tag:blogger.com,1999:blog-5848640164815342479.post8245160975331888513..comments2024-03-18T16:01:13.871-07:00Comments on Haq's Musings: Financial Services Sector in PakistanRiaz Haqhttp://www.blogger.com/profile/00522781692886598586noreply@blogger.comBlogger83125tag:blogger.com,1999:blog-5848640164815342479.post-84743218104122535772022-12-24T09:48:20.763-08:002022-12-24T09:48:20.763-08:00Banks’ income, assets flourish in 1HCY22
https://...Banks’ income, assets flourish in 1HCY22<br /><br />https://www.dawn.com/news/1723769<br /><br />https://www.sbp.org.pk/press/2022/Pr-28-Nov-2022.pdf<br /><br />Banking in Pakistan flourished during the first half of the calendar year 2022; both assets and income noted a strong increase while the balance sheet of banks expanded by 16 per cent over the same period of last year.<br /><br />The State Bank issued a “mid-year performance review” (MYPR) of the banking sector for 2022 on Monday.<br /><br />The review covers the performance and soundness of the banking sector for the January-June period (1HCY22).<br /><br />It also covers the performance of financial markets and microfinance banks (MFBs), as well as the results of Systemic Risk Survey (SRS), which represents independent respondents’ views about key risks to financial stability.<br /><br /><br />The sustained economic activity during 1HCY22 supported the expansion of banking sector balance sheet by 16pc during 1HCY22, said the report.<br /><br />A robust increase in the asset base was mainly driven by the flow of private sector advances and increases in investments, particularly government securities, said the report.<br /><br />Investments rose by 22.5pc (Rs3.3 trillion) during 1HCY22. “These funds were almost entirely invested in government securities,” said the SBP report.<br /><br />Investments in MTBs (market treasury bills) and PIBs (Pakistan Investment Bonds) observed a rise of Rs684 billion and Rs1.7tr, respectively.<br /><br />Also, Ijara Sukuk attracted substantial bank funds of Rs838 billion in the first half of the present calendar year. Accordingly, the share of MTBs in banks’ total holding of federal government securities declined to 33.6pc by the end of June this year from 46.6pc a year ago. The share of PIBs shot up to 52.6pc from 46pc in June -2021.<br /><br />“Increased share of long-term investments demonstrates the government’s strategy to improve its debt maturity profile,” said the SBP. The pace of growth in private sector advances during 1HCY22 was the highest in comparable periods of the previous three years. Improved manufacturing activity, as reflected in double-digit growth in the Large-Scale Manufacturing (LSM) index during 1HCY22, higher input prices and SBP’s refinance schemes augmented the overall flow of advances.<br /><br />Individuals and the sugar sector availed a major chunk of financing, followed by the textile sector.<br /><br />However, the monetary policy announced on Nov 24 had said that in line with the slowdown in economic activity, private sector credit continued to moderate, increasing only by Rs86.2 billion during Q1 FY23 (July 1 to Sept 30, 2022), compared to Rs226.4 billion during the same period last year.<br /><br />This deceleration was mainly due to a significant decline in working capital loans to wholesale and retail trade services, as well as to the textile sector in the wake of lower domestic cotton output, and a slowdown in consumer finance, said the monetary policy.<br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-24577691040374854602022-11-22T10:47:34.624-08:002022-11-22T10:47:34.624-08:00Insurance grows 22pc but penetration remains minus...Insurance grows 22pc but penetration remains minuscule<br /><br />https://www.dawn.com/news/1712835<br /><br />The insurance sector grew nearly 22 per cent last year even though its penetration — the ratio of premiums to GDP — stayed at a paltry 0.91pc, a new report showed on Friday.<br /><br />‘The Insurance Industry Statistics for 2021,’ the Securities and Exchange Commission of Pakistan’s (SECP) first report on the sector, said gross premiums jumped to Rs432 billion in 2021 from Rs355bn a year ago, a growth of 21.7pc.<br /><br />The size of paid claims rose from Rs170bn to Rs189bn, of which Rs136bn was paid by life insurance and Rs53bn by non-life insurance companies.<br /><br />The number of policies stood at Rs10.1 million by the end of 2021, including 8m in the life insurance and family takaful segment and 2.1m in the non-life insurance and window takaful segment.<br /><br />Insurance density — the ratio of gross premiums to the country’s population — stood at Rs2,084, the report said.<br /><br />As of Dec 31, 2021, the insurance industry had 41 active operators, including 30 non-life insurers/general takaful operators, 10 life insurers/family takaful operators and one reinsurer.<br /><br />The number of complaints also jumped, the report showed, as the sector received 10,297 complaints in 2021 compared to 8,254 a year ago. However, it also disposed of more complaints: 10,182 vs 8,086.<br /><br />Of the total gross premiums of the non-life industry, 56pc came from Sindh, followed by 35pc from by Punjab, 7pc from Islamabad, whereas Balochistan, KP, GB and AJK each had a share of less than one per cent.<br /><br />“As the data clearly demonstrates, Pakistan’s insurance market holds enormous untapped potential for growth,” SECP Commissioner Sadia Khan said in her remarks in the report.<br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-75093412036315622222022-10-04T16:58:39.497-07:002022-10-04T16:58:39.497-07:00World's highest #ATM奴: #Pakistan's mountai...World's highest #ATM奴: #Pakistan's mountaintop bank machine at 4,693m elevation, the #Khunjerab pass is the world's highest paved border crossing. It has been serving the small number of residents, border staff & tourists – since 2016. #China #Pakistan https://www.bbc.com/travel/article/20221003-the-worlds-highest-atm-pakistans-mountaintop-bank-machine?ocid=ww.social.link.twitter<br /><br />The Guinness World Record-holding machine works like any other; it can be used to withdraw cash, pay utility bills and make interbank fund transfers. But as my kids and I acclimated to the dip in oxygen, what struck me most was the unexpected festivity in the atmosphere: almost carnivalesque, with people FaceTiming relatives, posing for photos and orbiting the ATM to get the best selfie shot.<br /><br />Karachi school teacher Atiya Saeed had brought 39 of her secondary-school students – all girls – here to the Pakistan-China border. "It's the first time in a long time that we've travelled in Pakistan," she said.<br /><br />Although they didn't come for the ATM alone, the visit to the border was, she explained, an adventurous geography, history and economics lesson in the most hauntingly beautiful of "classrooms".<br /><br />Constructed by the National Bank of Pakistan (NBP) in 2016, the solar- and wind-powered machine serves the small number of residents and staff at this border crossing – and the adventurous travellers who flock to it as a badge of honour, taking pictures while making a transaction that brings new meaning to the phrase "cold, hard cash".<br /><br />"My account is frozen!" joked another visitor, South African retired principal Ayesha Bayat, who was on holiday with her husband. "We've come from a country where we do have mountain ranges… but not like this. I'm finding the panoramic views absolutely beautiful," she said.<br /><br />"It's important to have landmarks… like the Eiffel Tower," said Bayat's husband, Farouk. "They become an excuse to discover the rest of the landscape."<br /><br />But building this landmark was no small feat. And neither is maintaining it.<br /><br />The project took around four months, said NBP ATM monitoring officer Shah Bibi. The closest NBP bank location is 87km away in Sost, and Sost branch manager Zahid Hussain regularly travels back and forth, braving extreme weather, treacherous mountain passes and frequent landslides to replenish the ATM. "On average, around 4 to 5 million rupees [£15,540–£19,427] is withdrawn within the span of 15 days," he said.