BoK’s deposits drop by Rs7b in three months
MD insists bank performing well, no employee forced to quit
PESHAWAR: The Bank of Khyber (BoK)’s total deposits during the January-March quarter in the current year dropped by Rs7 billion.
However, the bank’s managing director Shamsul Qayyum said that the BoK continued to perform well and the deposits dropped only because one of the public sector organisations withdrew its deposits of Rs7 billion from the bank.
The bank’s profits also fell to Rs358 million from Rs604 million during the corresponding period of the last year.Sources told The News that five employees sacked by the board of directors (BoD) of the bank sometimes back had sought meeting with the chief minister to inform him of the situation.
When the coalition government of Awami National Party (ANP) and Pakistan People’s Party (PPP) completed its five-year term in 2013, the network of the bank’s branches was expanded to 77 and it recorded an after-tax profit of Rs1.08 billion and increased its assets base to Rs.82 billion in its 21 years of operation.
The first two years of the incumbent coalition government of Pakistan Tehreek-e-Insaf (PTI), Jamaat-e-Islami and Qaumi Watan Party (QWP) went well and the bank achieved the bench-mark profit of Rs1.15 billion. Its assets increased to Rs108 billion and its network expanded to 100 branches across the country.
However, after the resignation of Sirajul Haq as finance minister and subsequent takeover of the portfolio by his Jamaat-e-Islami colleague Muzaffar Sayyid and appointment of Shamsul Qayyum as managing director, the going for the bank got a bit bumpy.
Shamsul Qayyum took charge of office on October 2, 2014 and a few days later Muzaffar Sayyid also took over as finance minister. The bank management and finance minister haven’t been on cordial terms and have indulged in blame-game.
The bank posted a profit of Rs1.3 billion by the end of 2014 wherein Rs204 million were gained through sale of the bank’s reliable assets such as Pakistan Investment Bonds (PIBs).However, during the period the bank’s administrative expenses rose from Rs1.8 billion to Rs2.42 billion. This was something alarming.
In 2016, it was revealed that the bank earned after-tax profit of Rs2.020 billion.However, the same old technique was adopted and some profit was made through gain on sales of securities.
Moreover, the administrative expenses stood at Rs3.2 billion, the highest in the bank’s history.Till September 2016, the bank had 135 branches, out of which 73 branches were running in loss.
The financial statements indicated that out of its Rs206 billion assets, Rs142 billion were invested in Karachi in government securities, while only Rs32 billion (15 percent of total assets) were given as loans in the country. The share of Khyber Pakhtunkhwa remained less than Rs10 billion.
During the 1st quarter (January-March 2017) of the current year, the bank’s total deposits decreased from Rs157 billion to Rs150 billion and its profits reduced from Rs604 million to Rs358 million.
One of the sacked employees, who declined to speak on record, said senior staffers were being retrenched. At the same time though, he claimed some senior employees of other institutions who have reached the age of superannuation have been appointed on lucrative positions in the bank.
Shamsul Qayyum, however, had another story to tell. About the losses of the branches and inductions in the bank, he said there was nothing alarming about it. He pointed out that by and large new bank branches run in losses for quite some time.
“There are foolproof and merit-based criteria for inductions in the bank,” he said. He added that fresh induction were carried out through NTS, while for employing experienced employees there was also a proper way adopted by all stakeholders on the board.
“No one has ever been forced to leave the bank,” he said. “A number of employees opted for VSS to avail more benefits,” he argued.About the investment in PIBs and other products, he said the banks shift deposits to treasuries for investment and the treasuries then decide to invest it in PIBs or treasury bills, etc.“The province is our main focus when it comes to the lending and opening of new branches of the bank,” he added.