Category: Industry

National Bank of Pakistan (NBP) has reported a profit after tax of Rs 24.1 billion for the nine-month period ending September 30, 2021, as against a profit after tax of Rs. 26.1 billion in the same period as last year.

The earning per share of the bank stood at Rs. 11.35 per share, on total revenue of Rs 99.5 billion as against Rs. 12.28 per share, on total revenues of Rs. 107.6 billion for the corresponding nine-month period of 2020. This impact was seen after the substantial additional provisions of about Rs. 12.2 billion taken in 2021.

In line with the industry-wide margin compressions, revenues of the bank decreased 7.5% to close at Rs. 99.5 billion (Sep’20: Rs 107.6 billion), primarily reflecting the impact of the drop in the policy rate and normalization of yield on investment.

The bank recorded a net interest income of Rs. 72.4 billion, driven by an Rs. 240 billion growth in the average earning portfolio. While gross mark-up/interest income of the bank closed at Rs. 166.5 billion (19.2% down YoY), the interest/mark-up expense also dropped significantly by 25.4% to Rs. 94.1 billion. Despite the subdued trade activity during most of the period under review, non-mark-up/non-interest earning of the bank remained high at Rs. 27.1 billion.

Despite inflationary pressures and higher operating costs as the Bank continues uninterrupted delivery of services during the pandemic contributing to Pakistan’s economic growth and development, administrative expenses remained well controlled and recorded a marginal increase of 4.5% YoY to close at Rs. 47.0 billion. This translates into a cost-to-income ratio of 47.3%, slightly up from 41.8% in 9M’20. During the period, NPLs of the bank increased by 17.7% to close at Rs. 201.7 billion (Dec’20: Rs. 171.3 billion). To make its balance sheet more resilient in the prevailing circumstances, the Bank created a provision charge of Rs. 12.2 billion during the period.

On the balance sheet side, NBP has one of the industry’s largest balance sheets which further increased by 27.1% to Rs. 3.8 trillion, in the nine months of 2021 from Rs. 3.0 trillion level at the beginning of 2021. The bank’s Balance Sheet has grown on the back of stable deposit base expansion, leveraged with money market borrowings. Gross loans and advances of the Bank amounted to Rs. 1,207.7 billion depicting a 4.1% increase from the year-end 2020 levels.

The major share of the bank’s total funding comes from core customer deposits that contribute 87.2% (Rs. 2,224.6 billion) of the bank’s total deposits that stood at Rs. 2,551.6 billion. Compared to Dec 31, 2020 level, customer deposits have increased by 10.1% or Rs. 204.0 billion.

NBP’s Islamic Banking is operating a network of over 200 dedicated branches throughout the country. Islamic Banking continues to focus on Commercial and SME businesses by expanding trade hubs to provide ease of service to these segments. The bank has made considerable progress on its strategy across its consumer and institutional businesses and for playing its systemically important role in the economy while maintaining a strong and resilient balance sheet to deliver performance for shareholders.

The management is committed to modernizing the Bank to achieve excellence in risk and control environment, business processes, and service quality to clients. The Bank’s business strategy will increase its focus on financing and supporting underserved sectors including SME, Microfinance, Agriculture Finance, and the PM’s Low-Cost Housing initiative on a priority basis.

Source: Pro Pakistani

The negotiations between Pakistan and Russia on building the North-South Gas Pipeline (now called Pakistan Stream Gas Pipeline – PSGP) are underway as per the schedule.

The two sides had signed an inter-governmental agreement in 2015. The agreement envisages the laying of a 1,100 km long pipeline to carry 1.6bcf/d gas from Karachi to Lahore.

Teams from the two countries are currently holding the first session of negotiations on a ‘Shareholders Agreement’ of PSGP.

The Pakistani team led by Dr. Arshad Mehmood, Secretary Petroleum Division, comprises Syed Zikria Ali Shah, Managing Director of Inter-State Gas Systems, and other officials of the Petroleum Division, Law Division, Foreign Office, and Finance Division.

