Download STANDARD CHARTERED BANK (PAKISTAN) LIMITED

STANDARD CHARTERED BANK (PAKISTAN) LIMITED
DECEMBER 31, 2014
DIRECTORS' REPORT
On behalf of the Board of Directors, I am pleased to present the Directors' Report of Standard
Chartered Bank (Pakistan) Limited (SCBPL) along with the audited financial statements and
auditors' report thereon for the year ended 31'1 December 2014.
Economy
The growth momentum has picked up on lower international oil prices, record-high remittances
and the resumption of the IMF programme. Pakistan's economy posted a 4.1% growth in FY14
vs. 3.7% in FY13 on rising investor confidence, declining inflation and higher FDI inflows. It is
expected that growth will accelerate to 4.5% in FY15 (year ending June 2015) from 4.1% in FY14
on a pick-up in credit to the private sector, declining inflation and an improvement in energy
supply.
Headline inflation declined to 4% by end of 2014- the lowest levels recorded in the last 11 years
on the back of lower energy & food prices. This has given space for the central bank to ease
monetary policy- cutting rates to 9.5% by end of 2014 and then to 8.5% in Jan 2015. This is
positive for private sector credit growth and investment spending. Investor confidence has picked
up with successful conclusion of the fifth IMF staff review in December 2014 and the build up in
FX reserves to above USD 15bn by end of 2014 from USD 8.3bn at end of 2013. The
government successfully re-launched the privatization programme in FY14 after a hiatus of more
than seven years. It raised more than USD 465mn in FY14 by divesting shares in two SOEs.
Pakistan also successfully returned to the international credit markets with the issuance of a USD
2bn Eurobond in April 2014, and the successful USD 1bn Sukuk in December 2014- the first
since 2007. These transactions have put Pakistan back on the radar of global investors.
Banks are well capitalized with CAR of 17.1% and remain profitable with ROE of 16.1%. NPLs of
the banking sector have declined to 12.3% by December 2014, down from 13.3% in December
2013. Higher private sector credit growth and declining NPLs are positive for banking sector
outlook for 2015.
Operating Results and Business Overview
December 31,2014
(PKR millions)
December 31, 2013
(PKR millions)
38,716
60,715
304,504
150,040
128,590
189,678
38,716
55,729
296,557
157,574
135,495
146,687
28,256
12,248
312
15,696
466
15,231
9,725
24,214
8,729
271
15,213
(931)
16,144
10,528
Balance Sheet
Paid-up capital
Total equity
Deposits
Advances - gross
Advances - net
Investments- net
Profit and Loss
Revenue
Administrative expenses
Other non mark-up expenses
Operating profit (before provisions and tax)
Provisions I (reversals) (net of recoveries)
Profit before tax
Profit after tax
The bank has delivered strong operating financial performance with a growth in Revenue of 17%
to PKR 28.3 Billion. Profit before tax (excluding the one off reversal in executive and general
administrative expenses last year) increased by 16% to PKR 15.2 Billion. Tight discipline on
administrative costs and excluding one off reversal last year, the overall costs increased by 4%
despite inflation and continuous investments. Due to strong risk management and prudent credit
expansion loan impairments remained low. The bank continues to maintain high provision
coverage of over 90% against Non-performing loans.
The deposit momentum continues with a growth of around 3% since start of the year with current
and savings accounts now comprising of 92% of the bank's deposit base. This resulted in the
bank having one of the lowest costs of deposits in the industry. The balance sheet remains well
capitalised and highly liquid. The surplus liquidity is deployed in Government securities with a
balanced mix of short and long term securities. As the economy improves focus will be in building
quality customer assets, prudently.
During 2014, the bank contributed around PKR 8.9 Billion to the national exchequer in lieu of
direct income taxes, as an agent of Federal Board of Revenue and on account of FED I provincial
sales taxes.
Considering our long history of presence in Pakistan, we believe in sustained growth by
continuing focus on our clients and customers and a prudent approach to building the balance
sheet.
Outlook
Despite the changing external environment we believe opportunities exist and intend to follow a
prudent growth strategy at the back of the balance sheet strength, effective capital and risk
management practices and unique global capabilities. In line with the strategic priorities, the bank
will continue to focus on deepening client relationships, utilising cross selling opportunities and
further improve customer service and engagement.
Dividend
Final cash dividend of 15% (Rs.1.50/- per share) has been recommended by the Board of
Directors for approval at the Ninth Annual General Meeting of the Bank's shareholders. This is in
addition to 7.50% (Re. 0. 75/- per share) interim cash dividend announced during the year.
External Annual Audit
The financial statements of SCBPL have been audited without any qualification by the auditors of
the Bank, namely KPMG Taseer Hadi & Co., Chartered Accountants.
Credit Rating
Pakistan Credit Rating Agency (PACRA) has maintained the Bank's long-term and short-term
ratings of "AAA" (Triple A) and "A1+" (A One Plus) respectively in 2014. The Bank's outstanding
subordinated TFC has also been assigned "AAA" rating. These ratings denote the lowest
expectation of credit risk emanating from an exceptionally strong capacity for timely payment of
financial commitments.
Sustainability
As the largest International Bank in the country, with 116 branches in 29 cities of Pakistan as of
the year end 2014, Standard Chartered is now truly a part of the social fabric of this country.
Through our sustainability strategy we seek to strengthen relationships between our business,
community, government and customers.
In Pakistan, the Bank's community efforts are focused on education and health. Through our
education programme, the Bank has extended more than 3,586 scholarships to deserving
students and supports institutions of both vocational and higher learning. Through our health
programme "Seeing is Believing", we are contributing to the tackling of avoidable blindness, with
more than 566,600 cataract operations funded to date. In April 2014 we have launched Phase V
of this programme in which we will invest $1 Mn and reach 1 million people - directly and
indirectly- over five years. Under our support to the "Pakistan Urban Pediatrics Eye Care
Programme", we have screened over 1.2 million children since 2011. In recognition of our
contribution for the cause of tackling avoidable blindness, the Government of Pakistan has made
Standard Chartered its official and only corporate partner with presence on both National and
Sindh eye councils of the country.
The Bank also runs a programme called "Living with HIV" to create awareness about HIV and
AIDS. In 2014 our volunteers imparted basic HIV awareness training to over 1,000 people. To
encourage employees to participate in these initiatives and engage with the communities,
Standard Chartered provides three days paid volunteering leave to each member of staff. In
2014, SCBPL employees logged 3,696 volunteering days.
Performance of the Group
In compliance with section 236(5) of the Companies Ordinance, 1984, attached with this report
are the consolidated financial statements of SCBPL and its subsidiaries (the Group) namelyStandard Chartered Leasing Limited, Standard Chartered Services of Pakistan (Private) Limited
and Standard Chartered Modaraba, for the year ended December 31, 2014.
Operating Results
December 31, 2014
(PKR millions)
December 31, 2013
(PKR millions)
38,716
61,900
304,306
150,025
128,575
188,992
38,716
56,952
296,377
168,427
146,239
146,380
28,796
12,497
24,687
8,966
278
15.443
(925)
16,368
10,699
Balance Sheet
Paid-up capital
Total equity
Deposits
Advances - gross
Advances - net
Investments- net
Profit and Loss
Revenue
Administrative expenses
Non mark-up expenses
Operating profit (before provisions and tax)
Provisions I (reversal) (net of recoveries)
Profit before tax
Profit after tax
448
15,851
483
15,368
9,815
Corporate Governance
The directors are pleased to give the following statement as required by clause (xvi) of the Code:
•
The financial statements present fairly the Bank's state of affairs, results of its operations,
cash flows and changes in equity.
•
Proper books of accounts of the Bank have been maintained.
•
Appropriate accounting policies have been consistently applied in the preparation of financial
statements, except for the change in accounting policy as described in note 3. Accounting
estimates are based on reasonable and prudent judgment.
•
The International Financial Reporting Standards and International Accounting Standards as
applicable in Pakistan have been followed in the preparation of financial statements.
•
The system of internal control is sound in design and has been effectively implemented and
monitored.
•
There is no doubt upon the Bank's ability to continue as a going concern.
•
There has been no material departure from the best practices of corporate governance, as
detailed in the listing regulations.
•
Summarized key operating and financial data is tabulated in this Annual Report.
•
Details of Board and its Committees meetings held and attended by the directors/ members
form part of this report.
•
The Directors, CEO, CFO and Company Secretary have confirmed that neither they nor their
spouses are engaged in the business of stock brokerage.
•
Statement of Compliance along with Auditors' Review Report thereon form part of this Annual
Report.
•
All statutory liabilities, if any, have been adequately disclosed in the financial statements.
Statements on Internal Controls and Risk Management Framework
The management of SCBPL is responsible for establishing and maintaining a system of adequate
internal controls and procedures. Management's statements on Internal Controls and Risk
Management Framework form part of this Annual Report.
Directors' Meetings
Seven (07) meetings of the Board of Directors, five (05) meetings of Board Audit Committee and
five (05) meetings of Board Human Resource (HR) and Remuneration Committee were held
during 2014. Attendance by each director/member was as follows:
Sr.
No.
Name of Director
Board of Directors
Meetings
Held
1
2
3
4
5
6
7
8
9
10
1
2
3
Chnstos
Papadopoulos3
3
Mohsin Ali Nathani
Khalid Elgibaly'
Najam Siddiqi
(Acting CEO)
Shazad Dada
Najam I. Chaudhri 2
Parvez Ghias 2&3
Spenta
3
Kandawalla
Raheel Ahmed
Andrew Bainbridge'
Attended'
Board HR &
Board Audit
Committee Meetings
Held
Remuneration
Meetings
Attended'
Held
during
the tenor
in the
during
the tenor
in the
during
the tenor
in the
vear
year
vear
7
6
2
2
2
2
2
7
2
7
5
5
7
7
5
5
7
7
7
7
6
5
5
Attended'
4
1
1
5
2
2
5
5
3
3
5
Leave of absence was granted to the Directors/Members who could not attend some of the meetings
Member of Board Audit Committee
Member of Board HR & Remuneration Committee
Statement of investments of Provident, Gratuity and Pension Funds
Value of investments including accrued income of provident and gratuity funds as at December
31, 2014 on the basis of un-audited accounts is:
PKR '000
Provident Fund
Management Staff Gratuity Fund
1,790,082
1,127,370
1'
Non- Management Staff Gratuity Fund
Management Staff Pension Fund
Non- Management Staff Pension Fund
33,438
42,324
62,603
Changes in Board of Directors
The following changes have taken place in the Board of Directors since the last directors' report:
Mr. Andrew Bainbridge has resigned from his office of Director and Mr. Vinod Ramabhadran has
been appointed in his place to fill the casual vacancy.
The Board places on record its appreciation for the valuable services rendered by Mr. Bainbridge
during his tenure with the Bank.
Pattern of Share holding
The pattern of shareholding as required under section 236(2)(d) of the Companies Ordinance,
1984, and Clause (xvi) of the Code of Corporate Governance forms part of this Annual Report. At
December 31, 2014, Standard Chartered Bank, UK (holding company) held 98.99% shares of
SCBPL.
External Auditors
The Audit Committee has suggested the name of KPMG Taseer Hadi & Co., Chartered
Accountants as external auditors of the Bank for the next term. The Board of Directors, on the
suggestion of Audit Committee recommended the name of retiring auditors KPMG Taseer Hadi &
Co., Chartered Accountants as external auditors for the next term. The retiring auditors, being
eligible, offer themselves for re-appointment in the forthcoming Annual General Meeting
Appreciation and Acknowledgment
We take this opportunity to express our gratitude to our customers and business partners for their
continued support and trust. We offer sincere appreciation to the State Bank of Pakistan for their
guidance and cooperation extended to the Bank. Finally, we are also thankful to our associates,
staff and colleagues for their committed services provided to our valued customers.
On behalf of the Board
Chief Executive Officer
Karachi: March 04, 2015
KPMG Taseer Hadi & Co.
Chartered Accountants
Standard Chartered Bank (Pakistan)
Limited
Unconsolidated Financial Statements
For the year ended
31 December 2014
Auditors' Report to the Members
We have audited the annexed unconsolidated statement of financial position of Standard
Chartered Bank (Pakistan) Limited ("the Bank") as at 3 I December 2014 and the related
unconsolidated profit and loss account, unconsolidated statement of comprehensive income,
unconsolidated cash flow statement and unconsolidated statement of changes in equity together
with the notes forming part thereof(herc-in-after referred to as the 'financial statements') for the
year ended 3 I December 2014, and we state that we have obtained a lithe information and
explanations which, to the best of our knowledge and belief, were necessary for the purposes of
our audit.
. It is the responsibility of the Bank's Board of Directors to establish and maintain a system of
internal control, and prepare and present the financial statements in conformity with the
',approved accounting standards and the requirements of the Banking Companies Ordinance,
1962 (LVII of 1962), and the Companies Ordinance, 1984 (XLVII of 1984). Our responsibility
is to express an opinion on these statements based on our audit.
We conducted our audit in accordance with the International Standards on Auditing as
applicable in Pakistan. These standards require that we plan and perform tile audit to obtain
reasonable assurance about whether the financial statements arc free of any material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting
policies and significant estimates made by management, as well as, evaluating the overall
presentation of the financial statements. We believe that our audit provides a reasonable basis
for our opinion and, after due verification, which in case of loans and advances covered more
than 60% of the tota11oans and advances of the Bank, we report that:
a)
in our opinion, proper books of account have been kept by the Bank as required by the
Companies Ordinance, 1984 (XLVII of 1984);
b)
in our opinion:
i)
the statement of financial position and the related profit and loss account together
with the notes thereon have been drawn up in conformity with the Banking
Companies Ordinance, 1962 (LVII of 1962), and the Companies Ordinance, 1984
(XLVII of 1984), and are in agreement with the books of account and arc rurther in
accordance with the accounting policies consistently applied except for the change
in accounting policy as disclosed in note 3 to the accompanying financial
statements, with which we concur;
ii)
the expenditure incurred during the year was for the purpose of the Bank's business;
and
iii)
the business conducted, investments made and the expenditure incurred during the
year were in accordance with the objects of the Bank and the transactions of the
Bank which have come to our notice have been within the powers of the Bank;
c)
in our opinion and to the best of our information and according to the explanations given
to us, the unconsolidated statement of financial position, unconsolidated profit and loss
account, unconsolidated statement of comprehensive income, unconsolidated cash flow
statement and unconsolidated statement of changes in equity together with the notes
forming part thereof conform with approved accounting standards as applicable in
Pakistan, and give the information required by the Banking Companies Ordinance, 1962
(LVII of 1962), and the Companies Ordinance, 1984 (XLVII of 1984), in the manner so
required and give a true and fair view of the state of the Bank's affairs as at 31 December
2014 and its true balance of profit, its cash flows and its changes in equity for the year
then ended; and
',d)
in our opinion Zakat deductible at source, under the Zakat and Ushr Ordinance, 1980
(XV Ill of 1980), was deducted by the Bank and·dej:>Osited in the Central Zakat Fund
established under section 7 of that Ordinance.·
Date:
Karachi
KPMG Tasccr Iladi & Co.
Chartered Accountants
Muhammad Taufiq
.
. '
"
·,
..
Stan~ard
Chartered Bank (Pakistan) Limited
Un-Consolidated Statement of Financial Position
As at 31 December 20 I -1
Note
2014
2013
(Restated)
(Rupees in '000)
ASSETS
Cash and balances with treasury banks
llalances with other banks
Lcndings to financial institutions
Investments
Advances
Operating fixed assets
Intangible assets
Other assets
4
5
6
7
8
9
10
12
21,475,345
387,301
10,813,559
189,678,370
128,590,059
6,282,553
26,173,114
26,167,582
409,567,883
32,331.083
1.451,558
22,158,840
146,686.716
135.495,032
6,155.222
26,221,917
24,007.580
394,507,948
LIABILITIES
Bills payable
13
1-1
15
16
11
17
5,563,605
17,244,671
304,503,668
2,500,000
2,575,833
16,464,65-1
348,852,431
-·
60,715,452
Share capital
Reserves
Unappropriated pi'Oiit
18
Surplus on revaluation or assets -net or deferred tax
20
38,715,850
8,989,320
6,751 !303
54,456,473
6,258,979
60,715,452
Gorrowings
Deposits and other accounts
Sub-ordinated loans
Deferred tax liabilities- net
Other liabilities
NET ASSETS
-----6,5,10.213
16,566.175
2%.556.99 I
2.500.000
118,753
I(>,4 %. 79'1
338.778.931
55.729.017
------
REPRKSENTED BY:
CONTINGENCIES AND COMMITMENTS
19
38.715,850
7.044.339
6.526.127
52.281>.3 16
3,.142,70 I
------·
5S.729.0 17
=~:....==-=
21
The annexed notes I to 43 and Annexure I form an integral part of these un-consolidated linancial statements.
¥-~{Yli-..\V
\.\.\~~· ·· ,''Chairman
Director
Director
.,
.
,.
)
S-tandard Chartered Bank (Pakistan) Limited
Un-Consolidated Protit and Loss Account
For the year ended 31 December 2014
2013
2014
Note
(Rupees in'OOO)
Mark-up I return I interest earned
Mark-up I return I interest expensed
Net mark-up I 1·cturn/ intc1·cst income
(Provision) I reversal against non-performing loans and advances
Recovery of amounts written off
Provision for diminution in the value of investments
Bad debts written off directly
22
23
8.3&17.2
7.3
8..!.1
30,376,688
(12,047,981)
18,328.707
(489,241)
312,891
(74,151)
(215,344)
1,122,548
332,950
(28·1,833)
(239,868)
_ __,_(4:.:6.::;5,"'-84.:;5:!...) _ _.:_:9J' 0. 797
20,397,381
19,259,504
Net mark-up I return I interest income after provisions
C,
34,105,789
(13,242,563)
20,863,22(,
NON MARK-lJI' I NON INTEREST INCOME
Fees, commission and brokerage income
Dividend income
Income from dealing in foreign currencies
.3,300,165
84,204
2,908,748
727,267
Gain on sale of securities- net
3.027.008
76,817
2,551.310
732,486
Unrealized gain on revaluation of investments
classified as held for trading
Other income
7.111
25
Total non mark-up I non interest income
10,978
(513,643)
54,460
318,029
7,392,873
27,790,254
25.144.460
(12,247,951)
(8,729,42~)
-
NON MARI<-lJI' I NON INTEREST !eXPENSES
Administrative expenses
Other reversals I (provisions) I Asset writc-offs
Other charges
26
27
28
60,434
(311,740)
(12,559,691)
15,230,563
Totnl non mark-up /non interest expenses
Extra-ordinary I unusual items
PROFIT BEFORE TAXATION
-::-:-::-::-::-::-:::15,230,563
(331.294)
(9,000,28~l
16.144,180
------·
16,1 <14.180
'\
Taxation - current
- prior years'
-deferred
(4,255,131)
(187,'194)
(1,062,5~~
]9
---"-(5:!:,5:.::05,660)
PROFIT AFTER TAXATION
(Rupees)
BASIC I DILUTED EARNINGS P!-:R SHARE
311
2.51
!..7'2
The annexed notes I to 43 and Annexure I form an integral part of these un-consolidated Jinancial statements.
______,
""-\\"--Director
Dirc<.'to1·
Standard Chartered Bank (Pakistan) Limited
Un-Consolidated Statement of Comprehensive Income
For the year ended 31 December 20 J.l
2013
2014
(Rupees in '000)
9,724,903
Profit after tax for the year
I 0,528,013
Other comprehensive income
Items that will never be reclassified to profit or loss
subsequently
Remeasurement of post employment obligations
Related tax charge
(27,097)
9,484
(17,613)
3,023
(1,058)
1,965
9,726,868
Comprehensive income transferred to equity
I 0,510,400
Components of comprehensive income not reflected in equity
Surplus I (deficit) on revaluation of available for sale securities
Related tax charge
· ·" :·
3,834,308
(1,342,007)
2,492,301
Sl!rplus on revaluation of operating fixed assets
Related tax charge
(554,925)
194,223
(360,702)
380,110
(51,480)
328,630
Total comprehensive income for the year
12,547,799
I 0,149.698
\
The annexed notes I to 43 and Annexure I form an integral part of these un-consolidated financial statements.
~'~"'"'v
Chairman
-
Director
Director
Standard Chartered Bank (Pakistan) Limited
Un-Consolidated Cash Flow Statement
For the year ended 31 December 2014
Nole
'CASH FLOW FR01\I OPERATING ACTIVITIES
Prolit.bcforc taxation
Less: Dividend income
. Adjustments for:
Depreciation
Amortization
Gain on disposal of lixcd assets~ net
Unrealized gain on revaluation of investments classified as held for trm.ling- net
Asset writc-oiTs I other provisions I (reversals)
Provision for diminution in the value of investments
Provision I {rcvcrsabi) <~gains\ non-performing loans and advances- net of recoveries
16.144.180
(76.817)
16.0()7.363
478,888
48,803
(12,366)
(54,460)
493,372
52.116
(163.496)
(111.978)
(60.'134)
284.833
c__i_l:21"~
(620.217)
15.'147.1<16
t t,345,2SI
(7,100,324)
6,513,279
(2,381,823)
8,376,4 tJ
Increase I (decrease) in operating liuhilitie~
Bills payable
Borrowings from linand<JI institutions
Depo~its and other accounts
Other liabilities
innow before
15,2311,563
(84,2114)
15,146,359
74,151
391,694
926,7111
16,1173,069
(Increase) I dec reuse in operating assets
Lcndings to financial institutions
Net investments in 'held for trading' securities
Advances
Other assets (cxdmling ild\'ancc taxation)
ca~h
2013
2014
(Rupees in '000)
(976,608)
678,4%
7,94(1,(,77
714,512
8,363,077
32,812.559
ta~atiuu
(2.313.571)
2.704.327
9(J<I.7·13
(5.310.412)
'
(4,014,f)\_l)
[
375.346
{6.833.21·1)
29,SS6,930
13.783.783)
llJ.M5.279
31.077.512
(4,218,281)
28,59·1,278
(3.S:iO.W7)
27.227.115
CASII FLOW FROJ\1 INVESTING ACTIVITIES
Net investments in '<~vailahlc !Or sale' securities
Dividend income received
Net investment in lixed assets (including intangible assets)
Sale proceeds on disposal of operating lixetl assets
i\et cash used in invc~tin~ activities
(32,1176,713)
84,2114
(228,364)
1-1,(,21
(32.2116.2>2)
(18.243.633)
76.S\7
CASH FLOW FROJ\1 FINANCING ACTIVITIES
Repayment of sub-ordinated Term Finance Ccnificates
Dividend paid
Net cash used in financing :1ctivitics
Decrease in cash and c:1~h equivalents fo•· the year
(8,308.1121)
(8,308,1121)
(11,919,995)
Income tax paid
Net cnsh generated from operating acti\•ities
Cash and cash cquJvalcnt~ at beginning or the year
Cnsh :md cnsh eq••iv:~lcnts <1\ end of the yem
31
CASH ANI> C1\SII EQlii\'.\LENTS AT TilE END OF TilE YEAR
Cash and bnlances with treasury banks
Balnnces with other banks
33,7H2,6·11
21,862,6-16
21,475,345
387.3!11
21,862,6·16
(509569)
335.32.(,
~0.00{))1
,J:~~l
- · (S.95·1A2Sl
(61-: ..172)
33.851.\JIJ
------n:iX-2~
32.33 1.083
IA:iU58
33.7S2.MJ
The annexed notes I to •13 and Annexure !fOrm an integral part of' these un-consolidated Jinaneia/ slatcmcnts.
Director
Director
Standard Chm1crcd Bank (Pakistan) Limited
Un~Consolidatcd
Statement of Changes in Equity
hwtlu? p.:11r t'mh•l/31 IJN.:I!mlwr 201-1
Share
Share
Statuto\)'
Capitnl
Premium
HcserYe
UnaJlpropl'iatcd
Profit (ll)
Tot:ll
---------------(Rupees in '000)-------------------1,036,090
38,715,850
Balance as at J I December 2012
3,902,646
6,676,380
50,330,966
10,52S,Ol3
10,52S,OJJ
JSI)NS
151)N5
Tutal Comprehensive income for the year
l'1olit allcr tax for the year ended J I December 20 IJ
Smplus on rcvalm;tion of assets -net of tax
Other Comprchcnsi\"c income
( 17 ,613)
10,662,21)5
Hcmc;Jsurcmcnt of post employment obligations -net oftax
{17,hlJ)
\O,M•2,2'J5
Trans;Jctions with owners, rcconlctl directly in cctuily
Shmc based payment transactions (Contribution from holding Company)
Payl!lcnl ag01inst share based payment transactions {to holding Company)
2,105,603
Transfer 1o statutory reserve
(2,105,603)
Cash tlividcnd (Final2012) at Rs. 1.25 per share
(4,839,.181)
(4,S39,4Sl)
Cn~h
(3,871,585)
(.1.871 .585)
dividend (Interim 2013) at Rc. I per sh:uc
'frans!Cn·cd from surplus on revaluation of
fixed asset - net of tax
B~1lancc
:1s at 31 Decem her 2013
1,U36,090
38,715,850
6,008,249
5,357
5,357
6,52(,,127
5!,21%,316
Tnt:1l Colll]lrehensivc income for the year
Pmlit al1cr ta.'< lOr the year ended .31 December 201 11
DOD
Suqllus on rcvahmtinn of assets - net of Ia:'(
Other Comprehensive income
Remcasurement of post employment obligations - net of tax
Transactions \\ith uwners, recorded directly in e!JUity
?,72-l,?UJ
""
),72-l,?UJ
1
3-111
1,%5
1,%5
?,7-7,2US
'~.727,2U8
670,15(1
6711,156
'
Shan.: b01sed paymcm tmnsactions (Contribution frmll holding Company)
Pnymcnt against share based payment trans01c1ions (to holding Company)
Reversal ofliabiltty 01gainst share based paymrnt to holdit1g company
frausfcr to statutory ro.:scrvc
1,9-l-1,981
(1,9-I-I,?SI)
C1sh dividend (Fnwl 201.3) 011 Rs. I A per share
(5,-120.219)
(5,-120,219)
Cash dividend (huerim 201•1) at Rs. 0.75 per slmrc
(2, 9tl3,(o8?)
(2,'JliJ,(Il>j'))
Tran$fetTed from surplus on revalu:~tion of fixed asset- net of dcferTcd tax
ll:•hwcc :1-; nt31 December 2014
38 715 850
1 03Ci 1190
7 953 230
(i
-I,JIJ
-I ..HJ
751 31l3
5-I -15(, -173
(a) As fm1hcr explained in note 8.2.1 of these un-consolidated linaneia\ statements the :~mount of Rs. 694.766 million as :11 31 December 2014 repres~:nts mhlitimml prulit arismg
fr01u avmling forced sale vah1e benclit for dctcnuining provisionin~,.: requirement which is not available for the puqmsc of distrihutio11 of divitlcnd to slmrchul!lcrs f hnnus tn
elll[llnyccs.
The anuc.o;ed notes Ito <13 and Annexure I fonn an integral par1 of these
un·cousolid:~tcd linanci:~l
statements.
~\.~~
Chuirnwn
-
Director
!Jil'l'C{UI'
Standard Chartered Bank (Pakistan) Limited
Notes to the Un-Consolidated Financial Statements
As at 31 December 20 1·1
I.
STATUS AND NATURE OF BUSINESS
Standard Chartered Bank (Pakistan) Limited ("the Bank") was incorporated in Pakistan on 19 July 2006 and was
granted approval for commencement of banking business by State Bank of Pakistan, with effect from 30 December
2006. The ultimate holding company of the Bank is Standard Chartered PLC, incorporated in England. The registered
office is at Standard Chartered Uank Building, I. I. Chundrigar Road, Karachi.
The Bank commenced formal operations on 30 December 2006 through amalgamation of entire undertaking of Union
Bank Limited and the business carried on by the branches in Pakistan of Standard Chartered Bank, a bank incorporated
by Royal Charter and existing under the laws of England. The scheme of amalgamation was sanctioned by State l3ank of
Pakistan vide its order dated 4 December 2006. The Bank's shares arc listed on all stock exchanges in Pakistan.
The Bank is engaged in the banking business as defined in the Banking Companies Ordinance, 1962 and has
number of 116 branches in Pakistan (20 13: 116 branches in Pakistan) in operation at 31 December 2014.
:.1
total
Standard Chartered Bank (Pakistan) Limited has the following three subsidiaries. All of them arc incorponHcd in
Pakistan.
•
•
•
Standard Chartered Leasing Limited
Standard Chartered Modaraba
Standard Chartered Services of Pakistan (Private) Limited
During the year, the management of the Standard Chartered Bank Pakistan has decided to divest its shareholdings in its
subsidiaries and accordingly, this investment has been classified separately as investment in subsidiaries held ror sale as
per IFRS-5 'Non-Current Assets Held for Sale and Discontinued Operations'. (Refer Note 7.I I).
These financial statements arc separate financial statements of the Bank. Consolidated financial statements arc
presented scpar:.ltcly.
2.
BASIS OF PREPARATION
2.1
Basis of prcscntntion
In accordance with the directives of the Federal Government regarding the shifting or the banking system to Islamic
' , ·modes, the State Bank of Pakistan has issued various circulars from time to time. One pcnnissiblc form of trade related
mode of financing comprises of purchase of goods by the 13ank from its customers and immediate resale to them at
appropriate mark-up in price on deferred payment basis. The purchases and sales arising under these arrangements arc
not renectcd in these financial statements as such but arc restricted to the amount of l'acility actually utilised and the
appropriate portion of mark-up thereon.
The financial results of the Islamic banking branches have been consolidated in these financial statements for reporting
purposes. Key financial figures of the Islamic banking branches arc disclosed in note 41 to these financial statements.
2.2
St:ttcmcnt nf compliance
These financial statements have been prepared in accordance with approved accounting standards as applicable in
Pakistan. Approved accounting standards comprise of' such International Financial Reporting Standards (I FRS) issued
by the International Accounting Standards Board (IASB) and Islamic Financial Accounting St;mdards (IFAS) issued hy
the Institute or Chartered Accountants of Pakistan (ICAP) as arc notified under the Companies Ordinance. 198·1.
provisions of and directives issued under the Companies Ordinance, 1984 and Banking Companies Ordinance, 196:?. and
the directives issued by State Bank of Pakistan. In case the requirements difrcr, the provisions of and directives issued
under the Companies Ordinance, 1984 and Banking Companies Ordinance, 1962 and the directives issued by the State
Bank of Pakistan shall prevail.
The Securities and Exchange Commission of Pakistan has approved and notified the adoption of International
Accounting Standard 39, 'Financial Instruments: Recognition and Measurement' (lAS 39) and International Accounting
Standard 40, 'Investment Property' (lAS 40). The requirements of these standards have not been followed in the
preparation of these financial statements as the State Bank of Pakistan has deferred the implementation of these
standards for banks in Pakistan till further instructions. However, investments have been classified and valued in
accordance with the requirements of various circulars issued by the State Bank of Pakistan.
2.3
Basis of measurement
These finuncial statements have been prepared under the historical cost convention, except that certain avaih1blc for
sale, trading and derivative financial instruments have been measured at fair value, whereas ccrtnin fixed :.1sscts arc
stated at revalued amounts less accumulated depreciation and accumulated impairment losses, where applicable.
2.4
'Usc ofcstinmtes and judgments
The preparation of financial statements in conformity with approved accounting standards requires management to
make judgments, estimates and assumptions that effect the application of accounting policies and reported amounts of
assets, liabilities, income and expenses. Actual results may differ from these estimates. The estimates and underlying
assumptions arc reviewed on an ongoing basis. Revisions to accounting estimates arc recognised in the period in which
the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the
revision aff'ccts both current and future periods.
In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting
policies that have the most significant effect on the amounts recognised in the financial statements arc described in the
following:
-Note 7
-Note 8.3
-Notc9& 10
-Note 9 & 10
-Note II
-Note 21.7
-Note 29
-Note .13
2.5
Classification and provisioning against investments
Classification and provisioning against non-performing advances
Valuation and depreciation I amortisation rates for fixed I intangible assets
Impairment of non-financial assets including goodwill and other intangibles.
Deferred taxation
Derivative instruments
Income taxes
Employees' retirement defined benefit plans
Functional :md presentation currency
These financial statements arc presented in Pakistan Rupees, which is the Bank's functional currency. Except as
indicated, financial information presented in Pakistan Rupees has been rounded to the nearest thousand.
3.
SUMMAR\' OF SIGNIFICANT ACCOUNTING I'OLICIES
The principal accounting policies applied in the preparation of these financial statements arc set out below. These
policies have been applied consistently to all years presented except for the change in accounting policy relating to
acceptances. Previously, acceptances were classified as 'on balance sheet' in line with the SCB group policy in 'other
assets' :.md 'other liabilities' appearing in the Balance sheet or the Bank. 1\owcver, during the year, the Uank has
reclassified these acceptances to Contingencies and Commitments as is required by BSD C'ircul;u· 4 of 2000. The
comparative ligures ror such acceptances have been restated to rcllcct such change.
3.1
Business al·quisilions
Acquisitions.fi·om C!nlilies under common control
Business combinations arising f'rom transfers of interests in entities that arc under the control or the shareholder that
controls the Group arc accounted for as if the acquisition had occurred at the beginning of the cm·iiest comparative
period presented. For this purpose comparatives arc restated, where required. The assets and liabilities acquired arc
recognised at the carrying amounts recognised previously in the combining entity's financial statements.
Other acquisitions
Other business combinations arc accounted for using the acquisition method. For acquisition prior to I January 2009,
the cost of acquisition is measured as the fair value of the asset given, equity instruments issued and the liabilities
incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Idcntilicd assets acquired
arc fair valued at the acquisition date, irrespective of the extent of any non-controlling interest. The excess of cost of
acquisition over the fair value of identifiable net assets acquired is recorded as goodwill. Subsequently, any recoveries
or losses to fair value of net assets are taken to profit and loss account and disclosed in note 25 to these financial
statements.
,. 3.2
·,Cash and cash equivalents
For the purposes of cash flow statement, cash and cash equivalents comprise of cash and balances with treasury banks
and balances with other banks.
3.3
Investments
The Bank classifies its investments as follows:
a) 1/eld.forlrculing
These arc securities, which arc acquired with the intention to trade by taking advantage of short term market I interest
rate movements and arc carried at market value. The surplus I deficit arising as a result of revaluation at market value is
recognised in the profit and loss account. These securities arc to be sold within 90 days from the date of their
classification as 'Held for trading' under normal circumstances, in accordance with the requirements specified by BSD
Circular I0 dated 13 July 2004 issued by the State Bank of Pakistan. Market value of investment in Government
securities is determined based on the relevant PKRV and PKJSRV rates.
b) field to malurily
These arc securities with lixcd or determinable payments and fixed maturity that arc held with the intention and ability
to hold to maturity. These arc carried at amortised cost.
c) Availahle.fcn· sale
These arc investments that do not fall under the held for trading or held to maturity categories <md nrc carried at market
value. The surplus I deficit arising as a result of revaluation at market value is kept in a separate account below equity.
Market value of investment in Government securities is determined based on the relevant PKRV and PKISRV rates.
d) Subsidiaries
Investments in subsidiaries arc carried at cost less impairment in value, if any.
All 'regular way' purchases and sales of investments arc recognised on the trade date i.e. the date that the bank commits
to purchnse or sell the asset. Regular way purchases or sales arc purchases or sales of investments that require delivery
of assets within the time frame generally established by regulation or convention in the market place.
lmpairmenl
Impairment loss in respect of equity securities classified as available for sale and subsidinrics is recognised based on
management's assessment of objective evidence of impairment as a result of one or more events that may have an
impact on the estimated future cash news of the investments. A significant or prolonged decline in fair value of an
equity investment below its cost is also considered an objective evidence of impairment. Provision for diminution in the
value of debt securities is made as per the Prudential Regulations issued by the State l3ank or Pakistan. In case of
impairment of available for sale securities, the cumulative loss that has been recognised directly in surplus I (deficit) on
revaluation of securities on the statement of financial position below equity is removed there from and recognised in the
profit and loss account. For investments in subsidiaries, the impairment loss is recognised in the profit and loss account.
3.4
Sale and repurchase agreements
Securities sold subject to repurchase agreements ('rcpos') remain on the balance sheet; the countcrparty liability is
included in borrowings from financial institutions. Securities purchased under agreements to resell ('reverse rcpos') arc
recorded as !endings to financial institutions. The difference between sale and repurchase price is treated as interest/
mark~up I return and accrued over the life of the underlying agreement using the effective interest method.
3.5
Advnnces
Advances arc stated net of provision against non-performing advances. Specific and general provisions arc made based
on an appraisal of the Joan portfolio that takes into account Prudential Regulations issued by the State Bank of Pakistan
from time to time. Specific provisions are made where the repayment of identified loans is in doubt and reflect an
estimate of the amount of loss expected. The general provision is for the inherent risk of losses which, although not
separately identi lied, arc known from experience to be present in any loan portfolio. Provision made I reversed during
the year is charged to the profit and loss account and accumulated provision is netted off against advances. Advances
arc written-off when there is no realistic prospect of recovery.
When the Bank is the lessor in a lease agreement that transfers substantially all of the risks and rewards incidental to
ownership of an asset to the Jessee, the arrangement is presented within loans and advances.
Murabaha financings are reflected as receivables at the sale price. Actual sale and purchase is not reflected as the goods
Hre purchased by the customer as agent of the Bank and all documents relating to purchase arc in customer's name.
Funds disbursed under Murabalm financing arrangements for purchase of goods are recorded as Advance Against
Mmabaha.
In Diminishing Musharaka based financing, the Bank enters into a Musharaka based on Shirkat-ul-milk for financing an
agreed share or fixed asset (e.g. house, land, plant or machinery) with its customers and enters into a pel'iodic rental
payment agreement for the utilization of the Bank's Musharaka share by the customer.
Assets under ljarah arrangements arc stated at cost less accumulated depreciation and accumulated imp;:drmcnt losses, if
any. Assets under ljarah are depreciated over the term of the lease.
3.6
Opcruting lixcd assets- tangible
Owned
Operating fixed assets, other than land and buildings, arc stated at cost less accumulated depreciation and accumulntcd
impairment losses thereon. Cost includes expenditure that is directly att1·ibutable to the acquisition of lixcd <tssets. Land
and buildings arc stated at revalued amounts less accumulated depreciation.
Subsequent costs me included in the asset's carrying amount or arc recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Bank and the cost of the item
can be measured reliably. All other repairs and maintenance expenditures arc charged to profit and loss account during
the financial period in which they are incurred.
Land and buildings are revalued by independent professionally qualified valucr(s). Surplus arising on revaluation is
credited to the 'surplus on revaluation of fixed assets' account (net of deferred tax). Under the provisions of the
Companies Ordinance, 1984, deficit arising on revaluation of fixed assets is adjusted against the balance in the abovementioned surplus account. The revaluation is carried out with sufficient regularity to ensure that the carrying amount
docs not differ materially from that which would have been determined using fair value at the balance sheet date.
Accumulated depreciation on owned buildings, at the date or revaluation, is eliminated against the gross carrying
amount of' buildings. The net amount is then restated to the revalued amount.
Surplus on revaluation of fixed assets (net of deferred tax) is transferred to unappropriated profit to the extent of
incremental depreciation charged on related assets.
Land is not depreciated. Depreciation on all other rixcd assets is calculated using the straight line method to allocate
their depreciable cost or revalued amount to their residual values over their estimated useful lives.
The residual values and useful lives of fixed assets arc reviewed, and adjusted (if appropriate) at each balance sheet
date.
Gains and losses on disposal of fixed assets arc included in profit and loss account currently, except that the related
surplus on revaluation of fixed assets (net of tax) is transferred directly to unappropriated profits.
Leased
Fixed assets held under finance lease arc stated at the lower of fair value of asset and present value of minimum lease
payments at the inception of lease, less accumulated depreciation. Financial charges arc allocated over the period of
lease term so as to provide a constant periodic rate of financial charge on the outstanding liability. Depreciation is
charged on the basis similar to owned assets.
3.7
Intangible assets
Goodwill
Goodwill reJwescnts the excess of cost of an acquJSJtlon over the fair value of the share of net identifiable assets
acquired at the d<itC of acquisition. Goodwill is tested annually for impairment and carried at cost less accumulated
impairment.
Computer sq/iware
Acquired computer software licenses arc capitalised on the basis of costs incurred to acquire and bring to usc the
specific sol\ ware. These costs arc amortised over their expected useful lives using the straight line method.
Acquired intangihles in business combination
Acquired intangibles in business combination that have finite lives arc amortised over their economic useful life based
on the manner that benefits of the relevant assets arc consumed.
3.8
Impairment of nonwfinnncial assets
The carrying amounts of the Dank's non-financial assets, other than deferred tax assets, arc reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indic<ttion exists then the asset's
recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset or its cashgenerating unit exceeds its recoverable amount.
The recoverable amount of an asset or cash-generating unit is the greater of its value in usc and its fair value less costs
to sell. In assessing value in usc, the cstimntcd pre-tax future cash Oows arc discounted to their present value using a pre·
tax discount rate that reflects current market assessments of the time value of money and the risks speci lie to the asscl.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in
prior periods arc assessed at each reporting date for any indications that the loss has decreased or no longer exists. An
impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.
3.9
Staff retirement benefits
Defined bene.fit plan
The Bank operates approved funded pension and gratuity schemes for all its non-management employees, and a
management pension scheme only for its existing pensioners.
For defined benefit plans, the net defined benefit liability /asset recognised in the balance sheet is the deficit or surplus,
adjusted for any effect of limiting a net defined benefit asset to the asset ceiling. The deficit or surph1s is:
(a) the present value of the defined benefit obligation less
(b) the fair value of plan assets (if any).
The present value of defined benefit obligation is calculated annually by independent actumies by discounting the
estimated future cash flows using an interest rate equal to the yield on high-quality corporate bonds.
Actuarial g<~ins or losses that m·isc arc recognised in other comprehensive income in the period they arise. Service cost
and Net interest on net defined benefit liability I (asset) arc also recognised in profit and loss account.
Defined contrihution plan
The Bank also operates a defined contribution gratuity scheme lOr all its management staff, and a provident fund
scheme lOr all its permanent staff, contributing at 8.33 percent and 10 percent of basic salary respectively.
3.10
Foreign currency transactions
Transactions in foreign currencies arc translated to Pakistan Rupees at exchange rates prevailing at the date of
transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date arc retranslated to
Pakistan Rupees at the exchange rate prevailing at that reporting date. Foreign currency differences arising on
rctranslation arc recognised in profit or loss.
3.11
Taxation
Income tax expense comprises of current and deferred tax. Income tax expense is recognised in the profit and Joss
account except to the extent that it relates to items recognised directly in equity or in other comprehensive income.
Current tax
Current tax is the expected tax payable on the taxable income for the year (using tax rates enacted or substantively
enacted at the balcmcc sheet date), and any adjustment to tax payable in respect of previous years.
Deferred tax
Deferred tax is provided for using the balance sheet method, providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. DeiCrrcd
, tax is not recognised on temporary differences relating to: (i) the initial recognition of goodwill; (ii) the initial
'recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting
nor taxable profit: ;md (iii) differences relating to investments in subsidiaries to the extent that they probably will not
reverse in the foreseeable future.
Deferred tax is measured at tax rates that arc expected to be applied to the temporary differences when they reverse,
based on the laws that have been enacted or substantively enacted by the reporting date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available
against which the asset can be utilised. Deferred tax assets arc reviewed at each reporting date and arc reduced to the
extent that it is no longer probable that the related tax benefit will be realised.
3.12
Revenue rcl·ognition
Mark-up I return on advances and investments is recognised on an accrual basis using the effective interest rate method.
The effective interest rate is the rate that exactly discounts the cstimatt:d future cash payments and receipts through the
expected life of the financial asset or liability (or, where appropriate, a shorter period) to the carrying amount of the
financial asset or liability.
Mark-up recoverable on classified loans, advances and investments is recognised on a receipt has is in accord:mcc with
the requin:ments of Prudential Regulations issued by the State 13ank of Pakistan. Mark~up on rescheduled I restructured
loans, advances and investments is also recognised in accordance with the requirements of these Prudential Regulations.
Where debt securities arc purchased at a premium or discount, those premiums I discounts arc amortized through profit
and loss account over the rcmnining maturity, using the Effective Yield Method.
Fees and commission income arc generally recognised on an accrual basis when the service has been provided. Fees and
com111ission which in substance amount to an additional interest charge, arc recognised over the liiC of' the underlying
transaction on a level yield basis.
Dividend income is recognised when the right to receive income is established.
The cost from award credits for loyalty points earned on usc of various products of the Bank is measured by reference to
their fair value and is recognised when award credits arc redeemed.
Murabaha transactions are reflected as receivable at sale price. Actual sale and purchase arc not reflected as the goods
. arc purchased by the customer as agent of the Bank. Profit on the sales revenue not due for payment is deferred by
recording a credit to 'Deferred Murabaha Income' account.
' ljarah rentals me recognised as income over the term of the contract net of depreciation expense relating to the ljarah
assets.
3.13
Derivative financial instruments
Derivative financial instruments are initially recognised at fair value and arc subsequently remcasurcd at fair value. All
derivative financial instruments arc carried as assets when fair value is positive and liabilities when fair value is
negative. Any change in the fair value of derivative financial instruments is taken to profit and loss account.
3.14
Provisions
Provisions for restructuring costs and legal claims arc recognised when: (i) the Bank has a present legal or constructive
obligation as a result of past events; (ii) it is more likely than not that an outflow of resources will be required to settle
the obligation; and (iii) the amount has been reliably estimated.
3.15
Fiduciary
:u~tivitics
The Bank commonly acts in fiduciary capacities that result in the holding or placing of assets on bchal f of individunls,
trusts, retirement benefit plans and other institutions for which it earns a fcc. These assets and its related income arising
thereon arc excluded from these financial statements, as they arc not assets of the Bank.
3.16
Segment reporting
A segment is a distinguishable component of the Bank that is engaged either in providing products or services (business
segment), or in providing products or services within a particular economic environment (geographical segment), which
is subject to risks and rewards that are different from those of other segments. The Bank's primary format for segment
reporting is based on business segments. A brief description of the products and services offered by different segments
of the Bank is given in note 37 to these financial statements.
3.17
Offsetting
Financial assets and liabilities arc set off and the net amount presented in the balance sheet when, and only when, the
Bank has a legal right to set off the amounts and intends either to settle on a net basis or to realise the asset and settle the
liability simultaneously.
3.18
Subordin:ttcd liabilities
Subordinated liabilities are initially measured at fair value plus transaction costs, and subsequently measured at their
amortised cost using the effective interest method.
3.19
Non-current :tssets and disposal groups held for sale
Non-current assets and disposal groups comprising of assets and liabilities that are expected to be recovered primarily
through sale rather than continuing usc arc classified as held for sale. Immediately before being classified as held for
sale, the assets and components of disposal group arc rcmcasured in accordance with the 11ank's accounting policies.
Thereafter, the assets and disposal group arc measured at the lower of their carrying values and fair values less cost to
sell.
During the year, the management of the Bank has decided to divest its sharcholdings in its subsidiaries and consider
them as disposal group held for sale. In this regard, efforts to sell the same have been initiated. The management is
committed to the divestment and accordingly, these investments arc classified as held for sale (Refer note 7.11 }.
·'
3.20
Sharc~bascd
compensation
The Group operates various share-based compcnsntion plans which arc accounted fm as equity sctllcd share bnscd
payment transactions, regardless of inter group repayment arrangements. The cost for such share based payment
transactions is determined by reference to the fair value of options at the grant date. The fair value is determined based
on the market price or using an appropriate valuation technique. The cost is charged to profit and loss account and
credited to equity as a contribution from parent. The liability for these transactions which is based on the fair valm:
or
these options at the settlement date is settled through debiting equity.
3.21
Acceptances
J\cccptanccs comprise undertakings by the Bank to pay bills of exchange drawn on customers. The Bank expects most
acceptances to bl: simultaneously settled with the reimbursement from the customers. Al:l:cptanees an: act:ounled !"or as
off~balancc sheet transactions.
3.22
Basic mtd diluted eHrnings per share
The Bank presents basic and diluted earnings per share (EPS) for its shareholders. Basic EPS is calculated by dividing
the profit or loss attributable to ordinary shareholders of the Bank by the weighted average number of ordinary shares
outstanding during the period I year. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary
shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutivc potl!ntial
ordinary share.<>, if any. There were no convertible dilutive potential ordinary shares in issue at J I December 2014.
3.23
Dividend ttnd appropriution to reserves
Dividend and appropriation to reserves, except appropriation which arc required by law after the balance sheet date, arc
recognised as liability in the Bank's financial statements in the year in which these arc approved.
3.24
Borrowings I deposits and their cost
Borrowings I deposits arc recorded at the time when the proceeds arc received.
Borrowing I deposit costs arc recognised as an expense in the period in which these arc incurred using c!Tective
mark-up I interest rate method.
3.25
Financial assets :utd liabilities
Financial instruments carried on the balance sheet include cash and balances with treasury banks, balances with other
banks, !endings to financial and other institutions, investments, advances, certain receivables, bills payable, borrowings
from financial institutions, deposit accounts and other payables. The particular recognition methods adopted for
significant financial assets and financial liabilities arc disclosed in the individual policy statements associated with
them.
3.26
Provision for guar:mtee claims and other off bahwcc sheet obligations
Provision for guarantee claims and other off balance sheet obligations arc recognised when intimated and reasonable
certainty exists fOr the Bank to settle the obligation. Charge to profit and loss account is stated net of expected
recoveries.
3.27
New standards and interpretations not yet adopted
The following standards. amendments and interpretations of approved accounting standards will be effective for
accounting periods beginning on or after I January 2015:
Amendments to lAS 19 "Employee Benefits" Employee contributions-· a practical approach (cfrcctivc for annual
periods beginning on or after I July 2014). The practical expedient addresses an issue that arose when nmcndmcnts
were made in 20 II to the previous pension accounting requirements. The amendments introduce a relief that will
reduce the complexity and burden of accounting lOr ccrtnin contributions from employees or third parties. The
amendments arc not likely to have an impact on Bank's financial statements as these arc relevant only to de lined
benefit plans that involve contributions from employees or third parties meeting certain criteria.
Amendments to lAS 38 Intangible As.ets and lAS 16 Property, Plant and Equipment (effective for annual periods
beginning on or after l January 20 16) introduce severe restrictions on the use of revenue-based amortization for
intangible assets and explicitly state that revenue-based methods of depreciation cannot be used for property, plant
and equipment. The rebuttable presumption that the use of revenue-based amortisation methods for intangible
assets is inappropriate can be overcome only when revenue and the consumption of the economic benefits of the
intangible asset are 'highly correlated', or when the intangible asset is expressed as a measure of revenue. The
amendments are not likely to have an impact on the Bank's financial statements.
!FRS 10 'Consolidated Financial Statements'- (effective for annual periods beginning on or after I January 2015)
replaces the part ofJAS 27 'Consolidated and Separate Financial Statements. !FRS 10 introduces a new approach to
determining which investees should be consolidated. The single model to be applied in the control analysis requires
that an investor controls an investee when the investor is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over the investee. !FRS
10 has made consequential changes to lAS 27 which is now called 'Separate Financial Statements' and will deal
with only separate financial statements. Certain further amendments have been made to !FRS I 0, !FRS 12 and lAS
28 clarifying the requirements relating to accounting for investment entities and would be effective for annual
periods beginning on or after I January 2016. The management is currently assessing the impact in this regard on
the Bank's financial statements.
,-
!FRS I I 'Joint Arrangements' (effective for annual periods beginning on or after I January 2015) replaces !AS 3\
'Interests in Joint Ventures'. Firstly, it carves out, from lAS 31 jointly controlled entities, those cases in which
although there is a separate vehicle, that separation is ineffective in certain ways. These arrangements are treated
similarly to jointly controlled assets/operations under lAS 31 and are now called joint operations. Secondly, the
remainder of lAS 31 jointly controlled entities, now called joint ventures, are stripped of the free choice of using
the equity method or proportionate consolidation; they must now always use the equity method. !FRS I I has also
made consequential changes in lAS 28 which has now been named 'Investment in Associates and Joint Ventures'.
The amendments requiring business combination accounting to be applied to acquisitions of interests in a joint
operation that constitutes a business are effective for annual periods beginning on or after I January 2016. The
adoption of this IFRS is not likely to have an impact on the Bank's financial statements.
!FRS 12 'Disclosure of Interest in Other Entities' (effective for annual periods beginning on or after I January
2015) combines the disclosure requirements for entities that have interests in subsidiaries, joint arrangements (i.e.
joint operations or joint ventures), associates and/or unconsolidated structured entities, into one place. The adoption
of this !FRS is not likely to have an impact on the Bank's financial statements.
!FRS 13 'Fair Value Measurement' effective for annual periods beginning on or after I January 20\5) defines fair
value, establishes a framework for measuring fair value and sets out disclosure requirements for fair value
measurements. !FRS 13 explains how to measure fair value when it is required by other IFRSs. It does not
introduce new fair value measurements, nor does it eliminate the practicability exceptions to fair value
measurements that currently exist in certain standards.
Amendment to lAS 27 'Separate Financial Statement' (effective for annual periods beginning on or after I January
20 \6). The amendments to lAS 27 will allow entities to use the equity method to account for investments in
subsidiaries, joint ventures and associates in their separate financial statements.
Agriculture: Bearer Plants [Amendment to lAS 16 and lAS 41] (effective for annual periods beginning on or after I
January 2016). Bearer plants are now in the scope of lAS 16 Property, Plant and Equipment for measurement and
disclosure purposes. Therefore, a company can elect to measure bearer plants at cost. However, the produce
growing on bearer plants will continue to be measured at fair value less costs to sell under lAS 41 Agriculture. A
bearer plant is a plant that: is used in the supply of agricultural produce; is expected to bear produce for more than
one period; and has a remote likelihood of being sold as agricultural produce. Before maturity, bearer plants are
accounted for in the same way as self-constructed items of property, plant and equipment during construction.
These are not likely to have an impact on the Bank's financial statements.
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to !FRS I 0 and
lAS 28) [effective for annual periods beginning on or after I January 2016]. The main consequence of the
amendments is that a full gain or loss is recognised when a transaction involves a business (whether it is housed in a
subsidiary or not). A partial gain or loss is recognised when a transaction involves assets that do not constitute a
business, even if these assets arc housed in a subsidiary.
Annual Improvements 2010-2012 and 2011-2013 cycles (most amendments will apply prospectively for annual
period beginning on or after I July 2014). The new cycle of improvements contain amendments to the following
standards:
IFRS 2 'Share-based Payment'. I FRS 2 has been amended to clarify the definition of 'vesting condition' by
separately defining 'performance condition' and 'service condition'.
IFRS 3 'Business Combinations'. These amendments clarify the clnssification and measurement of contingent
consideration in a business combination.
!FRS 8 'Operating Segments' has been amended to explicitly r:.!quirc the disclosure of judgments made by
management in applying the aggregation criteria.
Amendments to lAS 16'Property, plant and equipment' and lAS 38 'Intangible Assets'. The amendments clarify
the requirements of the revaluation model in lAS \6 and lAS 38, recognizing that the restatement of accumulated
depreciation (mnortization) is not always proportionate to the change in the gross carrying amount of the asset.
lAS 24 •Related Party Disclosure'. The definition of related party is extended to include a management entity that
provides key management personnel services to the reporting entity, either directly or through a group entity.
lAS 40 'Investment Property'. lAS 40 hns been amended to clarify that an entity should: assess whether an acquired
property is an investment property under lAS 40 and perform a separate assessment under I FRS 3 to determine
whether the acquisition of the investment property constitutes a business combination.
Annual Improvements 2012-2014 cycles (amendments arc effective for annual periods beginning on or alter
January 2016). The new cycle of improvements contain amendments to the following standards:
!FRS 5 Non~currcnt Assets Held for Sale and Discontinued Operations. IFRS 5 is amended to clarify that if an
entity changes the method of disposal of an asset (or disposal group) i.e. reclassifies an asset from held for
distribution to owners to held for sale or vice versa without any time lag, then such change in classification is
considered as continuation of the original plan or disposal and if an entity determines that an asset (or disposn\
group) no longer meets the criteria to be classified as held for distribution, then it ceases held for distribution
accounting in the same way as it would cease held for sale accounting.
!FRS 7 'Financial Instruments- Disclosures'. If'RS 7 is amended to clarify when servicing arrangements arc in the
scope of its disclosure requirements on continuing involvement in transferred financial assets in cases when they
arc derecognized in their entirety. !FRS 7 is also amended to clarify that additional disclosures required by
'Disclosures: Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS7)' me nor specifically
required lOr inclusion in condensed interim financial statements for nil interim periods.
lAS 19 'Employee Benefits'. lAS 19 is amended to clarify that high quality corporate bonds or government bonds
used in determining the discount rate should be issued in the same currency in which the bcnclits arc to be paid.
lAS 34 'Interim Financial Reporting'. lAS 34 is amended to clarify that certain disclosures, if they arc not included
in the notes to interim financial statements and disclosed elsewhere should be cross referred.
The Bank expects that the above mentioned improvements will not have a material impact on the B;:mk's financial
statements in the period of initial application.
Note
CASII AND BAI.ANCES Wri'JI TREASURY
BANKS
In lmnd
- Locr~l currency
-Foreign cum·ncies
.f./
With St<lle Bank of P<~kistnn in:
- Local currency current account
-Local currency curn:nt nccomH-lslmnic l3anking
-Foreign currency deposit account
Cash rt::servc account (5% of FE 25)
Special cash reserve account ( \5% or FE 25)
Local US Dollar collection account
With National Bank of l'r~kistnn in:
~Local currency current account
4.1
2014
2013
(Rupees in '000)
2,374,6 tJ
2,168,908
2,5<17,()()3
2,351,724
1,·-116,212
12.\J(l, I!1·1
1,120,999
3,132,302
8,593,265
lll4,283
9,200,051
1,27-1,038
21,.J75,3.JS
1,545.377
32.33 \,0:-G
2.3R(l,'l]5
J,305,Jt\2
89,112
Tlus mclmles Natmnal Pnzc Bonds of Rs. 2.282 million (20 13: Rs. 1.653 millmn)
2014
2013
(Rupees iu '000)
BALAI"CI':S WITII OTJI[CR BANKS
In Pakistan
- In current accounts
215
Outside Pakistan
5.1
- In current accounts
387,301
387,301
_h:!_)\.3·13
!,.151.55R
5.1
This includes balances oi'Rs.337.420 million {2013: Rs.\,399.406 million) held with other branches and subsidimies ofStand;~rd Chartered
Group outside P:tkistan.
6
LENDINGS TO FINANCIAL INSTITUTIONS
Note
6.1
6.2
Repurchase agreement \endings (Reverse Rcpo)
Placements
2013
2111·1
(Rupees in '000)
2,500,000
_J!J 13,559
22, 15SJ~•IO
111,813,55?
22.15X X•IO
6.I
These carry mark-up at nlte 9.6 percent per annum payable at maturity, and arc due to mature during January 2015. These arrangements arc
governed under Master Repurchase Agreements.
6.2
This represents placements with other branches ;:md subsidiartcs of Standard Chartered Group outside Pr~kistun at mark-up rates ranging
from 0.06 percent to 0.35 percent per m:mum (20 13: 0.1 percent to 1.2 percent per annum), and arc due to mature Juring January 2015.
6.3
Particulars of lendin~
Note
In local currency
In foreign currencies
6.·1
.~.4
21114
2013
(Hupccs in '000)
2,500,1100
8,313,559
\{),813,5!'9
22, 15S,S40
-----22, 15X,X411
.sccul'itics held :1s rollntcrnl against !endings to financial institutions
llcld by
h:tnl<
21114
Further
given as
coll:ltcral
2013
Total
lldd by
hank
Further
given as
col\:1\t::ral
--------------------------------------- { R u pc cs i 11 '()(I{)) --------------------------------------·
Pakistan lnvcsttncnt llunds
6.4.1
2,51111,11011
2,5011,11011
2,51111,111111
2,5110 0011
The market value or securities held as collatcml against kndings to linancial institutions amounted toRs. 2,561.559 million (2013: Rs. Nil
million).
INVf.ST1\li~NTS
7.1
Investments by lypc
Natt'
1/.!/rl j11r trmliu:: .ll't'IUifi!!.l
1vlarket Treasnty Bills
Paktstan Investment Bllmls
Sukuk mullprah Bonds
th'tlilahli! flu .mil! .IW'Iuiti!•.l
Market Treasury Bills
Pakistan Investment Bonds
Ordinary shares of listed companies
Tcnn Finance CcrtiliclJtcs -nnhsted
Ordmary slmrcs tlfun1istcd ct•lll]mnies
Sukuk and ljar.~h Bonds- unhsted
7.6
7.6
7.7
7.'1
7.•'1
7.6& 7.'1
201>1
201J
I lc!d hy
Tn!nl
llcld by
hank
collatcnll
b~nk
collateral
--------------------------(Rupees in 'OIHI) -----------------------6.~98,875
6,498,!175
1.715,203
1,715,2!13
2·12.549
H41JJ•t6
963
963
J 1.122
52,7~2.769
102,6 70,705
Jl,l•l9A69
662.061
21!5.025
J,S'J'J
5o,~.t7,654
112,011,680
662,1161
285.0Z!i
2,29!i,l1!i
1!1,6%
3,un~
11,870,!\32
112,0311,37(,
662,061
2115,1)2.5
J,OO.t
11,870,532
2-12.5-P)
ll·li.CHl•
31,122
10.716.277
I02,6711,7fl5
31,161\.109
662,061
285,025
J.8'J9
10,71fo.277
•14,500
·12,000
-1>1.50()
:12.00{1
18,6-10
Suh.l'illiarif!.l'
Stamlard Chm lcred Servtccs nf
Pakistan (l'rivnlel l.nmtcd
Standard Chancn..'tl ~lndar.1ba
Standard Chm1erctl Leasing Limited
lnvcstm~nts at cost
Provision lOr dimnmlitm in
the value or investments
lnVC$tmcnL~ (net oftH'o''i~ion$)
Sm]llus on revaluation of
held for tr.1din~ secJu·itics- net
Smvlus f (deficit) on rcvalu:uinn of
avnilublc for sil1C sccuriltes ·net
--:-o-=-'~'~"~.5~8~9183,~9~.997
i.J
7.11
Total Investments- net
7.2
2,313,811
18!i,ll05,316
1,261
2,31.5,072
686,273
187 363 298
1·17,.119.2·12
7]11,51!9
.. --~~---,-"~
(8l)J,o.l92)
5o.I.~6U
3,931,060
186,677,025
Suhsiliiarics- llehl fnr !i:t1c
185,808,808
(8113.~92)
182,(.91,505
7./fJ
2,313,811
5~.~60
10,978
3,932,321
188,992,097
97,859
15•1
98.01]
146,667,922
18,79~
14fl,fl86,7lll
1·\6.6(17,922
llt7'J·~
I0.97ll
(186,273
23151172
189 671!,370
Investments hy sc)!;mcnt
2UI.l
{lhljlCC~
Noh'
Federal Go\'ei'IU11Cnt Securities
Market Treasury Bill~
Pakistan lnvcstmetll llonds
GoP ljarah Sukuk Buuds
Fully ll:titlu]J nnliuat)' sh:u·cs
Listed eompilnles
Unlisled compm1ics
lnvcslmcnl in subsidiJtrics
Pakistan (Private) Limited
Standard Ctmnered Services
Standard Chm1erc1l Modarahn
Stnndord Clmttered l.easin!: l.umtcd
Bonds and Term Finance Certificates- llntistetl
Tenn Fmancc (\.'11tli'c..,1ti.'S
Sukuk ond ljarah Bonds
Other in,·cstmcnls (llllllu:ll funds)
59,2.11,(1~~
102.913,25•1
J2,0H9.15$
JO,J%,~95
1J.212YJ9
6f>2,0f, I
M12.Uf1l
3,CIIl~
J.lliJ'J
·1·1.500
·12,011{)
7JU.~X'J
2X5,02S
J,.I75,00U
JXS,8U8,808
7.J
Less: Provision lht diminution mthe vnlue of investments
Investment (net of Jlruvi~iuns)
Surplus on revaluatinu held !Or trading securities- net
Surplus on revalunthm of nvailablc for sale securities ·net
20.2
In',,estmcnt in subsidiaries- licit! for sale
i. II
--~~
I85,1Ul!i,3 16
So.l,o.I6CJ
3,932,321
181l,1J92,097
or
Mi6,273
18~
Totalln\'Cstmcnts • nel
7.J.l
l':trticulars of JlrU\'i~inn fur tliminnlion iulhe \'illuc or in\'Cslmcnb
Openinl: balance
Charge for the ye:n
Reversals
Net charge
Provision agamst investment 111 subsidiaries dassilietl ns held lOr sale
Closing Balance
The tkl:tils nf 11ruvisiun hl'ltl
:1~:1inst
l
(,7!1 3711
!160,157
L74,~s'l
7~.151
2S5JI2S
1.525.000
------1•17 .·Cl1 .RR2
___ _!!f•fl.157)
Wd77.'125
10.97R
<JSJtiJ
l•lld!ll6.716
------!<1<1.{186.716
575 ..\21
c21l5.ll25
___ i!?l!
21l·UI.l,1
(IJO,Illf1)
===-~'.192
S6f1.157
7.7 & 7)i
SJH.~67
7.'1
2!15,025
·l·l·l ..l1(,
2S5,025
7.31
iii\'Cslmcnls arc as folhm s:
Ortlinmy share.~ f unlls. ol\':ul;<hlc for Sil1e
Tcnn Fmancc Cet1tliciltC!; -unhsted
St;mdnrd ('hmterct! Len~int! J .united· Subsali:uy
1A
).Ill]
in '(IIIII)
JIJ, 7~.5.:'>79
or
7.3
-----JM,,Mif,,71ll
]n\'estments include ~ccmittc~ having Uook value of Rs. 18 6% mltlion (2UIJ- Rs 1116-10 milltunJ plc!1!!.:d with the Stille
discounting facility !0 the 1\nnk. mclmling an amount cannarkcd ngainst the facilities nliOCilted to bmnches now in Bangladesh.
·-------=----=-:}UJ,.l'JlBnn~
__ ._1_:~'::'iJ!!_
===~~~ill~
of 1';1k1stan ns security tn filCIIllale r T.
