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Bankislami Quarterly Report March 2017

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Bankislami Quarterly Report March 2017 QUARTERLY REPORT March 2017 01 Corporate Information 37 Consolidated Financial Statements 03 Directors’ Report 38 Directors’ Report 07 Statement of Financial Position 40 Consolidated Statement of Financial Position 08 Profit and Loss Account 41 Consolidated Profit and Loss Account Consolidated Statement of 09 Statement of Comprehensive Income 42 Comprehensive Income 10 Cash Flow Statement 43 Consolidated Cash Flow Statement 11 Statement of Changes in Equity 44 Consolidated Statement of Changes in Equity 12 Notes to the Financial Statements 45 Notes to the Consolidated Financial Statements Corporate Information Board of Directors Mr. Ali Hussain Chairman Mr. Fawad Anwar Vice Chairman Mr. Ali Mohamad Hussain Ali Mohamad Alshamali Dr. Amjad Waheed Mr. Hasan A. Bilgrami Chief Executive Officer Mr. Noman Yakoob Mr. Siraj Ahmed Dadabhoy Sharia'h Supervisory Board Mufti Irshad Ahmad Aijaz Chairman Mufti Muhammad Husain Member Mufti Javed Ahmed Member Audit Committee Dr. Amjad Waheed Chairman Mr. Noman Yakoob Member Mr. Ali Mohamad Hussain Ali Mohamad Alshamali Member Risk Management Committee Mr. Fawad Anwar Chairman Mr. Noman Yakoob Member Mr. Hasan A. Bilgrami Member Human Resource Management Committee Mr. Ali Mohamad Hussain Ali Mohamad Alshamali Chairman Mr. Fawad Anwar Member Mr. Siraj Ahmed Dadabhoy Member Mr. Hasan A. Bilgrami Member Board Remuneration Committee Mr. Ali Mohamad Hussain Ali Mohamad Alshamali Chairman Mr. Fawad Anwar Member Mr. Siraj Ahmed Dadabhoy Member Executive Committee Mr. Ali Hussain Chairman Mr. Fawad Anwar Member Mr. Hasan A. Bilgrami Member Mr. Siraj Ahmed Dadabhoy Member Company Secretary Mr. Khawaja Ehrar ul Hassan Auditors EY Ford Rhodes, Chartered Accountants 01 Serving you, the Right way Legal Adviser 1- Haidermota & Co. Barrister at Law 2- Mohsin Tayebaly & Co. Corporate Legal Consultants / Barristers & Advocates High Courts & Supreme Court Management (in alphabetical order) Mr. Ahmad Mobeen Malik Regional General Manager Mr. Bilal Zuberi Regional General Manager Mr. Fakhir Ahmad Head, Human Resources Mr. Farooq Anwar Head, Operations Mr. Hasan A. Bilgrami Chief Executive Officer Mr. Khawaja Ehrar ul Hassan Company Secretary & Head of Legal Mr. Masood Muhammad Khan Head, Compliance Mr. Muhammad Asadullah Chaudhry Head, Service Quality & Phone Banking Mr. Muhammad Faisal Shaikh Head, Shariah Advisory & Structuring Mr. Rehan Shuja Zaidi Head, Internal Audit Mr. Saad Ahmed Madani Head, Corporate Banking Mr. Sadrauddin Pyar Ali Head, Administration & General Services Mr. Sohail Sikandar Chief Financial Officer Mr. Syed Akhtar Ausaf Head, Risk Management Mr. Syed Ata Hussain Jaffri Head, Information System Mr. Syed Muhammad Aamir Shamim Head, Treasury & Financial Institutions Registered Office 11th Floor, Executive Tower, Dolmen City, Marine Drive, Block-4, Clifton, Karachi. Phone (92-21) 111-247(BIP)-111 Fax: (92-21) 35378373 Email: [email protected] Share Registrar Share Registrar Department Central Depository Company of Pakistan Limited CDC House, 99 – B, Block ‘B’, S.M.C.H.S., Main Shahra-e-Faisal Karachi-74400. Tel: Customer Support Services (Toll Free) 0800-CDCPL (23275) Fax: (92-21) 34326053 Email: [email protected] Website: www.cdcpakistan.com PUBLIC DEALING TIMINGS Monday to Thursday: 9:00 am to 7:00 pm Friday 9:00 am to 12:30 pm and 2:30 pm to 7:00 pm Saturday 9:00am to 1:00pm Website: www.bankislami.com.pk Quarterly Report 2017 02 Directors’ Report Dear Shareholders, On behalf of the Board, I am pleased to present the financial results of the Bank for the first quarter ended March 31, 2017. The following are the key highlights: Mar 17 Mar 16 Growth (%) ………….Rupees in ‘millions’…………... Total Deposits 159,110 144,484 10.12% Total Assets 188,058 181,711 3.50% Total Financing and related assets-net 99,319 75,231 32.02% Total Investments 44,615 71,933 -37.98% Shareholder's Equity 12,304 11,533 6.68% Profit After Tax 66 125 -47.20% Basic Earnings per share - rupees 0.065 0.124 -47.58% Branches network-Number 322 317 1.58% Financial Highlights: The deposit size of the Bank grew by Rs. 14.6bn i.e. 10.12% growth from the same quarter last year. The Current and Saving Accounts (‘CASA’) mix improved from 68.13% in Mar 2016 to 75.00% in Mar 2017. The financing to deposit ratio rose to 62.42% from 52.07% in Mar 2016. Consumer financing as a percentage of total financing also grew to 12.00% in the first quarter of 2017 resulting in improved yield.In addition to this, the Cost of funds fell compared to last year. All of this resulted in improvement in gross spread to 47.17% from 37.26% i.e. a rise of 991 bps as compared to same quarter last year. The infection ratio of the financing & advances portfolio, including the inherited non performing portfolio of Defunct KASB Bank, dropped from 16.60% in Mar 2016 to 14.69% as of Mar 2017. The non-funded income of the Bank has improved by 64.28% mainly on the back of increase in fee income on transaction banking.There is an increase in Administrative Expenses by 5.36%, however the cost to income ratio went down to 93.27% from 95.01% last year, thereby resulting in the Bank to report a profit after tax of Rs. 66mn for the first quarter of the year 2017.Ignoring the one off deferred tax adjustment last year, there was an improvement of Rs. 43mn compared to first quarter of 2016. 