No prizes for guessing who has emerged as the biggest beneficiary from the (temporary?) resolution of circular debt. Now that Pakistan State Oil (PSO) is free from the clutches of circular debt—at least for now—improved liquidity to boost profitability was resounding ahead of FY13 financial result.
Being a small bank isn’t easy in such trying times. Summit Bank found it in the first half of 2013. The losses inflated to over a billion rupees, as high cost of deposits, not-so-good deposit mix, low spreads, low interest rates and high operating expenses all combined to dent the bank’s bottom line.
For a firm relying solely on dividends on investments, half yearly results offer very little reasons for joy. Dawood Hercules Corporation Limited (DAWH) faced a tough 2Q CY13 as the dividend income from investments in associates and subsidiaries came to a screeching halt.
In recent months, advances made by Standard Chartered Bank Pakistan Limited, have been ticking down in comparison to the deposits held by the bank. At the same time, SCBPL’s investments-to-deposits ratio has climbed a few notches. And in the first quarter of this year, investments finally outpaced advances.
Despite being a small sized lender, JS Bank is smart enough to mimic the industry trend by focusing on investments more than on advances.
JSBL’s investments more than doubled in a year’s time while its advances could barely post a 10 percent year-on-year growth in IQ CY13. Yet—although advances have not been the bank’s prime focus of late—it is shrewd enough to realize a top line growth of 24 percent year on year in 1H CY13.