S~1lc'
Quality of' Andlnhle fur
securities
Nole
Rnting
21114
Cost
1\lm·kct
value
2013
Cost
Rating
(Rupees in 'UUII)
7,(,
7.7
Fedcrnl Gm·ernmcnl Securities
Market Treasury Bills
Pakistan hwestment Bonds
GoP ljarnh Sukuk Bond$
Total
7.1).3
Pnrticulars ofsl~:•rc$ held~ listetl
2014
2013
(Number ofshnrc.~)
t1nr:1ted
52,742,769
tlnrnted
IIZ,OJII,J76
Unrated _I_Il,J95,5J2
_!Th I 68 1677
Rnting
2014
Cost
52,763,082
I 15,918,348
\0,419,840
179,101,270
1\l~lrkct
(Rupees in '1)\)0)
102,670,705
Unrated
31,168,109
Unrated
Unrated _9,191,277
\43 030 091
10::!.551.59·1
31,2H·I.265
9,7.%.290
1•13 132.1-19
2013
Cost
Rating
Market
value
\'~1\ue
{Rupee:; in 'UtlO)
18,916,1123
Market
value
1l\,916,023 Agritcch Limited
D
_ _,_,(i2,U61
6(i2,0Ctl
(Rupees in 'OIJO)
--~'~·0~2~,1I~O~I-
D
662,061
____66:!,0(1 1
662,06l
--~62Jl~-
662,061
Provision for diminution in the value 7.3.1
662 {!(,\
146 59K
662061
220 750
All shares nrc urdinary shares ofRs. 10 each except otherwise mentioned.
7.8
Particulars ofsh:JI"es held unlisted
M
2014
2013
(Number of shares)
., ..
573,7Ct9
21)14
2013
2H14
2013
(Rupees in 'Uilll)
Hati~----
573,7(1 1) Pakistan Export Finance Guarantee
Agency Limited
Chairman : Mr Munccr Kamal
tlnr:lled
R Society for Worldwide Interbank
Unrated
3,004
3.00·1
J,OO-t
J,S99
(3,1104)
{3,00<\J
Unrated
Fund Transfer
Provision for diminution in the value 7.J./
~=~~=7.9
Bonds mul Term Fimnll'e Certificates- unli.~ted
895
~.lliJ
11114
(\{nnees in 'llllll)
--~-------
Term Finance Cel"lificntes or Hs.$,000 e:leh
Agritcch Lmuted
Azgard Nine LinHtcd
17,000
13X,Il25
147,1lllll
138,025
Provision for ditmnutinnmthe value- note 7.3.1
] 1
2XS,II25
2R5,025
(285,1125)
(2R5Jl25J
Sukuk 111Hiljarah lhtnds
Noll'
Jbting
21114
Cost
2013
Market
\":tluc
Rating
{nllJICeS in'()()())
Wapda Suku\... Bnnds
Pnk1stan lntenwtwnal AHhnes (PIA) ~ukuk Bonds
7.1)./
7.9.2
Unrated
Unra\L't.l
151l,fltltl
1,325,01111
149,728
1,315,1llltl
I 4751JOU
1 474 728
Market
value
Cost
(Rupees in '1!00)
:wo,ooo
Unrated
UnratL·d
Unrated
1'15,9:.5
\,3.?5,000
1,325,000
1 525 non
--·--\.!~~~:...,
7.9.1
Wapda Sukuk Bomb carry mark-up rates 0.25% below 6 months Kll30R. The pn'ncipal and prolit is pa)'<1hh.! ~L·:ni-annually 1\"ith maturity in July .:!017.
7.9.2
PIA Sukuk bomb e:my mar\...-up rates 1.75% ahnvc 6 months KIBO!t The principal nnd prolit lS payable St.! lilt-annually w1th
7.9.3
GoP Jjarnh Su\...u\... Bontls e:trry marl..-up wtes of 0.30% below we1ghteU n\emuc y1cld of(, months treasury bills '!11e prnlit1s paynble scm1·annually with pnnL"ipal
redemption ntmatunt~· fallmg dut.! between Ntwembcr 2015 and July 2017.
7.10
llnrcalized
~-;nin/ (Ius~)
un revaluation of investments classified ns held for trmling
Marl-:et Treasury B1lls
Pakistan Investment Bomb
GoP ljarah Suku\... Bonds
m<~turity 111
(Jelllher 2019
Zlll-1
~013
(ilUJil'l'S ill 'lltlU)
41,237
13,1!13
l.IS5
1),·12~
_____.!!!.... ______.I!J_
7.11
Investment in
Subsidiaries~
Held for Sale
2014
2013
(Number of shares)
4,450,000
4,538,353
84,579,276
Note
Standard Chartered Services of Pakistan
(Private) Limited· 100% owned
44,500
Standard Chartered Modaraba • Listed
20%owned
42,000
Standard Chartered Leasing Limited· Listed
86.45% owned
Provision for diminution in the value
7.11.1
2014
2013
(Rupees in '000)
730,589
7.11.2
(130,816)
686,273
During the year, the management of the Bank has decided to divest its shareholdings in Standard Chartered Leasing Limited (SCLL)
(86.45%), Standard Chartered Modaraba (SCM) (20%) and Standard Chartered Services of Pakistan (Private) Limited (SCSP)
(100%). In this regard, efforts to sell the same have been initiated and the Bank has entered into a non-binding agreement with a
· prospective buyer. The management is committed to the divestment and accordingly, these investments are classified as held for sale.
These were previously classified as strategic investments of the Bank.
7.11.2 'The market value of investments in listed subsidiaries, namely, Standard Chartered Modarrtba and Standard Chartered Leasing
Limited at 31 December 2014 amounted to Rs 110.963 million and Rs 711.312 million respectively (20 13: Rs 77.515 million and Rs
592.055 million respectively).
ADVANCES
8
Note
Loans, cash credits, running finances, etc.
- In Pakistan
-Outside Pakistan
2014
2013
(Rupees in '000)
128,263,846
134,809,794
128,263,846
134,809,794
14,089,817
7,686,396
21,776,213
150,040,059
15,873,794
6,890,046
22,763,840
157,573,634
(21,450,000)
128,590,059
(22,078,602)
135,495,032
Net investment in Finance Lease
- In Pakistan
- Outside Pakistan
Bills discounted and purchased (excluding treasury bills)
- Payable in Pakistan
- Payable outside Pakistan
l
l
Advances- gross
8.1
Provision for non-performing advances
Advances- net of provision
8.3
8.1
Particulars of advances- gross
8.1.1
In local currency
In foreign currencies
128,739,439
21,300,620
150,040,059
145,263,061
12,310,573
157.573,634
8.1.2
Short term (for upto one year)
Long term (for over one year)
103,056,083
46,983,976
150,040,059
115,783,098
4 t,790,536
157,573,634
8.1.3
This includes assets under Ijarah arrangements runounting toRs. 856.895 million (20 13: Nil). Refer note 41.5.
1U
Advances indude Jb 23 095.733 million (20 IJ. R:; 24,655.36·1 million) whkh have been placed under non·performing !>latu:-; as clct<uled below:
21114
Cln:;.sificd i\dv:lllccs
l>nmcslic
0\·cr.scas
Total
Provision Hcquircd
l'rn\'isinn lldd
Domestic
O\·crsc:1s
Total
Dnmcslic
0\'Cn\C:Is
Total
~··~-·~-----------------···-~~~----------~------ ( ll11 pees in '11011) ---·-·-·-·········-~················-·-····---------------------·-··
Category of classific:ltinn
OAEM
Substandard
Doubtful
Loss
General
44,774
SJ€!,175
S:'\7,7119
•. ..!.!.·!~57,07~ - - - 2J.U'JS,7JJ
44,774
836,175
857,7119
21,357,075
23,1195,733
212,546
297,095
211,4UII,S94
211.') IH,S.l5
23.095,733
- - - 539,4(15
21.451l,llllll
ProvJ~Inll
------
2013
Provision Required
Domestic
Overseas
···············--~---------------·-··-····-·--··-····--·····-------- (Rupees 111 '000)
General Provision
635,748
2.352,816
21.666.800
2·1.655,364
153,847
1.147,027
20.217.266
21.518,\40
24 655 364
211,910,5.15
211,9111,:'\35
539,465
5J'J,4C.5
Domest1c
Total
-- _ _560.462
2~~602
22.078 602
212,546
297,1195
211.4UO,H94
zn.•JIII,5J5
· - - - - - ___ .:::;_\'),4(15-
·~~~~---:-_2_1~-
-~~--
Prov•s•on lleld
Overseas
-
560.462
22.078.602
To1<1l
153)~ 1 17
153.&·17
l,l•l7.(l27
20.217.266
21.5!8,1·10
153,&47
1,147.027
20.217.266
21.518,140
--~60,46_L
------- 2·1.~Jl_~~i.
212,546
297,095
21.451l,ll01l
Classified Advances
Total
DomestiC
Overseas
Cntcgnry ofclass1licatiun
OAEM
635.748
Substandard
2,352.816
Doubtful
Loss
__l!_:~J66.800
2·1.655.364
212,546
297,095
1.1.J7 ,021
:!!1.217 .266
21,5HU·IO
____
--
560,-~
2~.078.602
8.2.1
At 31 December 20\4. the provision requirement has been reduced by R~. I ,068.870 nulhon (3 I December 2013 Rs. 1,·162.377 nulhon) bcmg Ilene lit nf Fon.:cd
Sale Value {FSV) of commercial, residential and industrial properties {land and building only) held as collnteral, Ill accordance with thl' State Bank <lf PakJ!it:m
Prudential Regulations (PR) and SBP Circular 10 dated 21 October 2011 Increase m aecumulntcd prolits amounting to RsNM.766 nu\lion due tnthc said FSV
benclil is not available liu· clistribution of cash and stock dividend I bonus to employees.
H.3
Particulars nf provision :1).\ainst non·perfonning :Jd\'nnccs
201J
201-1
Note
~l!_ccific
Tnlal
Specific
General
Total
---------------·-----~---------------- {llu pees in '01111) -------------------~~·--~--------------------21,518,140
Opening balance
~"-;--······---·---
General
%11,462
22,078,602
23,891,270
570,65:::!
2·1.-1(1\.9:!2
Charge lOr the year
Reversals
SA./
Amounts wnuen niT
Other movements
Cl~sing
(895.127)
(127,270)
2119111535
balance
(895,127)
(127.270)
5391.465
21.4511.()(1()
(H62,652)
(21·1.2·13)
21.51X.l40
Nofl!
S,-1
Particulars nf write uffs
's.-t.l
Against prov1smn~
Charged and wn\lcn olf durmg the year
HA.2
Write-olE or Rs. 500,000 and above
Write-om> ofhclnw Rs. sno.ooo
8.5
Detail~
ll~.
560..162
=22.07~~02
2111-1
2013
(Hnpccs in '01111)
895,127
215,J,I4
11111471
(I(J.J,05'J
480,733
·198.4C• I
__!,J}Il 471_- .... 1.102.520
{,29,738
8.6
nf luaus \Hillcn-nrr nf
(86:!,652)
(21-I.:!·IJ)
5011,000 ami :lilln'c
In terms of sub-section (3) of section 33A or the Banking Companies Ord1nance. 1962. the statement in respect of written-oil" loans many uthcr Iinam:ml relief of
live hundred thousand rupees or above allowed ton pcrson(s) during the Yl'ar ended 3 I December 2014 is given in Annexure I
S.f•
This mcludes loans charged oil' as per Bnnk's pnhcy. Recovery elli:lns on tho.:: nmounl charged oil' nrc ongoing, us the Bank contmucs to have the lcg:1l nght tlf
recovery
'·'
l'~c1icubn
,,,
Nut<·
oflo1ns •nd adv1ncn to directors, anoti11~tl romp3niu, ctt.
~013
1014
(ltupcnin'OIIO}
Debts due by d1rccton, c><ecutives or a meers of tile b~nk or :my or
them c•ther scvcral!y or jointly with any other persons
nat~nce a\ bcgmning oft he year
Loans granted during the ycM
Repayments
Balance at end of the year
(n)
(1i1)
1,19.!i,44J
(306,936)
ll58,.!i07
Debts due by companies or firms in which the daeclors of the bank arc mtcrcnc<.l
as ducctors, pnrtncrs or in the case of private compances as members
Balance at bcg1nning of the year
Loans gmntcd durmg the year
Repayments
Ibbncc at end of the ye.1r
Dehu due by subsidiary companies. controlled firms. nlanJgcd
other rel:ltcd p;~rtil'l
Babncc at beg1oning oft he ye<'lr
Loans gmnted during the year
Rcp3)11\Cnts
Dalance at tod of the year
29,96(>
l,.!ilill,929
(90.!i,602j
693 29J
1,652,935
(4~7.-1')2)
1,195,.14)
~63.913
(5B,947j
29,966
modar.~b;u ~od
~-U,908
7J6,085
8,613,6~0
8,185 ..190
(3,279,979)
776 579
(H.47RJ(>7)
442.908
6,28M5J
56.213
6.09?,000
615~ 2n
OPERATING FIXED ASSETS
9.1
9.1
Capaal\1-ork·m·progrcss
l'ropcny and equipment
61SZ 553
9,1
c~ 11itJI work·in·pro~rtu
.lS.SJS
17.6711
%21.1
('wil \Wilks
,\dvanec pa)lncnltow;uds propeny and cqu1pment
'·'
Proptrly and
rquipm~ul
l!IH
Frrchold
bud
Duildin~:s
571,0JO
17,344
3,606,4211
215,680
280,408
69,657
(112,237}
"'
58li.J74
238
lJll,IO~
,\rcmnulated Dcprtdltion
At 1 January 2014
Ch~•11c for tht year
lte\·aluanon adJustment •
Tr~•1sfers (\,Titeoffs
Delchons
AtJI D~(~mbrr2014
8!,737
2J,SOO
{lll,lJ7)
3
nz Jas
6.67%
ad;ustments rdate to the accun,ulated dcprecmtu:m
Cost/ Valuation•
At 1 hnuary 2013
as~~
3,753.113
AdditiOns dunn );I the yc;~r
Tr3nsfcr,; I "THe offs
97,!1!\5
(366,133}
6,57Z
(~.022)
(2,304)
604 799
l99,712
75,21!\
{J66,1JJ)
{8,022)
6.67%
9,392,.128
3~0,110
(nS~HO)
68,273
{2,353)
{4,265)
I 268 665
2 7.~8 SlJ
(2,959)
{1,503)
93 J9J
693,253
77,441
2,149,244
27'l,54J
62,873
2.1,1!19
(2,358)
(3,811)
764 525
~04
140
6.67°/o•lii'V•
209,578
{4~.155)
{139,7~0)
(44,155)
1139,339)
2 245 l9J
5\.l 230
14.28°/o • 33.)3°/o
28Mill
{57.~9~)
{147,~12)
'l.J 7~.263
J,l93,319
~U.SH8
(1,211)
81Hn
(HH,J71L)
{S7,4'H)
(145,133)
3091710
\1,501
6 llll
(2,9~9)
~5J
3J.J3"/o
d~tc
261.731
19.800
(1,12J)
855,624
7(•• 792
(1,528)
280.·108
8'l7.H7
1.207 010
66.7S'I
230,'132
(,')),8·10
(\4(>68~1
llclc\1005
AtJI Dtctmbrr lOIJ
2,731,840
wl11ch 1s ehnunatcd agamst the l(ross carl)"lll!l amoum of the revalued assets
2013
Le11sehold
Duildmgson
Blllld1ngs on
Fuzmture,
Vehicles
Leased
Total
lnnd
f1echold land
hold
f>xturcs ~nd
bnd
Improvements
omec
cqmpmcnt
........... _ ................................................................ (Rupees 111 '000) .............................................................................
571,030
the rcva1ua\lon
1,207,010
77,~19
604 799
lbte or lltl>l"l~d~tion
re'>llu~tlon
397,257
J772l
Ntt book nlue
The
~Ill
on
lunhold
bud
Luscd
hold
improvements
Fumill11·c,
li:o.llu·c• 111d
office
Ntllipmcn\
- - - - - - - - - - - - - · - - - - - - - - { i t U ! l C t J in'OO!I) --··-··-··---·----····-··-····-····-·······
Cost/ Valuation•
At I bnu~ry 2014
Smplus I (de lieu) on revaluaunn
Revaluation adjustment •
AdditiOns duung the )"e<'ll
Transfers I write ofTs
[)e]diOnS
.UJI Dutmbtl·l014
Duihliugs on
rrcehold bod
571.010
3.6116,428
(:IJ.f>JI)
1,256.790
82.881
(132.476)
(18~!
2,703,0) l
l92,Sol0
(224,241)
(IJR7'l0)
2.712.8·10
98,617
'17.11~~
'1.1 112.1128
2,215,782
292,2SJ
(222.079)
(136.742)
2 149.24·1
.\.I.IK'I
.u~u.~uz
21,268
62.R7l
493,372
(2'l'l.IIIO)
(151.045)
l)'l1,8l'J
34 9R2
(, 0?0009
2.~22
9.~99,')]6
~7~.1.15
{J~'1,H•Rl
p,.~ll-1)
p22.81~)
Aaumulltrd llrlll"rdatlou
At 1 hnual)" 20IJ
('hat);IC for the ye.11
TI311Sfers (\\Tile OffS
Ddcuons
AI 3 I Durmbu 2013
Nrt book v~lnt
22M2
{664)
(10.~62)
U.737
~71
0.\0
3606 428
Hair or drpruiatiou
q.J
S0.218
(876)
I'll 671
6 (,7~~
2~9.712
597
(>67%
~4~
74,961
<n.J9IJ
(1571
693.25)
5137~7
667%-10%
~8_1
596
t42H%·llll%
(158~)
u_n~•
The n~nk's o"11cd l~od and bmldmJl~ were revalued by Independent accredited professional valuers, Iqbal A NanJee & Co (l'nvate) L1mitcd and Coli1crs International The valu~\IOn performed by
the ~01luers ";I$ based on acti\"C mMkct pnces. ~dJustcd for any difference in the nature. loe.1t10n or cond1t1on of the spcc11ic land ~od buihlin);l The date of rcvaluJuon was .ll Occclllhcr 21ll·t The
rcvaluauon h;u resulted mmcrcasmg the surplus on revaluauon of fixed a~Sei:S by Rs JSO 110 million If 1he 0\\11Cd land and bmldu•gs were nn•asur~d u.~llll! the cust nmdd. the c.1nymg amou111s
would ha,·c been as fnlloV>"S
2014
2013
[ ltupces in '000)
Cost
ACCUIIlUlated dcp!CClation
Curyioc ~mount
The n•ovcn•c•H 111 surplus nn rcvaluauon offi:<ed assets 1s );11\"cn in no1~ 20 I to the
'lA
l,J7l.J91
(881),717)
1,48\,(t74
lin~nc•al st~tcmcnts
As at 31 Oeccmbcr 2014, the cost of fully depteCI3ted lixed :mets Mill m usc amounted to Rs 2,JS4 l 3 I m1lhon (2013 Rs.2.183.705 n11lhon)
2.H9.11·1
:=j'~'~'"t·'~'~'~'
!56H.8JI•
9.5
Depreci~tion rate~ fm fiuninu<.', lhture~ and office equipment Me a5 follows.
' Furniture and fl.~ture.•
1
Prirt\CU
Other ("I nice ctJnipm~nt
Computer equipment
ATM machines
9.6
JJ JJ
33.33
20 00
J).:D
14 28
pcrcr.mt
t•~rcent
percent
perc~nt
percent
Details of dispu~al of fixed a~~cts whose original co~t or book value exceeds Rs I mi!lam t>r R~ 2~0.000. \'hid1 c\·er is less, and nsscts disposed of to the Chief Exe~ut!vc or to n director or 111
executives or ton shnrehnldcr l11•lding not less than ll.l'l-~ of the \"oting shares oft he bank or to any related patty. i1resp~ctivc or,·nluc, nrc given below
Cost
Book \"lllnc
Accumnlatcrl
dt]lrttillliOH
~nit
Gnin/(ln55)
l'rocrtrls
onSnk
Mot!~
l';u·licul~rs
uf
of purrlm~rr
tli.'J'"·"'I
· - - - - - · - - - - - · - · · - · · (l{lllltt~ in 'OUO) ···-··--············-····--l"euder
IILnlding on l.ense llnlrll;rnd
Lensed hold imprun:mcnts
Pt•miturc, fi\ttnes ami
oflkc cqu"rpment
3.0~7
3.0~7
'/0.116
12.867
6,044
3,894
M,7Jil
12,851
6,044
J.89•1
3,457
2.855
2,666
2.663
2.619
3.4~7
2,855
2.666
2,66)
2.619
2.555
1.5J2
2.·12J
2.276
2,117
I,<J80
1,680
I.MS
,,.],~
oflc.,s lhnn IU. 2!10,000 ;md
3.'185
'".,
168
1,6{)()
1,600
7
Ito
557
,,,
418
2555
2.532
2.42.1
2.27&
2,117
I,'JSU
1.680
Ito
55'1
·118
,,,
:!82
.,,
:?8:!
J<J2
J92
JS~
211
31>2
23 I
"
225
243
2·13
1.·121
1,421
1,336
1.312
I,JJ6
115
61
liS
61
200
JO
200
1,312
1.103
1.017
1,070
1.037
1,017
UUJ
1,211
U'l,292
1J7,1J!I
(O~I
no
•I,UOO
225
I.OJ7
ltcnu lra\'ill)! hnok
h~{.
"
1.&48
1,103
1.070
Vchrdcs
.l!l(•
"
''"
'"
5R6
!(,<)
5R6
"'
Temlcr
Tender
Tender
Tender
Teuder
Tender
Temlcr
Tcn!lcr
Tender
Tcuder
Tcmler
1\·ndcr
Tcru!cr
Tender
Tender
Tender
Tender
Teudcr
Temh-r
Tcmlcr
Tender
Tcudcr
Tender
Teudcr
/I.I!S ltclrahlc Sccmity
S1·•tt'U\~
Ml~ to.:('llCnrpm;nil"l
MIS !'UI\Cr Tech Engmccrin1:
MIS Nanon~l Traders
MIS Muh.1mmad Shahid SlJOIJ\1\l
MIS !'akist~olnternaticma!
1\1/S Muh:munnd Sh~lud Stl!umn
MIS !-\han ,\ucl!t>ncr~
MIS l'n~1slan lmcrnaununl
MIS ('apital N•lmn GM
MIS Nanunal Tinder~
MIS 1'-.'1uuual Trndt'r.<
MIS r..:ntional Trader~
11.1/S l'a~i,tan lntcrnallmtal
MiS l'akisl.ll\ ltuernatilm.ll
M<S N;rlinrml l'raller~
Mf~ 11-luhnmmad I !.1,;him Sun'
MIS l'a~rstan lntcrnatiunal
/1.1/!i r..:atiunal Trnders
1>1/S K!mn Au"inner~
M!S Muh~lmnad ! lashim Sons
M!S i\',1\!uu~l Traders
MIS Capit;rl Nilam G;!!
1\I,S 1\a\oa S~rap Mn,lcr
.\11') Nauunal Traders
nfku than Rs. I,OOO,OOIJ:
Building on lease huld !anti
Leased hold in•J""\"\"1\\cuts
FUJniturc. li~turcs nn<l ullke e<Juipmcnt
Tolal
10
INTANGIIII.t: MiSt:TS
intnnl!ihtr
irU•ul):ihl~
·-----···-·-·-··-·-·-·----------· (Hupces in 'UOUJ -·-·-···-·······---·-··-·-------····
Cost
At I January ~0!•1
•\dditions dunng th~ year
•\I J I Dtctruhrr 2014
1,9li2.4!J
=~~~~o-
Amortind
At 1 Jammy 201·1
Charge for the year
At 31 Dcccmbrr lUIJ
.
77-4,(,80
=_Li81& ==}"fh(,80 __J~:!!l.!! ..
1,9M2,41J
2'J,!'illll,l!IJ
JJli,J!\0
.
751,7H
=-=~=-~~Ji.J!In.
2115,731
=-_.)9.slln,ijf
J,J!\11,236
JJII,J!IO
---~S.t~~J-·
----1!1?!:!...
______ll:!..6..QL __ , __3Jll,J!I«l_ _ _J.&J..7}~!~-
lbtt of amorli~:rliou
----~"!......__,
_______ _
Cost
At!
Jammy~OIJ
~6.0%,310
.
1'/.t.&SO
_ 2i;.im..t12_
•\mort inti
At I January 20IJ
Charge for the ycM
AI Jl lltctmhrr 2013
- - - - - - - - - - ___U:_LR.L
·-·---1,9H2.•:!.L _ _ !l.!.,.?:!_L
~~]~~}.JJl ~
I •J82.·113
.lll'l.-100
.l.lli.35U
.
Additions during the year
At31 llcccmhtr liJIJ
=.-----i··i:u.so
=--1~::~~
J,.lOh.l~!l
'l.l!\55'1
_ _ _Jll.'))~
- - •.. · - - - ·
--~-~~731 _______ ."lJI>,.l~O
-~"'""'"''"'"''.
---.. ~·nl'­
J.nlcnt.
· - - .. ..-....=
10.1
As at Jl Uccerubtr 2()1-1. the wos~ ~Jrl)"ing amount uflidh· mnor1ised intangrble noscts !computer son ware) still in me amount~d tu Rs 3J11 JSO 1:1ilhun (20!3 l~s H~ .1~0 mr!hun)
10.2
The reco,·crabk muHuut ft>r the pmposc of ~ssessing impairmcntun good1\i1lo11 a~11uisnn>n of Union Bank Limi1cd was has~d on value m usc The calculahons a1c b.l~ctl on the ~Ill~ hlulgct ~n<l
forccam for suhsclJHCllt !1'<1 venrs as approved by the mannt:cmenl These have then been c~trapolntcd for a fu1ther 1•criod 1>f 17 rears using n stcm!y long IC!m fnrc.:a~1 GDI' t;n•wth mte mul ;r
termrnal value determined ha,cd 1011 a long 1erm carninlts multiple The cash flows arc tl!'cmmlcd using a prc·tax discount talc whid> rc!lcc1s the "'rrcnl111ar~~t r:rtc approprmtc li1r the hu,iue"
For the cakulauun ~s ;rl Jl Jle(ember 2014, the bank has used a long term forc~ast <;Ill' g({)"1h rate of4ll JlC"ent am! n discount rate of2•1.6 percent The m.magcmcnt bche1cs that .Ul\
_rcawnable tmssihle ehant:c.• h• the hy assumption$ <lll "hich c.1!culation of rceo1·erablc amuunt is ba~cd. would not cau~c the ~an-.,·iug amount 10 c~cecd the ICC!ll"cr.lhh: ~muum
II
DEFERRED TAX ASSETS I (LIABILITIES)- net
The following arc major deferred tax assets I (liabilities) recognised and movement thereon:
Note
At I
January
2014
(Charge) I
credit to profit
and loss
2014
Debit I (credit)
to equity I other
comprehensive
At31
Dcccml>cr
2014
income
------------------------------ (B.upccs in '000) ------------------------------
Available ror sale investments
Provisions for looms cmd advances
20.2
/1.1
Other assets
Fixed assets
Surplus on rcvnluation of Fixed
Assets
(34,305)
5,577,334
(86,822)
(227,668)
(20,064)
Goodwill and other intangibles
Actuarial gains on retirement
benefits
Note
(I ,342,007)
(221,088)
(164)
2,506
(876,145)
(12,413)
(118,753)
(1,062,535)
At I
January
2013
(195,312)
32,356
(5,314,81 5)
(51,480)
credit to profit
and loss
((>9,038)
(6,190.%0)
(I ,058)
(Charge) I
(1,376,312)
5,35(,,246
(S(,,I)g(,)
(I ,394,545L
2013
Debit I (credit)
to equity I other
comprehensive
(13,471)
(2,575,833)
At31
December
2013
income
------------------------------(Rupees in '000) -----------------------------t\vailablc for sale investments
Provisions for loans and advances
Other assets
Fixed assets
20.2
194,223
35,363
(34.305)
5,577..HI
p:r•. 822l
(227,6681
(29,154)
(4,439,830)
9,090
(874,985)
(20,064)
(5.3 1•1.815)
(21,897)
I ,523,544
( I.R46,004)
(228,528)
6,585,275
(79,291)
(263,031)
(I ,007.941)
(7,531)
Surplus on revaluation of Fixed
Assets
Goodwill and other intangibles
Actuarial gains on retirement
benefits
11.1
9,484
203,707
( 12,413)
(118,753)
The Finance J\ct, 20 I 0 amended the Seventh Schedule to the Income Tax Ordinance, 200 I whereby the limit for claiming
provisions for advances and off balance sheet items in respect of Consumer and SME advances has been enhanced from
I% to 5% of gross Consumer and SME advances. In case of Corporate ndvanccs, the limit continues to be I% of gross
Corporate advances.
The management carried out an exercise and based on that concluded that the Bank would achieve a deduction fOr
provisions in excess of the limits prescribed by the Income Tax Ordinance, 200 I in future years. Accordingly, deferred tax
asset of Rs. I, I 1(J million has been recognised on such provisions for income years 2009 upto year ended December 20 I•I.
Since 2012, the Bank has started claiming unabsorbed amount of provision against bad debts under the Seventh Schedule.
The Seventh Schedule has been further amended through Finance Act, 20 I 0 by introducing tmnsitional provisions,
whereby amounts provided for against irrecoverable or doubtful advances in tnx year 2008 (income year 2007) and prior
years, would be allowed in the tax year in which these advances arc actually written off.
The management considers that the amendment made vide Finance Act, 2009 in respect of provisions for bad debts
being allowed nt 1% oftotnl advnnccs is applicnble for tax year 2010 (income year 2009), whereas for tax year 2009
(income year 2008), the provision for bad debts would continue to be allowed under the Seventh Schedule at the time
of actual write-oil'.
The deferred tax asset recognized upto 31 December 2008 relating to provisions for advances and ofT balance sheet
items amounting toRs. 4,240 million has been carried forward.
12
OTHER ASSETS
Note
Income I mark-up accrued in local currency
Income /mark-up accrued in foreign currencies
Advances, deposits, advance rent and other prepayments
Receivable from delined contribution plans
Advance taxation (payments less provisions)
Branch adjustment account
Unrealized gain on forward foreign exchange contracts
Interest rate derivatives and currency options- positive fair value
Receivable from SBP I Government of Pakistan
Receivable from associated undertakings
Receivable fi·om Standard Chartered Bank, Sri Lanka operations
Non-banking assets acquired in satisfaction of claims
Advances against future Murabaha
Commodities under Islamic limmce
Advance Federal Excise Duty
Unsettled trades
21.7.2
12.2
12.1
P1·ovision
ag:~in.st
2013
(Restated)
(Rupees in '000)
8,381,3%
83,%3
710,980
138,949
9,095,167
20,095
581,241
302,107
462,362
52,057
39,979
5,593,532
Others
Less: Provision against other assets
Othc1· Assets- net of provisions
2014
12.1
4,485,20 I
77,426
726,605
9,320,0 II
6,005
I, 129,842
580,296
122,790
3,686
36,276
741,90 I
6,379,093
295,134
I 88,443
188,443
2,299
631,385
26,283,9SS
341.228
24,433,937
(116,373)
26, I 67,582
(426,]57)
24.007,580
42(.,357
(309,984)
116,373
547,149
( 120,792)
426,357
other :tssets
Opening balance
Net charge for the year
Closing balance
12.2
Consequent to Sale and Purchase Agreement (SPA) signed between Standard Chartered Bank. Sri Lanka (SCHSI.)
and Standard Chartered Bank (Pakistan) Limited (SCI3PL), the Sri Lanka branch operations of SCBPL were
amalgamated with SCBSL with effect from close of business on I 0 October 2008. According to the terms or SPA,
'unproductive debts', 'staff loans of SCI3PL who arc not retained by the purchaser', 'their corresponding housing
loans' and 'assets arising from litigation which cannot be assigned' arc held in trust with SCBSI... The recoveries
made (net of expenses) from such assets arc to taken to income from Sri Lanka branch operations, ns disclosed in note
25 to these financial statements, nnd consequently recorded as receivable. The Central Bank or Sri Lanka during the
current year had allowed remittance of major portion of the outstanding balance.
13
BILLS I' A YABLE
2014
2013
(Rupees in '000)
In Pakistan
5,020,614
542,991
5,563,605
Outside Pakistan
6,127,636
412,577
6.540,213
=-==--===
14
BOIU<OWINGS
Note
In Pakistan
Outside Pakistan
14.1
In foreign currencies
15,751.377
8\4,798
16,566.175
15,622,715
1,621,956
17 244,671
15,751,377
814,798
16,566,175
12,065,490
2,295,115
1,260,102
13,945,205
Details of borrowings secured I unsecured
Secured
Borrowings from State Bank of Pakistan
under Export Refinance (ERF) scheme
Repurchase agreement borrowings (Repo)
State Bank of Pakistan - LTFF
State \lank of Pakistan- LTF- Export
Oriented Projects
Unsecured
Overdrawn nostro accounts
I
15,622,715
1,621,956
17,244,671
Particulars of borrowings with respect
to currencies
In local currency
14.2
2014
2013
(Rupees in '000)
J./.2.1
14.2.2
14.2.3
1,796,279
3,370
14.2.4
15,620,707
15,744,854
1,623,964
821,121
17,244,671
\6,566.175
14.2.1
Mark-up on Expo11 Refinance (ERF) from State Bank of Pakistan is charged at 5.5 to 6.5 percent
(20 13: 6.83 to 8.4 percent) per annum. ERF borrowings also include borrowings under Islamic Export
Refinance scheme amounting to Rs. 1.349 billion (2013: Rs. 1.060 billion). These borrowings arc
secured against demand promissory notes executed by the Bank in favour of State Bank of Pakistan.
14.2.2
Repurchase agreement borrowings carry mark up rates ranging from 9.5 to 9.65 percent (2013: Nil)
per annum payable at maturity and arc due to mature by January 2015. These arc secured against three
months market treasury bills. The market value of securities held as collateral against \endings to
financial institutions amounted toRs. 2,295.726million (2013: Rs. Nil).
14.2.3
Mark-up on Long Term Finance Facility (LTFF) from State Bank of Pakistan carry mark up rates
ranging from 6.5 to II percent (20\3: 7 to II percent) per annum. These loans arc secured against
promissory notes executed by the Bank in favour of State Bank of Pakistan.
14.2.4
These include overdrawn nostro accounts with other branches and subsidiaries of Standard Chartered
Group outside Pakistan amounting to Rs.l ,62\.956 million (20 13: Rs. 807.349 million).
)
15
DEPOSITS AND OTHER ACCOUNTS
Note
2014
2013
(Rupees in '000)
Customers
Remunerative
-Fixed deposits
- Savings deposits
22,860,282
144,301,028
26,043,138
142,234,138
134,582,483
536,702
883,186
303,163,681
125,832,808
592,409
850,511
295,553,004
1,339,987
304,503,668
1,003,987
296,556,991
,Non-Remuncrati ve
- Current accounts
- Margin accounts
- Special exporters' account
Financial Institutions
-Non-remunerative deposits - Current account
15.1
15.1
This includes Rs. 438.857 million (2013: Rs.456.852 million) against balances of other branches and
subsidiaries ol' Standard Chartered Group operating outside Pakistan.
15.2
Particulars or deposits
Note
In local currency
In foreign currencies
16
242,970,932
61,532,736
304,503,668
232,165,284
64,391.707
296,556,991
2,500,000
2,500,000
SUB-ORDINATim LOANS
Term Finance Certificates issued
16.1
2014
2013
(Rupees in '000)
16.1
The Bank, on 29 June 2012, issued fOLn1h rated, unsecured, subordinated TFCs oi'Rs 2,500 million by way
of private placement. Terms for the fourth outstanding issue arc as follow:
Ycar of Issue
Rating
Rate
4th Issue
2012
;\;\;\
0. 75% above the
six months
Karachi InterLlank OITcrcd
Rate ("KIBOR")
prevailing one
working day
prior to the
beginning ol'
each semi annual
period
Floor
Ceiling
Repayment
\'-1' TV\\...../
I 0 years
17
No1e
OTIIER LIABILITIES
Mark-up I return I interest payable in local currency
Accmcd expenses
Advance payments
Sundry crcdilOrs
Unrealized loss on forward foreign exchange contracts
Unrealized loss on interest rate derivatives and currency options
Payable to de lined benefit plans
Due to liolding Company
Unclaimed bal~1nccs
Dividend Pa:. ablc
Provision against off balance sheet obligations
21.7.2
33.3
17.1
17.2
Worker's We\l(rrc Fund (WWF) payable
Unsettled trades
Others
17 .I
2014
2013
(Restated)
(Rupees in '000)
687,269
1,957,032
204,804
I ,417,521
I, 130,060
2,1,16,183
27,536
5,559.2S9
510,731
2,543,938
211,226
I ,566,204
725,758
631,850
32,077
6,442,443
I ,633,683
37,168
414,084
757,972
430,024
527,496
16,464 654
I ,643,340
21,281
318,638
531,620
852.226
16.496,799
Due to llolding Company
On account of reimbursement of executive and general
administrative expenses
Royalty and other payable
17.2
5,826,653
615,790
6 442,443
"
_!_,_~_!_8,4 ~
5.559.289
Provision against off-balance sheet obligations
Opening balance
318,638
95,446
414,084
Charge I (reversal) for the year
Closing balance
18
SHARE CAPITAL
18.1
Authorized Capital
Note
2014
2013
(Number of shares)
4,ooo,o o o,nnn
18.2
4.440,883
_
4,000,000,000
Ordinary shares ofRs.l 0 each
\34,761
183,877
318.638
2013
2014
(Rupees in 'tHJO)
40 000,\)\l\)
40.000,000
29,397,850
29,397,850
9,318,000
9,3 18,000
38,715,850
38,715.850
Issued, subscribed and paid-up Capital
2,939, 785,0 18
931,800,003
2,939,785,018
93 I ,800.003
Ordinary shares of Rs. I 0 each
Fully paid in cash
Issued in terms of scheme of
amalgamation
3,871 ,585,021
\<.{'
'(Yl )-'
---
3,871,585,021
18.3
18.3
These represent 892,554,151 shares of Rs. I 01- each issued and allotted at par to Standard Chartered Bank, United
Kingdom against transfer of entire undettaking of SCB Branch Business by SCB to the Bank, and 39,245,852
shares issued and allotted at par credited as fully paid up to persons who were registered shareholders of Union
Bank. These shares have been issued in accordance with the scheme of amalgamation duly approved by State Bank
of Pakistan on 4 December 2006.
18.4
At 31 December 2014. Standard Chartered Bank. United Kingdom, held 98.99% shares of the Bank.
19
RESERVES
Note
2013
2014
(Rupees in '000)
Share premium
19. I
19.2
1,036,090
7,953,230
8,989,320
Statuto1·y reserve
19.1
1,036,090
6,008,249
7,044,339
This represents excess of fair value of the shares over par value of shares issued to registered shareholders of Union
Bank in terms of the amalgamation scheme.
19.2
In accordance with the Banking Companies Ordinance, 1962, the I3ank is required to transfer twenty percent of its
profit of each year to a reserve fund until the amount in such fund equals the paid-up capital of the Bank.
20
SURI'LUS I (DEFICIT) ON REVALUATION OF
ASSETS- NET OF DEFERRED TAX
Note
2014
2013
(Rupees in '000)
20. I
20.2
3,702,970
2,556,009
6,258,979
3,378,993
3,399,057
380,110
(523)
3,565,399
Surplus I (deficit) arising on revaluation of:
Fixed assets
Available for Sale Securities
20.1
63,708
3,442,70 I
Sut·plus on revaluation of fixed assets- net of tax
Surplus on revaluation of fixed assets as at 1 January
Surplus on revaluation of owned properties recorded during the year
Surplus realized on disposal of revalued properties
Transferred to unappropriated profit in respect of incremental
depreciation charged during the year- net of deferred tax
Related deferred tax liability
Surplus on revaluation of fixed assets as at 31 December
(4,313)
(2,322)
(6,635)
3,772,009
(158.101)
(5,35~
(2,884)
(8,241)
3,399,057
Less: Related deferred tax liability on:
Revaluation surplus as at I January
Revaluation surplus recorded during the year
Revaluation surplus realized on disposal during the year
Incremental depreciation charged during the year transferred
to pro lit and loss account
Surplus on revaluation of fixed assets as at 31 December- net of tax
(20,064)
(51 ,480)
183
2,322
(69,039)
-------3 702,970-
(29.154)
6,206
2,884
(20,064)
3,378,993
20.2
Surplus I (delicit) on revaluation of Available for Sale
securities- net of t:u:
Note
Market Treasury Bills
Pakistan Investment Bonds
Sukuk and ljaruh Bonds
20,313
Related dc!Crred tax (liability) I asset
21
2013
(Rupees in '000)
2014
CONTINGENCIES AND COMMITMENTS
( 119.111)
3,887,972
116.156
24,036
100.968
3,932,321
9g.IJJ3
(1,376,312)
2,556.009
(34.3115)
63.70N
211!3
2014
(Restated)
21.1
(Rupees in '000}
Transaction-rcl:1tcd contingent liabilities
Guarantees issued
- Governmcm
-Others
l~wouring:
21.1.1
43,-155,938
37.738.11110
21,471,986
64.927,924
16.762.338
54.500JJX
21.1.1
Guaramccs rdating to Islamic Banking Business amount toRs 3.074 million (2013: Rs 1,178 million).
21.2
Tradc-rch1tcd contingent liabilities
Letters t1l' credit
21.2.1
18,121,183
23.937.1115
21.2.1
Letters of credit relating to Islamic Banking Business amount toRs 2,969 million (2013: Rs 7,203 million).
21.3
Tradc-rclntcd commitments
/\cccptancc~
21.3.1
5,041,122
21.3.1
Letters ofcrcdit relating to Islamic nanking Uusincss amount toRs 528million (2013: Rs nil).
21.4
Other coutingendes
Claims against the Bank not acknowledged as debt
21.4.1
21.·1.1
25,151,427
==4=·==9311.3 3-1
13.713.2g5
or
These represent certain claims by third parties against the Bank. which arc being contested in the Courts
lc.1w. The
management is or the view tlmt these relate to the normal cour:.e or business and the possibility or an outllow or
economic resources is 1·emotc.
21.4.2 The Bomk has identified that a rcgulalOI)' authority has tiled a case on the lund where <m orlice building is constructed
and the Bank owns a rortion of that premises. 1\ request for clearance of its premises from the competent court has been
lilcd based on the fact that the Bank is a bonafide purchaser of the premises having no relevance \\ith the principal case.
Considering the l~tcts or the case and the opinion of lcgtd expert. the management expects u favourublc th.:cision /'rom the
competent court. l'ht: Uank is also in liligation with various tenants for repossessing its orticc space in one of its other
Sindh und based on the facts
lhc Lase
owned propcrtil!s. The matter is sub judice before the honourable lligh Court
and the opinion or legal expert. the management expects a ll\Vourablc decision lhm1 the dealing courl.
or
21.5
Commitments in respect of forward foreign
cxclwngc contn1cls
Purcl1<1se fn1m:
Stntc Bank nf Pakist<Jn
Other b;,1nks
Customers
Sale to:
State Bank or Pnkistan
Other bomb;
Customers
The maturities or the above contracts nrc spread over a period o!' one year.
or
2014
2013
(Rupees in '000)
3,648,750
45,030,-'85
4,21 0,190
32,620,281
-1,631.521
·~5.491.250
'I 0.2 77 .0(>·1
2.490. 9.1 11
2.643.500
70.837.253
J.7(J\.9X(l
21.6
Commitments to extend credit
The bank makes commitments to extend credit in the normal course of its business but these being revocable
commitments do not attract any significant penalty or expense if the facility is unilaterally withdrawn.
21.7
Derivative instruments
21.7.1
Product analysis
2014
FX Options
Interest Rate Swaps & Cross
Currency Swaps
Notwnal
Principal*
(Rupees in '000)
No. of
Contracts
Counterparties
With Banks for
Hedging
Market Making
No. of
Contracts
Not1on:1l
Principal*
(Rupees in '000
10,561,430
With Fls other than banks
Hedging
Market Making
31
With other entities for
Hedging
Market Mahlng
21
---"1.=939=.86'-'--'1\\'--------'\\.___
__,
'-I
18,059,636
L______l\1'---
30,560,927
L_____j\1'--------'
____j
Total
Hedging
Market Making
2013
(Rupees in '000)
(Rupees in '000
Total
Hedging
Market Making
*
41
48,226,479
At the exchange rate prevailing at year end.
Contracts with banks represent contracts entered with branches of Standard Chartered Bank, UK to obtain cover
against the contracts with customers, except for 2 contracts with local banks having notional principal of Rs 6,10 I
million.
21.7.2
Mnturity analysis
Interest Rate Swaps & Cross Currency Swaps
Remaining maturity
Upto I month
1 to 3 months
3 to 6 months
6 month to I year
I to 2 year
2 to 3 years
3 to 5 years
5to lOycars
Above 10 years
~"<fV
No. of
contracts
Notional
Mark to Marl\ct
principal
Neg:ttive
Net
Positive
·---------------------------(Rupees in '000) -----------------------------------
5,934,000
(137,484)
(137,484)
6
6
13
5
2
5,474,606
6,933,023
9,303,543
1,961,166
954,589
( 171 ,055)
(89,872)
(230,548)
(2,020)
(871)
25,627
95,992
85,441
94,176
871
(145,428)
6,120
(145,107)
92,156
(0)
33
30 560,927
(631,850)
302,107
(329,743)
'
.. ,
22
MARK-UP I RETURN I INTEREST EARNED
Note
On loans and advances to customers
On loans and advances to financial institutions
On investments in: i) Held for trading securities
ii) Available for sale securities
On securities purchased under resale agreements
On call money lending I placements
23
GAIN ON SALE OF
SI~CURITIES-
Equity Securities- Listed
l
j
I 0,251,904
278,122
19,224
902,755
272,523
13,242,563
I ,244,824
253,907
12,047.981
44,780
638,289
27,004
710,073
359,016
326,396
46,593
732,005
17,194
727,267
481
732.486
12.2
3,567
2I ,240
12,366
(331,289)
494,738
117,407
318,029
I 0.619
32,281
163.496
(941 ,305)
214,241
7,025
(513.6422..
25.1
This includes gain on sale of non-banking assets amounting to Rs 112.999 million (December 2013: Rs
Nil)
\:(' 'Y"' 1--'
l
11,750,987
296,868
19,430
OTHER INCOME
Income Ji·om Sri Lanka branch operations
Rent on property
Gain on disposal of fixed assets
Loss on derivatives¥ net
Gains on assets fair valued at acquisition
Other income
25.1
16,100,537
I 09,474
126,707
13,498,799
528.724
12.447
30,376,688
NET
Federal Government Securities
Market Treasury Bills
Pakistan Investment Bonds
ljarah Sukuks
25
15,473,675
35,693
301,894
17,591,049
703,147
33I
34,105,789
MARK-UP I RETURN I INTEREST EXPENSED
Deposits
Securities sold under repurchase agreements
Call borrowings
Borrowings from State Bank of Pakistan under
Export Refinance (ERf) scheme
Term Finance Certificates (sub-ordinated loans)
24
2013
2014
(Rupees in '000)
. "
26
ADMINISTRATIVE EXPENSES
Note
Salaries, allowances etc.
Charge for defined benefit plans
Contributions to defined contribution plans
Rent, taxes, insurance, electricity etc.
Legal and professional charges
Communications
Repairs and maintenance
Stationery and printing
Advertisement and publicity
Donations
Auditors' remuneration
Depreciation
Amortization
26.1
26.2
9.2
10
Travelling, conveyance and vehicles' running
2013
2014
(Rupees in '000)
5,238,432
7,564
234,850
1,345,361
104,507
471,659
1,142,244
240,735
263,514
26,000
18,800
478,888
48,803
251,557
4,945,291
7,739
234,710
1,262,478
97,807
439,618
787,483
192,579
262,760
24,540
19,275
493,372
52,116
184,375
1,385,769
184,693
135,463
338,760
135,618
194,734
12,247,951
(977,596)
119,065
103,031
284,273
70,693
125,811
8,729,420
8,000
1,000
3,000
2,400
4,000
3,400
4,200
8,000
1,100
2,000
2,400
'1,000
3,100
3,940
Reimbursement of executive and general
administrative expenses
Royalty
Rewa1·d and bonus points redemption
Premises security and cash transportation services
Documentation and processing charges
Others
26.1
Details of the donations given in excess ofRs. 100,000 are given below:
Donee
Institute of Business Administration
The Citizen Foundation
The Kidney Centre
Lahore University of Management Sciences
Habib University
Aman Foundation
The I lunar Foundation
26.1.1
26.1.1 CEO of the bank is also a member of Board of Governors of The Kidney Centre.
26.2
Auditors' •·cmuneration
Audit ICc
Fee for audit of' pension, gratuity and provident funds
Special ccrtilications and others
Out-of-pocket expenses
16,927
310
563
1,000
18,800
16,528
700
1,047
1,000
19,275
..
,,
26.3
Total cost fill· the year included in Administrative Expenses relating to outsourccd activates is Rs I ,828.5
million (20 13: Rs 2,464 million. This includes payments to local companies for obtaining routine services
such as personnel for collection and recoveries, contact centre, service quality and technology maintenance,
courier services and executive and general administrative expenses ofSCB UK.
27
OTHER PROVISIONS I ASSET WRITE OFFS
2014
2013
(Rupees in '000)
Fixed asset write offs
Other provisions
Provision released against receivable under cross
currency swap arrangements
60.358
L--------~ IL-__~(_12_; :]~7'_)2~)
(120,7'!2)
(60,434)
28
OTHER CHARGES
Net charge I (reversal) against fines and penalties
·' imposed by Slll'
Worker's Well>trc fund (WWF)
29
For prior years'
4,255,131
1,062,535
5,317,666
3,749,027
I ,846,004
5,595,031
187,994
5,505,660
21.136
5.616,167
15,230,563
5,330,697
16,144,180
5,650,'163
Relationship between tax expense and
accounting profit
Profit bcl(11'c taxation
Tax at the applicable tax rate of35% (2013: 35%)
Income (dividend, capital gain etc.) at reduced rates
Expenses that arc not deductible in determining
taxable income
Prior year provision
29.2
1,821
329;173
331,294
TAXATION
I' or the year
Current
- Deferred
29.1
835
310,905
311,740
(13,325)
294
187,994
5,505,660
Standard Chartered Bank (Pakistan) Limited
The return l<1r incomc year 20 14 (Tax Year 20 I 5) is due lor !iIi ng by 30 September 20 I 5.
(65.606)
10,174
21. \3(>
5,616.167
The tax department amended the assessments for income years 2007 to 2013 (tax years 2008 to 2014
respectively) under the related provisions of the Income Tax Law, determining additional tax liability on
account of various issues (such as disallowances of expenses relating to provision against loans and
advances, goodwill amortisation etc.). The resultant tax demands of Rs. 10,918 million have been paid by
the Bank. Appeals against the amended assessment orders arc pending before different appellate forums.
The management considers that a significant amount of the additional tax liability is the result of timing
differences and is confident that the issues in the above mentioned tax years will be decided in liwour of the
Bank at appellate forums. Consequently, no additional provision is required.
The Tax Authorities have passed an order for the income years 2009 and 20 I 0 levying Federal Excise Duty
amounting to Rs. 188 million on ccl1ain items. The Bank is contesting the order in the appeal. The Bank has
paid entire amount under protest.
Further, an order lor income year 2011 levying Federal Excise Duty of Rs. 515.6 million has been issued.
The demand has been stayed by the Sindh High Court.
29.3
Stan dan! Chartered Bank- Branch Operations
The assessments have been finalized upto and including tax year 2006. The Bank's I departmental appeals
for the assessment I tax years 1976-77 to 2006 arc pending before diflercnt appellate l(>rums on various
issues. The management expects favourable decisions in pending appeals and consequently, no additional
provision is required.
29.4
Union Bank Limited
The tax assessments for the assessment years 1993-94 through tax year 2007 are pending at various appeal
lorums against certain disallowances. The management expects favourable decision in pending appeals and
consequently. no additional provision is required.
30
EARNINGS l'lm SHARE- BASIC AND DILUTED
2014
2013
(Hupccs in '000)
Profit for the year
9 724,903
I 0,528,013
(Number)
Weighted average number of ordinary shares in issue
during the year
3,871,585,021
3,871.585.021
(Rupees)
Earnings per share- basic and diluted
31
2.72
21,475,345
387,301
21,862,646
32,331.083
I ,451,558
33.782.641
CAS II AND CAS II EQUIV /\LENTS
Cash and balances with treasury banks
Balances with other banks
32
2.51
STAFF STRENGTH
(Number)
Permanent
Temporary I on contractual basis I direct contracts
Bank's own stafl'at the end of year
3,251
5
3,256
2,943
9
2.952
Outsourced
Total staff strength
1,072
4 328
1,558
4.510
Nun
Mn•Eonoc~l
Stoff
l'~n,inn
fuoul
Th" pbn prun<l.:, J>.:nS>on~:ol.ubt,;l a1 .\ll"•<•lth~ ·""'~go (':ll$IOI!~bl; 1-'b<} :rllcr ""'"l'lcUng :IU ~o~rs of .c""" l'l"' cmplo~«s oft I"' l"nl.u"crnnlod to cnh.:r !"'""""or gralu\1), 1"1 uul l~>lh ll<•\lcwo. >he c<nph"ws of ANI Gomdl."'
1Lm\; n~n1fcnW to 11"' tun~,,,.. <>nn'"l '" l•.11h 1"-'"''1>11 nool f."'lml) :md tlli: noil!lll\111\1 Jtllmh:r of)"-'IS '"1""'~1 f,, culolkn..:nt nfl"''"'""" ~' l"'"' fno !1><'>1: "'"Pl<>)c-.:1 Pco"'m~ is c.lknl.l!<'d ·" 11120 IIU>C> 11><: 1."1 dr.n<n ru«r-'1 "'l.lt< fno
,•ach )""' of .crvi,.,
:o.'nq ~bu~om<nr Sl•ff (;r•nril) fnnrl
Tho pbu pro\1dcsa '"'''""""~tal"'" c.rlcu1.n,~J.u """ nl{)lllh'l sola<} forc;rch rompklcd )<::II ofS<:I""' (trl.J\!IInnn ~~~ ruoml"1 llfrcr co•npl~tm~ 5 l"'"' of Kr<r<c I oo Ihe cmplo;,..:.< ofc\·IINZ Gnmlt:O)> ll.m~ lh< p!o11 pr<'ltd;:•" luu•t• """
cak,ilalcd ~~ ~ll'lc. of [.;sl dr;,11n rncr:!<>l "'1"" lor ""'h wmpklotl ~"" ~f "'""" (lll:l_,imum ~n Ul{)IU!") ~n;:r '""'J>l<IH>J: ,I )<nu of''"'"" I loll~"'- 1f th" ~mpi<>)CC ;, n<>l cnlnkd fur """""" tho l'•"'"""'t:c ;, mete•~ lo
'll""
cmplop:c•ofSLO arc Cllhik,J to ,·uh:r "'""'o" ''' ~:~.111111~. b11! 11<'1 bnlh
!1•,.·
Mno~omut Slolf I' on""" hon>l
Tlt< plan 11clo"'d lo:l<lr<;: ""'l'l""'' I he"'""' h.1brhl)' 11 on tC>l""' of "'"""J: fl<'""oncn
ll<«;ooull r:nc
l~,l~•tc'll r.uc of'""'""''" "'I") "' fulurc '"·'"
1:\p<:<:lotl mtcof wuou on pl.on '""'1'
E\p<:<:tcd lm•g tmn r:otcofu><.""'" ru
Monobt} l"lc
I"''"""'
IJS\lop.•.
127''•1'"
ll~o[U.
tn~·•r·•
u.~~~ ~~~.
u1~·•r"
~.s·,;,
t'·"'
51.1(' (ltmloiiS) ollimatc
r.u~"""
nn>rt~lir,
1.1(' Jln$·1'Jl ultrno."'' ruott.1hh
t•l>i< ral<>l dm•n nne !•~•
l:>bk T:Jicd <kmu ono war
U~kl
sen :o>un Zlhut"'"""'
'>CII N"n
rcn•lnn fun<l
JJ.J
{0r•tuit) Fund
~bn•~:om<nl
r,n,.;.,, F""'l
1UJl
2Ull
2t11l
211U
2!111
------(lluj><ctin'lli!IIJ-----·---------
ll«no<ili•tinn Hf(r«toh~hk) J l'".•~h!• frull\ /iu ddinooll><ndiiLll•n
Pt~~~~~ ,.,h~ofdcfnJ<:d
~l,foKI
b:nofl! ol~ir,oll<m•
(A!<.Wil/ h:obda,·
-~
u:w~mml
0\lh~alool>"'"l I lauu,on
('um;ru Kl\itocn•l
l'rror ScnltC Cost
lniC<O:StCOII
~'JJ~r.
~Ill
ncn><:><llr<:nw:m; A<ll>,.iaL 4)::rrnl flo« nn
6,Jf.ll
(17,252)
JMS
ubhJ~Uoon
D~ccmbcr
--~
l'~lf\11hii:>S>I 1/~m>l<}
LnlcJcot im:ouocun pl.rna>sct
Conlrrbullon by llw: bornk
lkn:filopaid
lkiii<>\<!IJCIIIO'IU_ ACl<la<i:oJ J!'llll I tfo><l "" p[,U\ :>><<'l>
F~lf •-:oh~e~U1ll0e«:mk<
Mmtm<Kll•
l~,M.~
ll~l.lM
H~~~J
~r..:lto
11~,MM'J
~ow,XP
_•.B.:.!1;!.
loll
_\!.!.!!l!.. _.J.:!!..:!':!.!l -...!..!.!!11.!.~ _j!'!:JJ2!!.
·~;12El• .,~ ~~-2:.!!t!.. ·~·-~~~·~L ,.~.~!ell.~ .1-3 ~~~-·
~<I~
11!1!,7(,~
511~
J,7U~
J(o,llfo
lo'J,6H
\X.l~l
2ll<o,lU7
2.X(,_l
1h~.~1'1
UlU
l,l!ol
H,IHIII
L'JIU'I
{~J,l4N1
tiU.HI\ll)
5.14~
!',"! Kt\ito "'" raultiug f•o•u cl>"IIJ:C m 1l11b
01d>g.>110lt,1J a! I)
5'1 Hb
~ _l!g-~ -~-IJ. ~
1'.1lf'"h~ofp1.1na.s.:ts
JJ.I•
!-.{'11
wu
21111
21!1~
Lil:ht
.'hn•~cmcnr
(17,1H)
(o,XIIOI
!LHl)
{JII,62'J)
/l.l•l'J
(lll,'J!5)
---;;i__)j(,"
~.l'JJ
(~.21·7)
.
~;- -~
11'111
{5.111'11
Jltll
1~.%'
-
.
17.~H
')_\toM
-~~,
2ll.h5X
(7,111111)
·m,-
.
-~:;~:;;;;;-
-·'j,k, ~11·-
7'1'J2H
ll'l,l'Jl
17< 72'>
'J.IIX
U,!•lf•
]IOU~ I
(4.711)
_ill!!!l. __'..!J~:?l.
(~,llol)
(JII,Iol'J)
---~!,!!~1,1.
/~
(~J,UK)
111'1)
_ _ _fll. _____ .!?.L ___<!
~ ~'~_,. -2~~'.! .. ~
(rtcth•hl~) lp•~~h!r
i,IH
M 159
U,ll6
:l'l~L
__ .ih~2!.t
J[UIIXII)
·--
t~~~!-
.
_ _,.!~--J~~::::.
~~.~ :·~~-
2l.b7~
(Ill HI)
w.nx
(l.H~l
17 ""'I
71l'J
f"''" /tu t!din"•ll><ndiiJ>lon
tl:o!anoc~•al1 l:m~>U)'
UJ.~'Jl)
C!•11J;cfotll>e)"t.~r
(2.~(,~)
(l'J ..'1H)
(U.lll
IX.J7/o
9,(o 0Jll
C'ontubouon to the 6nul dnrtn).llkW'II
__(.~,!!~
A<"'"""l (!}lin) Jim• on pl•n "'..:'~
~ _..!1,~~!..
ll:obncc~•"1lll>ccclll1>:t
--l.!!!il!:.'!i. _..Q.'.:.!:!Jl. _ ..!~~
• f:~p.:{;lcd /dum 011 pl:m "~"'''
• Act<•1ml g.lm /(loss) on ~l:>n
9,J2/,
'""'I'
~
'IIIII
fo,7bl
__ .!..!.J..!fl __lli•_M~~~.
~ --?~'!.!.....
·-.....-!~..!..
~
---'-"-' ____!.!:.11!!...
__1.:!1.!!!1__ ,.}/.!l'l'i_
-~'2!:... --J~
·--L'!.'.L __ ,!}i!JL ~-.• ~:~.-~:·:.
$.HX
~.l~f,
_ ____f!l _ _ _,_,_!
__ ..J!.:!!_~l- _..Q.:!l?l. __ ji•I_1~1J.
ll,follo
~.\2.1
-~ --&~ K, ___ .,.'::J ••
•-!.:e
211<1XI
.--~·-·..!.!!:P...
'"moun I rt<<'l!ni,.d in lulal «>riiJIN"loro.J• r in<umr
'The follonint arnounl~ lc~•~ !>.."Ctl ch.n~'>.~l m '"'l"'"' oflhc~ h:r«:r•ts to prufil mid hm "tt<><rnl atld olhtt '""'P'~l""""'" "'""'"~
('mrcmscmccco>t
llotcrcSI«>ss
bpcctcd wmn on plan a•.c•>
1\ocognilronof p.ul s.cr.icr cn<l
!-Ill
,ltH
r,,u,u
r.x~n
('J,Jllo)
('J,IIKJ
J.7!18
12,111•
ilo,7l•l)
11to:•
$.7'H
U711
l5,1Mlll
l'llii'J
(.I.HX)
$1U
1~,1~•)
t\Hil
{ll,~H•J
2.Xbl
-
-
~.21U
8.1$'1
- ('lc>ugc rn fuo.;nd"l ~'"""P'"""
lllo
- t'l••ug~ uo llcll~l~r•plno """"'!~""''
- Clo1!18t Ill :>t:ln.ut>1 ~"umpltOII>
• C'hmo~o in C\l"'li<IKC•S>ulnpllnu>
!2'1)
Acll»l lt<IICIIImtllt
__ __;.lli._~-~
t111_11MIJ
5,111
"'
(l.lonl
(lii,'Jl.'J
U,'/65
M/o~~
11~·
7r.~~
n~~
'!~"!.
u•;;,
h7~.
ll~'-
7M~.
5~'0
ll1 ~'I
_ __t!,~_!:!l ~---'L!.!L
J1HI
•J,IfoM
{7,1111tl)
ploii~'»CC•
lntcrot '""'"~ "'' pbll~"'-1'
Noll M>r»t~n.cm Pcm.iou fu11d
Non Mati.1E<nw:m Gr~wny f•u><l
M~oc1t<U!Cill Pc1111011 f111>d
-
IJh
In cum~ ul .,( l't'lurn un )>lu .._.,,..,,
lloools
Casb•r><ltr<l<!lurcntos«:l>
.
I<• S~l
~l--12~
J.(o!!<
R(·om~<~rtn>onl: lnC~r«.•t
-
p.u.ii. :_-:.ilJ.~~i =-~;£~ ::-_w.m : - - JJM ~::.!5. =~ .1t~ =~~i:L~f.
+I~•
-I~-
+I •;.
"'"'""nl
r•lc
lli""""l
·'•I••)
~·J,HM
·I
%!-.•lor~
;.,..,......
+I%
l'ro"'""
in ern"·
in<rc""'
- - - (A,~mnl in 'IIIli>) - - - - - - -
'"'"'
72,171
!<lo,folll
7•J,Jr.M
u~•!<J
~II,'JI!
'IT\.
\~
I
~~
......
t·~n>iom
;.,
~J.IIIIJ
52,.l7J
79,177
7!,1UJ
n,M.~
75,/o(o~
H~~JJ
~l,ttU
U,J%
17~'U
~l.,llll
l'I,J!J
..
lU/oiM
JJ.7,J Fin• yur dal:l nn
~nrplu.<l
(•ldic•l) or Ihe pbns and nperitn(e ad]lulmellls
--~-- ----'-"'-'---~----'-'-'-'-- ---~-"--
----·-·-------(HUJICtS in 'ClOO) - - - - · - - - - - - - - - - PrClienl value t•f <kline. I benc!it uhhgation
---~.hl.!.~
179.2<)1
~~~
27,536
~~
~.373
08.000)
(•.419
{7.h~7)
Delicill (Surpltls)
E.~periencc adjn$hlJ~f\ls
I ~7.12'1
16<J,'\2J
"
r=J,:!L~- ~~ ==~H~.!Jl.
nn pl.ln
liabilities -loss I (gain)
Experience ~djn~llnem~ on pla11
asse!S -loss' (gnutl
3,'177
JJ.7A
t:~pcc1cd contnbutltl!l ft>r the \"Cal ending 31 llccemhcr 2015 in rclauon to SCB No11 Mau.,gemum SlaiT Grahut~· hmd
nnllion re~pcC!I\dV
3~
SIIAHt:
BAS~: I)
17.~.72<)
~nd
H.2·17J
(741)
0.!1!\'lJ,
"llU
=•"--=-"-"""""'"""""
!">('IJ M~uagcmcnt l'cns1on hind nmuunt~ It> R~ 'I '127 millltul an<llt~ II 1'1"
I' A Y:\ltl\TS
The Bank'~ cmplt•:ccs panicipatc m the following share compensation plans operated globally by the ultimate holdinll com1mny, Slandard Chartered l'!c (SC'I'l.Cj For employee~ in Pakistan. the Gwnp
ha~ changed its a•r~ni!<'m~nl 10 i~~u~ sh~res of SC'l'LC upon mectin11 the vesting conditions l•rcvious1y the Group opcrmctl cash Ctjuh·~lent or "phamom" ana11g~m~n1s under which cmJlluyec~ can
receive a cash bcndil linl-.~d to c1ther the growth in GronJ>'s $hare (Share save scheme) or the value of the Grou1r's ~hare (rcmi~tcd f pcrformatlcc share amrrds) ami 1hc ;rnangen•cnt did nut s•~e an
option to the Banl-.'s emplnyces to buy SCI'LC ~hares The market valnc of shares is denominated in pounds ~tcrling at the lime of gr;mt Phantolll scheme not yet \cstcd Me st1ll bcin!l. accounted for
cash sculcd basis
The total expense rccogui~cd dunng the year in respect of above schetncs on equi1y scU!ctl b~si~ amoums to l~s 8Z 231 million {ZOIJ R~ !>'l 741 milh\'111) and is als<> mdutk<l m m,111agennl remnueraHnn
notk J5. As also c~plaincd in nute 3 20 in detail. the Uank's liability towards its parent. ho"e•·cr continues to be dctermiuc\1 and recorded on ca~h ~~ttlct! bas1~ lilf nptuu,~ nnt :·cl \·e~tcd The mam
features of each plan me ~s follows
i)
Standftrd {'h:u·trrrd Slmrr !'Inn
The 2012 Stantl,lrd Cha1tc•red Share Plan repbced all the Group's existing discrctionarv share plan arrangements lhllowiug appro~·nl by sharchnlt!cr~ M the Cir11up·~ Altnual General Mcc\nl[: nu \
May 20 II It i~ 1hc Group'~ rnaiu share plan, applkahlc to all en1plo)·ees with the ncxihllity 10 provide a variety of award types including performance sha1cs. ddbrcd nwards {shares or ca~h) aud
restricted shares l'erfurmnncc and renrie1cd share awards \\ill generally be in the form nfnil price options to par1idpa1e iltthe shares ofSCI'l.(' The remaiuin~; life of the plan is ten }"Car~
Movements in the munher nl" 'hare options held b)' the Hank's employees nre as f11llows ·
Wci~:hlr•l
lOU
Wci!lhled
:1nr~~:r
rurci$r
lu-kr
pnct·
.(per ~hm~·
£ flU sh:1rr
AI I bnuary
Granted dmi11r the war
Excrc1~cd durmg 1h,• H'M
L1pscd dunn1: !he \"Cal
Notwnal d~<~<lcntl
At 31 December
"{(\
"
{16)
"
"'
{l!i)
12)
(~I
-----'
------'-
=-= ..='-'"""""-·:!1~..
