DOCSLIB.ORG

Financial Stability Review

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Financial Stability Review Financial Stability Review 2018 State Bank of Pakistan Table of Contents Governor’s Message ........................................................................................................................................................... i Acknowledgements ........................................................................................................................................................... ii FSR Team ........................................................................................................................................................................... iii Data Convention and Coverage ...................................................................................................................................... iv Overview ............................................................................................................................................................................. 1 Box 1: SBP’s Systemic Risk Survey-3rd Wave (January, 2019) ..................................................................... 8 Box 2: SBP’s Initiatives to Strengthen the Stability of the Financial Sector ............................................... 10 Chapter 1: Global and Domestic Macro-financial Environment ............................................................................... 17 Chapter 2: Financial Markets Risk Analysis................................................................................................................. 27 Box 3: US Dollar Liquidity Remains an Important Aspect of Inter-Connectedness and Financial Markets Behavior during CY18 .............................................................................................................................. 36 Section A: Banking Sector ............................................................................................................................................... 37 Chapter 3.1: Performance and Risk Analysis of the Banking Sector ........................................................................ 39 Box 4: FATF and AML/CFT Regime in Pakistan ......................................................................................... 53 Chapter 3.2: Performance and Risk Analysis of the Islamic Banking Industry ...................................................... 57 Chapter 3.3: Resilience of the Banking Sector under Stress Scenarios ...................................................................... 65 Section B: Non-Banking Financial Sector ...................................................................................................................... 75 Chapter 4.1: Performance & Risk Analysis of Development Finance Institutions (DFIs) ...................................... 77 Box 5: Brief History of DFIs in Pakistan ........................................................................................................ 82 Chapter 4.2: Performance & Risk Analysis of Non-Bank Financial Institutions ..................................................... 83 Chapter 4.3: Insurance Sector Performance and Risk Analysis ................................................................................. 91 Chapter 4.4: Performance and Risk Analysis of Exchange Companies.................................................................. 101 Section C: Non-Financial Sector ................................................................................................................................... 105 Chapter 5: Performance and Risk Analysis of the Corporate Sector ...................................................................... 107 Box 6: Altman Z-score – Measure of distress .............................................................................................. 115 Chapter 6: Performance and Soundness of Financial Market Infrastructures ....................................................... 117 Chapter 7: Financial Inclusion and Financial Stability ............................................................................................. 127 Box 7: Financial Inclusion .............................................................................................................................. 132 Appendix A .................................................................................................................................................................... 135 Acronyms ........................................................................................................................................................................ 139 Annexures ....................................................................................................................................................................... 145 Governor’s Message The year 2018 remained quite eventful from both global and domestic perspectives. The global economic momentum softened, amid increasing trade tensions and tightening financial conditions. The domestic economy faced various idiosyncratic challenges. The country had to go through uncertainties associated with the political transition in the first half. Afterwards, the widening twin deficits and elevated inflationary pressures necessitated policy measures for stabilization, which, as expected, slowed down the economic momentum. Resultantly, the investors’ sentiments remained subdued and financial markets, particularly the foreign exchange and equity markets, observed increased volatility. In response to the market dynamics, the local currency depreciated and the KSE-100 index dipped. The money market, however, operated smoothly by virtue of the interest rate corridor