The Board of Directors of Silkbank announced a profit before tax of Rs 157 million in the first quarter of 2011. This was a complete turnaround for the Bank, as a loss of Rs 407 million was seen in the same period last year. Silkbank also made substantial gains in gross revenue numbers, registering a total of Rs 719 million compared to Rs 290 million in the first quarter of 2010, reflecting a growth of 148 percent in the period.
In comparison, Silkbank’s total expenses increased by only 19.6 percent for the first quarter in 2011 compared to the same period last year. Total deposits increased by Rs 9.6 billion in the first quarter, 19.7 percent higher compared to the same period last year. The Bank successfully launched current account products targeted towards business persons and salaried employees, which helped in reducing the cost of funds.
Gross advances also reflected a 22.5 percent growth over the corresponding period of last year, increasing by Rs 9.97 billion. As a conscious strategy, the bank is changing the advances mix by moving into higher margin consumer and SME markets, which continues to improve its balance sheet spread.
A noteworthy reduction in non-performing loans was achieved by Silkbank in Q1 of 2011, which results in a provision reversal of Rs 557 million. This propels a reduction in the ratio of non-performing loans to 21.4 percent from 26.9 percent, as at Mar 31, 2010. The Board of Silkbank appreciated the ongoing contribution of Shaukat Tarin as Advisor to the Chairman of the Board. Tarin continues to be a principal shareholder of Silkbank, along with Nomura Investments, Bank Muscat and International Finance Corporation (IFC).
