International Banking - Final Presentation - Nov - 15 - 09

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  • 1. “A feasibility report”WESTPAC BANK’SPOTENTIAL ENTRYINTO PAKISTANGroup Members:Awais Ahmed MemonShaikh Faizan AhmedSyed Anser AhmedSyed ImranRavi Kumar
  • 2. Add your company sloganLOGOIntroduction of Westpac HISTORY BACKGROUND TO OUR BEGINNINGS FIRST PREMISES
  • 3. Add your company sloganLOGOVISION AND VALUES Vision Purpose Values Ambition
  • 4. Add your company sloganLOGOOVERVIEW OF AUSTRALIA’S ECONOMY Australia has an enviable, strong economy with aper capita GDP on par with the four dominantWest European economies Business and consumer confidence and highexport prices for raw materials and agriculturalproducts economy in recent years
  • 5. Add your company sloganLOGOContinue… Remains relatively healthy despite falling exportcommodity prices.• The government plans to counter slowing growth in2009 with fiscal stimulus efforts.
  • 6. Add your company sloganLOGOWESTPAC BUSINESS PORTFOLIO Westpac Retail and Business Banking St.George Bank BT Financial Group New Zealand Westpac Institutional Bank Westpac New Zealand
  • 7. Add your company sloganLOGOTHE STATE OF THE PAKISTANI ECONOMYOVERVIEW Performance of the country would remain weak inFY09. Massive deterioration in external accounts, anddeclining industrial output. Government focused on restoring macroeconomicstability, and entered into a Stand By Arrangement(SBA) with the IMF in support of its reform program.
  • 8. Add your company sloganLOGOContinue…. Inflation began to was maintained with the fiscaldeficit being reported to be 3.1 percent of GDP Major macroeconomic indicators weaknesseswhich, if not addressed, could hamper economicrecovery. The downtrend in inflation owes to both,favorable international and domesticdevelopments, as well as a deceleration indomestic demand
  • 9. Add your company sloganLOGOContinue… The weakness in demand pressures amid fiscalprudence, lagged impact of relatively lowerinternational commodity prices To support industry and particularly the export-oriented sectors, that were pressured by the impactof the global recession As a result of this, SBP projections suggest thatdeceleration in inflation will be much sharper in thenext few months.
  • 10. Add your company sloganLOGOContinue… The growth in tax collections has already slowed,and may decline further in Q4-FY09 The government’s expenditure budget will alsobe stretched by the ongoing war on terror It is important to stress the “improvement” in thefiscal picture as a result of the sharp cut ondevelopment spending is neither sustainable nordesirable.
  • 11. Add your company sloganLOGOContinue… It is crucial that the government increase itsspending on health, education, andstrengthening social safety nets. Flows under financial and capital accounts arerelatively lower compared with the precedingyears, causing a rise in overall external accountdeficit
  • 12. Add your company sloganLOGOContinue… Finally, a practical solution is to enhanceproductivity in the medium term
  • 13. Add your company sloganLOGOTHE STATE OF THE PAKISTANI BANKINGSRECTOR Complete transformation of the banking industry,supported by privatization and restructuring andmarket oriented policies. A significant majority are unable to access even thesimplest financial services, meaning that they paymore to manage their money. The domestic liquidity condition, as a result ofslowdown in domestic credit requirements by thegovernment
  • 14. Add your company sloganLOGOContinue… The impact of improvement in demand pressures onrupee liquidity is quite visible from the softening ofmarket interest rates. The overall deposits mobilization by banks remainedweak during July-Mar FY09.
  • 15. Add your company sloganLOGOLENDING BEHAVIOR OF BANKS During the initial months of FY09, not only thedemand for private sector was strong, bankswere also willing to extend credit to the privatesector. With continued decline in deposit growth, rupeeliquidity in the inter-bank market started dryingup – this was also reflected in falling banks
  • 16. Add your company sloganLOGOContinue… Liquidity conditions worsened further following anabrupt and heavy withdrawal of deposits from thebanking system Concerns on quality of credit began to surface Banks used to assess collateral value more,which includes inventories and fixed assets, andless importance was given to the cash flows ofcorporates.
  • 17. Add your company sloganLOGOContinue… The resulting availability of loanable funds withbanks permitted the government to sharplyincrease its financing of the deficit throughscheduled banks. The group-wise analysis of incrementaladvances by banks suggests that the slowdownin private sector credit since September 2008
  • 18. Add your company sloganLOGOFOCUS ON BANKING BUSINESS SBP wants banks to strengthen their businessactivities so that significant progress made inrecent years is consolidated Strong capital adequacy along with profitabilityindicators Improvement in economic indicators in the recentmonths due to implementation of macroeconomicstabilization
  • 19. Add your company sloganLOGOIMPROVING COMPETITION IN THE BANKINGSECTOR The emergence of normal size banks Allowing the entry of strong foreign bank Establishing Islamic Banks parallel toconventional banks are some of the key steps topromote competition and inclusive finance
  • 20. Add your company sloganLOGOCREATING A LEVEL PLAYING FIELD Significantly changed the incidence of minimumcapital requirements for small-medium sizebanks. Small size banks in the wake of losses stemmingfrom cyclical downturn in economic activities
  • 21. Add your company sloganLOGOContinue… The small/medium size banks are in expansionphase as data on number of branches for CY08. The small and medium size banks have attractedlarger number of personnel in line with theirexpanding business activities.
