LAHORE: Naeemuddin Khan has been serving as the president of the Bank of Punjab for the last one decade. Khan shared the bank’s achievements in an interview with The News.
Q: How has been the bank’s performance over the past 10 years?
A: The present management took over the charge of BoP (Bank of Punjab) in September 2008. The bank was bankrupt, noncompliant with prudential regulations and incurred a net loss of Rs16.8 billion in 2008. Today, BoP is fully compliant with the SBP’s (State Bank of Pakistan) regulations and financially strong. It posted a profit of Rs7.6 billion in 2017. Its branch network has almost doubled to 540 branches as against 272 branches in 2008. The balance sheet size has ballooned to Rs650 billion from only Rs186 billion in 2008.
We have fulfilled all the prudential requirements of the central bank and earned their praise. The Work Bank has appreciated the turnaround the bank made in the last 10 years. Our rating has been upgraded to AA plus.
Q: How much defaulted amount has the bank so far recovered?
A: We recovered Rs80 billion through NAB (National Accountability Bureau) and we were the one that requested NAB for its intervention. The anti-corruption body helped us in bringing back some big defaulted amounts from Dubai and the United States.
Besides, we recovered another Rs120 billion through courts. We vigilantly pursued each default case. In fact, around 3,000 default cases were pursued by the bank both through NAB and the banking courts.
Most of the default cases have been resolved and we are vigorously pursuing the remaining few. The bank that was in loss in 2008 has now attained a position where it is expected to earn Rs1 billion per month. From a small bank with limited coverage we are emerging as a large bank in Pakistan’s banking industry. This year we will pay handsome dividends to our shareholders.
Financial institutions should be handled with prudence as any false news may hurt the value of its shareholders. People have faith in banks and so they entrust them with their deposits. Some reports falsely suggested that the bank deposited Rs36.8 billion in commercial banks on the instruction of former Punjab chief minister Shahbaz Sharif. This is totally wrong as the bank never deposited such huge amount in other commercial banks.
Let me clarify we have run the bank professionally and transparently without any political interference. We would welcome the new government to check our records and audit our accounts through third party. We have safeguarded the interests of our shareholders and are fully prepared for any scrutiny. In fact we have also prepared a presentation for the next government regarding our plans.
Q: Which are the key portfolios in the bank’s focus?
A: Our focus is on industry and agriculture. In fact, we are the only bank that has larger presence in the rural areas particularly.
This helps us in serving the farmers at their doorstep. We give more agricultural credit compared with other size than other banks. We supported industry because manufacturing sector creates jobs. Our exposure in the industrial sector has doubled in 10 years.
Q: Why do housing loans have low penetration in the market?
A: What I really missed during the 10 years was to offer secure loans for housing sector. There is a huge demand for such loans but the laws in Pakistan are such that in case of default on mortgaged property the bank has to run in courts for several years during with even the normal returns on loan are suspended. In developed world, the banks have the authority to occupy and auction the property on one month’s default. So no one defaults on house loans.
