The Bank of Punjab ("BoP" or the "Bank") was established under the BoP Act 1989 (the Act), as a non-scheduled bank, and was subsequently converted into a scheduled bank in 1994.

Initially focused on serving the financial needs of the public sector in Punjab, BoP has since expanded its services across Pakistan. It offers a broad spectrum of conventional and Islamic banking products and has a growing branch network nationwide. The Bank is listed on the Pakistan Stock Exchange (PSX) and has diversified its offerings to include corporate, retail, and investment banking. The Bank has its registered office at BOP Tower, 10-B, Block E-II, Main Boulevard, Gulberg III, Lahore. As of end-Dec24, the Bank operates with a network of 900 branches (end-Dec23: 815 branches) and employs 14,656 employees at end-Dec24 (end-Dec23: 13,659).

The Bank of Punjab (BoP) offers a wide range of services across retail, corporate, SME, agriculture, and Islamic banking. Its retail products include deposit accounts, loans, and card services, while corporate and SME clients benefit from various financing and advisory solutions. BoP began Islamic banking in 2013 under the brand name “Taqwa Islamic Banking”. At end-Dec24, there are 210 (end-Dec23: 160) fully functional Islamic Banking Branches and 258 (end-Dec23: 73) Islamic banking windows, offering Shariah-compliant products like Murabaha and Ijarah. The Bank also supports agriculture finance and has enhanced customer convenience through robust digital banking platforms.

The Government of Punjab (GoPb) holds a controlling stake of 57.5% in the Bank of Punjab. The rest of the shareholding is by individuals at 25.56% and institutions at 16.94%.

The ownership structure of the Bank is seen as stable, as no ownership changes are expected in the future. The majority stake will rest with the Government of Punjab.

Sponsor's business acumen is considered good, as BoP has been achieving milestones by successfully making the right business decisions. Over the last few years, it has sustained being a profitable institution.

BoP, being one of the flagship entities under the umbrella of the Government of Punjab, willingness to support the Bank in case the need arises is considered high; also supplemented by access to the capital markets.

The control of the Bank vests with a four-member Board of Directors (Board) comprising three non-executive directors and one executive director. All four members are representing the Government of Punjab. Mr. Zafar Masud, President - Chief Executive Officer (CEO) of BoP, is an executive director. However, this composition of the Board does not comply with the requirements of the Code of Corporate Governance of Pakistan, which mandates a minimum of seven board members, at least two or one-third (whichever is higher) independent directors, and at least one female director.

Mr. Syed Ghazanfar Abbas Jilani, Chairperson of the Board, is a seasoned civil servant who joined the Pakistan Audit and Accounts Service in 1984 and retired as Federal Secretary, Economic Affairs Division, Ministry of Finance in 2018. He has held key positions both in Pakistan and internationally, worked closely with major global financial institutions, and served on the boards of major national organizations. He holds an MBA and a Bachelor's in Economics and is also a director at Jilani Organic (Pvt) Limited. Mr. Mujahid Sherdil is a seasoned officer of the Pakistan Administrative Service, is currently the Finance Secretary of the Government of Punjab. With over 20 years of experience, he has held key leadership roles in planning, infrastructure, disaster management, and public administration. Known for his problem-solving skills and focus on infrastructure and financial management, he holds a Master of Architecture from Washington University and a BA in Mathematics and Pre-Architecture from Grinnell College. He was also a skilled tennis player during his academic years. Dr. Muhammad Amjad Saqib is a renowned social entrepreneur and former civil servant who founded Akhuwat, Pakistan’s largest interest-free microfinance organization, disbursing over $207 million for poverty alleviation. A medical graduate and ex-DMG officer, he left public service in 2003 to focus on social work. He advised the Chief Minister of Punjab and actively supports civil society efforts. His contributions have earned him the Sitara-i-Imtiaz and a Lifetime Achievement Award from ADIB and Thomson Reuters. However, the governance of Bank of Punjab may face challenges, as its key shareholder could influence the Board of Directors, potentially affecting its independence.

