Bank Alfalah, time for ‘paying it forward’


Bank Alfallah Limited (BAFL) the sixth largest bank in Pakistan, incorporated in 1997 is owned by Abu Dhabi Group. Bank Alfalah has commemorated gradual increase in it’s share in the Pakistani banking sector. There are news of Bank Alfalah investing in power sector also. CEO, Head of Merchant Banking and Deputy General Manager has been authorized for the proceedings. Bank Alfalah’s profit before tax was 1.527 billion in first quarter of 2013, whereas the net income for first half 2013 fell 16% to Rs1.94 billion compared to 2.33 billion in the corresponding period of 2012. Alarming for the bank it’s core income discontinued, the support came from non-core operations of selling stocks and government bonds. BAFL issued term finance certificates which were almost oversubscribed, bank managed to raise 4.08 billion compared to initially targeted 1.25 billion. Bank Alfalah held an analyst conference to discuss three quarters of 2013 results in which strong earnings growth was portrayed, a growth of plus 28 percent YoY (year on year) and 48 percent QoQ (quarter on quarter) which however is followed by a weak 1H(one half) where bank’s earnings witnessed declining. According to the latest news Bank’s assets have increased during the previous fiscal year. All in all there are mixed reports on bank’s performance, as the bank tends to show the brighter side, understandably, whereas the depositors and stake holders don’t seem too happy or satisfied.
It is generally perceived that Bank Alfalah has achieved many economic goals and have made substantial profits, but has not contributed enough to the Pakistani society and in reimbursement of economic situation, through better loan schemes. Governor State Bank also urged BAFL and some other banks to re-align strategies for promoting finances targeting unemployed youth. Mr Yaseen Anwar also urged banks to play active role in promotion of SME through effective use of technology and creating awareness, in a press note issued by SBP, last month. He persuaded banks to participate in the scheme as a viable business given a vast untapped market of youth entrepreneurs.
Banks should report such financing in their annual reports under Corporate Social Responsibility (CSR) initiative in line with SBP’s instructions issued on 29th November, 2013, he said.
Bank Alfalah has announced a ‘rising talent award’ in which it will announce a cash reward of 500,000 for the most promising individual. A good deed but it would have been much consequential if the bank had announced a loan scheme for all the talented individuals and upcoming talent. That way they would have made a better contribution to the welfare of social economic situation, a field in which bank is lacking so far. Banks and bankers are making a lot of money but their contribution in society isn’t a lot. Providing loans to already successful businesses is significant and might be more profitable too but it doesn’t help in minimizing the ever growing gap between the rich and under-privileged. BAFL should have played an active role in Prime Minister’s youth loan scheme which it did not, they have to learn to believe in the ordinary citizens of Pakistan. They still should come forward with the plans of their own and join hands with Government of Pakistan to help regain its economic stability.
Bank employees have to start thinking out of the box, corporate sector is important but public sector should not be ignored, besides major defaults happen in corporate sector. Business loans should be given to the middle and lower classes, their business means life to them and they are more success oriented, they want to be lucrative and are less likely to default. As a senior American banker wrote in his article” It’s human nature to want to be successful. The trick is to dare, to let the reins loose and work with human nature not against it”. When was the last time a survey was done to know about the needs of common people, and what they want from their bank? In most cases they are not even treated right in the banks. A Thesis on Pakistani banks shows the tendency of bank employees behaviour towards customers:
Bank Alfalah should also undergo a study to know how their customers feel about their bank. As to our knowledge their PR and Marketing & Advertising Departments are not doing very well. According to some critics these departments are performing poorly in impressing or even reaching the target audience. Advertising is being done in some newspapers which almost have no readership at all, why it is being done and why the most popular media houses are being ignored... makes the whole matter shady enough to raise questions .  BAFL’s 24/7 customer service also needs a lot of improvement as inquirers have to wait for long times before hanging up and that too without a satisfactory answer. We would like to suggest a few recommendations, in order to improve bank’s overall perceptions. It is very important to know what customers from different backgrounds want from their bank for that purpose ‘Think Tanks’ need to be formed, representing wealthy, middle and lower classes, supervised by senior bankers. Banking language has to be made easy, so that ordinary citizens could conveniently understand how their bank is performing; most of the forms for loans and other services are also very difficult to understand for common people. Another senior American Banker wrote in his recent article “Speak in a language that customers can easily understand, we feel today that customers interests are not delivered properly. Give utmost respect to the customer that might distinguish you from the rest of the banks”. These are the compassionate remarks from a society which already respects their customers to a great deal, one can imagine how much improvement is needed in our banking environment. We have pointed out few of the weaknesses and hope that they will be considered favorably, as our sole purpose is the betterment of institutions of this country.  One final thought, help the government in employing youth, we all have profited from this country and nation, it’s about time to ‘pay it forward’. 

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