mechanism and improved liquidity conditions. Amid these challenges, the financial institutions, however, remained sound and facilitated the improvement in financial intermediation. Banks, the key player in the financial sector, carried forward the rising momentum in total loans with 22 percent growth, while maintaining strong solvency and liquidity profiles. Their capital adequacy ratio at 16.2 percent stood well above the international benchmark and the non- performing loans ratio decreased to 8 percent, despite some increase in NPLs during 2018. Moreover, the financial inclusion broadened due to joint efforts of the SBP and its regulated financial institutions. Particularly, to pursue the National Financial Inclusion Strategy, SBP introduced policy measures to enhance financial access to priority areas of SME, Housing and Agriculture, and to promote cross cutting themes of Islamic Banking and Digital Financial Services. State Bank, in line with its strategic objective of ensuring financial system stability, under “Vision 2020”, is closely monitoring global and domestic developments and responding appropriately where necessary. The current Financial Stability Review provides a detailed assessment of the emerging risks and highlights measures taken to beef up the financial sector stability. Among the emerging challenges, SBP stepped up its efforts to strengthen the overall AML/CFT regime and fortified the cyber resilience. In addition, SBP progressed towards Macro-Prudential Policy Framework by introducing regulatory guidelines for the designation of Domestic Systemically Important Banks (DSIBs), improving coordination among financial sector regulators and stepping up efforts for the establishment of an overarching National Financial Stability Council (NFSC). I hope that the stakeholders would find this report helpful and informative. Any suggestions, comments and feedback are welcome. Dr. Reza Baqir Financial Stability Review, 2018 i Acknowledgements The Financial Stability Review (FSR) team is highly indebted to Mr. Tariq Bajwa, Ex-Governor and Dr. Reza Baqir, Governor, State Bank of Pakistan (SBP) for their encouragement and guidance. The team is also grateful to members of Publications Review Committee (PRC) of the Management for providing invaluable feedback on the report. We are also thankful to Mr. Jameel Ahmad, Deputy Governor (Banking and FMRM) and Dr. Inayat Hussain, Executive Director, Banking Supervision Group, for their continuous support and supervision in the preparation of this report. The team would also like to thank various departments of SBP, especially Research Department (RD), Banking Policy and Regulations Department (BPRD), Offsite Supervision & Enforcement Department (OSED), Exchange Policy Department (EPD), Agricultural Credit & Microfinance Department (AC&MFD), Domestic Markets and Monetary Management Department (DMMD), Islamic Banking Department (IBD), Monetary Policy Department (MPD), Payment Systems Department (PSD) and Statistics and Data Warehouse Department (S&DWHD) for their valuable support and feedback. We are also grateful to the Securities & Exchange Commission of Pakistan (SECP), National Clearing Company of Pakistan (NCCPL), Mutual Funds Association of Pakistan (MUFAP) and Pakistan Stock Exchange (PSX) for providing relevant data, technical information and comments on the relevant chapters/sections of the report. Publication Review Committee of the Management Dr. Saeed Ahmed (Chairman) Dr. Inayat Hussain Syed Irfan Ali Syed Samar Hasnain Mr. Muhammad Ali Malik Mr. Ali Choudhary Dr. M. Farooq Arby Dr. Omar Farooq Saqib Dr. Azizullah Khattak Mr. Muhammad Javaid Ismail ii Financial Stability Review, 2018 FSR Team Team Leaders Muhammad Javaid Ismail, Director – Financial Stability Department Dr. Asif Ali, Additional Director – Financial Stability Department Team Members Amer Hassan Anum Naeem Aqeel Ahmed Dr.
Load more

Recommended publications
  • June 30,2020 Table of Contents
    FOR THE HALF YEAR ENDED JUNE 30,2020 TABLE OF CONTENTS Corporate Information 02 Directors’ Report to the Members 03 Directors’ Report to the Members (Urdu) 06 Independent Auditors’ Review Report 08 Condensed Interim Balance Sheet 10 Condensed Interim Profit and Loss Account (Un-Audited) 11 Condensed Interim Statement of Comprehensive Income (Un-Audited) 12 Condensed Interim Cash Flow Statement (Un-Audited) 13 Condensed Interim Statement of Changes in Equity 14 Selected Notes to the Condensed Interim Financial Information 15 CORPORATE INFORMATION BOARD OF EXECUTIVE COMMITTEE TAX CONSULTANT DIRECTORS Mr. Muhammad Akram Shahid Grant Thornton Anjum Rahman Mr. Muhammad Akram Shahid Chairman Chartered Accountants Chairman Mr. Imad Mohammad Tahir Mr. Imad Mohammad Tahir Member BANKERS Mr. Abdul Aziz Khan Director United Bank Limited Member Mr. Muhammad Asghar Sindh Bank Limited Mr. Muhammad Asghar Director Khushali Bank limited Member Bank Al-Habib Limited Mr. Muhammad Saleem Shaikh Mr. Muhammad Saleem Shaikh Summit Bank Limited Director Member Zarai Taraqiati Bank Limited Syed Rahat Ali Shah JS Bank Limited Director HUMAN RESOURCE & Silk Bank Limited First Microfinance Bank Limited Mr. Abdul Aziz Khan REMUNERATION COMMITTEE Soneri Bank Limited Director Mr. Abdul Aziz Khan Telenor Microfinance Bank Limited Mr. Javaid Sadiq Chairman FINCA Microfinance Bank Limited NRSP Microfinance Bank Limited Director Mr. Javaid Sadiq Habib Metropolitan Bank Limited Member Mr. Imam Bukhsh Baloch National Bank of Pakistan Limited (SBP-FPT is under process) Mr. Imad Mohammad Tahir The Bank of Punjab Limited Director Member U Microfinance Bank Limited Syed Rahat Ali Shah Mobilink Microfinance Bank Limited PRESIDENT / CHIEF Member EXECUTIVE OFFICER Mr. Muhammad Saleem Shaikh REGISTERED OFFICE Member Mr.
