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Did JS bank really increase its profits by 1000%?

2020 has been the bearer of all sordid news, however, the silver lining seems to be just in sight. A leading Pakistani bank has been able to increase its profits by a whopping 1000%. Read more to learn how!

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Growing from strength to strength, JS Bank reported a profit before tax of PKR 628.5 million for the quarter ended March 31, 2020 as compared to profit before tax of PKR 54.7 million over the corresponding period last year, an incredible 1000% increase.

For the three months ended 31 March 2020, JS Bank Limited’s interest income increased 38% to PKR12.96B. Net interest income after loan loss provision increased 33% to PKR2.45B.

Quick look at JS Bank’s profile

JS Bank is one of the fastest-growing banks in Pakistan, with 360 branches in 180 cities including one international branch. The Bank is a leader in the digital banking space and distribution of insurance solutions.

Read more: JS Bank extends Rs. 110 Million for Immediate COVID-19 Response

JS Bank has been recognized on multiple international and national forums including the prestigious AsiaMoney, Asian Banking and Finance, DIGI and Pakistan Banking Awards.

What caused the surge in profits?

Profitability showed a marked increase primarily due to markup and commission income, FCY income and gain on sale of securities. The breakup value per share of the Bank as of March 31, 2020 is PKR 13.9 with the earnings per share of PKR 0.29.

Read more: JS Bank extends Rs. 110 Million for Immediate COVID-19 Response

In addition, the Bank’s deposits grew to PKR 379.25 billion whereas advances level maintained at PKR 235.1 billion, during the current quarter, which reflects a continued focus of the Bank on prudent growth and core business activities. Further, investments increased from PKR 142.6 billion to PKR 183.2 billion during the same period, up by 28.5%.

Overall industry trends during COVID-19

This is despite an overall trend in the industry which saw a decreasing spread (margin) as the State Bank cut the policy rate. This meant lower interest revenue with higher payments to depositors. In the wake of the COVID-19 pandemic, the State Bank of Pakistan cut the policy rate by 75 basis points on March 17, from 13.25% to 12.5%. Then in an unprecedented move, the SBP cut the policy rate again just one week later on March 24, by 150 basis points to 11%.

Read more: JS Bank to support SIUT with 10 Million against COVID-19

With the banking industry facing continued challenges due to the economic and financial impact of COVID-19, JS Bank is revisiting its business strategy to cater to changing ground realities. Emphasizing WOW customer experience, the Bank is realigning itself into an agile, digital-focused bank targeting well-defined target markets through a mix of innovative products and services.

The team at JS bank wants its vast network of 360 branches in 180 cities across Pakistan to serve as a critical and safe lifeline for business transactions to take place. This will help businesses conduct their regular transactions conveniently to ensure business activity picks up again. JS bank also offers internet banking services and mobile application banking that allows individuals to conduct their activity safely, without human contact, from the comfort of their home.

JS bank bags two “Best Bank” awards at Asia Money awards

JS bank recently also bagged the “Best Bank for SMEs” and “Best Bank for CSR” at the Asia money awards 2020. JS Bank is amongst the top three banks in Pakistan when it comes to lending to small and medium-sized enterprises (SMEs).

The Bank’s overall SME client roster has increased to approximately 22,000 with parallel business portfolio growth. These awards are proof of the unwavering commitment and determination of the team at JS bank towards establishing a conducive financial ecosystem in Pakistan.

Read more: JS Bank and Visa – Paving the way in payment innovations

As a response to COVID-19, JS bank again took the lead as a responsible corporate citizen and deployed a fund with Rs 110 million to combat the pandemic. The three-tiered strategy revolved primarily on providing immediate relief, pandemic control, and future response capacity building.

The first phase will focus on the provision of rations and necessities worth 30 Million Rs to food-insecure families while the second phase will see the distribution of Personal Protective Equipment (PPE) and donations worth 50 Million Rs to medical and other frontline institutions including non-governmental organizations.

 

Understanding the necessity of a long-term solution, the third phase of the program will focus on mitigating the long-term health impact of the virus through medical and technological Research and Development.

Read more: JS Bank extends Rs. 110 Million for Immediate COVID-19 Response

The focus area will include studies on the transmission, evolution and impact of the virus on the Pakistani population including pregnant women with the overarching aim of developing a vaccine, improving the specificity and sensitivity of diagnostic kits and development of rapid testing kits.

Committed towards its role as a catalyst towards the progress and prosperity of Pakistan, the Bank hopes to continue this journey of impact by providing a variety of innovative conventional and digital solutions in the years ahead.

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