<br /><br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-6854543568017267562022-07-16T20:13:29.818-07:002022-07-16T20:13:29.818-07:00#Finnish fund buys 17.6% stake in TPL #Insurance i...#Finnish fund buys 17.6% stake in TPL #Insurance in #Pakistan. The size of #Finnfund #investment is $3 million, which amounts to Rs632.8 million at the current exchange rate. https://www.dawn.com/news/1699871<br /><br />KARACHI: TPL Corporation said on Friday a Finnish fund has successfully completed the transaction to acquire 17.59 per cent shareholding in TPL Insurance, a subsidiary of the Pakistani conglomerate.<br /><br />Speaking to Dawn, TPL Insurance Ltd CEO Muhammad Aminuddin said the size of the transaction is $3 million, which amounts to Rs632.8 million at the current exchange rate.<br /><br />Finnish Fund for Industrial Cooperation Ltd, a private firm incorporated in Finland, was originally going to invest roughly Rs540m in the Pakistani insurer through a special rights transaction. However, the investment size increased in the local currency because of the recent depreciation in the exchange rate.<br /><br />“The investment will come through the issuance of new shares for which we’ve received approval from the regulator,” said the CEO.<br /><br />Finnfund is a development financier and impact investor that buys stakes in “responsible and profitable” businesses in developing countries.<br /><br />This is the second investment by an “impact investor” in TPL Insurance, which also raised last year an equity equalling 19.9pc of share capital from DEG, the private equity arm of the German government. The technology-driven business model of TPL Insurance supplemented by the Finnish fund’s global experience and knowledge will result in new product lines, a regulatory filing said.<br /><br />According to the annual report for 2021, TPL Corporation and TPL Holdings held a collective stake of 64.38pc in TPL Insurance. After the transaction, the stake of the TPL Group in the insurer will reduce to 52pc, said Mr Aminuddin.<br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-9585718308117820812020-01-28T07:52:12.570-08:002020-01-28T07:52:12.570-08:00#Pakistan #FinancialServices #profits surged 48% t...#Pakistan #FinancialServices #profits surged 48% to Rs. 45.5 billion in the third quarter (July-September 2019) over the same quarter of 2018. Cumulatively in the nine months (January-September 2019), #banking profit grew 20% to Rs127.7 billion. #economy https://tribune.com.pk/story/2144367/2-despite-tough-economic-reforms-pakistan-banks-profit-soars/<br /><br />----------------<br /><br />On average, banks charged 13.84% from borrowers and paid 8.71% to depositors – resulting in a spread of 5.13% in December 2019.<br /><br />----------------<br /><br /><br />Commenting on the latest data issued by the State Bank of Pakistan, Topline Research analyst Fawad Basir said, “Deposits of the banking sector grew 10% to Rs14.6 trillion in 2019 compared to 8% in 2018. The growth, however, remained lower than the five-year average of 12%.”<br /><br />Banks mostly invested the deposits in the government papers as they offer secure and higher rate of return during times of such crisis compared to the credit they offered to business in the year.<br /><br />Accordingly, investment in government securities (T-bills and Pakistan Investment Bonds) increased 16% to Rs8.8 trillion in 2019. Investment to deposit ratio (IDR) increased to 60% in 2019 from 57% in 2018.<br /><br />“On the other hand, advances (like credit to private sector) grew by just 3% in 2019 hindered by high interest rates and slowdown in the overall economic activity. Over the past three years, advances have grown at an average of 19%,” he said.<br />“Going forward, we see deposit growth in the range of 10-12% and advances growth of 11-13% in 2020 at the behest of economic recovery and an expected decline in interest rates,” he said.<br /><br />------------<br /><br /><br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-22518788430661551012018-03-11T19:33:27.111-07:002018-03-11T19:33:27.111-07:00Accelerating economy to support Pakistan’s banking...Accelerating economy to support Pakistan’s banking sector growth<br />Modest capital and large holdings of government bonds remain risk factors<br /><br />Published: 14:06 March 11, 2018 Gulf News<br />Babu Das Augustine, Banking Editor<br /><br />http://gulfnews.com/business/sectors/banking/accelerating-economy-to-support-pakistan-s-banking-sector-growth-1.2185848<br /><br /><br />The outlook for banks in Pakistan is stable over the next 12-18 months driven by an accelerating economy and stable funding, according to rating agency Moody’s.<br /><br />“Our stable outlook for Pakistan’s banking system is driven by an accelerating economy, boosted by domestic demand and China-funded infrastructure projects. Economic growth will stimulate lending and support a slight improvement in asset quality. Despite margin pressure, we expect profitability to remain flat. Stable funding from customer deposits and high liquidity are further strengths,” said Constantinos Kypreos, a Moody’s Senior Vice President.<br />Pakistan’s real GDP growth is projected at 5.5 per cent and 5.6 per cent in the fiscal years ending June 2018 and June 2019. Infrastructure investment and solid domestic demand will be the main drivers of economic growth and will fuel lending growth of 12 per cent to 15 per cent for 2018. The economy, however, remains susceptible to political instability and a deterioration in domestic security.<br />Analysts expect problem loans (NPLs at 9.2 per cent of gross loans as of September 2017) to decline in the current supportive macro environment, helped by the banks’ diversified loan portfolios and low corporate debt. Asset risk remains high, however, due to weaknesses in the legal framework, inefficient foreclosure processes and scant information for assessing borrower creditworthiness.<br /><br /><br />-----------------------<br /><br />With regard to asset risk, analysts expect asset quality to improve in the current supportive macroeconomic environment, helped by the banks’ diversified loan portfolios and low corporate debt.<br />Moody’s says that the banks’ profitability will remain flat amid margin compression. However, profits will be supported by strong lending growth, a focus on low-cost current accounts and moderate provisioning needs. Interest margins should level off towards the end of 2018, once pressure from the reinvesting of legacy high-yielding Pakistan investment bonds reduces, as the remaining of these mature.<br />Credit growth to pick up pace<br />Credit growth in Pakistan is expected to gain momentum in 2018-19 driven by robust growth in both private and public sector credit demand, according to rating agency Moody’s.<br />“We expect lending to the private sector to grow between 12 to 15 per cent during 2018, a result of the improved economic conditions. This is despite a widening fiscal deficit (5.8 per cent of GDP for 2017), which the banks will continue to partly finance,” said Constantinos Kypreos, a Moody’s Senior Vice President.<br />Loan growth and deepening financial penetration is expected to be supported by state initiatives, such as branchless banking. Regulations amended to allow customers to open bank accounts through biometric devices at agent locations, as well as through mobile phones, to facilitate remittances are expected to boost growth on both assets and liabilities. A central bank-initiated policy targets a 17 per cent share of private-sector credit for SME financing compared to 9 per cent at year-end 2016. The policy initiative has set minimum portfolio targets for banks; introduced risk coverage and refinancing schemes for SMEs; established g a registry to allow SME borrowers to obtain credit using pledged assets as collateral; and prudential incentives such as a relaxation of general provisioning and capital requirements.