International Banking - Final Presentation - Nov - 15 - 09


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International Banking - Final Presentation - Nov - 15 - 09

  1. 1. “A feasibility report”WESTPAC BANK’SPOTENTIAL ENTRYINTO PAKISTANGroup Members:Awais Ahmed MemonShaikh Faizan AhmedSyed Anser AhmedSyed ImranRavi Kumar
  2. 2. Add your company sloganLOGOIntroduction of Westpac HISTORY BACKGROUND TO OUR BEGINNINGS FIRST PREMISES
  3. 3. Add your company sloganLOGOVISION AND VALUES Vision Purpose Values Ambition
  4. 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. 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. 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. 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. 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. 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. 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. 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. 12. Add your company sloganLOGOContinue… Finally, a practical solution is to enhanceproductivity in the medium term
  13. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 24. Add your company sloganLOGOMARKETING FEASIBILITY FIRST YEAR OF OPERATIONS Industry expertise
  25. 25. Add your company sloganLOGOCOMPREHENSIVE RANGE OF FINANCIALOPTIONS Bilateral and syndicated loan facilities. Leasing products Project and structured debt Leveraged and Acquisition finance
  27. 27. Add your company sloganLOGOBANK ACCOUNTS BUSINESS PERSONAL
  28. 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. 29. Add your company sloganLOGOSWOT ANALYSIS OF WESTPACSTRENGTHSAdvanced InfrastructureFriendly Staff24 hrs. Banking servicesDIVERSIFIED PORTFOLIO
  30. 30. Add your company sloganLOGOWEAKNESSES High Bank Service Charges Less Credit Period
  31. 31. Add your company sloganLOGOOPPORTUNITIES Bank –Insurance services Associate with social cause
  32. 32. Add your company sloganLOGOTHREATS Competition Net Services Decentralized Management
  33. 33. Add your company sloganLOGOSWOT ANALYSIS OF PAKISTAN STRENGTHSCompared favorably on growthChanges in policyStrengthen in the sectorExtensive reach
  34. 34. Add your company sloganLOGOWEAKNESSES Old private sector Need to fundamentally strengthen institutionalskill levels
  35. 35. Add your company sloganLOGOOPPORTUNITIES Demographic shifts New private banks could reach the next level oftheir growth
  36. 36. Add your company sloganLOGOTHREATS Political instability Rise in inflation
  37. 37. Add your company sloganLOGOPROMOTIONAL STRATEGY Divided into various phases Kiosk activation MAUs (Mobile activations units)
  38. 38. Add your company sloganLOGOOPERATIONAL FEASIBILITY
  39. 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. 40. Add your company sloganLOGOContinue… Fourth year we are planning to expand ourbusiness Commercial and business hub Potential of customer base
  41. 41. Add your company sloganLOGORISKS Market risk Political instability Forex risk
  42. 42. Add your company sloganLOGOINFORMATION SYSTEMS AND WESTPAC Computerized banking system Westpac chose the ACI solution to strengthen itsfraud detection Technological innovation
  43. 43. Add your company sloganLOGOFINANCIALS
  44. 44. Add your company sloganLOGOCOST FOR OPERATIONS
  45. 45. Add your company sloganLOGOCONTINUED
  46. 46. Add your company sloganLOGOCONTINUED..
  47. 47. Add your company sloganLOGOProjected Statements Income Statement Balance Sheet Cash Flow Statement NPV-IRR
  48. 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. 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. 50. Add your company sloganLOGOTHE ENDTHANK YOU FOR YOUR TIME!