Submitted by:

Arfa Waseem Khan

Sana Salman
Syed Ahmed Hassan
Syeda Tayyaba Jafri
Zunaira Naeem

Submitted to: Miss Sumaira Hamid

nd
Date of Submission: 2 May 2018
 PART 1
Introduction
th
Standard Chartered Bank Pakistan Limited was incorporated in Pakistan on 28 September
1991 as a public limited company under the Companies Ordinance, 1984. The bank began its
operations in 1992. It is a medium sized bank. Its central office is located in PNSC Building,
Karachi while its registered office is situated at Rupali House 241-242, Upper Mall Scheme,
Anand Road, Lahore, Punjab and its shares are quoted on Pakistan Stock Exchange Limited
(formerly Karachi stock exchange limited). The Bank is engaged in banking services as
described in the Banking Companies Ordinance, 1962 and has 288 branches operating all over
the country including 16 Islamic banking branches. The bank provides online banking facilities
as well and is one of the fastest growing medium sized banks in Pakistan reaching both rural and
urban areas of the country.
Core Values of Standard Chartered Bank Pakistan:
We are customer-centric.
We have high moral standards.
We take ownership.
We are proactive.
We collaborate.

Mission:
We Provide Innovative and Efficient Financial Solutions to our Customers.
Vision Statement:
To better serve customers to help them and the society grow.
Services Provided By Standard Chartered Bank Pakistan:
Retail Banking: Also known as consumer banking or personal banking is the division of a bank
that deals with retail customers. Under this head banks provide consumers with facilities like
Current Accounts, Saving Accounts, PLS saving accounts, Agriculture Financing, Consumer
Finance, Online Banking, SMS alert service, Electronic Banking etc.

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Corporate and Investment Banking: Corporate banking is a specialized division of
Standard Chartered Bank Pakistan that offers various banking solutions such as cash
management, supply chain financing, working capital financing and investment banking to
large corporations.
Islamic Banking: This shariah compliant financing is practical application of shariah
through the development of Islamic economics. It includes services like Fatwa, SOC
certificates and Islamic banking branches.
Foreign Exchange Services: Forex services include Home Remittances, Mehnat Wasool facility
and other foreign exchange services.
Corporate Social Responsibility: Since the past few years Standard Chartered Bank
Pakistan has been generously contributing to Healthcare and Education programs to help the
underprivileged people. Other than that Soneri has been working to promote Art, Culture and
Sports sector as well. Another important aspect of CSR is its work for women empowerment.
It provides equal opportunities for both men and women in all business sectors
Deposits
Standard Chartered Bank Pakistan offers the following types of deposits:
1. Current Account: Soneri Current Account fulfills everyday banking needs with no
restriction on number of transactions. It offers a host of free services with no minimum
balance requirement.
This account provides instant access to funds from any branch across Standard Chartered Bank
Pakistan’s growing branch network.
2. Ikhtiar Business Account: no information available on website.
3. Savings Account: PLS Savings Account is a simple deposit account offering great
convenience. The account may be opened with any amount and there is no minimum
balance requirement. Currently Standard Chartered Bank Pakistan offers 4% interest rate
on saving account on Pakistani rupee.
4. Term Deposits: for this deposit account the minimum requirement is of 25,000RS. There are
various monthly, quarterly options available and hence different interest rates. The highest
interest rate offered is 5.35% at 3-year maturity.

The Types Of Loans Offered By The Bank Are:

1. Prime minister youth business loan
2. Soneri speed finance
3. Running finance
4. Term finance
5. Demand finance
6. Cash finance
7. Export financing scheme
8. Financing facility for storage of agriculture produce
9. Long term financing facility for plant and machinery
10. Soneri car finance
11. Soneri ghar finance and soneri personal finance
12. Working capital financing
13. Long-term project financing

Prime Minister Youth Business Loan: Policy At A Glance

Brief Description:
Small business loans will focus on (but will not be restricted to) unemployed youth, especially
educated youth looking for establishing or extending business enterprises.
Eligibility Criteria:
All men / women holding CNIC, aged between 21 and 45 years with entrepreneurial potential to
apply from designated branches.
Security Requirements:
One Guarantor.
Permissible Collateral:
Business Hypothecation.
Focus on Women:
50% of loans will go to women borrowers.
Debt-Equity Ratio:
90:10
The borrower’s contribution of equity would be in the form of cash or immoveable property and
will be required after approval of the loan.

Loan Period:
The tenor of a loan is up to 8 years including a grace period of one year.