    [Show full text]
  • Institutionalizing Islamic Banking: the Case of Bank of Khyber, Pakistan
    Journal of Islamic Business and Management 2018, 8(S), 218-226 https://doi.org/10.26501/jibm/2018.080S-002 Institutionalizing Islamic Banking: The Case of Bank of Khyber, Pakistan Muhammad Mohsin Khan 1∗, Muhammad Atiq 2, Karim Ullah 3 1Director, Institute of Management Sciences, Peshawar, Pakistan 2 Assistant Professor, Institute of Management Sciences, Peshawar, Pakistan 3 Founding Head of Centre for Excellence in Islamic Finance, Institute of Management Sciences, Peshawar, Pakistan Keywords Abstract. This article discusses the move for conversion of a conventional Islamic Banking bank into Islamic one taking the Bank of Khyber (BoK), Pakistan as a Financial Intermediation case study. It provides an in-depth and emprical narrative of how Islamic Institutional Theory banking has been introduced at the Bank of Khyber particularly motivated by political and social incentives to reconstruct the current conventional banking model. Initially, BoK was operating on conventional model of financial intermediation and gradually, an Islamic banking division, a Shar¯i‘ah Board, and multiple Islamic depository and financing processes have been introduced and institutionalized to establish social and political legitimacy within the context. This case highlights the core challenges to the BoK team and value creation of the institutional intervention, particularly shared value creation and collaborative efforts across the industry, from an institutional theory perspective. This case carries multiple implications for the Islamic banking professionals and offers practical insights on the process of business model reconstruction within the context of Islamic banking. KAUJIE Classification: H13, I2, J0 JEL Classification: G2 c 2018 JIBM. All rights reserved. INTRODUCTION Institutionalization and Institutional Theory Institutional theory focuses on institutional pressures and how firms give into those pressures to adapt to social initiatives to gain legitimacy.
    [Show full text]
  • Excellence Entity
    year of excellence entity Long term A Short term A2 JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has upgraded the medium to long term entity rating of the Bank from ‘A-’ (Single A Minus) to ‘A’ (Single A) while maintaining the short term rating at ‘A-2’ (A Two). Outlook on the assigned rating is “Stable”. The Pakistan Credit Rating Agency Limited (PACRA) has maintained long term entity rating of the Bank to “A-“ (Single A Minus) and short term entity rating at “A2” (A Two). Rating outlook is “Positive”. The ratings denote low expectation of credit risk emanating from a strong capacity for timely payment of financial commitments. Milestones Achieved 4 Serving with Distinction & Pride 6 Our Vision & Mission 8 Company Information 10 Our Products & Services 12 Board Profile 14 From the Managing Director 16 Financial Spectrum 18 Six Years Financial Highlights 20 Notice of 22nd Annual Genreal Meeting 22 Directors’ Report 24 Statement of Compliance 37 Review Report to the Members 40 Statement of Internal Control 41 Shariah Advisor Report 42 Auditors' Report to the Members 45 Financial Highlights 47 02 03 milestones DEPOSITS RS. ADVANCES 60BILLION RS. UP BY 32 % OVER 2O11 BILLION30 UP BY 17 % OVER 2O11 INVESTMENTS RS. ASSETS 46BILLION UP BY 25 % OVER 2O11 RS. 82BILLION UP BY 20 % OVER 2011 PROFIT AFTER TAX ONE BILLION UP BY 23% OVER 2011 04 05 serving with We embarked upon our journey 22 years ago, as one of the public sector bank, catering to the banking needs of our people. After successfully coming out of all sort of challenges, today we are all set to be a bank that is present almost in every part of the country.