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-89285106847796121582018-01-29T08:30:27.655-08:002018-01-29T08:30:27.655-08:00Bahrain’s Ithmaar Bank plans aggressive expansion ...Bahrain’s Ithmaar Bank plans aggressive expansion in Pakistan<br />Bahrain-based lender to add more than 100 branches in Pakistan this year through its subsidiary Faysal Bank<br /><br /><br />http://gulfnews.com/business/sectors/banking/bahrain-s-ithmaar-bank-plans-aggressive-expansion-in-pakistan-1.2164818<br /><br /><br />Dubai: Bahrain-based Ithmaar Bank plans to add more than 100 branches in Pakistan this year through its subsidiary Faysal Bank, to capitalise on the country’s low penetration rate of banking services, a senior executive said.<br />Ithmaar Bank owns 66 per cent of Faysal Bank, whose contribution to the Islamic retail bank’s overall balance sheet would likely grow to more than half as a result of the expansion, Ithmaar Deputy Chief Executive Abdul Hakeem Al Mutawa said on Monday.<br /><br />“We are planning to be over 500 branches this coming year and are aggressive in this,” Al Mutawa said in an interview.<br />“Banking penetration is around less than 20 per cent in Pakistan, so there are good opportunities to grow.” Faysal Bank, which is listed on the Pakistan Stock Exchange, focuses on corporate, commercial, retail and consumer banking activities.<br />Al Mutawa was speaking after Ithmaar Bank’s parent company, Ithmaar Holding, listed on the Dubai Financial Market on Monday.<br /><br /><br />The company is already listed in Bahrain and Kuwait.<br />“The listing is good news for the company for growth capital and we are well established now to approach the capital markets,” Al Mutawa said, adding that the bank had no imminent plans to raise funds through a bond or loan.<br />In Bahrain, Al Mutawa said there were opportunities to grow the business from working with the government on providing financing for social housing. The bank currently has 16 branches in the kingdom.<br />Bahrain’s Ithmaar Holding is exploring the sale of its 25.4 per cent stake in Bahrain’s BBK BSC, which has operations in Bahrain and Kuwait, India and Dubai, sources familiar with the matter told Reuters in August.<br />Al Mutawa declined to comment on the time frame for the disposal of the BBK stake or identify the name of the company advising IB Capital, Ithmaar Holding’s investment subsidiary managing the asset.<br />“The performance of BBK is very good and still part of the portfolio of IB Capital, and if there are opportunities to maximise shareholder value I’m sure the board will take those,” he said.<br /><br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-40725883723998072212017-05-22T21:11:45.740-07:002017-05-22T21:11:45.740-07:00#MiddleEast #investment bank EFG-Hermes commences ...#MiddleEast #investment bank EFG-Hermes commences operations in #Pakistan<br />https://tribune.com.pk/story/1416354/efg-hermes-commences-operations-pakistan/<br /><br /><br />KARACHI: After a gap of nine years, a foreign brokerage house has commenced operations in Pakistan ahead of the country’s reclassification to the MSCI Emerging Markets Index, a development expected to generate the inflow of millions of dollars this year.<br /><br />EFG-Hermes, a Cairo-based leading investment bank of Middle East and North African (MENA), has opened its office in Pakistan through the acquisition of a majority (51%) stake in Invest and Finance Securities Limited (IFSL).<br /><br />EFG-Hermes Group Chief Executive Officer Karim Awad said the bank was operating in nine major countries in the MENA region, including UAE, Qatar, Saudi Arabia and Oman.<br /><br />“Now, we are very proud to be in Pakistan. This is a market full of potential,” he said after ringing the opening bell to begin the trading session at the Pakistan Stock Exchange (PSX) on Monday.<br /><br />Pakistan upgraded to MSCI Emerging Markets Index<br /><br />He said PSX’s return to the MSCI Emerging Markets is set to attract significant foreign inflows. “We believe we can play a good role in bringing foreign inflows from western institutions and GCC countries to Pakistan’s stock market, as well as hopefully bring new IPOs [Initial Public Offerings] from local companies,” Awad said.<br /><br />“We are quite bullish on Pakistan’s economy and that’s why we are here,” he told The Express Tribune.<br /><br />Foreigners leave<br /><br />Foreign brokerage houses including JP Morgan, a US bank, suspended brokerage services in Pakistan about nine years ago when trading at the PSX (the then Karachi Stock Market) was suspended following the 2008 crisis.<br /><br />The US bank still holds PSX membership, but it has remained dormant since then.<br /><br />Cairo-based firm wants to sink teeth in Pakistan’s brokerage industry<br /><br />EFG-Hermes Pakistan (earlier known as IFSL) Chief Executive Officer Muzammil Aslam said the investment bank acquired 51% stake in IFSL at Rs15 per share, translating into a transaction of $1.5 million.<br /><br />“The brokerage house may bring a large part of foreign inflows of around $200-250 million of the total inflows this year,” he said.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-44627196578270462852017-05-07T07:24:20.076-07:002017-05-07T07:24:20.076-07:00#Pakistan to launch #Exim, #infrastructure banks, ...#Pakistan to launch #Exim, #infrastructure banks, development fund to boost its #exports-<br /><br />http://www.khaleejtimes.com/buzzon/jobs/banking-financial-services/pakistan-to-launch-banks-fund-to-boost-its-exports<br /><br />Pakistan will shortly launch two international banks and a development fund - Exim Bank, Pakistan Infrastructure Bank and Pakistan Development Fund - to boost foreign trade and step up funding for its mega projects.<br /><br />Pakistan Development Fund (PDF) aims at encouraging overseas Pakistan to invest their earnings at good profit rates.<br /><br />On instruction of Prime Minister Nawaz Sharif Finance Minister Ishaq Dar discussed the launching of the two international banks and the PDF with top leadership of US, World Bank and the Iternational Monetary Fund (IMF) during his just concluded talks in Washington.<br /><br />Islamabad is happy that its timing of the announcement of the two banks and the PDF has been welcomed by the IMF, which in its latest report put Pakistan's GDP growth at 5 per cent in FY-17, and projected it at 5.2 per cent for FY-18, well above the 3-4 per cent in the last decade. At the same time, its good to see the stock market indicating high foreign and domestic interest in investment. The stock market this month shot up beyond its highest position of 50,000 plus points which led to the international rating agencies to place it as Asia's Top-10.<br /><br />The Pakistan Stock Exchange (PSX) with such an attractive performance is now on its way to be ranked as "G-20" - at the global best 20 stock markets, rating agencies say. <br /><br />At the same time, according to international credit rating agencies, Pakistan is moving up and have upgraded Pakistan from "negative" to "stable," and just now to "positive."<br /><br />Dar said: "Pakistan has now emerged as a lucrative investment option for international investors."<br /><br />"I advise the multinational giants to consider Pakistan for establishing labour-intensive projects and facilities in South Asia," he said while talking to the Khaleej Times in Islamabad.<br /><br />"The Exim Bank will be fully operational by December this year. It will start with a Rs7 billion cash," said Shibli Fraz, chairman of the Senate Standing Committee on Commerce.<br /><br />He said, this information was provided by the Ministry of Commerce. The Ministry of Commerce also informed the Senate that it has sent three names to Finance Minister Ishaq Dar for the appointment of the head of the Exim Bank.<br /><br />The government has also decided to launch Pakistan Infrastructure Bank (PIB), with a paid up capital of $1 billion. "PIB will be providing funds to the private investors for developing big projects," Dar said.<br /><br />"The International Monetary Fund and the government of Pakistan will each hold 20 per cent stake in the PIB, and World Bank affiliate and lender to the private sector - International Finance Corporation (IFC) - will have the remaining 60 per cent shares," Dar said.