Standard Chartered Pakistan profit dropped by 4.4 percent to stand at Rs 9.288 billion in 2015 showing the bank’s struggling situation in the industry at times when major and mid-tier banks continued to show profit in the same year.
In 2014, the bank also reported a decline in profits that decreased to Rs 9.72 billion against Rs 10.52 billion recorded in 2013.
This year, the British-based bank’s profit before tax inched up by 1 percent to Rs 15.4 billion in 2015 whereas its revenue income merely increased by 4 percent to Rs 29.4 billion in 2015, with earning per share declined to Rs 2.40 from Rs 2.51.
The bank’s branches network continued to squeeze and now reportedly stand at less than 100 in 11 cities. On the other hand, the bank failed to set up its digital branches in Lahore and Islamabad through which it had been planning to promote its business through digital banking.
Despite of cutting-throat competition in the banking industry and various challenges to banks due to the increase of taxes, the foreign bank seems to have rolled back its operations which is evident its recently sealed deal with Orix Leasing Company.
The bank sold out its 84% percent shares in subsidiary Standard Chartered Leasing Company for its merger with Orix Leasing Company, which caused its divestment of Rs 666 million.
The deal got delayed only to be concluded last month in 2016. If it had been finalized earlier, the bank could have showed profit in the balance sheet. The forthcoming deal of divestment is likely to give SCB some respite in the coming months as stakes of its subsidiary Standard Chartered Modaraba will be sold out to another company.
Standard Chartered Pakistan managed its administrative costs well through operational efficiencies which resulted in a 1% decrease in expenses. In 2015, the bank’s deposits increased by 7 percent to Rs 327.2 billion.
The official statement of the bank on the financial result was:
These results are a testimony of the disciplined execution of the Bank’s strategy of improving profitability and efficiency, strengthening controls and enhancing customer experience.
Commenting on the results, Shazad Dada, Chief Executive, Standard Chartered Bank (Pakistan) Limited, said:
We will continue to be disciplined in cost optimisation and invest much of these savings into the future of our business, especially to further enhance our digital banking capabilities.
We will retain a strong balance sheet which both protects us from any economic volatility and positions us to capture future economic opportunities.