    [Show full text]
  • Acquiring – Terms and Conditions 2020
    Acquiring – Terms and Conditions 2020 nets.eu/payments Contents DEFINITIONS ........................................................................................................................................................................................................................................................................3 1. SCOPE OF THE AGREEMENT ....................................................................................................................................................................................................................5 2. GENERAL REQUIREMENTS APPLICABLE TO THE MERCHANT ...........................................................................................................................................5 3. ACCEPTANCE OF PAYMENT CARDS .....................................................................................................................................................................................................8 4. THE RELATIONSHIP BETWEEN THE MERCHANT AND THE CARDHOLDER ..............................................................................................................10 5. PRICES, PAYMENTS AND SETTLEMENTS ......................................................................................................................................................................................10 6. DISPUTED CARD PAYMENTS ..................................................................................................................................................................................................................11
    [Show full text]
  • National Payment System Development Strategy for 2021 – 2023
    NATIONAL PAYMENT SYSTEM DEVELOPMENT STRATEGY FOR 2021 – 2023 Moscow 2021 CONTENTS Introduction .......................................................................................................................... 2 1. Current status of the NPS ............................................................................................... 4 1.1. Regulation ..................................................................................................................................................................................4 1.2. NPS infrastructure .................................................................................................................................................................5 1.3. Payment service providers ................................................................................................................................................9 1.4. Payment service consumers ..........................................................................................................................................10 2. Global and domestic trends and challenges of the payment market ......................13 2.1. Transformation of client experience and consumption models .....................................................................13 2.2. New payment technologies ...........................................................................................................................................13 2.3. New payment market participants .............................................................................................................................14
    [Show full text]
  • IBFT- Account Number Formats
    IBFT- Account Number Formats Allied Bank Please enter Allied Bank Account Number by following the layout below: Total Digits of Account Number: 13 or 20 Digits Format Example: BBBBAAAAAAAAA or BBBBAAAAAAAAAAAAAAAA BBBB = 4 Digit Branch Code, AAAAAAAAA = 9 Digit Account Number, AAAAAAAAAAAAAAAA = 16 Digit Account Number Apna Microfinance Bank Please enter Apna Microfinance Bank Account Number by following the layout below: Total Digits of Account Number: 16 Digits Format Example: BBBBAAAAAAAAAAAA BBBB = 4 Digit Branch Code, AAAAAAAAA = 12 Digits Askari Bank Please enter Askari Bank Account Number by following the layout below: Total Digits of Bank Account Number: 14 Digits Format Example: BBBB = 4 Digit Branch Code, AAAAAAAAAA = 10 Digit Account Number Branchless Banking Account # Always consist of 11 digits Mobile Number. Al-Baraka Please enter Bank Al-Baraka total digits of account Number: Total Digits of Account Number: 13 Digits Bank Alfalah Please enter Bank Alfalah Account Number by following the layout below: Conventional A/C#: Total Digits of Account Number: 14 Format Example: BBBBAAAAAAAAAA BBBB = 4 Digit Branch Code, AAAAAAAAAA = 10 Digit Account Number Islamic A/C#: Total Digits of Account Number: 18 Digit Format Example: BBBBAAAAAAAAAAAAAA BBBB = 4 Digit Branch Code, AAAAAAAAAAAAAA = 14 Digit Account Number Branchless Banking Account # : Always consist of 11 digits Mobile Number. Bank Al-Habib Please enter Bank Al-Habib Account Number by following the layout below: Total Digits of Account Number: 17 Digit Format
    [Show full text]
  • Virtual Card Management Service (VCM) Built to Support Payment from Any Device