~~-~-~ ·~"'
The we1ghtcd avcr;I!;C ptKc "t the time the options were e.~crciscd during 201•\was r NIL (20\J !NIL)
201~
20D
\\'~ieht~<l
Wd):hlttl
llHr"J!t undn
No. of lljttious
(000)
Elprclrd
Wetghted avcr~ge rclna7r";;;;~-
!IHl"aJ!r nnmiuiu~: lift
y~nn
Coutr~ctnal
y~•tn
prirr
Wciglncd
a\W~!JC exercise
No .. r <>Jlluuts
E~pccted y~an;
t'nnlla~lual year~
(OUl)}
J>f!CC
NIL
"
'"
The intrinsic vn!ue of1ested International Shatc s.wc cnsh-~cttlcd awards as at 31 December 201~ was Its li,OhJ thnu~aud {201J l~s Nil)
As at 3 I Decemhcr 2014. tolal nnntb~r of option$ cxerci5.1blc were 6,46$
ii)
lntrrnnlior1.11 .'ihar"C" ~.wr .'ichrmr
The International Share save Scheme was fir~! bnmchct! in 19'16 nnd made available tu .111 ~mployccs of the llanl Eluplny<'C' have the dtllicc of opening a thrcc-y<·ar ur a li.'<'-Y<"ar s.1vin!l~ Ctlllll;l~t
Within a period nl" ~;, mtllltlh allcr the thin! or fillh anniversary, cmplo~·ccs n1ay c~crci'c the awards anJ rcccl<C m1~· benefit in ca,h. ahcrnatiw!y, the emp!ll)ee 111ay elect to have the sa1·mg'. pin~
intere5t, repaid in ca~h The pri~c at which they may pnrdtase shares is at a discountnf1111 to 20 per tent on the ~hare prke at the dale ~1ft he invitation There art m> pcrfmmancc cc>ntl:timt< an.tdt,•d
to 0111ion~ !Jlantcd nte <>ptu•ns lJr<ntled du mll confer ;m)" ri!lht 111 panicipatc in any ~h;nc issue nfany o1hcr Clllllf'Jll\"
Movements iuth<• muuhcr
nf;h~rc
options held by !he IIJnk's
Clllplnyce~
arc as fnllm'> ·
201~
2UIJ
Wd)!hlttl
nrrd'r
Wcll!htct!
C\eruw
pncc
anrHJ!~
;1~"\"f~g~
Jlri~r
:-Jnmhrr !'!HHil
"
"
All bnnarv
Gran1ed dtlflng the 1~ar
E~cr~ised tlnrinlJihe war
l.ap~cd dminl\ I he )em
AI J I 0C(Cl11h"r
'"
------~
="'"=-=~
t per
slmr~
:--llmkr ('QOO)
11.?1111.78
'),85
No. of optiom
{000)
EX!ltClttl
ye3r~
I! 118
II 78
"'
\(JI)!\
8·1
II<JI
____ __!_!t}_
10.85
--~-· ·--------~-·------------·-Wri~hlcd nnrHI!f rrm~ininJ~ lift
Weightfd
a\·rrnj:r e1ercisr
priu
""
"
'1.80
11.27 f \2,?'1
£ J>el ,h;ue
Ill)'}
20\J
··-- --·-;;v~•ghtctl ~~·;r;1g~7,;,7,;,~"ng hli.·
CoU\r:t(hWI
Wc!!Jhlcd
yrm:o;
~<.:rag~ c~crc•~c
Nil ufophuns
(000)
1:\pcctcdvc~IS
C"t>nlla<"hlalv<•;u~
pnce
..
.
::::::::·~·~-'~':::::::::z,~·:'i·I''~'~'-~''~:::: ------..,-~-~~-,,-~-, ::::::::•w•Jo~•::::::::.:~~·~·•::Jn.J,'c'";:,::::,·---'",_.}}.lf~--~~
The intrinsic v~luc uf ve~tcd !mcrna\ional Share Slli'C ca5h-sc1tled awards as at ) I December 2014 was 32,854 thouS<~nd {2013 R~ 41,688 thousand)
As at J I (kccntbcr 2lll·l. 1\llaluumbcr of options Cltercisablc were 19.200
iii) RtJiricud Shnrt Sd1rmr
The Resm'ctctl Sh~1c Scheme 1~ a tl1'scretion~r)' share incemive scheme for high performing ~ntl b1gh po\emia! st.1ffat nor !ev..:l of the organis~uon wh0111 the Gu"'P w1shc.< to motw.1tc .1nd rctmn
Except upon a]'pointmcnt "hen an e.xceutive tlircetor may be granted an award {\f rcwictctl shares, the Re>trictcd Share Scheme 1s not appli.:nhlc to the Gwup's cxecuu,·c dnn:tors. as n ha.< 110
pcrfom1ance contlitnms ~uachcd to it Filly per cent of the award vcm two years aflcr the tlntc oft he grant and the rcn1~indcr aflcr three years The awards granted uudcr this scheme arc n•l cost
ojltions with any hcndit paph!e in cash. The options gramed do not confer any right to pal\idpatc in any share is~nc of any 1•thcr C<ltllpany
Movements i11thc uun•bcr uf ~hare option~ held hy the Bank's employees arc as follows ·
201~
Wfichled
£per ~hnn
Numhrr l'onOJ
At 1 Jann~ry
Grametl dming the \CM
Exercised 1huin~: tlh· VCM
l.ap~ed during till' yc·~r
Noliona1 1hvi<1~nd
At ,ll lknmh,·r
201J
Nun]l;!Cr fllll!l)
\\'ca~hlcd
.E per
~~~~rc
22
,,,
{2~)
(10)
'
The weighlcd a\NaJJC :uke al the time the opti!lns \\ere c.xerci~cd durin!! :!.014 was Ntl C20JJ N•!)
Range of urrds~ 1•rirr
No. of options
(000)
ContrMlllll1
\Ve•ghtcd
a\'Crai:je exercise
price
)'flU~
No. oroplious
(OtlO)
NIA
The
JIJ
intrin~IC
value nf \'e~tcd llcslrictcd Shuc Scheme cash·scll!cd
aw~rds
as at J I December 201•1 was Rs
~3.062
lhomand p,O! J Rs I ~)32
1hnu~andl
A5 ~I J I De~ ember :!.01·1. tt>l.l! number of options c.~crdsab!c were IJ,478
iv) Supplrmenlmj· ltrstrictcd Sharr Srhtmr
The Group operates a Sopplc1uentary Rcstric1cd Share Scheme which can be used to defer part of an ctuployce's annu.1! bonus in shares. The piau is princtpallr used fnr cmplorc'Cs 111 Ill\' t~luha!
nm\..cts area aud is )'i1111lar 11• the RSS out~ucd al~JVC for three important factors c~ccuti,·c tlirc~tors arc ~pccilic~lly prohibited from the piau. no new 5harcs ~all b~ i~~ucd t<• ~alill}'aw;mb. am!
there is nu iudl\idu~! aunu~l hmit
Mo"cmcnt~ mlhc muubc1 nf ~hare options hehl bv the Bank's employees arc as IO!han ·
lOU
\\'cir.htcd
average ''\crd,c
Jlricr
t'.)uuhrr !'01101
)lfl~l'
i fltr shml'
(lll:r
,,1~11\'
1\1 I Jauuarv
Granted dmingthc year
E~crcised during the yc~1
l.ap;ctl during the yc;n
Atliustmcnt 1luc 11• ri!\hl i~suc
At .11 Dccc•n\>cr
~~="'··~·~'·
----~~--'-·-::o:c=:::c=
Wcitthtcd average rcm;i,;i;;);l,fe--
2014
No. of nptious
(000)
Wti):htrd aHragr rrmainin~: lift
E1prctrol yr:•rs
Contractunl
)·rars
Weighted
a1cragc cscrcisc
price
No of up! ions
(IJOO)
E"pcclcd years
Conlr~ctual
years
NfA
The intriu~ic value <11'\'C~\cd Supplementary ftcsuictcd Share Scheme cnsh·scu!ed awards as at J l December 201·1 w.n R~ ~.n7 thousand {2013 lls l.H~ th\lllsaml)
As at ) I Decemkr
1')
~ll
1•1. ww! number of option• csercisab!c were 1,360
rrrfornunr~
Shnrr l'lnn
The l'crfonnancc Sh:ue !'!ant' llcSi!!llCd as aumum~1c part of total remuneration fm the Group's cxc~11UIC olii~Ciors and f111 a ~mall number nflhc Gruup\ tlll>)J ~cntllf ..,,~cntl\'e~ !'he .tl'aub
gralltcd uudcr t!u~ s~hcmc ~ll·ni! co~! opti01t~ ('crtam pcrfmmance criteria need to h~ met bd(ne the optiun.~ can\w c~cn:i~ctl
The 1>ption urnnk~l ll1• nnt
Mu,cmcm~
~ouli:r
any right to participa1c in any share iS5UC of any other CIHnpany
m 1hc nuuthcr uf 'h.U<'
option~
hchl b)' the /lank's employees Me as follm" \\'riJ:hltd
2014
:!.013
lll'rr~J:~ ~~~rd~r
11ric~
i
fltr
JUice
! pn )hare
shnrr
1\1 I January
Granted dLUilll~ 1hc \'C•ll
Exercised domug the 1ca•
Lapsed during the Wolf
t\d;u$llnent due 1<· nt~ht i"'".
AI ) I Doccn1bN
(10)
'"
'"
-------------20\.1
\\'~iJ:hlnl :11 n~ge
Wrie.htrd
anrn~:r
urrdse
f'o. of options
(01111)
Exprctrd }t:trs
remniniug lifr
Conlntrlu<~l
)'ears
priu
We1ghtcol
a\'Cmgc c\crche
price
Nft\
The muinsk value
ofve~tcd
l'crformance
Sh~re
l'lan cnsh·scll!cd awards as at 31 llcccmhcr 2014 was Rs Nil
(~OIJ R~
2YJO thousand)
Nu
ufojJlion~
{OfiO)
L'[!C(tCII\'C.lfS
(ullttnl'tu.ol~car~
35
COMPENStiTION OF CHIEF EXECUTIVE AND EXECUTIVES
Note --:-:-7C"'I':-'i:::<.:.f.::E:::X:::C::C::U::Ii:,v;cc;-:;--- -----:c:::-:-"D:.:i:.:rc:::c:::l::n::rs,_·:;:::-::;--- -----:c:-:cC"E:::x:::c:::"::'l:.:i.:_vc::s~-::;--2014*
2013
2014
2013
2014
2013
-------------------------------------( R u Jl ccs in '00 0 )---------------------------------------
Director's
remuneration I fcl.!s
5,795
35.1
3,630
Managerial
n!llHLllcrat inn
35.3
74,390
112.1().1
2,247,31S
I.X5J.t)J(J
1,630
3,422
207,348
185,<167
3,558
7,467
461,721
407.843
889
1,867
115,430
101,%1
22,181
375
30,891
28.544
102,648
125.295
Contribution to
dclincd contribution
plan
Rent and house
maintcnam:c
Utilities
Medical
Others
Number
or persons
3
5,795
3,630
3,062,708
2.575.731
3
3
1,094
939
*'This includes m:.magcriul remuneration and other bcnclits of current ami previous Chief Executives.
35.1
The din.:ctor's remuneration /ICes represents remuneration paid to the Bank's 3 non-executive directors (20 1J: 3) l(w attending
Board nnd Sub-Committr.!e meetings.
35.2
The Chir.!f Executive is r.!lltitled to Bank provided free usr.! of furnished accommodation. The Chief Executive and som~ of the
the cxr.!cutives arc also
executh·cs arc also provided with Bunk maintained cars. In addition. the Chief' Executive and some
reimbursed for wst ol'm\xlical expr.!nses <md other bcnclits like club subscription, children education etc. as per their terms ol'
employment.
or
35.3
Munagerial r~nHuH.:ration also includes charge against share compensation plans.
36
FAIR V.\LliE OF FINANCIAL INSTRUMENTS
On-balance sheet lin:tncial instruments
l
Except ror investment in subsidiaries, unlisted companies, lixed term advances ol' over one ycar, staff loans and lixcd tcrm
deposits of over one ycnr, thc lhir v<.tluc of on balance shl.!ct linanci:.d assets ami liabilities ure not signilic:.mtly dillCn:nt li·om
their book value as these assets and liabilities arc either short term in nature or arc frequently rcMpriced. The lhir value or lixed
term advunccs nr over one year, staff loans, lixcd tcrm deposits or over om: year and invcstmcnt in l.!quity or unlisted
cornpanics comnot he calculated with suflicient reliability due to nOIHWailuhility or relevant active market for similar usscts
and liabilitic~. The fair \'c:tlue of investment in quotcd subsidiaries is disclosed in note 7 .II to these linancial statements.
J7
SEGi\lENT l>ETAILS WITH RESPECT TO UUSINESS ACriVffiES
Segment nnalysis with respeetto business neti\•ity
Corporate and
Comn1ercinl
Retail
Total
Institutional Clients
Clients
Clients
- - - - - - - - - - - - - - - ( R u p e e s in '000) - - - - - - - - - - - - - - 201-1
Internal Income
Net mark-up I return I interest income
Non mnrk-up I non interest income
Operating income
1'\on mark-up I non interest expenses
Internal non mark-up I non interest expenses
011ernting profit hcfore provisions and tnxntion
(13,212.375)
(1,607,2-1-1)
1<1,928,110
22,800,579
2,239,188
(4,176,5-11)
108,-191
2U,Ii63,2U,
3,382,691
424,419
3,585,763
7,392,873
12,970,89.5
1,056,363
14,337,332
2!l,36-1,59(1
3,702,8-18
493,183
8,363,660
12,.559,691
21,303
7,081
811,107
Hlli,-191
9,2-16,74-1
55Ct,099
5,!193,5(>.5
IS,(t%,-IOH
Direct write-nffs I pro\'isions against non-11e1·forming
loans ami advances- net of recoveries
(104,631)
(149,12.3)
3 1)1,694
8,527,145
660,730
6,042 688
15.2.30.%.3
Depreciation on tangible fixed nssets
95,183
5,849
377,856
478,888
Amortisntion on intangible nssets
44,410
4,393
365,714,055
32,232,997
3-1,121,512
432,0@,564
Segment non performing lonns
9,-176,183
9,089.774
4,529,776
23,095,733
Segment pro\'ision rec1uired
8,744,098
8,3.3.3,-178
4,372,424
21,-ISIJ,IIUO
3,477,556
239,469,@9
3-18,852,-IJ 1
6-15,448
Provision for diminution in the value of investments~ net
7-1,151
74,151
l'rofit before tnxntion
Other segment items:
Segment :mets (gross)
Sc~ment
liabilitic:;
105,905,186
Segment return on net assets (RQA) (%)
Segment cost of funds(%)
..
-18,803
2 ..l9'Yn
2.76'Y,,
20..31%
3.71%
6.32%.
6.43'Y,,
3.03%
3.98%.
(12,818,469)
1,570,119
11,410,740
162,390
19,905,961
(1,020,773)
(556,48 I)
I 8,328.707
2013
Internal Income
Net mark-up I return I interest income
Non mark-up /non interest income
Operating income
Non mark-up I non mtercst expenses
Internal non mark-up I non interest expenses
Operatiny profit before provisions and taxation
589,063
2,862,62'1
5,884,956
9,520,761
1,138,409
13,716,88)
24.376.{)53
2,196,880
399,085
6.404,314
9,000,280
48,717
6,496
107,177
162,390
7,275,164
7.32,828
7,205,392
1.\21:1,383
2.433,269
Direct write-offs I provisions against non-performing
loans and
advances~
net of recO\'eries
Provision for dimmution in the value of investments - net
Profit before tnxation
(800,492)
(503,891)
88,75.3
284,833
(1,215,630)
2S4,SJ.l
7,790,823
1,236,719
7,116,639
16,14,1.!80
Depreciation of tangible fixed assets
88,538
10,304
394,530
493,372
Amortisation of intangible assets
47.426
4,690
345,161,320
33,908,101
38,803,643
4 17 ,873,0(14
24,65.5,36<1
Other segment items:
Segment assets (gross)
52,116
Segment non performing loans
9,399,142
9,949,405
5,306,817
Segment provision required
8,131,788
9,097,\28
4,849,68(1
22,()78,602
107,865,407
838,316
230,075,208
338,771\,931
Segment liabilities
Segment return on net assets (ROA) (%)
2.31%
4.98%
20.96%
·.Ul8%
Segment cost of funds(%)
5.37%
2.22%
2.92%
3.73%.
..
Segment ROA"' Profit before tax I (Segment assets~ Segment pro\'lsions)
Segment cost of funds have been computed bnsed on the a\'eragc balances .
During the period, the Oank has revised the composition of its reportable segments. This is in line with the changes in the urgnnisationnl structure of the Banhs
, Paret;t•Company. According the comparative segments information has been restated and bring it in line with the current organi7.ational structure or the Bank J'his
change shall have no impact on the B:mk's overall profit and loss account, balance sheet or reported metrics.
Corporate and Institutional Clients
Deposits, trade, ad\'isory services and other lending activities for corporate and financml institutions. It also includes the overall management ol' trea~ury of the
Bank, which entails various cash and interest risk management products fur customers. The products include FX forwards, FX options and interest rate swaps
Commercinl Clients
Deposits, trade, Wealth management and SME discretionary lending activities.
Retail Clients
Wealth management, deposits, secured lending (mortgages, overdrafis etc), unsecured lending (credit cards, personal loans etc.) for priority :md smnll business
clients.
38
RELATED I'AitTY TltANSACTIONS
Related parties comprise of Standmd Chartered Pic., ultimate parent company, its other subsidiaries and branches und the B;mk's
subsidiaries. key management personnel, employees' retirement bcnclit funds and other associated undertakings. The transactions with
related parties arc conducted at commercial/ agreed terms. The bank also provides advances to employees at reduced rates in accordance
with their terms of employment.
The transactions and hahmccs with related parties arc summarised as IOI!ows:
Note
OUTSTANDING BALANCES
Group
Nostro balances with other subsidiaries and branches of the
holding comp:my
Overdrawn nostro balances with other subsidiaries and branches
of the holding company
Vostro balances of other subsidiaries and branches of the
holding company
Placements with other subsidiaries and branches of the
,-· IJolding company
o'eposits of g.roup company
Due from group companies
Due to holding compuny
Due to group company
Due from other subsiJiarics a11d branches oft he company
Interest receivable from group companies
Inter-company derivative assets
Inter-company Ucrivativc liabilities
Other receivables- SLA
Trunsaction-rch1tcd contingent liabilities- Guarantees
Commitments in respect of !Orward foreign exchange contracts
Derivative instruments- Interest rate SWllPS- Notional
Derivative instruments- FX options- Notional
Subsidi:u·ics
Deposits of subsidiaries
Loans to ,..-;ubsidinries
Accrued interest receivable
Tr:msaction-rei<Jil:d contingcntlinbilitics- Gumantees
Other receivables~ SLA
Key mnnagcmcnt personnel
Loans and advances to key management personnel
Deposits ofkcy mnlmj!,emcnt personnel
Rent payable
Others
Loans and advances to customers with common directorship
Deposits by stan· retirement bene lit flmds
Deposits by customers with common directorship
Accrued interest n:ceivnble against loans ami advances to
customers with common directorship
Payable to deli ned bene lit plnns
Receivable from ddined contribution plans
Derivative asset
Transaction-related contingent liabilities- Guarantees
Trade-related contingent liabilities- Letter of Credit
Advance reccivublc
38.1
2014
2013
(Rupees in '0110)
337,~211
1.399. 1106
1,621,956
807,3,19
438,857
'15(J,852
8,313,559
33,745
22, 158,8•10
2,9119
2911
6,~42.~~3
5.559.289
93,716
63,560
22.516
36,ti(J9
110H.725
•150
17,61<\.405
37.742
(IS
20,3111
214.~93
1,5118
24,199,988
7,540,663
4,459,958
38.1
38./
198,128
l.f,705
2,675
2,60H.'I54
7,057,768
•105.782
179.8,15
322.9•11
(J.387
uoo
38.1
38.1
2,125
1.289
(,f!,581
90.001
131.167
172,834
1,57-1
38.1
693,293
29,966
113,8711
325.577
95.858
435,90(1
17,855
2.·182
32,1174
27.5~()
138,9-19
9.775
526,739
1,1187
1,802
29;179
113.288
Note
PROFIT AND LOSS
Group
Mark-up I rl!turn I inh:rcst earned
Mark-up I return J intcrcst expensed
2014
21!13
(Rupees in '000)
37,%8
Fcc ami commission e;-.:pcnsc
Fcc and conHni%ion income
230
8,991
5.310
118,038
Reimbursement of c;\ccutivc nnd general mlministrutivc expenses
Pr~ymcnl to group company lOr direct sales services rendered
26
l,3N5,7(,1J
G69,.t9-l
Reimbursement ol' admini:itrativc expenses (including rent ami
other charges)
Net gnin I (ln.s.'i) on inter-company derivatives
I 1,7-l:i
178,01··1
Royalty expense
Dividend p.lid
\10.5%
202
•IS.434
(977.596)
731.1·12
5.WO
(53.35(1)
184,693
119.()65
8,239,528
S,622.763
30,26-t
65.796
Subshliarics
Mark-up I return I interest curncd
Mark-up I return I interest expensed
Commission incoml! earned
Reimbursement of at..!ministrativc expenses (including rent and other charges)
Dividend incmnc
5,218
1.918
60,371
24.9()7
63.417
23.887
76.7·10
81.27.~
1\:cy management personnel
Mark-up I return I interest earned
'Mark-up I return i interest c.-..:pcnsctl
3,205
Salaries <Hld benclits
Jio.st rctircmCII\ hcnclils
Remuneration I fcc paid to non·executive directors
Rent c;"penscs
4,151
3.8 118
2.31(,
387,7~7
399,093
19,349
5,795
6-17
18.1 (>4
373,7%
23,1.710
23~.8~9
2J.I.7\0
7,56-l
7.739
16,639
17.382
20,606
8.0811
22,8111
3,111111
7.93·1
3.(,30
Others
Contribution In de lined contribution plans • net of payments n.:ceivcd
Charge lbr deli11Cd contribution plans
Net charge for de tined hcnelit plans
Mark-up I return I interest expensed on deposits of staff retirement
benclit fund:-.
Mark·up i rdurn I intcre:-.1 expensed on deposits of customers with
common directorship
Mark-up I return I interest earned on advances to customers with
common directorship
Donation to The Kidney Centre
Loss on derivatives·llel
Payment mmlc to Central Depository Company of Pakistan Limited
Gus charges
Miscellaneous inco111c Ji·om comp<my with common directorship
38.1 Net movcmcnt.s in lunns and deposiL-. an; smnmnriscd
<IS
26.1
38.2
(9,775)
4,(129
H2
1,753
2.01111
{·16.711)
2 1.8.17
1
follows:
Balance :1s at
Net
B:1h:ncc :ts at
repayments I
31 Dcccmlu:l·
2!113
withdrawals
201-l
···-···-··--········-··-····-·- (H. u pees in '000) ·------·-----·····---··-·-·
31 December
Loans :md
Net
llishursemcntl
deposits
advanre~
Key management personnel
Subsidiaries
Others
90.001
- -322,941
29.966
36,111
7,1108,610
1.568,929
{57.531)
(J8.58J
= - (7,31<J.~I\6)
1{7115
{905,(>112)
(J93.293
Deposits
Group companies
Subsidinric:-;
Key management personnel
Others
38.2 The prcvi.n1s CEO
820.0118
{651.843)
(17,934.2\il)
{778.3•11)
198.128
172.S3~--
88.7•17,339
(8~61S.997)
5·19.776
(,S2.(,79
2.909
179.845
131.167
17,952,564
·121.434
or tile lnmk was also the member of the Board of this organisation.
:13.7·15
39
Capital Adequacy Rntio (CAR) disclosure
As at 31 December 201-t
Capital Structm·c
The State Bank nf Pakistan through its 13$0 Circular No.07 dated 15 April 2009 requires the minimum paid up capit<li (net of losses) fur all
locally incorporilled banks to be Rs. 10 billion on 31 December 2013 and onwards. The raise was to be achieved inn phased mmmcr requiring
Rs.l 0 billion paid up capital (net of losses) by the end of the limmcial year 2013. The paid up capital of the Bank li.1r the yc;u ended 31 December
2014 stands at Rs. Jl\.715 billion and is in complinncc with the SBP requirement.
Furthermore, the State Bank requires the Bank to maintain prescribed capil<ll to total risk-weighted assets mtios. The capital adequacy ratio:-; or
the 13ank were subject to the I3asel 3 cupital adequacy guiddincs stipuli1tcd by the State Bank through its BPRD Circular No.6 dated 15 /\ugust
2013. These instructHms me c!Tcctive from 31 December 2013 in a plm:-;ed mmmcr with full implementation mtcsu\cd by 3 I December 2019.
Under l3asd Ill gmddincs banks me required to maintain the following ratios on an ongoing basts:
Plwse-iu (ffrliiiJ:emeutmulfirlf implementation oftheminimum capital rf!tJllirt!meuts:
SNo. I
I
2
J
4
lbtio
I
I
Cumnmn Equity Tier I (CET I)
Additional Tier-! (ADT I)
Tier 1
Total ('apitai
*Capital Cn~1:-mnption [3u0Cr (CCB)
Total Ccopi:al plus CCB
Yc:tr End
21llJ
21ll-t
I
5.00%
1.50%
6.50%
10.00%
1.50%
7.00%
10.00%
-
-
10.00%
10.{10%
201:'
5.50%
31 Dcccmhcr
I
2016
I
6.00%
6.00%
1.50%
7.50%
10.00%
0.25%
·10.25%)
~~~
7.50%
ltUlO%
0.65%
10.65%
21117
I
6.00'J!o
1.50%
7.50%
10.00%
1.2t;%
11.2R%
21118 _j_
f
21119
6.00%
1.50%
l!JiO%
7.50%
I(UlO%
1.90%
11.90%
.,.50%
I -on·
·~:;;
10.00%
2.50%
12.50%
*(Consisting ~\rCETIImly)
Moreover. the State Bank, through its BPRD circular No. 02 dated 09 January 2015 i:-;sucd revised instructions fix c;Jlcu\ation of risk weight on
outstanding exposures against large unrated private sector borrowers. The circular requires that the risk weight on all unrated private :-;ector
borrowers with nggrcgatc outstanding cxpOSllrc lfom financial institutions (both Hmd-b;~scd nnd non-fhnd bn->..:d) orR:-;. 5.0 billion or nhnvc. net
or liquid assets. :-;11:~11 he taken 115% instead of previous requirement of I00% for the year ended 31 December 20 1•1. The circular amends the
requirements or BPRD circular Nn. 25 dated 23 July 2014. wherein the risk weight on unmtcd private sector borrowers with ;1ggrcgatc
outstanding exposure frnm linnncial institutions ofRs. 3.0 billion. was to be taken <lS 125% lhr the year ended 31 December 201•1.
Banking operation~ me c;ltcgorised in either the trading book or the b;lllklilg book. and rb,k-wcightcd assets arc tlctermincd accordiug tn
requirements thm seck to rcllcct the v;1rying levels of risk att:lched to <ISScts nnd ofr.. b;tlancc sheet exposures.
Tin: Bank·s regtil<llnrycapital is mwlyscd into three tiers. with total Tier I c:1pitul
bcin~
~pcc11icd
thc sum ofCETI ami/\DTI hcluw:
Common \:quity ·ricr I capital, whicl1 includes fully paid up~,;apital (includiJtg the btmus sl1arc:.). IH1h1ncc i11 :.hare premiusn account. gl'ncral
. reserves. statutory reserves as disclosed on the balance sheet and UIH!ppropriatcd profits (net or accumul:lh.!ll lllSscs. if ;my). Ooodwill and
other imangihlcs arc deducted from Tier I capital.
Addstional ·ncr I capital, which includes perpetual non .. cunmlativc preiCrence :-;hares ;md !>hare prcmimn resulting from the :-;umc .. \.he ll:mJ..:
did not have unr t\DTI as orJ I December 2014.
The deduction frum Tier I Capital include mamly:
i)
ii)
iii)
iv)
v)
vi)
vii)
Book v:1luc 1•1' gnotlwill/ intangibles:
De licit on rcvalmllion of available for sale investments
Dclined·hcnclit pension fund net a~scts
Rccipr(,e:ll crn:->s holdings in cqtlity catlital instnuucms of other bank:-~. fin:md:ll institutions and insuran~t: comp:mics:
Investment in muttml funds above :1 prescribed ceiling;
Threshold dcdm:tions applicable from 2014 on deferred tax as:-;cts and certain investment!>:
50% or investments in m:tiority owned securities or other 11nancinl sub.sidinries not consolidated in the statement of linanci<tl pnsitiou.
Tier II capit:ll iuclm\cs sub-ordinated debt, revaluation reserves on assets. exchange translation reserves and in1pairmcnt allowances that arc
not held against sdcntificd debts. lniOrmation on the terms, conditions and other ICaturcs of the I3nnk's sub·onlumted debt currently in issue
is given in note \6 to these linancinl statements. There is a restriction on the mnounl ol' impairment al\ow:uu:l'S that arc Jill\ held against
idcntilied debts upto 1.25 percent of credit risk weighted as:-;cts.
The deductions frnm T1cr 2 include mainly:
i)
. ii)
Reciprocal eros!> holdings in other capital instruments of other hanks. linanci;!\ ins!itution and insmnncc compamcs;
50% or investments in m:tiority owned securitic~ or other linancial sub!>idinries not consolidntcd iu the statement or finam:ml position.
during transilion phase.
The Bank rcmaiucJ compliunt with ull externally imposed capitnl requirements through out the year. Further. there has hccn 11\l !llatcrial ch:mg.c
in the Bank's management of capital during the year.
'·
2013
2014
-~~--~(Rupees
in '000)
~~-~--~-
Common Equity Tier 1 capital (CETI): Instruments and reserves
2
3
4
5
6
7
Fully Paid-up Capital
13a\ancc in Shnrc Premium Account
Reserve for issue of 13onus Shares
Discount on Issue of shares
General/ Statutory Reserves
Gain/( losses) on derivatives held as Cash Flow Hedge
~
Unappropriated profits
Minority Interests nrising from CETI c;~pital instruments issued to third parties by consolidntcd
bank subsidiaries (amount allowed in CETI capital of the consolidation group)
9
CET I before H.cgulntory Adjustments
10 Total regulatory adjustments applied to CET I (Note 39.1.1)
II
Common Equity Tier I
38,715,850
1,036,090
38,715.K50
1,036.090
7,953,230
6,008,249
6,751,303
6.526,127
54,456,473
20,573,934
33,882,539
52,286,316
21.163,11 17
J 1,122,899
33,882,539
3 I, 122,899
2,000,000
2,250,000
539,465
3,505,028
2,073,663
1,431,365
560.462
1,573.6S2
1.529,576
44.106
6,044,493
27-1,509
4,384.1•14
3•13, 137
5,769,984
39,652.523
4,041.007
35,163.906
207,956,111
206,729.XJ I
Additional Tier l (AT 1) Capit:ll
12 Qualifying Addition<~! Tier-! cnpital instruments plus any rc\ntcd share premium
16
17
18
19
20
of which: Classified as equity
of which: Classified as liabilities
Additional Tier~ I capital instnm1cnts issued to third parties by consolidated subsidiaries (amount
allowed in group AT 1)
of which: instrument issued by subsidiaries subject to phase out
ATI before regulatory adjustments
Total regulatory adjustment applied to AT\ capital (Note 39.1.2)
Additional Tier l capital afier regulatory adjustments
Additional Tier I capital recognized for capital adeqnacy
21
Tier I Cnpit:li (CETI + nl.1missible ATl) (11+20)
13
14
15
Tier 2 Capital
22 Qualifying Tier 2 capital instruments under Baselll1 plus any related share premium
23 Tier 2 cnpital instruments subject to phaseout arrangement issued under pre~ Basel 3 rules
24 Tier 2 capit;;~1 instruments issued to third parties by consolidated subsidiaries (amount allowed in
group tier 2}
25
of which: instruments issued by subsidiaries subject to phase out
26 General provisions or general reserves for loan losses~up to maximum of 1.25% of Credit Risk
Weighted Assets
27 Revaluation Reserves (net of taxes)
of which: Revaluation reserves on lixed ussets
28
29
of which: Unrealized gains/(losscs) on AFS
30 Foreign Exchange Translation R~erves
3 1 Undisclosed/Other Reserves (if any)
32 T2 before regulatory adjustments
33 Totul regulatory adjustment applied to T2 capital (Note 39.1.3)
34 Tier 2 capital (T2) afier regulatory adjustments
35 Tier 2 capital recognized for capital adequacy
36 Portion of Additional Tier l capital recognized in Tier 2 capitul
37 Total Tier 2 capital al.1missible for capital adequacy
38 TOTAL CAI)ITAL (Tl +admissible T2) (21+37)
39 Total Risk Weighted Assets (RWA) {for details rdcr Note 39.5}
Capital Ratios and buffers (in percentage of risk weighted assets)
40 CETI to total RWA
41 Tier~! capital to total RWA
16.29%
16.29%
15.05%
15.05%
19.07%
17.01%
47 CETI available to meet buffers (as a percentage of risk weighted assets)
6.29%
5.05%
', National minimum capital requirements prescribed by SBP
48 CETl minimum ratio
49 Tier I minimum ratio
5.50%
7.00"/n
5.00%
6.50%
10.00%
42 Total capital to total RWA
43 Bank spccilic buffer requirement (minimum CET\ requirement plus c<1pital conservation buffer plus
any other buffer requirement)
of which: capital conservation buffer requirement
44
45
of which: countercyclical buffer requirement
46
of which: D~SIB or G~SIB buffer requirement
50 Total capital minimum ratio
10.00%
39.1
201~
ltegulatory Adjustments and Atldilionnllnformntion
2013
--------~(Rupees
Amount
in '000) - - - - · - - - - · ,\mount
Amounts subject to
Pre- Basel Ill
treatment~
Common Equity Tier I cnpilnl: Rcguh1tory ndju5tntcnts
39.1.1
19,825,701
77,804
19
20
21
Goodwill (net of related deferred tax liability)
All other intnngiblcs (net of nny associated defctTed t~:>.: linbility)
Shot1fall in provisions against classified assets
Deli:rred tax nsscts that rely on future profitability excluding those arising from tempormy
differences (net of related tax liability)
Defined-benefit pension f1md net assets
Reciprocal cross holdings in CETI capitnl instruments ofbnnking, financinlnnd insurance cmities
C'Mh !low hedge reserve
lnn:stment in own shnrcsl CETI instnuncnts
SccuritizMtOil gain on sale
C'apit:~! shortfall ofrcgulntcd suhsidi:mcs
Deficit on account of revaluallon from battk's holdings of fixed nsscts/ AFS
\n\'CStmcnts m the capitnl instnmlcnts of banking, financial and insurance entities thnt arc outside
the scope of regulatory consolidation, where the b:mk docs not own more thnn I 0% of the issued
share cnpital (:unount above 10% threshold)
Significnnt in\'cstmcnts in the comtuon stocks of banking, limmcial and insurance entities th;~t arc
outside the scope ofrc11.ulatorv consolidation (amount nbove I 0% threshold)
Deferred Tax Assets arising from temporary differences (amount abo\'c \0% threshold, net of
related tax liahilitv)
Amount exceeding I 5% threshold
of which: si11.nilicnnt investments in the common stocks of financial entities
of which: deferred tax assets arising from temporary differences
National specific regulatory adjustments applied to CETl capital
ln\'CStmcnts in TFCs of other banks exceeding the prescribed limit
Any other deduction specified by SBP
Adjustment to CETl due to insunicicnt ATl and Tier 2 to co\'crdeductions
22
Total rcl!ulatory adjustments applied to C'ETl (sum of 1 to 21)
20 573 934
6
9
10
11
12
IJ
"
15
16
17
18
39.1.2
Additional
l3
2•1
2l
26
27
28'
29
JO
Tier~ I
20.780,495
39,785
395,920
1,583,(,79
274,509
27-1,509
343.U7
---:,:-1.;-:1"-:'·"""''"
& Tier· I (R]Iitnl: regulatory ndjustmcnts
!Jwcstmcnt in mutual funds exceeding the prescribed limit
hwcstmcnt in own ATI capital instnuncnts
Reciprocal cross holdings in Additional Tier I c:~pital instnmJcms of banking, finnncial:~nd
insurance entities
hl\'estmcnts in the capital instruments ofbnnking, financial and insurance entities that arc outside
the scope of regulatory consolidation, where the bank docs not own more than 10% of the issued
share capital (amount abo\'C 10% threshold)
Significant investments in the capital instruments ofbanldng, linancia! and insurnnce entities that
arc outside the scope of regulatory consolidation
Portion of deduction applied 50:50 to Tier-\ and Ticr·2 capitnl based on pre-Basel Ill treatment
which, during transitional period, rcmnin subject to deduction from additionnl tier- 1 c~pit~l
Adjustments to Additional Tier 1 due to insufficient Tier 2 to cover deductions
Total regulatory adjustment npplicd to AT! c.1pital (sum of23 to 29)
• as the Bank docs not have Additional TIER 1 Capital, deduction is made from CET l
39.1.3
Tier 2 CRtJitnl: regulAtory adjustnu::nts
31
J2
JJ
3<1
36
39.1..1
Portion of deduction applied 50:SO to Tier- I and Ticr-2 capital based on prc-lhsd Ill treatment
which, during transitional period, remain subject to deduction from ticr·2 capital
Reciprocal cross holdings in Tier 2 instruments of banking, finnncial and insurance entities
Investment in own Tier 2 capital instnunent
Investments in the capital instruments of banking, financial and insumnce entities that arc outside
the scope of regulatory consolidation, where the bank docs not own more than I 0% of the issued
share capita! (amount above I 0% threshold)
Si1,~1ificant in\'estmcnts in the capital instnuncnts issued by banking, financial and insurance
entities that arc outside the scope of regulatory consolidation
Total regulatory adj1tstment applied to T2 capital (sum of 31 to 35)
Atlditiunallnformntion
343,137
274,50')
343,137
274 509
2013
201-1
···~·----~ (lhtpecs in 'OU\l} ---·~--
37
(i)
(ii)
(tit)
(iv)
38
39
40
41
42
<13
44
Hisk Weighted AssetssulJjectto pre-lln5cllll treatment
Risk weighted assets in respect of deduction items (which during the transition~\ period will
be risk weighted subject to Prc:·Bnscllll Trcatntenl)
of which: deferred tax assets
of which: Dcfincd·bcucfit pcnsitm fum\ net asscls
of which: Rccogni~:cd po11ion of in\'cstmcnt in capital of banking, financialaud in~umncc
entities where holding is less than 10% of the issued common share capital of the entity
of which: Recognized portion of investment in capital of banking, financial and insurance
entities where holding is more than 10% of the issued common share c~pitnl of the entity
Amounts below the threshold.• for deduction (before risk weighting)
Non·signific~nt investments in the capital of other finm1c~1l entities
Sigmlicnnt investments in the common stock of financial entities
Dcfcacd tax assets nrising from temporary differences (net of related tax liability)
Applicable cnps on the inclusion of provisions in Tier 2
Provisions eligible for inclusion in Tier 2 in respect of exposures subject to stnndardizcd
appronch {prior to application of cap}
Cap on inclusion of provisions in Tier 2 under standardized approach
Provisions eligihlc for inclusion in Tier 2 in respect of exposures subject to intcmal ratings·bascd
approach (prior to application of cap)
Cap for inclusion of provisions in Tier 2 1mder intcmal ratings·hnscd approach
1,583,679
2,430,730
137,256
Jo\3,137
549,018
J,-155,297
686.274
S,577,33·1
539,-165
560.462
1,932,52')
1.791,303
39.2
Capital St1'uctun: Reconciliation
Bai:HICl' sheet as in
published liurwcial
39.2.1
S{i\(l'lllCII{S
21114
llndcr 1·c~ulatory
scope of
con~·nlitla lion
21114
Assets
Advance~
Operating fixed asseb
Deferred tax a:-;~cts
Other assets
Total asscls
Liabilities &
52,J-II),(i96
-1119,567,883
21,.f75,3.f5
387,3111
10,813,559
189,678,370
128.590,1159
6,282,553
:i,·B-1,896
52,3-111,69(,
-115,11112,779
5,563,MIS
17,2-1-1,671
30-1,503,6MI
2,51111,111111
5,563,(,(15
17.244,671
311·1,5113,668
2,51111,111111
2,575,833
16.464,65-1
3-18,852,-131
8,010,729
16,-lfi-1.65-1
35·1,287,327
38,715,850
8,989,3211
6,751,3113
38.715,85(}
8.989,320
6,751.3113
21 ,475,3.f5
387,301
10,813,559
189,678,3711
128,590,059
6,281,553
Cash and balances with treasury Onnks
Balanced with other banks
Lending Ill linandal institutions
Investments
Equit~·
Bills payable
Uorrowings
Dcposib and other accmmts
Sub-ordinated ill<IIIS
Liabilities agniu:<~t a:-;scts subject to limmcc lease
Dcfcrrc{l\a:o.: liabilities
Other liahilitks
Totalliahilitics
Share capital
Reserves
Unnppropriatcd pmfll
Minority lutcrcst
Surplus on rcvaluatilllltlfasscts
6,258,979
-1{)9,567,883
Total liabilities & r:quil>'
6,258,979
-115.1102,7~
H.r:l"cn•nec
llndcr regulatory
scope of
cunsulitlatiun
21114
201-1
··----------------- (ltupccs in 0(111) ----------------Halanec sheet as in
published financial
S(:I(CIIleiiiS
39.2.2
Assets
21,-175,3-15
387,301
10,813,559
189,678,37(1
Cash mnl balancl!s \\ ith treasury banks
Balanced with other hanks
Lending to !inancial institutions
Invest men Is
of wlm h: No/1-.1/,CIII/icaut 11/Vt:.I/IIU'I//.1'
ami in.t/11"111/Cc'
<'1111/lt'.'
111
tilt' L'IIJIIIIIlln.~/runll.'/11.~ 1~/ hankm.c.Jimmt·wl
<'.l"n't:dm}!. /0% !lu·e.tlmfc/
of H'l/1( h. •t,em/1< ,u/1
mklmnawnt• <'II/III<''
111\'t:.I"IIIU:II/.1'
11/tltc• ntptfalm.\'tl'lllllt'/11.\' /,\\/It'd h)' haukm}!.. /IIIWil'lllf
,•xu•ediiiJ.: re¥,/llatniJ' tftn.:.~liold
r~/ w/uc/1: t\/lllllllfl·/1/ul' t:.\'CI!ed/11}!. l'r.'}!.llflltlllytlln•sllllld
of wludt. n•ctJWU< a/ cm.ulwldm.c of cupllulm.\·trlllllt'/1/ {,l'('fll./1'/llt' fur f 'HI'/, AT!, /})
ojw!ud1: otfter.1
Advances
128.5911,059
539,-165
6,282,553
.ceuend prm•t.\/111/.1 rl'/lccted m Tier 2 ('1/jlllfll
Fixed Assl!ts
DciCrrcd Tax Assets
r~{wlndt:
/J/ As til< II rd,l nn.fitl/lft' flrl!/ituhtluy e.rdud/1/J!, tlmsr:
(11'1.\lll~jrmnt~·mponuy
d!fkn:IJ(<'·'
t!(wlw:lt: I )f~l 1 W'/,111/,C fmmtr:mptii'WJ' d!fkn:un!s exn:edm}.! I'<'J!.IIIIItiJI',I' thrL'.IIto/d
Other assets
oj 11'/lldJ: ( imu/11'111
oj U'/1/dt; flll<lll}!./1>/c•.\
c~(wluc
395,9211
52,3-10,6%
2CJ,0 1l5,31U
77,8()-1
It: I lc/in<'d f,,•uc/it pc·m·um fwtd 1/<'f aJ.t(•ts
Total a:;scls
-109,567,883
-115.1HI2,779
Balance sheet as in
tlntll.'r rc).!,ulatory
HdcrcnCl'
scope of consolidation
JlUhlishcd financial
statements
21114
2HI.f
··············----·-(Rupees in IIHII) -·····------·-····-Liabilities & Equity
Bills payable.
Borrowings
Deposits and other accounts
Suh-ordin::ued Juans
5,563,6115
17,244,671
304,503,668
2,500,0110
t!f'wludr: dt~thle far mduswn in ATl
n(which: dt,t:thl.: for mdusttlfl 111 Tter 2
5,563,605
17.244.671
30·1,5113,668
2,5110,0011
2,000,000
2.000,11110
2,575,833
o{wludt: /JT/.1 rdaft•d lo goodll'rl/
8,UIU,729
{t,269,61H
t!fwludt: I JT/ .1 r~·:oll'd to mltm~thh· f/.\.li!/.1"
1!( w/m-h; JJ"J"I ,\ rdfltt:d fo dr:jined f'CII.WIIljimd IIi!( ti.UCI.\"
I!( which: otha dc/i'l"lwllax /laht/!flt'.\
1,741,119
Liabilities <lt;:un~t as~ct-; ~ubjcct to finance lease
Deferred ta.'\ liah1htu.:s
"'"
"
"
<J
Other liabilitieS
16.-164,65·1
16,464.(,54
Totnlliabllitics
348,852,43 I
354,287.327
39,751,94()
39,751,9.(0
39,751,9-ltl
39,751,9411
7,?53,230
7.?53.2311
6,751,303
6.751,303
Share captt:ll
t!(wludl.· tiiiWIIItlcflgthlt'Jilr ('HTJ
t!(whtch: amoullf dtgth/cfiiJ' AT/
Reserves
t!{11'1uch: pori 11m dtgthh~jiJI' mclusrtm m ( '/:T/
o(wluch: p(Jr/u•n dt~lh/r:jiJI' mdu.mm m
1"1l'l'
"v
2
Unnpproprt<~tcd
pro tit
Minority Interest
o{w1ud/: f/11/'1/tm elr~thle {or mdu.mm m ( '1:'1'1
l!(w1uch: port/til/ dt).!lbh• (or ll!dll.\ill//111 AT1
t!f'wludl: Jlo/"111•11 dt,t:lhlc.fill' indu.H•III 111 'lkr 2
Surplus on revaluation of assets
1!(w1uch: lkwduolton H',\"r.!l'l'l'.t on l'lup,•11y
1!{11'11/dl: /lnrt'all;:ct! ( imll.l' /.0,1.\"r.!S 1111 :1/•;\'
/nl'fl.l"r.!
all
EtJuity
Disdn.~un·
:'IJ9,567,883
Comi)Olll'ill of
t'l'j;ulatnry capital
Template
rt'[lOI'ICd by bank
{Hnpn·s in 'UOU)
Common Equit,\" Tier I
l':tpit:~1
(CET1):
IJJ.~Il'tuuenl~
3
4
5
6
7
8
9
10
II
12
13
14
15
16
17
18
19
20
21
22
23
24
38,715,85()
B:~lance
in Share l'n.:mntm Account
Reserve l(tr issue ol'Bnnu~ Sh:1rcs
General/ Sta\utur~ Rc:;l!r\"CS
Gnin/(l.ussc~) on dcrivallvcs held a:; Cn~h Flow
Unnpproprmtcd prnlits
Source h:tsl·d mt
reference numhcl'
from sh'p 2
and reserves
Fully Paid-up Capllal' (':tpnal deposited wtth SBP
2
6,258,979
J,70.2,1J7tl
2,$5(o,tltl9
of"/ Jr:/tt'/1 ml l"<'l'cduaf/011 (d.:Ju,·fmll./i'lllll ( 'HTI)
Totalliallilitic.~ ~'\:
39.2.3 lbsellll
6.258,979
3,702,97()
2,556,0()9
1,036,090
7,<J53,231J
llcd~e
(1,751,3113
Mmonty Intcrc:;ts an,;mg hom CETI c:tpllal instruments issued to thtn.l party by conSl)lid:~ted
b:~nk substdmltcs t:muwnt ullowed m CETI c:tpttal ufthc consolid:~twn ~1nup)
CET I bcfnn: Hcgulatory Adjustments
Common Equity Tier ll'apital: Hegulatory :1djustmcnts
Goodwill {nl!t nfrclatl'd deferred tax liability)
/\11 other intangibles (nctol':my ussociatcd r.ldCrrcd 1:1x li<~bility)
Shortf:11l of provision~ against classilicd n~scts
D>!ferred \<1:-> as~cts that rdy on future prolitnbility excluding those arising from temporary
differences (net of related tax li:~bility)
(~)
\U)
{w)
(.'\l
54,-l:'i6,473
19,825,7111
77,8!14
(j) ·\Ill
(hl-(p)
(I)
l{!t)-(rl •x%
Dc!incd-bcnclit pension fund net assets
Reciprocal cross holdings 111 CETI capit:~l instrument$
Cash now hedg!.' f(.'SCfVL'
Investment in own ~harco,'CETI instruments
Securitization ~ain nn sale
Capit:1l shortfall of rct:ulatcd subsidiaries
Deficit on aCCllUlll nf revaluation from b:mk's llllldings of fixed nssctsi/\FS
lnvcstmenl$ in the capital insuumcnts ofh:mkmg,linanciul :1ntl insurance cnlltics that arc
outside the scnpc n!'rC[\ttlatory consolitlatinn. where the h:1nk docs not own llhJre th:1n 10% u!'
the issued share captl:Jl (;mwunt above 10% threshold)
:{1)-(tJ)l • x'!;,
(uJ
(a)· (ac)- (ac)
Si~nilicantmvcstmcnts mthc capital instruments issued by banking, linancial and in~urancc
entities llmt arc uut~idc the scope of regulatory consolitlation (nmount abovl! 10% thrl!shold)
DdCrrcd Tax /\s~cb am.ing from temporary dill'"crcnccs (:~mount above 10% thre~ho!d, net
related ta:-.: liabthty)
/\mount cxcccdint~ 15"" !hreshold
of which stgmlicant tnvcstmcnts in the common stocks of linancml cntHtcs
'
'
!hl · (adl- (:ll')
or
395,9211
OJ
Component of
regulatory caJJitnl
reported by bank
(Rupees in '000)
25
26
27
28
29
30
of which: deferred ta't assets arising from temporary differences
National specific regulatory adjustments applied to CETI capital
of which: Investment in TFCs of other banks exceeding the prescribed limit
of which: Any other deduction specified by SBP
Regulatory adjustment applied to CETI due to insufficient AT! and Tier 2 to cover
deductions
Total regulatory adjustments applied to CETI
Common Equity Tier l
43
Additional Tier I (AT I) Capital
Qualifying Additional Tier.\ instruments plus nny related share premium
of which: Classified as equity
of which: Classified as liabilities
Additional Tier·\ capital instruments issued by consolidated subsidiaries and held by third
parties (amount allowed in group AT I)
of which: instrument issued by subsidiaries subject to phase out
A'fl before regulatory adjustments
Additional Tier I Capital: regulatory adjustments
Investment in mutual funds exceeding the prescribed limit (SBP specific ndjustment)
lnvcs:mcnt in own AT! cnpital instruments
Reciprocal cross holdings in Additional Tier 1 capital instruments
Investments in the capital instruments of banking, financial and insurance entities that arc
outside the scope of regulatory consolidation, where the bank docs not own more than I 0% of
the issued share capital (amount above 10% threshold)
Significant investments in the capital instruments issued by bonking, financial and insurance
entities thnt arc outside the scope of regulatory consolidation
Portion of deduction applied 50:50 to core capital and supplementary capital based on preBase\ lli tr..:atmcnt which, during transitional period, remain subject to deduction from tier·!
capital
Rcgu!atory adjustments applied to Additimml Tier I due to insufficient Tier 2 to cover
44
45
•16
Total of Regulatory Adjustment applied to ATl capital
AdJittonal Tier I capital
Adtli!ion:1l Tier I capital recognized fur capital adequacy
31
32
33
34
35
36
37
38
39
40
41
42
Source based on
reference number
from step 2
274,509
20,573,934
33,882,539
(I)
(m)
(y)
(nc)
('d)
deduction~
Tier 1 Capital (Cf~Tl +admissible AT1)
<17
48
33,882,539
Tier 2 Cnpital
Qunlif}ing Tier 2 capital instruments under Basel Ill plus any related share premium
Capital instruments subject to phase out arrangement from tier 2 (Pre-Bascllll instruments)
2,000,000
Tier 2 capital instruments issued to third party by consolidated subsidiaries (amount allowed
in group tier 2)
50
of which: instruments issued by subsidiaries subject to phase out
51 Oenernl Provisions or general reserves for loan losses·up to maximum of 1.25% of Credit
Risk Wcight:!d Assets
52 Revaluation Rcser1cs
;;;
ofwl1ich: Revaluation reserves on fixed assets
5•1
of which: Unrealized Gains/Losses on AFS
SS Foreign E>...:h:m:.;e Translation Reserves
56 lJndiscloscdiOthcr Reserves (if any)
57 T2 before rcgulntory adjustments
Tie•· 2 Capital: regulatory adjustments
5S l)orlion of deduction applied 50:50 to core capital.-nd supplementary capital bnscd on pre·
ll:ts{'lllltrc:ltmcnt which, during transitional period, remain subject to deduction from tier·2
capital
59 Reciprocal cross holdings in Tier 2 instruments
60 Investment in own Tier 2 cnpital instrument
61
Investments in the capital instmments of banking, financial and insurance entities that arc
outside the scope of regulatory consolidation, where the bank docs not own more than 10% of
the issued share capital (amount above 10% threshold)
62 Significant invc:;tmcnts in the capital instruments isst..cd by banking, financial and insurance
cntitic:; that arc outside the scope of regulatory consolidation
63 · Amount ofRegul;:.tory Adjustment applied to T2 capital
64 Tier 2 c.apital (f2)
65 ' Tier 2 capital recognized for .:::tpital adequacy
66 '1~'\Ce'is AJditional'licr I capital rccogni~ed in T1cr2 capital
67 To:al Tier 2 capital admi3sible for capital adequacy
TOTAL CAPITAL (TI +admissible T2)
(II)
49
{z'J
539,465
3,505,028
2,073,663
1,431,365
(g)
pmtion of(a<l)
(v)
6,044,493
274,509
(ne)
('Q
274,509
5,769,984
5,769,984
5,769,984
39,652.523
J9.J
Di.<.closure tcmJllatc fur main featurcs of regulatory ea1Jital instruments
I!>SUet
2
3
4
Unit1uc identilicr (KSE Symbol)
Governing luw(s) or the instrument
ltcgulatury trcatmcnt
Transttional Basel Ill rulus
l'o~t-tran~itional
6
Bnsd 1J1 rules
Eligible ut solw t:roup/ group &
TFCs
Common Shares
Main Features
~olo
St:mUarU Chnrterctl Bank (l'aktstall)
Limited
SCBPL
Relevant regulatmns/ laws
St;,ndard Ch:utcr..:J
Limited
Common Equity Tier I
Tier2
l~anh
(l'akr.<.tan)
SCBPL
Rckv;,nt regulations/ luws
Common Equity Tier I
lnchgiblc
Solo ;,nU Group
Solo anti Gwup
7
ln~trument
Ordmary slmrcs
Other Ttcr 2 (Suhnrdtnatcd Ddt\)
8
AllltJunt rco.:oentJL•U in WbJul:~tory cnpll:~l {Currency in PKH
thou~amb. a.<. nl rcportilli.J !.l:lte)
J.S, 715,850
2,001J,Oll0
type
9
Pnr value orimtrument
l'KR 10 per sharl'
PKR 5,000 per Ccnific;,t..:
10
Accounting cla~stlicatiot1
Slmreholdcrs' equtty
Suh-ordinat..:d dcbtlli;1bility
II
Original U;,te ofisMmnc.::
Dec 2006
Jun..: 2012
12
Pcrpctu11l ord:lleU
Purpctual
Dat..:d
13
Oril.litml
Not npplicablc
December J 1, :wn
14
Js~uer
No
Yes
15
Optwnnl call tlat..:. contingent c;,ll dates and redemption amoum Not applicable
Mny be cnlkU, subtcct to rcuulator~·
ap[lmv;,l, at :my tun..: after 60th mouth frnm
the I!>SU:lllCe date
16
Not npphcablc
Not applicable
17
SuhsClJUent call dates, if applicnblc
CuttjlUilS /tlivitlcnds
Fi..,.cd m lloating dividend/ coupon
Not applicable
Flontini.J
18
Coupon rate :unl :my related indc .... t benchmark
Not npplicnblc
6 M KI130R; 0.'15% pa
nmt~trity
date
call suhjcctto prior supervisory ;,pproval
19
Existt:nce 11fa dividend stopper
Not applicable
f'.!n
20
Fully disct<.:tionary, partially dtscrctiotltll)' or mandatory
Fully Discretionary
l\1;mdatory
21
E.... istcm·c tli'SI<.:Jl up or other incentive to redeem
No
No
22
Nnncumulativ..: 11r cumulative
Noncumulntiv..:
Cwnul:Jtive
2J
Cunvertthle Ill mm-convcrtihlc
Nonconv..:rtible
Nonconvertiblc
24
If converttbh.:. cnnversion trigger (s)
Not apphcable
Not applic;,blc
25
lf conv..:rttblc. fully or parttnlly
Not npplicnbh:
Nm apphcahlc
26
lfconvcrtthlc, l'Otwersion rnte
Not npplicahlc
Not applicabk
27
If convertible. nwndatOI)' or optional conversion
Not applicabk
Not applicnblc
28
If convertible. spcct(y instrument type cotwcrtible into
Not
app!ic<~bk
Not applicable
29
1f convertible, spcciJ~· issuer of instrument it converts into
Nnt applicable
Nut applicable
JO
Writc-tlnwn li:mur..:
Not applicnblc
Not npplicablc
31
ll'writ..:-dmvn, \Httl!-dmvn trigger(:;)
Nnt ap111icnble
Not applic;,ble
32
ll'writc·Jnwn, full or partial
Not applicable
Not ;1pplic;,hlc
33
lfwnte·-do\\'n, pcrmnncnt or tcmpomry
Not applicnblc
Not applic:1hlc
3<1
lftcmpomry wnte-down, Jc5cription of write-up mechanism
Not applicable
Not upplicablc
35
Position in subordination hiemrchy in litJuidation (specify
instrument typ..: immediately senior to instrument)
Subordinated dcbtfl'FCs
Creditors inclmling Depositors
36
Non-complimll transitioncd fcatur..:s
No
37
If yes.
~p<.:ctlY
No
non-compliant fentures
39..1
CAI'ITAI.-ASSESSi\IE~T
39.4.1
Scope Of Allplic:ttions
ANU ,\UEQllACY
UAS~:L
Absence nfpnmt of non-viHhtluy
dau~c
Ill SPECIFI('
The Basel ] ft:ltne\\orl. rs applicable to the Bank both at the cnnsnhdiltcd levd a~1d abo on stamlahmc b:1~IS, SuhsHhaucs m..: mt.:hnlcd wh1lc cakul:ttlllg
Cunsolid:tlcd ( 'apllal AdeiJtmcy ratio of the Bank using full cnnsolidntion m<.:thod The Standardized Appmaeh is us..:d hy th..: Bank for calculating the Cnp1tal
Adequacy rntin lin Cr..:Url, Markct;,nd Opcrntional Risk.
39.4.2
Capil:tl Structure
During 2012. the Ban\.. tssucd unsecured, subordinated TFCs of Rs, 2,500 million by way of pnvatc plac..:ment. Th..: m~trument was issul!d at 0.75";, llhov..:
KIUOR to support th..: capstal base or the Bank and is for a tenor or 10 ye<~rs Th.:: instrument is structured to redeem in two cqunl s..:mi-annual instalments of 50%,
or the issue amount in :!022. The Bank may however call the TFC subj..:ct to prior ;~pproval or the St,llc ll;,nk, on nny pro lit paym..:nt Ume ;Ilia the 60th month
from the issuanc..: d:llc_ The instrument is also subject to n lock-in climsc meaning neither prmcipal nor JHOtit may b..: p;,id (c-...:n nt nHHunt~·ltf sm:h puvm..:nt
menns th;,t the B;mk lid I~ bdow or remnins below its minimum c;,nital rct1uircments The instrumcmts currently rated nt A/1./1.
The mstrumentiS cla.~~1fted as a liability ami is subordmatcd to
For rurtlu:r
llewtl~
pa~mcnt
or pnnctpal ;,nd prolittn all other mUcbtcdncss of the Bank. 1ncluJ1ng tlepostts
of the cap1tnl mstrumcn! curr..:ntly p;,rt of Tier 2 capttal, pl..:ns<.: refer Not..: 1(•
)
J9.5
Capital Adequacy
The Bank's capital management approach is driven by its desire to maintain a strong capital base to support the development of its business, to meet regulatory capital requirements at
all times and to maintain good credit ratings, maximising shareholder value and at the same time maintaining investor, creditor and market confidence.
l11c capital position is reviewed and monitored by the Asset and Liability Committee (ALCO) of the Bank. Regular reviews help to ensure that adequate levels of capital and an
optimum mix oftl1c different components of capital arc maintained by the Bank to support the strntcgy. This is integrated with the Bank's annual planning process that takes into
consideration business groMh assumptions across products nnd business segments nnd the related impact on capital resources.
The following matters nrc taken into account while reviewing the Bank's capital position:
a)
b)
c)
d)
current re~;ulatory capital requirements and our assessment of future standards;
demand for capital due to business gT0\\1h forecasts;
forecasted demand for capital to support credit ratings and as a signaling tool to the market;
a\'llilable supply of capital and capital·raising options
For calculation of Capital Adequacy Ratio, the Bank adheres to the calculation of capital requirements for credit, market and operational risk as per the guidelines of SBP.
\:or credit risk, the Bank uses the 'Standardized Appro~ch'. 1l1e Bank uses reputable and SBP approved rating agencies (ECAls) for dcri\'ing risk weights for specific credit exposures.
These are consistently applied across the Bank's credit portfolio for both on and off balance sheet exposures. The ECA\s used for rnting various types of exposures arc tabled in note
39.6 to these financial statements.
For lhe purposes of Credit Risk Mitigation under the 'Standardised Approach', the Dank follows the instructions laid dovm by SBI' vide their Circular No. 08 dated 27 June 2006 with
regard to eligibility of col!atcrals, valuation and management. Where a transaction is secured ily an eligible collateral and meets the cligiblhty criteria and minimum requirements ns
laid down by SBP, the Bank reduces its exposure under that particular transaction by taking into account the risk mitigating effect of the collateral for the calculation of capital
requirement. Co\laterals used include: Government of Pakistan guarantees, lnter·group guarantees, margins /liens and saving certilicates.
1l1e Bllllk calculates its capital requirement for market risk in its portfolio, based on the methodology provided by SBP which t11kcs account of spccilic and generalmarJ..ct risk capital
charge for interest rate risk using the duration method.
For ca.Jculation of operational risk capital charge, the business activities of the Bank arc divided into eight business lines: corporate finance. trading and sales, retail banking.
commercial banking. pa)1nerlls and settlement, agency services, asset management and retail brokerage. The Dank's operations me map11cd into these eight business lines as per the
criteria laid down by SUP vide Circular No 08 dated 27 June 2006.
Within each business line, gross income is the broad indicator that serves as a proxy for the scale of business operations and thus the likely scale of operational risk exposure within
each of these business lines. The capital charge for each business line is calculated by multiplying gross income by beta factors ass inned by SOP to thnt business line. Bela serves ns !1.
proxy for the industry·widc relationship between the operational risk loss experience for a given business line .1nd the aggregate level of gross income for that business line.
1l1c total cnpitnl charge is cnlculated as the three-year :we rage of the simple summation of the regulatory capital ch:ltJ;CS across each of the business lines in each year.
1l1c 'Standardised Approach' is prefened over the 'Basic h1dicator Approach' so as to arrive at a capital charge that is rcflecti\'C of the risks
associated with each of the Bank's business lines.
,"l11c cnpita! requirements for the mnjor risk categories arc indicntcd below:Risk Wci~;htctl Assets
Capital Requirements
2013
2014
Ru
2013
2014
cc~
in '000
CuditlliJk
&~nfsiliwu.!.ti~uiU1aru!~ulm.;l.D~!USunPJJ:l
Cash & c,\.·h equivalents
Sovereign
Public Sector entities
Banks
Corpcrat.:
Retail
Residential Mortgages
Past Due loans
Operating Fixed Assets
Other assets
Qff.IJalancc sheet
Non-market related
Loan Rcpa)1ncnt Guarantees
Performance Bonds etc
Stand By Leiters of Credi1
Market rdatcd
1.13,66~
15,6-13
27,80-l
565,794
8,765,938
856,478
90,292
221,771
628,255
1,290,881
12,462,1156
1:1.366
15,553
1.326,221
7,842,852
898,642
10·1.319
308,132
615,522
1.863,647
12,988,254
156,·125
278,036
5,657,'M-l
87,b!t9,J85
8,564,776
902,918
2,217,708
6,282,553
12,908,81.1
12o\,62H 558
1.1,262.205
78,428.522
8.986,415
1,0·13,186
3,081.:118
6,155,222
IR.635.474
1
12 1.882.53(,
1,558,604
1,127,892
217,939
2,904.435
\,313,983
980,245
292,570
2.586.79!1
I$,S.Uo,037
11,278,919
2,179,394
29,044 350
13,139,821<
9,802.·153
2.915.7!10
25.8(>7,981
78,280
131,493
782,804
1,314,933
14,660
146,598
22(1,750
1·1,660
22,075
ll4
22.209
1Mi,S98
l2~~2L
1·16,135
IJ.I,461
1,~61,346
!}ol,•l/>:~4
·100,(o00
5-16.73.5
60.1(>2
19·1,624
-l,OOt'i,OfiS
:"i,-llo7,351
(.()(.(.17
l 'J.I£,.2-11
15~,526
£•111il)' t.~9,;,1urc Ri.<k in the lkmhing IJor./o
Listed
Unlis<cd
C1Di.tallhllll.imathr.portfo!tm whjCJ:IlQ Sta!l.dn4z.ci.llpJWJ1rll
Interest rate risk
Equity position risk
Foreign f:xcha.1gc ri;k
O~rt~:ionaf
1.3·1~
RiJk
TOTAL
Capital Adc<ttJ3t)' Ratio
4,788,645
•1.749,605
47,886,-150
47,4%.048
20,795,611
20,672,983
207,956,111
20(•,729,1.131
2014
CtiTitotoTal RWA
Tict·l capita! to total RWA
l'Ptal cnpita\ to tot1ol RWA
~""'!
