Bank of Punjab
 | |
| Company type | Public |
|---|---|
| PSX:BOP KSE 100component | |
| Industry | Banking,insurance |
| Founded | 30 October 1989 |
| Headquarters | Lahore-54660,Punjab,Pakistan |
Key people | Zafar Masud(CEO) |
| Products | Credit cards,consumer banking,corporate banking,finance and insurance,investment banking,mortgage loans,private banking,private equity,wealth management |
| Revenue |  Rs.58.663 billion(US$200 million) (2023) |
| Rs.21.218 billion(US$73 million) (2023) | |
| Rs.11.339 billion(US$39 million) (2023) | |
| Total assets | Rs.2.216 trillion(US$7.7 billion) (2023) |
| Total equity | Rs.78.926 billion(US$270 million) (2023) |
Number of employees | 13,659[1](2023) |
| Parent | Government of Punjab, Pakistan(57.5%) |
| Website | bop |
| Footnotes / references Financials as of 31 December 2023[update][1] | |
The Bank of Punjab(Urdu:بینک آف پنجاب) is a Pakistani government-owned bank which is based inLahore,Punjab.It is owned by theGovernment of Punjab, Pakistan.
History
[edit]1989–2000: Initial years
[edit]The Bank of Punjab was founded in October 1989, pursuant to the Bank of Punjab Act 1989, by the provincial government of Punjab under the leadership of then-Chief MinisterNawaz Sharif.[2]The initiative was part of the provincial government's efforts to utilize its financial resources to support local policy objectives during the resurgence of multi-party democracy in the late 1980s.[2]Due to political instability in the early 1990s, the bank's establishment was delayed until 1994, when it received scheduled bank status under Chief MinisterManzoor Wattooand approval from theState Bank of Pakistan.[2][3]
In 1991, the Bank of Punjab was listed on theKarachi Stock Exchange,following an initial public offering.[4]A year later, the bank established First Punjab Modaraba, a wholly owned subsidiary of the bank.[5][6]
2001–2008: Turbulent growth, controversies, and financial crisis
[edit]Between 2002 and 2007, the Bank of Punjab experienced significant growth, with its deposits increasing from Rs24 billion to Rs192 billion, representing anannual growth rateof 51.9 percent, which was substantially higher than the industry average of 18.3 percent.[2]The growth was attributed to the country's economic expansion and the bank's strategic use of high-cost deposits from the private sector for lending to politically connected enterprises.[2]However, the bank's rapid expansion was accompanied by controversies related to imprudentlendingpractices underPervaiz Elahigovernment.[2]One notable case involved Haris Steel, which borrowed Rs 9 billion, significantly exceeding itscredit limitthroughfraudulentmeans and allegedcollusionwith bank officials, including then president of the bank, Hamesh Khan.[2]Khan left Pakistan in 2007 and was laterextraditedfrom the United States to facecorruptioncharges.[2]
The Bank of Punjab faced severe financial challenges in 2008 and was on the verge of bankruptcy, a year marked by the global financial crisis and a political change in Punjab.[2]Shehbaz Sharifassumed the role of Chief Minister in June 2008 and remained in this position until 2018.
For most of 2008, the Bank of Punjab operated without a full-time CEO until Naeemuddin Khan was appointed in September.[2]
2009–present: Bailout, clean-up, and growth
[edit]By this time, the bank's balance sheet had suffered extensive damage, leading to a three-year delay in publishingfinancial statements.[2]During this period, the Punjab government and theState Bank of Pakistannegotiated arrangements to keep the bank operational without declaring bankruptcy.[2]
The Bank of Punjab received substantial taxpayer-fundedbailoutsamounting to Rs20 billion between 2009 and 2010.[2]However, the bank still struggled to publish its financial statements, raising concerns about its stability within the financial sector.[2]The bank also faced marginalization in the interbank lending market ofKIBOR,where it had to offergovernment bondsas collateral to secure loans, indicating a lack of trust from other banks.[2]
In March 2012, the Bank of Punjab disclosed financial statements for the years 2008 to 2011, revealing loan losses of Rs19.2 billion, Rs10.2 billion, and Rs3.3 billion for the respective years.[2]These losses were particularly alarming given that the total loan portfolio prior to the crisis was Rs134 billion.[2]The 2011 financial statements also noted an additional Rs33.1 billion innon-performing loansthat were exempt from provisioning by the State Bank of Pakistan, due to an implicit guarantee from the Punjab government.[2]Ultimately, nearly half (49 percent) of all loans issued by the Bank of Punjab prior to 2008 defaulted, highlighting mismanagement that contributed to the institution's financial crisis.[2]
By the end of 2017, the problematic Rs33.1 billion in bad loans was reduced to Rs14 billion.[2]In the same year, Naeemuddin Khan made the decision to fully absorb the remaining amount within the year, aiming to clean the bank's balance sheet and eliminate doubts about its financial health.[2]As a result of this decision, the bank's financials went from a net profit of Rs4.9 billion in 2016 to a net loss of Rs3.3 billion in 2017.[2]However, this move effectively removed the burden of the problematic loans.[2]
In December 2018, Naeemuddin Khan stepped down from his role as president in December 2018, creating a leadership vacancy that lasted until April 2020.[2]In April 2020,Zafar Masudwas appointed as thepresidentandCEOof the bank by theGovernment of Punjab, Pakistanand later was approved by theState Bank of Pakistan.[7]
In December 2020,Pakistan Stock Exchangedesignated Bank of Punjab amarket makerfordebt securities.[8][9][10]
References
[edit]- ^ab"Bank of Punjab Annual Report 2023"(PDF).bop.pk.Retrieved27 March2024.
- ^abcdefghijklmnopqrstuvwxTirmizi, Farooq (7 November 2020)."The Miracle Man at the Bank of Punjab".Profit by Pakistan Today.
- ^"The Bank of Punjab – Business Recorder".Retrieved31 December2020.
- ^"History of the Bank of Punjab".
- ^"Bank of Punjab posts significant growth in earnings".The Express Tribune.27 October 2018.
- ^MarketScreener (20 February 2020)."First Punjab Modaraba: Board of directors meeting of First Punjab Modaraba | MarketScreener".marketscreener.Retrieved31 December2020.
- ^"Zafar Masud appointed Bank of Punjab President".Pakistan Today.16 April 2020.Retrieved24 May2020.
- ^Ahmed, Ali (18 December 2020)."Bank of Punjab becomes Market Maker for Debt Securities on Pakistan bourse".Brecorder.Retrieved31 December2020.
- ^"Bank of Punjab becomes Market Maker for debt securities on PSX".The Nation.20 December 2020.Retrieved31 December2020.
- ^"Bank of Punjab Becomes Market Maker for Debt Securities on PSX".Daily Times.20 December 2020.Retrieved31 December2020.
External links
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