 bil­lion from Rs 45 bil­lion.

The board di­rected the banks man­age­ment to at­tain the bench­mark of Rs 30 bil­lion grad­u­ally from Rs 24 un­der the head of in­vest­ment net pro­vi­sion and en­hance lend­ing amount of Rs 15 bil­lion to 25.5 bil­lion by 2016.

Re­cently, JCR-VIS Credit Rat­ing Com­pany Ltd has up­graded the en­tity rat­ings of Samba Bank Lim­ited from 'AA-/A-1' (Dou­ble A Mi­nus/A-One) to ' AA/A-1' (Dou­ble A/A-One). Out­look on the as­signed rat­ings is ' Sta­ble'.

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