Silkbank’s continued growth ascend-2017 midyear performance


Silkbank continued to reflect a robust earnings trajectory in Q2, outpacing Q1 by a massive 152%. Q2 Profit after Tax stood at PKR 342.4 million.

Net Mark-up Income after Provisions for six months, increased from PKR 1,837 Million to PKR 2,329 Million, registering a significant growth of 27% over corresponding period last year. Non Mark-up Income grew even faster reflecting a 40% increase in comparison to the same period last year. Margins rose from PKR. 476 Million to PKR. 890 Million; a substantial growth of 87% while only Q2 contributed a healthy PKR. 612 Million in 2017, a massive 167% increase over Q2 2016.

Net Profit after Taxes showed an increase from PKR 345 Million to PKR 478 Million; 39% increase in comparison to the same period last year.

For the first time the Bank’s deposits crossed PKR 100 billion mark and closed at Rs 102 billion for the period ending 30 June 2017. The Bank made significant gains this year in the current account portfolio which stands at 29% of total deposit. CA year to date growth is 31%. This current account growth coupled with a strong savings account momentum has driven the CASA figure up to 64% of total deposit.

Net advances reflected a growth of PKR 16.8 billion compared to June’16 with strong contribution from the high yielding consumer assets which led to higher spreads.

The growing high yielding consumer portfolios and low cost CASA deposits have played a significant part in pushing the Bank’s profitability up. Going forward, with the same trend the spreads are expected to widen. Resultantly, this would accelerate the Bank’s profitability in the future periods as well.

Silkbank’s business momentum will get further augmented by the addition of 35 new branches this year. The new branches are expected to contribute significantly to further growth in low cost deposits.

The Bank’s newest initiative is the launch of the Digital Banking. Digital Silk has already been soft launched for the employees and is expected to be a game changer. Like credit cards the offering is not dependent on a branch distribution network. Digital Banking has the ability to reach a much wider market segment, generating low cost deposits and enable the bank to leap frog growth.

Silkbank’s Non-Performing Loans ratio is 6.6%, down from almost 37% a few years back. This is amongst the lowest in the Banking Industry. As of June 30, 2017 NPL’s dropped by 31% over the same period last year.

The repossessed OREO properties continue to contribute significantly to the Bank’s profitability.

With a further 16% incremental equity, the Bank’s compliant on the SBP’s Minimum Capital Requirement (MCR) as well as the Capital Adequacy Ratio (CAR).Capital Adequacy Ratio will get a further boost by the recent successful completion of a PKR 2.0 billion TFC by Silkbank. In due course, the Bank’s CAR will get further strengthened by a second tranche of an Islamic TFC later this year.