Second-Biggest Pakistan Bank Targets `Enormous' Youth Market

(Bloomberg) -- Pakistan’s second-largest bank by assets aims to double its current-account deposits in five years as it extends its reach into the nation’s rising middle class through new technology and a branch revamp.

United Bank Ltd. is seeking to increase its number of customers by about 40 percent to 10 million in three years, with domestic current-account deposits doubling to about 920 billion rupees ($7.9 billion) by 2022, Chief Executive Officer Sima Kamil said in an interview in Karachi on Wednesday.

“We have a good customer base, we have an established brand,” said 61-year-old Kamil, who is the first female head of a Pakistani commercial bank. “It just needs that extra push which I think I’m here for.”

UBL, which was established 59 years ago and has a presence in 11 countries, is looking to grow customers in the world’s fifth largest nation by population as disposable incomes rise. Only 13 percent of adults in Pakistan have a formal account, according to the World Bank.

Kamil who joined last summer after a 16-year stint heading the corporate and retail units at Habib Bank Ltd., Pakistan’s largest lender, plans to relocate about 100 branches this year. The bank has about 1,400 outlets with 40 percent in rural areas, which Kamil said are a focus.

Tailor Products

“We have to tailor products that fit the high-income levels and also the lower ones,” said Kamil. “The challenge is to make sure we meet their needs and that it’s a sustainable model for us so we can make some money from it too.”

Pakistan has an “enormous youth bulge,” Kamil said, which has turned the nation into the world’s fastest growing retail market. UBL aims to grow its consumer and small- and medium-sized enterprise segment by as much as 30 percent a year, said Kamil. The bank also has the third-largest number in Pakistan of users of mobile wallets, which allow customers to open accounts at small roadside shops through agents for basic services including money transfer.

UBL’s shares rose 3.5 percent to the highest in 10 weeks in Karachi, taking this year’s gained to 14 percent, compared with 15 percent increase in the benchmark KSE100 Index.

Pakistan’s economy is growing above 5 percent but showing increasing vulnerability as dollar reserves decline the most in Asia and as Pakistan’s current account deficit has risen by 50 percent in the eight months ended February. Monetary authorities have devalued the rupee twice since December to ease pressures.

The South Asian nation’s central bank also increased rates for the first time in four years in January but then unexpectedly held last month as inflation has stayed below 4 percent. Kamil was not surprised.

“There is nothing to suggest in the inflation numbers that there is a need and we wouldn’t want the growth impetus to be compromised,” said Kamil, who was appointed to an economic advisory committee last month by Prime Minister Shahid Khaqan Abbasi.

The central bank “will be very inflation dependent,” she said. “They are going to watch and I don’t think they will take a knee-jerk and start increasing it every two months.”

To contact the reporters on this story: Faseeh Mangi in Karachi at fmangi@bloomberg.net, Chris Kay in Karachi at ckay5@bloomberg.net.

To contact the editors responsible for this story: Arijit Ghosh at aghosh@bloomberg.net, Colin Keatinge, Russell Ward

©2018 Bloomberg L.P.