{.::)
(i)
_]
2013
,\ctu:ll
II
Required
50%
6.5%
10.~~
Acl1oal
39.6
Types of exposures :md ECAI's used
Corporate
.ICR- VIS
i'ACRA
STANDARD AND l'OORS
MOODY'S
FJTCII
Sovcrci~ns
Bnnks
-/
-/
-/
-/
-/
-/
-/
-/
-/
-/
v'
-/
-/
-/
-/
The Bank mlhcrcs to the mapping instructions issued by SBP on the Revised Rcgulatol)' Capital Framework under Basel II.
issued vide BSD Circular No. 8
or 2006 dated
27 June 2006, vide BSD Circular Letter No. 09
or 2007 dated 24
August
2007, vide JlSJJ Letter No. llSDIJ3AJ-2/2011!141/2009 dated 2 December 2009 and vide llSD Circular No.5 oJ'20IO dated
5 October 2010 with regard to credit ratings to be used. These arc as follows:
LONG-TERM RATING GRADES MAPPING
Risl< \Vcightagc
Standnnl & Poors Moody's Investors
Ratings Services
Service
Fitch Ratings
PACRA
AAA
AA+
AA
AAA-1-
AAA
AA+
AA
AAA+
A
1\llBIJ+
llllll
llllllllll-1·
,JCRVIS ..-
,
AAA
AA+
AA
AAA+
A
AlllllH
Bllll
llllllllll+
20%
50%
100%
100%
--150%)
150%
llll
llllll+
ll
llCCC+
CCC
CCC-
cc
c
Aaa
Aal
Aa2
Aa3
AI
A2
A3
Baa I
Baa2
Baa3
Ba l
Ba2
Ba3
Ill
ll2
ll3
Caal
Cc:m2
Caa3
Ca
c
[)
A
/1-
lll3ll+
llflll
llllllllll+
llll
llll1\+
ll
llCCC+
CCC:
CCC-
llll
llllIll
B
llCCC+
___
AAA
AA+
AA
AAA+
-·---
/1
- - -1\---
lllllH
llllll
llllllIJJl-1
---
llll
llllJlt
------
ll
llCCCI·-
CCC
CCC
CCC-
CCC-
cc
c
cc:
c
cc
c
D
JJ
D
Fitch R:1lings
PACRA
Fl+
FJ
F2
F3
ll
/\-1
/\-1
A-2
/\-3
/\-2
/\-3
Others
Other:.;
··--
SHORT-TERM RATING GRADES MAPPING
Risl< \Vcightngt..•
20%)
50%
100%
150%)
Stnndanl & Poors Moody's Investors
Ratings Services
Scrvitc
/\-1+
/\-l
/\-2
A-3
ll
ll-1
ll-2
ll-3
c
P-1
P-2
1'-3
NP
c
D
I
.JCRYIS--
--
-.'
..
40.
RISK MANAGEMENT
Through its risk management structure, the Bank seeks to manage efficiently the core risks: credit. market.
operational. country, and liquidity risks. These arise directly through the Bank's commercial activities whilst
compliance and regulatory risk, operational risk and reputational risks are normal consequences or any
business undertaking.
The basic principles of risk management followed by the Bank include:
Balancing risk and return
Risk is taken in line with the requirements of the Bank's stakeholders. Risk should be taken within the \lank's
risk appetite, consistent with the approved strategy. Any such risks arc avoided which have a material
probability or causing financial distress to the Bank or its clients or customers.
Re>ponsibili~l'
Given the Bank is in the business of taking risk, it is everyone's responsibility to ensure that risk taking is
both disciplim'd and focused. The Bank takes account of its social responsibilities and its commitment to
customers in taking risk to produce a return.
A ccoullla biIi(l•
Risk is taken only within agreed authorities and where there is appropriate infrastructure and resource. All
risk taking must be transparent. controlled and reported.
Anticipation
The Bank looks to anticipate future risks and to ensure awareness of all risk.
Competith•e Atlwtntage
The Bank seeks to achieve competitive advantage through ei'Jicient and effective risk management and
control.
Risk mmwgement
The I3ank aims to implement best practices and have a specialist risk function of international standards, with
strength in depth. experience across risk types and economic scenarios.
Ultimate responsibility for the effective management of risk rests with the Company's Board or Directors.
Acting within an authority delegated by the Board, the Executive Committee reviews specific risk areas and
monitors the activities of the Executive Risk Committee ("ERC') and the Asset and Liability Committee
("ALCO").
ERC headed by Country Chief Risk Officer (CCIW), through authority delegated by the Board through the
Bank's Executive Committee, is responsible for credit risk, market risk) operational risk. compliance risk and
regulatory risk. legal risk and reputational risk. ALCO, through authority delegated by the tloard through the
Bank's Executive Committee, is responsible for management of the Bank's liquidity. capital adequacy and
structural !(>reign exchange risk. The Pension Executive Committee, through authority delegated by the Board
through the !lank's Executive Committee is responsible for management of pension risk.
The day to day responsibility for managing risk rests with CCRO who oversees and manages the risk through
a team or managers; Senior Credit Officer responsible for credit risk in Corporate & Institutional Clients and
Commercial Clients, Country Credit 1-lead responsible for credit risk in Retail Clients. Head of Special i\sscts
Management responsible for remedial risk management, !lead or Credit Risk Controls t·esponsiblc ror
collateral management, security documentation, credit MlS and controls, Head of Market Risk responsible for
liquidity risk and risks associated with price movements, arising from interest and exchange rate movements
and Head of Operational Risk responsible for enterprise wide operations. The Bank has established policies,
procedures, processes, and controls and have provided the Risk team adequate support by way of risk systems
and tools fOr measuring and reporting risk for monitoring. controlling, reviewing and managing risk.
40.1
Credit Risk
Credit risk is the risk that a counter party will not settle its obligations in accordance with agreed terms.
Credit exposures may arise from lending, trade finance. securities and derivative exposures. Credit exposures
include both individual borrowers and groups of connected counterparties and portfolios in the banking and
trading books.
The Board or Directors has delegated down the authority to ERC through the Bank's Executive Committee to
establish risk appetite and make recommendations to the Board for approval of risk appetite and policies lor
managing credit risk. The CEO and the Executive Committee in turn rely on CCRO and the Risk Committee
to determine these and recommend for their suppo11 and Board's approval. The ERC is also delegated down
by the BOD responsibility to delegate credit authorities to independent Risk Officers.
Credit risk appetite is established through business strategy papers and underwriting standards by the business
managers, which are approved by the Board once recommended, and supported by the Executive Committee.
Specific procedures for managing credit risk within Corporate & Institutional Clients, Commercial Clients
and Retail Clients are determined at the Senior Credit Officer and Country Credit Head levels for their
respective jurisdictions with specific policies and procedures being adapted to dif"l<:rent risk environments and
business goals. Credit analysis includes review of tllcility details. credit grade determination and financial
spreading I ratio analysis. Portfolio review, Early Alerts and Stress Testing based on scenario analysis is a
combined responsibility of Client Relationship and Risk and Finance function. Client relationship origination
and credit approval roles arc clearly segregated throughout Corporate & Institutional Clients, Commercial
Clients and Retail Clients segments.
Credit concentration risk is governed by specific policy, the adherence to which is managed by the Executive
Risk Committee (ERC). Credit concentration risk is principally managed based on three components: single
name borrower exposure. industry concentrations and product concentration. In addition to the SBI' specified
prudential limits on single or group exposures. limits arc also established by the CCRO and approved by CRC
in line with the Credit Reference Level framework ("CRL").
40.1.1
Corporate and Institutional and Commercial Banking Clients
\Vithin the two business segments, a alpha numerical risk grading system is used for quantifying the risk
associated with a counter-party. The grading is based on a probability of dcl1111lt measure. with customers
analysed against a range of quantitative and qualitative measures. Expected Loss is used for further
assessment of individual exposures and portfolio analysis. There is a clear segregation of duties with loan
applications being prepared separately from the approval chain.
40.1.2
Retail Banking Clients
For Retail Banking. program based standard credit application forms arc generally used. which arc processed
in central units ror different products and market segments. Retail Banking Analytics team has developed
Bureau scores and uses Bureau data for portfolio monitoring and for underwriting new business.
40.1.3
Sc~rncnt hy
Class uf Businc:;s
21114
Adv:mccs- Gross
l,crccnt
(Rupees
in '000)
Chemical and phannaccuticals
Agri busim::s~
Textile
Communication
Insurance
Tclccommuni~.::Jtilms und
information technology
Cement
Sugar
Automobile und transportation
equipment
Transpurtatim1
Financial
13,899,988
5,118,266
32,843,153
5,233,454
Deposits
(Rupees
Percent
in '000)
Contingencies :md
('ommitmcnls
f•crccnt
(Rupees
in '1100)
9.94
9.26
3.41
21.89
4,209,828
·147,393
I ,773,702
058
8,757,658
26,197
3,279,39-t
3.49
12,1-19,161
3.99
·l,.t.t3,819
11.03
3.72
5.0-t
1,301,076
0.43
1.38
0.15
91,950
1,972,388
2,184,830
0.06
1.31
1.46
1,914,641
4,675
3,-1%
0.63
175,302
225,1148
62,4110
0.20
0.26
0.07
2,070,735
4,871,158
207,868
1.38
3.25
0.14
1,337,670
I ,446,937
824,020
0.4·1
0.-18
0.27
2,4117.788
2,597,29-t
JS,0-13,·158
2.73
2.95
·B.I9
1,359,030
0.91
-I,-160,.t..t0
1.46
·1,103,316
-1.(16
17,270,036
11.51
0.85
10.55
30.53
100.00
1·1,224,415
93,181
203,218,343
57,094,690
304,503,_6_68
4.67
0.03
66.74
18.75
1011.00
3,5S7,525
4.07
11.02
Electronics and electrical
appliances
Producti011 and transmission
of energy
Shoes and leather garm~.::nts
Individuals
Other:;;
1,273,809
15,831,439
45,811,955
150,040,059
20,192
6-15
211,3(,0,193
88,11911,229
'1(113
23.12
- -1110.00
----·---·-
Contingencies :md
Chemical and pl1annaccuticals
Agribusiness
Textile
Communication
Insurance
Telecommunications and
infOrmation technology
Cement
S11gar
Automobile and transportation
equipment
Transportation
Financial
Electronics ;1nd clcl:trieal
appliances
Production and transmission
or energy
Shoes and leather g:mncnts
Individuals
Others
""'l'i''-'
Advances- Gross
(Rupees
Percent
in '000)
Deposits
{Rupees
Percent
9.478,1149
8.134.640
32,969,511
5,417.355
'1.389.750
311.1HO
1,386,S37
12.266,053
1.160.833
lAS
0.10
0.'17
0.64
1>.0 I
5.16
20.92
3.44
in '!IIIII)
(~ommitlnents
(Rupees
ill '000)
Percent
3.{139.5·17
·111.712
2.1·15.350
1.550.752
3.RS
0.05
2.7·1
1.98
0.01
0.00
52.109
217.895
95.262
0.07
0.28
0.12
5.1·1
4.14
0.39
2.915,894
2,946,934
1.87
1.895,336
42.0Xl
4,085
2.896.457
4,005.359
2.515.045
1.8•1
2.5·1
1.6(1
63·1.871
1.889.852
1.337.529
11.21
OJI3
0.'15
U>71.820
4.(12 11.157
27.137.097
3·1.()()
3.592.146
2.28
4.521.5·13
1.52
3.7i>0.77•1
•1.79
23.283,078
2.966,675
16.760,590
39.1>91 ,90 I
157.573.634
1•1.7X
1.88
10.64
25.19
100.00
11.95'1J38
•13.92'!
19•1.286.431
(>{).'127.'18j
296,556.991
1.~5
2.13
/:J.O(,
18.1188 ..112
510.{){1(1
0.(15
0.111
65.51
1.3(19
0.00
20.53
211.•111
I(>.1 02.2RO
------· ----·100.00
100.00
7X.'137.4·12
•UJJ
- ="--==-----=
-Ill. IA
Details or i\on·Jlerfnrming Advances l\IH.I Specific ProYisions
by Class nf Business Segment
2014
(:l:~ssifit•tl
2013
Specific
Provision
held
Advances
306,804
14,999
7,197,1115
:;,997
Chemical and pharmaceuticals
Agri husmcss
Tc:-.t1k
Fo(ltwcar anr.J l.cathcr p.arments
Automnhtlc :md transpnrtation equipment
306,804
14,999
6,757 ,1)HJ
5,997
302,563
-19,326
502,.f(){l
-19,32(,
Financial
Jlroducti\11\ HJHl trnnsmission of energy
202,617
2112,617
16,9()2
Individuals
16,902
13.253,344
20,910,.535
14,799.(173
Others
23,119.5.733
40.1.5
Clussilkd
Advances
Spccilic
Provision
hdd
290,825
102,997
7,6:ll.)J9
310.625
I 02.997
7J~2tJ.O:l2
5,1)!}7
5.W7
316.939
tJ9.326
222.332
li.I31J,JI3
3\6,939
·19.326
222.332
3.672 .. 1(1(1
9.205.72()
24,(155.364
21.51S.l•ll
·1.67tUHl3
Segment hy Sl•ctur
2014
AUvanccs
Rupees
Rupees
%
Private
6,167,800
143,872,259
150,0..JO,IJ59
%
in '000
in '000
Publk I ChiVcmmcnt
Contingencies ami
cmnmitmcnts
Rupees
'X,
Deposits
-1.11%
95.89%
in '0011
4,9-15,769
299,557,899
J(l-1,503,(1(,8
HIOD;;,
1.62%,
98.38%
100%
-1,795,1111(1
5.-l-1°,!,,
83.295.2.3_2.__ _____ 2:1.%%
88.11911,229
I IIU'1o
2013
Advances
Rupees
in '000
Puhlic 1 ( iovernment
Private
..JO.I.Ci
11.233,776
146.339,858
157,573,634
Contingencies anli
ctunmitments
Rupees
'""'
in '000
Deposits
'""'
Rupees
--------------
%
in'OOO
7' 13'}(,
92.!\7%
291,963.402
1.55 11.,
9S.45'Jt;,
100%
296.556.91)1
100'%
•l.:'i93.5X9
I \1_71'~-o
:\IJ.21J%,
X.'Hl0,2M
70.037.17()
-----100%
Details uf :\un-pcrfunning AU\'anccs :111d Spcdlic Provisions hy Sector
2013
201-t
Clas.~ified
lHI\'liiiC'eS
Spccilic
provision
held
-------;---'"""--;:---,;:
C\assilicll
:~Uvanccs
Spcdlic
prm is ion
held
Private
-10.1.7
Geographical Scj.!lllt'nt Anlllysis
201-1
Total
Net assets
c:ontingt'lll'it•s
cmplcl) t•tl
:u.scts
and
t'lliJlluycd
t•ummitmt•nts
-··-··--------····--··-·--- (Rupees in '0\JO) -··-····-·-··--·-·..·····-·-l'rulit
ht•fure
taxatinn
Pnkiswn
- - - · - - - - - - : : : - -21113
;--------------l'rtllil
before
Total
Net A:-.:.ds
asscis
cmpltlycd
Luxation
employed
l \mtwgcnr1cs
and
Comnulmctll:.
---------·---------------·· ([{upecs in 'f/00) ------·-------------- -----Pnkis!an
16.1,1-1,JSO
399.'13S,2S2
40.2
Market Risk
The Bank recognises market risk as the exposures created by potential changes in market prices and rates.
Market risk exposures arise primarily from interest rate and foreign exchange related contracts. The Bank
has no significant exposure to equity and commodity price risk.
MTCR approves the limits within delegated authorities and monitors exposures against these limits, and
is locally under governance of CCRO, who agrees policies and procedures and levels of risk appetite in
terms or Value at Risk ("VaR"). Limits arc then proposed by the business within the terms of ngrccd
policy. These arc agreed and delegated down by RC under delegated authority ti·om the llOD. Policies
cover both trading and non-trading books.
In addition to market risk policies, as well as VaR and other market risk limits, independent stress testing
ofporti(Jiios, !actor sensitivity measures and derivatives arc also employed as additional risk management
tools to manage and hedge market risk exposures. Risk models arc periodically back tested against actual
results to ensure that pre-determined levels of accuracy are maintained.
40.3
Foreign E:\change Risk
2014
Assets
Off-balance
sheet items
Liabilities
Net foreign
CUJTCilCY
exposure
------------------------------- (Rupees in '000) ------------------------------Pakistan rupee
United States dollar
Great Britain pound
Euro
Swiss Frnnc
Japanese yen
Others
325,220,097
34,393,601
5,809,804
1,621,047
21,350
27,844
25,682
367,119,425
284,268,082
51,226,462
5,808,079
4,380,041
21,350
19,472
25,618
345,749,104
47.,444, 107
(39,701,194)
(192,632)
(700,425)
(54,676)
(603,453)
(1,191,727)
83,396,122
(56,534,055)
( 190, 907)
(3,459,419)
(54,676)
(595,081)
(1,191,663)_
21,370,321
2013
Assets
Liabilities
Off-balance
sheet items
Net foreign
currency
exposure
-------------------------------(Rupees in '000) -----------------·-------------Pakistan rupee
United States dollar
Great Britain pound
Euro
Swiss Franc
Japancsc yen
Others
''40.3.l
295,972,545
44,295.260
6,144.750
5,298.447
19,390
169,777
35.048
351.935.217
271.424.353
54.773,814
6.139.909
5.225,455
25,064
176.553
42.804
337,807,952
43,642,526
(36.30 1.863)
(832.886)
(3.509.463)
( 123.497)
(2, 172.093)
(702,724)
68,190.718
(46.780.417)
(828,045)
(3.436,471)
(129.171)
(2, 178.869)
(710.480)
14.127,265
Currency risk is the risk that the value of a financial instrument will lluctuate due to changes in foreign
exchange rates.
40.3.2
The management sets limits on the level of exposure by currency in total which arc monitored daily.
~0.~
Mismatch or lmurst It ate !icmWn Anets and Liabilities
Nm1 inl<"r<.•l
Tm~l
~idol/
O>nlhrcc
mn~lh
int~rc.•l
r~lt
c•r.:-e month•
mootb• lu
_,;. muntb•
O•cr•i•
mnnth• to
uoc )nr
Oltr!>IIC
~c;•r
ll>
O>crtlln
O•·cr three
Onrfi•-~
o..·r len
hc~rin~:
)c•r• tn
)'C"r.• HI
)C~r~ Ill
'"""
Jinnntinl
'"" )C~r.•
--·---------------··-----·---···(1\ut~c•
thrc~ year•
li>c )'tar•
ten )cnr•
in,>tr~mcnt.•
in 'INK!)---..···-····-····-·-·-··-··-··-..····--·---------·---·---···
An<'IJ
c•• b ~~~<~ b>br><:e• "''h
tre~•U')'
binl..s
u.n.!i •.U.!i
12.n~:.m111
3117,3111
3117,3111
Uolanca \\llh oilier bani.J;
lcndonp \0 fin>IICIII
in•t•hllions
111•~~'/H
In•~'""'""
l!!.fol",~
111'),67H,l7U
1Jl>/l.!i~~'J\
7,711,371
J\,725.11'1.1
I~,IIJ7~~7ll
MU.%H~~M7
l'J.~!U.'J1f.
IM1.77.!i
Ad~31>CCI
1H.l2"1.
1211~~911,0~'1
~7.l'II,3Mi
311,71~~~2.~
lll.trJ~.nu
1,foOMHfo
ftn,nu
7H,70'J
I,I'J7,11'Jl
-03,711'1
l,.l$7,11(,(,
~1.1.71\'J
7111,J!i7
JlJ.f,J/1
---'----711~17~."!_'1_1__
1(•• 17~.7?1
Oth<:IO'IC\S
l/oi~,7JJ
J67,119,H!i
l!Hl,3113,7Sl
17.lH,&71
l.~M!i,ll!i
JI.!Jf,~~llJ
/Jah/Ntic~
.!i.~f,J.t.ll~
Bolio pl)>bk
l!Of<C\\Ing•
tkpo<oll ond Clbcr acocunl•
(o.!iH",I.
Sub·e<~onalod
III.'Jil'l'.
loan•
7.!1"1.
Jll4~~UJ,6(;8
~~~,1123.1(,1
9,1~1.ll0
3,771,367
1~00,11110
l~~'IM,l~H
l.tl-l~.7~H
J!i.U•l
1~.r.!i!i
~,III'J,G'J~
JM,'!I!i
JJio,J!~
~,ll!i!i 1 J!iK
~3'1,~711
J3(,..ll!i
I/•1J.%l
1.1KHI
1J7,JH,J~
2.~1JII,I"Xl
l!i.'JJJ.Jf,U
l.!i,?37,1f.ll
Otha hobohua
JH,7~9 1 1\ll
l!iS,~IIll
H6
11,?!il,~S7
71Ul.'J%
u.n.~r.7,11~7
(27.'13'1)
l'nnt'{)r,f l.en,hn}(
lntcr~SI Rot~
7,'Jf.J,7f,J
liCMI.IHNI
Sw•p
~17,1'15
Forci&n CunetlC)" opiiO<I
Fo"•>rd fon"ign C,,doongc Comrocl•
1,016.1120
~,6UJ,6H
7.9f.J,767
~.67~.(,(1(,
2.ll'l..lSI
1,33'1.775
l'nn<(m/ /~Jtn!M'/nr;
ln1ero11 Role S"•P
Forcogn Cunem:roplian
F<m•ard fon"ign E.•chan&c C'rnolrocll
.!i,9J~,CHKI
CumuiMihe )idol /intnc•t ri•k """'iti•ity
~77,2'15
~·r
2UIJ
Toul
~reid!
Up~oonc
IIIICre<l
mo11th
role
O•ctone
mon1bro
thlte month.<
0•-crtlu<:<:
01tr11~
lll<>nllo$10
monllostn
.,~
month•
O•cronc
'car
In
h\O)OOfS
o,.,,,.. o
lo
three wan
~~nrs
O•crtlorcc
,cor~ to
r,cycal5
O•crtcn
""""''!\
)Corslo
fiU.lUCo")
[~II ~~;II<
""''""'"""
·-············-··················-------·--··--------·--·····--····............... (Rupees m1!1111)·--................. ,_ ............................................................. ..
Aueti
Cashnndb•l•=•"•th
treasury bon~•
Dnbn«l wilh othtr banl..s
L..::ndu•gsta financial
institutions
32.331.083
9.2DII.OS1
B.l~l.ll.ll
I.Hl.$$~
22,1SK.!40
n~o
ln•·osmomll
?
Ad•-•r><:c.s
1117"~
146,6~6.7lf•
lJM?S.OH
1.451.5.1~
17.103.25?
l'.l.'J07,1'J?
75,820,0-H
77.)46.433
7.SJLHr,
14)2K.•III
~.IS4.7UI
IXJIJ(o.K~l
31.9~11.H1
2A<JJ.Il27
7tH1.36'J
13.M•2.7K6
6%.223
122,UJII,SS(,
121J.JU.l7L
2l.KI~t.~S7
10.6H.72K
1?.2117,2111
H.JS'I.Ili~J
213.UIK
Ln,27'.l.7S4
?.OOS.OI4
7.2Sl,l14
~,(o71l.H3
11.61f>
4,7.S2,lliJI
HK.UIJ
M4.37K
411.'117
J?KA03
?S3.l1K
r.!z.xn
•mu..ur.
2.~71<.71·2
13.RI1,9~K
Otbcrossets
3SI,?3S.217
lJ.KIL.'JKK
41 . .1'14.~.n
/Jdilitie~
111111 pa~ablc
r..S4u.21J
6.Htl.213
IJ.orrm""&'
!Xpositt and Oil>« :>WXlnll
Sub-ordinated loons
Oil..:r hob>h11ct
7 71~1.
S!J3'}:0
'J r.i'~~
Uo.S66.11S
l96,SS6.'J?I
2.SOO,IMKI
lSC,UHJ
337.Kil7,'.1H
2,?2'JJ2Co
222.3H
'JIIUU
K2U21
12K.27'1.71S
I.IIIHI
2,SIIO,I~Ul
1\JoH.H.l
IS2.1S2,772
lfo.H7.2lK
LO.IIMI.IIfo'J
4.71o3.r.J7
J~I.!K~_Kl!
1~.2'1.l.'152
1·""'""1/.endmx
lnlcm1Rotc511>p
Foro>tn Currcmyopuon
2U!IS,~!IS
4U.S.7KI
J~II.S6S
Forward F«cogn E."l!.lnge C:onlro~IS
U.l~'J.2H
32.131.'1)7
lll.J~r.
133.3))
tlm.mi.~'Jil)
('.lll1512)
1.2\HI.(HM\
7.1'Jl.27K
1.2tHl.(JIIII
7.!'JI.l7K
111.~2~.773
4.241.3S'J
9111.1111~
H.2Jr,
~2.SJJ.ll!
IV'!).I!Hl
!.IO).(m!l
hmo-aNIIJorm~m!{
ln1oro;s1 RotcS"•I'
Fotc>gn CWTC'nC) oplion
Fon•ard Fon:tg.n E.~ohan~c C:MtrOitll
TO!al )1dd ltntcrcst rll~
•cn.olll\lt~ ~ap
Cumulom1: ~1dd /snlcr<:>l m~
~~~-~
Yidd llntcrl!llt
R•t~
"n"t""~
gop
23.420.?75
411.S,7&1
3KII.S65
77.242.7~()
3').111K.IH
.li.MU.?lG
6A'I3Jm,
1111,069.4%
3'J.4U.6~?
33.362.404
(o.63USK
J.?H.?SII
(2.707.617)
11 K.H(,J?7
l7.7~'J.X'Jl
J.l7foA?I
KUX7.7?~
'JX.'JH/.~(,
llll,IH.IKII
1.721.4U
12.~01.113!
(G.'J76.1S7)
2fo •.S2X.)!IJ
(J7.J'!H 4113\
!llJ~(,
J.?~J.'J~II
'Jill.HII~
H.! II>
(9.325.773)
2.'J~'J.'JI'!
7.')fiO,IJS
ll!n.fo"/1 ~')!I}
lloA'!R.foiiK
IIUPJ2.3~'1
121YJII.%7
!37.122_411~
J;llo.li'JK•Jl
Llfo.21'1X'l_1
Ri.•k
Yidd ~~~~ 11 lk til~ of deohne tn e:nmngs d..c to ad•nJc n~~>•cmCI\1 oflbc >ldd cuf\c_ lnlerc.st •~lc m~ I! them~ !loa\ d~~: >aluc of rm~ncs~luulrumcm< "'11 Ll~~<:luotc due to d''"&c• on Ihe "'"'41 mien:~ I r••~• Th~ U.1n~"
>"'pclod 10 uuou1 mi.., O!<<XIOied '"'" lhc dl"e<:U of lluctuouuns in 1hc PR"•·aihng k•-c.ls of morkcl !Oicn:sl r~tts en >IS fil••nd31 posilwn ond co<b llou~, The O~n~ mano~:c• duo ri<~ b~ mn1ehong the rc·r<'""'& of 3'"''' ••ul
hob>hlicl ond oiT·bala~>Ce 1hccl 1nmmnom•
'j
-10,&
l.iquidicy ltisk
The
ll~nlo.
t!cfmc' hqul<hl'' mi.
J'
the potential that the lhnl. Cllhcr
doc~
nut have sulliciCill IU]<lld
C.Mncmllcs<mrcc~
:w;nbhlc 10 meet all
ll~
ohht;atoons as thcv
1~11
due or
~an
only accc"
lh~.,.c
hn~I1CI3IItmliiCC' at C'\Cl"i~l"' Cl><l
LHjllldtty n~k. both •hmttcrm .uul S1rUCIU1lll IS ntQmlOrcd through the mlcm~l hquuhty mi. manli).\C!liC!\1 fmmc•wrl. and
commct1cc. chan<·!! by tlw f'l:O, 1< tcspocmblc for both slatmory ;md prudcntcal hqucd11y
A ranse ofto<lb :uc usctl l'n1 chc
momtonng offutmc ca\h nu"~
In
mana~:cmcnl
of hquu.hty
The~<:
due to
unfou:~cen
limdmt: pbns ~re fC\'111\~ellp~rmlhc.llly to ensure
a•kciS<' changes 10 the nla1kel pla~c.
th~t altctn~ll~c
,,b turitits of ,\~.In' ami l.i.11Hlilir.• •
b~srtlon contr:Hin~l
maturil,l' of ~s.•rU
amlll~hiliti~-•
slmlci_HC~
fun1lm;;
,\ substanllalJ)OIIInn uf !Ia• llank ·~ as~cts are funtkd by customer dcpOSI\5 made up of cmrcnt ami sa vult:>
1\\MIIIIly, ICJlrCM!II\ :1 Stahle SOlUICC nffunds
~11. 7
l\l,1n:tgcd through the t\>scl a•nl
compmc conunitmcnl ami 1•holcsalc borrowmg t:mddm~-s. l.cy balance
~dd1hon, hquuht~· Clli\IIIIJ.l~ll~\
th:~tm~y ~fiSC
1~
nccount~
me 111
l'~~~c ~nd
~hcct
Lmh1hl~'
rnllo". mcthum ccnn fumhng
Ctl!llllllllcc !"t\1.("0"1 Tlu,
rcqnucncclll~
aud da) u• .1.1y
can be IUllllcmcll\Cd on :1 Inn ely 1M> I~ to lllllllllliO:C the ll<]llllh\1"
and other d<·poSils These cn~tomcr dCilOSIIS,
,,[n~h
,11e \\HI ely dwcrs1fied by
t~pc
11~~
and
nf thr ban!.
In ""ordancc Mth the ;;utdchnc' 1"Uc1l by SIJP throut:h BSD (trcnbr l.dtcr No .I oi'ZOII and BSD Ctrcular Lcucr No ~ uf 201 t ll.lnb ~rc u;quucd w dt~clow IH~hHIIic.' 1>f as~cls an<ll1ahthllh
scp~r~tel~ for 't<>nlractual matur111c'' ;md 'exp~:ctctl matunncs' The cx1•cetcd matmthe~ me calcol~tcd usml_! IInce [J I ~-c~r~ 1nMurtcal b.llan,cs .1nd ulcnnfrrnu "(\•rc' and "Knn-Core" habncc~ usm;\
month!}' \·olatthw an,ll~'i'' l'r'lc•ll ml.ln~<blc asscu arc 1Ht!'!Ciltcd on the basts ofthc11 dcprcctatton ramurt•s.1tton 'ldtctlulc
2014
---c;:::::;----;-;::;:-::::---,===--n:::::-;;:::::---;
Total
U[llO one
Over one
O•·rr thrtt
O..r1' six
month
month Ia
thrrr n>ontln
------
1110111hs to
six months
month~
lo
On•·unr
yu•·to
ll•o )'UI'J;
0\'rl'h\0
O•r1·trn
110.968,!i!l7
6,741,982
J,-176,975
l!i8,26J
6,1tJ'I
29,$20,9";'1>
6,109,898
5,799.62$
15.\,261
6,639
)'UI'SIO
our yur
lhrtc yun
fi•·c ,~~"
ttnyurs
·-··-------···(1-!.upr•• iu'UUU)-----·---··-------·-----...-·--·----·-··-
Cash and balance~ wuh
treasury banl;s
llalance.• wnh olhcr h.1n~~
LcndtOij$ 10 fmanctal m.,llluho"'
lnvcslmcnts
Advances
Other assets
Opcr.tltnll fixc•l assets
lntangtble aswt~
Oefcu~'<.l Ia"< as,cls
l,ia!Jililiu
Otlls p;~~-ablc
Dorrowinus
Deposits and other ac~uums
Sub-ordmatcd loan~
Other liab•lt!ICS
Dcfcncd tax liahll1hcs
2.1.~7!i.l~!i
21,~75,J~5
J37,JOI
26,167.~82.
337,J01
lt1,81J,559
22.919,317
!i0,736,941
IMJ.ns
6,lll,!i~J
\J,\9~
26,17,1,11-1
5!iJ
8,.)911,6-l!i
18,8-1!1,198
12,.~52,~ 17
l!t,377
1,107
~119,567,83.1
IU7.J89,9J8
~9,823,8H
-15,81-1,187
9,131,120
3,771,.167
2.598,2-18
J5,4f•4
7~M~
2,0H,7~8
4,1119,69~
36~,'115
1,266,132
9.412.'120
121,9~9
10,81J,!i~9
139,678,J7(1
12.8,590,(1~9
!1,563,6115
.~.563,6(15
17,24~.671
-1,2U9,119
29J,I65,6!9
Jo~ ..~IIJ,6611
15,3.17,~78
15,07M96
8,~0l,HII
299,~73
2,91111,.)17
79,131
3,JI9
39,56~
1,6!tU
.
l,48!i,77$
U\,,5'1\1
9,!i20,li~O
1.57(1,759
9~.176
87\
JI~.J'J7
7r.s,nu
~.727,417
IJ.2711
Jl,'lOU
26.1117,01'1
.
2,575.~~:!..
1.6511.71~
~~~=3~ffi~=
16.~90,929
.
27,i2\;!i!IJ--9i:J~i~:i~95,3'l'l ~~ -l,S\7~4<)--,\iAl~-;Q"Gj-
71f.l.JS7
JJ6,J25
~~1,~19
0s~,O~O't'·~"~'~::ttU,lG/1,~78
Jl·?~~~...29J12!!_,?2S
J3.J32~,_J 2 ,9o~M9
~-11,6~/1
I,OUO
2,500,11111)
16.~6~.654
_ J~8.~52,~JI__
311-1,!>97,\77
~_.1),M,H.=•~..'U!,2117,U9l
N~t
JO,~OI1,8'1J
2,0211
2,:'00,00\l
1171
---~~~J!~~-·---· _______,
799,8!j ___ _l!.2_!~~~~~----2,9~!!SI2.._ ___ ._, _ -·-;ill!~~~ ,__..,hl_-!.~~~~.-_,..,_~Ji-~MJ!~L=-.~~.!IV.!?.~~-'
uJru
Share eapn.tl
H.c.l'crves
Unappropnated profn
Surplus on reVI!Iuauun
ofassc\5 -net
J8,71!i,li5U
8,959,Jl.(l
6,751,JI1J
6
2~11,'11'1
~:=
-~c::;:;---------------·------·---- -- _2~~ .. ··-··-······---------- -·
Total
Up\0 one
month
O•·er on~
monch to
three mouchs
Over tluc~
tnonlh$ to
$tX months
0.-cr "~
month.• to
one :.-~~r
t"~\
(her uuc
rear to
two Y'~u~
Ove1
I!I}O(o,S•II
IJ,6Ct2.7Hc.
l.23H.J·I.I
2.<145,-19~
5.18~.29-1
6.~0-1,275
612.S9.\
3.63'1,<\85
19.1.229
.141.·111
21511
'/l\(•.157
53;\ll)
2~~-Hl
~car;
ll'
Over IInce
yc~~~ In
fil'c yc~r~
0\cr!ivc
)'<WStO
ten )'C~t$
thccc r~~•s
-·-··········-····-···-·-·······-··-··-······-·····-········-·····-········--·( H.111>cc:. 111 'Ol)l) 1- •••• ···•-••••••••••..···················-······ ··-················-····- ••
,\ntis
Cash ami balances wnh
\IC.lSUI)' ban~s
l2.J.l l.OS}
l2.3JI.OHJ
IA515~ll
1.451,5~8
hl\'cstmcnts
22.158,8·10
146,68(••11(>
Ad~·~nces
IJS.<19~.0J2
17,103,259
19,622,173
72.620.636
430.807
14,555
ll~lanccs
wnh uthcr IJ-.111~!.
Lendm~ to fmanc~:ll
lllSU\Ul!OilS
Oth~r ~s~~ts
Opcratin~; fixed a~-.'\5
Intangible ancls
Uc(cncJ ta~ as~ct~
2-1,(10'/J&u
6.155.222
26,221.'117
""
5,o55581
77.346.-IJJ
)1,09-1.099
11.253,6'16
29.110
1.79)
7J32.54(,
10,070,612
)9-1.1-14
H,664
8.15·1,701
l_q97,751
2Jlfol.-198
n.Jl7
3.{>f>li,9J8
2)0.ll(>7
2,1J8<)
D7H
10,7~5
5.944.72'!
17-1."55
10.755
143,624,969
124."1110,71~
(•J40.21.l
lf•5(•h.Jn
loJ40,213
1,0'14.H•1
'1.00\01·1
·1.670,ql
11.1•\{,
2\~.N~Il
-tii,•JI"/
2'lb5~6.'l'JI
2~0.~~'1_46')
7.2~1)1-1
2.'l~'l.~lh
·t'/~2.01~1
l>h 1,1"/X
.l•lX,·!Ul
1.17(>,62-1
·1,252.7))
1.127.7~3
20.S09.W.1
8.727.812
l.iallilili~s
Dtlls payahk
Oorro"1np
l>eiiOSits nml ulhc< n~wnnt.•
Suh·<,ndmated k>~n~
Othe1 h3bllthcs
Dcfcffcd tnx habthuc•
2.500,000
16.-1%."/99
N~l an~ts
311.715.8~0
Rcscr\'CS
Unappropnale~
u~r.c11
on
pwl'lt
1.0·14,_\\9
6.HI•,IZ7
IC\'alu~uo;>n
ofas~cls
·net
).442."101
55 7~2}'..,.
'J01.'12
1,1\ll()
2,~00.000
118.7~)
338,778.9)1
55.72'1.017
(14~.74~.676)
I.'H'/.lS~
1:1_539
•1;1-17.-17.1
.:!f•.ll-1,65~
~-------~~--------------
211\4
Onrrhr~· ---~~-o;~~-~·-·(h'rt·two
Q,·crrhrrr
(hrrliH
O•·rr·tcn
)'Cat'tn
)C~I~ to
~·ran to
)f~l'lo
111011\h
mrmlhlo
months to
months to
ouc year
two yean
truynn
------····--·---------·-----··--·--·-·----·(Hup•••~
'OOIJ)----------··--·-··-·--·-·-·----·····-···--·---·-·------···-···-·-·
'I nlal
tltrlo our
0.-rrone
in
("~sfl ~tld b~I~UCC!;
Wi\b
1rcasu1y banks
21,·17S.JH.
JS7,JOI
IO,~IJ.SS?
ZI,HS,.l4S
l117,JOI
IO,SIJ,SS•J
lnvcs\menls
lli1J,fo78,J7G
22,919,.117
1\dwnc~::~
11~590,059
ll~lanccs
\\llh other bani.<
l.cndUIJ>S to financmlms111u11<HIS
11,.198,6-IS
JO,SIJ,IJII
2,'JOO.J 17
8U,'I6li,S87
Jf,.J&2,S70
J,-176.'J7S
79,131
1Sll,261
l,l19
6,(,j')
JO,-IOO,II?J
11.S7-I.JSI>
!?9,473
J?,S6S
\S,Hl7,S7&
1,1>60
13,-IM,769
Oihcrasscts
Opcra\1111': fiwd assets
l1>,lf>7,.M2
1\,'JlJ.lJl
I,04J,72H
l>.l~l.SSJ
1.1,1~-1
.lnt~lll:thlc as~els
ll•,l1l,ll-l
SSJ
S,5C.J,60S
S,Sf>J,fiUS
-1,209,179
9,1111,120
l,!Wli,H~
35.~6~
'14,6~5
JU6l,lJ9
12,-171,.)15
IS,U'J-1,670
J0,91'1.~39
21J.~I9,~XO
I,6Sll,77-l
J,SJS,-IH
H.6'12,7'17
lS,I90,877
, Dcfcncd
I Z,SSl,-117
26,.171
1,107
29,520,976
6,109,5911
S,799,6ZS
!Sll,lfd
6,639
l,-18S,77S
146,S99
9,510,8-10
l,S71l,7S'I
""
9-1,176
13.2711
76S,920
J2,9111!
70~.JS7
4-11,64M
ll-l..l'J7
-l,n7,H7
26,1117.01'1
!a~~scts
Uabilitirs
ll11l~ p;~yablc
llorrowmlls
Deposits and o1hcr accoun1s
Sub-mdmaled loans
Other hab1l111c~
Oefcncd ta'< habllnic'
17,2-1-1,671
.111-I,SUJ,6611
l,SIIO,UOO
11>,-IM,C.S-1
_2,S7Mll
}_iii.~_Sl,-IJI
l~cservcs
lluapJ11npuatcd prnfu
on rcvaluatloll
ofasscls ·net
t,uon
z.~•m.onn
'--·"_61J,7~~~~~1,:1J~ 26.300,807
Ncl auds
Slwc carita!
JJ6.JlS
2,U2U
9,~12,'Jlll
18 '1~9,11~11
~O,J67,9ll
li__J,foi(>,l~~
799,871
l9.J~6f!_2_?_=~~Uil'I)=-~~\'U)~.!!,:Z,?$,m
2,~7~.HJJ
"'
llSJ UO
... _h'J-12,~19
-~~~.2~6 -=--.t-~,~~
----·-Jl,4H~.!_.,
.lll,71 S,8SO
li,'IS'I,l20
h,7SI,.)OJ
Surpln~
h:!~/1,979
_.,--!·~~
2HU
I' mal
t:ptoonc
UlOtlth
(),·crone
nuurth to
lhrcc months
01·cr three
month' to
Sl~ urouths
Ql'cr Sl~
nronths to
one yc~r
0\CI lCll
}'Cnf!O
tO
tlllccycms
)'ColtS
tl\'\'1 )'CJIS
~-c~rs
y•·mS!<l
len year:.
to
1hcyc~1<
yc~t<
..................................................................................(ftupc.•s 111 '0001·-···----·· ......................................
,\ . . ~(J
Cash 1<11<l b.1lan~es "''h
Uc.1sury hanl.s
ll~bn~es wHh other bani.;
Lcmhngs to financ•al
lmlltullom
I;!.J.li.OSJ
J2.JJI.OHJ
4~15~8
I.I~U~ll
I
~:!.1 ~&.8-10
17,103.~~·~
5.!155.581
lll\CSIIllCil\S
1-lfo,hltf•.il(>
19.622.113
77.346.-133
15.12.-~.u.
8. 1.~4. 701
18,50(>,8•1!
c.n.N<J.l
ll\,-1'1~.012
2.7.17'1.~'11
IJ.7tJR.I•I'!
6.~1M,l7~
l,(ol'l..J~~
-IXO.H07
.l.t>f,S.'IJH
~.'l.J4.729
1'1.1,2~')
X.WJ
1..1 ~~.22~
1-U~~
'J.39.!,M2·1
2.063,4<18
&1..121
l•l,J!<J_Il05
~-1.(1{)7530
33.559.12.4
11.25Jl>96
29,11(1
1,793
IJ.M•2.786
\1&5.29-1
I.Bs.J.JJ
Ad\-~IICCS
~_1())((,'/
17·1.65~
1-11,41.1
"lllh,l~"/
Dill
10,7~~
10.755
2UII
~3.-lll,l
·I.•H'/,111
2h.l J.l.l·~"
1111.~\·1
12.-1'1'1.' II
Other
MSCIS
Opcr~tmg
fiwd ~sscl'
111L111!;lblc OUSCIS
!Jefcncd Ia~ assets
~r>1ZI.'117
""
I'! l,.-07.'J~S-;-Ji.'i8j~~2-1
12'1.245,737
3'14.14-1
·ll,M•·I
2,6ll'!
21.7·11:1~--
-
-
l'l.7UJ.7!;-.. --~,~-j:U,::m;;2.J.'l"/l\,21'1--i\:;}i'l'll'-·-
<o
1.')1"/,lH"
Uabililifs
ll1lls jl.l)'ithlc
llorrowm~:s
Dcposl\s ami other ~c~'"'"''
Suh-nnlmJted lnans
Other ha!nhltcs
l>cfcrrc<lta~ hablhllcs
h\IO,ZIJ
f>.~4li.21J
111.\(>6.175
I,O•lUJ<J
9.UIJ5.1tl4
4.f•"I05·11
~% ~~(,,991
27,%~.\~H
1-1.640.373
14,011.71,1
~
llnap!'<OJlllatcd pror.t
ocnclt on rc\·aluallnn
of ~~set'· net
2-l~.~l\0
·111,'117
212.h20.61 (>
l'l8,40J
'101.\l!
t.uoo
\tlll.UOO
~ ~!II)J)()(l
J(,,.\'Jh,79<J
~.'>I')
IIR,7~J
IIH,~~&:i?·l.5lT
~\}~~~·'·10
Share capn;ol
Kcscr\es
ll.b!b
26.91 r•.-177
ll\ II\
R~U
(11·1-'..l.l<J
"\21>,127
}.d.!.!P~~----- -·
.. ---"-"_1~~~ .. -.::::•)•J,~-!..,
''
40.9
Operational Risk
Operational risk is the risk of a direct or indirect loss being incurred due to an event or action arising from the failure of technology,
processes, infrastructure, personnel and impact of external events.
The Country Operational Risk Conunittcc ("CORC") has been established to ensure that an appropriate risk management framework is
in plncc at a grass root level, and to report, monitor and manage operational, social, ethical and environmental risk. The CORC is
chaired by the CEO, and CCRO is an active member of this forum.
All business units within the Bank monitor their operational risks using set standards and indicators. Significant issues and exceptions
arc reported to CORC and arc also picked up by the independent Risk function for discussion at the Country Risk Committee chaired
by the CCRO. Disaster recovery procedures, business contingency planning, self-compliance assurance and intcmal audits also form
an integral part of the operational risk management process.
41
ISLAMIC BANKING BUSINESS
The Bank is operating with 10 Islamic Banking branches at the end of current period (20 13: I 0 branches).
41.1
Balance Sheet
Note
2013
2014
(Rupees in '000)
Assets
Cash and balances with treasury banks
Due from Financial Institutions
Investments
Islamic Financing and Related Assets
Operating fixed assets
Other assets
2,284,066
2,813,527
51,229,516
1,899,718
5,055,581
10,848,738
27,921,996
52,407
606,873
46,385,312
117
1,349,000
2,760
1,060,000
22,<162,038
1,776,086
20,042,224
11,816,177
2,721,606
11,768
268
256
1118951570
4I. I. I
33,322,582
471915
865,856
Liabilities
Bills payable
Due to Financial Institutions
Deposits nnd other accounts
Current Accounts
Saving Accounts
Term Deposits
Others
Deposit from Financial Institutions -Remunerative
Deposits from Financial Institutions-Non-Remunerative
12,272,682
-
-
36,522,842
34,580,263
8,320,362
221,136
46,413,457
4,816,059
5,564,870
130,390
41,338,283
5,047.029
Represented by:
Islamic Banking Fund
Unappropriated!' Unremitted profit
200,000
4,592,023
Surplus I (deficit) on revaluation of assets- net
4,792,023
24,036
4,816,059
200,000
4,754.891
4,954,891
92,138
5,047.029
4,417
3,218
Due to Head Office
Other liabilities
Net Assets
CONTINGENCIES AND COMl\IITMENTS
Remuneration to Shariah Advisor/Donrd
Charity fund
Opening balance
Additions during the year
Pa}1nents I utilization during the year
Closing baluncc
21
1,071
4,232
(3,095)
2,208
20,411
4,294
(23,634)
1,071
2013
(Rupees in '000)
~I. I. I
Islamic ;\lode of Fin:mciug
Mumlmha
M11sharnku
Diminishing. rvlusharaka
ljarah
\stisnn
Mus;1wmnmnh
Others
-lt.l.ln
·11./. Ia
.f/.1./b
7,1183,998
9,000,(1·19
-11././c
·11.1./d
.f/.1./e
·11././f
1~,492,11~8
11.645,654
5,597,541
9,\66,725
856,89:5
1,550,000
122,91-/
216,1178
33,322,582
1.223,8•13
98,850
189,383
27,921,996
41.1./g
i\lurah:1ha
41.1.\b
9,01ltl,6.t9
5,597.5•11
5,593,532
i\lush:ll'al.:a
Fimmcing,s/ln\"Cstmcnts/Rcccivnb\cs
4 1.1.1 c
7,083,998
4,971,128
6,379,093
295,433.00_·_
11.645,65•1
1.~911,-/66
Financings/lnvcstnlcnts/Rcccivuhks
Atlvnnccs
:\ sscts/1 n vcn! nrics
Dimiuishint.: i\lush:u·:tl<a
9,166,72.:.')
1'in:mcingsllnvcstmcnts/Rcccivah\cs
-ll.l.ld
ljarah
856,895
Finnncings/lnvcslnlcl!ls/Receivables
-ll.l.lc
lstisna
Fi mmc in gstlnvcstmcnts/Rcce ivn bh:s
41.1.11'
1,550,000
i\lusawammah
98,850
Financings/lnvesllllents/Rcccivablcs
·H.I.lg
1.223,843
Others
Financint~s/lnvcslmcnts/Reccivahlcs
216,1178
41. 1.1 h
Gunr:mtccs relating to Islamic flanking flusincss amount toRs. 3,074 Million (20 13: Rs. 1.178 Million)
41.1.1 i
Letters oi'Crcdit relating to Islamic Banking Business amount to Rs. 2.969 Million (20 13; 7.203 Million)
41.1.1j
i\cccptanccs oi'Rs 528 Million (2013; NIL)
41.2
Pr·ofit antll.oss
Pro lit I return earm:d on linnncings, investments anti placements
Return on deposits ;md others dues expensed
Net spread emncd
Provision against 11011 pcrt'orming Jinancing
Net spread after provisions
Other· income
Fees, commission
Other income
liiHI
~1.121]
L0~2!lll
3,1%,657
_ _ (J5,.fl7)
J,I61,2·HI
Other expenses
Administrative c.'\pcnses
Profit hcfure t:n:ation
(191,960)
2,201,353
654,097
755
brokerage income
Total other inconw
189.383
9-111,2(11
·1,101,501
(1,264,36'))
2,837,132
654.852
2,856,205
_ _ _(987.607)
1,868,598
Deposit and other m:counts include redeemable capital or Rs.l<l,060.804 million (December 31,2013 : Ih.l 11.538.039 million) and
deposits uu <)ani basis nrRs.22.-162.0:H~ million (December 31.2013 · Rs.20.U,12.22·1million). Rcmuncmtivc dt•posit" which arc on
M11darabah hasis arc considered as Redeemable Cnpital nnd noJHcmunerutivc deposits arc clussilied as being on Q<lfll basis.
2!114
2013
(Rupees in '000)
41.3
CASII F!.OW
Profit hcfot•c
FRO~!
OI'ERATING ACTIVITIES
2,837,132
tax:~tion
Adjustments for:
Dcprcciatiott
Gain on disposal of Jixed asscts ~net
Provision against loans ami mJvanccs -net of recoveries
1,868,598
27,111
(755)
191,960
218,316
11,981
(679)
35,-117
____ _:!6,719
2,883,851
(Increase) I dccrc:~sc in opcr:1ting :1sscts
Due from financial institutions
Net investments in 'held for trading' sc:curitics
Advances
Other :tsscts
(cxcluditl~
2,2.t2,1l5-l
30,598
(5,436,003)
advance taxation)
981,952
(2:i8,9.~4)
(31,600)
(9,538.629)
(211,062)
(3,422,335)
{8,799.339)
Increase I (tlccrc;tsc) in opera tin~ liabilities
(2,643) [
Bills pnyahk
Borrowing..., from lin:mcial institutions
Deposits and other a..:counts
Other liabilities
Cash inllnw before taxation
(7,3•18)
(308,000)
289,000
1,9·12,580
'1,340,399
2,8-t~~~
4,579,238
5,075,175
8.604,289,_
4.536,(191
1,891,86•1
.... 536,691
I,R91,8M
(1,145,532)
(6,811)
(1,152,343)
(\,950,000)
Jm:oml! tax paid
Net cash ~:cncn1tcd fl'om opcnJtinJ.! :1ctivitics
Net investments in ';wailablc for sale' securities
Net investment in lixcd assets (including inumgihlc nsscts)
Net cash usf.'d in ilwcsting activities
Appropriation/ pnyml!nts made to I lc<td of!ice
Net cash used in linancing nctivities
lncrcnse! (decrease) m cash and cash cquivaknts for the year
1
Cash :tnt! cash cquiv:tlents :1t beginning of the yenr
Cash and c:ash equivalents at end of the year
_ _I ,899,Z!!!_
2,284,1166
Cash mul hnlanccs with trc:1sury lmnl;;s
41..t
{9,1107)
(1,959,407)
(3,11110,1111o>l
~1!.1!!1·0110)
3N4,348
2,284,0(,6
2,284,066
(67,543)
1.967,261
1,899,718
===
),899,718
1,899,7)8
Ijarah Financing
Cost
As at .Junuar.v 1, 2()1-1
AdditiOn:> dunng the ycat
Trnnsll:r/ Write
Deletions
1,2116,111111
As nt December Jl, 2014
1,2116,111111
on:.
~~_j·
Accumulated Depreciation
At ,Janmtr)' I, 2111·1
Charge for thl! year
Tnms!Cr/ Write
Deletions
on:..,
As at December 31, 2014
Net nook \':tlue
Futm·e Ijar:li1 payments
Not l:ttcr tlmn one year
Later than one and h:ss than live years
Total Future lj:trah p:tymcnls
~-~.
349,10!'
-----856,895
458,470
573,1188
I,OJI,S58
=---==·=
-11.5
Profit 8.: Loss distl'ihulion and Pool i\1:\llag:cmcnt
The Bank
nt<IIW.[!CS
following assets pools for profit and loss distribution:
a) Islamic E:-:pnrt Rcl'inancc Scheme (IERS) Muslmraknh PooL and
b) Mudomllmh Depositors Pool
n) IEUS i\lusharal•ah Pool
Key features. risks, rewards untl calculation of pro lit/loss of this pool nrc in compliance with the SBP IER S<.:hcmc nnd the rclcvnnt
circulars issued hy SBP from time to time.
h) 1\lml:mthnh Depositors Pool
I
(il!ncml Deposttors Pool
2.
Spc~.:ml
Depositors Pool
i) Key featm·es and risk & rewanl characteristics
Deposits nrc acccptctllfom customers on the basis ofQ<ml (current accounts) and Mw.larabah (Saving and term deposits). No profit or
Joss is p:1ssed on to cutwnt nccount depositors.
For deposits :wceptcd on Mudambah basis from depositors (Rab-ul-Maal) the Bank acts as Manager (Mudarib) and invests the fmtds
in the Shnrinh Compliant modes or linancings. Rab-u\-Maa\ share is distributed mnong depositors according to wei{!.htagcs declared
for a month hc!(Jre start of the period
In case orJoss in a pool during the prolit calculation perioU, the loss is distributed among the depositors (remunerative) according to
their ratio or investment.
ii) Parameters used for nlloc:ltion of profit, chnrging expenses nnd provisions
The prolit lbr the deposit pool is cakulated from income eamed on nil the remunerative assets bookcU by Ulilising the funds from the
deposit pool. Expenses Uircctly incurred in eaming the income arc then dcdltctcd from this prolit amount. Rcsuliant prolit, net or
Bank's share :~s investor, is distributed between Mudarib anU Rab-ul-Maal based on declared sharing ratios before start ofcvety given
month.
The ratio lhr Mudarib :md Ra!HJI-manl was 50:50 (Jnnuary to December) in general pool, 50:50 (J:muary to October) and 40:60
(November to December) in special pool. No expenses (of general or administrative nature) were charged to pools. No provision
against :my nun-performing asset of' the pool is passed on to the pool except on the actuolloss I write-off or such non-perlbrming asset.
iii) Deployment of i\1 udnn1hah h:1sell deposits
The deposits mtd li.mds accepted under the above mentioned pools arc provided to diverse sectors including Cement, Chemi<.:al,
Phannaccuticals. Communication. StJgar, Textile, Agribusiness, Tnmsport Cit:. :IS well <IS in Govcmment or Pakistan backed ljnmh
Sukuks.
iv) Other information
Pro lit rate I weil,\ht:tge announ<.:emcnt frequency
Mudarib shnn:(amowtt in 000)
c=
Type of Pool
,-Gcncr;;cJ
Spcrial
Monthly
Monthly
532,320
Mutlnrih shaw(%)
47.52%
Mudarih Sh<1rc transferred through lliba (Amount in 000)
27.838
Mud:trib Share tnmsiCrred through Hiba (%)
Avemgc return
tlll
pool assets
Average return on deposits
]
130,951
21.76%
161.297
4.97%
55.19%
10.39%
10.60%
5A6%
S.22%
42.
CORRliSI'ONDING JIIGliRliS
42.1
Rcclassifil'lltion from
Statement of Fin:111ci:tl Position
St:1tcment of Fin:tncial Position
Acceptances (Other Assets)
Contingencies And Commitments
42.1.1
4,930,334
Acceptances (Other Liabilities)
Contingencies And Commitments
42.1.1
4,930,334
2014
42.1.1
2013
Reclassification to
This represents balances pertaining to Bank acceptances. In line with the SCB group policy such balances were previously considered
as an on~bahmcc sheet item, however, to bring it in line with the 13SD circular 4 of2006, these balances arc reclassified to contingency ·
nnd commitments.
42.1.2
Certain other r.:ompnmttvc ligures have also been
rc~arrangcd and rcMc\assificd for better presentation, the effect ofwhil.:h is co!lsldcrc~l ·.·'
immntcnal.
43.
DATE OF AUTIIORIZATlON
These financial statements were authorized for issue in the Board or Directors meeting held on 04 March 20 15.
Clminnan
Director
KPMG Taseer Hadi & Co.
Chartered Accountants
Standard Chartered Bank (Pakistan)
Limited
Consolidated Financial
Statements
For the year ended
31 December 2014
Auditors' Report to the Members
We have audited the annexed consolidated financial statements comprising consolidated
statement of financial position of Standard Chartered Bani< (Pakistan) Limited and its
subsidiary companies as at 31 December 2014 and the related consolidated profit and Joss
account, consolidated statement of comprehensive income, consolidated statement of changes in
equity, and consolidated cash flow statement together with the notes forming part thereof: for the
year then ended. We have also expressed separate opinion on the financial statements of
Standard Chartered Bank (Pakistan) Limited and have reviewed its subsidiary companies namely
Standard Chartered Leasing Limited and Standard Chartered Modaraba for the six months period
ended 31 December 2014 except for Standard Chartered Services of Pakistan (Private) Limited
which was reviewed by other firm of auditors for the six months period to 31 December 2014
whose report has been furnished to us and our opinion, in so far as it relates to the amounts
included for such company, is based solely on the report of such other auditors. These financial
statements are responsibility of the Holding Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
Our audit was conducted in accordance with the International Standards on Auditing and
accordingly included such tests of accounting records and such other auditing procedures as we
considered necessary in the circumstances.
In our opinion, the consolidated financial statements present fairly the financial position of
Standard Chartered Bank (Pakistan) Limited and its subsidiary companies as at 31 December
20 14 and the rcsul ts of their operations for the year then ended.
Date:
Karachi
KPMG Tascer lladi & Co.
Chartered Accountants
Muhammad Taufiq
Standard Chartered Bank (Pakistan) Limited
Consolidated Statement of Financial Position
As at 3 I December 20 l.f
Note
2013
(Restated)
(Rupees in '000)
2014
ASSETS
Cash and balances with treasury banks
Balances with other banks
Lcndings to financial institutions
Investments
/\dvanccs
Operating tixcd assets
4
5
6
7
8
Intangible assets
9
10
Other assets
12
21,475,345
387,30 I
10,813,559
188,992,097
128,575,353
6,282,553
26,173,114
37,024,009
419,723,331
32,33 I. I 67
1.608.9]2
22. I 58,840
146,380,25 I
I 46,238.554
6, I 72,744
26,222.840
24,216,522
405,329.850
5,563,605
17,244,671
304,305,541
2,500,000
2,575,833
25,633,393
357,823,043
6,540.2 I 3
I 7,291.175
296.377.146
2,500,000
260.65 I
25.408.776
348,377.96 I
61,900,288
56.95 I .889
38,715,850
9,111,044
6,889,177
54,716,071
38,715.850
7,180,552
6,721.973
52.6 I 8,375
925,238
55,641,309
882,322
53,500,697
6,258,979
61,900,288
3,45 I. I 92
56,951.889
LIABILITIES
Bills payable
Borrowings
Deposits and other accounts
Sub-ordinated loans
Deferred tax liabilities- net
Other liabilities
13
14
15
16
11
17
NET ASSETS
REPRESENTED BY:
Share capital
Reserves
Unappropriated pront
Attributable to equity holders of the Bank
18
19
Non-controlling interest
Surplus on revaluation of assets- net of deferred tax
20
CONTINGENCIES AND COMMITMENTS
21
The annexed notes I to 43 and Annexure I form an integral part of these consolidated financial statements.
~·
Director
Director
Standard Chartered Bank (Pakistan) Limited
Consolidated Prolil and Loss i\ccounl
For year ended 31 Decem her 201 .f
Nole
20I4
20I3
(Rupees in '000)
Mark-up I return I interest earned
Mark-up I return I interest expensed
Net marl\-up I return I intt•rcst income
(Provision) I reversal against non-performing loans and advances
Recovery or amounts written orr
Provision lbr diminution in tl1c value or investments
Bad debts written ofJ'dircctly
22
23
8.5 & 17.2
7.3
8.6.1
Net mark-up/ return I interest income after provisions
NON
~lARK-UP
35,269,158
(13,873,493)
2I,395,665
3 I,493.33X
(I2,6S7,175)
I 8,806. I63
(5II,39I)
3I6,883
(73,643)
(2I5,344)
(483,495)
20,912,I70
_I, 115,9(l,5·
339.SR'J
(29\,I98)
(239,868)
924,788
19,730,951
I NON INTEREST INCOME
Fees, commission and hrokcmgc income
Dividend income
Income from dealing in !Orcign currencies
Gnin on sale of securities- net
Unn:alizcd gain on n::valuation or inve:>t1m.:nts classiricd
as held for trading -net
Other income
Totnl non mark-up I non interest income
NON MARK-UP I NON INTEREST EXI'ENSilS
Administrative cxpen~e~
Asset write-oil$ I other (provisions) I reversals
Other charges
2·1
7./IU
25
26
27
28
Total non m:t!'k-up/ non interest expenses
Extra-ordinary I unu~ual items
PROFIT I!EFORE TAXATION
Taxation - current
- prior ycars'
-deferred
29
PROFIT AFTER TAXATION
3,32 I,683
3,754
2,908,748
727,126
3.0<17.280
54,460
384,498
7,400,269
28,312,439
10,978
(29<1.535)
5,881,0•I8
25,611,999
(I2,496,824)
(555)
(447,053)
(12,944,432)
I5,368,007
(8,966,028)
I5,368,007
I6.3(>8.185
(4,256,948)
(I87,994)
(I,I08,I80)
(5,553, I 22)
9,8I4,885
(3.735.531 I
(2I.I3(>)
(1.912.199)
(5.668,866)
10,699.3I9
9,652,462
162,423
9,8I4,885
10,559.620
139,699
83-1
2,383,8·12
732,6·19
59.763
(337,549)
(9.243.8I·I)
16,368, I 85
Attributable to:
Equity holders o!' the hank
Non-controlling interest
10.699.3I9
(Rupees)
BASIC I DILUTED EARNINGS I'IlR SHARE
30
2.49
2.73
Thc anncxcd notes I to ·IJ and Anncxurc I fbrm an integral part of these consolidated linancial statements.
~ '\.\,..,._.,._.
Ch;tirm:tn
Oircctm:--
Director
Standard Chartered Bank (Pakistan) Limited
Consolidated Statement of Comprehensive Income
For year ended 31 December 2014
2013
2014
(Rupees in '000)
9,814,885
Pro lit after tax for the year
I 0,699,319
Other comprehensive income:
Items that will never be reclassilied to pro lit or loss
subsequently
(27,097)
9,484
(17,613)
3,023
Remeasurement of post employment obligations
Related tax charge
(I ,058)
1,965
9,816,850
Comprehensive income transferred to equity
I 0,681,706
Components of comprehensive income not reflected in equity
Surplus /(deficit) on revaluation of available for sale securities
Related tax charge
(552,876)
194,511
(358,365)
3,825,915
(I ,342, I 05)
2,483,810
Surplus on revaluation of operating fixed assets
Related tax charge
380,11 ()
(51 ,480)
328,630
Tohtl comprehensive income for the year
Attributable to:
Equity holders of the Bank
Non-controlling interest
12,629,290
10,323,341
12,438,441
190,849
12,629,290
10,187,261
136,080
I 0,323,341
The annexed notes I to 43 and Annexure I form an integral part of these consolidated financial statements.
~.t\',..... ~
Chairman
~
Director
Director
Standard Chartered Bank (Pakistan) Limited
Consolidated Cash Flow Statement
For J'i!ar ended 31 Dect'mher 20 I-I
Note
2013
201-1
(Rupees in '000)
CASII FLOW FRO~ I OPERATING ACr!VfriES
Pro lit before tax for the yc;1r
Less: Dividend income
15,368,007
(3,754)
15,36-1,253
16,36R, l S5
Hn·t)
16,367.351
,\djustmcnts ror:
-180,725
Depreciation
Amortization
55,3311
Gain on disposal oflixcd
:~sscts-
net
494,900
(12,36fi)
52,75S
( ICJ.I.35·1)
(5-1,4@)
(I 0,97R)
Unrealized gain on rcvahmtion ofinwstmcnts classilicd
as held !br trnding- net
555
As!'ict writc-oOS I (lthcr provision I (reversals)
73,643
Provision lbr diminution in the value of investments
-109,852
953.279
1(,,317,532
Provision against non-pcrlbrming lo:ms and adv:mccs- net of recoveries
{59,763)
291.11JH
(1,215,986)
-
15.755,1~6
l)('cn•ase I (inl'rl'ase) in opcr:tling assets
II,H5,2XI
Lcndings to linancial institutions
Net investments in 'held lhr trading' securities
Advances
Other usscts (excluding :~dvancc taxation)
(2.3 13,571)
2.70·1.327
(7,1011,324)
17,253,3-19
( 13,025,JSH)
H,472,91S
{5,136.331)
(4./'WJ,l\71)
(97(,,(,0S)
(.lft,50-l)
7,928,395
971,274
7,H7l•,5:'17
32,667,11117
375,3•16
(6,10f.l,21•1)
29,778,575
(3,99·1,955)
20.0:.0,7:.2
30,956,007
(4,1132,1(14)
2S,63.J,9UJ
(3.SOS.S51)
27,1·17,-15(1
Net investments in 'available for sale' securities
Dividend income received
Net investment in operating lixed assets (including intangible assets)
Sale proceeds on dispnsal of opcmting lixcd assets
(3 1,70.1,7911)
(18.176§/1)
3,754
(598,393)
I·U121
(518,2·18)
Net cash used iu iun·stinJ.: acli\'ilit•s
(J2,2N~.SUS)
lncrcasr in Ojll'nttin~.: liabilities
Oills payalllc
Borrowings lfom financial institutions
Deposits :md other nccmmts
Other liabilities
Cash in now befo1·e taxntinn
Income tax paid
Net cash generated frnm OJH.'r:tting :lctil'itil'S
CAS! I FLOW
FI~Oi\IINVESTING
( HJol.2%}
ACTIVITIES
SH
J 1(1,1 R.J
'·-
CASII FLOW FROi\1 FINANCING ;\CTIVlTIES
-
Repayment ofsoh·on.linatcd Term Finance Cl•rtilkatcs
Dividend paid
Dividend paid to Non·COntrolling interest
<SA27,:.'1-18)
(12,077,453)
(25U.OtJ0)
(8.70·1.-12R)
(83.218)
(9,037.6·16)
(24S.09 I)
33,9-10,099
3<1,18S.l1JO
21,862,6·16
33,940.(JiJ9
21,475,3-15
387,30 I
21,862,(t.J6
32.331.167
(8,3118,1121)
(119,527)
Net c:1sh used in linllndn~.: activities
Decrease in Cllsh :wd t'ash cquh·nlcnls for the ye:1r
Cash antl cash equiv:~!ents at beginning of the year
Cash and cash equiv:~!ents at end of the ycur
31
CAS II AND C,\SII EQliiVALENTS AT 'I'IIE Ei'\D OF TilE YEAR
Cash and bu!unces with treasury banks
13:11:mccs with other banks
1,60lL9J2
33,9·10,091)
The :~nncxcd notes I to 43 and Annc:>:urc lli.mH an integrnl part oJ'thl'SC eonsolid:1tcd limmcial swtcments.
