In an exclusive interview with Business Recorder on Tuesday Naseer Hasan Head of Consumer Banking Standard Chartered Bank (SCB) Pakistan has said that initially 30 branches have been selected to start "Trade Desk" and SME sector will be the main beneficiary of this new project as they can avail major trade facilities without visiting head office.
"This will be a part of SCB efforts to support trade and industry mainly Small and Medium Enterprises (SMEs) sector," he added. Being a large and potential financial market, Pakistan can't be ignored as it has 180 million population including 50 percent people less than 19 years and among this young people a large number will be bankable in next few years, Naseer said.
"SCB is working in this region since 150 years, it has witnessed massive growth here and knows the region requirement," he said and added that being a strong bank in this emerging market SCB believed that despite some up and down, Pakistan's economy will do well.
Talking about the international financial institutions, he said that some financial institutions are consolidating their operations, definitely this will raise some opportunities for other banks including SCB, which is investing more in the market to take full benefit of the current opportunities. Naseer said on technology side with 100 percent online branches, SCB is one of the strongest bank. It is providing best internet banking services in the country and some 290,000 customers are registered for internet banking and among these active internet customers 140,000, which are doing regular financial activity. These numbers are even higher in SCB group as well as in the Pakistan, he mentioned.
"Pakistan's economy has experienced steady growth over the last ten years, with GDP rising to $212 billion in FY11 from $72.6 billion in FY01. Besides this, Pakistan's annual trade almost tripled over the last 10 years to $60 billion by 2011," he informed.
Remittances from Pakistanis working abroad have been a key driver of growth and in FY11 workers posted record inflows of $11.3 billion and as 5.5 percent of GDP, he said and added, however, the economic environment remains challenged by the global financial crisis, rising commodity prices and natural disasters.
Elaborating the performed in 2011, Naseer said that our annual profit (before tax) have grown by 52 percent to Rs 8.4 billion in 2011, with earnings per share up at Rs 1.41 from Rs 0.93 in 2010. This is the testimony of the disciplined execution of our strategy of improving profitability, enhancing customer service, and people engagement, he added.
"Revenue increased to a record Rs 26.8 billion fostered by improved net interest margins and volumes. Both consumer and wholesale banking businesses are exhibiting good momentum. Income from consumer banking assets is stable and focus is continuing on building secured and SME portfolio and diversified cost effective retail liabilities base," he described. The bank's balance sheet remains highly liquid and well capitalised as we continue to manage risks and returns prudently, he said.
He informed that the deposits base has increased by Rs 15.6 billion to Rs 235.9 billion and with the Advances to Deposits Ratio of 55 percent, the surplus liquidity has been deployed in short term Government Securities. The capital base is strong which is evident from the Capital Adequacy Ratio of 12.9 percent compared to requirement of 10 percent. "We continue to be prudent on provisioning against non-performing assets resulting in a high loss coverage ratio of 83 percent," he added.
Head of consumer banking said that SMEs is a key pillar of economic diversification in the country, therefore SCB is being provided them with preferential pricing on their financial performance. "We provide them with financial solutions tailored for their business needs," he said.
Strengthening the public-private partnership, ensure sound business performance and governance, transparency through the establishment of a credit bureau, providing more market research and statistics are need to further support the SME sector, he mentioned. Replying to a question regarding consumer segment progress, he said "our strategy remains unchanged and our overarching business opportunity is to grow market share in chosen products and customer segments."
"There has been momentum in deposit mobilisation. This is testimony of the strength of Standard Chartered brand and our expanded geographical footprint," he said. Talking about the trend of NPLs, Naseer said that the rate of increase in NPLs might slow down from now on as compared to previous years. However, on the corporate side and the SME side there are challenges because of the state of the economy.
He said that as the pioneer in innovative online banking in Pakistan, Standard Chartered Online Banking offers a fantastic range of free interbank funds transfer and bill payment services available to all our online banking customers. "In Pakistan there are nearly 800,000 registered customers for internet banking, of which Standard Chartered Bank has 37 percent share. This speaks of the technology savvy-ness of our customers and our online banking product/service offerings", he pointed out.
SCB have leading the online banking space with more than 80 percent share of the total monthly interbank funds transfer transactions and 26 percent of the total monthly utility bill payment transactions happening via the online banking in Pakistan, he explained.
About Islamic Banking in Pakistan, he said that Islamic Banking industry in Pakistan has seen phenomenal growth over the past few years. To leverage this growing market share, Standard Chartered Saadiq has recently launched its customer value proposition bringing in new Shariah-compliant financial product with the focus on providing convenient, friendly, fast and accurate service, Naseer said.
Islamic banking products and services can be provided across any of our 132 branches with 600 relationship managers, he added. "Our goal is to be able to offer consumers Islamic banking services which are comparable in terms of diversity and convenience, to suit their needs in parallel with our conventional offering and then let them choose," he added.
Standard Chartered Saadiq offers Current & Savings accounts, Term Deposits, the first Shariah compliant credit card, Takaful, Home Financing and SME Trade & Finance facilities, he elaborated. "Our goal is to be able to offer consumers Islamic banking services which are comparable in terms of diversity and convenience, to suit their needs in parallel with our conventional offering and then let them choose," he concluded.