Banking Update

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Unilever, Standard Chartered sign agreement

our correspondent

Thursday, September 25, 2014From Print Edition

Karachi: Unilever Pakistan Limited will now collect payments from its dealers living inremote areas using Standard Chartereds virtual account technology. he consumer goodsgiant and the largest international !ank in Pakistan signed an agreement in this regard onuesday" a press statement saidA significant portion of Unilever Pakistans dealers make payments via demand draft instrumentswhich are vulnerable to time lags. elays in payments often hinder the supply chain and reduceavailability of supplies for shops and stores in far flung areas.!n the statement issued by the bank, it said that Standard Chartered stepped in with unparalleledproduct capability and uni"ue solution structuring using a combination of #eal$%ime &ross Settlement'#%&S( ) A%* payment modes, channeled through +irtual Accounts technology to effectively transferpayments to Unilever on the same day.

*aid A-i-, head of %ransaction anking said, /Consistent with our brand promise 0we are1 offeringbanking solutions that greatly enhance our clients operational efficiency in line with the dynamics ofPakistans business environment.23e said with simple, widely available online payments mechanisms 4 #%&S and A%* $ transfers virtualaccount technology will allow funds to be transferred between banks and reach the beneficiary on thesame day, with complete payer identification. /5e believe that this product will go a long way and helpenhance Unilevers business operations and outreach to remote areas through efficient and securecash management solutions.2Asiya 6aidi, corporate finance director, Unilever Pakistan 7td, said a technology like +irtual Accountsbrings fle8ibility not only to improve cash flows but also to minimi-e our credit e8posure./%his is indeed a big leap forward in how businesses can manage their operations more effectively,

especially in volatile market situations.Unilever is proud of its partnership with Standard Chartered ank on this breakthrough initiative,2 sheadded.

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Guly , ;.> last year(.%he &roups deposits increased by =.?D to #s. ;.


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%he ank earned #sB.= billion in the corresponding period of last year. Farnings per share remained at#sB.@.%he board has also announced a second interim cash dividend of #s.? per share/%he banks core income reported an increase of ;. percent JoJ to #s. billion compared to

#s;@.> billion in ;3CJ;=,2 said *A Capital *anagement in its post result report./%he increase in the earnings is attributed to higher interest earned by ;=.E percent JoJ and a lowerprovision e8pense of ;?.< percent JoJ,2 it added.%he report said non$interest income remained strong during ;3CJ;


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espite challenging security conditions and the energy shortages, the &P grew by


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Some economists said the central bank is running economy on ifs and buts and not in a hurry to cut

interest rates now.

5athra told newsmen that the average CP! inflation in LJ;.?

percent to B.? percent. /3owever, international oil price uncertainty and unanticipated price shocks

owing to turmoil in the *iddle Fast pose risks to the inflation outlook,2 he said.

%he SP governor said that the bank is effectively managing market sentiments by supplementing the

monetary policy stance with calibrated li"uidity operations in the interbank market, adding that this

has contributed in achieving stability in the foreign e8change market and in building foreign e8change

reserves.

%his has also facilitated the shift in banks investment from %$bills to P!s, improving domestic debt

maturity profile of the government.

espite significant inections by the SP, appetite for li"uidity remained sufficiently high in the market,

he said, adding that it resulted in higher short$term interest rates, making the rupee li"uidity more

e8pensive.

/%his reduced pressure on e8change rate as it discouraged speculative holdings of foreign e8change

and made trade financing through foreign currency deposits held by banks more attractive, 2 said

5athra.

3e said that a significant reduction in government borrowings from the banking system is contributing

towards low inflationary e8pectations and has provided necessary space to the private sector to

borrow from the banking system. 3owever, persistent energy shortages and deteriorating security

conditions hint towards some risks to credit demand.

%he SP governor maintained that sustainability of lower government borrowings from the banking

system, including SP, is contingent upon further reduction in the fiscal deficit and continuation of

e8ternal financing, adding that government needs to watch the fiscal position of LJ;? i.e. the revenue

side cautiously.


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5athra told the audience that the growth in domestic debt during LJ;< had decelerated to ; percent during the last

three years. /%his bodes well from the point of view of countrys risk perception and could help in

attracting investment in the economy.2

3e reminded the audience that the increase in e8ternal borrowings since Lebruary ;< had provided

a much needed respite and short term stability to the balance of payments position.

%hese foreign inflows resulted in a capital and financial account surplus of N@.; billion which

comfortably financed the current account deficit of N.@ billion and led to a significant increase in

SPs foreign e8change reserves. y


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%he !*L said four banks, including one state$owned and three private banks, dont have enoughcapital to continue their business operations, as their financial strength is weak.According to the report, the non$compliant banks comprise @.< percent of banking assets with thetotal capital shortfall being less than .? percent of gross domestic product.

%he state$owned bankOwhich represents around =.> percent of banking assetsOis only .>percentage points below the regulatory re"uirement.%he public sector banks capital ade"uacy ratio improved to E.= percent as of end$*arch ;

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