By: Syed Minhajul Rab
KARACHI: The financial condition of the First Women Bank is deteriorating, threatening account holders.
The bank is on the State Bank’s list of threatened banks. According to details received by The News, the bank has suffered Rs320m loss while its equity is Rs1.7 billion. However, according to the SBP, the equity of the bank should have been Rs10 billion; therefore, the bank needs Rs8.29 billion more to get out of the list of ‘endangered’ banks.
Sources in the bank said the decline in the performance was due to the poor strategy of the bank administration which is making appointments at attractive salary packages despite facing a huge deficit.
According to the report of the First Women Bank, over Rs60 million less was recorded in the income of the bank till September 30, 2014 compared to last year. Its income was over Rs610 million in September 30, 2013 which came down to over Rs55 million on September 30, 2014.
The amount of the bad loans increased to over Rs565 million. However, a 5.41 percent decrease was recorded in the administrative expenses of the bank compared to last year.
At present, 41 branches of the bank are working in the country, employing over 600 people. The bank was set up 25 years ago and the government has also added equity to the bank off and on.
The government has added almost Rs1.5 billion during the last five years, but despite that its condition has been deteriorating.
Sources said the SBP will have to take strict measures to improve the condition of the bank. Spokesperson for the bank Shaheen Zamir said the bank’s depositors were safe.
Sixty-five per cent equity of the bank rests with the government. The National Bank possesses 4 per cent shares while four other big banks — the MCB, UBL, HBL and ABL — hold the remaining shares.