Analyst Briefing: Bank of Punjab to increase concentration in SME, Agri and Housing sectors

December 23, 2020 (MLN): The Bank of Punjab held its analyst briefing on Tuesday to discuss the latest business performance as well as future strategies of the bank.

The management discussed how it was working rigorously to improve the existing deposit mix to increase the share of private and low-cost deposits. The bank’s CASA and Current Account Ratio are expected to align with the industry average within the next 3-5 years, the management stated.

Talking about the Treasury Single Account, the management said it will have minimal impact on its financial positions lest it is implemented on a federal level. Nonetheless. the Bank will work closely with the Government if the implementation is done on a provincial level.

The management spoke extensively about future business strategies, many of which had to do with geographical expansion. The management said that commercial business will be launched and will remain the main focus for the next three years, particularly in central Punjab.

Geographically, there is also great potential especially in the south, i.e. Karachi, and limited presence in the north i.e. Islamabad and above. To ensure presence in the latter, it said that structural changes have happened and expansion will take place there via branch activity.

It was further stated that BOP will place focus on trade, cash management, and investment banking business and leading the transactions in these areas to ensure that it remains ahead of the market, in non-funded income in relative terms within the next three years.

The bank also plans to increase concentration in SME, Agri, and Housing (especially low-cost housing) sectors, which will help it to be number one in these sectors in the next 3 years. Homes remittances will be another growth and focus area based on robust both pull and push channels.

The management said it is evaluating the possibility of launching a Digital Bank in the next 3-5 years to remain cut above in the industry. It also spoke about Improving the Consumer Finance portfolio to 15% of the assets’ portfolio, from the current 2.5% in the next three years.

Apart from the above-mentioned factors, BOP is planning to be a technology-based bank in five years with a combination of optimal brick and mortar and technology mix and match. It is also planning to restructure Islamic Banking Business to make it more meaningful and impactful on our bottom-line.

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