Silk Bank Limited has made a surprise recovery from massive losses to handsome profitability, which stood at Rs. 1.88 billion by the end of July-2020, according to financial results.
The bank closed 2019 with a colossal loss of Rs. 3.9 billion and the first quarter of 2020 with a loss of Rs. 581 million. It made a sharp recovery in the second quarter of 2020 despite the Covid-19 outbreak.
The bank has witnessed a whopping 16 times increase in net profits to Rs 1.88 billion during the first half of 2020, compared to the profits of Rs. 116.8 million in the corresponding period of last year.
The bank’s earning per share stands at 0.21 and its deposits are Rs. 157 billion.
Silk Bank’s progress in 2019 was curtailed due to decline in real estate prices on account of the economic situation of the country. As a result, the bank classified the real estate loans, with a concrete recovery plan in place.
The SBP, during its last inspection, has also identified a security shortfall in the real estate portfolio of the bank. However, the shortfall identified has been more than adequately covered through additional collateral valued by SBP nominated valuators.
The bank expects substantial payment against these loans in 2020, which would make these accounts regular and improve the bottom line of the bank.
Additionally, the board has tasked the management to make efforts to revive the mortgage assets business for further growth in consumer banking. Most importantly, the bank will increasingly emphasize its human capital by strengthening a pay for performance culture and improve the succession planning process.