The Board exercises close monitoring of the management’s policies and the Bank’s operations via six sub-committees, namely i) Audit Committee, ii) Human Resource, Compensation and Nomination Committee, iii) Risk Management, Compliance and NPL Review Committee, iv) Strategy, Islamic and Priority Sectors’ Financing Committee, v) Information Technology and Communications Committee, and (vi) Environmental, Social & Governance Committee. Meetings for all six committees are held quarterly. The Board members’ attendance and participation are considered good and effective.

The Audit Committee the internal audit function includes a review of the annual and interim financial statements of the Bank, before their approval by the board, focusing on major judgmental areas, significant adjustments resulting from the audit, going concern assumption of any changes in accounting policies and practices, compliance with applicable accounting standards, compliance with regulations and other statutory and regulatory requirements. M/s. A.F. Ferguson & Co, Chartered Accountants, classified in category 'A' by SBP and having a satisfactory QCR rating, are the external auditors for BOP. They expressed an unqualified opinion on the financial statement for the year ended 31st December 2024.

The Bank operates with a streamlined organizational framework, where experienced senior management leads each functional area and/or unit. This structure incorporates essential segregation of duties, ensuring a robust control environment. The Bank's operations are further specialized across various groups, each dedicated to distinct banking functions and support services. i)Consumer Banking Group, ii) Corporate & Investment Banking Group, iii) Risk Management Group, iv) Finance Group, v) Islamic Banking Group, vi) People & Organizational Excellence Group, vii) Staff & Strategy Group, viii) Digital Banking Group, ix) Treasury & Capital Markets Group, x) Compliance & Control Group, xi) Information Technology Group, xii) Operations Group, and xiii) Legal Group.

The Bank’s President and CEO, Mr Zafar Masud, is a seasoned banker and entrepreneur with 27 years of proven track record of success and delivery, holding key positions in the Ministry of Finance. He has extensive experience working at the board level, extensive experience working at Board of Directors level for major public and private sector entities, including the State Bank of Pakistan. Member of the Independent Monetary Policy Committee, Oil & Gas Development Company Limited, Port Qasim Authority, Quaid-e-Azam Thermal Power (Private) Limited, and Gadoon Textile Mills Limited. The senior management consists of seasoned bankers having diversified experience. Mr. Nadeem Amir, Chief Financial Officer (CFO), joined the Bank in 1991 and has over three decades of post-qualification experience in finance. He holds Master's degrees in Commerce and Economics from the University of Punjab, specializing in Finance, Monetary & Fiscal Policies, and Development Economics. He is also an Associate Diplomat of the Institute of Bankers in Pakistan and has participated in numerous banking and finance conferences, representing the Bank in various investor forums both domestically and internationally. Mr. Arslan Muhammad Iqbal, Chief Risk Officer (CRO), has over 13 years of experience in the banking sector, specializing in Corporate Credit, Relationship Management, Project Finance, and Credit Modeling. He joined the Bank in 2016 and previously served as Deputy Chief Risk Officer before assuming his current role. Before BOP, he held senior managerial positions at various local and foreign financial institutions. He holds an MBA from the University of Wales, UK, a Bachelor’s (Honors) degree from Dublin Business School, and is a Moody’s trained credit professional. Mr. Ahmad Mansoor, Chief Compliance Officer (COO), brings 27 years of diverse experience in the financial sector. He has served in key roles at leading institutions including Citi Bank (N.A), MCB Bank Ltd, Habib Bank Ltd, Allied Bank Ltd, and the State Bank of Pakistan, where he was Senior Joint Director for three years. He also held leadership roles in Credit Risk Review and Special Assets Management at Allied Bank, and later served as its Chief Compliance Officer. Mr. Mansoor holds M.Com and LLB degrees from Punjab University, Lahore. He is also certified CA from ICAP, and holds Diplomas in Banking and Islamic Banking from NIBAF Pakistan.

