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HBL rescheduled Rs 8.609bn textile sector loans in 1999

RECORDER REPORT

KARACHI: Habib Bank restructured and rescheduled the non-performing loans of textile sector to the tune of Rs. 8.609 billion last year, which was 66 percent of the total restructured amount.

HBL exposure to the textile sector has also increased despite high ratio of non-performing loans.

According to HBL sources, the bank's exposure to in sector was approximately 26 percent of the total advances as of December 31, 1998. The exposure to the sector increased to 29.50 percent in just one year, from December 31, 1998 to December 31, 1999.

The bank had very large textile industry exposure in the past. "It was logical that the bank should first clean up its non-performing portion in portfolio, before further enhancing its exposure," said a statement of the bank.

"The viability of the bank depends upon revival of textile sector by carrying out rescheduling and restructuring to the tune of Rs. 8609 million, representing 66 percent of total restructured amount of Rs.13,139 million in the year 1999," it added.

It says that in addition to Rs.8.6 billion restructuring and rescheduling, the bank undertook the task of revitalising operating efficiencies of the textile sector through judicious loaning for BMR to upgrade value-addition and export competitiveness of key customers.

Of the total Rs.1000 million in BMR projects undertaken in 1999, some major revivals and extensions were: Nishat Mills Ltd., Rs. 200 million, Chenab Fabrics Rs. 120 million, Gul Ahmed Textile Mills, Rs. 100 million; Liberty Mills Rs. 60 million; Kohinoor Weaving Mills Rs. 60 million; Jaguar Pvt Ltd, Rs. 30 million; Mohammad Farooq Textile Mills Ltd. Rs 26 million; and Amtex Pvt Ltd Rs. 8 million.