    Virtual Card Management Service (VCM) Built to support payment from any device EASY DEPLOYMENT Nets’ VCM is designed to easily integrate with your existing payment Fast time to market for platform, ensuring compatibility with your current processes for card mobile payment solutions. management. Payment technologies, schemes, wallet types and Virtual card management in place for easy integration functionalities are included in a single API – making it fast and easy to with your core services. implement, integrate and deploy a strong solution. REACH THIS SERVICE IS BASED ON: 50+ banks already • A personal user experience for your • Full card management on individual virtual on board. Independent of customers through smart customisa- card level in accordance with industry stand- payment technology with ble self-service features. ards. full control and transparen- • A one-stop solution including all • Secure processes for critical card manage- cy from a card is virtualised necessary features for virtual card life ment functions such as card virtualisation, until it expires. cycle management. passcode reset, etc. through integration to customer provided cardholder identification EASY AND SECURE • A highly secure and constantly availa- and authentication security processes. The virtual card ble mobile payment solution ensuring • A fully fledged API to enhance user experi- management service is a reliable solution for your customers. ence based on customer preferences. based on industry stand- ards in addition to PCI DSS • A fast and smooth deployment solu- and PCI CPP compliance tion that integrates with your existing The ability to manage and control virtual cards regarding card management life cycle management process. is crucial for you as a card issuer as it enables and control.
    [Show full text]
  • Jafri, Juvaria.Pdf
    City Research Online City, University of London Institutional Repository Citation: Jafri, J. (2019). Bifurcated banking: the political economy of inclusive finance in Pakistan. (Unpublished Doctoral thesis, City, University of London) This is the accepted version of the paper. This version of the publication may differ from the final published version. Permanent repository link: https://openaccess.city.ac.uk/id/eprint/23914/ Link to published version: Copyright: City Research Online aims to make research outputs of City, University of London available to a wider audience. Copyright and Moral Rights remain with the author(s) and/or copyright holders. URLs from City Research Online may be freely distributed and linked to. Reuse: Copies of full items can be used for personal research or study, educational, or not-for-profit purposes without prior permission or charge. Provided that the authors, title and full bibliographic details are credited, a hyperlink and/or URL is given for the original metadata page and the content is not changed in any way. City Research Online: http://openaccess.city.ac.uk/ [email protected] BIFURCATED BANKING: THE POLITICAL ECONOMY OF INCLUSIVE FINANCE IN PAKISTAN JUVARIA JAFRI A thesis submitted to City, University of London for the degree of DOCTOR OF PHILOSOPHY Department of International Politics, School of Arts and Social Sciences, City, University of London June 2019 0 1 TABLE OF CONTENTS TABLE OF CONTENTS ........................................................................................................................................
    [Show full text]
  • NETS and Comfortdelgro Launch Convenient In-App Payment for NETS Users
    Media Release NETS and ComfortDelGro launch convenient in-app payment for NETS users NETS Click, the new in-app payment method enables consumers to use NETS bank cards on apps such as the ComfortDelGro Taxi Booking App for seamless and hassle-free payments Singapore, October 31, 2019 – NETS and ComfortDelGro Taxi today announced the launch of NETS’ new in-app payment method for taxi bookings and street hail trips made through the ComfortDelGro Taxi Booking App. Named NETS Click, the initiative enables consumers to use their NETS bank cards from DBS, OCBC and UOB to conveniently pay for both mobile booking and street hail trips with ComfortDelGro taxis via the ComfortDelGro Taxi Booking App. The partnership with ComfortDelGro Taxi marks the first time consumers can store NETS payment details on file to use their NETS bank card as an in-app payment mode. NETS will soon partner with online merchants to integrate NETS Click into their in-app payment process, providing consumers another option when they make payments for their purchases on their mobile devices. To use NETS Click for ComfortDelGro taxi rides, passengers can add their NETS bank card to the ComfortDelGro Taxi Booking App and authenticate their identity with a one- time password sent to their registered mobile number. Subsequently, NETS can be selected as the in-app payment option for ride bookings made via the app or street hail. For street hail trips, passengers would need to select the ‘Pay for Street Hail’ option on the ComfortDelGro Taxi Booking App. When they have boarded the hailed taxi, they may select NETS Click as the payment method on the app.