Vladimir Shcherbatykh, General Director of PakStream Ltd, is heading the Russian side with other officials including financial and technical experts from the Russian government and allied entities.

The PSGP is a strategic project, which has made more progress in the last four months than the preceding five years. As a testament, the Head of Terms (HOT) Agreement was signed in July and Technical parameters were finalized in August this year. Both parties have made substantive progress on the finalization of the Shareholders Agreement in a collaborative manner. It is an important document for which multiple negotiation sessions are planned.

The Russian side has appreciated the progress made, showing confidence in the negotiations as they are going as per the expectations of both sides.

Source: Pro Pakistani

Banks credit to the housing and construction sector, mainly builders and developers of housing societies, have surged to Rs. 305 billion at the end of September 2021, which was Rs. 166 billion at the end of September last year, showing an increase of Rs. 139 billion and year-on-year growth of 84%.

In July 2020, the State Bank of Pakistan advised commercial banks to increase their lending for housing and construction sectors to at least 5 percent of their private domestic sector advances by December 2021. To assist in this, the State Bank advised quarterly targets to each bank after individual consultation, leading to concerted effort. For the quarter ending September 30, 2021, banks have achieved 94 percent of their assigned targets on a consolidated basis.

During July-September 2021, banks increased their credit to the housing and construction sector by Rs. 48 billion from Rs. 257 billion as of June 30, 2021. An increase in credit to the housing and construction sector reflects that banks have realigned their internal policy dimension/strategic focus towards the development of housing and construction. The banks have, in recent months, revamped their systems and procedures, upgraded and streamlined technological platforms, and motivated their banking staff through incentives and training.

The banks have also established a joint call center to address queries of the general public regarding Mera Pakistan Mera Ghar (MPMG) which was recently inaugurated by the Governor SBP. The general public can reach the call center at 03377786786. This call center will help resolve complaints and assist common persons who would like to borrow under MPMG but face difficulties in completing the requirements of banks.

Earlier, State Bank launched a user-friendly online complaint resolution mechanism in January 2021. The complaint resolution mechanism comprises an IT-based portal supported by a comprehensive network of State Bank and commercial bank staff to take care of problems faced by applicants and resolves complaints within a predefined timeline with a proper escalation mechanism.

Some of the other steps taken by SBP in collaboration with NAPHDA, other government agencies, banks, and stakeholders include a simplified loan application, standard facility offer letter, amendment in the prudential framework, development of standard risk assessment criteria for builders/developers, development of income proxy model and streamlined financing documents.

Speedy Approvals of Financing Under Low-Cost Housing Scheme

The low-cost housing scheme MPMG has continued to attract the interest of a number of citizens as the amount against the applications surged to over Rs. 200 billion, however, the approval of financing stood less than 50 percent whereas the disbursement of stood less than 10 percent so far.

According to the data, the banks have approved an amount of Rs. 78 billion. On the other hand, these companies disbursed merely Rs. 18 billion. Governor SBP, Dr. Reza Baqir, stressed the need to accelerate the pace of approvals by banks to match the requests for financing to ensure that people are not discouraged by the processing time. He expressed the hope that with the combined efforts of all stakeholders, the dream of Pakistanis to have their own homes can become a reality.

While appreciating the efforts to date, Reza Baqir also asked stakeholders to increase the outreach of the Government’s Markup Subsidy Scheme for Housing Finance commonly known as Mera Pakistan MeraGhar to the wider public. He said that when the journey of MPMG started last year, low-cost housing finance was almost non-existent as commercial banks rarely ventured into this area fearing its inherent risks.

However, the strong commitment of the government especially NAPHDA, SBP, banks, and other stakeholders, to promote housing and construction activities in the country, is beginning to result in a considerable increase in finance for housing and construction.

Source: Pro Pakistani

Allied Bank Limited (ABL) has managed to sustain its profit growth which stood at 4.5% year-on-year from January to September 2021.