Ch11innan
-
Director
rf-Nn__'
Standard Chartered Bank {Pakistan) Limited
Consolidated Statement of Changes in Eqtcity
F<lr .n•art'll<hf J/ lkc,·m/ou 2/J/.J
Sh:1rc
Statuturr
llu:tpprnt>rlatctl
Tutnl
:'\un-Cmarn!linJ.!
Tnt:ll
l'rcmium
Hcscrvc
l'rulit {:1)
Interest
···-··-·---------------------------------·----{Hupccs in 'UUU)---------------·--··--······-----------------------·
Shnrc
Capitnl
38,715,!150
U:1l:mcc :1s :11 Jllh•ccmhcr 21112
Cnmprchcnsivc incumc fur the yc~r
l'rolit arccr tn'li for the year cmlcd J 1 December :!OIJ
(o,!l¥>.9-10
so.c,:; !.·tis
10,559,620
Hl 55'J.(o21l
151,8')5
I Sl,!l95
·t.o;:U.iH
l.OJ(>.(l')O
51.·157.:!5')
825.8-1 I
Tut~l
DOD
Slnvlns on n:vnluatinn uf as~eb - n~·l uf In 'I:
A
Tr;msn~tiun~ with owners, rccurdcd din:ctly in cquilr
Shnrc based p;lymetlltmnsaecinns (cunmbutinn frotn
\l(lh\ing company)
!'ayment ng:tinsl $hnre hnscd payment tnmsnctions (to
!mlding comJmny)
(17,613)
10.(>93.9U2
59.741
59 71!
(60.977)
{(>O.'J77)
( 1,236)
IJ.:!Jf>l
DOD
Transfer tu stntutnty r.:sero:c
117.(>13)
10.69:'1,902
2.111.92·1
D
D[:J
Smphn; tm tev:tluntiun tlf :t>set~ - uetufta\
()Ih<'r ( 'umpn:h<'IIXII'<' 111('11111<'
of post Clll]lluymcnt nbligntums- net ofta:.;
Tnmsnctinns with cmncrs, recunletl dircc11y in Cl[Uity
Share based papncut lraus:t~lions {conuil>ution from
huldiu~ comp:my)
l'aym~nl again~! sh:tr~· h:1~c•l ]!:l}llll'llltr:tn~:teliuus (hl
holding cumpnny)
I.OJ6,09(J
f•.I·I·I.H•1
(f>0'l77)
( I. l~(.)
(!iJ.~
f·UIJ'J.IR!l
\).l\7 1,51:15)
JJ.K71,5l\~)
{J.ll71."S5)
5)~7
DOD[
I,'JJU,-1')2
'),652,-162
9,(>52,-162
""
3-111
1,9-l:'i
1,?-15
'J,65-1,7-17
'J,f>!i~.7-17
112,231
82,231
IU,IS7
\U,IS7
'J2,J8K
'J2,JIIfl
670,156
{1,930,492)
[l~r
di\'idcml {Interim 2Ul·l) at Rs. 0_75
~- -~7
I
1:1!1:!.32:!
5~.50H.h'J1
162,-12J
'J,KI-l,l\85
J.jl)
"'
1(,2,-1-13
~::~~
'J,817,1')ll
[~
(>711,156
Dividetu! Jlaid I<) Non-Ccmtwllmg Interest
82,2JI
IU,I:'i7
1Jl,388
(,70,\Sfo
(11'1,527)
( 119,527)
shnrc
(5,-120,21?)
(:'i,-120,21'1)
(5,-121l,21'J)
p~r
(2,'J03,6119)
{2,911J,68!J)
(l,'JUJ,Ml'Jj
shnrc
Tmnsfctrcd from surplus on rel'aluati<ln of
li,.ed assets- net ofdcl'encd ta\
201~
Jfi71Sfi5U
I UJC, U'JU
8117-1 'J:'i-1
-1,313
1,313
6&89177
.5-l 716 ll71
-I,JIJ
'J25 1238
(a) As ftH1hcr e.~plnincd in note S..l of thcs~ un-comolidmcd !iuancial stmcmcnts the mnonnt of Rs. 743 59 mtlliun net of I;! 'I; ns nl J I December 201·1 tcprcsems nd<litiunnl pwlit
;w~iling Jbn:cd sale value benefit for dcl~nnining plo\ isiuning reqnin:tnent is not nvailnhlc for the purpose of distribution uf tlividcnd to shnreholdc1s I honu> to en1ployecs.
The annc~cd 11111cs I to ·D nnol,\mte\urc I fnnn :111
inte~ml ]latt
nf these consulidnh:d fin:utdnl Mntemcnts.
\:-.).\"'......Chairm:m
]1{)
(~JO'>.·IRIJ
- - -{>.721.')73
- - - - -52.C>IH.J7)
----
DDCJ
Rc1·e•sal of liability against slwrc based payments
to holdin1: company
Tmnsfcr to stntutory rc~erw
B:tlancc a~ :II Jl llcccmhcr
-
of
Tot:1l CnmJirchcnsln: im·unu- fnr the JICrimJ
l'rnlil nftcr In\ for the year <'11\lcd J I lkccmber 201-1
Ca~h
5') 71!
(•1.839,-181)
5)51
Cnsh tlivi1lcnd (Finn! 2013) nt lb. I -I
-
(RJ.21!l)
38.715,8.50
Rcmensur~mcut
l 1'/.rol:<t
l!t.!i.~,_(,!l\
(2.111.'J2·1)
Cltsh dividend (Fiunl2012) nl Rs. I 25 per shnro."
re\·;,lu.ni<~u
151.!\'l~
13').(>')9
Dividend pai1lt() Non-Conlrullinr, hnerc\1
T•:msfcrred from ~urplu~ ou
liwd assets· nctoft:l\
]ll.f>'l'J. .il'l
-
Uin·ctur
llireetnr
5!i,f•-!,kJil'.l
atHUlJ~
tf<•n•
Standard Chartered Bank (Pakistan) Limited
Notes to the Consolidated Financial Statements
For the year ended 31 December 2014
I.
STATUS AND NATURE OF BUSINESS
Standard Cha11crcd Bank (Pakistan) Limited ("the Bank") was incorporated in Pakistan on 19 July 2006 and
was granted approval for commencement of banking business by State Bank of Pakistan, with effect from 30
December 2006. The ultimate holding company of the Bank is Standard Chartered PLC, incorporated in
England. The registered office is at Standard Chartered Bank Building, 1.1. Chundrigar Road, Karachi.
The Bank commenced formal operations on 30 December 2006 through amalgamation of entire undertaking of
Union Bank Limited and the business carried on by the branches in Pakistan of Standard Chartered Bank. U
bank incorporated by Royal Charter and existing under the laws of England. The scheme of amalgamation was
sanctioned by State Bank of Pakistan vide its order dated 4 December 2006. The Bank's shares are listed o.n all'
stock exchanges in Pakistan.
'
The Bank is engaged in the banking business as defined in the Banking Companies Ordinance, 1962 and has a
total number of 116 (20 13: 116) branches in operation branches in Pakistan at 31 December 2014.
Standard Chartered Bank (Pakistan) Limited has the following three subsidiaries. All of them are incorporated
in Pakistan.
• Standard Chartered Leasing Limited
• Standard Chartered Modaraba
•
Standard Chartered Services of Pakistan (Private) Limited
These financial statements arc consolidated financial statements of Standard Chartered Bank (Pakistan) Limited
and its subsidiaries ("the Group").
During the year, the management of the Standard Chartered Bank Pakistan has decided to divest
its shareholdings in its subsidiaries and accordingly, these arc accounted for as Disposal Group Held for Sale as
per lFRS-5, 'Non-Current Assets Held for Sale and Discontinued Operations'. The related assets and liabilities
of these subsidiaries are classified as 'Assets Held for Sale' and 'Liabilities Held for Sale' in 'Other Assets' and
'Other Liabilities' in the statement of financial position. (Refer Note 12.3).
2.
BASIS OF PREPARATION
2.1
Basis of presentation
In accordance with the directives of the Federal Government regarding the shifting of the Banking system to
Islamic modes. the State Bank of Pakistan has issued various circulars from time to time. One permissible form
of trade related mode of financing comprises of purchase of goods by the Bank from its customers and
immediate resale to them at appropriate mark-up in price on deferred payment basis. The purchases and sales
arising under these arrangements are not reflected in these financial statements as such but arc restricted to the
amount of facility actually utilised and the appropriate portion of mark-up thereon.
The financial results of the Islamic banking branches have been consolidated in these financial statements for
rcp011ing purposes. Key linancial figures of the Islamic banking branches are disclosed in note 41 to these
financial statements.
2.2
Statement of compliance
These financial statements have been prepared in accordance with approved accounting standards as applicable
in Pakistan. Approved accounting standards comprise of such International Financial Reporting Standards
(!FRS) issued by the International Accounting Standards Board (IASB) and Islamic Financial Accounting
Standards (IF AS) issued by the Institute of Chartered Accountants of Pakistan (!CAP) as are notified under the
Companies Ordinance, 1984, provisions of and directives issued under the Companies Ordinance, 1984 mid
Banking Companies Ordinance, 1962 and the directives issued by State Bank of Pakistan. In case the
requirements differ, the provisions of and directives issued under the Companies Ordinance. 1984 and Banking
Companies Ordinance, 1962 and the directives issued by the State Bank of Pakistan shall prevail.
'
The Securities and Exchange Commission of Pakistan has approved and notified the adoption of International
Accounting Standard 39, 'Financial Instruments: Recognition and Measurement' (lAS 39) and International
Accounting Standard 40, 'Investment Property' (lAS 40). The requirements of these standards have not been
followed in the preparation of these financial statements as the State Bank of Pakistan has deferred the
implementation of these standards for banks in Pakistan till further instructions. However, investments have
been classified and valued in accordance with the requirements of various circulars issued by the State Bank of
Pakistan.
2.3
Basis of measurement
These financial statements have been prepared under the historical cost convention, except that certain available
for sale, trading and derivative financial instruments have been measured at fair value whereas certain fixed
assets arc stated at revalued amounts Jess accumulated depreciation and accumulated impairment losses. where
applicable.
2.4
Use of estimates and judgments
The preparation of financial statements in conformity with approved accounting standards requires management
to make judgments, estimates and assumptions that effect the application of accounting policies and reported
amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. The
estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates me
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and future periods.
In pm1icular, information about significant areas of estimation uncertainty and critical judgments in applying
accounting policies that have the most significant effect on the amounts recognised in the financial statements
are described in the following:
-Note 7
-Note 8
-Note 9 & 10
-Note 9 & 10
-Note II
-Note 21.8
-Note 29
-Note 33
2.5
Classification and provisioning against investments
Classification and provisioning against non-performing advances
Valuation and depreciation I amortisation rates for fixed I intangible assets
Impairment of non-financial assets including goodwill and other intangibles.
Deferred taxation
Derivative instruments
Income taxes
Employees' retirement de lined bene lit plans
Functional nnd presentation cuncncy
These financial statements arc presented in Pakistan Rupees, which is the Group's functional currency.
Ex~:cpt
as indicated, financial information presented in Pakistan Rupees has been rounded to the nearest thousand.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3
The principal accounting policies applied in thi..! preparation of these consolidated financial statements arc set
out below. These policies have been applied consistently to all years presented except !Or the change in
accounting policy relating to acceptances. Previously, acceptances were classified as 'on balance sheet' in line
with the SCB group policy in 'other assets' and 'other liabilities' appearing in the Balance sheet of the Group.
However, during the year. the Group has reclassified these acceptances to Contingencies and Commitments as
is required by BSD Circular 4 of 2006. The comparative figures for such acceptances have been restated to
reflect such change.
3.1
Basis of consolidation
Subsidiaries
Subsidiaries arc entities controlled by the Group. Control exists when the Group has the power to govern the
financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control.
potential votinr, rights that presently are exercisable are taken into account. The financial statements of
subsidiaries arc included in the consolidated financial statements from the date that control commences until the
date that control ceases.
Non-controlling interest is measured at their proportionate share in the net assets of the subsidiaries.
Material intra group balances and transactions arc eliminated.
Acquisitions.fi·mn entities under common control
Business combinations arising from transfers of interests in entities that are under the control of the shareholder
that controls the Group arc accounted for as if the acquisition had occmred at the beginning of the earliest
comparative period presented. For this purpose comparatives are restated where required. The assets and
liabilities acquired are recognised at the carrying amounts recognised previously in the combining entity's
financial statements.
Other acquisitions
Other business combinations arc accounted for using the acquisition method. For acquisitions prior tO, I January
2009, the cost of acquisition is measured as the fair value of the asset given, equity instruments issued and the
liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition.
Identified assets acquired arc fair valued at the acquisition date, irrespective of the extent of any Noncontrolling interest. The excess of cost of acquisition over the fair value of identifiable net assets acquired is
recorded as goodwill. Subsequently, any recoveries or losses to fair value of net assets arc taken to profit and
Joss account and disclosed in note 25 to these financial statements.
3.2
Cash :md cash equivalents
For the purposes of cash now statement, cash and cash equivalents comprise of cash and balances with treasury
bank and balances with other banks.
3.3
Investments
The Group classifies its investments as follows:
a) Held ji!r trading
These arc securities, which arc acquired with the intention to trade by taking advantage or short term market I
interest rate movements and are carried at market value. The surplus I deficit arising as a result of revaluation at
market value is recognised in the profit and Joss account. These securities are to be sold within 90 days from the
date of their classification as 'Held for trading' under normal circumstances. in accordance with the requirements
specified by BSD Circular 10 dated 13 July 2004 issued by the State Bank of Pakistan. Market value of
investment in Government securities is determined based on the relevant PKRV and PKISRV rates.
b) Held to maturity
These arc securities with fixed or determinable payments and fixed maturity that arc held with the intention and
ability to hold to maturity. These are carried at am011iscd cost.
c) Available for sale
These are investments that do not fall under the held for trading or held to maturity categories and are carried at
market value. The surplus I deficit arising as a result of revaluation at market value is kept in a separate account
below equity. Market value of investment in Government securities is determined based on the relevant PKRY
and PKISRV rates.
d) Subsidiaries
All'rcgular way' purchases and sale of investments are recognised on the trade date i.e. the date that the Group
commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of investments that
require delivery of assets within the time frame generally established by regulation or convention in the market
place.
Impainnent
Impairment loss in respect of equity securities classified as available for sale and subsidiaries is recognised
based on management's assessment of objective evidence of impairment as a result of one or more events that
may have an impact on the estimated future cash flows of the investments. A significant or prolonged decline in
fair value of an equity investment below its cost is also considered an objective evidence of impairment.
Provision for diminution in the value of debt securities is made as per the Prudential Regulations issued by the
State Bank of Pakistan. In case of impairment of available for sale securities, the cumulative loss that has been
recognised directly in surplus I (deficit) on revaluation of securities on the statement of financial position below
equity is removed there from and recognised in the profit and loss account. For investments in subsidiaries. the
impairment loss is recognised in the profit and loss account.
3.4
Sale and repurchase agreements
Securities sold subject to repurchase agreements ('rcpos') remain on the balance sheet; the counterpal1y lii•l;>.ility
is included in borrowings from flnancial institutions. Securities purchased under agreements to resell ('reverse
rcpos') are recorded as !endings to financial institutions. The difference between sale and repurchaSe price is
treated as interest I mark-up I return and accrued over the life of the underlying agreement using the c!Tcctivc
interest method.
3.5
Advances
Advances arc stated net of provision against non-performing advances. Specific and general prov1s1ons arc
made based on an appraisal of the loan portfolio that takes into account Prudential Regulations issued by the
State [lank or Pakistan from time to time. Spccinc provisions are made where the repayment of idcntined loans
is in doubt and reflect an estimate of the amount of loss expected. The general provision is lor the inherent risk
of losses which, although not separately identified, arc known from experience to be present in any loan
portfolio. Provision made I reversed during the year is charged to the profit and loss account and accumulated
provision is netted off against advances. Advances arc written-off when there is no realistic prospect of
recovery.
When the Group is the lessor in a lease agreement that transfers substantially all of the risks and rewards
incidental to ownership of an asset to the lessee, the arrangement is presented within loans and advances.
Assets given under Ijarah contracts entered after I July 2008 arc depreciated over the period of lease on a
straight line basis. The ljarnh arrangements nrc shown as financing under loans and advances.
Murabaha financings are reflected as receivables at the sale price. Actual sale and purchase is not reflected as
the goods arc purchased by the customer as agent of the Group and all documents relating to purchase arc in
customer's name. Funds disbursed under Murabaha financing arrangements for purchase of goods are recorded
as "Advance Against Murabaha".
In Diminishing Musharakn based financing, the Group enters into a Musharaka based on Shirkat-ul-milk for
financing an agreed share of fixed asset (e.g. house. land, plant or machinery) with its customers and enters into
a periodic rental payment agreement for the utilization of the Group's Musharaka share by the customer.
3.6
Operating fixed
~lsscts-
Tangible
Owned
Operating fixed assets, other than land and buildings, arc stated at cost less accumulated depreciation and
accumulated impairment losses thereon. Cost includes expenditure that is directly attributable to the acquisition
of fixed assets. Land and buildings are stated at revalued amounts less accumulated depreciation.
Subsequent costs are included in the asset's carrying amount or are recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Group and the cost of the item can be measured reliably. All other repairs and maintenance expenditures arc
charged to pro lit and loss account during the financial period in which they are incurred.
Land and buildings are revalued by independent professionally qualified valuer(s). Surplus ansmg on
revaluation is credited to the 1SUrplus on revaluation of fixed assets1 account (net of deferred tax). Under the
provisions of the Companies Ordinance, 1984. deficit arising on revaluation of fixed assets is adjusted against
the balance in the above-mentioned surplus account. The revaluation is carried out with sufficient regularity to
ensure that the carrying amount does not differ materially from that which would have been determined using
fair value at the balance sheet date.
Accumulated depreciation on buildings, at the date of revaluation, is eliminated against the gross carrying
amount of buildings. The net amount is then restated to the revalued amount.
Surplus on revaluation of lixcd assets (net of del"crred tax) is transferred to unappropriated pro lit to the cxtt:nt
incremental depreciation charged on related assets.
or
Land is not depreciated. Depreciation on all other fixed assets is calculated using the straight line method to
allocate their depreciable cost or revalued amount to their residual values over their estimated useful lives.
The residual values and useful Jives of fixed assets are reviewed, and adjusted (if appropriate) at each balance
sheet date.
Gains and losses on disposal of fixed assets arc included in profit and loss account currently, except that the
related surplus on revaluation of fixed assets (net of deferred tax) is transferred directly to unappropriated
profits.
Leased
Fixed assets held under finance lease are stated at the lower of fair value of asset and present value of minimum
lease payments at the inception of lease. less accumulated depreciation. Financial charges are allocated over the
period of lease term so as to provide a constant periodic rate of financial charge on the outstanding liability.
Depreciation is charged on the basis similar to owned assets.
3.7
Intangible assets
Goodll'ill
Goodwill represents the excess of cost of an acquisition over the fair value of the share of net identifiable assets
acquired at the date of acquisition. Goodwill is tested annually for impairment and carried at cost less
accumulated impairment.
Computer snjiware
Acquired computer software licenses arc capitalised on the basis of costs incurred to acquire and bring to usc
the specific software. These costs are amortised over their expected useful lives using the straight line method.
Acquired intangibles in business combination
Acquired intangibles in business combination that have finite lives are amortised over their economic useful life
based on the manner that benefits of the relevant assets are consumed.
3.8
Impairment of non-financial nsscts
The carrying amounts of the Group's non-financial assets, other than deferred tax assets. arc reviewed at each
reporting date to determine whether there is any indication of impairment. If any such indication exists then the
asset's recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset or
its cash-generating unit exceeds its recoverable amount.
The recoverable amount of an asset or cash-generating unit is the greater of its value in usc and its fair value
less costs to sell. In assessing value in use, the estimated pre-tax future cash -flows arc discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the time value of money
and the risks speei lie to the asset.
An impairment Joss in respect of goodwill is not reversed. In respect of other assets, impairment losses
recognised in prior periods arc assessed at each reporting date for any indications that the loss has decreased or
no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine
the recoverable amount.
3.9
Staff retirement benefits
Defined ben4it plan
The Group operates approved funded pension and gmtuity schemes for all ils non-management employees, and
a management pension scheme only for its existing pensioners.
For defined benefit plans, the net defined benefit liability /asset recognised in the balance sheet is the de licit or
surplus, adjusted for any effect of limiting a net defined benefit asset to the asset ceiling. The deficit or surplus
is:
(a) the present value of the dcfmcd bene !it obligation less
(b) the Htir value of' plan assets (irany).
The present value of defined benefit obligation is calculated annually by independent actuaries by discounting
the estimated future cash nows using an interest rntc equal to the yield on high-quality corporate bonds.
Actuarial gains or losses that arise are recognised in other comprehensive income in the period they
arisC.
Service cost and Net interest on net defined benefit liability I (asset) are also recognised in profit and loss
account.
Defined contribution plan
The Group also operates a defined contribution gratuity scheme for all its management staff and a provident
fund scheme for all its permanent staff, contributing at 8.33 percent and 10 percent of basic salary respectively.
3.10
Foreign currency transactions
Transactions in foreign currencies are translated to Pakistan Rupees at exchange rates prevailing at the date of
the transaction. Monetary assets and liabilities denominated in fOreign currencies at the reporting date nrc
retranslated to Pakistan Rupees at the exchange rate prevailing at that reporting date. Foreign currency
differences arising on rctranslation are recognised in profit or loss.
3.11
Taxation
Income tax expense comprises of current and deferred tax. Income tax expense is recognised in the profit and
loss account except to the extent that it relates to items recognised directly in equity or in other comprehensive
income.
Current/ax
Current tax is the expected tax payable on the taxable income for the year (using tax rates enacted or
substantively enacted at the balance sheet date), and any adjustment to tax payable in respect of previous years.
Deferred tax
Deferred tax is provided for using the balance sheet method, providing for temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation
purposes. Deferred tax is not recognised on temporary differences relating to: (i) the initial recognition of
goodwill; and (ii) the initial recognition of assets or liabilities in a transaction that is not a business combination
and that affects neither accounting nor taxable profit.
Deferred tax is measured at tax rates that are expected to be applied to the temporary differences when they
reverse. based on the Jaws that have been enacted or substantively enacted by the rcp011ing date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be
available against which the asset can be utilised. Deferred tax assets arc reviewed at each reporting date and arc
reduced to the extent that it is no longer probable that the related tax bene lit will be realised.
3.12
Revenue recognition
Mark-up I return on advances and investments is recognised on an accrual basis using the cff'cctivc interest r:1tc
method. The effective interest rate is the rate that exactly discounts the estimated future cash payments and
receipts through the cxpcclccl life or the linancia\ asset or liability (or, where appropriate. a shorter period) to
the carrying amount of the financial asset or liability.
Where debt securities are purchased at a premium or discount. those premiums/ discounts arc am011izcd through
profit or loss account over the remaining maturity, using the Effective Yield method.
Mark-up recoverable on classified loans, advances and investments is recognised on a receipt basis in
accordance with the requirements of Prudential Regulations issued by the State Bank of Pakistan and Securities
and Exchange Commission of Pakistan. Mark-up on rescheduled I restructured loans. advances and investments
is also recognised in accordance with the requirements of these Prudential Regulations.
The Group follows the ef!'cctive interest method in accounting for the recognition of lease income. Under this
method. the unearned lease income i.e. the excess of aggregate lease rentals and the estimated residual value
over the cost of the leased assets is deferred and taken to income over the term of the lease, so as to produce a
systematic return on the net investment in lease. Unrcalised lease income pertaining to non-performing leases is
held in suspense account, where necessary. in accordance with the requirements of the Non-Banking f-inance
Companies and Notified Entities Regulations. 2008. Processing, front end fee. commitment fcc, penal charges
and commission arc recognised as income when realised.
The Group follows the finance method Cor recognising income on ljarah contracts commencing prior to 30 June
2008 and accounted for as finance leases. Under this method the unearned income i.e. the excess of aggregate
ljnrah rentals (including residual value) over the cost of the asset under ljarah facility is deferred and then
amortised over the term of the Ijarah, so as to produce a constant rate of return on net investment in the ljarah.
For ljarah arrangements commencing on or after I July 2008. Ijarah rentals are recognized as income on accrual
basis, as and when rentals become due. In case of ljarah arrangements with staggered rentals, the income is
recognised on a straight line basis over the Ijarah term. Documentation charges. front-end fcc and other ljnrah
income arc recognised as income on receipt basis. Unrealized ljarah income pertaining to non-performing
ljarahs is held in suspense account, where necessary, in accordance with the requirements of the Prudential
Regulations.
Fees and commission income are generally recognised on an accrual basis when the service has been provided.
Fees and commission which in substance amount to an additional interest charge, arc recognised over the lire or
the underlying transaction on a level yield basis.
Dividend income is recognised when the right to receive income is established.
The cost from award credits !Or loyalty points earned on usc of various products of the Group is measured by
reference to their rair value and is recognised when award credits arc redeemed.
Murabaha transactions arc reflected as receivable at sale price. Actual sale and purchase are not reflected as the
goods are purchased by the customer as agent of the Group. Pro lit on the sales revenue not due for payment is
deferred by recording a credit to 'Deferred Murabaha Income' account.
3.13
Derivative financial instruments
Derivative financial instruments are initially recognised at f~tir value and are subsequently remeasured at fair
value. All derivative financial instruments arc carried as assets when fair value is positive and liabilities when
fair value is negative. Any change in the fair value of derivative financial instruments is taken to pmfit and loss
account.
3.14
Provisions
Provisions for restructuring costs and legal claims are recognised when: (i) the Group has a present legal or
constructive obligation as a result of past events; (ii) it is more likely than not that an out now of resources will
be required to settle the obligation; and (iii) the amount has been reliably estimated.
3.15
Fiduciary activities
The Group commonly acts in fiduciary capacities that result in the holding or placing of assets on behalf of
individuals. trusts, retirement benefit plans and other institutions. These assets and income arising thereon arc
excluded from these financial statements, as they arc not assets of the Group.
3.16
Segment reporting
A segment is a distinguishable component of the Group that is engaged either in providing products or services
(business segment), or in pmviding products or services within a particular economic environment
(geographical segment), which is subject to risks and rewards that arc different from those of other segments.
The Group"s primary format for segment reporting is based on business segments. A brief description of the
products and services offered by different segments of the Group is given in note 37 to these financial
statements.
3.17
OITscttin~
Financial assets and liabilities are set off and the net amount presented in the balance sheet when, and only
when, the Group has a legal right to set off the amounts and intends either to settle on a net basis or to realise
the asset and settle the liability simultaneously.
3.18
Subordinated liabilities
Subordinatcclliabilitics are initially measured at fair value plus transaction costs, and subsequently measured at
their amortised cost using the effective interest method.
3.19
Non-current assets and disposal groups held for sale
Non-current assets and disposal groups comprising of assets and liabilities that arc expected to be recoVered
primarily through sale rather than continuing use are classified as held for sale. Immediately before being
classified as held for sale, the assets and components of disposal group are remeasured in accordance wit,l1 the
Group's accounting policies. Thereafter, the '"sets and disposal group are measured at the lower of thci1·
carrying values and fair values less cost to sell.
During the year, the management has decided to divest its shareholdings in its subsidiaries and consider them
as disposal group held for sale. In this regard, efforts to sell the same have been initiated. The management is
committed to the divestment and accordingly. assets and liabilities of these subsidiaries arc classified as disposal
group held for sale. (Refer note 12.3).
3.20
Share-based compensation
Standard Chartered PLC operates various share-based compensation plans which are accounted for as equity
settled share based payment transactions, regardless of inter group repayment arrangements. The cost for such
share based payment transactions is determined by reference to the fair value of options at the grant date. The
fair value is determined based on the market price or using an appropriate valuation technique. The cost is
charged to profit and loss account and credited to equity as a contribution from parent. The liability for these
transactions which is based on the fair value of these options at the settlement date is settled through debiting
equity.
3.21
Acceptances
Acceptances comprise undertakings by the Group to pay bills of exchange drawn on customers. The Group
expects most acceptances to be simultaneously settled with the reimbursement from the customers. Acceptances
are accounted for as off~balance sheet transactions.
3.22
Basic and diluted earnings per share
The Group presents basic and diluted earnings per share (EPS) for its shareholders. Basic EPS is calculated by
dividing the profit or loss aHributablc to ordinary shareholders of the Parent by the weighted average number of
ordinary shares outstanding during the period I year. Diluted EPS is determined by adjusting the profit or loss
attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding lOr the
effects of all dilutive potential ordinary shares, if any. There were no convertible dilutivc potential ordinary
shares in issue at 31 December 2014.
3.23
Dividend and appropriation to reserves
Dividend and appropriation to reserves. except appropriation which are required by law alicr the balance sheet
date, arc recognised as liability in the Group's financial statements in the year in which these arc approved.
3.24
Borrowings I deposits and their cost
Borrowings I deposits arc recorded at the proceeds received.
Borrowing I deposit costs are recognised as an expense in the period in which these arc incurred using
effective mark-up I interest rate method.
3.25
Fimmcial assets and liabilities
Financial instruments carried on the balance sheet include cash and balances with treasury banks, balances with
other banks, !endings to financial and other institutions, investments, advances, certain receivables, bills
payable, borrowings from financial institutions, deposit accounts and other payables. The rmrticular recognition
methods adopted for significant linancial assets and financial liabilities are disclosed in the individual policy
statements associated with them.
3.26
Provision for glmnmtce claims and other off balance sheet ollligations
Provision lOr guarantee claims and other off balance sheet obligations arc recognised when intimated and
reasonable ccrt:J.inty exists for the Group to settle the obligation. Charge to profit and loss account is stated net
of expected recoveries.
3.27
Net investment in finance leases
Leases where the Company transfers substantially all the risks and rewards incidental to the ownership or an
asset arc classified as finance leases. A receivable is recognised at an amount equal to the present value of the
minimum lease payments under the lease agreement, including guaranteed residual value, if any.
3.28
New standards and interpretations not yet adopted
The following standards. amendments and interpretations of approved accounting standards will be effective f"or
accounting periods beginning on or after I January 2015:
Amendments to lAS 19 "Employee Benefits" Employee contributions- a practical approach (effective lor
annual periods beginning on or after I July 2014). The practical expedient addresses an issue that arose
when amendments were made in 20 II to the previous pension accounting requirements. The amendments
introduce a relief that will reduce the complexity and burden of accounting for certain contributions from
employees or third parlics. The amendments arc not likely to have an impact on Group's financial
statements as these arc relevant only to defined benefit plans that involve contributions from employees or
third parties meeting certain criteria.
Amendments to lAS 38 Intangible Assets and lAS 16 Property, Plant and Equipment (c!Tcctivc for annual
periods beginning on or aflcr 1 January 20 16) introduce severe restrictions on the usc of revenue-based
amortization for intangible assets and explicitly state that revenue-based methods of depreciation cannot be
used for propc11y, plant and equipment. The rebuttable presumption that the usc of revenue-based
amortisation methods for intangible assets is inappropriate can be overcome only when revenue and the
consumption of the economic benefits of the intangible asset are 'highly correlated', or when the intangible
asset is expressed as a measure of revenue. The amendments arc not likely to have an impact on the Group's
financial statements.
!FRS I 0 'Consolidated Financial Statements' - (effective for annual periods beginning on or after I
January 2015) replaces the part of lAS 27 'Consolidated and Separate Financial Statements. !FRS 10
introduces a new approach to determining which invcstee.s should be consolidated. The single model to be
applied in the control analysis requires that an investor controls an in vestee when the investor is exposed. or
has rights, to variable returns from its involvement with the investee and has the ability to affect those
returns through its power over the investcc. !FRS 10 has made consequential changes to lAS 27 which is
now called 'Separate Financial Statements' and will deal with only separate financial statements. Certain
ft~rthcr amendments have been made to !FRS 10, !FRS 12 and lAS 28 clarifying the requirements relating
to accounting for investment entities and would be effective for annual periods beginning on or after 1
January 2016. The management is currently assessing its impact on the Group s financial statements.
1
!FRS II 'Joint Armngements' (effective for annual periods beginning on or after I January 2015) replaces
!AS 31 'Interests in Joint Ventures'. Firstly, it carves out, from lAS 31 jointly controlled entities, those
cases in which although there is a separate vehicle, that separation is ineffective in certain ways. These
arrangements arc treated similarly to jointly controlled assets/operations under lAS 31 and are now called
joint operations. Secondly, the remainder of lAS 31 jointly controlled entities, now called joint ventures,
arc stripped of the free choice of using the equity method or proportionate consolidation; they must now
always usc the equity method. !FRS II has also made consequential changes in lAS 28 which has .now·
been named 'Investment in Associates and Joint Ventures'. The amendments requiring' ·busines-s·
combination accounting to be applied to acquisitions of interests in a joint operation that con~titutcS a
business arc effective for annual periods beginning on or after 1 January 20\6. The adoption of this JrRS is
not likely to have an impact on the Group S financial statements.
1
!FRS 12 'Disclosure of Interest in Other Entities' (effective for annual periods beginning on or al\er I
January 20 15) combines the disclosure requirements for entities that have interests in subsidiaries. joint
arrangements (i.e. joint operations or joint ventures), associates and/or unconsolidated structured entities,
into one place. The adoption of this !FRS is not likely to have an impact on the Group's financial
statements.
!FRS 13 'Fair Value Measurement' effective for annual periods beginning on or after I January 20 15)
defines fair value, establishes a framework for measuring fair value and sets out disclosure requirements for
fair value measurements. !FRS 13 explains how to measure fair value when it is required by other IFRSs. It
does not introduce new fair value measurements, nor docs it eliminate the practicability exceptions to fair
value measurements that currently exist in certain standards.
Amendment to lAS 27 'Separate Financial Statement' (efl'ective lor annual periods beginning on or after I
January 2016). The amendments to lAS 27 will allow entities to usc the equity method to account lor
investments in subsidiaries, joint ventures and associates in their separate financial statements.
Agriculture: Bearer Plants [Amendment to lAS 16 and lAS 41) (cfl'ective for annual periods beginning on
or al\cr I January 2016). Bearer plants arc now in the scope of lAS 16 Property, Plant and Equipment !'or
measurement and disclosure purposes. Therefore, a company can elect to measure bearer plants at cost.
However, the produce growing on bearer plants will continue to be measured at fair value less costs to sell
or
under lAS 41 Agriculture. A bearer plant is a plant that: is used in the supply
agricultural produce; is
expected to bear produce for more than one period; and has a remote likelihood of being sold as
agricultural produce. Before maturity, bearer plants are accounted for in the same way as self-constructed
items of property, plant and equipment during construction. These are not likely to have an impact on the
1
Group s financial statements.
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to
!FRS 10 and lAS 28) [ciTcctivc for annual periods beginning on or after I January 2016]. The main
consequence of the amendments is that a Cull gain or loss is recognised when a transaction involves a
business (whether it is housed in a subsidiary or not). J\ partial gain or loss is recognised when a transaction
involves assets that do not constitute a business, even if these assets arc housed in a subsidiary.
Annual Improvements 20 I 0-2012 and 20 I I -2013 cycles (most amendments will apply prospectively for
annual period beginning on or after I July 2014). The new cycle of improvements contain amendments to
the following standards:
!FRS 2 'Share-based Payment'. !FRS 2 has been amended to clarify the definition of'vcsting condition' by
separately defining 'performance condition' and 'service condition'.
!FRS 3 'Business Combinations'. These amendments clarify the classification and measurement of
contingent consideration in a business combination.
if'RS 8 'Operating Segments' has been amended to explicitly require the disclosure of judgments made by
management in applying the aggregation criteria.
Amendments to lAS !6'Property, plant and equipment' and lAS 38 'Intangible Assets'. The amendments
clarify the requirements of the revaluation model in lAS 16 and !AS 38, recognizing that the restetemcnt of
accumulated depreciation (amortization) is not always proportionate to the change in the gros·s' can:ying,
amount of the asset.
lAS 24 'Related Party Disclosure'. The definition of related party is extended to include a management
entity that provides key management personnel services to the repmiing entity, either directly or through a
group entity.
lAS 40 'Investment Prope11y'. lAS 40 has been amended to clarify that an entity should: assess whether an
acquired property is an investment property under lAS 40 and perform a separate assessment under !FRS 3
to determine whether the acquisition of the investment property constitutes a business combination.
Annual Improvements 20 I 2-2014 cycles (amendments are effective for annual periods beginning on or
after I January 20 I 6). The new cycle of impmvements contain amendments to the following standards:
!FRS 5 Non-current Assets Held for Sale and Discontinued Operations. !FRS 5 is amended to clarify that if
an entity changes the method of disposal of an asset (or disposal group) i.e. reclassifies an asset from held
for distribution to owners to held for sale or vice versa without any time lag, then such change in
classification is consic!CI·cd as continuation of the original plan of disposal and if an entity determines that
an asset (or disposal group) no longer meets the criteria to be classified as held for distribution, then it
ceases held for distribution accounting in the same way as it would cease held for sale accounting.
!FRS 7 'Financial Instruments- Disclosures'. !FRS 7 is amended to clarify when servicing arrangements are
in the scope of its disclosure requirements on continuing involvement in transferred financial assets in cases
when they are derecognized in their entirety. !FRS 7 is also amended to clarify that additional disclosures
required by 'Disclosures: Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS7)' are
not specifically required for inclusion in condensed interim financial statements for all interim periods.
lAS 19 'Employee Benefits'. lAS 19 is amended to clarify that high quality corporate bonds or government
bonds used in determining the discount rate should be issued in the same currency in which the benefits arc
to be paid.
lAS 34 'Interim Financial Reporting'. lAS 34 is amended to clarify that certain disclosures, if they arc not
included in the notes to interim financial statements and disclosed elsewhere should be cross referred.
The Group expects that the above mentioned improvements will not have a material impact on the Group's
financial statements in the period of initial application.
Note
CASil Ai'iD BALA:\'CES WITH TREASURY BAi'\KS
In hand
- Local currency
- Foreign cmrcncies
4.1
With State Bank ofPotkistnn in:
- Local currency current :1ccount
- Locnl currency current account-Islamic Uanking
- Foreign currency deposit accoutn
Cash reserve account (5% of FE 25)
Special cash reserve account ( 15% or 1:E 25)
LoL"nl US Dollar L"OilL"L"Iion
m:~.:ount
With National Bank of Pakistan in:
- Local currency current account
..J.I
This inchu.lcs National Prize Bonds ofRs. 2.282 million (2013: Rs. 1.653 million).
5
BALANCES WITII OTHER BANKS
2013
2014
(Rupees in '000)
2,37-t,(IIJ
2,1MI,9!18
2.547.67X
2.3X6.'1J:i
2,351,724
l,..J76,212
12,136.173
3,132,3112
8,593,265
104,2S3
3.305,342
9,200,051
I,274,03S
2l,·l75,3..J5
1.5·15.377
32.33\.\(17
1,120,999
XCJ, 112
2014
2013
(Rupees in '000)
In Pakistan
- In cmn:nt nceounts
Outside Pakistnn
- In current accounts
157,589
5.1
3S7,3111
3S7,3111
5.1
This includes bahmces of Rs.3J7 .'120 million (20 13: Rs. 1.399.'106 million) held with other branches and subsidiaries
of Stamlard Clu1rtcrcd Group 011tsidc Pakistan.
6
LEND!i'\GS TO FI~ANCIAL 1:'-iSTITl..ITIONS
Note
6.1
6.2
Repurchase ilgn.:cment !endings (Reverse Rcpo)
Placements
1.608.932
2013
21114
(Rupees in '{)00)
2,51111,111111
8,313,559
10,813,559
22, I 5S,H-10
22.1 58.8·10
(•.I
These carry nuu·k~up at rate 9.(• pcn.:..:nt per :utnt1111 (201:1: Nil) p:1yabk at maturity, and an: due to mature duriu!'. .lanuary :?.015.
arnmgcments arc governed under Master Repurchase Agrcements.
(1.2
This represents placements with other branches and subsidiaries of Standard Chartered Group outside Pnkistan <llmark-up rates ranging
f"rom 0.06 to 0.35 percent per :mmtm (20 13: 0.1 to 1.2 percent per annum). :md arc due to mature during January 2015.
6.3
Particulnrs
or lending
201)
2014
(Rupees in '000)
In local currency
In lbrcign Cllrrcneics
6.-t
Th~'"t..'
6.4
2,51111,11110
8,313,559
10,813,559
22, I 58,8<111
22,158.8,111
Securities held :1s collateralllg:tinst !endings to tinanchtl institutions
llcld by
h:wl•
21114
Further
given :IS
col\atcr:ll
Tot:tl
Held by
bunk
2013
Further
given as
col Iitteral
Total
(Rupees in '000)
Pakistan Investment Bonds
6.4.1
2,500,0011
2,51111,1100
The market v:tluc of" securities held as colla tern! against !endings to financial institutions nmountcd to Rs. 2.561.559 million {20 13:Rs.
Nil million).
7
IN\'ESTi\H:NT.S
2013
:WI-I
llcltl by
7.1
llcld by
Gtvcn as
Total
h:wk
bank
collateral
----~---------~---·-······-· (ltupccs in 'IIIJU) -····------·---~------·······
Jn\'l'SIIIIl'OI.~ h)' l~'!)l'
Gh·cn as
cu\l:llcntl
Tul:tl
lfeltlfor trmfing .n•curitie.~
2·12,5·1 1)
8.Jt,!J.Hl
M:ukel Trcnsury Bills
Pnkistan 111\'CStmem Bouds
Sukuh nmlljarah Bomb
31.122
Awtifah/r: for S/111! ,\'f!cllrifh•s
102,1JR2,-IlW
31,lfo8,HI')
Market Tre;tsul)' Bills
J>nkistan lnvcstmcutllnnd~
Onlinm)' shares uflis!cd companies
Units I cerliticatcs 111' mutual fum is
Term Fimmcc C..:1tificntes -unlisted
Ohlinary shares nfnnlisted cumpanies
Sul..uh mnlljamh Bonds- unh:-tell
fl62,0f• I
!,J(d
2S5,0:!~
},f!l)l)
10,116)TJ
1/drl To M11t11ri(t'
P;tkistanlnvcstmcm Bonds
Sukuk mulljamh Bonds - unhsted
lnvcstmcnl.\ :11 ens!
5R,2Mi
-:-:::-::'?C'::::------:-;;-:-::;------;-;::.,C5 8,2 J(l
IR,6·10
1·17,050,.11K
Provision lOr dimmntion in
thc value of invesunems
I 11\'CSimcnts (net nr pmvisinns)
('IK7,551}
146,?.62)i(l]
Surplus on rcvalnminn or
held for trading secl'r:ttes - net
Surplus It Deficit) on fC\'Hhration of
nvnilab!c !Or sale securities- net
Total htvc.~tull'nts ·net
IO,W!R
106,.106
154
I R.71J.\
7.2
146
~lHl.25l
2(11.1
2fll-l
(HU]Il'l'\ in 'tltlll)
Fcdl•ntl Gn\'crntnl'lll ~ecul'ilics
Market Tn.!<ISUI)' Bills
Pr~kistanlnvcstment Bonds
Gop tjnrah Sukuk Ilnnds
Fully paid up nnlinary shnrcs
Listed companies
Unlisted companies
Bonds and Term Fin:111cc Ce•·tificntcs
Sui;.uk and Jjarnh Bonds
Term Finance Ccrti!icatcs
5?,2.11 ,(144
103,225,0.\X
32.0(,7.-J:lJ
113,7.15,57')
111,3%,4'15
9,222,399
662,1161
M•2,0(ol
J,IIU-1
3,S'J9
l,.l75,0Ull
2H5,1l2S
!,5R3,210
2RS.<n5
Other iii\'CSI111l'IIIS (mullml funds)
l,}f>J
Tntnl in\'cstment nt cnst
I H5,!1UH,lWII
Less: Provision lhr diminution in the value of ill\-cstments
(lH13,492~
I nvestrnent (net uf pro\'isiuns)
1·16,262,11f•7:
S-1,4(,(1
3,'>32,321
10,978
J()(,,.\0()
___l!lli,22b_ll'J7
1·163KO 2.5 I
7!l7,SSI
·196,353
l':lrticul:trs nf prnvisinn for diminution in tht• v:lllll.' of invcsttncnls
Opening bahmc..:
L
Charge !Or the year
Reversals
Net charge
Transfer to hchl for snle
Closing B:~lancc
7.3.1
(7S7,551)
18!',005,316
Surplus on rev:~hmlion of held !Or tmding securities ~ net
Surph•s on re\'aluatinn of n\'nilnblc for Si'llc ~ecurities • net
Tot:lllnvcslments- m·t
7,3
147,050,•11!1
The del:tils of Jll'tl\'hion hL·hl ngninsl
7.3.1
inv<'~tmcnt.~
Ordinnry shares I uni!s- :~vnil:~hlc !Or sale
Tl!rrn Finance l'cr!itic:1tes -unlisted
Sukuk bonds- held to matmitr
7-1.151
(5tlH)
I
29l,WO
(ltJ2)
73,643
29\,IIJS
(57,7!12)
81)3 -192
787,551
SIX,-167
.J.J·I,J 16
2HS,II2S
2R5,07~
8113 ·192
787Jlk
nrc ns follows:
7.7&7.11
7.')
5R,21()
7A
Investments include securities having book \•alue of Rs. 18.696 million (20 13: Rs. 18.640 million) plc,!gcd w1th the State Ban\.. of Pakistan ots security to f.1c1litatc T T
discounting f:1cility to the Bank, including ;m amount ..:arnmrked t~gainstthe !iJcilitil!s allocated to brm1chcs now in Bangladesh
7 .S
Market Treasury B11ls and l'n\..ist:m hwcstment Bonds arl! eligible \l)f discounting with the State Bnnk of Pakistan.
21114
Quality of'A,·nilahll' fur Sale' secul'ities
Mnrkct
vnluc
No/('
Rr~~ing
2013
Cost
\•aim:
(Rupees m '000)
(Rupees in '000)
7.6
Fcdernl Gnvernull'nl Securities
Markel Treasury Btlls
Pakistan lnvc~tmcnt Bonds
Go!' lj;~rah Sukuk Bonds
7./f/.3
Unrated
Unrated
Unmted
52,742,7(•9
112,0311,376
lt1,395,!'i32
52,763,1182
115,918,348
10,419,840
Unrated
Unrated
Unrated
- - - -:::::-:c:-:-=::-175 1Mifi77
7.7
l'articuhu·s uf ~>han•s hdtl
~
179 1111 27tl
Hl2,9R2,4R9
31,168,109
9,191,277
102,H63,0flt,
31 ,2fi·l,265
143 34 I 875
143 •J.\3 (J"!I
21114
li,\tctl
lbtin~.t
21l1J
21114
(Number nf Shnn•s)
IX,916,023 Agritcch Lll11ited
D
IR,IJ16,02J
Market
9,2%,21)()
20\3
Mnrket vulue
(Rupees in '{lUll)
Cost
_ _M2,1161
Mi2,061
(,(,2,0(JJ
(,62,061
Hatin~.t
[)
Cmt
Marl,et value
(Rupees in '000)
M2,0f•l
662,061
(162,061
662,0f•l
(•141,311)
(!'il5,463)
Provision for thminution in the value
146 59H
All shares :m: tmlinary shares having !bee \':llue ofRs. 10 c:~ch except otherwtsc mentioned
7.R
2013
l'articulars of unit~ I Cl'rtificntes held in mntual fnnds
lbting
Cost
i\l:trkct
Marl-.ct
value
Cost
llntin~
value
2013
(Numhcr of tlnits)
{Rupees in '000)
(Hupces in '001))
2014
3,·1•17
Nntionallnve~tmcnt
(Unit)Trust
10,017
I0,0-17
1,363
1,363
Provision !i.1rdiminution in the value
7.'-J
Jloutls anti Term Finanrc
Ccttific:tl~s ~
2013
201-1
{HUJICCs in '0011)
unlislcll
,\'ol<'
Term FinmH'l' Ccrtilicatc~ of lls.S,IlUO cal'l1
Agritech Limited
Azgard Nine Limited
147,000
1•17,001)
138,025
13~.025
- =211S,U2!'i
: : - - -2K\tl25
--Provision for diminution in the value
7,10
Sulmk nntllj:trah Bonds oflls. S.ll!lll each
Hating
2014
Cost
Mllrkct
2013
Cost
Rating
value
(ll.upecs in 'tlOO)
Wapdn Sukuk Bonds
Pakistan International Airlines (I'! A) Sukuk Bonds
7./fl./
7.11/.2
Unrated
Unrated
150,000
1,32S,IIOO
1,325,000
uuo
I .474.728
1 475
7.1U.I
(2R5J)25)
(285,025)
149,728
Market
vnluc
(Rupees in '000)
Unrated
Unrated
200,000
1,325,000
!95,955
1,3:!5,000
I 525 000
I 520 955
Wnpda Sukuk Bonds carry mark-up niles 0.25%, below 6 months KIBOR The principal and pmlit is payable scmi-nnnunlly with maturity
111
July 2017.
7.1U.2 PIA Sukuk hunds c:trry m:1rk-up rates 1.75% :tbO\'e 6 months KIBOR. The principal and 11rolit is payable scmi-unnunlly with mnturity in October 2019.
7.111.3 GoP IJarah Sukuk Bonds carry mark-up r:nes of0.30% below weighted a\'emgc yield of 6 months treasury bills. The pro lit is
redemption atnmturity falling due between November 2015 and July 2017.
7.10.4 llnrcalized
~a in
f
(lu.~s)
1111 revaluation of investments classilicd as held for
Inulin~
p:~ynhle semi~annually
with princ1pal
2013
21ll-'
(Rupees in 'IJUU) .
Market Treasury Bills
P:~kistan Investment Bonds
GoP ljarnh Sukuk Bonds
41,237
I,IS5
13,183
: 9:122.
<O
!i4 460
"371
ltl
97~
7.11
Particulars of shares held -unlisted
2013
(i\'umhcr nf Shan·s)
2014
573,769 Pakist<m Export Finance
( iuarant~c Ag~ncy Limitl!d
Chairnmn: Mr Munecr Kamal
8 Society for Worldwide Interbank
Fund Tr:msiCr
2111-1
2013
Unnned
Unrated
Unrated
Unrntcd
Note
2013
21114
(l{upces in 'tiOO)
3,1111-1
3.00·1
1\95
3,11114
Provision lOr diminution in the value
8
7.3.1
(3,0114)
ADVANCES
Loans, cash credits. running limmces, de.
- In Pnkist:m
- Outside P:tkistan
Net investment in Finance Lease /ljarah Finance
- In Pakistan
-Outside Pakist:m
8.2
Bills discounted and purchased {excluding treasury bills)
- Payabli.! in Pakistan
- Payable outside Pakistan
128,249,140
i'I0.627.9;D
128,249,1-111
140.627.9·13
:l I
5.113·1.~·11]
5.03·1.HI
14,089,817
7,686,396
21,776,213
15.873,7')<!
6.890,046
22.763.8·10
Advances- gross
8.1
150,025,353
168,426.527
Provision !iJr non-performing advances
8.5
(21,-150,0110)
(22.187.973)
128,575,353
146.238.55·1
128,724,733
21,31111,6211
150,025,353
156,115.95 I
12.310.573
168.426.527
1113,041,377
46,983,976
I 50,025,353
118.231.35·1
50.195.173
168.426.527
Advances- net
or provision
8.1
l':u·til"ulars uf:HIYanccs- Gross
8.1.1
In locnl currency
In ~~)reign curn.:ncics
?..1.2 Short h:rm ( l~lr upto one year)
Long term (lOr over one yenr)
8.1.3 This includl!S assets under ljanlh nrrnngemcnts amounting toRs. 856.895 million (2013: ·1..185.415 million)_ Rc!i.:r note 4 lA. and 8.3.
"·'
lUI~
Nrt innstment in Finance l.enH
Notllller
lhun one
y~nr
Later than oue
and less thnn
fi\'C: yc:trs
0\·~r
fh'e
Tutu\
Not later
thnn one year
201:\
Ov.:r!iv.:
Later than one
years
nnd kss limn
live years
Tut.tl
• (Rupees in '000) - - · - - - - - - - - - - - - Lease rental n.:~:civnble
J~~:sidual value
Minimum t.~nse lln)lllents
2,033,727
299,118
2,3:12,8-15
Fiu:mci:~1 charges for future periods
Present value of minimum le:l~c JlU}1ncnts
1.9-12 841
8.2.1
lltis relates to Stundnrd Chartered
8.3
Assets under 1jarnh
l.easin~
(390,00~)
4,62').07:!.
\, 122,R77
2.595,:H5
R23,759
3,.\ 19,104
(7\7,205)
(327,201)
J,U9J,9fJ3
Limited. which is classified as disposal group held for sale
nrrnn~:cments
Following is a statemem of assets lensed out subsequent to 1 July 2008 that have hcen accounted for under Mamie Financinl Ac~:ounting Standllrd 2, 'Jjnwh' (IF AS 2):
2014
Accnmuhtted
depreciation
Con
Tangible
Plant, machine!)' and cquipment
Motor vehicles
8.~
20\3
,\ccnmulnted
Ntt book
depreciation
Cost
value
(Rupees in '000} - - - - ·
1,206,000
(349,105)
856,895
1.206 000
p49 1Io5!
856,895
3,905,207
3,683.462
7,588.669
1,602,686
1,500,568
3,103 254
Net hool..
value
2,302,521
2,182,894
'l,olll5.415
Advances include Rs. 23.095.733 million (31 December 2013: Rs.24,938A39 million) which have been pi need under non-pcrfonning stntn~ ns dcwiled below:
201~
Classified Ad\':mccs
0\'Crscas
Domestic
Category of classlfi~ation
OAEM
Substandard
Doubtful
Loss
l'ro\·isinn nequired
Total
Oontulic
Oversells
Total
- - - - - - - - - (Rupees in '000) - - - - -
4~,774
4~,77-1
836,175
857,709
21,357,075
23,(]95,733
836,175
857,709
21,357,075
23,095,733
23,095!733
23,095.733
Geneml provision
Domestic
Classified Advanc~'S
Overseas
Totnl
2!2,5~6
212,546
297,095
20.400,894
20,910,535
539,465
21.450,000
297,095
20,400,894
20,910,535
539,465
21,450;000
2013
Provision Required
Overseas
Total
Domestic
Provision lleld
Overseas,
I>omutic
212,546
297,095
20,400,894
20,910,535
539,465
21 450 ouo
212,5Mo
297,095
21J,-IUO,X9~
20,910,535
539.~65
21.~50,000
Provision Held
Overseas
Domestic
•Tohtl
Tut:1l
··----------------········---------······--····---··· (Rupees in '000) ------·----·--·--·---·------------.---------------------.OAEM
Substnndnrd
Doubtful
Loss
526
39
39
757,89~
178,276
1,178,601
20,270,595
21,627,511
560,462
22.187 973
178,276
1,178,601
20,270,595
21,627,511
560,462
22 187 973
526
757,894
2,441,6\0
21,738;108
24,938,438
2,441,6\0
21,738,408
24,938,438
2-1,938.438
24.938.433
Gcncrnl provision
39
178,276
1,178,601
20.270,595
21,627.511
560.-162
22.187.973
39
178,276
1,178,601
20,270,51)5
21,627,511
560,462
22.187.973
At 3 l D~ccmher 201-1, the provision requirement has been reduced by Rs. I, 143.984 million (31 December 2013: Rs. \,493.662 million) bcin~; ben~ lit of Forced Sale Vnluc (fSV) of
commercial, rcsidentinl rntd indus1rial properties (land and building only) held as collateral, in accordance with the State Brn1k of Pakistan Prudential Reguhllions (PR) and SOP C'irculnr
10 dated 21 October 2011. lncrens~ in aecumula!ed Jlrofits amounting toRs. 743.59 million due to the snit! FSV benefit is not :wailnblc for distribution ofcnsh nnd stock dividend I
bonus to employees.
8.5
l'articulars ofJirovisiun ag:1inst nun-performing nth•anccs
S]leeific
2014
General
Total
2013
General
Spccilic
Tvtal
· - - - - - - - - - - - (Hupecs in '000) ----------·-------------·
Opcnin~;
bal:mcc
21,627,511
560,462
22,187,973
23.999,18·1
572,303
2-1,571..137
Charge for the year
Reversals
Amounts wriucn on·
Other movements
Tmnsfer to held for snle
Closing hnlane.:
(904,66~)
(127,270)
(121,98.1)
211910,535
(904,664)
(127,270)
(UJ9,5-11)
(11·1,131)
(869,5·11)
(21•1,131)
(121,98~)
539
~65
21.~50,000
21.627,~
II
560 -162
22.187,973
8,(i
2014
2013
(HUJ!eU in '000)
J>nrticulnrs nfwrite offs
8.6. I A~<~inst provi5iuns
Charged and written ofT during the year
8.li.2 Write-oil's of~~~. 500,000 and above
Write-oil's of below Rs. 500,000
9114,6()4
215,34>1
869,54 I
239,868
1,1211 UU8
1.109.40 1)
639,276
>180,732
610,9-17
498,462
1.1 09,40CI
1.120,0118
8,7
lht:1ils nflmms wrinen-nrrnrlh.
~no,nno
:1nd above
In tenus of sub-section (:l) of section 33A of the Uanking Companies Ordinance, 1962. the statement in resr1ect of wnttcn·oll' lo;ms or any mher fimmci:1] relief of
five hundred thousand rupees or above nllowcd ton person{s) during the ye:1r ended 31 December 20 1·1 is given in Annexure l.
l11is includes Junns chnrgcd off as per flnnk's policy. Recovery ciTorts un the amount chnrgcd oil' :1re ongoing. as the flank cuutinucs to hon-c the legal right uf
TI.'CO\"Cry.
8.11
l'urtkulan ufhmns :uul
:uh·nnc~s
tu dlrcc!urs, ussod:ltcd comjl:lllies,
2013
(llnpfn in 'liOU)
201~
et~.
Dchts due by dircctors, C)(ccutivcs or oniccrs ofthc bank or any of
them either scvemlly ur jointly with any other persons
Balnncc m hcginuing of the ycnr
Lo~ns granted durin~; the year
Repayments I tr:msfcr
Ba!omce :11 end of the ycnr
(i)
1,29~.7>10
19,962
(346,167)
968,53S
Dcbts due by companies or linus in which the directors of thc bank arc interested
as dircctur.;, panuers or in the case ofpri1•a1c companics ns mcmbcr5
B;~lancc at bcgim1ing of the year
Lonns ~;rnntcd duri•1g the ycnr
Rcpaymcnts
B:1lancc ;~tend of the ycar
1,732,0!13
-'8.•164
(485,807)
1.294.740
(ii)
(iii)
Debts due by subsidiary companies. controlled finns, managed
other rclmcd p:u1ies
Balance ut bcgil\lliug of the ycnr
Loans ~;ranled during thc year
Rcpnymcnts
Bnlancc nt end of the ye:Jr
8,9
modm<~lms
29,966
1,%!1,929
('.10~,602)
29.966
90,001
36,111
102,395
39,416
(51,810)
90.001
nnd
(S7.~31)
6R S81
201-'
l.ntrr limn
five years
Not Inter
than oue
ycnr
Totnl
y~:lr
yeurs
- · - - - - - - - (llup~es in '000) - - - - - - - -
Rentals receivable
Residual vnlne
Totnl fmure lj:trah
pa}111Cnls rcccivnblc
2013
Later than
one and less
thnn live
years
OI'EilATING
Lntcr than
lh·c years
Total
················•···•······• (Rup¢CS in '000) ··•••·••••••••••••••••••••••
4S8,>170
573,088
I,03t,~S8
1,977,585
226,991
2,731,520
757.729
79
4,709,184
984,720
~s8.~70
S73 088
I 031
2.204,576
3,489.249
79
5.693.904
~S8
Noh•
2013
(Rupees in '000)
2(1J.j
Fl~\I.:D ASS~:TS
Capital work·in·pwgrcss
!>ropc11Y aud cquipmcnt
9.1
693,293
Contractual renl:lls rcceil·a!Jic·ljnr:Jh contrncts cOJilmtllcing I July 211011
Not later l.nter !han
than one one :mtl lc~s
9
563,913
(533,9~7)
Cnrlilnl work·in·Jirogrcss
Civil works
Advance pn)11lcnt towards pmperty and cquipm~ot
':J.I
':J.1
6,282,SS3
6,282,SSJ
68,780'
6,103,964
6.172.74•1
38,535
30,2•15
68.71!0
9.2
J'rOJil"f\)" :IIHI
equi[IIUenl
21114
Tntlll
Furniture,
Vehicles
fixtures :1nd
orrice
e•tuipment
--···-··-·-··---·····--···--······--·--·····-··----- {It ''J'l'e\ in '111111) ····-----------·-··········-------------------------· ---Fredwhl
Lnml
Cost I V:llmtlions
At I Janunry 101-1
Surplus/ {Ddicitl nn ro.::valuollinn
Revaluation ••d;ustmo.::nt
Additions dnrmt~ tho.: yo.::ar
Trnnsfo.::rs I wruo.:: ot1S
1'r:ms1Cr tu hdlllhr ~ak
lkletion~
At 31 Del"em1u,or 21114
571,0311
17,3.1-1
l.ea~ehuhl
!.ami
J,l'iUfi,42:1
215,()110
Buihlint.:s on
frcehnhlland
2!Hl,·IU8
(,•J.(,,S7
(112,237)
573
lluildint.:s on
Leasehold lund
Leased
hold
impro\·ements
897.257
77.429
(JM,,IJJ)
1,2U7,010
(,,572
2,74'1,149
9!1.2119
(1,959)
(354)
(1,5113)
•JJ.39J .
9,.tll'J•. I'J1
JHU,IIU
(·178,.\7!1)
2!l:'i,UUI
(57,4')4)
( !6,MoJ)
(J.I7,812)
(8,1122)
()!1,178
(2,358)
---------------58!l,.l74_
J,IU2,1HR -~~~-
(1,3tl.t)
@4,7'1')
(4,265)
l,Uoii,MiS
2U'J,578
(-14,155)
(I r'i,Jil9)
{IJIJ,7411)
2,7SR,S2J
118,737
2J.Stl0
(I 12,237)
29'1,712
75.215
(J66,1J3)
(19),253
77,.t..JI
2,1Ml,821
280,'132
(o3,flll4
23/o37
(44,155)
(12,96{1)
(139,339)
2.245,21)3
(2,959)
(579)
(1,211)
8!,892 ~?..~!!_
'),37-1,2~.
An~umulnlt•tl
l>eprel'iatiuu
At I January 10\o!
Char~..: for the year
Ro.::volurl!ion adjustment
Transfers I write un:~
Transfer In held for ~al1·
Dektions
At J\ l>ecemlu!l' 2ll\4
Net hook Y:llue
5118.374
3.822.108
!tate of depreciation
238.·101
(H,fl22)
{2,358)
(772)
(3,1HI)
76·1,525
lill4,7')')
6.(,7':1,,
6.67'Y.,
Buildint;~ on
Buildings on
Leasehold l:111d
504.1-10
6.67%,-IU%
3,3115,527
·U\11,725
(·1711,3711)
(57,-1'14)
(13,545)
(1-l:'i,IJJ)
II 511!__ _!•.J.lil,_~.53
S13..J.:!.Q_ ==
14.2fi'X,- 33.33%
33.33%
Furruturo.::,
li;>;turo.::snml
ol'lkc
O.::tJtupmcnt
Vehicles
2013
Fn.:chult!
Land
Lo.::aschold
Land
freehold land
Lca~o.::d
hold
imprnvcmcnts
Tot:! I
---------·-··--·-···················· ..······---- ·------------------- (Rupo.::cs in '000) ........................................................................
Cost/ Vuluntiuns
At I Jomuary 201.1
Additions durint;the year
Tran~ICrs/ write on's
Deletions
t\1 31 Decem her 2013
571,030
571,0311
3,753,113
( 146,685)
3,606,428
Accumulated l>epreci:lliun
At I January 2013
Charge for the year
Transfers I write oil$
Ddctions
,\131 December 2!\IJ
Net hook \':tine
Rate of th:prcciation
IJ.J
261,731
19,800
{1.123)
855,62·1
76,792
( 1,528)
(33,631)
897,257
1.256,790
82,8RI
(132,476)
( 185)
1,207,010
88,737
230,932
80,218
(876)
{ 10,562)
299,712
693,840
74.961
{75,391)
(157)
693,253
\91 671
597 5·15
513 757
280,•10S
66,759
21,642
(664)
_2l!1J}ll
3.606.<128
6.67%
6.67%-\0%
2.716,226
395,95·1
(22•1,241)
( 138,790)
2,7·19,1•\IJ
99,R50
2,822
2,225,949
293,693
4-1,081
23,386
5'/R.:l.l')
(35'J.JM\J
(4,463) ___1323.75·1)
1),'109,.191
98,209
(22~.079)
3,261,561
•19·1,900
{299.(}10)
(136,7·12)
2,160,821
(•1,•163)
63,00•1
588.328
35 205
\4.28% • 33,3JD!u
9,5\<\,J(d
(151.92·1)
3,305,527
-~LQ}.,IJii>\
33.33%
The Bank's owned land and buildings \\We revalued by indcpcm!cnt accredited proiC~sinnal valuers, Iqbal A. Nanjco.:: & Co. (Private) Limited :111d .('nllicrs
International. The v:~luation po.::riOrmcd by the valuers was bnscd on activ.: market prices, :u!justcd for any dillCrencc in the nature, location or conditio;,,ofthC sp'o.::cUlc
land and building. The date nfrcva1uatiOil wns 31 December 2014. The revaluation has resulted in incrcnsin~; the surplus on revaluation of 11:-.ed assets by Rs. 380 110
million. If the owned land nnd buildings wo.::ro.:: mc:~suro.::d using the cost model, the carryinu mnounts would have been as follows:
2013
201-1
((hllll'CS in '!\011)
Cost
Accumuhncd depreciation
CniT}'inJ.: :1n111unt
2,371,391
_ _{881),717)
The movement in surplus on ro.::valuation of Ji:.;ed assets 1s giwn in note ?.0.1 to the financiul statements.
