Standard Chartered Bank (Pakistan) Limited has recorded a drop in profits of 17 percent in the first quarter of 2017 when compared with its results last year.
According to official results announcement, the foreign bank made a profit (after tax) of Rs 2.66 billion in the first quarter of 2017 as compared to Rs 3.20 billion profit (after tax) reported in the same period last year – a decrease of Rs 544 million in profitability.
The drop in profits is not just limited to SCB, it is a prevailing trend in the banking industry at large this year.
SCB reported profit (before tax) of Rs 4.10 billion compared to Rs 4.90 billion for the same period last year. Revenue was lower by Rs 942 million primarily due to reduced margins. The impact of margin compression on revenue was partially offset by a stable non-funded income and decreasing cost of funds.
Administrative costs continue to be well managed through operational efficiency and disciplined spending, leading to a 1 percent decrease over Q1 2016. Moreover, strong recoveries of bad debts coupled with lower impairments, led to a net release of Rs 340 million in the current period.
All businesses had positive momentum in client income with strong growth in underlying drivers. This was evident from a pickup in advances, which have grown by 21 percent since the start of this year. This was the result of a targeted strategy to build profitable, high quality and sustainable portfolios. With a diversified client base, the bank is well positioned to cater to the needs of its clients.
On the liabilities side, the bank’s total deposits grew by 3 percent since the start of 2017. The continuous increase in low cost deposits has significantly supported the bank’s performance with current and savings accounts comprising 92 percent of the deposit base.
Commenting on the results Shazad Dada, Chief Executive Standard Chartered Bank (Pakistan) Limited, said,
“These results demonstrate the diversity and resilience of our business. We will continue to make investments in our people and infrastructure to grow safely and capture the business opportunities in the country. Having worked hard to secure our foundations we are now focused on realizing their potential. We are fully committed to delivering sustained growth by consistently focusing on our clients and product suite to bring to them best in class services.”