According to the financial results, the bank’s profit increased to Rs. 13.2 billion by the end of nine months of 2021, as compared to the profit of last year which stood at Rs. 12.6 billion in the same period.

The revenues made from interest income decreased while income from non-markup sources surged thanks to investments in government securities. The bank’s interest income stood at Rs. 34.6 billion, whereas the non-markup earning stood at Rs. 11.7 billion. The bank’s expenses also surged to Rs. 24.9 billion during the nine months of 2021.

The earning per share of the bank stood at Rs. 11.53 this year from Rs. 11.03 of the last year.

The board of directors announced a dividend of Rs. 2 per share in addition to Rs. 4 interim dividends announced earlier this year.

The bank has a large network of over 1,350 online branches and over 1,500 ATMs in Pakistan and offers various technology-based products and services to its diverse clientele.

Source: Pro Pakistani

The Pakistani Rupee sank to a fresh all-time low against the US Dollar today. It depreciated by 84 paisas against the dollar and closed at 175.27.

It hit its prior record low against the USD yesterday when it closed at 174.43.

The former Treasury Head of Chase Manhattan Bank, Asad Rizvi, said that the uncertain direction of the PKR was exacerbating uncertainty for market players.

Pakistan’s discussions with the International Monetary Fund are still ongoing, and no date for their conclusion has been announced yet.

The National Database and Registration Authority has activated the mandatory biometric verification of dollar buyers.

The central bank had made biometric verification mandatory for the buying of $500 or more from the open market on 7 October in a bid to prevent dollar outflow to Afghanistan after a heavy increase in demand that destabilized the exchange rate in the open market.

Meanwhile, the Pakistan Stock Exchange closed lower for another session today. “As per analysts, the introduction of a new platform, namely the Designated Time Schedule caused the investors to stay on the sidelines,” Capital Stake said in a market wrap report.

The PKR also lost 83 paisas against the Pound Sterling (GBP), 53 paisas against the Australian Dollar (AUD), 19 paisas against the Canadian Dollar (CAD), 22 paisas against the Saudi Riyal (SAR), and 23 paisas against the United Arab Emirates Dirham (AED) today.

However, PKR gained 15 paisas against the Euro.

Source: Pro Pakistani

The Pakistan Telecommunication Authority has terminated Wi-Tribe Pakistan Ltd.’s licensed telecom services for its failure to comply with the terms and conditions of licenses regarding the provision of uninterrupted licensed services to its consumers.

The authority (PTA) has also directed all cellular mobile licensees, Long Distance & International, Local Loop (WLL & FLL), and CVAS licensees to terminate telecommunication facilities extended to the company under the licenses, and submit a compliance report within three working days from the date of the receipt of the order.

The PTA panel, headed by Chairman Maj. Gen. Amir Azeem Bajwa (R) heard a show cause notice issued to Wi-Tribe Pakistan Ltd. and decided to terminate its services with immediate effect.

The decision was made in accordance with the license condition that the licensee will not discontinue providing licensed services or a category of licensed services unless (a) the licensee gives the PTA and the affected customers a written notice of such a discontinuation at least 90 days in advance; and (b) the PTA’s previously written approval to such discontinuation is obtained.

Letters from the licensee dated 14 July 2020, 21 July 2020, and 22 July 2020 show that it has been noticed that as a consequence of a commercial dispute between the licensee and EDOTCO Pakistan (Pvt.) Limited (Telecom Tower license holder), the telecom services being provided to the consumers were discontinued. This non-provision of telecommunication services had affected the users without any default on their part.

The license condition makes it obligatory for the standard contract service to include refunds or other rebates for the service problem. As a result of the discontinuation of telecom services to customers without any default on their part, a Show Cause Notice (SCN) dated 21 August 2020 was issued to the licensee, requiring therein a remedy to the contravention by adhering to the license conditions in terms of the provision of the licensed services to protect the interest of the consumers and by submitting a compliance report within three working days of the issuance of the SCN, and also to explain it in writing within thirty days.