9.4
As at 31 December 201•1, the cost of fully dcpro.::ciatcd lixed assets s!il! in usc amounted to Rs.2,354.131 million {2013: Rs.2.183.705 million)
2,35lJ.1l•l
(7(m.~ntJ
9.S
Th:pr~iation
r:lt¢s for fumitur.!,lhtun.:s
;md
office cquipnll."'l\:lrc ~s follow$:
Furniture ruul Jhtun.':S
l'ri1•tcrs
Oth!:r offiec equipment
33.33
3D3
20,00
33.33
14.28
Compul<:rcquipm~nt
ATM ll'!:lthincs
9.6
p.:r.!rot
p.;rtent
..P'=•
~.
p.;rccn\
lku•!s ofdispos;~l of /he'd ass~U \\]!O$C migm<~li:OOt or book l'l!!uc c~c~'l.-d~ Its I million or Its 250,000, \\hich ever is lc"Ss, :md as5<:~ disposed of to 1k ChkfEx~uth"C or to a din:<: tor or 10 c~ccuti~o:s or 10 a shareholder
holding not less tiWl IO%of1k voting shan."S ofth!: bank or to:~ny relate-d p3<1}', irrcsJX.~Il'>: of';;l!u~. are gi1.:n below:
Particulus
Cost
lll){)knlut
Accumubttd
dcprcei•tion
Gain I (Loss) on
Sale
Sale Proceeds
Particulars of
Purchas.r
Mode or
Di.posal
(Ruf"'n ia '000)
Duilding on L<:!lse Hold lruul
1...::~sc-d
hold imprownll."'l!s
Fumitur.!, fi~turcs ;~~~d
oiToeccquipnii:IIL
2,0-t4
1,4M
1,525
'"
61
3,tl57
3,057
7U,II6
12,867
(o9,13tl
3Ut
656
270
12.1152
~.0·1·1
6,t1·14
"
4,000
3,9115
]loll
l,~<.H
2,666
3,1194
3,457
2,855
2/·66
2,H.i
2,663
2,619
2,619
3,457
2,115~
\'~hkks
""
2,~55
2,$55
2,532
2,423
2,27(>
2,117
1,980
1,680
1,6-18
1,421
1,)3(,
1,312
l,ltl3
1,070
1,037
],017
2,532
2,423
2,276
2,\17
1,980
1,68(1
1,6-18
1,421
1,336
1,312
1,103
1,070
1,037
\,017
'"
Tcrnkr
MIS Reliable Sc'<.'Urity S)"SI>:ffis
Tcrnkr
MIS Natioru.ITr:ulm
4
4
Tc"'l<kr
Tcrnkr
Tc"'ldcr
Tcmkr
'·'""
""
"'
1,600
Tcnd~r
7
T~"'ld~t
Ttn&:r
67
287
47
""
m
"'
"'
"'
m
"'
"'
"'"'
67
Tow•
47
Tcrnkt
Tender
Tcrnkr
'"
"'
"'
307
"'"'
"'"
743
700
'"
'"
"
1(,9
1,211
292
1.524
1,232
2,157
I\7H
li,57M
1,208
""
754
454
"
7052
14!113)
'"
"'
047
(169)
1052
2 679
15 O.f5
12366
MIS
MIS Capibl Ni!:Lm Gar
MIS NationalT~r$
MIS Nati01l31Tr.ulm
MIS National Tradm
MIS Pakitlilll lntmmlional
MIS Pakist:1.11lntematioru.l
MIS Natioru.l Tr11dci'S
11-VS Mull:lnun:ld ll:uhim Sons
WS P.Wslilll lntemational
MIS Natioru.l Traders
MJS Khan Auttioncn
!I-tiS Muh:umn:&d llashim Soot
MIS Nation:!! Tra.J.m
MIS Capiul Nilam G:~r
/<.tiS llaba Scrap Master
MIS Nation.1l1'rndcrs
T~<k<
T.:n&:r
T~'IKI~r
Tcrnkr
T~-rnkr
T~-n&.:r
Tender
Tcn<kr
91
r~kislilll lnt<:rna.tiD~Ul
T~"'ldcr
Tcrnkr
Tcn<kr
'"
137,m
MIS P~ki$t:1.11lnrem:~!ioru.l
!1-t/S Mu11l11t\11\ad Sh:iliid Soomro
MIS Kh;!n Auctlonm
T'"""
'"'"
1,503
MIS Natioru.ITr.ukn
MISMullllmmad
Tcnd~r
61
700
IJ9,2'12
WS NCR Corpor.uion
MIS Pow.:r TCl:h Engim:.:ring
]ruurnncc claim
MIS Ad;o.mj.x \ruurn.nc.:
ltcm'l havint book value of less
thn Us. 250,000 and cost or
less thu lb. 1,000,000:
Duildins on Lcasd10ld l.md
l.rnml hold impro\'l.mcn\5
Furnltur<:, Jhtun:s and om"" equipment
Total
"
1n1112
192
"'
047
INT,\NGIUL" ASSE;IS
201~
Goodwill
Cost
At I January20I4
Addiuons during Ill<! >-.::~r
Tr.msfc'f 10 held far s:~k
All! December 2014
Core
deposits
inllntible
Computer
SoCtwuc
Cu•tormr
llr•nd
relatioaships
n1mcs
inllntible
(Rup«s ia '000)
'rota!
26,0'15,310
1,982,413
774,68(1
389,400
H3,133
26,095,310
1981413
774 680
389 400
338.350
1,9&2,413
751,742
9,869
2115,731
342,210
6,527
3,362,0'}(>
JS,'J)..j
761 611
314665
il03S7J
338.JSO
jiO 3k7J
3 ..j07 039
!4,183)
29,58~.936
14,783)
29 SilO 153
r\mortis~d
r\t l bnuary2014
Charg~ for the>\";!<
5~.330
O.:lt.tionslwri~<.·offs
Trnnsrcr 10 h~ld far !!lie
r\!31 Dtttmbet 2014
198241J
Ntt book value
lbte of •mortiutian
13069
261095dl0
6~
7JS
26 173,114
2(1%
2013
Cost
All J:u~uary20D
Atkh!IOHI d<trin!l11"' ~'I!M
At,lt llrrrouhrr 2111,1
26,095,310
~~,!,!!!_
Amorti ... d
At I bnu3ry2013
Clurg~ for II~~; )-.::1<
AI 31 Dttombtr 2013
l,9K2,413
774,68(1
)8'1,400
343,1)3
29,SM..j,9J6
1,'1112,41)
774 MO
3H'I4111J
,\43 1.\.1
2'1~4,'1.\(,
1,9112.413
7)11,339
\l,lt3
751 7..j2
246,79g
)g,9))
285 731
HI,56K
<>47
3J!N,H8
5!.nH
342 210
3.36! 096
219311
!OJ 669
"'
26 12! IL..jO
I 9111413
Nd book value
261095~10
Rile of amortisalil>n
10.1
As at 31 lkc>."'l•b.:r 2014, the: gross c~rl)ing ~n10nnt of fully ~n>O<tisc..J
10,2
The =owrablc: :unount ford~~;
20%
int.lngibl~
assets (eon•pnt~r rofl11;tr~) sllll in use :unountcd toRs 3311.35(1 million (2013 IU. 33X 350 m1Uioo).
purpos~ ofanc-ssing imp;~im~t on goodwill on aequis•lion of Union llanl: Limit•..! u;u \l:l$cd Ofl wluc in U$C, Thc calculation~ arc b:ucd on the 2015 budget ;md for.:casu for subsc't]\lc"'lt
two }l:iltl ;u 3pprcm:d by Ill<! nWll'IS(mcnt. Tili.':SC 1!:1'" then bet:n extrapolated far<~ furthe-r p.:riod of 17 )l:iltS usif18 a stmdy Joog term forc:CMI GDP vuwth rate ;md a tcm1in:~l value d.:tcrmincd bast:d on;~ long tern1
c;~mingt mu!lipl~. TI~e CMh flow$ !Ire discounte-d using 3 prc·ta.X disc:oont rnlc which rdl•:cu 111~ cum"'ll m:11k~t r.na appropriate fm ll~e business. For lb.;: ea)culalioo as at 31 0.'<:1.'1llbcr 2014, the~ 11M u!l.'d a long t~rm
fon:ast GOP growth rate of 4.& f"'fC<."'ll :tnd a discount rnh: of26.2 p<:m."'lt. Tile m.,nagcmcnt bcliCI-.:$ that any r=b!e possible elwlges to lb.;: ko.•y :usump!ions on Y.hich ca!cubtion of f'CW','<:!llble :unount is b:u<:tl.
woulJ ool c;.us.:: ~~carrying :amoonl toc.,cc.:d th~ rcC(l\'l!rnbk ;~moon!
'lt\<1',_.;
II
DEFiciU!ED TAX ASSETS I (LIABILITIES) -NET
The fnllowing an:
nn~jor
deferred ta.\: assets I (liabilities) recognised ;md movement thereon:
(Ch;Jrgc)/
credit to prolit
and loss
At I
.IJ\Iluary
2014
2014
Debit/ (credit)
to equity I other
comprchcnsiYc
incumc
Tr:msfcr In
held for sale
AtJI
DcccmiH•r
2014
------------------------------------------------- ( R u pees in '000) -------------------------------------------------
Avail<lhk ror sale invt.:stlllCll\S
Provisions for lmms ami advances
5,.t35,339
(1,376,312)
(I ,342, HIS)
(34,207)
t-11,99:"
(221,0HH)
5,356,2-1(,
Other assets
(86,822)
(164)
(H6,9X(,)
Fixed assets
{227,GGIJ)
(26,1JH)
(195,312)
(20,0(,4)
2,506
Surplus on n:valuatinn or Fixed 1\ssl'!s
(5,314,815)
Goodwill
1\ctunria\ gains on n.:tircmcnt bcnclits
(G,IIJ0,%0)
(876,145)
(12,413)
(26!1,651)
({,IJ,OJS)
(51,480)
(1,121,!12?)
(1,058)
(13,471)
( 1,3?4,643)
(2,575,8JJ)
2013
(Charge)/
At I
.lmmary
2013
Avaihlhk ror sak
illVCS\IIlCillS
Provisions lbr Jn:ms and advam:cs
credit to profit
and loss
(228,71 8)
6,509, 175
1
(7,531)
:~sscts
(2(>3,1132)
35,363
Goodwill
Actuari<ll gnins on rctin:mcnt bene tits
(29,154)
(4,439,830)
At 31
DcccJnhcr
2013
5,435,339
l!-:6,1-:?.2)
{227,(1(,1))
(20,1164)
9,0911
(5,31,1,815)
(874,985)
(21 ,897)
1,<147,553
11.1
(1,074,136)
(79,291)
Surplus on revaluation of Fixed Assets
Translt::r to
held for sn!e
19•1,511
Other assets
Ftxcd
Debit I (credil)
to equity I other
comprehensive
income
(1,912,199)
9,484
(12,<113)
203,995
(260,651)
The Finance Act, 20 I0 mncnded the Seventh Schedule to the Income Tax Ordinunct:, 200 I whereby the limit ror claiming provisions ror
tldvanc~.:s and orr balance sheet items in n.:spect or Consumer and SME advances hns been enhnnccd from I0/n to 5% ol' gross Consuml:r and.
SME mlvnnces. In case oi"Corporate advances, the limit continues to be 1% of' gross Cmporate udvances.
'
''
The munagement carried out an exercise and based on that condl1dcd that the Group would achieve a deduction for provisions in excess of the
limits prescribed by the Income Tax Ordimmce, 200 I in future years. Accordingly, del~rrcd tax asset of Rs. I, 116 million hns been recognised
on such provisions for income years 2009 upto ycur ended December 20\4. Since 2012, the Bunk has started claiming unabsorbed amount of
provision ngainst hnd tkbts under th~J St.•wnth Schedule.
The Seventh Schedule has been further amended through Finance Act, 20 I0 by introducing transitional provisions, whereby mnounts
provided !Or against irn:coverable <lr doubtful advances in tax year 2008 (income year 2007) und prior years, would be allowed in the tax ~car
in which these advances arc nctually wrincn off.
The management considers that the amendment made vide Fintmcc Act, 2009 in respect of provisions !'or had debts being allowed at I'Yo ol'
total advances is applicable lbr tax year 20 I 0 (income year 2009), whcrcns !Or tax ycm 2009 (income year 2008), the provision lbr bad debts
would continue w be :1llowed under the Seventh Schedule at the time or actual write-orr.
The deferred tax asset recognized upto December 31, 2008 relating to provisions lOr advnnces and oiT balance sheet items amounting to Rs.
4,240 million has been cmricd lbnvanJ.
12
Note
OTHER ASSETS
8,381,396
83,963
710,984
138,949
9,095,167
20,095
581,241
302, I 07
Income I mark-up accrued in local currency
Income I mark-up accrued in foreign currencies
Advances. deposits, advance rent and other prepayments
Receivable from defined contribution plans
Advance taxation (payments less provisions)
Branch adjustment account
Unrealized gain on forward foreign exchange contracts
Interest rate derivatives and currency option- positive fair value
Receivable fl·om SBP I Government of Pakistan
Rcccivabk: Ji·01n associated undcrl<lkings
Receivable from Standard Chartered Bank, Sri Lanka operations
Non-banking assc!s acquired in satisfaction claims
Advances against future Mun.1balta
Advance Federal Excise Duty
Commodities under Islamic finance
Unsettled trndes
Assets llcld li:.Jr Sale
Others
2013
(Restated)
(Rupees in '000)
2014
462,362
12.2
52,057
39,979
or
Less: Provision against other assets
Other Assets- net of provisions
12.1
5,593,533
188,443
4,622,075
77,42(,
741.328
9,320,0 I I
6,005
1,129,1-/tl~
580,296
122,790
3,(,8(,
36,27()
7,1,1,251
6,379,093
I ~8.4·\J
295,133
2,29()
I~.J
12.1
10,SIJJ,53S
594,269
37,140,382
(116,373)
37,024,009
398,895
24,645,550
(429,028)
24,216,522
429,028
(309,984)
(2,671)
116,373
556.02(,
( 126,998)
Provision ag:linst other assets
Opening balance
Reversal during the year
Transfer to held for sale
Closing balance
429,028
12.2
Consequent to Sale and Purchase Agreement (SPA) signed between Standard Chartered Bank, Sri Lanka (SCBSL) and
Standard Chartered Bank (Pakistan) Limited (SCBPL), the Sri Lanka branch operations of SCBPI, were amalgamated
with SCBSI.. with effect from close of business on I 0 October 2008. According to the terms of SPA, 'unproductive
debts', 'sta!T loans of SCBPL who arc not retained by the purchaser', 'their corresponding housing loans' ~mel 'as~cts
arising from litigation which cannot be assigned' arc held in trust with SCI3SL. The recoveries made (net ofCxpcnScsY
from such assets arc to taken to income !'rom Sri Lanka branch operations, as disclosed in note 25 to these linanCial
statements, and consequently recorded as receivable. The Central I3ank of SriLanka during the current year had
allowed remittance of major portion of' the outstanding balance.
12.3
Disposal Group llcld for Sale
During the year. the management of the Standard Chartered Bank Pakistan has decided to divest its sharcholding in
Standard Chartered Leasing Limited (SCLL) (86.45%), Standard Chartered Modaraba (SCM) (20%) and Standard
Chartered Services of Pakistan (SCSP) ( 100%). In this regard, cf'f'orts to sell the same have been initiated and the Bank
has entered into a non-binding agreement with a prospective buyer. The management is committed to the divestment
and accordingly, these investments arc classified as held for sale.
As at 31 December 20 ]t\, the dispo~;al group wus s\;Jtcd at fair value less l:OSI to sdl :md compris~.:d the following assets m1d li;~bilitics;
Asscls classified
:IS
SCLL
SCM
SCSI'
Total
--------------------------------- (Rilpees in '()()()) ---------------------------------
heltl for sale:
C;1sh and balam:cs with tn.:asury bnnks
Balances with other banks
Investments
Advnnces
Operating !hell ;1ssets
Intangible nsscts
Other nsscts
Provision against
imp<~inncnt
12.3.1
'151
495.207
130
( 1,513)
21
496,720
"17.672
4,872,961
2.888
550
70,6-15
5,363,333
(119,200)
5,015,169
230
18,547
78,139
5,608,826
27,2·11
40,579
5.2~~.133
5,608,826
~11.579
650,000
190,1·14
3.591.614
.J,-131,758
274,183
13.338
. •13Ull o
9,8SX.\30
3.118
19,097
176.025
11,012,738
(119,2011)
10,893,538
Liabilities clnssified ns held for sale:
Borrowings from financial institutions
Deferred tnx liabilities- net
Other linbilities
!.3.1
1J
tl,446,839
II ,178
~.721,022
ll,l78
Impairment loss oi'Rs 119.2 million for write-down of the disposal group to the lower of its cnrrying amount and its fair value less cost to sdl
have been included in 'other charges' in the pro lit and Joss nccount. (Refer note 28)
Note
BILLS l'AYr\BLE
6,127.636
·112577
(1,),10.213
15,622,715
1,621,95(1
17,2-J-1,(171
16.476.377
1\ 1•1,71)8
17.291.175
15,622,715
l ,(121,956
17,24-1,(171
16,476.377
81•1.798
17.291.175
14.2.1
1-1.2.2
12,()65,490
2,295,115
13.9115,205
IV.J
1,2(,{),102
725.000
1.796,279
3,37()
15,620,707
16,461J,S5'1
1,623,%.{
821.321
17,2-J-1,671
17.291.175
BORROWINGS
In Pakistan
Outside Pnkistan
1-1.1
l'articnl:lrS of hurrnwinJ!S \Yith respccllo currencies
In local currency
In foreign currencies
1-1.2
2013
2014
(Rupees in '000)
5.020,614
542,991
S,%3,6115
In Pakistnn
Outside Pakistan
I~
924.183
190.1•1·1
8.049.631
9,163,9:\H
Dcl:1ils of hon'll\\'illJ!S secured I unsecured
Secured
Borrowings from Stntc Bank of Pakistan
under Export Rclimmcc {ERF) scheme
Repurchase agreement borrowings {Rcpo)
Long Term Fimmcc·securcd
State Bunko!' Pakist;m - LTFF
State B;mk of Pnkistnn- LTF. Export Oriented Projects
(JnSl'CIII'l'IJ
t 'all hnrmwiup.s
Overdrawn nostro accounts
1-1.2..1
or
1-1.2.1
Mark-llp on Export Rcrinam::c (ERF) from State Hank
Pakist;m is charged at 5.5 percent to 6.5 pcrccnt (2013: 6.83 pcrccnt to HA percent) per
annum. ERF burrowinl~S also indudc bonuwiugs under Islamic l:.xpurt Refinance scheme ;unuunting to Rs. 1.3-19 hilliun (20 13 Rs. 1.060 bdl1nn)
These borrowings arc secured against demand promissory notes executed by the Bank in favour of State 11ank or Pakistan
1-1.2.2
Rcpmchasc ngrcclllcnt borrowings cnrry m:1rk up rates rnnging from 9.5 percent to 9.65 percent (2013: Nil) per annum pnyablc at mnturity and
:1rc due to mnturc by January 2015. These arc secured ngainst three months mmkct treasury bills. The mnrkct vnluc of securities held as collateral
ngainstlcndings to linancial institutions ammmted toRs. 2.295.726 million (2013:Rs. Nil).
1-1.2.3
Mnrk-up on Long Term Finance Facilily (LTFF) from State 11ank ofPakistnn carry mark up rates ranging from 6.5 percent to II percent (201 3· 7
percent to II percent) per annum. These loans nrc secured against promissory notes cxccutcd by the Bank in filvour of State Bank ofPukistan.
14.2.4
These include overdrawn nostro accounts with other branches and sub!;idiarics of St:111dard Ch<1rtcrcd Group outside Pakistan amoun!ing to
Rs.l.621.956 ti1illion (20 13: Rs. 807.3•19 million).
IS
DI<:POSITS AND OTHER ACCOUNTS
Note
2013
2014
(Rupees in '000)
Customers
Remunerative
- Fixed deposits
-Savings deposits
Non- Remunerative
- Current accounts
-Margin accounts
- Special exporters' account
22,860,282
144,301,028
26,043,138
142,054,293
134,384,356
536,702
883,186
302,965,554
125,832,808
592,'\09
850,511
295,3 73, !59
1,339,987
I ,003,987
304,305,541
296,377,146
Financial Institutions
-Non-remunerative deposits- Current account
I 5. I
15.1
This includes Rs. 438.857 million (2013: Rs.456.852 million) against balances of other branches and
subsidiaries of Standard Chartered Group operating outside Pakistan.
15.2
Particulars of deposits
No!e
In local currency
In Corcign currencies
16
SUB-ORDINATED LOANS
Term Finance Certificates issued
16.1
2014
2013
(Rupees in '000)
242,772,805
231,985.439
61,532,736
64,391 '707
304,305,541
296,377,146
I6. I
2,500,000
2,500,000
The Bank, on 29 June 2012, issued fourth rated, unsecured, subordinated TFCs of Rs 2,500 million
by way of private placement. Terms for the fourth outstanding issue are as follows:
Ycar of Issue
Rating
Rate
2012
AAA
0.75% above the six months
Karachi Inter-Bank Offered Rate
("KIBOR") prevailing one working
day prior to the beginning of each
semi annual period
Floor
Ceiling
Repayment
I 0 years
17
OTHER LIABILITIES
Note
2014
2013
(Restated)
(Rupees in '000)
510,731
Mark-up/ return I interest payable in local currency
175.717
Musharika and accrued profit thereon
3,990.379
Certificates of Musharika
2,543,938
I ,984.343
211,226
204.80·1
1,566,204
I ,636.358
Unrealized loss on forward foreign exchange contracts
725,758
1.130.060
Unrealized loss on interest rate derivatives and currency options
631,850
2.146.183
32,077
27.536
6,442,443
5,559.289
37,168
1,633,683
21,281
1.643,340
414,084
318,638
757,972
531.620
Accrued expenses
Advance payments
Sundry creditors
Payable to dcrincd bene lit plans
Due to Jlolding Company
17.1
Dividend payable
Unclaimed balances
Provision against off balance sheet obligations
17.2
Worker's Wei rare Fund (WWF) payable
Security deposits
I ,947,745
Certificates or Investment
2,495, I 85
Unsettled trades
Liabilities held ror sale
Others
17.1
7'14.070
430,024
12.3
9,163,958
532,277
852,228
25,633,393
25.408,776
5,826,653
4,440.883
615,790
1,118;106
6,442,443
5,559,289
318,638
134,761
95,446
I 83,877
414,084
318.638
Due to Holding Company
On account of reimbursement of executive and general
administrative expenses
Royalty and other payable
17.2
Provision against off-b:tlancc sheet obligations
Opening balance
Charge ror the year
Closing balance
~'l'{''r-/
18
SHARE CAPITAL
18.1
Authorized Capital
2013
2014
(Rupees in '000)
2014
2013
(Number of Shares)
4,000,000,000
18.2
4,000,000,000
Ordinary shares of Rs.l 0 each
40,000,000
40,000,000
Issued, subscribed and paid-up Capital
Note
2014
2013
(Number of Shares)
2,939,785,018
2,939,785,018
931,800,003
931,800,003
3,871,585,021
3,871,585,021
Ordinary shares of
Rs. 10 each fully
paid in cash
Issued in terms of
scheme of
18.3
2013
2014
(Rupees in '000)
29,397,850
29,397,850
9,318,000
9,318,000
38,715,850
38,715,850
18.3
These represent 892,554,151 shares of Rs 10/- each issued and allotted at par to Standard Chartered Bank,
United Kingdom against transfer of entire undertaking of SCB Branch Business by SCB to the Bank, and
39,245,852 shares issued and allotted at par credited as fully paid up to persons who were registered
shareholders of Union Bank. These shares have been issued in accordance with the scheme of amalgamation
duly approved by State Bank of Pakistan on 4 December 2006.
18.4
At 31 December 2014, Standard Chartered Bank, United Kingdom, held 98.99% shares of the Bank.
19
RESERVES
Note
Share premium
Statutory reserve
19.1
19.2
2014
2013
(Rupees in '000)
1,036,090
8,074,954
9,111,044
1,036,090
6,144,462
7,180,552
19.1
This represents excess of fair value of the shares over par value of shares issued to registered shareholders of
Union Bank in terms of the amalgamation scheme.
19.2
In accordance with the Banking Companies Ordinance, 1962, the Bank is required to transfer twenty percent
of its profit of each year to a reserve fund until the amount in such fund equals the paid-up capital of the
Bank.
'v_~\"Y\l--'
20
SURPLUS I (DEFICIT) ON REVALUATION OF ASSETS
-NET OF DEFERRED TAX
Note
Surplus I (deficit) arising on revaluation of:
Fixed assets
Available for Sale Securities
20.1
20.1
20.2
3,702,970
2,556,009
6,258,979
3,378,993
72,199
3,451.192
3,399,057
380,110
(523)
3,565.399
(4,313)
(2,323)
(6,636)
3,772,008
(5.357)
(2.884)
(8.24 I)
3,399,057
(20,064)
(51 ,480)
183
(29.154)
2,323
(69,038)
3,702,970
2.XStl
(20.0(,.1)
3.378,993
20,313
3,887,972
24,036
(119,403)
116,156
I 00.968
8,685
I 06,406
Surplus on revaluation <Jf lixcd assets- net of tax
Surplus on revaluation of fixed assets as at 1 January
Surplus on revaluation of owned properties recorded during the year
Surplus realized on disposal of revalued properties
Tn:msfCrrcd to unappropriated profit in respect of incremental
depreciation charged during the year- net of deferred tax
Related deferred tax liability
Surplus on revaluation of fixed assets as at 31 December
Less: Related dcrerred tax liability on:
Revaluation surplus as at I January
Revaluation surplus recorded during the year
Revaluation surplus realized on disposal during the year
Incremental depreciation charged during the year transferred
to profit and loss account
Surplus on revaluation of lixcd assets as at 31 December- net of tax
20.2
2013
2014
(Rupees in '000)
6.206
Surplus I (deficit) on rcvahmtion of Available for
Sale securities- net of tax
Market Treasury Bills
Pakistan Investment Bonds
Sukuk and ljarnh Bonds
Listed shares and units of mutual runds
3,932,321
Related deferred tax (liability) I asset
21
CONTINGENCIES AND COMMITMENTS
21.1
Trans:~ction-rchttcd
(34.207)
72.199
(1,376,312)
2,556,009
2013
(Restated)
(Rupees in '000)
2014
contingent li:abilitics
Guarantees issued favouring:
- Government
-Others
21.1.1
(158,101)
21.1.1
43,455,938
21,471,986
64,927,924
37,738,000
16,762.338
54,500,338
Guarantees relating to Islamic Banking Business amount toRs 3,074 million (2013: Rs 1,178 million).
Note
21.2
2013
(Restated)
(Rupees in '000)
2014
Trade-related contingent liabilities
]
/.]./
18,121,183
23.967.127
or credit relating to Islamic Banking Business amount toRs 2.969 million (20 \3: Rs 7.203 million).
21.2.1
Letters
21.3
Trade-related commitments
Acceptances
Note
21.3.1
2013
(Restated)
(Rupees in '000)
2014
5,041,122
21.3.1
Letters of" credit relating to Islamic I3anking I3usiness amount toRs 528 million (2013: Rs nil).
21.4
Other contingencies
Note
2014
4.930.33<\
2013
(Restated)
(Rupees in '000)
Claims against the Bank not acknowledged as debt
21.4.1
25,151,427
LL713.2S5 .
21.4.1
These represent certain claims by third parties against the Bank. which are being contested in the Cotuts of law.
The management is of the view that these relate to the normal course of business and the possibility of an
outflow of economic resources is remote.
21.4.2
The Bank has identified that a regulatory authority has filed a case on the land where an office building is
constructed and the Bank owns a p01tion of that premises. A request for clearance of its premises from the
competent court has been filed based on the fact that the Bank is a bonafide purchaser of the premises having
no relevance with the principal case. Considering the facts of the case and the opinion of legal expert, the
management expects a favourable decision from the competent court. The Bank is also in litigation with
various tenants for repossessing its office space in one of its other owned properties. The matter is sub judice
before the honourable High Court of Sindh and based on the facts of the case and the opinion orlegal expert.
the management expects a favourable decision from the dealing cou1t.
21.5
Commitments in respect of forward foreign exchange contracts
2013
2014
(Rupees in '000)
Purchase from:
State Bank of Pakistan
Other banks
Customers
Sale to:
State Bank of Pakistan
Other banks
Customers
3,648,750
45,030,485
4,21 0,\90
45.491,250
40,277,064
2,490,93<1
2,643,500
32,620,281
4,631,521
70.837.253
3,761.986
The maturities of the above contracts arc spread over a period of one year.
2 I .6
Commitments to extend credit
The Group makes commitments to extend credit in the normal course of its business but these being revocable
commitments do not attract any significant pcnnhy or expense if the facility is unilaterally withdrawn.
2013
2014
(Rupees in '000}
495,146
663,899
21.7
Commitments of suhshliarics
21.7.1
The amount n::present h::ase commitments of Standard Chartered Leasing Limited outstanding as nt 31 December 2014.
21.7.2
The amount represent outstanding commitments of StatH.Iard Chnrtcrcd Modnraba in respect or letters of comfort as at 31 December
2014.
21.8
Derivative instruments
21.8.1
Product an:tlysis
2014
FX Options
Interest Rate Swaps :md Cross Currency
Sw:tps
Counteq1arties
No. of
Conlr:tcts
With Unnl.:s for
II edging
~larliel ~laking
L __ _ _ _
No. of
Contracts
Notional
Principal*
(Rupees in '000)
_:_9JI
Notional
Princip:ll *
(Rupees in '000)
0"',5"'6"'1'"'~3: .:1_,1
..:.;l
L l_ _
With Fls other th:tn b:ml.:s
II edging
l\larlietl\laliing
With other entities for
Hedging
l\·larl{ct l\laldng
21 I
~'-----"1800,o,s"'9,'"~3,_,6_~1
Tot:tl
Hedging
i\l:u·\{C! Making
2013
Total
4_8._22_6_.~_7_9~1
llcdging
Market Making
*
41 1 L-1_ _ _
-441
8_1 _, _:6_4_~1
L l_ _ _ _
1\t the exchange rate prevailing at the end of the reporting period
Contmcts with banks represent contracts entered with branches or Standnrd Chartered Bank, UK to obtain cover agninst the contracts
with customers, except for 2 contracts with local banks lmving notionnl principal of Rs 6,10 I million.
2 1.8.2
Maturity :Ilia lysis
Interest R11tc Swaps and Cross Currency Swaps
Rcmainin~
No. of
Notional
i\lllturity
Contracts
Principal
Ncgntivc
Mark to i\1nrltct
Positive
Net
--------------------------- (Rupees in '000) --------------------------------------
Upto I month
I to 3 months
3 to 6 months
6 month to 1 year
I to 2 year
2 to 3 years
3 to 5 years
5 to 10 years
Above I0 years
5,934,000
(137;184)
6
6
13
5
2
5,474,606
6,933,023
1,961,166
954,589
(171,055)
(89,872)
(230,548)
(2,020)
(871)
33
30,560,928
(631,850)
9,303,543
( 137.·18·1)
25,626
95,992
85,442
94,176
871
302,107
( 145,429)
6,120
(145,106)
92,156
(329,743)
22
MARK-UP I RETURN /INTEREST EARNED
Note
On loans and advances to customers
On loans and advances to linancial institutions
On investments in: i) llcld for trading securities
ii) Available for sale securities
On securities purchased under resale agreements
On call money lending
23
2013
2014
(Rupees in '000)
16,591,011
35,693
30 I ,894
17,637,082
703,147
331
35,269,158
17.178.250
I 09,4 7·1
126.707
13.537,736
528.72·1
1:!.<1'17
31.493.338
11,826,113
296,868
19,430
I 0.283.179
27X.122
19.224
902,755
332,922
272,523
222,882
13,873,493
1.244.824
359.262
253,907
248.657
12.687.175
44,550
638,378
27,004
709,932
17,194
727,126
359.016
326.559
MARK-UP I RETURN /INTEREST EXPENSED
Deposits
Securities sold under repurchase agreements
Call borrowings
Borrowings from State Bank of Pakistan under
Export Refinance (ERF) scheme
Profit on redeemable capital, musharika and murabaha
Term Finance Certificates (sub-ordinated loans)
Others
24
GAIN ON SALE OF SECURITIES- NET
Fcdcntl Govcnuncni Securities
Market Treasury Bills
Pakistan Investment Bonds
Sukuk llonds
Equity Securities- Listed
25
732.168
481
732,6-19
OTHER INCOME
Income from Sri Lanka branch operations
12.2
Rent on property
Gain on disposal of fixed assets
Loss on derivatives
Gains on assets filir valued at acquisition
Others
25.1
46,593
25.1
3,567
21,240
12,366
(331 ,289)
494,738
183,876
384,498
This includes gain on sale of non-banking assets amounting to Rs. 112.999 million (20 13: Nil).
10.619
32,2Sl
I 64.35<1
(773.837)
214.2<11
57,80T
(294,535)
26
Note
ADMINISTRATIVE EXPENSES
5,375,048
7,564
234,850
1,357,646
113,181
472,275
1,147,660
243,336
265,580
26,000
20,543
480,725
Salaries. allowances. etc.
Charge I (income) for de lined benefit plans
Contributions to defined contribution plans
Rent. taxes, insurance, electricity, etc.
Legal and prorcssionnl charges
Communications
Repairs and maintenance
Stationery and printing
Advertisement and publicity
Donations
Auditors' remuneration
Depreciation
/\mortizntion
Traveling, conveyance and vehicles' running
Reimbursement or executive and general administrative expenses
26.3
Royalty
Reward and bonus points redemption
Premises security and cash transportation services
Documentation and processing charges
Others
26.1
Details of the donntions given in excess of Rs. 100,000
201}
2lii.J
(Rupees in '000)
~1rc
5,105,813
7,739
234.710
1.274.763
105.327
440.333
792,'196
195,33 I
264.792
2•1.5•10
21,055
494.900
55,330
253,528
I ,385,769
184,693
135,463
338,760
135,618
263,255
12,496,824
52,758
I 86.403
(977,596)
119,065
I 03.031
284.273
70,693
165,602
8.966.028
8,000
I ,000
3,000
2,400
4,000
3,400
4,200
8.000
1.1 00
2,000
2.400
4.000
3.100
3,9tJQ
18,336
310
692
1,205
20,543
17.928
700
given below:
Donee
Institute of Business Administration
The Citizen Foundation
The Kidney Centre
26.1.1
Lahore University of Management Sciences
Habib University
Aman Foundation
The Hunar Foundation
26.1.1
CEO of the Bank is also a member of Board of Governors of the Kidney Centre.
26.2
Auditors' remuneration
Audit fcc
Fee for audit or pension, gratuity and provident funds
Special certifications and others
Out-ol~pockct
26.3
expenses
1.18'1
1.2·13
21.055
Total cost ror the year included in Administrative Expenses relating to outsourced activities is Rs 1.830 million
(December 2013: Rs 2,46'! million. This includes payments to local companies for obtaining routine services
such as personnel for collection and recoveries. contact centre. service quality and technology maintenance.
courier services and executive and general administrative expenses ofSCB Ul<.
27
ASSET WHITE-OFFS I OTIIEH (PROVISIONS) I REVERSALS
Fixed asset write offs
201~
2013
(Rupees in '000)
555
60.358
555
(120.792)
671
(120.121)
(59.763)
Other provisions
Reversal of provision against receivable under cross
currency swaps arrangement
Others
28
OTII!m CIIARGES
Net charge against fines and penalties imposed by Sl3P
Worker's Wei fare Fund (W\VF)
Impairment loss on rcmcasurcmcnt of disposal group held for sale
29
- Deferred
For prior years
- Current
4,256,948
3.735.531
1,912,199
5.6•17.730
337.549
I, I 08, ISO
5,365,128
187,99~
5,553,122
21,136
5.668.866
15,368,007
16.368.185
Relationship between tax expense and accounting profit
Profit before taxation
Tax at the applicable tax rate of35% (2013: 35%)
Expenses that arc not deductible in determining taxable income
Income (dividend. capital gain etc.) at reduced rates
Prior year provision
Others
29.2
1.821
335.728
TAXATION
For the year
Current
29.1
835
327,018
119,200
447,053
5,378,802
294
( 13,325)
187,994
(643)
5,553,122
5,728,865
10,174
(65.606)
21.136
(25,703)
5.668.866
Standard Chartered Bank (Paldstan) Limited
The return for income year 2014 (Tax Year 20 15) is due for filing by 30 September 2015.
The tax department amended the assessments for income years 2007 to 2013 (tax years 2008 to 201 •I
respectively) under the related provisions of the Income Tax Law, determining additional tax liability on account
of various issues (such as disallowances of expenses relating to provision against loans and advances, goodwill
amortisation etc.). The resultant tax demands of Rs. I 0.91 S million have been paid by the Bank. Appeals against
the amended assessment orders arc pending before different appellate forums.
The management considers that a significant amount of the additional tax liability is the result of timing
differences and is confident that the issues in the above mentioned tax years will be decided in favour or the
Bank at appellate forun1s. Consequently, no additional provision is required.
The Tax Authorities have passed an order for the income years 2009 and 20 I 0 levying Federal Excise Duty
amounting to Rs. ISS million on certain items. The Bank is contesting the order in the appeal. The Bank has
paid entire amount under protest.
Further, nn order for income year 20 II levying Federal Excise Duty of Rs. 515.6 million has been issued. The
demnnd hns been stnyed by the Sindh High Court.
29.3
St:uulard Chartc1·cd B.ank- Branch Opcr:1tio11s
The assessments have been finalized upto and including tax year 2006. The Bank's I departmental appeals l'or
the assessment I tax years 19/6-77 to 2006 arc pending be!"orc di !Terent appellate fOrums on various issues. The
management expects ravourablc decisions in pending appeals and consequently. no additional provision is
required.
29.4
Union Bani<. Limited
The tax assessments for the assessment years 1993-94 through tax year 2007 arc pending at various appL·al
forums against certain disallowances. The management expects favourable decision in pending appeals and
consequently. no additional provision is required.
30
EARNINGS PER SHARE- BASIC AND DILUTED
2014
2013
(Rupees in '000)
Pro lit fol' the yea I' attl'ibutablc to equity holdci'S or the bank
9,652.462
I 0.559.620
3,871,585,021
3.871.585.021
Weighted average number of ordinary shares in issue during the year
(Rupees)
Earnings per share- basic and diluted
31
CASH AND CASH EQUIVALENTS
Cash and balances with treasury banks
Balances with other banks
32
STAFF STRENGTH
2.49
2.73
2014
2013
(Rupees in '000)
21,475,345
387,30 I
21,862,646
32,331,167
1.608,932
33.940.099
(Number)
Permanent
Temporary I on contractual basis I direct contracts
Group1s own stafrat the end of the year
3,304
5
3,309
3.008
9
3.017
Outsourced
Total StaiTStrcngth
1,091
4,400
1,572
4.589
33
llEFl~Ell
33.1
General dcsl'l'iJlliun
BE\EJ!JT 1'1,,\i\'S
Non i\l:tn:tgcmcnl S1:1ff l'cn~ion Fnml
The plan prnvidi.!S pension calculated :II 50"" of thl! average pensionable salary al'ter cumpktmt: 30 ~..:ars of scrv1ce The ..:mpln~ ees nf the lmnl- arc enllll!.!d tn
eithcr pcnsmn ur uratmty. hut not both llnwc,·er.the emph)~C..:s of ANZ Cirrmllays Bank transli.:rred to rhe bank arc entitled 111 both pcnsmn mit! grntmt' omd tlw
minimum numhcr of years required for cmitlement ofpenswn is 25 )Cars lhr these cmplm·l·l.!~ l'enSI\1111~ cnh::ulated n~ 1'120 11mes th<.! la~t dr:l\\llmCrgcd :-.al;Jf\
fur\!ath )e:Jrof~l'f\IC<.!
Non i\l:inaj!.l'IUl'lll S!affCr:1tuity Fund
Thc plan prnv11k~ a lump ,\lUll grallu't~· ~·alcul:nctl :11 unc month's ~alar.\ li1r each completed .'.:ar of sen 1cc (maximum ·Ill month<;) a ncr complctmt: 5 \c:lr' of
service. Fnr the ..:mplnyces ofcx-ANZ Cirmdla~·s ll:ml.., thc plan pro\oldcs a lump sum calcul:Jted :1t 50"o nflast dwwn mcq~\·d ~alar: l'or each completed ~l'OH of
service {maximum ·10 mnnth~) alier complcling 5 ye:1rs of sen•1ce. I hme\"Cf, if the employl'l! IS nnt entitled IUr pension, th!.! pcrcenta!,'.l' IS mnea~cd to lOtl"o '!he
emplo~ecs ofSC ·narc entitled to..:ither pension or t:ratuity, hut not hn!h
i\I:Jnaj!.cment
Starr!'~·nsiun
The plan IS closL'd to act1ve
Fund
cmpiO)CC~
The last actuanal vahmtmn of th<.!
valuation were ;1~ fnlltl\\S"
The <.!II tire liah11ity is Ill
~chemc
re~pccl ufi.'Xl~ling pcn~wners
u:-:ing projected umt credll lll<.!lhlltl was cmr1cd out on 3 I DecemhL'T 201·1 :md J..cy
Discount rate
Expected rate ofincr..:asc m s:'llary in futm.: ycms
Expected rate of return on pl:m assets
Expected long t<.!rm rate ofincrca~c in pcnsi{lll
Monality mte
1013
13.:"'X, p.a.
1175% p.a
1175°0pa
l.275°opa
675"upa
Ul' ( 1975-7 11) ultimate mmtaht~
tahlc mtcd down one year
l.lt:ht
13Sllo p.a.
asx. p.a.
sue (20111-11:") ultimntc mortalily
tahlt• rah·cl dnwn nne year
LiJ:hl
sen i\'on i\lanagcment
l'l'll.~inn
21114
SCU Non i\tanagl·mcnt
Fund
2013
used fm acluanal
21ll4
ll%p.:l.
\V1thdrawul rate
as~\lllljliiOns
SCB l\lanagcnH·nt
Pension Furul
Gr:1tuil\' Funcl
2013
2014
2014
2013
To!al
21114
.2013
·-·---·--··-·--··-·-·-···--·-----··---·---·----------·--·-·-····- ( ltu JlCt'S in 'Ill!()) -·---·-·--------·-----·--·-···--···-···--·--·-------·---·-------·
JJ.3
ncconl'ilintion of {n'{'Civ:~hle) I payable from/ to tlclined hcnclit plan
Present value oft!cl"ined bendit
obligations
Fair value {lfplan as!>ct"
(As~ct) /li:lbility recognised
J3A
1\lovt•mcnt iu
tl~·finetl
75,M>5
(U>,444)
49,221
lll0,765
(52.3R9)
·IS.376
:"9,346
502
60,408
504
100,765
3,70H
6,4(10
(17.252)
6,880
(4,TI\)
12,746
(311,629)
3.(>25
(3,675)
·17,543
(4·1.427)
3.116
·16,716
(·1·1.06·1)
2,652
17:",HS9
(143,812)
32,1177
::!06)Q7
(179,21)1)
17,5.16
61J,63·1
2,&63
5,1 •I.J
R,I51J
46,716
3H,387
2tJ(,,827
4,210
1M~.·I19
(111,925)
14,%5
JOO
59,346
15M:"
lfl0,7(15
79.91S
9,11S
52,389
li,76.f
·16,%0
=-=--=
ht•ncfit obligation
Oblignliun n~ nt I Jm1uar:·
Currcnt servicc cnst
Prior Service Co~t
Interest cost
Bcnclits paid
Remeasuremcnt: Acttmrial (!lain) I
lo~s on obligation
Past service co~t resultinu from
change in Rules
Ohli!;atiun as at J I lkcemhcr
335
59,346
(S2,/G8)
(23:192)
52,6SI
__ (7VJ.tl) _
__ Q_~.261l)_
=
526!'11
------
5,794
(5.267)
·1,270
{5,309)
9,36R
---------·16,71()
47 54J
25,000
(53,148)
(7,0UU)
3,3Cl7
5,,1·14
19,301)
(lO,OSO)
1.0,65S
175 H89
206,S}7
i\lovcnlt'nl in fair \';lhll' nfplnn :1sscts
F:1ir value as at 1 J:muary
Interest income on plan :~ssct
Contribution by the bank
Bencti!s paid
Rcmcnsuremcnt: Actuarial ~am/
(loss) on pl:m tt~~ets
fnir vn!u\.' ~~~at J 1 lket:mlll·r
H2,H3S
9,42(i
(17,252)
_, __i2,071)_
=·22,9·11
5.-m:
{4,771)
(1.437)
~~~'-"'-~83~8~
(2.11811)
26 .J.J.J
(9)
:'i1.3S9
44,1)64
5.·156
·IS,R·ll
5.525
179,2 1)1
2J,(,.f6
175,729
2tl,OXl
(5,267)
(:'i,J09)
(53,148)
I !O.OSll)
174
-14,427-
{·1,993)
(3,977) ___16_..~}~.
.J.J,O(d """"""'"--l.f3,H!2 -~79.~.!._.
SCB Nun :\l:m:tgcm[•nt
SCB Non l\l:maj.:cmcnt
Gntluity Fund
21114
201J
J>cnsinn Fund
2013
21ll4
33.6
l\lo\'Cillcnt in
(rcrch·:~hlt•)
sen l\l:tn:tgcmcnt
Tot;d
Pension Fund
201-1
2013
21114
2013
---------··········--------------------------·--·············---- ( Rupees in '0()0) ----------------················-·-··-·········--···············
I p:ty:t!Jit• from I
to tic fined henrfit pi:Hl
(23,-192)
(2,-16-l)
(19,520)
( 1,734)
- - 5,696
=(21l.2Wl
(2,23!0
(23 4921
9,426
(2,071)
9,118
(1,437)
Bnhmce ns at I January
Charge for the ye:~r
Contribution to th\.' limd
during th\.' ycnr
Actuarial (gain) 1 luss on
plan assets
Bnlance <l.' at 3 I Decemh\.'1
33.7
48,376
9,690
22,67·1
10,728
2,652
338
(8,8-l5) _ _ 1·1,97-1
126
3.116
=- .t9,221____ •llU76
(7,300)
27,536
7,564
(10,-15·1)
(1,255)
_ _1•1.361
(3,023}
32.1177
2,652
7.739
"27J)W/
=
27.5_1~
Actu:d n·tum on 11l:m assl·ts
Expected return on plan assets
Actu:uinl gain I (lo:.s) on phm assets
_!!355
7 681
6,76-l
{2,08())
4.(o8-l
5,-138
19)
5 429
5,456
174
5 630
5,525
(•1,993)
532
21,6-l6
(3,977)
17,Mi 1}
20,0!\1
{6:139)
13,6-12
Amount rccoj!nizt•d intutall'Omprl'ltrnsin• income
The rullnwing amounts han! he en chart:\.'d In respect of the~c bcnclit:. tn pro lit
Currcnt $ervi<:e co~t
Interest cost
Expcctcd r\.'turn 011 plan assets
Recnt.;nitinn tJf pa:-.t scn icc ~·tJS\
502
6,-l60
(9,·126)
~:lin/loss
Chunge in lin:mcial assumptions
Change in demographic
:1ssumptions
Change in :1ctuarial assumptmns
Change in experience assumptions
3,708
12,7-1(,
((o,764)
account and other comprehensive lll<:nmc
2,863
8,159
(5,<138)
5,794
(5,-156)
·1.270
(:'i.525)
(1,734)
).69(1
1
------ - - - - - ------w._z_2s ----7%4
338 _(1,255)
2,()71)
204
5,555
59
(111,594)
336
(29)
-331
(111,925)
1·1,658
1·1,%5
953
126
(7,562)
1,500
7,1155
10,85 [
{2,153) _ _1_1,61l9)
JOO
1),36!{
Actual net return nn plan usscts
Interest income m1 ph111 a~sets
2,1171
33.7.1 Components nf pl:tn
:ts.~t·ts
2,0811
----5,6%
86%.
;~s~ct:-.
I·I'Y.,
t]'Y,,
(2.238)
{8.845}
33%
67'!"o
76'Y,,
1~1.9'~·~
126
l-l.361
Ubl·nunt
-I%
l>isrount
nth'
l':th•
·19,228
72,272
-14.~~3
(\(>(>
JO
(6,493)
(7,11110)
--~
~,(,69)
~:~
181
(3,1123}
97~;.
22%
24%
tl '1.. S:tl:try
inl·n•:tw
~,\muun\
Non Managemcm Grattuty Fund
Man<~gcment Pcnsiun Funt!
1.n1J
20,6'iS
6.-139
-------- - - - - - -
3'~
;,
33.7.2 Sensitivity ,\nalysi~ un tkfincll hc.ndit uh1iv,:ltions
Nun Managcment P\.'nsitm hmd
{20,\Jl<>!)
__.iJ.:!i.,
10,851
,646
3,977
•I, 1J93
:IS n perccnt:lj!C nf total plan nsscts
BnnJ$
Cush and net curr\.'nt
3,367
]lJ,Jt\1)
on uhlig:ttiun
(4,1109)
(3,938)
3,625
(3,675)
Hc-mcasnn•mt•nt: intcn•st income nN of return on ph1n assets
Net re-mcasurcl\lL'lll rccu!:msctlm
other <:omprchcn.;ivc income
-l.210
25,UIIU
(21,646)
S,l'l·1
j2,M,J)
H.c-mcasurcmt•nt: ,h·tuarial
50-1
6,880
(9.11 S)
(lilt! ln~s
56,604
79,368
50,912
53,\l[)J
79,777
47,5-l3
-I '%Salary
inl'l'l':tM'
IJ'Y,,
.] %
l'cnsiun
im·n•:tM'
l't•nsiun
in~"l"t':t\l'
in '!UlH] ..... '" .................... .
52,373
71,R-l3
-17,5H
%,·1-lO
75,665
51,1143
49,323
75,665
44,3%
27.(197
33.7.3 Fin- Yl'ar dat:1 on surplus/ (ddicit) of the plans
and l').jlcril'lll'l' :uljustrucnh
Present value ul'ddined henelit
obli~ation
Fair value or plan nssets
.!£J=
tM:.-129
=·-·.!_69.6-15
17~291_
1?5,729
_ _ 169.-123
17.S.H!ICJ
_ _ 2C~.
l.t}.SI2
-
lklkit /(Surplus)
32,077
E-.;pcricncc adJustments on pian
liabilllies -loss' ll~>~ml
((,,41)3)
t:-.;penencc adju~tmcms on plan
assets · loss 1 t gatn 1
~010
201 I
21ll2
in '0011) ······---------·····----------~-······------··············
2013
21ll-l
~--···················· ····--···················l Rupees
=---- 3~77
27.536
17.300)
222
5,373
CI H.OOOJ_
!7•11)
6,.[39
(7 ,637)
=--~~~2-~lo
_L ~ "! Yl<J
c 1R.yt5J
(·1,2J]J,
13,!189)
3\0
==-----:=:=
33.7.-1 E-.;pectcU contrihuttml l'ur the ycar ended 31 lkccmher 21lt5 in rcl:1tion tn SCB Non Mnnaecmcm Sta11'Urattnty Fund and SCB Managcmcnt l'ensmn hmd
nmounts toRs. 9.927 mil!J\111 and Rs 0 305 million respectively.
3-t
Sll.-\ IU: HASEn I' A Y;\1 E~TS
The Ban~·s empluyecs participate mthc l\1lkmmg shnre compensatwn plans opcr:ltcd etoh:tll~· by th ...• uhim;tte hoh.ling compnn), !';t;mdard Chnnt..·n.·U Pic (SCI'I.l'l
For employees in Pakisl:lll, the Group has changcU its arrangement to issue shares ofSCPI.C upon mceling the vcstmg comhtmns Previously the Group opcmteU
cash cquivnlentur "phanwm" ;'lrrangcmcnts under which employees can receive a cnsh benefit hnkcd IU ctthcr the growth in {iroup's share (Sharcsavc scheme) or
the value of the Grmtp's share (restricted I pcrli.mnance shnrc mvards) ;md the arrangement did nO\ give an option to thc Bank's cmplnyecs to buy SCPI.C ~hare:.
The market '<alu ..· M~harcs i~ denominated 111 pounds sterling :uthe tun~,· nf grant Phnntom sd1cme not \"et ,.e.!<tcd arc still bcmu acetlunto.:d li.lf cash ~cnkd ba~1'
The total expense rccogmscd in tcspect of above schemes on equity se\1\ed basis <unounts toRs H;i.13 I milhon (2013: Rs 59.741 tmlhnn) and is also itu.:httblm
managerial remuneration notc 35. As also explained in note 3.20 in detail, the Bank's liuhility towarlls its parent, however contmues to he determined and rcetmkd
on cash settled basis li.1r options not yet vested. The main fcaturcs of each plan arc as li.11lows
i)
St:nul:lrc1 Chartcn·t! Share l'lan
The 2012 St:md.1rll Chartl.'rcd Sh<ITl.' P\.111 r..·placcd nllthe Group·~- e.-.;isting discretionary shme pl;m mmngcmcnts following approvnl b_v shareholders at the
Group's Annual General Meeting on 5 Mny 2011. It is the Group's main shurc plnn, npplicablc 10 all employees wllh the llc.-.;ibility to provide n v:trict~ of
award types llh:ludinr. p.:rlhrmance shares, deferred awards (shares or cash) :mU rcstnctcd sharcs. Pcr!i.mnancc and restricted slmre tlwnrds will generallv he
in the li.mn of nil price options to panidpatc in the shnrcs ofSCPLC. The remaining li!C of the phm is ten ycms.
Movem.:nts in the number of share opt10ns held by the Bank's employees arc as fol!ows··
201]
2111-i
avcr:lgC CXCrCISC
pncc
li\"Crll)!t'
exercise price
Numherl'tlllll)
97
18
At 1 January
Granted dminl~ thc ycar
Exercised dllfinl~ the year
Lapsed durin!]. the year
Notional div1dend
At 31 Occcmbcr
£ pt•r slm re
H!t!!ll}l;r_(OQQ)
70
36
(\6)
(8)
{15)
12)
I
I
R5
The wc:ighteU :w,;omge price ntthc timc the options were cxcrciscU
durin~20\4
-----97
was£ NIL (2013 £Nil.).
2014
Wci~;hted
n:mgc of exercise price
Weighted
li\'Crll)!C
Number
('000)
an-rage rl'mnining life
Expected yc:1rs
Contractual
yc:trs
excrdsc
price
NIL
10
5.119/7.91
We1g.htcd
average
ex.:rl'JSe
pricc
Number
('000)
2013
Weit:htcU nwmge rcmaming ltl"c
E.-.;pected ycnrs
Contractual
10
5.6SIS26
The mtnnsk v:1luc or,-c,ted lntcrnatinnal SltmeS;l\'e cn:.h-scttkd aw:mb as atJI !kccmhcr 201·1 wns Rs ll,CJ(IJ thou:-.aml (:!Cl\] lb Nil)
As at 3 I December ~0 l·l. total number nfnptions exercisable wen..' 6,•165
ii)
lntcrn:llinnal Sh;trcs:tvc Scheme
The International Shnresnvc Scheme was lirst lmmched in 1996 nnU made available to :til employee~ of the Bank. l:mplnvces ha\"e the cho1ec uf npcmng a
three-year ilr n live-.\car savings contract Witlun a period of si.-.; months :1licr the thirtl or filih :mntvers:try, emplo_\l'es ma\· e-.;erc1~c the nwards and r~·retve
:my hcnelitln cash~ alternatively, the Clllpluyce may elect to ha\'e the savmgs, plus mlcre~t. repaid in cash. The pricc at whid1 they may purchase "hare·; l ' at a
discount or up to ::!.0 percent on the ~hare price :11 the d;~tc of the mvitation. There arl.' no performance conditions attaehed w uptmns granted Tlh~ llplum'
granted do not con!Cr any right to participate m ;~ny shnrc issue of any other company
Movement!' 111 the munbe1 of share nption!- held by the Bank's cmph,~ccs arc as !IJ!lows:WcJghk·d
avcr<Jt:e exeru~e
t•xcn:ist• pl'iCl'
prll:~·
"·'26
£per share
!1.91/11.78
9,85
ill
(39)
11.27 I !2.'J'J
i'\umher !'Oit!Jl
At I January
Grruncd durmg the year
E.-..:crci~cd durn1l~ thu vear
Lapsed dunng the ~·car
At 31 December
:2013
avcra~c
Wci~hh·tl
201-t
](,
!·I)
I H!J
R4
111.!1:5
lhc \WIVhh:tl :1wr.1UL' pnccatthc tlllll' the nptions were cxercJsctl durtnl' 2014
wa~
=--=-==
£9 X(2013: l!O !Jli)
2111·1
Wcithlc!!..!!~~~·ni).\C
lbtl).\l' of l'M'rl'iSl' prin•
WciJ,:hll·d
~umber
tl\'Cf:l).:l'
('tlllll)
Expectl·d yc:1 rs
II ss
117X
10 'lli
lllJ"/
11 'II
6X
').Nil
711
£per ~hare
!'lu!l.lll~.r.l'tJ~li.!J
rcmaininA lift•
Contractual
r:u·rdw
JWin·
Wci];htrd
:m:mgc
CXefCISC
pnce
I !.91
£9.85/il•l.fll
Number
('000)
:!:0 13
We1ghted avcmgc rcmaimm~ ht\: _
Expected }Cars
Cuntractu.d
yc:us
333!) 33
R4
1.3\!J •12
The intrinsic v:1lue of vested International Sharcsave cush-settlcd awards as at 31 \Jeccmbcr 201·1 was 32,85•1thmlsand (20! 3 Rs •II ,68!\thousanr.l)
As a1 31
\)~·ccmbcr
201•1, total lllllllbcr nfuptwns exercisable \\Cro..' 19.200.
iii) Rl•slricll'll Sharr Schcml'
Thu Restricted Share Scheme is a discretionary share incentive ~chemc lOr high pcrfnrming and high potenlial staff many lcvd of the organis:ui<Hl whom the
Group wishc~ to mntiv:~tc and rct:1in. Except upunnppointmcnt when an executive director may he granted an nward of restricted !>1J:Jrcs. the Res!rlctcd Share
Scheme i.~ not applic:Jblc to the Group's c:o;ecutivc directors, as it ha~ no perlimmmce cunditions altached to it Fifty p..:r cent or thl..' mvard vests two years alkr
the datu or the !\rant and the remainder after thrcu years. The aw:~rds ~,;ranted under this schcmu me nil cost {lptinns with an~ henctit pay:1hlc in cao;h The
options grant~·d do rwt cnniCr any right to participate in any sh:~re issue of any other company
Movements m the number ofslmrc nptmns held by the Bank's cmpluyccs ;~rc as
2014
Wciehte!l
£ pcrslmre
1'\umhcr('IJtJII)
At 1 January
Granted during thc year
Exercised durint~ the year
Lapsed during the year
Notional dividenJ
At 31 December
({Jllow~WCI~\\Ued
2013
i::J.ll!l.ll~r_('t)!.!ill
t per "hart!
56
2l
(25)
(9)
(10)
22
=--=="'==
The wci).;htcd :werat•.e price :~tthc time the options were exercised durin~ 2014 was Nil (20 13: Nil)
2014
R:tngc of cH·n·isc price
NIA
Wt•ighted
:1\'{'l":t).:l'
exercise
prir:e
;\:umber
{'UIHI)
201J
Weighted :nw:1ge rem:tinin;.: I!~
Expected Yl'ars
Coutnlclual
Yl':trs
13
2.07
Wei~hted
nvcmge
c.-..:ercisc
price
Number
('OO!l)
22
Weu:htcd nvcml~e rcmainuw IriC
Expeclo.!d years
Contractual
~·cars
~==
313
The intrin!>IC value or vested Restricted Sharc Scheme cash-sen led awards as :u 31 D~·ccmber 2014 wus Rs 23,062 thousand (2013 Rs. 15,332 thousand!
As at 31 December 20\·1. totnl nmnbcr nf npti{lriS cxcrcbahlc wcrc I ~ .. In
iv) Sull!Jicment:ll)' Rcstrictetl Sh:u·e Schcnw
The Group opcmtes a Supplementary Rc:>tricted Share Scheme ''hich can he used Ill dciCr part of an emplo}ee·~ annual bonus in shures The plan is
principally t1sed for employees in the global markets area and is similar to the RSS outlined :1bovc for three imp<~rt:mt f:u.:tnrs: executive d1rectms ;m~
spccilicnlly pmhihited from the plan: nu new shares can be issued to satisfy awards: :md there 1s no individual :mnuallunit.
Movements in th~· number of share options held hy the lkmk's employees arc as lOIIows:·
\Vei~hll'd
2014
::!013
WcightL·d
:1\·cra~l'
pnce
exercise price
Kumht'r I'IUIIIJ
£ pl'r
£.per sh;1r..:
~1m rc
At I Januaf)
Gr:mted during the year
Exercised during the year
Lapsed during the year
t\djustmcnt due tn right1ssuc
At 31 Decemhl!r
I
=-·=
2014
Range of exercise pticl.'
Wci~htt·d
Numher
nvcra~e
('000)
Weighted :n·cr:q;e remaining lifl'
Expected years
Contn1ctual
years
Weighted
average
exerCISe
price
cxerdst•
JH'ice
N/A
Number
2013
Weil:hted awmgl!
Expected ~cars
remmmnt~
l1li.·
Contractual
('000)
year~
·1 07
3.117
The intrinsic value of vested Supplementary Restricted Share Scheme cash-selllcd awards as
thousandl
:n 3! December 2014
\\<IS
Rs 2327 thousand
(~tl\3
1b !,S75
As at 31 December :?ll\•1, total number tlf options exercisable were 1,)(10.
v)
l'erfnnn:UU'l' Sh:tn• !'I an
The Performance Sh:m: Plan IS r.lcst!.\ncd ns an unnnstc p;lrt of tot:ll remuneratmn ror the Group's executive director~ and fm a small number of the <iruup's
most serum exeeuuves The awards grunted under thts scheme arc ml cost opuons. Cen:un pcriOrm:mcc criterw ne..:d to he met hdi1re the opuons l':m he
exercised.
The opt inn t:r:uucd do not confer nny riulnto participate in any share issue of:my other company.
Movements in the numh..:r of share optit)llS held hy the 11ank's emplovccs me as 10\lnws··
2014
2ll1J
Number ('Utllll
At 1 Jnnuary
Granted during the year
Excrcisl!d during the ~e:~r
Lapsed during the year
Adjustment due to right issue
At 31 Decem her
~l!!!!t:~r..mnru
12
(10)
(I)
(I)
=:-_._~
2tll4
2013
Wei~;htl'd
H:tll~l'
uf l'M't'dSl' ptkc
Wei~-:htetl
Numhl'r
:n·cragl.'
l'XI.'n:+•t·
prke
('UIIIl)
avctagc remaining lift·
Expec!l'd yt·ars
Contractu:! I
yc:trs
Weighted
:werogc
exercise
pnce
Number
Wci1:htl!d avcrat:c renmimnt•, ~~~~Expected years
Cmnmctu;1l
('000)
N/A
The intrinsic \':due ofvcstL'd Pcrll1rmanl'\! Sh:1rc Plan cash-sen!cd mvards as at 31 December ]0 1·1 w:L'> Rs Nil (2013 Rs 2,590 thuu.<oaml).
~\!:us
:1 19
35
COMPENSATION OF CIIIEF EXECUTIVE AND EXECUTIVES
Note
Chief Executive
2014"
Executives
Director
2014
2013
201~
2013
2013
----------------------------------------(It u pees in '0 00 )----------------------------------------Director's remuneration I
ICes
35.1
M:mngcrial remuneration
35.3
5,795
3,630
74,390
112,16<1
2,337,796
1,946.113
1,630
3.422
219,889
190,7·18
3,558
7.467
461,721
416,7R6
889
1.867
128,170
10•1.809
22,181
375
31,734
·11.25(1
I 02,648
125.295
Contribution to deli ned
contribution plan
Rent and house maintenance
ivh:dical
Others
Number of persons
5,795
3,630
3,179,310
2.699,712
3
3
1,131
9X5
3
*'This includes mmmg.crial r!!mum.:rntion and other bcnclits or current and previous Chief Executives.
35.1
Th~..:
35.2
The Chid Executive is entitled to Bank provided free use of furnishl!d accommodation. The Chid Exccutivl! and some ot' thl!
executives arl! also provided with Bank mnintaincd cars. In uddition. the Chief Executive and some of thl! cxl!cutivcs arc also
reimbursed for t.:ost of medical expenses and other bcndits like club subscription. t.:hildrcn education etc. as per thdr terms of
employment.
35.3
tvlanagcrial r:.::muncration also includl!s charge against share compensation plans.
36
FAIR VALUE OF FINANCIAL INSTRUMENTS
din:ctor's n:mtmc1..11ion I li.:cs represents remuneration paid to the Bank's 3 non-executive directors (2013: 3) for altl!nding
Board and Sub-Commith!l! meetings.
Except lhr invl!stmcnt unlisted companies. lixcd term advances of over one year. staff loans and lixed term deposits of over one
yt:ar. the litir wllue ol' on balance sheet lin:mcial assets nnd linbilitics nre not signili1..:antly diflt:rent from their book vnluc as these
assets and liabilities arc either shon term in nature or arc li"equcntly re-priced. The 1~1ir value or li:xcd term advances of over one
year, staff loans, li:xcd term d~posits of over one year and investment in equity of unlisted companies cannot be calculated with
sullicienl relinhility due to non-nvailahility of relevant active mm·kct fbr similar assets and liabilities. The !'air value of investment
c\assilied as held to maturity mnounted toRs. 58.755 million (2013: Rs. 58.755 million).