The Bank has various committees in place at the management level to oversee its day-to-day operational matters and make decisions to implement the strategy outlined for it by the Board. These include the i) MANCOM, ii) Asset and Liability Committee (ALCO) (Investment Committee), iii) Compliance Management Committee, iv) IT Steering Committee, v) Property & Premises Committee, vi) Non-Banking Asset Management Committee, vii) Marketing & Communication Committee, viii) Fraud Risk Management Committee, ix) Operational Risk Management Committee, x) Credit Risk Management Committee, xi) Service Quality Committee, xii) Disciplinary Harassment & Grievance Committee, xiii) Agriculture Credit Committee, xiv) Environmental & Social Risk Management Committee, xv) Islamic Banking Transformation Steering Committee, xvi) Steering Committee International Banking and xvii) Charity Committee. The Management Committees consist of the CEO and fourteen department heads. The committee, responsible for overseeing the operational matters of the Bank, including human resources, different lines of business, compliance, and administration, meets fortnightly to review these areas.

A comprehensive IT security policy has been put in place along with risk mitigation protocols. The Bank has been using the internationally renowned Oracle-based Core Banking System (CBS) ‘Flexcube,’ with all branches migrated to the new system.

The Bank has adopted a disciplined approach to managing risk, including assessments of various risks through self-assessment techniques, stress testing, portfolio review, early warning indicators/alerts, and dynamic monitoring. Over the years, the Bank continued to strengthen its capacity to manage its risks and risk management environment. The Bank continued to focus on and improve its Credit Risk Management program through effective portfolio management. In addition to that, the Bank has put in place a standardized and well-defined approval process for all credit proposals to minimize the credit risk. The Risk Management Division (RMD), headed by CRO, Mr. Arsalan Muhammad Iqbal, manages different facets of risk, including credit, market, operational, liquidity, reputation, and country risk. Heads of Credit Risk Units – Corporate, Commercial, Consumer, Special Assets Management (SAM), and Agri – report to the head of credit risk, while heads of Operational, Market, and Risk Policy report directly to the CRO.

During CY24, Pakistan's Banking sector's total assets posted growth of ~15.8% YoY whilst investments surged by ~14.5% to PKR ~29.8trln (end-Dec23: PKR ~26.0trln). Gross Advances of the sector recorded growth of ~29.1% to stand at PKR ~16.9trln (end-Dec23: PKR ~13.1trln). Non-performing loans witnessed an increase of 7.3% YoY to PKR ~1,067.9bln (end-Dec23: ~994.8bln). The CAR averaged at 20.6% (end-Dec23: 19.7%). Looking ahead, given the expected monetary rate cut and high cost environment, Banks are likely to sustain some dilution in profitability by CY25. Source: SBP Compendium

BOP, a medium-sized Bank, holds a customer deposit base of PKR 1,693.4bln other than financial institutions at end-Dec24 (end-Dec23: PKR 1457.8bln). On such basis, the market share of deposits of the Bank inclined to 5.8% (end-Dec23: 5.5%).

During CY24, BOP’s NIMR witnessed an incline of 7.8% on a YoY basis to stand at PKR 44.2bln (CY23: PKR 40.9bln), primarily attributable to increased mark-up earnings amounting to PKR 343.8bln (CY23: PKR 327.2bln), up by 5.1% on a YoY basis. The majority of the markup earned is primarily derived from investments, debt instruments, and other earning assets, clocking in at PKR 226.3bln (CY23: PKR 171.9bln), whilst markup earned from advances clocked in at PKR 117.5bln (CY23: PKR 155.2bln). Whereas, the markup expenses increased to stand at PKR 299.6bln (CY23: PKR 286.2bln). The Bank’s asset yield was reported at 17.3% (CY23: 20.7%). The cost of funds decreased to 14.4% (CY23: 17.2%). Consequently, Spread declined to 2.9% (CY23: 3.5%).