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Pricing:
6% fixed for a borrower.
Size of Loan:
Up to Rs.2.000 Million.
Sectors and Products Feasibility Reports:
All sectors.
Approved SMEDA Business Feasibility Report, private sector service providers or Applicant’s
own prepared Feasibility Report will be admissible.
Application Form & Processing Fee:
The form would be both in English and Urdu and require minimum essential information with a
simple format.
Both the forms would be available at our designated branches and corporate website.
Nonrefundable form processing fee will be Rs. 100 (one hundred).
Monitoring:
SBP will publish consolidated information about the loans extended under this scheme for
information of the public on quarterly basis on its website;
An effective Complaint Centre to process and resolve complaints will be set up;
E-government directorate of Ministry of IT will provide support.
Geographical Distribution:
Whole of Pakistan through 12 designated branches of the bank
Quota for Special Persons:
Banks are advised to note that the Federal Government has approved 5% quota for three
categories i.e. Shaheed (widow and children of Shaheed), widows and Special Persons
(cumulative quota for three categories combined) on the basis of number of loans approved by
the banks under the PM’s Youth Business Loans Scheme.
Guarantor Qualification Criteria:
Guarantor(s) must
A. Have individual or collective net worth of 1.5 times of requested loan amount. The applicant
can also provide a guarantee of more than one guarantor (maximum 3) with an aggregate net
worth of 1.5 times of the requested loan amount. OR

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B. Be government Employee of BPS-15 or above with minimum 8 years of remaining service at
the time of providing the guarantee. No net worth required if the guarantor is government
employee of BPS-15 or above.
Either of the two guarantors in (A) and (B) above will also fulfill the following conditions:
Clean Credit History
Not an employee of Bank working as Executing Agency for PMYBL Scheme
Cannot be the applicant
The following points in this respect may also be noted:
Blood relatives can be a guarantor
It is not mandatory for the guarantor to reside in the same city of the applicant
There is no age limit for guarantors who are not government employees
C. Those borrowers, who are seeking loans for expansion of their existing businesses or for set
up new businesses and have immoveable property in their own name valued at least 1.5 times of
the requested loan amount, can offer this property as security in lieu of guarantee
Repayment during Grace Period:
All loans will have a grace period of 12 months from the disbursement date during which
installments will not be paid. However, the customers will be required to pay only mark-up
during the grace period.
Premature Termination of Loan:
Under the PMYBL Scheme, early settlement of loan facility at the request of the borrower is
permissible. However, no premature termination penalty to be charged to the borrower.
Waivers:
The processing charges as mentioned in the Bank’s Schedule of Charges are waived under this
Programme Scheme. However, other charges like CIB, Legal / Security Documentation,
Valuation Charges (if applicable), insurance charges etc will be borne by the borrower at actual
or as per prevailing Schedule of Charges
Turn Around Time (TAT) for Approval:
For sanction / approval process period under this Scheme, the turnaround time (TAT) to be
maintained is 15 working days. The Processing time will not exceed 15 working days.

5
 PART 2
FINANCIAL ANALYSIS
Balance Sheet Analysis (2017)
(Zunaira Naeem)
ASSETS:

Change in Total Assets: 8.l7%

Market share: 1.76%
Advances to total assets: 26.8%
Infection ratio: 12.45%
Investments to total assets: 53.05%
Government securities to total investments: 99.3%
ADR: 36.4%
Net assets: %

The market share of Standard Chartered Bank Pakistan in 2017 was 1.76% which indicates that it is a
small sized bank. However, it did increase from 1.52% in 2016 which does indicate an increase in
market share. The intermediation efficiency (ADR) of the bank is 59.2%, which decreased from
59.4% in 2016. This reduction shows that the bank is issuing less advances in the form of interest
bearing loans and this will lead to lower income for the bank, but this can also be a good sign as the
non-performing loans will be also lesser in ratio so there will be more repayments of loans for the
bank. The industry benchmark for ADR is 46.6%. An increase from the industry benchmark of
Standard Chartered Bank Pakistan shows that it might not have enough liquidity to cover any
unforeseen requirements. The first major use of funds for this year is Advances. Advances made up
51% of the Total Assets for the bank. This percentage has increased from 44.99% since 2016. And
the industry average was just 35.5%. This is a good indication as it means that the bank is performing
its major function. The
highest number of Advances were given to the sector Food and Allied (32.5%). And the Infection
Ratio was 5.93% whereas, the industry average for the same year was 8.4%. The lower the value
of the infection ratio, the lower is the credit risk. Hence, the position of Standard Chartered Bank
Pakistan is better than that of the industry in terms of credit risk. However, if we compare it with
2016, the infection ratio has increased from 7.79%, which shows an increase in credit risk for the
bank since 2016. The second major use of fund is Investments, which make up 36.5% of the
Total Assets. This value has decreased from 42.3% to 36.5% in the last year. Among these
investments, 94% consisted of Government securities which are risk-free investments in 2017,
which is an increased value since 2016, showing positive change. Whereas, the industry average
of Government securities as a percentage of total investments was 90%. Hence, Standard
Chartered Bank Pakistan had a higher percentage of investments done in risk-free securities
which is favorable for the bank.