37
SEGMENT DETAILS \\'!Til HESI'ECT TO IHlSINESS ACriYITIES
('oqwrate anti
Commcrci:1l
lh•tail
Institutional Clients
Clients
C'lit•nts
Tutal
- - - - - - - - - - - - - - - - - - (ltupccs in '0!10) ----------------------·-
20J.j
lmern;~llneomc
Net mark-up I n:tum I interest income
Non nmrk-up I mm
intere~t
{I ,6U7 ,2.14)
14,'J21\,IJ U
IUS,4'l\
23,046,829
2,525,371
(4,J7(t,5-11)
21.3'J5,(1(,5
3,3-J8.584
465,923
13,183,113R
1,384,05(,
3,'J57,772
623,0110
8,3lo3,Moll
21,3113
7,081
H!l.lll7
1118,491
9,203,963
753,975
5,H'J3,564
15,851.5112
mcmm:
Operating income
Non nmrk-up I non
( 13,2 i 2,375)
interc~t expen~es
Internal non mark-u11 1 rllllllllterest expenses
Opemt1ng profit hefm<: provisions anti taxation
3,5H5,7Ct2
------1-1.337,331
1,.JilU,2fo'J
28,911-1,425
12.9-l-1,432
Direct writc-offs I prm.isiom against non-performing
Juans and
advance~- net
(113,-Wl)
(1·19,123)
409,852
8,457,927
867,393
6,0-12,687
\5,J(j8,U!I7
95,(•32
7.237
377,856
480,725
50,6(•7
4,MJ
371,253,029
36,718,655
34,121,512
442,09.3,1%
(,72,3')3
of recoveries
7J,(,.IJ
73,6.13
Provision for diminution in the value of investments
Profit hcfOI'C \:1xntinu
Othl·r st·~ment items:
Depreciation on
tan~iblc
Amortisation on
intan~ibk
lh;ed assl!ts
assets
Segment assets (grns~)
55,3311
Segment non performing loans
9,47(,,183
9,1189,77-l
-1,529,776
2J,H95,73J.
Segment provision re•tuirell
8.744,098
8,333,478
.1,372,·124
21,45U,(lnll
1111,435,328
7,918,026
239,4(!9,689
357,823,0-13
Segment liabilities
Segment rl!turn 1111 net
;~ssets
..
(ROA) (%)
Segment cost of funds(%)
2.33'Xo
3.06'Y,,
2tUI%
3.Ci5%
6.32%
6.43%
3.113'%
3.9R':t.,
( 12.K 18,469)
1,570,\19
11,'110,7-10
21113
Internal Income
10,157,970
Net m:lrk-up I return i interest income
(795,326)
(556,'181)
162.390
IS,!W6,1h3
Non mark-up/ IWll mt<:rest mcome
2.-179,856
538,568
Opcmting income
9,8\9,357
1,313,361
Non mark-up I non imerc.\1 <:.Xt'cn~e$
2,331,531
507,968
6:10-1,31·1
·18,717
6,496
107,177
162,39\l
7,-139,109
798,R97
7,205.392
15:1·13,3 17
Jntemnl non mark-up/non interest cxpen~es
Opemting profit b<!l'ore provisions :1nd taxation
2)162.62·1
------13,716,883
5,XX I,!J.I8
2•1,!U!J,fJOI
9,2·13.81-1
- - - - - - - - - - - - - - -1 -
Direct write-ol'IS f provisions ag;~inst non·Jlerl'onning
lo;~ns ;~nd
:ulv:mces- net of recoveries
Provision for Jimimnion in the
v;~lue
(782,677)
of investments- net
(522.0621
KR,753
291,198
( 1.215,9/-i(•J
2tll,l9X
-------
7,930,5/lH
1,320,959
7,116,639
Depreciation of tangible lixed assets
89,173
11,197
)tJ.\,530
·19·\,'Jil\)
A mortis;~\ ion tlfintangih!c assets
47,799
4,959
351,1X6,171
3!1,7•1•1,587
J!U!OJ.(J·IJ
•12X.7.l·l.-l!J 1
2>1,9.38.-IJS
l'l'ufil hcfut'l' ta•mtitHt
O!ht•l' segment
item~:
Segment assets (gross)
Segment non
16,)(18,1/-::i
p~·rllllutint,:
loans
9,587,8·15
\0,043,776
5,JOf>,K 17
8,\92.703
9,145,584
·l,X•I'I.M-:6
22,1K7,!J'I3
112,9·18,255
5,35,1,49K
230,075,20!1
3•18,377.%1
S<:gment provisitln required
Segmentlmbilitles
..
Segment return on net nssets (ROA) (%)
Segmcm cost of funds(%)
52,7.-;:\
2.31'%
4.46%
2096%
.J.lJ3"<•
5.37%
2.22%
2.99%
3 7>"<.
Segment ROi\""' Nctulconll! I {Segment asse!s- Segment provisions)
u
Segment cos\ of fund:> have b..:en cnmpuled based on the avcmge bnlances
Dunng the perwd. the Bani-. lms revised the cumposi!ion of its rcportahlc ~egments. This i~ 111 line With !he change~ in !he ort:allhiltlnnal stnlt'lltre of the Bani-.'~
I'a rent Company Acconlin!_\ly, the compnrauvc seumenls information lm<> heen restated ami to hrint; it in line with the curr~·nt urganualumal ~tnlcture of IlK· nan I-.
This change shall ha\e nn unp:tct on the llnnk"s uvcrall pro lit :md lnssun·nunl, halanc<: \heel nr reported metncs
Cnrpnr:llc anclllt\litutiml:ll Clients
This includes Jepns1t~. trade, aJvtS00' ~erv1ces and other lending acti\"111<:~ for corporate :mJ financ~<tl mstitutions. It :1hn mc!mlc~ the m·erall man:ll:elllellt of
trensury of the Bank, which ..:mails \':I filiUS cash and i111crest risk m:um~ement products fnr eu~tumers The products mcluJe rX fnmanb, I X {1pt10ns and mk•re~t nne
S\\':l(lS
Uetail Clients
This mcludes wealth mana_!;ement, deposits.
husmcss clients
This mcltn.lcs deposits. trade. Weal!h
~ccured
m:um~<:ment
lending (mortg:tges.
O\ erJralis
etc.), unsecured lending (credit cards,
nnd SME discrcuouar\' lending :JCtiVItte~
Jll.'f~on:d ltl;lll~
etc ) ll1r priority
;~n,t
small
3H
RELATEili'ART\' TRANS,\CTIONS
Rdnh.:d parti~.:s comprise of Standard Chartl:n.:d Pic., ultinH1le pan:nt company. its other subsidiaries and branches. key momagcml.!nt
personnel. employees' n.::tin::mcnt benefit !hnds and oth~.:r nssociatcd untic11:lldngs. The trnnsa~:tions with rdnted partit.:s arc condm::ll·d
nt commercial I agreed IL'flllS. The Group also provides advances to employees at rcdtJced rates in m:cordance with their terms or
employment.
Th~.:
transactions and bnlam::cs with related parties arc summarised ns follows:
Note
Ol!TSTAi'\ntl\'G BALANCES
ZUI.J
2013
(Rupees in '000)
Group
Nostro balances with other subsidiaries and branches o!'thl! holding company
Ovcrdmwn nostro balances with
the holding C{lmp:my
oth~..:r
subsidi:1rics :md
brancb~.:s
1.39tJ,.JO(J
1,621,9%
R07 .3·PJ
or
Vostro balances of other subsidiaries and branches of the holding company
Placements with other subsidiaries and branches ol'the holding company
38.1
Deposits of group compnny
337,-1211
.JJH,H57
·156.R52
8,313,SSIJ
22.15H.H·III
33,7-15
2.909
290
Due from group companies
c,,.l-12,·1·B
Due to holding company
93,71(,
Due from otl1er subsidiaries and bnuu.:!Jcs of the company
Interest rcccivnble from group companies
lntcr~company
derivative assets
lntcr~company
<k:rivntivt.! liabilities
Other receivables~ SL/\
TransactimHdatcd contingent
liabilities~
Guarantees
Commitments in respect of f(mvard foreign exch:mge contr:u.:ts
Deriv:1tivc
instnuncnts~
lnwrcst rate swaps- Notional
mana~eml·nt
63.5C!O
(,5
22.516
20,3111
36,•1(19
21-l,-193
408.725
I,SOS
•\50
2-1,199,988
17.61·1.'1115
7.5-IO,G(,J
2.WSA5·1
7,0)7.7(1:-i
-1,-t59,1J58
Derivative instrumL:nts- FX options- Notional
Key
5.559.2X9
37.7.1:.
Due to group company
•105.7R2
personnel
Loans and advnnces to k!.!y mam1gemcnt personnel
38.1
68,S81
90.0111
Deposits of key mnnagcmcnt personnel
38.1
172,H3.J
13\.1(17
R~.:nt
1,57-l
paynhk
Others
Loans and advances to customers with common directorship
Deposits by st;1rfrctircmcnt benclitli.1nds
Deposits by customers with common directorship
Accrued inten:st recdvablc against loans and ndvanccs to
customers with common directorship
(Paynblc to) I receivable from dclinL:d benefit plans
Reccivnble frmn dclincd contribution p!nn.s
38.1
693,293
29,1)(J6
113,8711
325.577
-t35,906
95,H5S
17,855
2AH2
32,1177
(27.5JC>)'
138,9-19
Derivative asst.:!
9.775
TransactiOIHclatcd contingcntliabiliti..:s- Guarantees
TnKh.::·n::latcd
contin!!~.:nt
Adv:\llce recci\'ahlc
liabilities- Lcll(.!r of Credit
526,73')
29.·171)
I,UH7
·13.2XS
I,H112
Note
PROFIT AND LOSS
2014
2013
(Rupees in '000)
Group
37,968
202
Mark-lip I rdurn I interest earned
Mark-up I rc\llrn I interest expensed
Fcc ;md commission expense
Fcc :md com1nission income
Rdmburscmcnt ol'cxccutivc and general administrative cxpcnscs
Payment to group company for dirt.:ct sales Sl!rviccs rendered
Reimbursement of administrative expenses
(including rent and other charges)
Net loss on inter-company dcrivativcs
Royulty expense
8,991
26.3
IIH,03H
1,385,769
669,..19-1
11,74:;
5.600
178,(1(,-J
53.35(1
119.0(15
18-1,693
8,239,528
Dividend paid
110.59()
230
5.31 ()
I•1.321
(977.59(1)
731.1•12
S.622.76."l
Key management personnel
3,2{)5
-I, lSI
387,747
19,3..19
5,795
M:1rk-up I return I interest carnl!d
Mark-up I return I interest cxpcnsl..'d
Salaries rmd IK~nclits
Post fl.!\in.:mcnt bcndits
Remuneration I !Cc paid to non-executive directors
Rent expenses
3.S·IX
1.31 (J
399.093
I X, I(,.J
3.630
6·17
Others
Contribution to ddint:d contribution plnns- net ofpnymcnls rct:dvL'd
Clmrgc !'or de lined contribution plans
Net ehargl! I (ineoml!) ror tk1incd bcndit plans
Mark-up I return I interl!st expensed on deposits or starr
rctireml!nt bene!it funds
Mark-up I return I interest expensed on deposits or customl!rs
with common directorship
Mark-up I n:tmn I inh:n:st carn('d on mlvances to customers
with common dircctorsltit'
Donation to The Kidney Centn::
Net gain I (loss) on derivatives
Payment made to Central Depository Compnny ol' Pakistan Limited
Gas charges
Miscellaneous income !'rom eomrxmy with common directorship
38.1
N~t
mn,·cmcnts in loans :1nd deposits :u·c sunHmtriscd
:1.~
26.1.1
373,796
23-1,849
7,%-1
1.3·1. 710
23<1.710
7.73 1)
16,639
17.3S2
20,6(1(,
X.IIXO
22,XOI
3,0011
7.93-t
2.1HIO
('1(>.721)
2·1.H>?
(9,775)
38.2
-1,(,29
H2
1,7:'i3
follows:
B;Jiancc as at
Net
Net
Balance as at
31 December disbursement I
repayments I
31 December
20 13
deposits
witlu..l rawals
20 1-t
------------------------------( R u pees in '00 0)---------------------------
Loans :llld advances
Key m:mag~ment perS(lnncl
911.1101
36,111
(57,53 I)
6X.5R I
Others
29.966
1,56H.929
(905,602)
691'.293
2,909
682.679
(651.843)
33.7·15
Key management pi.!rsonncl
131.167
8211.008
(778.3·11)
172.R34
Oth~rs
•121.434
88.747.339
(88.618.997)
Deposits
Group companies
38.2
The prl.!vious CEO of the bank was also the member of' the Board of this organisation.
39
Capital Adcqn:ll'Y Ratio (CAR) tlisrlnsun.•
AsatJI Dcl·cmhcr2014
Capital Strurtun·
The State Bank of Pakist;m through its BSD Circular No.07 doted 15 April 2009 requires the minimum p11id up c:tpital (net of losses) li.1r all
locally incorporated banks to be Rs. 10 billion on 31 December 2013 and onwards. The raise was to be achicwd in a phnsed nmnncr requiring
Rs.IO billion paid up capilrll (net of losses} by the end of the linancial year 2013. The paid up capital of the Bank li.)r the ye:1r ended 31 December
201 '' stands ;It Rs. 3S.715 billion and is in compliance with the Sill' requirement.
Furthermore. the State Bank requires the B:mk to maintain prescribed capital to totnl risk~wcightcd osscts ratios. The capit;~l adequacy mtios nf
the Bank were subject to the Basel 3 c;lpital adcqtmcy guidelines stipulated by the State Bank through its BPRD Circulm No.6 dated 15 Augu:-t
2013. These instmctions nrc ciTcctivc from 31 December 2013 in a phnscd manner with full implcmenmtmn intended by 3 I December 2019
Under Basel Ill guidclmcs banks arc required to maintain the Jblllm ing ratios on om ongoing basis:
Phase~in
arrangement tmtl full implementation of tile minimum mpilaf ret}ttirenwnts:
I
I S No.
I
2
3
4
Rnlio
I
Common Equity Tier I (CET I)
/\dditiotHil Tier~ I (ADT I)
Tier 1
Total Capital
*Capital Ctmsmnption Bul1Cr {CCB)
Total Capitnl plus CCB
21113
I
21114
5.00%
1.50%
6.50%
10.00%
5.50%
1.50%
7.00%
ltUlO%
-
-
10.00%
10.00%
Ycnr Ent.l
2015
I
6.00%
1.50%
7.50%
10.00%
0.25'}0
10.25%
21116
21117
I
6.00%
1.50%
7.50%
6.00%
1.50%
7.50%
10.00%
Jf).(lO%
0.65%
10.65%
1.2R%
11.2R%
2111S
I
I
31 Dcrcmhcr
2019
6.00%
1.50%
7.50%
1o.oo~Yo
1.90%
11.90%
6.00%
1.50%
7.50%>
1o.oo~~,,.
2.50%
12.50'!1u
"(Consisting ofCETI only)
Moreover, the Stntc Bank, through its BPRD circuhu No. 02 dated 09 January 2015 issued revised instructions li.1r calculation or risk weight m1
outstnnding exposures ngain:;t large unrntcd private sector borrowers. The circular requires that the risk weight on ;til unrated private sector
borrowers with nggrcgate outstanding exposure from linancial institutions (both fund-based <llld non-fund based) of Rs. 5.0 billion or above. net
ofliquitl usscts, shall be taken 115% instead of previous rcqt1iremcnt of 100% t{,r the year ended 31 December 20H. The circular amends the
requirements of BPRD circular Nn. 25 dated 23 July 201·1. wherein the risk weight on unrated private sector borrowers with nggrcgatc
lllltst:mding. exposure front linancial institutions or Rs. 3.0 billion, was to be taken :1s 12.5% lhr the year ended 31 December 20 1·1.
flanking operations me categorised in either the trading book or the banking book. and risk·WI!ighted assets arc dctcrnuncd uccording to spcdlkd
requirements that seck to rcllcct the vnrying levels of risk atlachcd tn assets :md off-balance sheet exposures.
The Bank's rcgul:1tory capital is nnalyscd into three tiers, with total Tier I cupital being the sum ofCETI and ADTI bclllW:
Comn11111 Equity Tier I cnpil:ll. which includes fully paid up capitul (including the bonus shares), balance in slwre premium account, general
reserves. stallltory reserves as disclosed on the balance sheet and un~appropriatcd prolits (net of accunmlmed lllSscs. if any). Goodwill :uHI
other int:mgiblcs arc deducted rwm Tier I cupital.
Atlditional Tier I capital. which includes perpctunl non-culllulativc preference
did not have any ADT! as of3J December 2014.
sl~:1rcs
and
sh;~n.'
premium
rc~ultin~!
!hun the same. The B:111k
The deduction from Tier I Capital inclmlc mainly:
i)
ii)
iii)
iv}
v}
vi)
vii)
Oook value or goodwill I intangibles;
De licit on revaluation of i\Vllilnblc li.H sale investments
Dclined~bcnelit pension fund net assets
Reciprocal cross holdings in e(]Uity c:1pital instruments of (>\her banks, fin<mcial institutions and insuwncc com panic ... :
hi vestment in mutual funds above <1 prescribed ceiling;
Threshold deductions applicable li'om201<l on deferred Ins assets and certain investments:
50% of investments in majority owr1cd securities or other limmcial subsidiaril.'s not consolidated in the statement of Jinancial position.
Tier II L'apital includes sub-ordmmed debt, revaluation reserves on assets, e.\(.'hangc tmnslntion reserves and impnirmcnt allow;mCL'$ that <~rc
nut held :tg.:un:il idcntilied debts. lnl'brmation on the terms, conditions and mher !eaturcs ol'thc Bank's su!Hlrtlinalc<l debt currently in is\UC
is given in lltl\1! l(r to these linancial statements. There is a restriction tlll the amount nr impairment allownncc:- that me not held n~niu..;t
itlcntil'icd dchls uplo 1.25 percent tlfcrcdll risk wcighlcd a:-wh
The dctluctinns li'om Trer 2 indudc nwinly:
i}
ii)
Reciprm:al cruss lwldings 111 other c;1pital instruments of other hanks, linnncial institution and insurance companrcs.
5()'}·;, 11r irtvc'>tmcnt..; in majority tl\\'lled sr.:curitic:-> nr other linanci:1l suh~idimic~ not consnlidated in the :-;tatt·rncnt of linanci:1l
durit1g tnlll\ttitm pha'>c
po,ltlt~ll.
The Bank remained ctlmpliant with all cxternnlly impose<! capital requirements through out the year. Further. there ha:- been nn material
in the Bank's managl.'ment of capital 1luring the year.
chan~!l.'
2013
2014
(Rupees in 'IIIlO)
Common Equity Tier t t•apit;ll (('ETI): lustrunwnts ami rcser\'l's
2
3
<\
5
(,
7
g
9
I0
II
Fully Paid-up C<1pita!
13a!ancc in Share Prcmimn Account
Reserve for is:-;ue of Bonus Shares
Discmmt on ls~uc of shares
Gencr<~ll Sl:ltutory Reserves
Gain/(l.tlsses) on tlcrivativcs held as Cash Flow !ledge
Unappropriated pwlits
Non-contw!ling Interests arising from CETI capitalmstruments isst1cd to third parties by
consolidated hank subsidiaries (amount a!!nwcd in CETI capiwl nl'thc consolidatmn group)
CET I ht'fo1·c Uegul:~tory Adjustments
Total rcglllntory adjustments applied to CETI (Note 39.1.1)
Common E<Juily Til' I' I
Additional Tier I (AT I) Capital
12 Qualil'ying Additional Tier-! cnpital instruments plus any rchlled share premium
13
ofwhieh: Classified as equity
H
or which: Clnssilicd as li;Jbilitics
15 Additional Tier-! capitnl instruments issued to third pnrties by consolidated subsidiaries (mmllmt
or \lowed in group AT I)
16
of which: i11strument issued by subsidiaries subject to phnsc out
17 ATI before ref!ulatm·y adjustments
IR Total reguhnory adjustment applied to ATI capital (Note 39.1.2)
19 Additional Tier I eapital alter regulatory ndjustmcnts
20 Additional Tie1· t capital rtcognizcd for capitui:Hil'quncy
21 Tier I Capital (CETI ·I atlmissiblc AT I) (11+211)
Tier 2 Capital
22 ()ualiryin~ Tier 2 ~.:;1pita! instrunH.:rns under B:1sellll plus any related shmc premium
23 Tier 2 capitalm:.trumcnts subject to phasc~out arrangement issued under pre-Basel 3 rules
2·1 Tier 2 capital instruments issued to third p;uties by consolidntcd subsidiaries (;unnunt allowed in
group tier 2)
25
of which: instruments i:-;sucd by :->libsidiaries subject to plwsc out
7.6 Gencml provisions or general reserves for lonn losses-up to mnximum of 1.25% of Credit Risk
Weighted Assets
27 Revaluation Reserves (net of taxes}
2R
of which: Revaluation reserves on fixed assets
29
of which: Unrealized gains/losses on AFS
30 Foreign Exchange Transl<1tion Rcscrn·s
3 I Undisclosed/Other Reserves (if any)
32 TZ before l'l'gulatory adjustments
33 Total regulatory adjustment applied to T2 capitnl (Note 39.1.3)
3•1 Tier 2 capital (T2) aller regulatory adjustments
35 Tier 2 capital recognized !i.Jr cnpitnl ndcquacy
36 !\1rtillll of Additionnl Tier I corp ita! rl.!cognized in Tier 2 capital
37 Total Tier 2 ca(lital :ulmissibll' for capital adequacy
3S TOTAL CAPITAl. (TI +admissible T2) (211·37)
39 Total Risl.: \\'cightetl Assl'ls (R\\'A) {fnr details refer i\ott• 39.SJ
40
Tie1·~1
47 CETI available ttl meet burli.:rs (as a percentage of risk weighted assets)
National minimum capit:rl rcquin:11tents prescribed by
..JR
J8.715.S50
1,036,090
R.n7.t,9S4
6.1.J4A62
(,,1{1{9,197
H35,11·1
6.721.973
SR2.322
55.SS I ,2115
211,3117,167
3S.244,113S
5350,0.697
CETI minimum ratio
4:) Tier I minimum ratio
SO Total capital minimum ratio
20.R21.203
32,679,.19·1
14,4112
14.4112
14,4112
35,258,440
32.679;1'J.I
2,0\l(),l){l\)
24,1103
2,2511.000
539,465
560;162
3.5115,1128
2,07J,(,(J3
1,431,365
1.577..15S
1.529,57(1
·17.RR2
·US7.920
41.326,9~6
(,,IIMI.496
•1,3R7.920
37.067,.11·1
21X.SS7,2S2
219,750.851
Capital Ratios ami butTers (in pe1·n·ntagt' of l'isli. Wcif,hll'd :rssets)
CETt to total HWA
t•apital to tr:talltWA
42 Total capital In total RWA
•IJ Bank spccilic buffer n.:qt1ircmcnt {minimum CETI requirement plus capital cnnserv:rtinn hufJi.:r
plus any other hufli.:r requirement)
4·1
of which: capital c~mservatinn buffer rct1uirement
nl'\\hich: countcn.:yclicallmfli:r retJuiremcnt
of which: D-S!B nr (i-S!B bulli.:r requirement
•II
3X.715,H511
1,1136,11911
I·I.X7%
16.13'!1,,
18.91 '!{,
6.13%
~Ill'
S.51l%
=---==
7.11U'X,
5.00" ..
6.50'!-U
~~=~](~),()j)'}(,
2013
2111-1
3').1
·-··-·--··-··-••••• (JlUjlC'-'S in 'lHIH) • -••·············•••-••••••
.\nrnunr
Amnwrls suhj ... ctw
.\rnnunl
i'n•- \la,d 111
rr ...:llm<•nr•
3'.1.1.1
Common Er)Uily Tier I c:rpit:rl: lh'J!UI:ltory
:rdjustmcnr~
ol'rclatcrl dcr~rT~d 1:1' hahihtyl
i\IJr•th~r U\1:tll!'[hJ.::,;_ (n.::t of :my l\SWCi:llcd d~felTI.'d tm: li:r\rrlity)
Shr,nl':r!! mpwrr~i•'rb :rl~;rin~r clm;srl'i.::d :r~~d,;
D.::li:n..::d '''" ih~•·ts th:n rely on frmu.:: pmlit:rhrlity .::'clmhu): tho~~ :m~m!! nom tcmpur:11}
drlli:ren.::~~ (n,.1r•l' rcl:rt.::d Ia\ h:rhrh1yl
Good1rill
(>
'J
Ill
11
12
D
l5
[(,
17
IH
! 1J
20
21
(u~·t
D.::nn,.d·hcn.::lit p.::n~ion 1\md n.::r nssct'
R,.dpwcnl cw,s lwldllll'·~ in CETI ~-:rpu:rl in,uum.::tl!s uf bnnl-.in~. liumr~Hrl :urd insuran.::.:: .::n!ltt.::'
('ash tlrm h.::rl~e r.::ser\..::
ln,.::slllr.::lll m rn\ n ~h.u.::"' ( 'ET I m~trurn.::uh
S.::.::uritit;ruun l'Jlrn rHr sal.::
C"apunl shtHtl:rll ofr.::gul:ll.::d suhsuliancs
Ddidt on :rccnuntufre,:rluntion fmm h:rnJ..', holdrn~s uflhed a~~cts• :\I-s
lnv.::,;tmeuh ru the 1.':1pitnl inSilllm.::nts of'h:rnhrn!~· linanci:rl :md insurance l,'lllitlc~ that arc uut~id.::
\Jrr! Sr!Upe or 1\!t'.U[;h<liV <;Oli~OJidatiUII, \\h,::re thr! \JitUk docs J\lll 1,)1\JJ IIIOIC l!Jall [()"(,or the i~~n.::d
~h:1r.:: C;lpH;Il t:uummt :rhrlle 1()'1;, tln~~hnlr!)
Sil:mlk:mtruw~UIWIIIS rn th.:: cum11l<ll1 ~tu~l-.s ul"h:ml..inl~· fru:mcial amlm~ur:mcc emui~~ thm :rre
\lutsitk th•• ~.::up.:: nf !egnl:llory cun~\'lnl:rliun (:unount :~hove 10~0 thrc,ho!d)
D.::!~n.·rl 'I' a' :h~.::h ar biu1~ fwru lcrnplli:Hy rhl"l'.::l.::n.::cs (;unllnnt :11111\ e Ill", rhr.::,huld. 11~1 ul
rel.rlerlt.l'o. h.ll'lhl\)
,\nwuru es...:~erhn1: 15'~ .. thr.::shold
or\\ hieh. ~ir~ni]icant iH\"CSIUJcnt;; m th.:: ~11111111011 stucks of firHrn<.:lal en nile~
of ~rhkh: rl.::li:ned tn' a~wts :rri~illt! lhllll 1\!lll[IOHU)' dil1i:renc:t:s
Natiuua! ,p.::..:ilic re):ul:rlllry :rdjn~tm~nts :rpphed to CET l cnpit:rl
hrve~t1ncnr~ in 'IT(·~ ,r other h:ml-.s c,.;e.::din!~ 1he plc,~rih.::rl !unit
!\ny oth<.:r tkdut:tit'n ~pccilicd by S11l'
,\djuslnr.:nltu C'ET! due Ill insullici.::m ATI ;ur1! Tier 2 to t:O\W d~rhrctions
Tlltlll rt:t!nlmury m!justmcll!s applied tu C'CT!
(~mn
of I to 2!)
2{),7!\0.1')~
i'J,S2:'i,7Ul
%,901
.[!),70!1
I,S311,2:''l
20,K2UO."l
20,307.167
Arlr!itiun:rl Tkr·l & Til-r-1 C':tpit:tl: rrJ!nlatut-y mljustrm•nts
3'l.1.2
2~
21
2Ct
27
28
hwcstm.::nt in mruu:rl funds \·~cc.::rling th..:: prcscrib.::rllimit
lmcstm~nt in Ill\ II i\TI cupital in~trum~nls
Reciprocal cru~~ holdint:s in i\dtlitioual Tier I c:tpitnl instmm.::nts ul' hanl..rut:. fin:mci:tl nnd
nhunmn• ~nl!lll.''
!uVC~IIIICIII' 111 the ~iiJIIlill lii,,IIUmcnl' u!" h:rnJ..iUJ\, !"mandai i1Utl111SIU:lii~C ~nlthes llmt me tlllhllk
th.:: scnp.:: uf rc!'u!mmy C<.IIIS<llidation, whctc tl>e h:rnk docs no1 own rmm: than 1n~n of the is~uctl
share c:rprtal (muuunt :~hrwc 10% thre~huld)
Srgmlic:numvc,un.::nl~ mthc cnpll:rl nr.-umncnts ofh:mkrng. financr:tl :nnllll~ltnmcc entrtrc~ that
:rrc nutsrrle th.:: s.::opc r•l O\·guhtl<liY con~nlr<l:ttwn
Poniun of dcduetrtm appli.::tl 50:50 to Tier·! :nul Tier·:! c:tpital b:ts.::d <.Ill pre-Basel Ill tremmem
whi~h. during tmnsitiumtlpcrirtd. renmin subjccttu dcductiun front arlditiun:tl tier-! c:~pital
2'J
Atlju,tm~nt~
:;o
Tot:rlr~gulnllll)'
Ti~r 1 tlu.:: ht in,ullicicnt Tier 2 lu cov.::r tkductu>us
:rdjmrmcut il[lplict! tn All \";lprtnl {MUll o1'23 to 29)
hi Ar!ditnuml
• :lS \he ll:mh do.::s mlllra\e i\dditiOil;l] Tll'.:R l C:~pit:~l, deductinn is m;ld.:: liom n:r l
Tier 2 C:l]lit:rl:
39.1.3
31
n
·'·'
J.[
35
39.1.-1
rc~:ui:Jtury
ndjusHncnts
/'or1iun of dcrlu~liun :1pplied 50;50 to Tier~! :md Ti.::r-2 cnpitnl based un pr.::-Baselllltreaumnr
which. durinl: tnursitirm:r[ peri11d, r.::m:riu subJ~Ct\11 deductron li-l.)m trer-2 capital
Reciproc;r! r;HISS lwldml~~ in Tier 2 i•l>trum.::nts l)flmnking, Jinanci:~l :rnd insm:urc~ Clt1itics
ln\esturent lllll\\11 Tser 2 capit:~l in~lnun.::nl
lnvcstmcnts in the l.':rpiwl msllunr.::H!s of b:mking, finmrci:~l :rnd insur:mce .::ntilr~s th:1t :~re l.)ntsidc
the ~-cop~· oi'n,;olm!,ll\11)' t.:<.tn~ulitiltiun, \\ hen.• li\C bm1k docs not own 111\.>1~ thmr IU% 1.) fthc b~n~'ll
shnrc capital (nmount nhiii'C 10% thrc~hn!d)
Signi!icnnt im c~hll~nts in the l.'apil:rl in\Htnneu!s is~ued by h:~n\..ing, JirHmd:rl ami msur:mc.::
.::ntiti.::s that :rrc unt>idc tire s.::ope of rr:gu!;umy con:>olidntion
Total r.::gulii!<.U) :rdju~nnent applied 111 T2 capit:1l (stun of31 to 35)
,\clditinn:ll [nfurnratinn
,,,
Wci~:ht~d As~ct~
Ri~k
(ii)
(rii)
(!!'which· Ddiued-hcndlt pcn~11<n fund net :tss.::ts
ul'which: Recogni1..:d ponion ufitw~stmenl in capital ofbnnkint:. lirr:ml.'ialnmlmsnnmc.::
entitic~ 11hcre h11lding 1~ less thnu 10"0 ufthc issut:d cmnmon shar.:: c:~pual ofth~ cnllly
(iv)
or \\lridr; Hc~I'J'IIiletl poni<llr ol' inveslm~nt in cupita! l.)fb:rnhrng. Jin:rncial :md insur:mc.::
entitr.::s ~rhere Jr,,Jdmr 1~ 11101.:: than I()",, ufthe i%UC<I cunnnon slmre c:rprta! ul'th.:: .::ntlly
,\lllounts hdnw the
38
39
411
1?.
·D
.J.I
(Rupl'CS in '0011) ~··--····----
subject to Jlf~·ll:tselllltre:rtml'lll
lr.::i!:ht.·d iiSSeb in rcsp~cl of dcrhrctic•n items(\\ hidr during tlr..:: transitiumr! period \\ rll b.::
risl-. \\eight~r! snh.i~'<.:t to Prc·BllSCllll Tr.::mm.::nt)
llislt
37
2013
21!1-1
·-····-··-····~···
for detluttiuu (hdon~ risk weighting)
in the c:~pital l'fnth.::r !inanci:~l cmities
Sil:nili.::;rnt tu\.::~111\~nts 111 the common ~tuck of Jinnncml .::ntitics
D.::Ji:netlta\ :r~>ets ari~mg li-om lc!llpurmy diO~·r.::nccs (n.::t \If rdm~d tn'o. lr:rhilrty)
,\pplknhlc c:tps nn tht• indu~ion or [lrln-biuns in 'I icr 2
l'm\'isrtm' drt:ihle liH inclu~ronw Tier 2 in r~SJI~'t ofe"I"'Sllres ~nhje{;t to ~tmu!md11ed apptuach
(prior 10 :1pplic:r1iun t•l'<.:ilp)
C'ap1m mdn,ir,nuJ' pW\ biun~ m Trer 2 Ulllkt :.t;nul:lnltt••tl ;1ppma~h
l'm1 i>i<>n~ dituhlc Jill" nrdu~iou 1t1 'lrer ~ rn re>pcct of cs.pll~llres suhie~t lu rmctnaltalm~s·IHrwd
:rppwuch (prror tu iljl[lh.::minn ofcnp)
Cap f11r indn>ion nf jl!ll\isions in Ttel" 2 umkr int~mnl rntiii!!-S·bn~.::d :rpproadr
I,SJ/1,2:'i'J
2,•1UU7H
3.Sl11,15-l
5.RI-1,11lH
threshold~
Non-~truilic:rnt im·e~tm..::ug
2.ll61.-ll'l
39.2
Capital StnH·tnrc Hcconciliation
39.2.1
Balance shcct:1s in
J1ublishetl fin:lnriat
statements
ttut.il'l' n·~.:ulatory
scope nf
cnnsolidaticlll
21114
21114
Assets
Total assl·ts
l.iabililies
~~
63,197.123
419,72J,JJ I
21,475.34.5
387,3111
111,813,5.59
188,992,097
128,575,353
6,282,553
5,4-12,978
(13,197,123
-125,166,309
5,563,(,115
17,2-l..f,(i71
3(1-1,3115,5-11
2,500,0011
:i,%3.6115
17.24-l/171
311-1,3115.541
2,51111,0011
2.575,833
25.633,393
357,823,043
8.1118.811
25.633.393
363.266,1121
38,715.8511
9,111,1144
6,889,197
925.218
(•,25S,IJ79
419,723,331
38,715,8511
1
),111,11·14
(,,SS9,! 1)7
IJ2S,21S
(1,258,')71}
-125,166,3119
21,475,345
JS7,Jtll
10,813.559
188,992,097
128,575,353
6.282,553
Cash nnd balances \'.ith treasury banks
Balanced with other bank~
Lending to linancial institutions
Investments
Advances
Operating Jixcd asset~
De!Crred tax assets
Other assets
Equity
Bills payable
Borrowings
Deposits and other accounts
Sub-nnlinatcd loans
Liabilities against assets subject to tina nee lease
Deferred tax liabilities
Other linhilitics
Tntalliabilitil'.s
Sh:uc capital
Reserves
Unappropriated pro!1t
Non-controlling Interest
Surplus on rcvaluatiou of assets
Total tiahililil'S ~'\: l'quity
(imh-1' l'egulatol'y
H.eftn'lll"l'
SCU[H' of
con:-.nlidation
2UI.t
21114
·--~~~~~-~~~-~~~~~~ (H. u pees in 111111) ---~--~~·---~-~-·-
Balann· sheet as in
publisht•d linanci:ll
statements
39.2.2
Assets
21,475.3-15
387,3111
10,813,559
188,992.1197
Cash nnd bal:mccs with trcnsury banks
Bul;mced with other banks
Lending to Jinmu.:ial institutions
Investments
21.-175,3-15
387,3111
111,813,559
188,992,1)97
ofwlm·h: Non-.>l):.lll/it"anllm'r:.l"lml'/11.1" mthr: t"llpl(a{ m.wrumt•nfx u/ l>cmkmK. ji11cmnul
cmd /111"1/l"lllll"l' t'llll/lc'.l"l'.l"n•t•clmJ.! /()% throho!d
of
wlueb:
rl11• ntptta/m.Wriiiii<'IIIS t,llll<'d 1>1· h(lld/11'-!.
<'.Yt"l't'dlll,!!.l"l"'-!.lllalll/:l'llu·l.'.,/w!d
\ttmlinllllll/\'t'.\"ltl/t'IJ/1" Ill
amiiiii"IW.IIIl<'<'ll/1111'.1
11/ wluch,· ,\Jut/lui Fund1
('.H"<'t'dlllh
'
h
/iiiii/Wtlll
l"t',l.!.lllotory thrl.'slwld
'd
ofwluch: l"l"t"lf'!"IICIII , roHiw!tlmg ofl"ttJIIIttlml"/rtiiiWIII (.wpant/(" for ('I:"!" I, .. 1fl. 12)
ofwluch: oth,·r'
Adv;ulccs
sltor/{a!lmJWtii"/.WI//1"
p,<'lh"l"al Jll"lll'll/<11/1
t'.l"t"l'.H
128,575,353
S39,-16S
6.282,553
!iJ9,4(,;'j
6,282,553
5,4-12,978
'
of total h'l, 0/111!11111 m·cr t•/sgJh/t• f!l"tii'J.HIJJ/1 under IUH
re/ll'dt·.l 111 lkr
lrllf'tlitl
Fixed /\ssets
Deferred Tax /\sscts
ofw/udt: I H: 1' /Jut/
128,575.353
n·~\"1111./illlll"t'
g
h
pm/itvht!uy t•xdmlmg tlmw !11"1'11/'-!. fro/1/lt'llljllll"llr_l'
tft/1<'1'1'1/U'\"
o{wludt: /H:·h
o/'l.l"lll.l.!.fmmii!IIIJ1"rur.l'dt/fl.'n'tlct'.l"l!.\"n~edmg
Other assets
ofwludt: (ioodwtl!
r!fw/udt: lulcmtdl/c.l
r~/
t"l.').!ulillmy thrt•,\J/11/d
38-1,565
63,197,123
26,095,31()
96,9111
384,565
(,J,l97,123
26,1195,3111
96,9()\
.t 19,723,331
.t25,166,3119
wludt: I h•{tltt'tf-h,•l!<'{it Jli.'ll.'lllll fumltl<'lll'·'''/.1"
Total assets
.I
k
nal:mcc sheet as in
limier n').lui:llory
scope of consulida lion
published financial
si:JicJUents
2tll-1
21114
·······-·······--·-- (nupcl's in UOO) ·-··-·····------·-··
Lbthilitics ~~ EljUity
Bills payable
Borrowin~s
O~pO~itS ami other OICCOUn\S
Sub-urditmtcllloans
o(wllld!: d1gd•h· for mdusum 111 A'f'l
r~(wludz:
5,563,605
17,244,671
304,305,541
2,5UO,IlUU
5,563,(,{15
17 ,244,(o71
311-1,3115,541
2,511{),000
2,00U,UOO
2,000,1111{)
2,575,833
8,018,!!11
(;,269,610
m
dJg1hlr: .for mdzmon 111 '/'Jer· 2
Liabilities "!l'lin:;t assets subject to finance !ca:.c
Dcli!rrcd tax liabilities
O(W/1/d/.' /JI'/.1' l'dllfL'd /f) ~11111/J1'/f/
o{w/uc/J; /)fl.l rl'fuh•d /1111/1/11/glhh• 1/Ht'/.1
a{wlud1: I >Tis rdah·d to de/int•d fll.'llltonfund m·t an·e1.1
Other liabilitic$
Totalli:thilitil'S
Shari! capital
o(wiuch: wnotlllf dt,:,thi;:Jor ChTJ
11/11111/lll dr~thh• /ill·
25,633,393
357,823,1143
39,7$1,9411
39,751,940
J9,751,9411
3'J,751,940
8,074.954
8,1174,954
8,t174,95-l
!l,U74,1J54
6,!!89,197
925,218
(;,!!89,197
925,21!!
o(\l'hrch: flo/'l/111/ dl~lhlcjor mchmonm ( '/:'/'/
of' which: por11o11 d1~1hfc for inc/1/x/(//11/1 {WI' 2
.:hg1hh• }ill' mdi/S/f!l/111
"
v
Unuppropriatcd prolit
Non-controlling Interest
of'wluch: portmn cliglhlcJor mdmum m ( '/:T/
pm'l/111!
"I'
A7'1
Rc~crvcs
o(whkh:
"
<I
1,749.201
25,fo33,3')3
3(,J,2M,,U21
of wluch: ollit•r dcf<·n-.•d Ill.\' fwhrhtw1
of'wluch:
Hefcrcn\'l'
w
·'
~IT/
1~(wluch: puri/IJ/1 dt~thk {iw mdJ/.1'/1111 m fll'l" 2
Surplus 1111
G,2$K,97'J
J,702,')7(J
2,$56,009
(o,25!-l,'J7')
3,7(12,9711
2,556.11!19
419.723,331
·125.1 (,(,,3n9
rcv;~ht<ltion nf;Js..~cts
·~f'wluch:
/?cl'tthmtmn ,.,•.~,'1'\'CS on /'ropl.'rl,l'
o(wluch: I fnn:uh:;l'd ( ium.1· /,tJ.I'I't'.l'tm,l/·X
/nnt~t.' vf/ h•fi('/f
on I'(Titl/1!1/twl (rf,·duc/tll!l
;,h
/1'11111 ( '/:"/'/)
Tolallinhilitics & ElJuity
Component of
C:lJlit;Jl
rl'Jlllrtcd by bani<
(ntql\'CS in 'tl00)
39.2.: Basel II! llisclosurcTcmplall'
•·c~ul:1tnry
Snurn• h:1sctl on
n·fcn·nt'l' uumhcr
fmm stl'Jl 2
Common EtJUityTicJ'I capil:tl (CETI): lnstrumcnls and rcscrws
2
3
•I
5
6
7
S
Fully Paid-up Capital/ Capiml deposited\\ 11h SBP
Ua\;mcc in Share l'rcmnun/\ccoum
Reserve lOr issue of1hln11S Shares
Gencml/ Stututory Reserves
Gain/( losses) on derivatives held ns C:1sh Flow ltcJgc
Unappropriated pro1i:s
Non-controlling Interest:; uri sing from CET I capital in~trumcnts issued to third party by
consolidntcd bank subsidiaries (mnount allowed in CETl c:tpitnl of the consolidation group)
38,715,!!50
l,ti36,11!JII
(!-.)
8,07-1,954
(II)
6,889,197
835,114
(\\')
CET 1 hefurl' Rl',I!Lihttnry ,\djustmcnts
55,551,2()5
(.'\)
Commnn EIJUity Til·r I l':lpital: Hl•gu\:llnry ;ulju:.tmcnts
9
Ill
II
12
13
1•1
15
16
17
Ill
II)
20
21
22
23
24
Goodwill (net ofrdmcd ddi:rred tax liability)
All 11\hcr int;m~ibles (nctnf;my associ:ucd dd'crrcd tax li~JbihtyJ
Shortll1ll of provisions :1~<1inst classiticd assets
Dl·l'cncd tn-.: il~Sl'IS tlwt rdy on future prnlit;1hih1~· cxcludinJ•,thosc
dilli:rcnces tnet of related t:JX hability)
;m
19,K25,7!11
%,9111
aris1111~
fwm
(J)
~(II)
(kl- {Jl)
(I)
:(II) - { r : * .x'~-;.
ll'lllJinnu)'
Ddincd-bcnclit pension fund net assets
lh•ciprnc:Jl nnss hnltling~ in CETl capi1:1l instruments
Cash now hcdec reserve
Investment in own sharcs/CETI instruments
Securitization l~ilm \111 sale
C:~pital shortfall {lf reg,ulatcd subsidiaries
Deli cit on account of rcvaltmtmn from bank's holdings of lixl!d assets.' J\FS
lrwcstment$ in the ~·;~pita\ instruments ofbanking, financial and insurance entities Umt arc
outside the scope of regulnlill)' consolidation, where tl1c banK docs not own more than 10% ur
the 1ssucd sh:uc cap1tal {amount above 10':;, threshold)
:(I)- CqJ: * x~-;.
Significant investments in the capitn! instruments tssucd by br~nking, linancial and insurance
entities that arc outside the scope of regulatory consolidation (nmountubovc 10% thrc5huld)
Deferred Tax As~ets mi~ing fromtempnrary difli.:renccs {amount above 10% thresholtl. net of
related ta.x liahihty)
Amou111 exceeding 15% threshold
of which' signilicnnt investments in the common stocks of financial entities
(b)-{:ld)-(010
!d)
(ah)
(a)· (ac)-
3R4,565
(t)
(ac)
( 'umpnncnt of
I'Cj!UI:Itnry l':rpitaJ
rl']Hll'h'li hy h:lllli
(Rillli'CS
25
26
27
2H
29
ofwhu:h tk!i:rrcd w' ;t~~-=ts arismg. rrom tcmpnrar~ th!li:renc..:~
National spcctl'ic rct~ulahHV adjustmcnl:. applinl tu CETI capital
of\\hich: lmc~tmcru m TFCs of other hanks cxccer.ling the prcscnhctl hmn
of which_ Any 11th~r dcduclinn spcctlicU by SBI'
Rct~ulatory adjmlmcnt applied to CETI due to msul'licicnt ATI :md Tier 2 to cover
30
Tnt:tl rcgulatnrv adtu~tmcnts applied In Cl·ll
("mumuu Equil.1 Tit•r I
Suurn· hawd on
rt'ft•rcnn· numhcr
from \lt'Jl 2
in 'UUO)
deduction~
JI
32
33
3-1
35
36
37
3~
Yl
·10
4I
·!2
43
44
45
•1(1
Adtlitinn:tl Tkr· 1 (AT I) C:tpit:ll
<Jmtht)'ing ,\ddt tiona! Ttcr-1 mstrumcnt~ pitt:. any rdated share pn:mwm
of which· Classified as equit~·
of which Chtsstfil·d :1s liabilities
tu!thtional Trer-l capttal instruments b~ucd h~· con~olttl:l\cd :.uh~idt:mc~ :md held hy thtrd
parties (nmount a]ltlll'ed in gwup AT 1)
of which: instrumcnt issued by subsidiaries subject to phase out
,\T! hdnrt· n·~nlatnry aclju~lnwnts
Additional Tier· I C:tpilal: n:~ulatory :Jtljtts\rm·nts
lrwcs\lllCnt in mutual funds exceeding the prescribed limit (S£3P spcc1lic adjustment)
Investment in own/\TI capital instruments
Rccipwcal cross holdlllt\S m/\dditional 'l'Jcr 1 capl\al mstrumcnts
Investments in the capllalmstrumcnts of hanhml:. financial and insurance cnlities th:ll me
outside the swpc oJ'n:gulattH)' cnnsolid:mon, where the bani-. docs nnt ll\\111\\orc than l\J", of
the 1ssued share capital (:mwunt above JO·~;, thre~holt!)
Significant mwstmcnts in the capital instruments issued by banking, financial and insurance
entities that arc outsit!e the scope or regulatory consolidation
l'nnion of dedut•tinn :1pplicd 'i0:50 to core capllal :md supplementary cap1tal based on pre·
Basd Ill treatment\\ luch, durmg tr:msitrunal pcnod, remain subject to deduction from lter-1
capital
Regulatory :~djustments applied to ,\dditional Tier 1 due to insunic1cnt Ttcr:: to cover
deductwns
Tot:t1 of Regulatory Adjustment apphetl tn AT! cap1tal
Additional Tier I capt tal
Athlitiun:ll Til'!' I c:1pital n•cu~-:nizt•d fur cnpitnl :ukquacy
Til•r 1 (':1pital ({'ETI
47
•IS
·19
50
51
52
53
5<1
55
56
57
SX
I atlmh.~ihll'
AT I)
Til·r Z Capit:ll
Qualifying Tier:; capital instruments under Basel !Jl plus :my related ~hurc premium
C:1pital instruments suhJec\11.1 phnse out nrran~cment from tier 2 (Pre-Basel Ill instruments)
Tier 2 c:tpital instruments issued to tlmd p:lfly by consolid<~ted subsidt:tncs !amount allowed
in group tier 21
ofwhiclr in~trumcms issued by subsidimics subject to phas<: out
Gcnerull'rovismns ur ~cneml reserves for loan lnsscs-up to nm.'>imum \lf 1.25% ofCredn
Risk Weighted Ao;scts
Rcv:tluation Reserves
ofwhtch: Rcv:1luation reserves on Jhcd as~cts
of which Unreal ired Gnins/Losses on AFS
Forc1gn Exchange Translation Reserves
Undisclosed/Other Reserves (if any)
'1'2 hl'forc rc~u1atory :uljustnH·nts
Til·r Z Capital: rc~-:ulatory ndjustmcnts
Pmtion of dcductiun applied 50:50 to Cl.lrl' c:1pital aud supplementary c:tpital based on preBasel llltrcatmcnt \\hich, during transit tonal pcrmd. rcmmn subject to dcdw.:tton from ttcr-2
Ill
(Ill)
1..J,. tu2
'"
14,..JUZ
(:tC)
(ad)
14,-UIZ
1-f,.UJZ
35,258.-I..JO
!nl
2,000,0011
2-J,UIIJ
,,,
53'),4(,::;
ft'-1
3,505,112R
2,073,663
l,..JJI,J6S
[l\lr\1(11\
nl'(aa)
(\')
6,068,-t%
c:~pita!
59
60
6\
62
63
6·1
65
66
67
Reciprocal cross ho!dmg~ m Tier 2 instruments
Investment in nwn Tier::! capllal instrument
lnvcsunents m 1hc capt tal tn~trwncnts of banhrn~;. !inancial :md insur;ml·e cnttllcs that arc
nutstde the scope uf rct~ulahuy cnn~olldation, \\here the h:mh dnes not m\"11 mor..: than Ill";, 11f
the issued share capt tal (ammmt above Itl'!" threshold>
Signitic:mt investment~ in th..: c<~pital instruments i$sucd by bank mg. lin<t.IC!al :md insurance
etmtics that arc out~i>!c I he scope of regul:llmy cnnsolidation
Amnunt ofRcgulattuy 1\d_tu~tment applied to T2 caprtal
Tier 2 cupnal (T::!)
Tier 2 cnpital rcco~~nucd for capital adcquac~
E:.;ccss Additional Ttcr I capital recog_nli'ct! 111 T1cr::! capital
Tnt:1l Tier 2 caprt:1l admiss1hlc for c:1pital adequacy
TOT,\L CAl' ITA!. (TI I admissihll- TZJ
tni'J
6,0Ml,.t%
6,1168,-1%
6,(1(18,-l%
-11.326, 1),)(,
J'J.J
Disclusu n· tl'mplatc fur main fc:l\nrc~ nf fl'gulatury c~tpital imt I'UIIIl'l\1.~
('ummun
hsm:r
:!
Uniqm: identifier (KSE Symbnll
(jo\e!IIIUt:
1;1\\(~)
nfthe
lll~t!IIUll'llt
Ucgulalury ll'l'HIIlll'lll
Tran~itinnal Basclll! rules
4
6
7
Shun·~
Standard Chanered ll:mk ( l'aki~t:m)
LimtteJ
StnndarJ Chartered Bank
l.tmttcd
SCBPI.
lk!c1anl
SCI! I' I.
Rde\;U\l IC)'lll:rllon-..
tt'l',ul:ttlml~f !<111"~
L1\\~
Common t:q111ty Tter I
T1cr 2
{'omuuut Fqmtv ltt·r I
!ndtrthk
E!tgthh.: at ~nlui grnup' group & solo
Solo omd Grnup
Solo and <iroup
ln~trumemt~-pe
Ordmary
t\llllllllll tel:Of',lllll'd Ill rq~u!alon l';lllltal (Cuuene\' ml'IZJ{
1X.71\X\O
:.",1)(111.11()(1
l'KR 10 per sh:He
I'KR 5Jlllll per Ccrlllic:llc
'ilmrcht1ldcr~·
Suh urdmatl·d dl"lll· lt:t!IJ!it.v
tllllu~ands. a~
Other T1er 2 !Suhurdumtcd !kill)
share~
uf rcpnrtmg date l
l)
!'iir \;IIUC nf ll\Strllllll!lll
II
Original Jate or t~suanec
Dec 2006
12
l'crpelunl nr dated
Pcrpet11:11
Dated
IJ
( ltt!;inal matuntv 1l:ne
Not applic:thlc
December 31. m22
1·1
Issuer call suhJeet to prior supervtsnry approval
No
cqwt1
Jun..:2012
Yes
May he called, subteclto regulatory
npprol"al, :11 any time alter 6!l1h mnnth from
th..: lS~li:IIICC Jnte
15
Optional call date. contmgentl·all dates :md redemption :mlount Not applicable
"'
St1hsequcnt call dmcs, ifapplic:tblc
Not applicable
17
CoulHHI\ I dividl·nds
Fi-.:td or lloating divll!cml/ coupon
Not applicable
Floaung
IS
Coupnn rate and any related index/ benchmark
Not ap1)1icahlc
6 M KIBt)l{ · 0 '/5",. pa
19
l:_~;tst~:nt:e
20
l'ully distrclltlm1ry,
of a dn ttknd
~hl(llWr
p:~rtial!y
Not :1pphcahlc
Nut apphl·ahlc
d1scretumary or m:mdahlry
Fully
No
Dt~crettnttary
M:mdatnry
E\istcnt"l.' of :;tcpup or tlther inCl'nli\c to redeem
Nn
Nunnnnulattve ur cumul:t\1\e
Nolll'Ullllllatl\e
Cumert!hle nr non·convcrtihk
Nonco111ertthk
Noncnnvert1ble
] f Cl'l\~erlthk·,
COII\er~ion
No
Nm OIJllllicahlc
Not applk:thlc
25
If con1erllhlc, fully or partially
Not upplicnhlc
Not appl1cahk
26
lfcnmo:rtihk, cmll"ersion rate
Nm apphcahlc
Not appl1cahlc
"2S
lfl!onvertiblc. man,latnry or optional emwersion
Not applicable
Nut appllc:lhlc
If convcnihlc, Slk•cify instrument type convertible 11110
Not appllC>1blc
Nut applicable
29
If convertible, spcci(v issuer of instrument it converts 11110
Not npplicab!c
Not applicablc
30
WriiC·lluwn feature
Not npphcnblc
Nnt
31
,,
_,_
lfl\rite·llnl\11, write-t!own trigeet{sl
Not applicnhlc
Nnt applteahk
lflntll'·dllwn. fulltn pn1tial
Nut apphcahk
Not :1pphcahlc
33
lfwrite-tlollll. p.:tnwnent or
35
tl'ak1~t:m1
lrig)Jer ( S)
\l.'mpnr:tr~·
apphc:~hlc
Not appltcahk·
Nm :l(ll>lll'ahk
If temporary 11ntc-down, de\cription ofwnte-up mecham~m
Nnl applicable
Not .1ppln:ahk
Postunn m suhordmatmn h11!rardlv m hqUIJaunn (speed~
1n~trumcnttype tmmetlinh:ly ~enu1r tntn~trument)
Suhor.lm;u..:d d..:ht
tnm~iuoned
36
Non-complmnt
37
If~~!~. spect!~· 11ni1-Ctllll]lliant !i:atures
IN.:~
Ye~
No
Ji.•atu1es
Nn
J').-l
CAI'ITAI.-.\SSESS:'\1 E:"\T Ai'\D ,\DEQllAC\' HASEL Ill SPECIFIC
J'J.-'.1
Scopl' Of .\11J11katiol1~
The Basd 3 rr:m1e1111fk ~~ applic;lbk 111 the Bank both :1\ the con~nl1d:ncJ le1cl .md :1bu nn stauti:J!nnc b:1S!S Suh~1d1:1n!.'~ <tn.' mcluded 11htlc c;Jicu!atmt•
Conso!id;He\1 ( 'apual A1kquae~· mt111 11f th..: Bank using full l'<ln'>oltdiltHIII mcthnd lh!.' SwndarducJ t\pproadt i'> U'>l'd [H tiK· l!:m\.. h1r cakulatint• th..: l\tptt,\1
Adetjllil!.'\" wtrn fnr t "rcdn. /l.!:trkct and ( Jpewt11>na! R1~\..
39.1.2
C!pil;tl Stntctun·
Dunng 2012, th..: Bank ~~suet! un~ecurl·d, suhordmntctl TFCs of lh :-!.5\ltJ m!lhon h~ 1\01\" of ptll";l!<' ph1ccmcnt !"hc m~truml'lll 11a~ ts~ued nt 0 75'\, :1hm..:
11"n
!tl suppnrlth..: capnal ba~c of IlK· !lank and 1s for a tenor of 10 yc;tr~ Tho.! 1n~trument 1~ ~tructur..::d to fl·Jc..:m tn 11111 ctJtml .,emr-;tnnu:ll!ll\lalmcm~
of the issue amount in ~0:!2 The B:lllh. ma~ however callthc 'l"FC' suhiec\111 prwr nppw1al ufthe S1atl·llank, on an~· pmflt palmcnt .. late :1n..:r the (,Oth mnntl1
frnm thc 1~suancc •ktc '!he mstrumem i~ abo subject to :1 !nc\..-m cl;PJ~e me;uung n..:nher prmc1pal nor llrulit mm hL' p:ud (c1en at mawnlV)If ~ud1 palm,·nt
means that the B:mk litll~ below or remam., hdnw liS 1\lllhllHIIll capital reqmrements 'I he m•.trument 1~ l"turcntly r:~t..:d :11 ,\AA
,,r "'
KIBOR
The
lll~lfUIHl'llt ~~ cla~\1 riel I as
a h:lhthl\' :unl
I~ ~uhurdmateJ
to (lll\"ll!erll ur Jlri11CI)lal :wd ]lllllil to <111 other wJchteJnc~\ oJ thl· Hank mclmltnr lkpu~ll~
Fnr fm1h..:r detmb 11fthe l'apnalmstrumL'III curr..:nth part or !"ter 2l·;tp!l;tl.
pka~c
refer
Xnl~
Ill
-1.
---~
%0 Ill
'-----J:"C!·•e'.C-')__ -"~fl ~
--p;-~---
% lloRI
'X,fi''JI
'Y.,fi''JI
~~i[-
%11"111
%WL
%~'!>
(I:UP\'
l!i'f1 I t~t·
...
,,,
V 1\U[ [llllll <ll[lll!lh:~ [•MIJ.
(,1)
V,\\ll plllll ••I I CU
V,\\~J (<l\01 Ol(l:l!th:.1 [l!HIJ.
p:\.i[iih,lU
H!l<l}[ .\;u:uh.lp\' J<li!dl:,)
till~
([()i:
~--ll!Ol.'Uli:
=.=J
i:S't'l.~!O'!IIi:=
!0\Hl'!>f.O'Ii:
I!'Jf''J!>t'!it
_li'JJ·
tart·
vu..tl)\
Hl.'!O!O!!'Ii:
'JV.LO.l
~~'l (Jlfffi'ilil!f.'ld<l ii>fJu.lubtulh:iU jU~UITJ
Lc•J'sJH't
Y'm fiiiUIJI"~-~do
11;:-p)((i-
I!ST'l.!lt·'s
IU-%1
i:'l['IJIJ
!OUU''JilU'I
/.['J'J()<J
STL'SI'!t
'1~1.1
UU9'UO[·
,,;iucl[:l\;[ u,l!,llll:J
'1'1.1 lh>IIISlld .\J!llh;;J
!td/,~C!
r.;r'JIIt't
f,w,'<;U
Sfl'!ltt
'1'11,1]11.t]\,1J,llll[
lf5iiilll.ld~"j'ill:f\lfclS iir1:'1;'.f•jii,~jlf1Hl j<~[-IU,'Iui;>Jllli<~~flil\!UCJ
.'f~!H
;:r,o-r;:;:
]l(,<;'•Jtl
r,n;:·;:;:
n1
099'tl
Rf,S''Jtl
<;Lo';:;:
t)')'J'tt
n·Cl
o~L·u;:;:
/i>.'fJIIJ\'
j!Zil~!lll:l
p;\J$!"J
.'JI'<II/ ,'fii!)/11/Jff o1l{l llf .'f~!lf ,)J//.Wd,\'3 ,ljfllil.,1
t~t.'11Cl
~Uli'i:lll.
-;-:(Jit'l 'I~''IL
li•JL .. ~ii~·-,
~
q (Ul;"to
Mt.'tUfU
t:M'IO
uu,·~t.!:i'c.i:
Uhi''JS•l'i:
tlof'C.I.I'i:
(,](,'lll.i:'ll
tll.~'i:foi:
LU'J''Jil''JI
~Ll. 'tliCI
~~·.:·uu,
Ulli:'lll.
P·'l'P' PV•~I\1
-u.~·t.s:i/;:
JI]IZI.I,)JII \!.1U,YJA]]!'III~IS
loffo'Lil
Ll•ll'l.i:l'l
1'J'J'II'1'1
';\);\
~1'11"!1 ,1.1lll~lll((>J1.1,]
s,>,>llll!ll:ll!) Jti;\Ut\l~d.>~]lW\1']
P·'IC(ZIJ P']l1llll-UilN
JJ,>1]S
1
i"~;\i.I'Jt·l
J·utr.cil·'t·rJ
/;~zr~c.!-- r''"o:ui'o:l-qt_'i..'L!'•I
Co')<J'!>Si:'')
:n~·l~n·~
IIUL'I.Ii:'i:
·•~1·: I tl'l
lilco'i:nh
'Jl.l.'t·•JS's
~II 'llilo'li
II u tl.l 'ttl!
rt.!:i'n!.'t.r.
1)lilo' 0J!>L'S
ll~'fHo0: ~I
')fll'lil.i:
'h ~.-~~I
Si:t''J!il
~'l'l t~ I
I r,S"'L1'1 '!•I
Lfi'Htl~
1Uo'llli-'n
llt'UL<:'I
l.%'lii:l)
ll.l.'li:i:
hi t"J·()]
;:r,;:'uc,
II'J'liMI
w;:'t.Jto'li
J;<Jf"h;:t:'J
SLI·'•JS:II
~tL't:I·(,'J
SU:"LI'l
~.~nt
.'.'Jf'fl
,1~UI1111U•JJ0
~).'~\U l~l]l()
spssv J'ZI~I:l \lmwr.•do
sum1J ,lll(l lSI:,]
<.1~\l~.il "'II/ ]11lJU;'IJ!lS,l}(
ll111·'n
I.S~'t·s:t.'r.
·'Will<ll<l,)
{,(,<J'!>I.!O
tn!l't.;:
i:t9'!.'1
''1"''11
SJlJlJU.>lliP.>S~IJ<]II,(
lliii,\1,\IOS
Sjll,ljl:.\lllh,> IJ~l~.l
;y 1['11,)
(:>JthinSfJJ~I:U.iddi!lf.17.ip.it~i•lnn~ ·''' 1.',1fqns ~<>1(\>jT!il~j
.'fV!/JI!/Ioll,}
.... ·········-----------lnuu. "!
~·
~-'·"l"lll
nm:
t!Ui:
Ill<:
···········-----------.......
'SJ>l~"''"""""·''""'t!l"!·'"·'"\ 11'!~1
tw~:
SIU~IU<U!Oh.l}l 1111!<~
•:.11\1]~'] jlZIJ1~:ll(IU1 ;\II) ~:>puobli:ZI '\~U J0f1!1U .llJI lliJ 'lll;'llU,>HUh~IJI!IIdl!.l ZlllJ.
'S;\lll1
,~.'lll~ll<J \~11111] ;'1111 Jll 1J.lll·' l(ll" J>.>u:I~O~W ~']~II Zllll JO :1\!l~·'lf-'1 Sl llllll ~0l11~1p Jl!Jldt:;-. 11 Jll ;'l.\11.ll~ Ill ~~~ US ,lpllOJddy J<>)ll.llpH] ~!~11!1, .ll!l J~.10 jl~.U.lJ-'U[ ~~ ,l(~llnu!.IV I'•"IPWPIU!JS, JlJ(.
J\1.>{ IJ~ll;> Ill ~;'lUI) \9ll11U<J ;>ljljll I]:>CJ %\IJ": S.>,ln:t(;l ]I!Jllh~:> \.llll\1]11~;'1! ~~~~ JO U<llll~IUUHIS J)thlll~ ~~~~ JO ~:lltl;I.W J\1:1.\-~,lJ\jl Jill Sl! p;'IJil(ll;'>lll;l ~~ ;.OlJli1j~ Jl~l!lh!~ (lll<ll ;111.J •
.)Jllj \';"llll~lU] )l:ljl
I' ' " ' · ' ' ' · "
!UJ
.1(111>~111 ~'tlJoi JU jJ.\;1( ;IIJ:;i;>IOi;h~ ;11(1 pm~ :0111( \~,l(II\IH)lt:>,\1;\1: l<~) ~~li;\IJ,>d~;, SSOJ '\SIJ Jml<liWJ,ldU ,llJJll,l,l.IIP'\ d!ljSIIUl)I!J;'II ;op1 \\• (IJS111!1l! ;11[1 J<lJ
llJ.liJ ,lUll \~Jill'll<J H~l(l Ill oil(\
\q
p.>U:ll~Sil SIOJ;\1!( 111;'11)
.\q
;llll\l;"llll ~\Ul;! ihll.\[dllllllll ,\<( p.>U1J11:1[1l:'! S! ;Ill![ ~PII!S1U] lJ"'.'I .lllj ;>\1.11!1[~ II!Jl<h:;o
.lllJ,
,\1.\l.UJ
·~~~~~~ ~\;"lll!Sll<l ZIS.ll]l JO l(;\ll,l
Ul!(ll II .llll'<llh;. 'J'Il J!lUUIU:<~Ihl .J'' .1(1~~~ .\~~~1( Z\1)1 Slll]l [11111 ~lllllll!l;'ldO \~~111\IH) j(l ~JC:lS ~1{1 J<lj .\<o.nnJ ll SU S~<\.I~S llll[l J0111Jljl1ll ]WOJt( ;11[1 Sl Jlll'l~lll ~~u.lil ';'Ill!] SS~U!Sll<j tpU;'I lllljll,\\
<JOOi: ,>UUf !.<: p;.lllJll!O "N U:JII~.Il,) ;.pt.\ <HIS .\q 11\\<lll Jlll!lll!.I:I1!J~
·'!(ll,l<l 'll ~~Ill( SP\ll~IUJ 11\oh,l ·''·'1(1 <IIlii p.>th!CIIl ,lJ\1 ~ll<>l)llJ;IdO S,'\11111( ·li(.J. .>o1lll;'l~l111J (WJ,ll (1111~ )UJUl;\~CUUIII J,lSSU 'S;.;!pJ.1S ,\~U~>'hl ')UJlli;IIIJ;'I~ ]1111! '111;'11\l.\cd '~llll'jlli~!J(Il!~J:IIIIlll<l~
,lll!']lll'<( [U:\.11 '~;'1]11~
pm:
;hupt~ll '.>.1111llltJ .1)1111Hl.Hl~ :~.'IIIIJ \\~Ul~IIIJ \l(iil~ U1111 p.1pt.\lp ~.Ill ljlWj] ·11(1 JO S:>li!MPC SS;'IIII~\11) Z\1(\ ',>iiJI~I(:'! Jlll!dl!~ ']~lJ Jl~UUIJllJ.ldU J<l 11\!!llljll;\[ll~ J<l;J
JIUIJIJIII llll!JCinll ~'!I \lm~n ~'O.l .ljlll)~;\.1;1111! lOJ ZlilJClp
jl'JUh::> ~'11 P'jll:l<l ]11.1i>UZ\;! pull JUl~,ldSJ<l \lll!OJJO: S;\~l!ll].lllj\1 <!tiS ,\t]J'•'['l\tHd .{ilOJIIjl<JI]IJUI ;11JIU<l
p;-.scq 'O!JOJU<l!!
Sll \11lj~U);\1Sillll JOJ )11:1\U;\JillhJ!(l~\!lh~~ S\1 SJ)llpl~ICJ ljllll£1 ~IIJ,
S;IJI~J~fl\1;'1~ !lUI 11!~ p1111 ~~~~!( f SUtiiJI:IU 'S;\JJIII~.Ilinil lill<llfi•l.llll] 'S>l:llmUCilil m:JS!~ll,] JO JllZIUlll.I~Ml!) 'ZI(Illl;'lll! (lJMI S(IU~H!!IIl,) 'JU;I\U;'IJU\hJt
Jl'll!i>'.l
.1" ll<llJll(l1~(11~
.1\[\ hlJ )l~J.l)llll"~ .1\(1 Jll J1Jjj;'l ~hl!lll:hJUU ~~U Z\1[1 )lllH1.1.ll~ 111111 iltll']lll .(<JiliiiPI~IUllJJ .lll)llll)llld 11:1[1 ,l;;pun .lHI'<IlhJ ~II ~.l;\np.ll ']llll\1 ;1111 ' 11!1S .{1(11.\\llp ]11111
,,, ')ll.llll,'llllh.>l I!U\Ul]UIIll
pm: l1l1,1lll.l \11(hJ'ill].> ollJI $);1~111 pne [11J,11\!I!t>.l •'[<jlollp Ull .(q ]>~Jil~J~ \1 llll!I~~SllllJ1 ll ;11;'11[,\\ 'Jli:IUI;'I\11~11\:Ul (1111: llO!IUllJl~.\ 'S[l'J~II~!lU~ J<l .\J!(IIJ!:fl]~ 01 p.ll~i!JJ
l[!"' '11l!IC .>llll( Li: p.lJil)l );II " ' lo~[ll~ll.) IJ;>l)l .>ptl .JI\S ,\t]ll\\li]IJIU~j 'll<liJ~III\\UI.llJI ~\\<l!ltlJ 'jll\11( .ll[l ',IJ~UilJthiV jl;'I~1[1U~Jllli~IS, Zll!ll•1!'Ull110111l;hJI[\I 'j'l~\ 11(1;\I.)Jtl \,>sml.nuJ Jl]l lllJ
<)U.,UPJl~)' ]l~\.,Ul:Ul! .1~,1111
Ill')
(o~
.>u•u Ill J'·'(<j~l .~II! ~.> ltl\1>1(\,'.Jt> ,,,[ \1 "'"' 11:\ ;'iUIJl~J lllJ j!;\'11 'I \I,).] ·llll 'Zillt'IU(\~ p,ll[' .1;\UllJli!J.lJll pill~ UU i[I<><J ltlJ lliJUJIIIId Jljl;ll;> ,,~Hill] ;\\(1 ~'111;11~ l'·']ldth~ ~[IIJ.l!'l~UU~ ;'ll\i ~'·"!.1.
'·'IU~tl<l\,l Jlj>;'IJ;l ~!Jl.1;><b h~] 'llj\lt.l\1 '\'II ,lnl\U~p lllJ (SJ\'.),J) ~;>l;\U;'I:lU ~UIICI p;o.\o.U!th~ ,[HS JIUll.>[<JllliHI;'IJ S:ISll ~111111 ;'111.1, )pl!tiJthlV [l;\"IIJ1.111p!HIIS, ;'ll)l s;o~n 'j!Wil ·'l)l '']~U lljlJI~ lll:J
<IllS' Jl> ~;llli[•1(Ull;l ·11(1 J~d
W '1~11
(llU<liii!JZidn pm: J,1'j lUlU 'Jip,>n lUJ '\ll~lll~llllhZil Jlllllh1;>Jtl ll\111\l(ll~Jil~ ~l]llll SJJ~II!H: ~1111!] ;>IJI 'O!JC}j ,\~il\lh;\[1\' (\11llhl.) J<l IIOIJI!IIlJ(l::l
SUU]1<i<l <hi!\!CJ•jl~l!<iU~ (lUll Jl'l!ih1.1 Jll .\ld<in~ ;'1]<[1~[11!.\1:
'P'\nlm ~<JI
(11
1'1111<11~1' p;.Jst~;\Jl<IJ
(:~
:SJ511;\ZIIUJ 1[1\\0Jfi SS;IIHSI\<jlll ~lljl [1\Jilh!~ Jllj (Hllllll~[l
{I]
'\('H1111VI5 ,1JliH!J JO j!IJUISS.~5S\l .lll<l fl\111 ~IU:'HU.'l.l!llhJI li!J!Ih~~ .(n>ll~]llfi,ll )UJJJn~
(11
••I
1<'111 .iu!w~u:i!s" s1: puc s:imJCJ I!JlZI.I~ unddns n1 Jllltd<1~
l<',J
JOJ
Utll)l"Hl (1111lh~~ ~.ljlW\1 ;oqt l/nl-\\;'11 \;\I •'Jll[\1 )llll\JJ~l~ U)ltl UJ~l~l ;>m ~1.'111:111 :lmiiOJl<\1 JI(.L
\J~.liHI\~1 jllll<h:.> 11<1 p1:tlun \l;'llll)~J ,1lJijlll11 ~)U,1UI01:.s SSJlll~111J Jlllll ~~~llpll.Ui '~tii~C Sllll!ldlllll\~1~ 1!11\t>lol S\;1111Sill) U\JIJlli;"IJl]511<l~
nJm \;'l']lll 1<~111 "_,,,ttld ;imu<WJ<i JPlllllll! '· '\Ul~l/ .1ljl IJII.\1 p.lJl~Jol.lJUl \I \11(1
,(,bJl~tJ\ .ll]l Jlll<ldn\ 111 'jlllliJ ,>1[1 .(lj p.1UIIl)UU:Ill ;'1111 Jllllth:~ J<l ~111.1Htlill1Ul~
JU.li.'.U'I'
.11)1 Jll \1111 tmlllllJ<hl
m· p111: J111llhl;'l jll \j;l.\•'1 ,>u~:th;\]11! 11~1)1 ,111\\IIZ\ <II dp!J S.\\;\!.\;'11 .II:Jna.>l( ''11l~fl ,ll(l J<l ((),)')\') ~·'ll!llllllll,) ,\1!1!•1~!'1 pull ~~~'V ;'It[! ,\<)JIZIJt'l!lllHU pull jl~l\,li\M ~~ lllliJl\<HI p:11d1:~ ,1ll.J.
,>~U.111!JlnU 1•1']Jl!lU puv J01)]l.1J:'! 'JU~.'l.\11! OiUIIIIll)llll'UI,1U1!l·111111S ,11111~ [111~ Jlllt'.\ JZijlllll(~Jl~lJS <lii)S!'II)XItul 'S\lll)lll.l(lp~.l~ )'11<1,1 Ullliii!I'UI \11 pUll SJili)I!IU
W \JII.1(11,1JU1h;'ll Jl:ji1)!1J .{1<1l1qn:!~l 1,1;1111 <11 '\\;'IIUSIUJ Sl! JO \U,,llllh>IJA;\Jl ,1!]111!11!\ln\ Ill ;\\lllllllJilh:~ \111111\\ I~ ll!lllll!l:lll Ill Z\li~;'IJl SJI .\q U,l\IIJl Sl lplltllddc IU~III~,jl'U\llll JBl!l!J:,l \~Hill[ ,1111.
.bl:nll.lp\' J11t!d".)
~·r,r
39.6
Types of exposures and ECAI's used
Corporate
Banl~.;s
Sovereigns
JCR- VIS
,/
,/
,/
I'ACRA
STANDARD AND I'OORS
,/
,/
,/
,/
,/
,/
MOODY'S
,/
,/
,/
FITCII
,/
,/
,/
The Bank adheres to the mapping instructions issued by SBP on the Revised Regulatory Capital Framework under Basel 11.
issued vide BSD Circular No. S
2006 dated 27 June 2006, vide BSD Circular Letter No. 09
2007 dated 24 August
2007. vide BSD Letter No. llSDIBAl-2/201/l\41/20f}t) dated 2 lkccmbcr 200t) and vidc BSD Circular No.5 or2010 d:~h.:d
or
or
5 October 2010 with regard to credit ratings to be usctl. These are ns lhllows:
LONG-TERM 1\ATING GRADES MAPPING
Standard & Poors Moody's Investors
Ratings Services
Service
Rislt \Vcightagc
2()1}'()
Fitch Ratings
PACI\A
.ICRYIS
AAA
AA+
AA
AAA+
AAA
AA I·
AA
AAA+
t\AA
AA+
AA
AAA+
AAA
AA+
Ana
At\
A
A-
A
A-
A
A-
/\a 1
50%
AAA+
100%
A
Allllll·l
Aa2
Aa3
AI
A2
A3
Baal
llllll+
llllll+
lllllli·
llllll
Baa2
llllll
llllB
llllll
Bna3
llllllllll+
lllllllllli·
Bn2
llll
Ba3
llll-
Ill
ll+
llll
llllIll·
llllllllll+
llll
llll-
150%
llllllllll+
llll
llllll+
ll2
113
150%.
ll
llCCC'+
ll
llCCC+
CCC+
ll
llCCCI
CCC
CCC-
CCC
CCC-
CCC
CCC-
cc
c
cc
c
cc
[)
I)
ll
Fitch Ratings
PACRA
.JCR VIS
A-1
A-1
A-2
A-3
Others
A-2
100%
lla I
Cual
cc:
Cna2
Caa3
Ca
c
c
CCC
CCC-
D
SIIORT-TEI\~1
50%
100%
150%
ll-
Ht
--
c
RATING GRADES MAPPING
Risk \Veight:tgc
20(Y;.
ll
Stand ani & Poors !Vloody's Investors
Ratings Services
Service
A-1+
A-1
A-2
A-3
1'-1
Fl+
P-2
Fl
F2
P-3
F3
ll
NP
ll
Il-l
c
ll-2
f)
ll-3
c
A-3
Other~
--
~0.
RISK MANAGEMENT
Through its risk management structure, the Bank seeks to manage cllicicntly the core risks: credit, market.
operational, country, and liquidity risks. These arise directly through the Oank's commercial activities whilst
compliance and regulatory risk, operational risk and rcputational risks arc normal consequences of any business
undertaking.
'!'he basic principles or risk management roll owed by the Bank include:
BaluucinJ.: risk ami return
Risk is taken in line with the requirements of the Bank's stakeholders. Risk should be taken within the Bank's risk
appetite, consistent with the approved strategy. Any such risks arc avoided which have a material probability or
causing linancial distress to the Uank or its clients or customers.
Rt!SfJOIISi hiliiJ'
Given the Bank is in the business of taking risk, it is everyone's responsibility to ensure that risk taking is b~th .
disciplined and focused. The Bank takes account of its social responsibilities and its commitment to customers. in
taking risk to produce a return.
Accoun ta biliO'
Risk is taken only within agreed authorities and where there is appropriate infrastructure and resource. All risk
taking must be transparent, controlled and reported.
Au tiCijm tion
The I3::mk !ooks to anticipate future risks and to ensure awareness of all risk.
Competitive At!t'Uilt(fge
The Bank seeks to achieve competitive advantage through efficient and effective risk management and control.
Risk 111l111l1gement
The Bank aims to implement best practices ami have a specialist risk function of international standards, with
strength in depth, experience across risk types and economic scenarios.
Ultimate responsibility for the effective management of risk rests with the Company's Board of Directors. Acting
within an authority delegated by the Board, the Executive Committee reviews specific risk areas and monitors the
activities of the Executive Risk Committee ("ERC") and the Asset and Liability Committee c·'AI.CO").
ERC headed by Country Chief Risk Officer (CCRO), through authority delegated by the Board through the Bank's
Executive Committee, is responsible for credit risk, market risk, operational risk, compliance risk and regulatory
risk, legal risk and reputational risk. ALCO, through authority delegated by the Board through the Bank's
Executive Committee, is responsible for management of the Bank's liquidity, capital adequacy and structural
foreign exchange risk. The Pension Executive Committee, through authority delegated by the Board through tilL'
Bank's Executive Committee is responsible for management of pension risk.
The day to dny responsibility for managing risk rests with CCRO who oversees and manages the risk through a
team or managers: Senior Credit Officer responsible for credit risk in Corporate & Institutional Clients and
Commercial Clients, Country Credit I lead responsible !Or credit risk in Retail Clients, I lead of' Special 1\ssch
Management responsible for remedial risk management, Head or Credit Risk Controls responsible for collateral
management, security documentation, credit MIS <md controls, !lead of Market Risk responsible for liquidity risk
and risks associated with price movements, arising from interest and exchange rate movements and !lead or
Operational Risk responsible for enterprise wide operations. The 13ank has established policies, procedure'>,
processes. and controls and have provided the Risk team adequate support by way or risk systems and tools !'or
measuring and reporting risk for monitoring. controlling. reviewing and managing risk.
40.!
Credit risk
Credit risk is the risk that n counter party will not settle its obligations in accordance with agreed terms. Credit
exposures may arise rrom lending, trade finance, securities and derivative exposures. Credit exposures include both
individtml borrowers and groups of connected countcrpartics and portfolios in the banking and trading books.
The Board of Directors has delegated down the authority to ERC through the Bank's Executive Committee to
establish risk appetite and make recommendations to the Board for approval of risk appetite and policies for
managing credit risk. The CEO and the Executive Committee in turn rely on CCRO and the Risk Committee to
determine these and recommend ror their support and noard's approval. The ERC is also dckr.atcd down by tlu:
BOD responsibility to delegate credit authorities to independent Risk Officers.
Credit risk appetite is established through business strategy papers and underwriting standards by the business
managers, which arc approved by the Board once recommended, and supported by the Executive Committee.
Specilic procedures for managing credit risk within Corporate & Institutional Clients, Commercial Clients and
Retail Clients arc determined at the Senior Credit Oflicer and Country Credit \lend levels !'or their n:spcctivt:
jurisdictions with specific policies and procedures being adapted to different risk environments and business goals.
Credit analysis includes teview of facility details, credit grade determination and financial spreading I ratio
analysis. Portfolio review, Early Alerts and Stress Testing based on scenario analysis is a combined responsibility
of Client Relationship and Risk and Finance function. Client relationship origination and credit approval roles arc
clearly segregated throughout Corporate & Institutional Clients, Commercial Clients and Retail Clients segments.
Credit concentration risk is governed by specific policy, the adherence to which is managed by the Executive Risk
Committee (F.RC). Credit concentration risk is principally managed based on three components: single name
borrower exposure, industry concentrations and product concentration. In addition to the Sl3P specified Prudential·
limits on single or group exposures, limits arc also established by the CCRO and appmvcd by CRC in line with the
Credit Rclcrcncc Lcvelli"amcwork ("CRL").
40.1.1
Corpon1tc and Institutional and Commercial Banking Clients
Within the two business segments, a alpha numerical risk grading system is used for quantifying the risk associated
with a counter-party. The grading is based on a pmbability of default measure, with customers analysed against a
range or quantitative and qualitative measures. Expected Loss is used for further assessment of individual
exposures and portfolio analysis. There is a clear segregation of duties with loan applications being prepared
separately from the approval chain.
40.1.2
Retail Banking Clients
Fo1· Retail Banking, progl'am based standard credit application forms are generally used, which arc processed in
centrnl units !br different products and market segments. Retail Banking Analytics team has developed Bun:nu
scores and uses Bureau data for portfolio monitoring and lbr underwriting new business.
40.1.3 Segment by d:tss of business
21114
Pcn:l'nl
{H.upCl'S
in 'IHHI)
Chemical ami pharnw.:cuticals
Agribusiness
Tc\tik
Conum1nit:atim1
('nnlini!CUdcs and
('nmmitmcnts
Deposits
,\d\'anccs- Grnss
Prrccnt
(H.IIjll'l'S
IJ,H')9,91iH
5, II 8,266
•).27
J..tl
{RIIJH'l'S
i'l'l'l'l'UI
in 'ntltl)
in 'Uiltl)
.t,21l9,H2H
4-l7,393
I.JS
S,7:'7 ,658
l),l).j
tl.IS
2(,,197
II.IU
1
J2.R-13,153
2UI9
1,773,7112
11.58
J,27 J,JI).f
J.n
5,233,-lS-1
J..t9
12,1-19,161
3.9 11
-l,-l-IJ,SI9
5.0.1
1.311 1,117(,
fl.-13
O.(iJ
lusurancc
Telecommunications and
91,9511
11.06
1,914.6-11
175,3112
11.20
Ccmcnt
1.972,388
I.JI
-l,(l75
225,1l.tS
11.26
Sugar
2,18-l,lBil
I.·H1
3.496
62,-HHl
ll,U7
2,11711,735
I.JR
1,337,6711
11..4-1
2.-Ul7 ,7liS
2.73
-I,S71.15S
3.25
J,.uCJ.~J7
u..ts
2,51)7,2~-1
2}15
2(17,868
II. I-I
625,892
0.21
38,11-13.-158
.tJ.l~
1,359.030
0.~1
-1,-1611,-1-ltl
J.-17
<.1113.316
-1,(17
17 ,27tl,U36
11.51
3.:iH7,525
-t\17
11.85
111.55
1-1.22-1.-115
93,181
-1.67
1,273,8119
tl.03
(1(1,78
211.192
(1-15
11.!1~
infnrm:11iontcchtHlhlg)'
Automnhilc ancltran-;pclrlation
equipment
Tmnsport:uinn
Financial
Electronics and cb:tril:al
appliance:;
l'mductinn and tran:;mi:,:;ion
l)f energy
Shoes ami il!ather gomw:nts
Individuals
Others
15,831,-13~
2113,218,3-13
-15,797,2-1~
311.52
57,09-1,691
18.76
21l.3(10.193
23.11
150,1125.353
IOU.IHI
30-1,305.5-11
IOU. till
88,11911,22~
lllii.IHI
:wJJ
<. 'ontmg.em:ie~
Advunecs- Gross
Pcn.:ent
{Rupees
in '000)
Chcmic:1l and pharmaceuticals
Agri business
Textile
Cmnmunication
Insurance
Telecommunications and
in!Onnatinntcchno!ogy
Cement
Sugar
Automobile und transportation
equipment
Transportatitm
Financial
Elcctmnics anti electrical
npp\ianccs
Production and transmi'ision
or energy
Shoes and leather garments
Individuals
Others
\C0~
10,251,784
8,676,633
3·1,057.909
5.523,026
6.09
5.15
20.22
3.28
De osits
{Rupees
in 'OOll)
4.389,750
311.(}110
Percent
ami
('nmmitmcnts
Per< en\
(Rupee'>
in'()()())
1.48
3.039,5:17
.1.81':
0.10
-10.712
2.1-15.350
1.550.752
2.7-1
I J86,X37
12,266.053
1.160,8.13
•1.14
0.-17
1.98
0.39
7.167
0.00
1.895.336
0.6'1
52,109
()_fl7
2.940.894
1.75
2.19
42.081
0.01
on
4,0!-:5
0.00
217.895
95,2(12
0.21
O.M
0.39
1.671,820
4,112·1.157
27,1J7.097
213
5.13
}\_(10
3.695,392
0.12
3.105,305
4,550,181
2,75,1.318
1.84
63•1,871
2.70
1.6·1
1,8S9J.:52
1.157.68·1
3,60K,66X
2.1•1
4,521,:'i 11.1
1.53
.1."}(,0,774
.J_79
24,06.1.211
1·1.29
2.09
10.86
25.75
11,959.333
·-L0-1
I X.OXl-1.312
13.92 1J
19·1 ,286.'131
60A27AHJ
21)(1.377.146
0.01
510,006
1.369
16.102,280
7XA.n.·l•l2
23.06
{) fJ5
3.52•1.374
18,297,782
4.1.369.883
16!-:.426.527
100.00
1
65.53
20A 1
100.00
(J
00
20.58
10000
.ttl.l ..t
lktails nf nuu~JH'I·fnnnin~ :ldValH'l'S and SJll'rilic provisions
hy class of business Sl'gmrnt
21113
2111~
Cl:l.~silicd
Classified
Advances
Sperl lie
l)rovision
hdd
Advances
Spccilic
Provision
held
-~-~-------------~---------------~--- (Rupees in 'llllll) ------------------------------------
-Hl.l.5
306.8()4
14,999
6,757,983
5,997
Jti2,56J
-19,326
2112.(1]7
I (1,9112
IJ,253,3.t.t
211,9 I 0,535
306.HII.t
14.999
7,197,015
5,997
5112,-Wtl
-19.326
2112,617
16,9112
l-1,799,(173
23,1195,733
Chcmicnl and phmmm:cuticals
/\gri business
Textile
Footwear und Leather gannents
Automobile amltranspllr\ation equipment
Fimmcial
Product inn and tr:lll)'.llll\~inn uf e1ll.:rg.y
lndividm1ls
Others
3-1).(,32
!5X.f,7·1
7.X55.0 16
5.1J!J7
293.1-ll
IJO.X.\(1
7.675.6X I
5.'N7
3·10.210
.\29.5:'5
19 ..\2(,
<19.326
222.1JO-\
·I.MU.IJX2
2~2.1Jtl.l
Jt.ns.(,r~x
3.67X.tlh2
IJ.212.0!J7
2·1. 1J.\X.·IYJ
2].(127.5!1
ScJ.,:IIIl'lll by Sl'Cinr
2111-1
('nntin~-:endes
AtlvanCc!;
(Rupees
in '01111)
Public I Gtwcrnment
Privutc
(,,167,8(1{)
1"3,H57,553
150,025,353
ami
Cnmmitmt•nts
•:;,,
(Rupees
in '111111)
Ill' )()SitS
%
(Rupees
in '{11\U)
-1.11%
95.89%
4,9-15,769
299,359,772
30-',3115,~-1 I
IIIII'Yo
'!!..
5.77%,
9-1.23%
lUll%
-1,795.111111
7H.25-'.IIl7
8J,II-IIJ,IU7
1.63%
9H.37°/.,
100%
2013
c_·lmlingcneics ami
Pub! ic I Government
Privme
.tll.l.6
lkpnsits
Advances
(Rt!pCCS
in '000)
%
11.233.77(1
157.192,751
6.67%
93.33%
16R.426..127
100%
(Rupees
Conunitnlt:nts
in 'O(JO)
'1.593.51':9
291.7H3.557
296.377.1,16
..
S.-100.2(1(,
70.0(17.!99
?S.-167.-H•S
1.55%
98.45%
100%
10.71";,
X9_2tJ•~·;,
!Oil"U
Dcta ils of nun-pl'l·fnrm ing :uh·anres n ntl specific provisions by sector
2013
2111~
Classilicd
All\':liJCCS
Public I (invermnent
Private
-111.1.7
~
(Rupees
in '(100)
'Yo
C:lassilied
Advunces
Specific
l'ro\'ision
held
Spccilic
Pnwisinn
held
23,()95.733
23.095,733
2!1,91!1,535
211,910,535
Prolit
before
Tot:1l
assets
taxation
employed
24.938.'139
21.627.511
21.627.:"_1 I
GEOGRAI'IIICAL SEGMEi'\T ANALYSIS
2111~
Kct Assets
t•mployl't!
Contingcncks
:111d
Commitments
-------~~-~-~------------------------ (Rupees in 'Utili) -----------~~---~-----------------··-
Pnkist:m
15,36H,IIIl7
-119.723,331
61,91111,2HH
HJ.U-19,107
15,J(,S,IItl7
-119,723,331
(,J,911ti,2SS
83,11-19,1117
2013
Pro lit
bclbre
taxation
Total
assets
t\~sch
crnplnycd
Conting.enc1e~
aud
Commitm~:nh
L'znploycd
-----------~--~-----~----~-{Rupees
Pakistun
Net
in '000)
--------·--------------~----
16.36R.l !-:5
•105.329,850
56.951.XS9
16,368.1 85
40:U29.850
56.951.XX9
~!l.l.8
Marli.ct Risk
The Bank recognises market risk as the cxposun.:s created by potential changes in market prices and rates. Markt.:t
risk exposures arise prinw.rily from interest rate nnd foreign exchange related contracts. The Bank has no
significant exposure to equity and commodity price risk.
MTCR approves the limits within delegated authorities and monitors c:-:posurcs against these limits, and is locally
under governance of CCRO, who agrees policies and procedures and levels of risk appetite in terms or Value at
Risk ("VaR"). Limits arc then proposed by the business within the terms or agreed policy. These arc agreed and
delegated down by RC under delegated authority from the BOD. Policies cover both trading and non-trading
books.
In addition to market risk policies, as well n.s VaR and other market risk limits. independent stress testing of
portfolios, factor sensitivity measures and derivatives nrc also employed as additional risk management tools to
manage and hedge market risk exposures. Risk models arc periodically back tested against actual results to ensure
that prc-dctcnnincd levels or accuracy arc maintained.
40.2
Foreign Exchange Risk
2014
Assets
Off'balancc
sheet items
Linbilitics
Net foreign
currency
l'XjlOSUI"l'
·------------------------------------ (Rupees in '000) ------------------------------------·
Paliist;tn rupee
Uni!ed Stales dollar
Great Britain pound
Eurn
Swiss Fnmc
.Jnpancsc yen
Others
42,4~4, I 07
8·1,737,269
1,621,0~7
51,226,462
5,808,079
4,380,041
(39, 70 I, 194)
(192,632)
(700,425)
(56,534,055)
( 190,907)
(3,459,41 9)
21,350
27,844
25,682
377,431,184
21,350
19,472
25,6(8
354,719,716
(5~,676)
(603,453)
(1,!91,727)
(54,676)
(595,081)
335,531 ,85(,
293,238,694
34,393,60 I
5,809,80~
(1,191,663).
22,711,4(,8
2013
Assets
Liabilities
0 fl~balancc
sheet items
Net foreign
currency
exposure
·-------------------------------------- (Rupees in '000) ----------------------------------··-·Pakistan rupee
United States dollar
311,706.336
44,295,260
Great Britain pound
6,144,750
5,298,447
Euro
Swiss Franc
Japancse yen
Others
19.390
169,777
35.0<18
367.669.008
285,81 I ,819
54.773.814
6,139,909
5,225,455
25,064
176.553
42.80•1
352,195,41 s
43.M2.526
(36,30 1.863)
69,537.043
(46,780.417)
(832,886)
(3.509.463)
( 123,497)
(828,0•15)
(3,436;171)
(2.172.093)
(702.72•1)
(2.178,869)
(710.<180)
(129,171)
15.473.5'JO
40.2.1
Currency risk is the risk that the value of a financial instrument will fluctuate due to chan!!eS in foreign exch:m.!-!c
rates.
40.2.2
The management sets limits on the level of exposure by ctiiTcncy in total which arc monitored dnily.
~nJ
.111\~IAT<"l\
OF [.>;U:Hf:H 1\,\ Tf. .'>F.:<SIT1\'[ ,\SStTS ,\:oiD l.tMilt,tTIES
-Eff«ll><
""~~-c~,--:=:~=:=:=:=.==:=:=:~==~=====-=='~"="====~~""GC~~~~~~======;;;;=:=:=;=.;=.===--;t>.··"""
To~o.l
btk""~ '" <!<14/lotrr"<•l r-1< thl
)1<1>11
l'j<l«<•••
lh<r""'
U<«lkr«
O•«•h
O><ruo<
lol<,..\1
t•lr
mnolh
muol~ '"
lbr<"<muoob•
'"""'h' '"
""'"'h' '"
)<U 11>
..... '"
01«1>'1>
""~ ioh'<•""
........
r,.,,,,,.
O><tlbt<'<
(h«fnt
ll><rlto
r. ...... ,
--------------··-·-----"--lll•t""''"''"'nl--·-----··--· ......--.. ·--..·-------I uri!
("~,j,,,.,[ht\.>1"''"'""['
'"'-''""''"'''
.......
ll ~'~ 14<
[,~,[mph>li"""''"l"""'"'"""
'-·~·.
[11_~[\WI
[l,[ot~"\.">l'lllt<•l~<thcm\.•
.1~71U1
t. ...~ .....,h
~~~.'1')~ "'''
M'""''""
IlK~'~
l<l
Ill ~I I
<~•1
ll ~-~'"'''
'1..'!'!].\(,1,
1.71:!172
IM7N_~l)
n<~·n
1\1<[111,
l'J$101'17/o
l""'<<l'~t
7,\K~'I'"
nl7m
11
11••]1<
,,.,.,..,,
27_!S7 <!•J
,~,"~"'""1'
J77,Ut,t••
""'-~"~·"'"'
~l.~li,Jf,J
fj•M/"'""
'-"·'·"''
lhii•['""N"
t7,N4«71
lh~'"""'~'
n,,.,,,,.,.t,,t ...,. ...~""""
""·'''''-II
z.~<"H'"'
·"
~"'~"'''""''•'~~I'""'' ur ..
...
f~t ~lt,Mttoo,
:!.~X~ lll
t<r.tl)r,,.,7
'llKI\2<1
2 •••• ~··
_1_771."·'
2<1-14.74"
,,,,...
4 I•~<• ~-~
..,,,,,
,,. ,
'"·'·"
lt.I,'Jt<
111<•1<
'I"""'
1
.' '
l
'"
'.
. ')
f<.<~om/1""'"'"
[,,.,,0<\[lul~.~""l'
I""'·'''
7%1,71o7
ll.l'Jl.1<,l
I '"'"'~" (\nt<U< I <'!'"'"'
177 ~···
''"'"'"'''"''''"'''''''"'''
/w,..on/1~~"'~"'"
lnl"'"" 1\oi<S""I'
l<~<•;ul\"'''"'' ,,,,..,
r.....,,.tt '"'"'f" "'"'"'"f" r."'"'""
' "
ll7,7'l,JIWI
tJJ,IJr,,n"''
[/,l,lK7,1o'l
IM,I71.11J
"""''"
'"''"'"
liw••'·'"
!M.,I u.,Jl.~'-...!'"'o'··o"O''·"""-'
lUI\
1 n,~,,~
.. d.ll
""·''
n,,,,,.,,..
''"'"'''
ltwii<IW
"""'"'"
lht<OII~ml)"
, ... ,.l),,j..
,,.,,"'
""'"'''''"
'"'" h<
"""""''
"'"""'''"
.,,.,[,,·
.,.,.,,,,.
l>«tkl<
,......
!"'""'''
,..,,,,.,.,,
· - - - - -.... ---·--------Hlut••:•:•mlW~tJ--------
h"''
t'•>l••u><lhobn'"'""h
10!>>11!\
""'~'
32,.111,11·7
11tl..t1<<1\\lllo<"l"~''"'l.'
[.,>[11\~ol<>
<JJ<~J.(Ill
H.t1l,tl<•
t,W •.'Jl2
fm:mnol ltl•llllllloOl>
htl•'"'"'"""
l '""'")
n.t~x.~w,
J7,[1J1,l~Y
l,OH,lKI
l-lf>.J~IJ,!JI
)II <JH,Illo
77,'-11.41\
7Hl,<..t/,
K.l~t.7nt
~~~IJ(oKII
11,11o2,7!1o
'J[KXUo
w.,l.lK_lll
7l,hll,<J711
1X,H2!JK\
H•Jll.ll>l
1.X71.K1K
l.l<•7.USJ
'.fi!J.l,l..ll
lfotl!l)l!
lh.7H,4.11
''·''' ~~..
''"''"''
IJ21'J2
l7«•·1l·<
t!1t !llo
ll '""''"~'
11111-llo
J4,11!fi'J\U
Ill')"'""
ll,UlK,WJ
IJ.Witlc<
thll<p.n•hl<
l•J·1H.l!1
lkmo>\ln):<
.,
[}._1~""" onJ <'lh•'f "'"'~'""
~HIK<IJn"'l•>ll"'"'' rtt'•
"''''·
IJI["' h•l'lhll«
1<1~
'l<>i%
f,',h!ll
17,:!~1.171
'J'JK,<JIK
•.1n.w.
lll,II'N-'~J~
z·~
2-~"-'"'
H.<l<·'"'
9,1KJ5.11H
l.fo'1u!>ll
7..'!Sl.214
l
''~'I
Ill•
III•H•
l-I~.KKII
4.7~l.IXII
M..!,17K
lll\4
~!I
Ill
~~· 2'' 71_\
tio"oi•l
)I «•.II!<
!1<1)'1' 7·N
t!>loi.SKI
I<"II>I<I[L,>Jo!l~
II!,W,
hu,~.:.l[\oi<~""P
4115,7~!
f<ll<tfUt'l"fL'"''"l~""'
!\~""'J F•~"'~" I ,.~.,,v< ~-.'""""'
111,111
J~IJ,~f•5
lS,2!1o
1~.1l1,~)7
ll4'J1,1l<l
l,IIJ\IOXJ
lllo,l<l,t.fol
1.1"·'1\
1 ~ll '''"
l"'""'JIJ<><I<'I<III!
2J,4lii.•J7S
liJ,W,
koi<~MJ>
4'lS)~I
!Slllo
lnl.'l•">l
7,lM'J!!
'II!!I.J\
''*'"'"
I!J_SZS71\
h•<l~lll'IIOTC~"\1'["1<'>
!-t"""'''!'"''1"1 "'""''"'""""'~"
urr.o .. t••«•h•<~~•t•
l'<••llwiJI<nk;<""-.l-<n•!!J\11\f''l'
tl!<lto!<!
1\),lll _\'){,
41U
Yic!~/lai<N•IIh!t
111 ~~··
'11~
7·J' ',.,,
''" ~~~··n
IU•l
'll'"
\'w!d roll; 1~ th~ mi. of<!,·dm~ on c~"""£' du~ 10 adwr.;c muwtnl'llt <>fth~ ~idd CUt\-'I: lnt.:rc-;t tal~ ml IS !lw tisk that II~<: \<I hi~ offin:m><~l tnmumc'fi!S ";u fluctuate <!u~ tu cto~n~c·s 111 lh~ m~rl..cl m\.;1\:SI ratci
ll.luk
to 'a"'"" ml.s ~Sit>o:oatcd \Hth 1!1~ effects .,ffluctu~tmu.l in th•· 1'"'\'ao!m~ k'<ds ofm~t'-•'1 mtclc<t l~tcs on ns financlalp<JSIIion ~rnl cash !lows Titc llank "~"~'£•" !Itt< ll'k h• matchmg the tc·pncm~ <II ·""'"
a•~l hah>hu,.,. a<h! ,,n.l>.<la<\cc '"'"''"~"""'''"~>.
1< <'\['<.!«.'<.!
Tir~ n~n~
de nne~ lntnr<hh r"~ as rh,• m~ rhallhc B:ur~ c1uwr 1lucs rml h.11c ~ullicrcnl r>narm.rl h'W\1/(C> :u aolalrl~ 1\l II ICCI ,1llll> u\rhJ::IIIOil> ,uu! wmmnnwru a' "''d "lwn th•·• f~ll 1h1~. or ~;m accc~' rh,•rn uuh :11
;ur C"C~S!\C COSt
Lut•mht~ rrs~ 1~ 1\hllli!•'IC<Irhrmrrh 1hc llliCfllallntn"ht, m~ mau~r~mcnr t><>hC\ A r:m;:c nt t<'"b a1c 11\C<I fvr the """'"1'•"mCnt uf h•t""*''' 'llocsc nmrpmc C!lmllulmcnr .nlll r•hnlc,ak lmnu\HliJ: rru<khnc' h••
ha!:u"c >heel ""'"' ""'tlnmr t<'llll ftuhhn~ rcquncrncllh ,urd <Ia• l<J !1:" mumturm:: uf funuc c.l'lr 11"'"
In adthti<Hr. hqur.!tl' t'nlli"'!!Cnn hrmhllt: pbns arc'"'"'"".! l'"""'hcall• lor cmurc th.rl all,•ur:omc ftmJmg 'lfJICJ:le> ""' IIIJ'l.Jc~ :md Gill he unplcmcnll'<l un
:m'c 1luc In unf'""'''"" aJ\~1<•' ,·h:ur!'"'"' rh~ on~r~t'l !•bee
1\
~u\>;tanlr~! l><•llrun of th•• Ball~·,
""cl' ;rrc fun<k<l
:1
IIIlich ha'" In llltlllllllW the lll]tlllhl\ '"~ rh.ll '"·"
II\ c"""lll•'f ,!cpu; IN maJ~ up uf C\!llt'nl an• I'"' n1J!' :KC<U11ll> .mol other •1•'1'''''" l'h~'~ cu,huner .!~!'""" "h«h .11\' '"'ld1 thlcl\lfocd h1 ''1'" ;nltlnl,\lolloll
rq<lt'"'nlaswlo!c'"""'''"fllln•l'
In accuHI:ul\'C 1\llh the runldmt'l 1\Su~<ll" Sill' thn•nrh 11\D Cirw!,1r Lcucr No l of ~1111 :unl HSil {"ucular Lcllcr ;o.."u ~ ,f ~1111 lbnh arc rc<tunc<llo> 'l"d"''' lll:J!IU<IIC• ul ·'"""mod h.1l•ohuc, •<'J'.II.>kh ''''
"'!'"''''''
\·uumwtualm;rnmtr~..,· .lntl'c\)'''""'1 m;llllllllc~· ll>e
m.11unllcs ;uc cakular~d "'"ll'
F"cJ 1 uu:uocohlc ~"ch arc p1CWI11•'•1 nn Ihe h,"" uf tlw11 <it'l""";rllorn · :omoum;nonn "hcohrk
!lucc
month lu
thel'~ 1111\lllhs
monrh~
to
,;, mu111l"
murnh• to
'"'~ ~··~··
------·-----···-·····--·----------···-----······--------······--·-··-------------·-lltorJ"'~'
21.H5 ..1~\
l~:rnh
3~7.111]
3~7.3111
]O,l\).l,i~<J
IIIH'>IIIIC!\1~
IU.XIl5i'J
22.'!1'1.317
A<h~n~C>
11~ qi, l~:l
'i1L7JI,-'J~
Other m~crs
OJICJaiUIJ: n\cd ~'"""
lma"!\•hlc ~-~··r~
)t'art"
}Un lu
thr~~
(h~r
"""!'
mo•mhh wl,llthl\ -"' ''"''
n .. ,.,..,
thrrt•
)f~l .. "'
)I'"'-.
)Nl""<
lhr )<'"'''
in •uno J---······--··---------··-····· --··-·-
l~n >Un
·---·--·----·-·······--·--------···--·---·----·
21.41'~.H'
lXX 'l'!l,ll'/7
l.CU<hllJ:S lU fu\.111CI:tllll\hllliiii!IS
hlcnlll"n~ "t\uc" ;utd "'·'" t'oHc" h.<!.m"''
lt11> )Ul'<
'"'h
{"n'h anJ h.1larrcc•
uca~u" baul
Babncc~ \\llh uthcr
:urJ
--0-"-',-1,-,.--o,;,. ~.!!!.l.i_u;-;;;;,;-,---;0c,-.,c.,c..-,
--.,-,-,~~-----c,,-,,c,-,-,,---:oc,-.,-.u,,.
murl!h
(l) "'"" llhh>IIC:>l h:o\.n>('''
~~~'
77'-
141o_i'J'J
'J '~ll
X II!
1. ~ /IJ. 7i•)
'Jl.l71o
ll12H
1171
71o'iloH
1
1~7 11~
1•
nx
H'lliU
~ ••
1"1 •·1'1
7!1~
I <.1
I
I
ZK.K.]i_2 11X
n.o:.l.mo•J
XXH17
12 i.'>2 ·117
fo,2S2.hJ
21o.l7.l.! [.J
IJ.llll
21. Jr,x
l,l117
.i..'lo,l (0f)'i
i}.(oJ.W5
.1_2{1'1,\7'1
2'!J.Ifo5,1o2U
<<3
)~
0725%
2'1'1A7)
)'J ~~~
!Moll
X .\~1.
J Hlo'l7'o
fo,lll'l.li 1JS
'i,7'l'llo2i
I 'iK.2Ur.
]'ol\.2111.
r,,r,l'J
(,(,1'1
.. 7~1.'1112
'\~~
11.'11).11<,<,
7'1 to~
1,11 11
I '>'HI I'J/
Dcfcnc'<.ll:o\ :"~crs
l.i~loilitir<
lhl!~f~l~ahk•
17.2~~.1.71
lllllfO\IlnJ:S
lktr<.lSrl~ ~nd
culw accum11s
Sllh-or<lmale<ll,,an · ll(\
[ldCHCtlt:t\ ha\nhiiC>
Olh~r
Jfi.\)U<.,qt
2,'1111! UI!IJ
'.1,1111 120
l.77U1•7
25'JK 2H
2 u.J~.7~x
7 1 r.;~
.I'.Hol
lt21.'ilolt
~
11.~
'l)i
I~
I Ioili
1111111
U7~Xll
2.'\.(.)3.~~~1
habt!illcs
Nrt a"~''
Share c'allllal
311,11 'i x;o
!lc<~I\~S
'llll,lill
Un~ppwpna1c.t
pn•fll
lo,l\l\'1.177
SurpiU'J(tkfr•rl) '"' rc1alu:rtrnn
r._~'iR.'r7•J
uf.l\Wb
--~l1_1<__
~~~
----'J;i;;I----~Jp!t> UIIC
{he!
un~
nwnth Ill
rnonlh
1hrce
month~
----···········-···· ·---·-··-------·-···········-··-···-··-
,\s<t'l!
c~c---cc.cc~'""'''c_~.
01<'1 "'
th~e nne
0;-crrhr~c
rnonlh> to
)'..:~r
momhs 111
st\ months
10
Ott'IIU<l
~·eJrS In
{h~tlhrcc
lhcrli1~
th~rwo
]\\(> \C~IS
··--··--·---·····""""'"••tHtopce~
ltt'IIIIIJI··················--·--··-·-
C.1>h m11! bal:lli<C' uuh
IIC:ISIII)
O~IJn~cs
ban~
1\llh uthc1
Lt'll<llllJ:S w
han~<
H.lll_tl.7
IJoiiX 'Ill
.12.JJL.H•7
22,1'1~ ~HI
17 !Ul.!i'J
1'1,1·22 !71
71.1o!ll,21o2
l,loi!~.<J)!
nnauct.11
IIISII\UilllU<
l•llo_IRII !\I
I ~1•. 2.1~. '·'I
'"'''''""~'''
AJl:lll~CS
Oihc•r ~>sets
Opcl.lllllJ: li\cd :r.,WI'
IUIJ11J:Ihk• .1.'\CI'
lkfcrr~<lla\
\1!'1'1 iXI
771,\7 '12\
1'14.1~1
2 ur, 1 ~·rx
~'ih
H.'l~'i
X7_XXX
211 112
I, XIX
2 7<.r,
'ill
1J.1.•m.1r,2
.. ~17
lo,l72,'/l-1
l~./.115
2'1
2fo.222 X Ill
'II 'I
2~.211•.'n
:I>W"
r.~
'/ 'o12,'i.ll.
IX \IJ(, X II
.i_lll2.177
llo(,X'IlX
Jt.sr.r. x2>
11.2'7'111
l4J.nr.".7;;,,,---,.,o,c.5~,••c,c,,::cu
111.1·7"
JX.I•l'l
7o'
~ow.
Xl'i\/111
I
J/~
..;1,2
11 /,1,!,7X/,
7,\Jl'/]1
'i.'l~ I ]1<1
I
~~~~
X'll
"
~ 11
'"'
'!(,(,
l'J\ :~·J
H! \XI
!1,1125
IU2'J
!! '22
27 HI! 711
27.lX\_)~I.
l/X.2X2
]'Ill ,17
52X 'iX4
7'2 Ill! I
fofd 17X
l'JX
'i
lXX
!•J lXX
I'J'Jt ~n
X5!•J
7MdX'i
iHXI
.'1'>1'>11
ll.l
I 111 !"II
21• lltr,H
Li~bililie<
Htll~ l'·""hlc
!IUJIU\\!11~\
lkt~»rl•
and nrhcr anulll\\'
Suh-noJmatcd 1<"111- rt c-,
llcfcllcJ 1:1\ h:ohrhllt''
Othc1 h;rlnhuc,
lo.'i·HI.~ II
17.2'11 U'i
!'lld771~1.
(, 'W.21.1
l.fl'l~.ll'/
'I.U\Ji,Ul-1
U"l X7t,
r/ 11 f,H
7.2'12 21·1
2 '12'1 i!'l
~XU
U~!
'11!1
'I~
)IIIII)
21•11 r,,l
__2~1!_, _
lX.7l\X'iU
7,1 Kit}~!
i"llll·CH111nllh11J: UliCIC'I
II'>
2,\0IIIIIIU
_:.;,~'1],7.\1,
2'1ll.lii\, 1Jl2
~~!~._..Jl~lo.J2'1_,17XJ
llnapp1vpmtcJ prolit
Surplu>/(dcr.cn)oarc'alua\llm
uf:.sscrs
~11\
2,'1011 !lUll
HK.l77,%!
Share caprlal
~
fo.7!1.'17l
3.~'1.1'12
K~2.l2!
11,7
lll/o 11,112 11
)'i<JH/o!.'IU
2_!2\.'Jq
t221~>.1.~7l
2\211/o,Jio'j
5.1177.'1'~~~~·~/1,
2l.l),'o_22!
1111>22 [J.l
tu~.2J.J.Jtx
xml,_'ll.~
2~'12.1~~
20~Il'I]I'...~"-'---
H XR'J ~~. ~-?:;~:~~,-,~, l.~-~7..:!.:1_:,.
~ll.7
:\1,\TliRITn:s OF ,\SSETS A:-Ill 1.1.\UIJ.ITIES • b:>1rd on np~rcrd I!UIIlllily ur n)$rll and li;lbilicirs or lhr b:>nl;
-",c,c.,c.•c,c,.--~o=w•· dn·rr
llplOl llllf
Tul~1
month to
muuth
month~
lUI~
c,c"c,c,,:-':::.'-;0c,:.,c.•:,:.--~,;:,:,:,~..c.:--nch~·· rhrr~
- - ;0
10
month< to
ytan to
lh~r y.. an.
r~~rlo
)'tan to
fhr) rm1o
(htdivr
)f~,.,
In
lrn yran
h\o yrars
chrrt monlhi
si~ month~
...............................................- ....- ...............................-···(ltulorrs iot 'OIHJ)....- -..· - - - - - - -..-······..··--·················............................ .
C;c;h ;~ml
b~l~>u:c~
'"'h
21.475,34~
trcrumybanh
l!.tl;m~c~
\>l!h nth~r b:uol'
Lcudu•c.~
H> liot;onco~l msl•lnlhUI~
21.475.J.\~
)1:7.llll
,1S7.)01
IU.HI~55<J
111.&1155'!
lnvc~lm~nl~
1NH.'J9Vl97
10.·100 H'JJ
1..'.1~J.)O~
~O.'l68,587
2'1,520,'17(,
11H.~7\35J
22.'11'J,ll7
11.'121,2)2
~.l<J8.6·15
,\d\';mc.·~
JO.~l.l.IJS
17Y/.l.l~h
ll.l'JO.Ohl
Jr•.l82J70
C..1ll'l.8'JN
.l702·l.O(l'}
HK7 •.1J7
J;'!J52.~17
2•J'J,.\71
ll.'JI3.0~~
JA7t.,'l7~
\7'1'lJo2~
'J.\.17h
l>.282JSJ
I JJI~l
26.l6R
) 1 1.~.'1
7'1.!0·1
158.206
71>\Cd7
""
·17n.\.l~
5H
1,107
l)l'l
(,,(>\1}
158.2(Jb
6.(.1'}
11·1.2Hli
U>.173,ll~
11.27~
n.•100
~~· !070!'!
Oihcr a_,~~ls
Opcr;llmllli\cd a5~CI'
lmanllrblc nssc1s
Dcfcncd
Ia~
assets
1.6h0
l.~N~.TI'<
'1.~211
H II>
1·1(>,\<)<)
c.qo.7~·J
15'l!II'J7
-"'"'""·'"'"'·'3 7.,:--·,c..,c.,c.,~...~,c,c---c,c.,-,,c-"7'.c"c.,c--,",-c
..11.!'.'JJc,;--,c.,".'""c,.c.,o,---;,,,c"·o,,.o.,c,.,c.,",--,,c,,;;,_c,c0c,7,--,tl,n:t.J$,
l.i>>bililies
11>11Sj>.1y:>hlc
llmrN""t:'
flcposrl< am.l nlhcr
ac~""m'
SulN1tdm.11Cd !n;111>
[Jdcrrcd
1.1~
\~01.60~
.J.2(1<).J7'J
9.181.120
2Ylli,24R
l\·1!•·1
74.h.H
7(1.1,1".1
JO.l.J0\~~1
.12.21·1.2·!0
12.~71)1~
1~ n•J.J.h70
10.711.-lll
21.1.~19.~8(1
IJllll>
2. ~OU.UI)[)
2. ~oo.oou
habrhlocs
Ocher lmhlhlh.':l
Nrt
\~C.J.605
17.~~4.671
~.~7~.8).1
2.q\!tll
:~'~'i·'~'~'·~,.~"E:~·~. ·~"~··~"~··E3~. ~·'~'"~·'~'~'E3~··~'~"'~·~"~':j·~··~"~·~··~··~~~i:3ill·~~~·~·~~~··~·:::~~-:'~'~'"·i"['~·::J$7~~2.l,IJ~J
·il.(>'J~.'I'JX
2$,1911,1177
lN,<)$9,0W
49,JJ/I,$J4
21J.616,UI~
C.!,900,28.~
H,n7,7(,7
26.JOU,7<JII
l'l~l!'b,NIIJ
(~o,.'llll.l>llll)
('12,62J,!U7l
0WIS1X
Owro11~
799,871
~li.7,$,41J
J,!/IJ,ll!l
l,'lH,$1'1
_ _ _ _,_,_,- - ·
-··--------..·---
;!JJlll
/1,14$,1~7 ~=~~..:.~.:!~~
:1s~ets
Sh;uccapn.1l
J/1,71$,H$U
ltcsc"·cs
'1,111,0~~
Unappmpnarcd pwlil
6,.'1/19,177
Swplus nn rcn<luallll!l
ofao:scl~
• nc1
915,238
b,l$.'1,'li 1J
Ntllt·(llnlmlhn;: onlc>C'I
-·-~---
b1,'JUIJ,2ll~
.............
~
~~~
-c.,.c02c,1c----
11
u ,;;-;;~~
Q,w.,n~
Owr chrc"
111011111
mnnch In
nwnths to
\'C~IS
IO
w;u~'''
line~ numth~
s" nllmth~
011~ Y<'JI
1wn )11~'~
three ycMs
c;,.., war~
................................................................................... tH.upc,·> 1n '000)·-·······.. ·-·................................. .
('a.'h and
habnc.·~
'"'h
l"'""uyl•anl<
llnbnrcs w1th othc1 banh
Lcndmll~
In
12. lll.lh7
1~.111.((17
1,608.'l.12
l.C.US.'IJ2
~uanconl
lll,llhlll\lllS
,\,!vm>Cc"l
O~>cr a•set~
Opcr:llinllliwtl ns.o:cts
lnlniiJ:Ih1c assc•ls
22.1 ~s.s.m
l'I.IUI.2~'l
\O~.'.~RI
l·lb.J~0.251
l'lJ•22.17J
77.1J57.n~
.,.~12.~·1h
8.1q.701
1¥•.23&5~·1
27.1<>'1.117
H.Oll,/1.50
1·1.171.242
10,773.C•U
2U.Ifo.52!
bHHill
11,!.57,')15
}'1.1.1~·1
t(Jbl.·l'IX
6.172.7·1·1
!4,60\
2'l.256
2h,222.X·1ll
•lJ<J
I.HJH
IR.~Ob.\1·11
13.662.71111
l,!lJJ.!I'JI
\'},188
21.1.·1~··
l.'l')l.l\77
5.9·1·1,72'!
l'Jl.~~·)
li.~JI)
!JI.7.12
Jl!K.<Jr.(,
H2 . .'Xl
7&r. ;s~
.II,U!\
11.12')
21.\~2
~J..\/1.\
59.31~.233
27.l81.l2C.
ll'J.O~l
<)(!)512
H·.R'l~
6R7
7.~73.71(•
J,66\I.<J1\I
.t\,'l.j~
2.7~(,
9
2.\ 1)1.••71
'"
.1 l17J71
2h 11·1
(,~,
l>~fcn~d t~x •~~~~ts
~05.J2'l.li~O
C,J.10.21J
lh>rro\\1n;~~
Dcpn~t!S
an•l olb~r
~CWltlll>:
SulH'Itlon~l~d k"""
Dcf~n~tlta~ h~bllillc>
Ocher habohllcs
~1.08\23.~
115·10.21J
!7,291,175
1.0<J~ •.J.10
'1,00~.01~
~.7\)J!7C.
178.2H2
490.547
528.5R·I
296.377.146
27.7RK.~13
14,640.373
I~.UI1.7C..t
26,'11{•.477
21:!:.620.<>I<•
J'l8,40J
2!,0.651
18.715.850
ltc'CIW~
7.1 HO. ~~2
tJnapJli<'Pmtcdp!l'f"
h,721.'J7J
Ddktl on rcvalualll'll
of assets ·llct
Non·COI\liUihn~ llliCIC~I
2.~00.00()
26V.i•' I
;c2~8~.';'>8~.J~J~(,==;~2.~2~''1~.J~)~I'=~~l.~OJ~J~.O~''t'== 2.'J1K.73l
!0.'17b.lb7
I.Ob'J.02'l
I.~C.\B~
1.4!\1,2.1~
::;1X.l77.%1
17,7J.I.H02
2H.72J.1Hl--;271~"C'ICl;.;J;-2-~(;--~jjiitii<)~-·~~-·-·2.1lEO,•l!l
i"~··~'"~I~.•~S~''=~I•tl:~~ ....~~~.2,2~•1_
Sh~rc ~npual
1.000
2,«.nn.onu
JA~I.l?!
882.122
'\f>,')~
I,HS<J
~~,~--
lb.'lX\.~'liJ
1
11«.
\"2~1J~<~"~I- - E.''l'l
l.R<.',·'c"~''"l-"'"·'·cllll'l.2tl·~=_;~~~~l ~" ...!,:.-.~_-,,-~-,-,
-JJ.I~~::~~
40.8
Opcr:ttion:tl Risk
Operational risk is the risk or a direct or indirect Joss being incurred dul! to nn event or action arising !h1lll the ruilure t\r
technology. processes. in Jhl.strueture. p!..!rsonnd and impact of c.-.;ternnl events.
Thi.! Country Operational Risk Committee ("CORC") has been established to ensure that an appropriate risk management
fralllework is in place at a grnss root level, and to report. monitor and manage operational. sodal. ethical and environmental
risk. The CORC is chaired by th~.: CEO. and CCRO is an active member or this J'orum.
All business units within the Bank monitor their operational risks using set standurds and indic.ators. Signilicant issues and
exceptions arc reported to CORC and arc also picked up by the independent Risk function for discussion nlthc Country Risk
Committee chaired by the CCRO. Disaster recovery procedures, business contingency planning. scll'..compliancc ussurancl!
and internal audits also form an integral part of the operational risk m:.magcment process.
41
ISLMllC BANKING BUSINESS
The Bank is operating with 10 Islamic Banking
41.1
branch~.:s
Balnnce Sheet
nt the end
or current period
(Dec 2013: \0 branches).
Note
2014
2013
(Restated)
(Rupee;;: in '000)
Assets
Cash and bab.mccs with treasury banks
Due from Finnneial Institutions
ltwcstmcnts
Ishm1ic Financing nnd Related Ass~.:ts
Operating lixed assets
Other assets
~ /./.
Liabilities
Bills payable
Due to Financial Institutions
Deposits and tl\hcr accounts
Current Accounts
Saving Accounts
Term Deposits
Others
Deposit !'rom Finant.:ia! Institutions ~Remunerative
Deposits li·om l:inaneial lm;titutions~Non~Remuncrati,·e
I
2,284,066
2,813,527
11,895,570
33,322,582
1,899.71 s
5.055.5S I
IO.S<IS.7JX
27.921.9()(1
47,915
52,.10(1
865,85(1
51,229,516
606.S7J
•I6.3X5.312
117
1,349,000
l.O(JU.OO!l
22,462,0.\8
12,272,682
I ,776,086
11,7(,8
268
-
Due to I kml OJ'Jice
Other liabilities
Net Assets
2.7(1()
20.0·12.22·1
11.81(>.177
2. 721.60(1
2)h
-
36,,22,842
3·l,)S0.26.'
8,320,362
221,13(,
46,413,457
4,816,059
5.561.870
I:W.J90
·11.3JX.2S3
5.0·17 .1129
,
Represented by:
Islamic Banking Fund
Unapproprhttl!d/llnrcmitted pro lit
Surplus I (de licit) on n:vnhl<ltion of;1ssr:ts
200,0110
4,5'!2,023
4,7'!2.023
24,1136
4,816,1159
~net
CONTINGENCIES AND COilliiiiTi\IENTS
Remuneration to Shariah Advisorllloanl
21111.11110
•1.75•\.X'J I
•1.95·1./N I
92.13.~
).{).)7 .(J:~IJ
21
4,417
3.21 X
1.071
4,232
(3,095)
2,208
20.-111
·1.29·1
(23.63-1)
1.1171
Ch:trity fund
Opening balant.:e
Additions during the year
Payml!nts I utilization during the year
Closing. halam;c
2'013
2014
(Rupees in '000)
41.1.1
Islamic !\lode of Financing
Murabaha
Musharaka
Dimishing Mushmaka
ljarah
lstisna
Musawammah
Others
4l.l.la
41.t.lf
9,000,6-49
9,000,649
5.597.5·11
5.597.5·11
14,492,048
14,492,1148
9.1(1().725
9.\6(1.72)
856,895
856,895
1,550,01111
I ,5511,01111
1.223.X·!3
J.22J.s.u
122,914
122,914
9S.X50
21(,,1178
216,078
IX9.JS1
189.383
Musawammah
9lU~50
Others
Fi tmncingsllnvl!stmcnts/Rccci vahlcs
41.2
7,083,998
•1.97\.12S
(),)79.(19.1
295.·133.00
11.6·15.65·1
lstisna
Financings/ln\·cstmcnts/Rcccivablcs
-JI.l.lg
1,490,466
5,593,532
\89.33~
27.921.99(1
lj:ll':lh
Financingsll11n::::-.! 1ncnts/Rccci vablcs
-ll.l.lc
./I. I. Ig
1.22J.S•l:i
98.850
Dimishing Musharaka
Fi nunc i ngslln \'Cs t men ts/R cct.: i vab Ics
41.1.1<1
./I. I. ld
./I. J.Je
·II. I. If
11.6·15.65-1
5.5n5-ll
9.16<1.725
1\'lusharak:t
l:i nanc ings/lnvcstmcnts/Rl:cci vablcs
41.l.lc
./1. J.Jc
7,083,998
9,000,649
14,492,048
856,895
1,550,000
122,914
216,078
33,322,582
Munlhalm
fi nan c i ngs/J n vcs t men ts/R ccc iva b !l!s
A<lvanccs
Assets/! n \'Cll\()ries
.tl.l.ILJ
./I. I. Ia
./I. I. I b
Profit and Loss
Prolit I n:turn earned on lin:mcings. invcstm~..:nts and placcnwnts
Return on deposits and oth~.:rs dues expensed
Net spn:::ad earned
Provision against non performing financing
Net spread after provisions
Other income
Fees. commission and brokerage income
Other income
Total other income
Other expenses
Administrative expenses
Profit bcfo1·c laxation
4,(>71.127
3,196,657
(35,417)_
3,161,2411
3.323.123
(93-UUOl
2.393..11 3
(191.%11)
2.20 1.35.1
939,582
679
65·1.1197
755
9411,2(>1
4,1111,501
65<1.852
2.8%.205
(I ,474,-170)
(I ,264,369)
2,837.132
(987.(>07)_
I.R6X.59X
41.3
2013
2014
(Rupees in '000)
CASH FLOW FROM OPERATING ACTIVITIES
Pro !it hdlll·i..! tax for the year
2,837,132
I.H6X.59X
2,837,132
1.X6X.5lJS
Less: Dividend income
Adjustments lt)r:
l)cprcciation
Gain on disposal o!' lixcd nssds- net
Provision against loans and advances- net of rccovcri~..:s
11,981
((>79)
35,417
46,719
2,S83,851
(Increase) I dccJ·casc in operating assets
Lcndings to linancial institutions
Net investments in 'held ror trnding' securities
Advances
Other assl.!ts (excluding advance taxation)
2,242,054
(9.538.629)
(S.799.33l))
(2,643)
289,000
(7.3·18)
(308.000)
I ,942,580
2,846,238
(211.11(>2)
4.340.39'!
Cash inllow before taxation
Income tax paid
4,536,691
4.579.23X
8.604.289
1.891.S6·1
Net c:tsh gcncr:tled fr·orn operating activities
~.536,691
1,891,86·1
Net investments in 'availabh: J'or sn!e' securities
Net investment in li\:ed assets (including intangibk assets)
(1,1-15,532)
(6,811)
( 1.950.000)
(9,.1117)
Net l'ash used in investing al'livitics
(1,152,34.\)
( 1,95'!.·1117)
lssuanc~.:
/ (n:paym~.:nt)
-
oi'suh~ordinatcd
Term Finance Certilicates
Appropriation/ payments made to I lead ot'fice
~nd
(3,000,000)
or
Payment
lease obligations
Net cash used in fimmciug activities
Increase I (de~.:reasc) in cash nnd cash equivalents J'or the year
Cash and cash cquiv:tlents :tt beginning of the year
41.4
981.952
( 31.6011)
(258,984)
(3,422,335)
Borrowings rrom linanciallnstitutions
Deposits and other accounts
218.31!>
30,598
(5,436,()()3)
Increase I (tlccrcllsc} in opcnlting li:tbilitics
Bills payahk
Other liabilities
27.111
(755)
191.<)()0
(3,000,000)
CJ
-------(67.5'i.l)
Cash anti cash equivalents :tt end of the yc:tr
384,348
1,899,718
2,284,066
C:tsh :md balances with treasury baul\s
2,284,06(,
I.S99.7Jg
2,284,066
I.IN9.7Jg
1.967.261
1.899.718
ljarah Financing
Cost
As at 1 .Janu:ary
Additions during the year
TransJ'cr/ Write ol't's
1,206,0011
Deletions
As at J l December
I ,206,0011
Act·umulated Depreciation
At 1 .J:muary
Charge !'or the ~ 1.:ar
Transli.::r/ Write oils
Deletions
As at 31 Dccemhe1·
Net Boo]{ vah:t•
Futur·e lj<u-:th p:1ymcnts
Not Inter than om: year
Later than one and less than Ji\'l! years
Total Futm·c lj:~rah p:tymenls
41.5
This includes acceptances o!'Rs. 528 million (2013: lb. NIL).
CJCJ
349,105
856,895
458,470
573,0R8
1,031,558
-11.6
Prurit & Loss distribution anti Pool i\lanagement
The Bank manages following assets pools for pro !it and loss distribution:
a)
blamic Export Rdinancl.! Sdll.!llll.! (IERS) tvlusharakah Pm)l: and
h) (it.::nl.!rallkpositors Pnol
:t) IERS 1\-lusharakah Pool
K~.!y fl!atur..::s. risks. rewards and calculation ofprolil/loss of this pool arc in I.!Ompliancl.! with the SBPIER Scheme and the
relevant circulars issued by SBP from time to time.
b) General Depositors Pool
i) Key re:\lun:.s and risl{ & t•ew:u·d characteristics
Deposits arl.! accepted from custmnl.!rs on the basis ofQard (current accounts) and Mudarabah (Saving and term deposits). No
pro lit or loss is passed on to current account depositors.
For deposits accepted on ivludarahah basis from depositors (Rab-ui-Maal) the Bank acts as Manager (i'vludarib) and inn:sts
the funds in the Shariah Compliant modes or linancings. Rab-ul-l'kml share is distributed among depositors according.to
weightages declared for a month before start of' the period.
In cast.: or loss in a pool during the prolit calculation period. the loss is distributed among thl! ckpositors (remuncratin:)
according to their ratio orin vestment.
ii) P:1ramctcrs used fo1· alloc:tlion of profit, clwrging expenses and provisions
The ratio l(w Mudarih and Rah-ul-nwal was 50:50 (January to December) in general pool. 50:50 (.January to October) and
:J0:60 (No\'cmb~.:r to Dccemb~.:r) in special pool. No expenses {ol' general or ndministrative nature) \n:re charged to pools. No
provision against any non-perll.mning asset or the pool is passed on to the pool except on the actual loss I write-niT or such
non-pcrl(mning asset.
iii) Deployment of 1\'lud:traha based deposits
The deposits :md funds accepted under the above mentioned pools arc provided to diverse sectors inclmling Cement.
Chemical. Pharmaceuticals. Communication. Sugar. Ti.!xti!e. Agribusiness. Transport etc. as wdl as in Governnwnt of
Pakistan backed ljarah Sukuks.
iv) Other infol'lnation
Pro lit rate I weightnge announcement f'requcncy
Mudarih share( amount in 000)
Mudarib share(~{~)
Mudarib Share tnms!CrreJ through lliba (Amount in 000}
Mudnrib Share transf'erred through lliba (%)
Average return on pool nssl!ts
Average return on deposits
41.7
Type of Pool
Special
i\lonthly
Gcucr:il
i\Ionthly
5J2J20
•17.52%
27.XJR
.).97%
1O.Jl/\'1)
s.. J6u,.l)
IJO.tJ51
2J.76°fiJ
161.297
55,J9U!(l
]().(,()!fll
X.221l·u
Dt.:posit and olhL·r accounts include redt:l.!mable capital or Rs. I·l.O(,!UW·I million {December J I.:!0 IJ: R-...I ·1.5JX.039 million)
and deposits on ()an.! basis or Rs.22.4(l2.038 million ( Dl.!cembl!r 31.20 13 : Rs.20.0·12.22·1 milliun). Rcnnmcnnin: dL'posits
which art: on Moduraba basis arc considcn::J as Redeemable Capital and non-remunerative dqmsits arc dassili~.:d as h~.:in~ nn
Qard basis.
42
CORRESPONDING FIGURES
Note
42.1. I
2013
2014
(Rupees in '000)
Rcclassific:ttion from
Statement of Financial Position
Reclassification to
Statement of Financial Position
Acceptances (Othcr Assets)
Contingencies And Commitments
-12.1.1
4,930.33·1
Acceptances (Other Liabilities)
Contingencies And Commitments
42.1.1
4.9311.3J.I
This represents ba\nnccs pertaining to Bank acceptances. In line with the SCB group policy such balances were previously
2006. these balances an:
considered as an on-balance sheet it~:m, however, to bring it in line with the BSD circular 4
reclassified to contingency <md commitments.
or
42.1.2
Certain othcr comparative figures have also been re-arranged and re-classified !Or better presentation, the cf!Cct of' which is
considered immaterial.
43
DATE OF AUTHORIZATION
These financial statements were authorized for issue in the Doard or Directors meeting held on 04 tvlan:h 2015.
Chairman
j
Director
Director