  • 22. Add your company sloganLOGOASSUMPTIONS Westpac’s strategy is to enter the Pakistani marketas a corporate banking entity. In the fourth year of operations Westpac will gounder the expansion process by introducing twomore branches and entering into the retailbusiness Westpac will initially start off with a network of fivebranches and a head office
  • 23. Add your company sloganLOGOContinue… We expect our advances to grow by an averageof 18% annually. While deposits on the otherhand are expected to grow at a rate of 32%annually. WestPac will be bringing in AUD 103 Million aspaid up capital which is equivalent to PKR 8Billion.
  • 24. Add your company sloganLOGOMARKETING FEASIBILITY FIRST YEAR OF OPERATIONS Industry expertise
  • 25. Add your company sloganLOGOCOMPREHENSIVE RANGE OF FINANCIALOPTIONS Bilateral and syndicated loan facilities. Leasing products Project and structured debt Leveraged and Acquisition finance
  • 26. Add your company sloganLOGOSECOND YEAR OF OPERATIONS HOME LOANS PERSONAL LOANSUNSECUREDSECURED CREDIT CARDS BUSINESS LOANS
  • 27. Add your company sloganLOGOBANK ACCOUNTS BUSINESS PERSONAL
  • 28. Add your company sloganLOGOTHIRD YEAR OF OPERATIONS CAR LOANFixed rate car loans for the life of the loanFinancing of all brand new locally assembled vehiclesand used cars.Financing limit ranging between Rs. 200,000/- to Rs.2000,000/- for brand new cars.
  • 29. Add your company sloganLOGOSWOT ANALYSIS OF WESTPACSTRENGTHSAdvanced InfrastructureFriendly Staff24 hrs. Banking servicesDIVERSIFIED PORTFOLIO
  • 30. Add your company sloganLOGOWEAKNESSES High Bank Service Charges Less Credit Period
  • 31. Add your company sloganLOGOOPPORTUNITIES Bank –Insurance services Associate with social cause
  • 32. Add your company sloganLOGOTHREATS Competition Net Services Decentralized Management
  • 33. Add your company sloganLOGOSWOT ANALYSIS OF PAKISTAN STRENGTHSCompared favorably on growthChanges in policyStrengthen in the sectorExtensive reach
  • 34. Add your company sloganLOGOWEAKNESSES Old private sector Need to fundamentally strengthen institutionalskill levels
  • 35. Add your company sloganLOGOOPPORTUNITIES Demographic shifts New private banks could reach the next level oftheir growth
  • 36. Add your company sloganLOGOTHREATS Political instability Rise in inflation
  • 37. Add your company sloganLOGOPROMOTIONAL STRATEGY Divided into various phases Kiosk activation MAUs (Mobile activations units)
  • 38. Add your company sloganLOGOOPERATIONAL FEASIBILITY
  • 39. Add your company sloganLOGOOFFICE LOCATIONS Initially opening five branches in the differentareas of Karachi: North Nazimabad Chundrigar Road Gulshan-e-Iqbal Saddar Shahrae-faisal
  • 40. Add your company sloganLOGOContinue… Fourth year we are planning to expand ourbusiness Commercial and business hub Potential of customer base
  • 41. Add your company sloganLOGORISKS Market risk Political instability Forex risk
  • 42. Add your company sloganLOGOINFORMATION SYSTEMS AND WESTPAC Computerized banking system Westpac chose the ACI solution to strengthen itsfraud detection Technological innovation
  • 43. Add your company sloganLOGOFINANCIALS
  • 44. Add your company sloganLOGOCOST FOR OPERATIONS
  • 45. Add your company sloganLOGOCONTINUED
  • 46. Add your company sloganLOGOCONTINUED..
  • 47. Add your company sloganLOGOProjected Statements Income Statement Balance Sheet Cash Flow Statement NPV-IRR
  • 48. Add your company sloganLOGOCONCLUSIONS AND RECOMMENDATIONS Best bank in 2007 In Pakistan, Westpac realizes IRR of 6% andNPV of 11,219780 Westpac can introduce new products as initiallywe are launching selective products in Pakistan
  • 49. Add your company sloganLOGOContinue… We do have an option to go public in 5th year ofour operations Based on the report, we highly recommend theentry of Westpac in Pakistan
  • 50. Add your company sloganLOGOTHE ENDTHANK YOU FOR YOUR TIME!