National Bank of Pakistan (NBP) – one of five large commercial banks – is set to open two branches in China next year to exploit the growing business opportunities between the two countries under the multibillion-dollar China-Pakistan Economic Corridor (CPEC) projects.
“National Bank will open two branches in China’s major cities like Beijing and Shanghai by the middle of next year (June 2018),” NBP President and CEO Saeed Ahmed said while talking to media on Friday.
Finalisation of formalities to open the branches was under way at the central banks’ level, he said.
The branches would help the bank to offer full-fledged banking services, including raising deposits and lending money. To date, the bank had operated in China via its corporate offices, he added.
Simultaneously, the bank, which had a deposit base of Rs1.65 trillion on December 31, 2016, is establishing a regional office in Gwadar, which is the centre of economic development under CPEC.
Under CPEC, China’s government is building roads, ports and railways and setting up power projects at an estimated cost of over $60 billion.
Besides, Pakistan, which is to facilitate China’s huge trade via its roads and railways from Gwadar port to Xinjiang province, has also attracted huge Chinese private investment in such projects.
“NBP would prefer to finance (Pakistan’s) export-oriented projects,” he said.
Admitting that the level of services to its clients was not satisfactory, Ahmed said they were going to turn around the bank into a full-fledged digital institution very soon.
Until recent times, NBP was operating with a single internet connection. Now, it has acquired one more connection to install a backup system in order to deliver quality digital services.
In the first stage, the bank would offer digital services to its staff only for about a month to test and strengthen the project. Later on, the services would be offered to its clients.
Apart from this, the bank has placed an order for 200 ATM machines. Some of them would replace the aging ATMs.
Despite a non-digital bank to date, he said, the bank had achieved the highest rate of lending (advance-to-deposit ratio) in the industry.
“NBP’s advance-to-deposit ratio stands at 50% against 46% for other banks in Pakistan,” the NBP president added.
The bank has provided financing of over Rs700 billion to various sectors of the economy, including agriculture, small and medium enterprises, textile, fertiliser and construction material.
Moreover, the bank had invested 40% of its deposits in available instruments, he said.
Re-launch of PM youth programme
He said the bank was going to re-launch the prime minister’s youth financing programme to promote self-employment and provide new employment opportunities.
The recent PM youth programme did not get desired results as youngsters could not apply for the available financing due to the mark-up factor. Now, the programme will be re-launched within a month after being transformed into Shariah-compliant financing.
NBP would try to provide financing to all the eligible applicants.
The bank had allocated Rs100 billion for youth financing under the recent conventional mode of financing. They have, however, availed only Rs17 billion in the last three-and-a-half to four years, he added.