<br /><br />The government will launch PDF in collaboration with the Manila-based Asian Development Bank (ADB). The PDF shares worth Rs10 billion will be offered for investment expected to be made by the Pakistani diaspora. The PDF shares will be enlisted on the PSX.<br /><br />"After success of Pakistan's sukuk bonds, PDF will be another attractive investment for the overseas Pakistanis to receive good dividends," Dar said.<br /><br />The government will offer $1.3 billion shares to the overseas Pakistanis. It will be non-convertible dollar shares and will be invested in commercially viable projects in the public sector, Dar said.<br /><br />He also said: "Since rupee is stable, we hope a positive response from investors. The rupee only registered a 5 per cent devaluation over the last five years, so if you invest in a good development fund you can get a good return," Dar said. <br /><br />The ADB is also bullish over Pakistan's economic prospects and has upgraded the its growth estimate to 5.2 per cent in FY-17.<br /><br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-62028434074438149232017-04-26T22:21:49.311-07:002017-04-26T22:21:49.311-07:00#Pakistan to set up #infrastructure bank with $1 b...#Pakistan to set up #infrastructure bank with $1 billion capital to finance private sector development. #IMF #IFC<br /><br />https://tribune.com.pk/story/1394404/pakistan-set-1b-infrastructure-bank/<br /><br />Finance Minister Ishaq Dar has announced that the government will set up Pakistan Infrastructure Bank with a paid-up capital of $1 billion, which will give financing to private investors for development projects.<br /><br />Pakistan government and the International Monetary Fund (IMF) would have 20% shares each in the bank and the rest would be held by global organisations such as the International Finance Corporation, he said.<br /><br />AJK plans tourism corridor along CPEC<br />He was speaking at a briefing held for the Pakistani media towards the end of his visit to Washington DC during which he attended spring meetings of the IMF and the World Bank.<br /><br />Dar also revealed that the government would soon be launching Pakistan Development Fund (PDF) and its shares worth Rs100 billion would be offered to Pakistani diaspora in order to channelise their remittances effectively.<br /><br />Later, these shares will be listed on the Pakistan Stock Exchange. “After the success of Sukuk (Islamic bonds), the PDF will be another attractive investment for overseas Pakistanis,” he remarked.<br /><br />Giving a detailed round-up on the plenary sessions with the IMF and World Bank, the minister said there was positive sentiment about the tremendous economic rebound experienced by Pakistan over the last four years.<br /><br />“Pakistan was on the verge of bankruptcy in 2014 and today it is likely to achieve approximately 5% growth during the current financial year,” he said. “Both IMF and World Bank are on the same page with the Pakistani government in these projections.”<br /><br />Promotion of it: Work on innovation centres begins<br /><br />Global credit rating agencies have upgraded the rating of Pakistan from negative to stable and from stable to positive in the last four years to an extent that the country is likely to be included in G-20 countries by 2030.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-57443619288184509342017-03-01T22:12:15.363-08:002017-03-01T22:12:15.363-08:00#Investment inflows spur #Pakistan's corporate...#Investment inflows spur #Pakistan's corporate #sukuk (Islamic bond) market http://reut.rs/2mHKBoO via @Reuters<br /><br />Growth of sharia-compliant investment funds in Pakistan is helping fuel demand for sukuk, or Islamic bonds, giving local firms new funding options while strengthening the case for Islamic pensions in other majority-Muslim countries.<br /><br />Strong demand for Islamic funds, and in turn sukuk, could encourage other countries trying to deepen their Islamic capital markets, in particular in the Gulf region where private pensions are rare.<br /><br />Pakistan's Islamic banks lag their conventional peers, holding around 13 percent of total deposits, while Islamic mutual funds and private pensions have a far greater market share.<br /><br />Islamic mutual funds held 242.7 billion rupees ($2.3 billion) in assets as of December, or 37 percent of the total, official statistics show.<br /><br />Almost two-thirds of assets in the country's voluntary pension system (VPS) are now managed under Islamic principles.<br /><br />All 10 VPS managers offer Islamic pension products, worth a combined 14.5 billion rupees, or 63 percent of total VPS assets with the largest VPS product being sharia-compliant.<br /><br />Attractive yields, tax exemptions and greater flexibility in choosing external managers have made VPS products popular, which in turn adds to demand for sukuk, said Abdullah Ghaffar, head of investment banking at Al Baraka Bank Pakistan.<br /><br />"Mutual funds, both fixed income as well as equity funds, have become big time investors in existing and new sukuk issues taking place because of the huge assets under management under their disposal."<br /><br />Two recent sukuk transactions from manufacturing companies attracted significant interest from such investment funds, while equity funds are also becoming active in initial public offerings, Ghaffar added.<br /><br />Reforms from Pakistan's capital market regulator have also helped equity-like financing vehicles, known as modarabas, to grow their combined assets above 41 billion rupees.<br /><br />This has attracted a wide range of issuers: Byco Oil Pakistan Limited raised 3.12 billion rupees via sukuk using a credit gurantee and Ghani Gases raised 1.3 billion rupees via a privately-placed sukuk last month.<br /><br />In December, Fatima Fertilizer Company mandated banks to raise 10.5 billion rupees through a lease-based sukuk.<br /><br />Pakistan GasPort Consortium Limited plans to raise 8.6 billion rupees via seven-year sukuk to finance the construction of the country's second LNG import terminal.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-70106948096306405582016-07-19T16:29:30.160-07:002016-07-19T16:29:30.160-07:008,100 willful defaulters owe banks INR 766 Billion...8,100 willful defaulters owe banks INR 766 Billion (US$ 11.4 Billion): #India's Arun Jaitley #BJP http://indianexpress.com/article/business/banking-and-finance/over-8100-willful-defaulters-owe-banks-over-rs-76600-crore-arun-jaitley-2923796/ … via @IndianExpress<br /><br />There are 8,167 wilful defaulters who owe banks an amount of Rs 76,685 crore and 1,724 FIRs have already been filed in 2015-16, government said on Tuesday.<br />The details were provided by Finance Minister Arun Jaitley in Rajya Sabha during Question Hour, where he also said that a Joint Committee of Parliament is presently looking into a Bill relating to debt recovery which aims at empowering banks to take more effective steps in dealing with default situations.<br />Congress leader Anand Sharma raised the matter relating to many positions in the Debt Recovery Tribunals being vacant.<br />Sponsored: Pay 5% on booking & 1% per month till possession for semi-furnished homes @ Godrej Prana, Undri in Pune.<br />Jaitley said Sharma was “perfectly right that the Debt Recovery Tribunals have to be made more effective.”Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-1766261786231390702016-06-27T17:00:59.093-07:002016-06-27T17:00:59.093-07:00#Pakistan’s financial system remains sound but ban...#Pakistan’s financial system remains sound but banks must deal with non-performing #loans: #SBP http://go.shr.lc/296oyp9 via @Shareaholic<br /><br />The banking sector observed year-on-year growth of 16.8 per cent in CY15 (average growth of 13.2 per cent during CY13-CY15) to reach PKR 14.1 trillion as of end December, 2015. During the same period, advances grew at a modest pace of average 8.1 per cent (average 8.7 per cent during CY13-CY15); while Investments - mostly in government securities - increased by 30 per cent (average 20.1 per cent during CY13-CY15).