The licensee replied to the SCN, highlighting that a complaint had been filed to the PTA against the EDOTCO on 27 July 2020, which remains pending. The EDOTCO had blatantly, deliberately, and with complete disregard for the law, closed the network down simply as an extortion and blackmail exercise to gain commercial advantage.

The licensee’s teams have succeeded in restoring services despite the hurdles placed by the EDOTCO at forty-nine locations through the operational site at the said locations as a result of the new contractual relationships with other telecom operators and passive infrastructure service providers.

The licensee’s main contentions are that it had entered into Master License Agreement on 28 June 2016 with Tower share (Pvt.) Limited for the provision of passive infrastructure services, including space on BTS sites, which was later assigned to Tanzanite Towers (Pvt.) Limited that is now called ‘EDOTCO Towers Pakistan (Pvt.) Limited’ but the licensee’s network was forcefully shut down in July 2020 in most of the areas as the Tower Facilities on which the licensee’s active telecom equipment operated for the provision of the licensed services were unlawfully shut down by EDOTCO without the licensee’s consent.

The licensee maintains that the EDOTCO has time and again violated the terms of the Agreement by demanding huge sums of money for disrupted and faulty services. The invoices generated and submitted to the licensee have been flawed as full amounts were demanded for services not even delivered. The licensee claimed that it had raised this issue with EDOTCO at every chance, but in vain.

The licensee alleges that it has been negotiating a way forward since August 2019 to resolve such outstanding issues, including the lack of services but the EDOTCO had informed the licensee on 6 March 2020 that even though the pandemic has led to an invocation of the Force Majeure clause of the Agreement, and as lockdowns were being imposed by the government, negotiations would no longer be undertaken.

Despite this statement by the EDOTCO and understanding the dire requirement to ensure the provision of uninterrupted WLL services to its customers, the licensee continued to discuss and improve upon its offers to resolve the issue with the former until 29 June 2020.

Despite the continuation of the licensee’s numerous efforts to resolve the issue, the EDOTCO had served Notices of Termination dated 23 June 2020, 7 July 2020, and 13th July 2020, following which it had shut down over 400 of the licensee’s Tower Facilities on 5 July 2020, 8 July 2020, 13 July 2020, 14 July 2020, and 15 September 2020. The licensee further claimed that there had been no transgression on its part and that the EDOTCO had shut down its Tower Facilities without its consent.

The requirements of subject regulations related to the discontinuation of services are in cases where the licensee is conducting a voluntary and preplanned termination of services in a licensed region. The unlawful actions of the EDOTCO confirm that the breakdown in the licensee’s service was neither voluntary nor pre-planned.

The licensee also stated that it has tried its best to resolve the dispute with the EDOTCO and had approached the Civil/District Courts, the PTA, and the Ministry of Information Technology and Telecommunication in this pursuit. It had also filed for injunctive relief soon after the first closure of the Towers Facilities and had procured an interim injunctive order dated 6 July 2020 against the EDOTCO’s actions, and therefore, the shutdowns that had taken place after this date were all in grave violation of the interim injunctive order issued by the Civil Court.

Regarding the matters related to the consumers, the licensee asserted that it has resolved numerous consumer complaints and refunds many of them, but despite the license’s refund offers, there are some customers who demand the continuation of the licensee’s licensed services and have refused to take the offer as they do not wish to transfer to any other telecom service provider.

The licensee requested that no adverse action be taken against it, and that it be granted some leniency and time to resolve its dispute with the EDOTCO until the arbitration proceedings are concluded and a final award is given by the arbitrator.

During the course of the hearing, the licensee reiterated the same statements that it had given in reply to the SCN. It also highlighted that it has been striving to seek alternative solutions for the provision of licensed services to its customers.

In furtherance to the aforesaid submissions, the licensee vide letter dated 12 January 2021 provided detailed written submissions to questions raised in the hearing before the PTA. The submissions made are reproduced hereunder: Wi-tribe Pakistan had never contracted with Edotco Towers; it had been forced upon it due to the sale of the passive infrastructure from the Tower Share (Pvt.) Limited with whom it had the Master License Agreement dated 28 June 2016 (the ‘Agreement’), to EDOTCO Towers. It presumes that this transaction had been approved by the PTA and/or brought to its notice by the two concerned entities.