LIABILITIES:

Debt ratio: 87.74%

Deposits to total liabilities: 83.79%
Current account to total deposits: 41.7%
CASA: 90.8%
Customer Deposits to total deposits: 99.1%
Financial Institute Deposits to total deposits: 0.9%
Saving deposits to total deposits: 49.1%
Borrowing to total liabilities: 5.77%
Sub-ordinated loans to total liabilities: 0%
Interest Deposits to total deposits: 58%

The debt ratio for the bank for 2017 was 94.3% whereas, the industry average for the time period
was 92.4%. the debt ratio in 2016 was 93.4%. A higher debt ratio shows the possibility of a high
insolvency risk for Standard Chartered Bank Pakistan and a high dependence on debt financing.
The first major source of fund is Deposits. Deposits make up 91.3% of the Total Liabilities of the
bank, as compared to the industry average of 76.7%. The fact that Standard Chartered Bank
Pakistan has a higher debt ratio means is favorable as it means that there are more funds flowing
in the bank and hence, more availability to give funds and to lend and invest in financial markets.
However, this increase should result from non-interest bearing deposits. We find that out by
finding out the percentage of current accounts in total deposits. In this case, it was 21.6%
whereas, the industry average was 35.2%. This is not favorable for the bank as the higher the
percentage of interest bearing deposits, the more the interest expense the bank has to incur. The
cost of deposits is found by finding out the CASA ratio. For Standard Chartered Bank Pakistan, it
was 52%, whereas the industry average for the same year was 71.2%. The higher the CASA, the
lower is the cost in terms of interest expense on deposits. Hence, a lower CASA value is
unfavorable for the bank.
EQUITY:

Share capital:
CAR: 19.27%
MCR: Required= 10 Billion
Actual= 38.715 Billion
The minimum capital required by the State Bank of Pakistan is 10,000,000,000. If a bank meets
this criterion, then the bank is a well-capitalized bank. Failure to do so results in a penalty.
Standard Chartered Bank Pakistan has a share capital of Rs. 11,024,636,000, which shows that it
is a well-capitalized bank. The Capital Adequacy Ratio (CAR) helps in assessing sufficiency of
capital to cover any risk related to risky assets. The higher the value, the better it is for the bank
from the solvency perspective. The required CAR in 2017 was 11.275% for the bank and
Standard Chartered Bank Pakistan had a CAR ratio of 12.77% which shows that the bank does
have enough capital to support its risky assets. However, it did decrease in 2017 if we look at the
CAR value of 2016, which shows that they capital may have decreased in 2017, but it was still
above the required rate, which means that the position of the bank was safe in 2017 as well.

Income Statement Analysis (2017)

Change in net income after tax: -14.2%

Change in net interest income: -10.36%

Change in interest expense: 5.65%

There was a decline in the net income of 12.5% from 2016 to 2017. However, it was still positive
which is favorable for the bank. But, it did decrease from the last year. The net interest income
has also declined from 2016 by 2.71%. However, it is still positive hence, it can be used to offset
any losses in the non-interest portion and PLL to give a positive net income value overall. The
interest income on available for sale securities has reduced by approximately around 3 billion
rupees due to which we see a decline in the net interest income. The highest interest earned is
51.9% which is more than the investments value which tells us that the major use of fund of the
bank is Advances. This tells us that the bank is performing its function efficiently. The cost to
income ratio of Standard Chartered Bank Pakistan is 86.6% whereas, the industry average is
75.2%, hence, it is unfavorable for the bank as it either means increasing costs or decreasing
revenues for the bank.
 CAMELS Ratio Analysis (2017)
ROA: 1.6%
ROE: 13.1%
Net Interest Margin: 3.36%
Net Non Interest Margin: -0.68%
Cost to income ratio: 60.73%

The CAR, Infection Ratio, Cost to Income ratio and some of the Income Statement ratios have
been analyzed above, so will not be analyzed here.

The administrative expenses to total assets ratio fell in 2017 from 2.28% to 2.20%. Even though
this is a minute decrease, it is a favorable change for the bank as the expenses have decreased.
There has also been a decrease in the ROE from 11.7% to 9.9% which indicates that Standard
Chartered Bank Pakistan has become less efficient in making use of shareholder’s equity to
generate additional profits. The ROA has also declined from last year, from a value of 0.675% to
0.5%. This change means that the bank has become less efficient in converting investor’s capital
into net income and that they have become less profitable in the relativity of their total assets.
The net interest margin has reduced from 2.4% to 2.07% since 2016, which means that the profit
that the bank is making on its investing activities has reduced, but as the value is positive, it
means that it isn’t going into losses.

The Cash and Balances as a percentage of Total assets ratio has declined in 2017. From a value
of 6.6%, it has come to 6.03%, which is unfavorable for the bank as it means that the liquidity of
the bank has decreased as the cash has decreased. The spread value is positive throughout the
years which shows that it is profitable.
Sensitivity to Market and Interest Risk:

Share price:
Spread:
Yield on Earning Asset:
Cost of Borrowing:
Earning Assets: