Karachi January 26 2022: Emirates NBD Bank PJSC, UAE has bought 144,200,144 or 13.01 percent of BankIslami Pakistan Limited from Dubai Bank PJSC UAE, as per company’s filling to the exchange.
The transaction is executed at price of PKR 13.18 per share. The stock gained PKR 0.4 per share or 3.21 percent in today’s trading session at the exchange.
BankIslami Pakistan Limited was incorporated in Pakistan on October 18, 2004 as a public limited company to carry out the business of an Islamic Commercial Bank in accordance with the principles of Islamic Shariah. The State Bank of Pakistan (SBP) granted a ‘Scheduled Islamic Commercial Bank’ license to the Bank on March 18, 2005. The Bank is principally engaged in corporate, commercial, consumer, retail banking and investment activities.
Continuing with the strategy of improving the deposit mix, BankIslami remained focused towards garnering low cost Current and Saving deposits. Resultantly, Current and Saving deposits grew by 15.0% and 17.5% respectively as compared to end of December 2020. Likewise, the Bank also trimmed its high cost Term Deposits which reduced by 3.6% during the same tenor. As a result, Banks’s overall Deposits went up by 9% during nine months ended Sep’21. Comparing the same with the Deposit position at the end of Sep’20, total deposit depicted a growth of 20.7%.
In line with supportive FY22 economic budget, accommodative monetary policy and growth in domestic demand, BankIslami increased its core earning asset base via Islamic financing and investments. On the credit side, the Bank expanded its exposure towards corporate and consumer segments on the back of its robust risk underwriting framework due to which infection ratio of the Bank also improved to 10.7% at Sep’21 vis-à-vis 12.1% at Dec’20. The investment book of the Bank also grew by 12.3% during the same period, as surplus liquidity was parked towards GoP Sukuk to strengthen BankIslami’s Capital Adequacy Ratio which stood at 16.7% at the end of Sep’21 when compared with CAR of 16.1% at the end of Dec’20.
Bank’s Net Spreads Earned narrowed by 18.9% despite growth in CASA deposits and earning assets. This was primarily due to downward repricing on assets consequent to reduction in discount rate during the year 2020. Service based Non Funded Income of the Bank grew by 13.6% owing to continuous growth in Fee and Commission Income stemming from (i) Digital Delivery Channels, (ii) Trade and FI relationships, (iii) Wealth Management segment, and (iv) Consumer Finance services. The Bank also generated one-off capital gain of Rs. 151.6 Mn on sale of its investment in two of its subsidiaries, namely, BIPL Securities Limited and BankIslami Modaraba Investments Limited. Increase in NFI through these channels was partially off-set by decline in FX income and Capital Gains on sale of fixed income securities.
Operating expenses of the Bank rose by 9.1% mainly due to increase in costs on account of inflation and variable cost incurred to support business growth.
As a result of contraction in net spreads following the reduction in Policy rate, the operating profit of the Bank decreased to Rs. 2,652 Mn during 9M’21, but profit before tax increased due to recoveries during the period against previous delinquencies as opposed to net provisioning charged against infected assets during same period last year. Net reversals booked during 9M’21 also includes reversal of provision against advance paid for acquisition of property, amounting to Rs. 722 Mn, as a result of settlement of dispute with a developer and withdrawal of related litigations. This reversal was off-set to some extent on account additional provisioning booked during 9M’21 against non-performing exposures. Consequently, the Bank posted Profit After Tax amounting to Rs. 1,855 Mn for the nine months ended September 30, 2021, depicting a growth of 5.3% from PAT of Rs. 1,762 Mn posted during same period last year.
As at September 30, 2021, total assets of the Group rose by 7.8% when compared with asset base of December 2020. Growth in the financial position of the Group was primarily attributable to growth in Deposits and Earning Assets of the Islamic Banking segment. Owing to reduction in Policy rate and the related repricing of assets and liabilities, net spreads earned by the Group reduced during the nine months ended September 30, 2021. Nonetheless, the Group still reported a Profit After Tax (PAT) of Rs. 1,801 Mn for 9M’21, higher by 12.6% when compared with PAT of Rs. 1,599 Mn for 9M’20. This was mainly due to (i) net reversals booked against non-performing assets; (ii) increase in profit from associated entity and (iii) increase in profits from discontinued operations (held for sale subsidiaries).
During the period ended September 30, 2021, the Group successfully completed the sale transaction of its two subsidiaries which were classified as ‘Non-Current Assets held for sale’, namely, BIPL Securities Limited and BankIslami Modaraba Investments Limited. As a result, these entities have now ceased to be part of the Group.
