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Asiamoney best bank awards 2018: Pakistan

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Best domestic bank: MCB 

Best corporate and investment bank: HBL

Best international bank: Standard Chartered

Best digital bank: Telenor Bank

Best bank for SMEs: HBL

Best bank for CSR: Allied Bank


Awards winners


Best domestic bank: MCB

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Imran Maqbool, MCB
After years of chasing HBL and United Bank, MCB may be on the verge of becoming Pakistan’s banking leader. In June, MCB formally began its absorption of Pakistan’s 11th biggest bank, NIB Bank, and is reaping the benefits: total deposits jumped 24% to cross PRs1 trillion ($9 billion) for the year, while assets climbed 23% to PRs1.37 trillion.

Now vying with UBL as the country’s second-biggest bank behind long-dominant HBL, MCB is poised to capitalize on HBL’s legal dramas in the US – HBL was fined $225 million by New York regulators for breaching anti-money laundering laws – to vault to top slot in coming years. MCB’s president is Imran Maqbool.

Extra branches are helping. The NIB deal added 170 outlets to bring MCB’s national footprint to a total of 1,433. Taxed profits slipped 1% to PRs22 billion in 2017, putting MCB among the better performers of Pakistan’s big banks.

Chaired by Pakistan’s richest man, Mian Mohammad Mansha, and part-owned by Maybank of Malaysia, MCB was also busy on the investment banking side this year, handling 16 transactions worth a total of $910 million.

Notable deals during the year include the $255 million syndication for Paki-stan Mobile (Mobilink) to expand its 4G network, where MCB was lead arranger and played an advisory role, and its backing of a $150 million syndicated letter of credit for Chinese utility HubCo to build a thermal power station in Balochistan.

Other notable deals include a $125 million loan for local cement producer Cherat to build a clinker plant and underwriting a $42 million listing of the Pakistan Stock Exchange on its own market.

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Best corporate and investment bank: HBL

Already the largest commercial bank in Pakistan, HBL’s main focus in 2017 was to power up its corporate lending business in the domestic market as it fought fires from regulators overseas.

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Rayomond Kotwal, HBL
Focusing on services, fleet financing and IT, HBL increased its commercial lending by 11% as of September 2017, compared to the previous year, and says its lending book has reached PRs50 billion ($450 million). That gives HBL a market share in corporate banking of around 15%.

Last year, HBL was fined $225 million by New York regulators for breaching anti-money laundering laws, a hit which also claimed the scalp of chief executive Nauman Dar.

Its ability to recover from this setback was helped by a solid 18% increase in its wider deposit base to PRs2.02 trillion up until September 2017 from the previous year.

HBL now boasts more than 10 million customers across the country; it banks most of Pakistan’s biggest companies. It has positioned itself to capture business flowing on from the $62 billion China-Pakistan Economic Corridor project, hiring a team of Chinese and local bankers to snare deals. HBL’s acting chief executive is Rayomond Kotwal.

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Best international bank: Standard Chartered

In an admittedly limited field of foreign banks in Pakistan, Shazad Dada’s Standard Chartered Pakistan continues to have few peers. Assets crossed PRs500 billion ($4.5 billion) during the year as pre-tax profits fell 12% to PRs13.5 billion, from PRs15.3 billion. Dada blames this on tighter margins and re-pricing within his investment portfolio, in a “challenging” market.

As margins were squeezed, Dada says he focused on bringing administrative costs down. They were 4% less than last year. On liabilities, StanChart’s total deposits grew 3%, while current and saving accounts grew 1%.

Though HSBC and Barclays, among others, have abandoned Pakistan, StanChart remains a big player in a country that it has been in for more than 150 years. Indeed, with StanChart’s 101-strong branch network and a state-of-the-art mobile platform, Dada sees local banks as his main competitors over internationals.

But for how much longer? Pakistan may have become off-limits for most Western banks, but the Chinese are arriving in numbers, following China-Pakistan Economic Corridor and Belt & Road business generated and financed in Beijing.

This year saw two of the world’s biggest banks – Industrial and Commercial Bank of China and Bank of China, both of which are state-owned – extend their networks in Pakistan, both boasting support from the Pakistan government to do so. Both are rumoured to be looking at local acquisitions.

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Best digital bank: Telenor Bank

It has been a busy year for Telenor Bank, the former Tameer Bank, which has pioneered mobile phone-enabled micro-payments in Pakistan on the Easypaisa platform.

After absorbing Tameer in June, the Norwegian-led Telenor extended what was already the largest footprint of any Pakistani bank to boast an estimated 23 million users across the country.

It then joined hands with Nestlé Pakistan in a unique programme to help Pakistan’s dairy farmers get paid, while providing expansion finance to farmers. That programme promises to be a model for other rural industries.

The bank also pioneered one of the country’s first data-driven digital methods to assess risk and make loans. And as the year drew to a close, Telenor agreed terms with China’s Alibaba group for latter to take a 45% stake in Telenor Bank in a $185 million deal.

The purchase underlines the ever-closer corporate links between Pakistan and China, most notably under the $62 billion China-Pakistan Economic Corridor project. And with 100 million Pakistanis still outside the financial inclusion net, there would appear to be much upside for Telenor after its Alibaba deal.

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Best bank for SMEs: HBL

It’s not just Pakistan’s biggest companies that turn to HBL for help. Over the last year, the bank has benefited from a sharper focus on small and medium-sized enterprises, and in doing so has extended its dominance as Pakistan’s largest SME lender.

Though 2017 was a challenging year, HBL says it managed to achieve its targeted penetration into the small traders segment through its flagship product, HBL Small Business Finance (SBF), identifying fleet expansion financing and lending to educational institutions and agriculture, with a focus on the cotton, rice and flour milling industries.

That resulted in PRs8 billion ($72 million) in new SME business for HBL, and the bank added more than 1,000 new clients across the segment.

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Best bank for CSR: Allied Bank

Allied Bank (ABL) is a quiet achiever in Pakistan’s bank corporate social responsibility efforts. It focuses on distant, low-profile and often-dangerous parts of the country, notably the backward and overlooked region of Balochistan in Pakistan’s remote west.

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Tahir Hassan Qureshi,
Allied Bank
Balochistan is Pakistan’s poorest province, according to the United Nations Development Programme, with some regions showing 96% of the population living on less than $2 a day.

Allied Bank is led by Tahir Hassan Qureshi. In the last year, the bank has promoted financial inclusion programmes for Balochi farmers, while donating computers and education material to neglected schools across the province.

In the Balochi capital Quetta – one of Pakistan’s more dangerous cities, which is battling a long-running Islamist insurgency – the bank has upgraded sports facilities in an effort to rebuild broken communities.

In line with central bank directives on financial inclusion, ABL officers have also fanned out across Balochistan, conducting financial awareness seminars on small and medium-sized enterprises and agriculture financing. In southern Balochistan, the bank has also donated fully equipped ambulances to service struggling district hospitals.

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