However, the prices offered by Tower Share (Pvt.) Limited against the provision of passive infrastructure services were the most competitive in the market and were also cost-effective at the time, which is why most of the towers were shared with them and they had broadly met the SLAs.

In the instant matter, the question before the PTA is for it to determine whether the discontinuation of the telecommunication services by the licensee to its customers, which was a result of a contractual dispute with EDOTCO (a Telecom Tower license holder), falls within the framework of regulatory laws or otherwise.

Under the Act, the PTA is mandated to protect the interests of consumers and has jurisdiction to entertain and decide matters related to consumers within the applicable legal framework.

While responding to the SCN, the licensee stated that it had filed a complaint to the PTA under Section 4 (f) and Section 31 of the Act against the EDOTCO on 27 July 2020, and the same is pending.

Secondly, the licensee had stated that its team has succeeded in restoring services at 49 out of 400 locations in Lahore and Karachi through contractual arrangements with other licensed telecom operators. In this regard, the PTA is of the view that since it has taken the cognizance of the subject matter (the discontinuation of services) and has issued SCNs to both the licensee and the EDOTCO, the complaint filed by the licensee under Section 4 (f) and Section 31 of the Act pertaining to the same cause of action stands infructuous.

Moreover, the restoration of services at 49 tower locations in Lahore and Karachi does not substantiate the fulfillment of the licensed obligation with regard to the provision of licensed services to their customers. The primary issue in the instant matter is to protect the interest of telecommunication consumers by providing uninterrupted licensed services as per the terms and conditions of the license.

On the contrary, the licensee’s arguments regarding the restoration of services at the 49 locations through a contractual relationship with other licensed telecom infrastructure seem to be unjustified on the grounds that the PTA has received a total of 250 complaints relating to coverage issues, overcharging, non-provision of services, etc. between May 2020 and Jan 2021.

Nevertheless, the licensee, vide an email dated 27 January 2021, had stated that it is not providing licensed service in any licensed region. Therefore, it suffices to conclude that licensee has failed to provide licensed services in accordance with the service contract to its subscribers. The licensee is obligated to ensure the provision of licensed services and to protect the consumer’s right to the use of services in accordance with the terms and conditions of the license.

At the time of the granting of the license, the licensee had unequivocally and expressly agreed to abide by all the terms and conditions of the license, including the provision of uninterrupted licensed services to its customers. Thus, it does not exonerate itself from the discontinuation of licensed services on the grounds of a contractual dispute with the other licensed telecom operators. Also, inaction on the part of the licensee in not taking remedial steps for the provision of licensed services is evident as it did not take proper, reasonable, and justifiable measures for the continuation of licensed service in the telecom regions. Consequently, consumers suffered because of the licensed services besides facing financial losses of the amount paid against the services.

In order to determine and ascertain the refunding of the amount against the subscription of the licensed services, the licensee was required to provide the details of the affected consumers who had been deprived of legitimate services as a result of the discontinuation of services. However, the licensee has not provided the same despite the fact that during the course of the hearing, the representative of the licensee had ensured and undertaken that they had remedied the grievances of all the consumers by providing rebates and would provide proof of the same to the PTA accordingly.

In light of the available record, it is an admitted position that the licensee has failed to comply with the terms and conditions of the license regarding the provision of uninterrupted licensed services to its consumers.

The licensee has also failed to provide an alternate mode to continue the provision of its licensed services as per the terms and conditions of the license. According to the available record, the licensed services were discontinued mainly for the regions KTR, LTR, ITR, and RTR, therefore, in such circumstances, the licenses bearing No.WLL-02-2004, dated 1 November 2004 awarded to Wi-tribe Pakistan Limited for the said licensed regions are hereby terminated with immediate effect.

Source: Pro Pakistani