Non Mark-up/Interest Income
Non Mark-up/Interest Income
Non Mark-up/Interest Income
Interest income on investment for the year under review was PKR 58,906 million, higher by PKR 3,239 million or
5.8% compared to PKR 55,667 mien of prior year. A significant portion of high yield bonds matured during the
year. On the back of reducing discounts rates, yield curve of government bonds recorded a generally descending
trend. To effectively manage the interest rate risks we optimally placed our funds into low-risk securities, thus
increasing our income.
Mark-up/Interest income earned on deposits/due from financial institutions against dep osits and repo arrangements
was PKR 1.245 million i.e. PKR 302 milion lower than PKR 1.547 million earned in 2015. This was primarily due to
volumetric drop in placements.
Interest Expense
Interest expense for the year was primarily driven by the deposits and amounted to PKR 50.070 milion. lower by PKR
3,224 million or 6% against PKR 53,294 million of last year. Reduction in the mark -up/interest cost was achieved
through a favourable shift in liability-mix as wel as the pricing. We attracted more deposits at a lower mark -up rate.
Given the higher transaction volumes. interest cost incurred under repo transactions and short term borrowings
amounted to PKR 9.507 milkon as against PKR 6.647 milson of prior year.
Catering to our customer requirements, the bank accelerated innovation in its products universe. services offered and
delivery channels. We also propelled transformation and development of fee -based businesses. promoted the
application of technological progress of financial services to benefit a wider group of customers and also improved the
financial service level.
Operating Expenses
During the year, the bank implemented various measures for an optimal cost management and continued to boost Its
operating efficiencies. Total operating expenses for the year were PKR 48,351 million, PKR 4.683 milion or 10.7%
higher than that in 2015. Excluding other provision charge of PKR 1,098 million, administration expenses amounted to
PKR 47.252 milion. HR costs amounted to 67% of the total administrative expenses and increased by 9.8% during the
year to PKR 31,430 million. Increase is very much in Pie with market based growth.
The bank implemented multiple measures for effective control & reduction of operating costs. This included installation of
solar panels, deployment of IT systems to optimise HR utilisation and reduce traveling costs and centralsation of certain
cost functions. So far we have installed solar panels at over 200 branches to run ATMs leading to reduction in power cost.