<br /><br />The asset expansion has mainly been financed by deposits growth of 12.6 per cent (average 12.5 per cent during CY13-CY15) followed by financial borrowings. Asset quality improved with reduction in infection ratio (11.4 per cent in CY15 compared to 13.3 per cent in CY13) and rise in provision coverage (84.9 per cent in CY15 compared to 77.1 per cent in CY13). However, banks do face challenge in reducing the high stock on non-performing loans.<br /><br />To this end, SBP is working on various legal and regulatory measures. The operating performance observed considerable improvement as banking sector posted record after tax profit of PKR 199 billion during CY15, largely contributed by growing income share from investment in government papers.<br /><br />As a result, profitability indicators have improved; return on assets (after tax), increased to 1.5 per cent in CY15 from 1.1 per cent in CY13 and ROE (after tax) increased to 15.6 per cent from 12.4 per cent in CY13. The solvency has also remained robust with high capital adequacy ratio at 17.4 per cent in CY15 (14.9 per cent in CY13). Islamic banking increased its share in overall assets to 11.4 per cent in CY15 (9.6 per cent in CY13) in line with the Strategic Plan for the Islamic Banking Industry 2014-18.<br /><br />While banks are maintaining high capital levels, expected growth in credit and gradual enhancement in minimum capital requirements prescribed by the regulators require banks to shore up their efforts for further strengthening their capital. Apart from banks, non-bank financial institutions (NBFIs) including development finance institutions (DFIs), leasing companies and mutual funds have performed reasonably well during the Financial Year 2015 (FY15) except for investment finance companies which have continued to post losses.<br /><br />Insurance sector has posted healthy profits and increase in gross premiums improved the overall penetration rate of the sector to 0.8 per cent in CY15 (0.5 per cent in CY13). Financial markets (Money, FX, and Equity) also performed smoothly during CY15; though, some volatility was seen in equity and FX markets during the second half of CY15 (post Yuan devaluation and anticipated rise in interest rates in the US). FSR also highlighted few challenges facing the financial system.<br /><br />------------<br /><br />Though credit to private sector has improved in recent years, however, prime risk taking activity that is lending, is still at a low level. Consequently, advances to deposit ratio is falling for the last few years. This could be contributed by both demand and supply side factors, particularly challenging economic and business environment due to various structural issues such as power shortages facing the economy.<br /><br />As such, banks have increased their inclination towards risk free investments in government securities and their balance sheets - loaded with PIBs and MTBs - are more prone to market risk due to interest movements. On the funding side, the deposit growth in past couple of years, although decent, has remained short of meeting asset growth requirements of both the private and public sector.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-47207821593610089872016-03-07T10:06:35.822-08:002016-03-07T10:06:35.822-08:00Change is afoot to grow #Pakistan’s banking sector...Change is afoot to grow #Pakistan’s banking sector. #financialinclusion | World Finance http://www.worldfinance.com/banking/change-is-afoot-in-pakistans-banking-sector …<br /><br />Pakistan’s economy presents great opportunities for the banking sector. Habib Bank is hoping to bring an end to its unbanked masses<br />Now that Pakistan stands at the cusp of socio-political and economic change, it is the ideal opportunity for the banking sector to redress the lack of outreach towards sections of the population that were hitherto excluded from the formal financial sector, or did not have the knowledge to utilise banking services.<br /><br />Indeed, it is a very real appreciation of impediments at the grassroots level that has driven Habib Bank Limited (HBL) to expand its product line to especially cater to the low-income population of the country, which would have otherwise remained disenfranchised from the national economy.<br /><br />Hence, HBL has made a conscious effort to ensure delivery of financial services to this segment by streamlining products, policies and procedures to enable financial inclusion. As such, most of the initiatives HBL has undertaken have been ground breaking in both scope and outcome, and their key focus has been easing the transition from conventional methods of money handling towards more reliable, convenient and trustworthy avenues.<br /><br />Getting banks up to speed<br />Another shift that has been witnessed by the industry is the exit and scale down of various foreign banks operating in Pakistan. This provides an opportunity for local banks to reach out to global corporates that seek a certain standard of service and technology.<br /><br />HBL has been very successful at capitalising on this market opportunity with a majority of large local and multinational corporations now utilising HBL banking services. HBL has also strategically acquired the retail operations of Citibank, and recently the entire operations of Barclays Bank in Pakistan.<br /><br />As far as performance is concerned, the banking sector is one of Pakistan’s best performing industries, with its assets rising to approximately $129bn between Q2 and Q4 of 2015. Its profitability remains high and the industry’s key performance indicators for nine months of 2015 displayed a robust picture.<br /><br />The capital adequacy ratio, a measure of solvency, stands at 18.2 percent, which is well above the benchmark of 10 percent set by Central Bank of Pakistan and international standard of eight percent. All in all, the sector is going from strength-to-strength, with this trend likely to continue into 2016 and beyond.<br /><br />Islamic financing<br />Pakistan was among the first three countries to attempt to implement Islamic financing at a national level, and its origins date back to the 1970s. Today, Pakistan has six dedicated Islamic banks and almost all the commercial banks have Islamic divisions that provide sharia-based solutions to their customers. The emergence of Islamic finance in Pakistan has led to greater financial inclusion for a large segment of the population awaiting sharia-based products.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-12342766296508900922015-12-19T19:02:17.656-08:002015-12-19T19:02:17.656-08:00The State Bank of Pakistan has pointed out a numbe...The State Bank of Pakistan has pointed out a number of weaknesses in economic policies, including energy strategy, and has asked the government to address the weaknesses.<br /><br />Pakistan's economy grew 4.2 per cent in fiscal 2015, but investors remain wary of systemic weaknesses, the central bank said in its annual report, urging the government to adopt clearer, more consistent policies on industry and trade. Growth for the financial year to June 2015 fell short of a target of 5.1 per cent, it was slightly better than the 4.0 percent achieved in 2014, the bank said.<br /><br />According to the report, the economy needs to expand at least six per cent each year to absorb new entrants into the work force from Pakistan's growing population of 190 million.<br /><br />“Despite a sharp reduction in interest rates and an incre¬ase in public investments, private investments did not recover. Investors' confidence demands the presence of a predictable macroeconomic environment with well-coordinated and consistent long-term industrial and trade policies,” the report said. Another factor daunting do¬me¬stic and foreign investors is the state of domestic energy supplies. Businesses have suffered over the past few years because of frequent power and gas outages.<br /><br />Although the situation improved slightly in a couple of years, several industries like leather, paper and glass, are still not able to produce at optimal capacities.<br /><br />“At its core, this shortage of energy also reflects the lack of a coherent policy,” said the report. The absence of an export-oriented growth strategy or a rational import-substitution focus, over the years has resulted in recurring stress on the external account, which did not allow the economy to move towards a high growth trajectory, said the report.<br /><br />http://www.fibre2fashion.com/news/textile-news/sbp-flags-weaknesses-in-pak-s-economic-policies-176530-newsdetails.htmRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-45610811681548258732015-11-29T08:30:07.291-08:002015-11-29T08:30:07.291-08:00Investing deposits in risk-free government securit...Investing deposits in risk-free government securities is lazy banking. The practice allows banks to grow profits while avoiding risks associated with the expansion of the private-sector loan book.<br /><br />One obvious casualty of lazy banking is economic growth, which depends in large measure on the availability of affordable credit to private businesses.<br /><br />CEOs of banks operating in Pakistan take offense when they are called lazy bankers.<br /><br />While bank CEOs insist their conservative lending policy is not driven by the profit motive, latest banking data suggests otherwise.<br /><br />Banks operating in Pakistan made a combined profit of Rs148 billion in Jan-Sept, up a whopping 28.7% from earnings recorded in the same nine-month period of 2014, according to the State Bank of Pakistan’s quarterly compendium on the banking system released last week.<br /><br />Banks are commercial enterprises and their earnings growth – however quick and mind-boggling – should not be held against them. Nonetheless, it is perfectly legitimate to look into the source of the outlandish increase in banks’ profitability over such a short period.<br /><br />Bank deposits increased 5.2% in the first nine months of 2015 as opposed to a corresponding rise of 2% in advances (another name for loans that banks extend to businesses and individuals). This means deposits mobilised by banks in Jan-Sept (Rs485 billion) far outweighed the advances generated (Rs89 billion) over the same period in both absolute and percentage terms.<br /><br />No wonder the advances-to-deposits ratio stood at 46.7% at the end of September, slightly lower than 48.2% recorded at the end of December 2014.<br /><br />So what did the banks do with the disproportionately high deposit mobilisation if they held back loans to businesses in the last nine months? Banking data suggests they simply invested that money in riskless government papers, like Pakistan Investment Bonds (PIBs) and treasury bills, and saw their bottom lines grow further.<br /><br />Banks’ investments increased 26.4% to Rs6.7 trillion at the end of the first nine months of 2015. In a nutshell, the net increase in banks’ advances was Rs89 billion over the first nine months of 2015 while the corresponding rise in their investments clocked up at more than Rs1.4 trillion over the same period.<br /><br />Resultantly, the investments-to-deposits ratio (IDR) at the end of September stood at 69.1% compared to 57.5% recorded at the end of 2014. Banks held 79.3% of all outstanding government securities at the end of October, according to a separate publication of the SBP.<br /><br />Speaking to The Express Tribune, Invest & Finance Securities CEO Muzammil Aslam said banking investments in government securities is at an all-time high.<br /><br />“The standard threshold for government treasuries was 20% while 75% of deposits were supposed to be reserved for credit off-take and 5% for meeting regulatory cash reserve requirements. That doesn’t seem to be the case anymore,” he said.<br /><br />http://tribune.com.pk/story/997034/financial-sector-lazy-banking-huge-earnings/<br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-75681747340037442332015-11-09T21:46:29.674-08:002015-11-09T21:46:29.674-08:00NBP, KARANDAAZ #Pakistan to work to improve finan...NBP, KARANDAAZ #Pakistan to work to improve financial inclusion. Focus on G2P and P2G #mobilemoney transactions http://pakobserver.net/detailnews.asp?id=278596 …<br /><br />National Bank of Pakistan (NBP) and Karandaaz Pakistan signed a Memorandum of Understanding (MoU) for jointly working on multiple strategies to create the much-required Digital Financial Ecosystem, through a suite of financial transactions to facilitate the citizens of Pakistan with a focus on Government to Person (G2P) and Person to Government (P2G) transactions. The two institutions agreed to collaboratively develop a comprehensive digital financial services strategy for NBP; develop and deploy the required technology as well as roll out a mobile financial system that will add multiple channels of transactions.<br /><br />The signing took place at the Karandaaz Pakistan’s office in Islamabad and was attended by senior management from both organizations including Mudassir H. Khan – SEVP/Group Chief CRBG NBP, Azfar Jamal – EVP/Head of Remote Banking & ADC and Mr. Imdad Aslam Interim CEO of Karandaaz Pakistan. Speaking at the occasion, Mudassir H. Khan, stated, “By leveraging on the expertise of Banking and Telcos, NBP aims to achieve its long term goal of financial inclusion in Pakistan and also bridge the service-divide between rural and urban. Development of a Financial Eco-system in partnership with Telecom service providers will be catalyst to extend the financial outreach and convenience to every citizen of Pakistan. NBP is working to enable every possible channel by aggregating all the P2G and G2P transactions. <br /><br />We are excited to have Karandaaz Pakistan joining us in this initiative, whereby Karandaaz, which is a Bill & Malinda Gates Foundation & DFID sponsored entity, will provide their rich experience and expertise to NBP in building the much required financial ecosystem in Pakistan”. Speaking at the event, Imdad Aslam, Interim CEO of the company, stated, “The potential of G2P payments to accelerate financial inclusion in the short to medium term is tremendous and cannot be over emphasized. On the one hand, governments can determine the way they disburse payments to their beneficiaries and drive them towards digital payment streams, which in turn can enable the creation of financial products that address the barriers to financial inclusion. <br /><br />On the other hand, social benefit payments, intended for the marginalized and vulnerable, inevitably reach some of the most financially excluded populations. Digitization of such payments, therefore, presents great opportunity to increase recipients’ access to financial services and provide them with a financial transaction history.” Concluding the event on a high note, Imdad Aslam said, “The cost of digitization is overshadowed by the benefits to individuals, financial institutions and the government over time, and we expect to see the same in this case.”Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-82053813617103391532015-07-06T22:22:30.200-07:002015-07-06T22:22:30.200-07:00“When I debriefed BCCI executives after the operat...“When I debriefed BCCI executives after the operation, they didn’t understand what was happening with them. They used to say they hadn’t done anything which other banks weren’t doing,” Mazur said in an hour-long interview with The Express Tribune over phone from London.<br /><br />“At that time I thought they were lying. But now I am 100% sure that they were being honest. Many other banks laundered money too –they still do.”<br /><br />The anger and anguish felt by many former bank employees for being targeted is completely understandable, he says.<br /><br />“They had done what they were accused of doing. But I am sure if I had walked into any other bank, I would have witnessed the same sort of dealings. I can understand that they [BCCI employees] feel like they were singled out.”Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-92090487805210678892015-07-06T21:17:48.732-07:002015-07-06T21:17:48.732-07:00Robert Mazur brought down #Pakistan BCCI now says ...Robert Mazur brought down #Pakistan BCCI now says it was singled out;other guilty banks were spared. #moneylaundering <br /><br />http://tribune.com.pk/story/868778/the-man-behind-the-bust-a-chance-encounter-that-changed-history/<br /><br />Robert Mazur is the man behind the downfall of, perhaps, a Pakistani’s greatest commercial achievement.<br /><br />He is the former US Customs agent who led the sting operation which proved Bank of Credit and Commerce International (BCCI) laundered money for Colombian drug traffickers.<br /><br />And now, ironically, many years later, he says that he is convinced many other foreign banks were doing the same and that they should have faced a similar fate.<br /><br />----------<br /><br />The lowest point in his entire story is how BCCI got entangled in the money laundering affair. It is important to make a distinction here. In this sting operation, it was not the cartel which led agents to BCCI. Rather Mazur took the money to the bank and asked if it could be moved discreetly.<br /><br />“As I cruised down palm-lined Ashley Drive in downtown Tampa in a money-green Mercedes 500 SEL provided by customs, a building containing the upscale offices of Bank of Credit and Commerce International caught my eye. BCCI in large gold letters glittered from the second story and screamed of overseas accounts, so I called an officer and scheduled an appointment,” he writes in his book.<br /><br />And this is how BCCI got involved.<br /><br />“I swear to God that’s exactly how it happened. I was driving and saw BCCI written in gold letters and decided to call up someone there,” he said.<br /><br />“You also must understand that Tampa is not a cosmopolitan city. It’s not as huge as Miami and they don’t have many banks in the area.”<br /><br />His first contact in the bank was Rick Argudo, vice president of the Tampa branch, who grilled Mazur about his business history and finally agreed to open up an account. It was also when Mazur realised the bank was up to something big.<br /><br />Argudo was told that the account will be used to bring in money from Panamanian bank accounts where Mazur’s Colombian clients were accumulating wealth to be invested in the US.<br /><br />But when Argudo asked if he wanted to move money in the opposite direction from US to Panama and offered a way to avoid IRS (Internal Revenue Service) his suspicion rose.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-92149155768888779312015-06-18T17:27:57.704-07:002015-06-18T17:27:57.704-07:00Software Failure Leads to US Sanctions Penalty for...Software Failure Leads to US Sanctions Penalty for National Bank of #Pakistan in New York. http://on.wsj.com/1BlWupQ via @WSJ<br /><br />The National Bank of Pakistan’s New York branch settled “apparent violations” of sanctions with U.S. authorities Thursday, agreeing to a penalty of $28,800. The case illustrates how companies can be penalized for violating sanctions, even if the illegal transactions are only processed because of flaws in screening software.<br /><br />The U.S. Treasury Department’s Office of Foreign Assets Control found that the New York branch of the state-0wned bank processed wire transfers totaling $55,952 for the blacklisted Kyrgyzstan airline, Kyrgyz Trans Avia, OFAC said in a statement. The bank’s sanction screening software failed to recognize the name of the account name LC Aircompany Kyrgyztransavia as belonging to Kyrgyz Trans Avia account, OFAC said.<br /><br />OFAC blacklisted Kyrgyz Trans Avia in May 2013 after authorities alleged the airline helped Iran acquire aircraft used to bring in “illicit cargo to Syria for the Assad regime’s violent crackdown against its own citizens.”<br /><br />The increased complexity of sanctions and an ever increasing number of blacklisted entities have made it hard for automated screening tools to keep up, experts say.<br /><br />Under the strict liability of sanctions laws, companies can be punished for transactions, even if they are processed because of a software failure. The penalty was light, OFAC said, because supervisors at the bank cooperated with authorities and were unaware of transactions with the blacklisted airline.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-15236380106936995292015-01-15T22:36:17.150-08:002015-01-15T22:36:17.150-08:00Pakistan’s first real estate investment trust will...Pakistan’s first real estate investment trust will offer an initial 9 percent dividend and stakes in one of Karachi’s most prominent malls and office towers when it sells shares within three months.<br /><br />A 25 percent stake in the Dolmen City Real Estate Investment Trust will be offered to foreign and domestic investors, said Nasim Beg, chairman of Arif Habib Dolmen REIT Management Ltd. The trust’s assets will be the Dolmen Mall, which hosts stores including Mango and Debenhams, and the adjacent office building that houses Engro Corp. Both are near the Karachi seafront, one of Pakistan’s wealthiest areas.<br /><br />“The outlook of the real estate market is not too relevant,” Beg said yesterday in an interview in Karachi. “Investors will be paid dividends from rental income that will continue to grow as per agreements.”<br /><br />The trust is likely to pay a dividend of 9 percent in first year and increase to 14 percent in the fifth year, said Muhammad Ejaz, chief executive of Arif Habib Dolmen REIT Management. The dividend yield of the benchmark KSE100 stock index is currently 4.4 percent, according to data compiled by Bloomberg.<br /><br />Prime Minister Nawaz Sharif’s government is broadening investment options in Pakistan as it seeks to spur economic growth in the midst of an escalating conflict with domestic Islamist militants. The Pakistani Taliban killed 134 students on Dec. 16 in one of the country’s worst terrorist attacks.<br /><br />Beg said he expects four or five other REITs to be listed on the Karachi Stock Exchange within two years.<br /><br />“Improved regulation surrounding the creation of real estate investment trusts could pave the way for increased investment via this format and lead to more Pakistani investment being directed in the home market rather than overseas,” London-based Business Monitor International said in its latest report on Pakistani real estate, released this month.<br /><br />The property that will go into the Dolmen City REIT is owned 80 percent by Dolmen Group and 20 percent by Arif Habib Group. After the IPO of the trust, those stakes will drop to 60 percent and 15 percent respectively.<br /><br />http://www.bloomberg.com/news/2015-01-15/first-pakistan-reit-to-offer-9-dividend-stakes-in-leading-mall.html Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-79644922633612900992015-01-04T13:24:04.673-08:002015-01-04T13:24:04.673-08:00
....To regain momentum, Mr Modi this weekend ple...<br /><br />....To regain momentum, Mr Modi this weekend pledged to give greater independence to struggling public sector lenders, while tempting global investors to participate in plans to raise Rs1.6tn ($26bn) by selling down government bank stakes.<br />Speaking at a summit of the heads of all of India’s public sector financial institutions, Mr Modi promised to end the country’s heritage of “lazy banking”, a term often used to criticise risk-averse lenders.<br />Addressing concerns that banks face political pressure to give loans to favoured companies, Mr Modi said lenders “would be run professionally” in future, and promised “no interference” from New Delhi.<br />Jayant Sinha, minister of state for finance, said that the moves were “a very important step” to repair the banking sector, which must raise an estimated $50bn to meet new capital rules over the next four years while also reversing recent increases in bad loans.<br />“To bring everyone together at this event, and to ask all of India’s banking system to look seriously at bold structural reforms, is an unprecedented move,” Mr Sinha said.<br />India is now likely to bring forward measures to increase the autonomy of bank boards, ensure the independence of senior appointments, and introduce market-linked pay for bank executives.<br />The banking reforms come in advance of the likely appointment this week of Mr Panagariya, a widely respected and liberally-minded economist, to lead the government think-tank set up to replace India’s Soviet-era planning commission.<br />In August, Mr Modi scrapped the planning commission, which had guided India’s economic development for six decades through the publication of weighty five-year plans. He accused the body of excessive centralisation, obstructing the plans of state-level governments.