1.The current government has now been in power for over six months. How do you see Pakistan evolving under the PTI government?
The PTI government has come in with huge expectations and a refreshed look at the economy and the country. They inherited a lot of challenges so the first few months have been about understanding these issues and handling the economy which they have done well, they have brought a degree of stability on that front. The Government is now able to focus on areas such as education, health, agriculture, SMEs and low-cost housing. There is still a lot more work to be done because the problems in the economy are long-standing, there are no quick fixes but I believe they are moving in the right direction. There is now a degree of optimism that the country will start to turn around; it is a refreshing change for everyone.
2. The Banking Industry has seen an impressive growth in the last few years but Pakistan is home to 100 million adults without a bank account, with 13% adults citing religious concerns as a reason for not having an account at a financial institution, according to a World Bank report. Please give us your output of the banking space in Pakistan and how can it be improved?
The banking sector in Pakistan is strong and well regulated. It went through difficult periods in the 70s, 80s and even 90s when it was nationalized. Nowadays, the bulk of the banking sector is public but it is privately owned and therefore has a very sound future. Our regulator, the State Bank of Pakistan is very good which allows the banks to be stable and capital strong, there are no bank failures and there are no weaknesses, which are not handled properly.
The biggest challenge facing the banking sector is financial inclusion; on the whole we have about 30 Million bank account holders which is a very low number considering the 200+ Million population and the 150 Million adults. One of the main reasons for this, is that the economy is undocumented. We are a very low-income country and the banks have not been able to cater the needs of the population. The main questions people ask are: “Why should I have a bank account? What is in it for me?” What we need to do and we are working on that is to show them value in a bank account. For instance, one advantage is the ability to transfer money safely and to promote this we have introduced branchless banking. We have over 36.000 agents in villages, small towns, cities where the ordinary consumer can go and make the payments. United Bank Limited (UBL) is the first bank in Pakistan to have introduced this, we call them Omni Shops and people can transfer money, pay bills and buy railway tickets from these shops.
Financial inclusion will increase through platforms like branchless banking and mobile phones, especially for the new generation as there is an increase in cell phone penetration. Therefore we, and a lot of other banks are going to use digital applications to bring in customers and offer them a more convenient service.
3. United Bank Limited (UBL) is a Pakistani commercial bank, it is one of the largest bank in the private sector, the Bank operates a network of over 1,400 branches across Pakistan and over 15 branches overseas, with a customer base of over 5 million. The bank has an asset base in excess of $15 billion, a global workforce of over 13,000 people. What are your objectives for 2019?
Our main objective is financial inclusion through digital innovation, it is our forte and we are ahead of the competition in that area. In the past year, we have started a digital design lab, which consists of designing the journey of our customers based on their needs. We will soon start opening accounts for people without them having to go to the physical branch.
We have the largest number of rural branches and plan to focus even more on agriculture, SME and low- cost housing over the years. Something important for Pakistan is that we need to focus more on our compliance regime; it will ensure that our systems are robust and able to combat all the issues.
4. United Bank Limited has posted a standalone Profit Before Tax (PBT) of Rs. 25 Billion for Full Year 2018 and gross revenue of R81.3 Billion. How has the bank achieved such important profits?
Most of our profits come from our domestic network, which allows us to tap into the deposit base. We are an intermediary by bringing in deposits and lending them out. We do project finance; corporate banking, consumer banking, SME, agriculture and we are big lenders to the government and the power sector. For many years, Pakistan has been power deficient but the situation is improving. We are now focusing on other large infrastructure projects such as water and we will be assisting the textile industry with a special focus on exports.
5. The highlight of 2018 was UBL being declared the ‘Bank of the Year 2018 – Pakistan’ at ‘The Banker’ Awards in London. What current projects are you working on? Do you have any expansion plans?
I already spoke about the digital strategy, which is how we will expand our client base. Our focus now will be on informed lending so that a customer does not have to visit a branch to get a loan. We are amongst the largest players in the car loan sector. Our customers should be able to log into their mobile apps to get a car loan or a personal loan. We have to increase our product offering on digital but we still need to offer our clients services such as insurance, wealth management, personal loans and further down the road home loans. A home loan is a very recent concept in Pakistan and it needs to develop further.