    [Show full text]
  • March 31, 2020
    First Credit And Investment Bank Limited ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Vision Be a preferred investment bank enhancing value for the stakeholders and contributing to the National goals. Mission Statement Contributing through innovative financing and investment in quality portfolio, advisory services delivered in an environment of trust and customer confidence supported by a team of professionals. First Credit And Investment Bank Limited ________________________________________________
    [Show full text]
  • Annual Report
    Annual Report Head Office: 23 - A, Sunderdas Road, (Thandi Sarak) Zaman Park, Lahore. Tel : +92 42-36362475-76 UAN : +92 42 111-771-772 Email : [email protected] www.apnabank.com.pk OUR PURPOSE Enhancing Quality of Banking and Contributing to a future. Online You can find more information about the apna bank at www.apnabank.com.pk Social Media Pages: Facebook: https://www.facebook.com/Apnamicrofinancebank Twitter: https://twitter.com/amfbl/ LinkedIn: https://www.linkedin.com/company/apna-micro-finance-bank-limited/ KEY PERFORMANCE INDICATORS Based on results Deposit and Other Accounts Micro Credits of the Bank as 26,179 10,505 (PKR in million) (PKR in million) presented in the Financial Total Assets Total Equity Statements 28,831 2,259 (PKR in million) (PKR in million) Mark-Up/Return/Interest Earned Profit Before Tax 3,418 58 (PKR in million) (PKR in million) Profit After Tax Earning Per Share 37 0.11 (PKR in million) TABLE OF CONTENTS About AMBL 3 Categories of Shareholders 39 Vision & Mission Statement 4 List of CDC Beneficial Owners Holding Shares by Sponsors Directors 40 Core Values & Bank’s Philosophy 5 Organizational Chart 6 List of CDC Beneficial Owners Holding Shares 10% and Above 40 Key Financial and Operational Data at a Glance 7 Major Loans Products 41 Board Of Directors 8 Corporate Meetings 9 FINANCIAL Corporate Information 10 STATEMENTS Key Management 11 Independent Auditors’ Report 43 How We Performed 12 Balance Sheet 48 Chairman’s Review 14 Profit and Loss Account 49 President / CEO’s Message 15 Statement of Comprehensive
    [Show full text]
  • ATM & NETS Link Frequently Asked Questions
    ATM & NETS Link Frequently Asked Questions 1. What do you mean by linking of my DBS/POSB current/savings account to my DBS/POSB Credit Card? When you link your DBS/POSB current/savings account to your DBS/POSB Credit Card, ATM and NETS functions are made available on your DBS/POSB Credit Card. 2. What are the benefits of doing the linkage? • Save wallet space with one Card, reduce the need to carry many Cards around. • Perform ATM card functions such as cash withdrawal from your DBS/POSB current/savings account with your DBS/POSB Credit Card. • Enjoy the convenience of NETS with your DBS/POSB Credit Card at more than 70,000 NETS acceptance points. 3. How do I apply for this linkage? You can log into your digibank via internet or mobile banking to apply. You can visit https://www.dbs.com.sg/personal/support/card-application-link-card-to-deposit-account.html for more details. Please allow up to 5 working days for processing. 4. How will I know if the linkage is successful? An SMS or letter will be sent to notify you upon the successful linkage of DBS/POSB current/savings account to your DBS/POSB Credit Card. 5. When I sign for my transactions via American Express®/MasterCard®/Visa on this linked Credit Card, will it be considered as a Credit Card transaction? Yes. When you sign for your transactions with your linked Credit Card, it will be considered a Credit Card transaction. Only when you make NETS transactions, the purchase would be debited from your DBS/POSB current/savings account linked to your DBS/POSB Credit Card.
    [Show full text]