<br />Mr Modi will officially chair the replacement — to be called the NITI Aayog, or National Institution for Transforming India — but two people familiar with the matter confirmed that Mr Panagariya had accepted the position as vice-chairman, making him its operational head.<br /><br /><br />http://www.ft.com/intl/cms/s/0/9a776db4-93e3-11e4-92dd-00144feabdc0.htmlRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-1976519754995096092014-11-16T17:29:01.216-08:002014-11-16T17:29:01.216-08:00Pakistan regulators merging three Islamic investme...<br />Pakistan regulators merging three Islamic investment firms<br /><br />Nov 17 (Reuters) - Pakistan regulators are merging three small Islamic investment firms after the central bank took control of Karachi-based KASB Bank Limited, accelerating efforts to strenghten financing by investment partnerships.<br /><br />Last week, the government directed the central bank to reorganize or amalgamate KASB Bank in the next six months, after the lender failed to meet minimum capital requirements.<br /><br />On Friday, KASB Modaraba said it had taken management control of First Pak Modaraba and First Prudential Modaraba, three of a total 26 modarabas active in the country.<br /><br />Modarabas are a form of Islamic investment partnership where assets are managed on behalf of clients, with income and expenses shared under a pre-agreed ratio.<br /><br />The sector remains a tiny part of the country's Islamic finance industry, with several firms lacking scale to compete.<br /><br />Last week, First Habib Bank Modaraba, a unit of Pakistan's largest lender HBL Bank, liquidated its business.<br /><br />As of March, the three modarabas held a combined 1.9 billion rupees ($18.7 million) worth of assets, dwarfed by larger peers such as Standard Chartered Modaraba with 5.3 billion rupees in assets.<br /><br />The Securities and Exchange Commission of Pakistan (SECP) has also developed risk management guidelines for modarabas, last year introducing sharia compliance and sharia audit mechanisms to strengthen the sector.<br /><br />http://www.reuters.com/article/2014/11/17/pakistan-modarabas-idUSL6N0T701320141117Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-19388700813123379002014-08-06T10:13:05.092-07:002014-08-06T10:13:05.092-07:00Shama Zehra is founder and CEO of newly-launched A...Shama Zehra is founder and CEO of newly-launched Aligned Independent Advisors, a boutique independent advisory firm on Wall Street. It’s still a male-dominated area of finance, just 13% of brokers and advisors are female but Zehra’s unlikely to be unfazed. As a glance at her career path proves – engineer, business-owner, pilot and banker –resisting convention comes pretty naturally.<br /><br />As a teenager Shama Zehra started her first business, a clothing company with her mom and her sister from a rack in the corner of their apartment in Pakistan. Over time the trio outgrew the apartment and opened a small factory with six staff. This led to a flagship store, sales to the Pakistani equivalents of Macy’s and pop- up stores at five star hotels, which brought about lucrative exports.<br /><br />Still, attitudes to women-owned businesses dragged out simple transactions, says Zehra. “Pakistan is a very male-dominated society so over there a man rules, so that was one of the biggest challenges,” she says. Even more difficult was negotiating constant security risks like thefts and curfews as well as electricity blackouts which meant the machines couldn’t run.<br /><br /><br />The trio sold Zehra’s, and after a stint as a pilot, Zehra got into finance. She built the number one wealth management business at Standard Chartered Bank in Pakistan before emigrating to the U.S to become one of the largest producers at Goldman Sachs and Morgan Stanley MS +1.24%.<br /><br />“Once you have your own business you really understand how to treat every job. I’ve always treated every job that I’ve had like my own company or my own business and that really does change the dynamic…as an entrepreneur you’ve got to do everything to make it work.”<br /><br />With her latest venture, Aligned Independent Advisors, Zehra says she’s building a firm that’s totally independent but has a human touch, something she thinks has been lacking.<br /><br />“It’s easy to find smart people in finance but it’s difficult to find good hearted, helpful and sincere people,” she says.<br /><br />http://www.forbes.com/sites/hollieslade/2014/08/05/from-a-clothing-business-in-pakistan-to-a-wall-street-firm-lessons-from-a-serial-female-entrepreneur/<br /><br />http://onforb.es/1s84hBtRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-12861952236286975662014-07-08T20:11:07.244-07:002014-07-08T20:11:07.244-07:00A soft revolution of mobile money in Pakistan: A p...A soft revolution of mobile money in Pakistan: A pathway to financial inclusion<br /><br />Over the past decade, there has been a rapid expansion of mobile money (m-money) networks in developing countries. These are largely intended to help financial services reach unbanked populations. This innovation has been taken up by cellular mobile companies in Pakistan, in partnership with domestic financial institutions, and thus creating some innovative business models for the use of m-money. While these innovations are a positive step forward for greater financial inclusion in Pakistan, a national strategy is essential to facilitate targeted and coordinated efforts between regulators and the private sector. <br /><br /> <br /><br />The challenge of high financial exclusion<br /><br />Despite comprehensive financial sector reforms in Pakistan, progress on financial inclusion has been slow. In 2011, only 10% of Pakistan’s adult population had accounts at formal financial institutions (Figure 1). In comparison, 68.5% of the adult population in Sri Lanka had bank accounts, whereas this figure is 39.6% in Bangladesh and 35.2% in India. <br /><br />Pakistan’s m-money infrastructure has expanded rapidly since the launch of the first domestic initiative in October 2009. This expansion has been promoted by a liberal financial and telecommunications regulatory framework, and active private sector participation. Four out of five cellular mobile companies currently operating in Pakistan have launched m-money systems in partnership with financial institutions. The m-money market volume has reached 153 million annual transactions worth US$ 6.2 billion. <br /><br />There are two ways through which m-money services are provided in Pakistan. More than 95% of m-money transactions are carried out through mobile banking (m-banking) agents, and the rest are processed directly through customers’ mobile-wallet (m-wallet) accounts, using mobile phones. M-banking agents (retail points) provide the basic infrastructure for Pakistan’s m-money services, whereas customers’ m-wallet accounts currently have a limited role in the m-money services market. <br /><br />In Pakistan, m-money services can improve access to financial services for the unbanked population, which is something which traditional banking channels have not managed to do. The network of 93,864 m-banking agents against only 10,250 commercial bank branches in the country provides a perspective as to the reach m-money has on the un-banked and poor.<br /><br />The current high rate of dependence on agents to complete mobile transactions is typical in the initial adoption of m-banking. Moving forward, the importance of m-wallet accounts cannot be neglected. Many financial services including savings, insurance and micro-credit can be delivered through m-wallet accounts, which provide a store of value. As of June 2013, there were only 2.6 million m-wallet accounts, which is not large enough to reduce the high level of financial exclusion in Pakistan. Three new players that started operations in 2013 are relying solely on agent-based m-money services, while neglecting the potential of m-wallet accounts.<br /><br />https://aric.adb.org/blog/57/a-soft-revolution-of-mobile-money-in-pakistan-a-pathway-to-financial-inclusionRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.com