6. The Bank remained committed to providing easy access to financing for SMEs. In line with this commitment, average SME lending grew by 25%. The agro-portfolio also grew by 59%, on an average basis, over the previous year. Are you looking to diversify your services into other sectors?
We are a universal bank and involved in all sectors. The only sector where banks have failed in Pakistan is mortgage finance. This is largely due to the legal system and the challenge in terms of land records, if a bank lends a mortgage for a house, it needs all the documentation that goes with it. Once the land ownerships issue is dealt with and fixed, we are hopeful that mortgages will transform the banking sector as well as the economy. We have the capacity and knowledge to offer mortgages and we need the enabling framework. The government is now giving incentives from a tax perspective and banks will now receive tax breaks when they lend to the agricultural sector, SME’s and housing sector. Taxes will be 20% instead of the standard 39%.
7. What is the strategy of the bank in terms of international development?
We are involved in the Middle East and that will remain our main area of focus, as there is a large Pakistani community in that region. We are in Bahrain, Qatar and have been in the UAE for over 40 years. Those economies are going through difficult times but we remain there because we are committed to those markets. We also have some subsidiaries in the UK, one in Switzerland and one in Tanzania. Going forward, we will largely be focusing on the Middle East and Pakistan.
We believe there is a lot of potential in Pakistan, it is a huge and buzzing economy, far more vibrant than the numbers might actually suggest. Despite of our 200 Million+ population, we still have a surplus in agricultural production. Pakistan is a very productive country and we need to ensure that we market it properly while giving it the enabling structure. This is why we need investments from countries such as the US as they can bring in the technical knowhow.
Another project that we are working on, it is assisting businesses with their investments in modern technologies and human resource capabilities. This will increase value, employment, per capita income and ensure the country moves up the value chain.
8. As the first woman to lead a major Pakistani Bank. How does it feel like to have succeeded in a world full of men? What is your message to other women, aspiring to enter banking, business or to challenge the status quo?
It has not been that difficult, the world views Pakistan as a conservative Islamic country, which makes them believe it is a difficult workplace for women. I have studied in London and lived in Australia and I believe it is difficult for women anywhere in the world. In this country in some ways you get more respect as a woman than you would get in other countries and I have found that the more conservative men are easier to work with. Getting to this position has not been very difficult.
For the women aspiring to enter the banking sector, the simplest thing to realize is that you do not have to become a man to be successful, you need to remain a woman. Speak up for yourself, be strong and you will find the opportunity to get ahead. It all depends on hard work, respect and fairness. Be proud of being a woman.
9. United Bank is very involved in corporate social responsible activities; you contribute to a number of programs related to education, health, vocational and skills training, community development, information technology and sports events. How important is CSR for United Bank? And in which CSR projects are you involved?
We focus largely on health and education; we donate a lot to colleges, universities and hospitals. I do not believe in showing off our CSR too much but some of the projects we have worked on are providing ambulances for Red Crescent. There is a college in Mianwali where we have set up a residential facility for the students and we also provide high-end equipment for hospitals.
10. You have 30 plus years of experience in banking which has included assignments in Risk Management, Retail, Corporate and Investment Banking. You started your career at American Express Bank and went on to work at ANZ Grindlays and Standard Chartered. You were also a director of the First Micro Finance Bank. Your last assignment was at Habib Bank Limited where you worked for 16 years, first as Head of Corporate & Investment Banking and then as Head of Branch Banking. From your personal life, what do you feel most proud of?
What I feel most proud of is the respect that I have gained from the people I have worked with. What has made me the happiest is the fact that I have been able to challenge people and lead them to succeed.
11. What is your final message to the readers of USA Today who consider Pakistan as a potential investment destination or are looking for potential partnerships in the banking sector?
The first step that a US investor needs to take is to spend some time in this country and understand its potential. It is such a big country; we have over 200 million people and there is a huge amount of productivity. Investors can come in and invest in education, health, agriculture, IT, banking…the choices are limitless and the opportunities are enormous. My message would be to come here and see the country for yourself, do not rely on the news and the numbers. It is a much safer place now and it can only be understood by visiting and talking to the local people.