03 Serving you, the Right way Achievements: The Bank continued to partner with renowned brands under loyalty program for its Debit Cardholders. The Alternative Delivery Channelsof the Bank have provided much needed impetus to its non-funded income and helped in generating healthy revenue stream. ATM Transactions, POS transactions, mBankIslami mobile app downloads and SMS banking activations have continued to show encouraging trends. The Bank continues to use technological driven platforms to enhance its service delivery and provide convenience to its customers. We expect 2017 to be yet another year where the result of the Bank will be erratic due to the impact of amalgamation with Defunct KASB Bank. While the operational integration has been completed, the growth in business of the acquired branches has been slow coupled with withdrawals. Substantial assets of the merged Bank remained frozen due to ongoing litigation while the Bank continues to fund them from its resources. That said, we are confident that by the end of 2017, we shall be in a position to put all of this behind us. InShaAllah. The growth in all of the business segments is very encouraging. Alhamdulillah. The Credit rating of the Bank is "A+" for long term entity rating and “A1" for short-term rating by Pakistan Credit Rating Agency Limited (‘PACRA’). The Board would like to place on record its deep appreciation for the State Bank of Pakistan for providing assistance and guidance. It would also like to thank the Securities and Exchange Commission of Pakistan and other regulatory authorities for their support to us. We would like to show our gratitude to our valued customers, business partners and shareholders for their continued patronage and trust. Moreover, we would also like to acknowledge the dedication, commitment and hard work put in by our management team and employees that has enabled BankIslami to capture a prominent position in the Banking industry in general and Islamic Banking industry in particular. On behalf of the Board, Hasan A Bilgrami Chief Executive Officer June 20th, 2017 Quarterly Report 2017 04 (Gross Spread) 05 Serving you, the Right way Quarterly Report 2017 06 BankIslami Pakistan Limited Condensed Interim Statement of Financial Position As at March 31, 2017 (Un-audited) (Audited) March 31, 2017 December 31, Note 2016 ------------- Rupees in '000 ------------- ASSETS Cash and balances with treasury banks 6 7,291,443 8,921,433 Balances with other banks 7 1,036,855 1,140,150 Due from financial institutions - net 8 16,788,755 27,218,665 Investments - net 9 44,614,808 46,316,927 Islamic financing and related assets and Advances (net) 10 99,319,420 77,816,802 Operating fixed assets 11 9,316,286 9,347,525 Deferred tax assets 12 6,021,438 5,918,460 Other assets - net 3,668,536 4,166,208 188,057,541 180,846,170 LIABILITIES Bills payable 2,460,813 2,273,934 Due to financial institutions 13 9,029,756 6,066,307 Deposits and other accounts 14 159,109,559 154,399,657 Sub-ordinated loans - - Deferred tax liabilities - - Other liabilities 5,153,704 5,661,606 175,753,832 168,401,504 NET ASSETS 12,303,709 12,444,666 REPRESENTED BY Share capital 15 10,079,121 10,079,121 Discount on issue of shares (79,042) (79,042) Reserves 16 613,636 613,636 Unappropriated profit 280,919 212,553 10,894,634 10,826,268 Surplus on revaluation of assets - net of tax 17 1,409,075 1,618,398 12,303,709 12,444,666 CONTINGENCIES AND COMMITMENTS 18 The annexed notes 1 to 26 form an integral part of this condensed interim financial information. CHIEF FINANCIAL OFFICER PRESIDENT / CHIEF EXECUTIVE CHAIRMAN DIRECTOR DIRECTOR 07 Serving you, the Right way BankIslami Pakistan Limited Condensed Interim Profit and Loss Account (Un-audited) For the Quarter ended March 31, 2017 Note March 31, March 31, 2017 2016 ------- Rupees in ‘000 ------- Profit / return earned 19 2,480,247 2,234,486 Profit / return expensed 1,310,371 1,401,943 Net spread earned 1,169,876 832,543 Reversal of provision against non-performing Islamic financing and related assets and advances - net 10.13.2 (84,430) (500,768) Provision / (reversal of provision) for diminution in the value of investments and placements - net 178 (46,605) Bad debts written off directly - 523 (84,252)
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