DIB Pakistan bets big on aggressive growth strategy

Islamic Bank (DIB) Pakistan Limited will sustain its aggressive growth strategy to expand its presence in the country as the economy moves in positive trajectory and shows promising business prospects ahead, its top official says.
Junaid Ahmed, chief executive of DIB Pakistan, said the bank has established its strong presence in the country in past five years through its 175 branches and 50 branchless banking booths in 223 key locations of 55 major cities across Pakistan.
"We are planning to reach over 250 locations in 60 cities by December 2015," Ahmed told Khaleej Times in an interview during his recent visit to Dubai.
DIB Pakistan Limited is a wholly-owned subsidiary of Dubai Islamic Bank, UAE. It was incorporated in Pakistan as an unlisted public limited company on May 27, 2005 and commenced operations as a scheduled Islamic commercial bank with effect from March 28, 2006.
The bank reported Rs408.51 million profit before tax and Rs106.47 billion total deposits during first half of 2015 and is principally engaged in corporate, commercial and consumer banking activities and also involved in various investment projects in the country. It enjoys a short-term credit rating of 'A-1' and long-term credit rating of 'A+' with a 'stable' outlook, from JCR-VIS, indicating it's robust position in the industry.

Fresh entrant
Ahmed said DIB Pakistan is a fresh entrant in the country's Islamic banking industry but emerged as a strong financial institution, which expanded its network in 55 major cities with steadfast determination in first decade of operations. He said the bank continues to reaffirm its commitment to Pakistan with new branches and absolutely Halal and Shariah-compliant new products and services.
"Within the first five years of operations, the bank quickly established itself as a pioneering Islamic bank offering world class banking - The Islamic Way. Although, we had opened only 36 branches in Pakistan by then but we had already been recognised as a market leader in consumer finance, particularly in auto finance and home finance. In addition, we became the first and also only Islamic bank to launch priority banking services," he said.
In addition, he said DIB Pakistan has been a pioneer in offering the most comprehensive portfolio of state-of-the-art alternate delivery channels giving 24/7 banking access to customers comprising of Internet banking, SMS banking, ATMs and cash deposit machines.
"We are the first Islamic bank to launch Visa Debit Card for our customers," he said.
First decade of success
Ahmed said DIB Pakistan is pursuing an aggressive growth strategy to increase its share in growing Islamic banking in the country. He said the bank's branch network recorded huge expansion in past five years and will continue the same strategy to sustain growth in coming years.
"In 2010, we made a conscious decision, particularly after I assumed office in DIB Pakistan to shift gear and expand our footprint across Pakistan more aggressively to become one of the fastest growing banks in Pakistan.
"From only 36 locations [36 branches) in October 2010, today DIB Pakistan stands at 223 locations [175 branches and 50 branchless banking booths] in 55 cities across Pakistan. We have plans to Insha Allah reach over 250 locations in 60 cities by December 2015."
Sharing the success formula, he said the bank has launched branchless banking booth model, the first-of-a-kind mode of banking where it offers services to the customer's doorstep.
"Initially, we started with three booths, but now we have over 48 booths nationwide," he said.
He said DIB Pakistan will continue to make deep inroads into the country's growing Islamic banking business, which is expanding at 30 per cent annually.
"We have almost 10 per cent share of the total Islamic banking market in terms of deposits and 7.5 per cent share in terms of assets.
"If we go by 30 per cent Islamic banking growth we can achieve Inshallah 15 per cent of market share of Islamic banking in a very short span of time."

Rs100b deposits achieved
Sharing the bank's financial performance, he said the bank recorded Rs926 million profit before tax in 2014, which reflected year-on-year increase of 337 per cent. The bank also registered 24 per cent annual growth in customer deposits, which reached at Rs84 billion in December 2014. "I'm happy to report that our deposit book has surpassed Rs100 billion mark in the first half of 2015," Ahmed said.
On the asset side, he said DIB Pakistan's total assets rose by 27 per cent in 2014 and reached at Rs102 billion. The bank's financing grew substantially by 66 per cent over the year, taking total financing to Rs59 billion in 2014.
Targets overseas Pakistanis
Eyeing the future in a very competitive Islamic banking industry of Pakistan, Ahmed said DIB is keen to provide not just Islamic products but offer its customers a distinctively unique range of Islamic banking financial solutions second to none.
"In this endeavour, we will undertake more marketing campaigns to reflect upon the virtues of Shariah-compliant products and solutions that serve genuine needs of the economy and finance.
"Our plans for the next five year include further branch footprint expansion across Pakistan to become a key player in the industry in line with our global expansion strategy. We will continue developing further new niche-market products and services best suited for the Pakistani market."
About the products in the pipeline, he said the bank is going to introduce revolutionary and unique propositions like Foree Paisa - First Islamic domestic money transfer service, Business Account - one of a kind bank account for retail shopkeepers and traders, Western Union Tele-Transfer - Telephone remittance services via Inter-bank fund transfer, Consumer durable finance variants and personal finance - Pakistan's first Islamic personal finance facility.
To a question about specific products for overseas Pakistanis especially working in the UAE and Gulf region, he said DIB Pakistan has established a Non-Resident Pakistan (NRP) Help Desk in DIB Dubai branch to facilitate millions of Pakistani expats living in Dubai and the UAE.
"We plan to open further Help Desks at DIB global branches to enable NRPs to avail Pakistan based banking services including priority banking with Visa Debit Card, auto finance, home finance, free home remittance, Internet banking with Inter-bank fund transfers and BancaTakaful from their foreign soil with convenience," he explained.
Developing sukuk industry
Ahmed said DIB Pakistan has been playing an instrumental role in developing sukuk market in the country by offering financing and advisory services to investors and the government institutions. The bank takes on the role of both an investor and a facilitator to serve as a catalyst for further foreign direct investment (FDI) in the country.
"Pakistan exchequer has benefitted from over $130 million of FDI from DIB Pakistan alone. In addition, the bank continues working closely with a number of UAE-based large business corporations in identifying opportunities and channeling FDI flows into the country."
He said the bank has also been actively involved in bringing global brands to Pakistan and is honored to act as the sole financial adviser for various global franchises operating in Pakistan.
DIB was one of the lead managers in the last 2014 Pakistan government's foreign currency sukuk worth $1 billion. It is also one of the lead managers in Pakistan government's first sovereign sukuk deal worth $600 million in 2005.
"The Bank continues to play an active role in developing the market of Islamic commercial paper in Pakistan by participating in all major sovereign sukuk issue from the government of Pakistan as well as sukuk issue from the private sector," Ahmed concluded.
- muzaffarrizvi@khaleejtimes.com