During CY24, the non-markup income inclined by 50.6% YoY to stand at PKR 26.7bln (CY23: PKR 17.7bln), with major contributions from FCY income, which increased by 188.6% YoY and fee & commission income by 53.1% YoY. Subsequently, Non-markup income to total income improved to 37.7% (CY23: 30.2%). The non-markup expenses grew by 34.4% to stand at PKR 50.4bln (CY23: PKR 37.5bln). The total provisioning reversals of the Bank have significantly inclined to PKR 4.1bln (CY23: PKR 53mln), which is mainly due to the adoption of IFRS-9. The net profitability increased by 17.9% to stand at PKR 13.4bln (CY23: PKR 11.3bln).

The management envisages growth in the deposit base while bringing granularity to the customer base through further private-sector deposits, which will optimize the cost of funding. Growth in advances is also the focus of the management, wherein the criteria are higher margins and a sustainable risk profile. Implementation of modern technological tools would help in improving the control regime and bringing efficiency to the operation.

At end-Dec24, BOP's net advances declined by 3.6% YoY to stand at PKR 777.4bln (end-Dec23: PKR 806.4bln). The Advance-to-Deposit Ratio (ADR) also declined to 45.4% (end-Dec23: 53%), indicating a more conservative lending approach. Non-Performing Loans (NPLs) have increased to stand at PKR 53.7bln (end-Dec23: 50.9bln). The infection ratio stood at 6.5% (end-Dec23: 6%). Despite the increase in NPLs, the limited uptick in the infection ratio suggests that asset quality remains relatively stable. 

At end-Dec24, the investment portfolio of the Bank has increased by 44.6% to stand at PKR 1,320.9bln (end-Dec23: PKR 913.2bln). Government securities constitute 98.3% of total investments (end-Dec23: 97.7%). Government securities are mainly comprised of Pakistan Investment Bonds (PIBs), which have inclined to PKR 936.3bln (CY23: PKR 830.1bln), followed by Market treasury bills (T-Bills), which have increased to PKR 314.6bln (CY23: PKR 27.2bln), while the Ijarah Sukuk concentration increased and stood at PKR 44.4bln (CY23: PKR 29.7bln). The sharp rise in overall investments, particularly in long-term PIBs and short-term T-Bills, reflects a dual approach to optimize returns while maintaining liquidity. The consistent concentration in government-backed instruments highlights the Bank’s conservative and stability-focused investment strategy, aiming to balance yield enhancement with capital preservation in a changing interest rate environment.

At end-Dec24, total deposits increased by 12.5% to stand at PKR 1,710.3bln (end-Dec23: PKR 1,520.8bln). This growth was primarily driven by a rise in customer deposits, reflecting enhanced depositor confidence and successful outreach and mobilization efforts by the Bank. The deposit mix also showed a rational shift, with Current Account (CA) deposits increasing to 21% (end-Dec23: 19%), indicating an improvement in low-cost funding. Meanwhile, Savings Account (SA) deposits moderated to 41% (end-Dec23: 45%), suggesting a strategic rebalancing. Additionally, the Bank’s liquidity position strengthened notably, as the Liquid Assets-to-Deposits and Borrowings Ratio rose to 59.3% (end-Dec23: 38.8%).

The Bank remains well-capitalized, maintaining strong buffers above regulatory requirements. As of end-Dec24, the Capital Adequacy Ratio (CAR) stood at 17.93% (CY23: 18.37%), with a Tier I CAR of 14.26% (CY23: 15.42%), in full compliance with SBP’s minimum thresholds. The Bank is committed to sustaining capital ratios significantly above the regulatory benchmarks to ensure robust risk absorption capacity. The Bank has issued five Term Finance Certificates (TFCs) to raise capital: i) Subordinated perpetual TFCs - ADT I of PKR 8bln, ii) Subordinated perpetual TFCs - ADT I 2nd Issue of PKR 3.95bln, iii) Privately placed TFCs - II of PKR 4.3bln, iv) Privately placed TFCs - III of PKR 7bln, and v) Privately placed TFCs - IV of PKR 7.57bln.