Emirates NBD Bank PJSC, UAE
Emirates NBD, the leading Banking Group in the MENAT region, was formed on 19 June 1963, when H.H. Late Sheikh Rashid bin Saeed Al Maktoum signed the Charter of Incorporation of the National Bank of Dubai (NBD) which became the first National Bank established in Dubai and the United Arab Emirates (UAE). With the blessings of H.H. Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, NBD merged with Emirates Bank International (EBI) on 06 March 2007, to form Emirates NBD, the largest banking group in the region by assets. On 16 October 2007, the shares of Emirates NBD were officially listed on the Dubai Financial Market (DFM). The merger between EBI and NBD to create Emirates NBD, became a regional consolidation blueprint for the banking and finance sector as it combined the second and fourth largest banks in the UAE to form a banking champion capable of delivering enhanced value across Corporate, Retail, Islamic, Investment, and Private Banking, Global Markets & Treasury, Asset Management and Brokerage operations throughout the region.
As at 30th September 2021, total assets were AED 699 Billion, (equivalent to approx. USD 190 Billion). The acquisition of DenizBank represents a significant milestone for Emirates NBD with the Group expanding its presence to 13 countries, servicing over 14 million customers. The Group is ranked among the top 20 in the Forbes’ list of the World’s Best Regarded Companies, securing a leading spot among global brands.
The Group has a significant retail banking franchise in the UAE and is a key participant in the global digital banking industry with 94% of all financial transactions and requests conducted outside of its branches. The Group also operates E20., a digital business bank for entrepreneurs and SMEs while Liv., the lifestyle digital bank for millennials continued to be the fastest growing retail proposition in the UAE and KSA. Emirates NBD was awarded ‘Best Bank in the UAE’ for a seventh consecutive year, and ‘Best Bank in the Middle East’ by Euromoney Awards for Excellence 2021. In addition, Emirates NBD received the ‘Excellence in Leadership in the Middle East’ award, introduced in 2020 in light of the Covid-19 impact, as a recognition of its efforts in responding to the Covid-19 crisis. Emirates NBD ranked 5th in Forbes’ Top 100 companies in the Middle East for 2021. The Bank is ranked 95th globally in The Banker’s list of the World’s Top 1,000 Banks for 2021. Emirates NBD was named ‘Bank of the Year – UAE 2020’ for the sixth year and ‘Bank of the Year – Middle East 2020’ for the third time by The Banker. In addition, Emirates NBD has been assessed as the ‘Strongest Bank in the UAE’ and ‘Fifth Strongest Bank in the Middle East’ by The Asian Banker 500 Largest and Strongest Banks Rankings.
The Group has operations in the UAE, Egypt, India, Turkey, the Kingdom of Saudi Arabia, Singapore, the United Kingdom, Austria, Germany, Russia and Bahrain and representative offices in China and Indonesia with a total of 906 branches and 4,084 ATMs / SDMs. The Group has a large social media following, being the only bank in the Middle East ranked among the top 20 in the ‘Power 100 Social Media Rankings’, compiled by The Financial Brand for 2019. Emirates NBD Group serves customers, businesses, governments and institutions with a range of financial products and services including retail banking, corporate and institutional banking, Islamic banking, investment banking, private banking, asset management, global markets and treasury, and brokerage operations.
Emirates NBD is an active participant and supporter of the UAE’s main development and community initiatives, in close alignment with the UAE government’s strategies, including financial literacy and advocacy for inclusion of People with Disabilities under its #TogetherLimitless platform. The Group is recognised for the pioneering efforts in employee volunteering and corporate social responsibility by IMPACT2030, the corporate volunteering arm of the United Nations. Emirates NBD Group is a Premier Partner and the Official Banking Partner for Expo 2020 Dubai.
Preservation of the UAE culture and heritage is at the heart of the Group and in addition to supporting various initiatives that aim to preserve the UAE culture, Emirates NBD launched in 2003, the first pearl museum in the region containing the largest collection of natural pearls in the GCC. The Emirates NBD Pearl Museum is a gift from the late Sultan Al Owais, the founder of the National Bank of Dubai to the people of the UAE to remind them of their culture and heritage before the discovery of oil.
Currently, more than 25,000 people, representing more than 70 nationalities, are employed by Emirates NBD, making it one of the largest and most culturally diversified employers in the UAE. As a national banking champion, Emirates NBD is an ambassador of economic and social progress for the entire UAE to the world.
Dubai Bank
Dubai Bank was an Islamic bank based in Dubai, UAE. The bank was launched in September 2002 and transformed into Shari’a-compliant financial institution with on 1 January 2007. Dubai Bank was part of the Dubai Group, a Dubai Holdings company. On 1 December 2012 the bank was acquired by Emirates Islamic Bank.
