Daily The Business

President, his aides skimming Bank of Punjab

BoP shareholders get dirty end of stick

M J Hayat

LAHORE: The Bank of Punjab (BoP) shareholders have been getting the dirty end of the stick as no dividend has announced for the last many years despite the bank tall claims to earn huge profits every year. This time also the bank has announced to earn a huge profit after tax and claimed a hefty growth before tax profit but no dividend is announced.

The Bank of Punjab (BoP) despite the fact that its management has declared an after-tax profit earning of Rs 3.7 billion for the first half of the calendar year 2018 against the profit of Rs 2.1 billion same period last CY 2017. The bank claimed to have posted 61 per cent profit before tax earnings growth for the six months of 2018.

The Bank declared Rs 1.43 as earning per share for the period.

Banking sectors expert, Dr Babur Zaheerudin commenting on the bank financial position said that the bank has added the reversal against the bad debts from the period of Hamesh Khan as president as the profits for the six months under review.

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It is very strange the bank has earned Rs 1.43 EPS but is unable to announce even a single paisa as the dividend to the shareholder, he stated.

The actual position of the bank is that the bank management has manipulated and fidgeted the books giving an outward rosy picture of the bank, he said adding that BoP is standing on a fragile letter of comfort (LoC) given by the Punjab government to the State Bank of Pakistan (SBP) and as soon as the new Punjab government takes over the bank may be taken over by the SBP.

Due to the extravagance of the bank’s top management including the bank president the bank has not made any significant progress and performance, he said, ironically adding that only one good thing has happened to BoP is that the President is receiving increment of over 35 percent in his salary and perks and his close aides are no exception.  He said that the bank president and his aides are skimming the bank at the cost of shareholders and the employees of a lower cadre.

On the other hand, the employees of small cadres and the shareholders have never been extended any handsome raise and dividend of a single penny even for the last many years, he said.

As per the Bank of Punjab (BoP) unconsolidated financial statement issued by the bank for the half year of 2018, the bank earned Rs 9.18 billion on account of net mark up or net interest income. On the other hand, the bank boasted of earning 61 per additional profit before tax during the six months of 2018 against the same period of last financial year. The Bank has realized Rs 1.04 billion against the provision of nonperforming loans and added the reversal in the profit earnings.

On the other hand, the bank management has not shown restraint in the administrative expenditures as the expenditures have escalated more than 20 per cent during the six months of CY 2018 against the same period last year.

The bank actually earned just Rs 554 million additional during the period under review against the same period last CY 2017 by incurring huge expenditures worth Rs 5.93 billion, the unconsolidated financial statement of the bank for the six months of 2018 disclosed.

A top shareholder of BoP on the condition of anonymity said that the things are not going well with the bank as after Hamesh Khan the has been used for vested interests and, therefore, the NAB and FIA should conduct a forensic audit of the bank which will lay bare the reality of BoP.

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