Professional Documents
Culture Documents
DEFINITION OF BANK
According to Peter, S Rose
A Financial Intermediary that accepting deposits and granting loans called Bank. Bank is reliable financial institutions which receive the money from one group of people and lend to other group of people. So bank performs the duty of financial intermediary among the people and creates the credit money.
History of Banking:
EVALUATION OF BANKING:
It has not so far been decided as to how the word Bank originated. The explanation of this origin is attributed to the fact that Jews in Lombardy transacted the business of money exchange on branches in the market place and when the business failed. The people destroyed the Bank. Incidentally the word Bankrupt is said to have been evolved from the Italian Money changers were never called Banchierei in the Middle Ages. Other authorities hold the opinion that the word Bank is derived from the German work back which means joined stock fund. Than Back was Italianize into Bank.
EARLY GROWTH :
Banking in fact Is as primitive as human society for ever since man came to realize the importance of money as a medium of exchange. Perhaps it was the Babylonians the development banking system as early as 2006 B.C It is evident that the temples of Babylon were used as Banks because of the prevalent respect and confidence in the clergy. King Haurabi (1686---1728 B.C) the founder of the Babylonian empire, drew up accede where in he laid down standard rules of procedure for banking operation by temples and great Landlords. He got his code inscribed on the block of diorite about 8 feet tall containing about 150 paragraphs which deals with nearly all aspects of loans. Interest pledges , guarantees natural accident, loss, theft etc. later on Sumerians Babylonians, hitties and Assyrians standardized the value of the goods in silver copper and bronze. It is not certain as to whom invented money but history recess that king of Lydia castled electrum ingots of identical shapes and of uniform weight with a triple emblem engraved on it as an official guarantee of value in 687 B.C in 1401 a German public bank was framed comprising the operations discounting and transferring of money . by the 16th century some more public Banks were formed in Venice, Milan, Amsterdam, Hamburg and Nuremburg. In
order to streamline Banking organizations and techniques conferences were held in Nuremburg from 1548 to1551 and it was agreed that the commercial interest of the time needed a bank with facilities of growth and transfer but it should not be run by private individuals . Ultimately in 1587 a Stat Bank under the name of Banco DI rialto was formed in Genoa. Later the Bank of Amsterdam was also formed in 1609. This Bank had guarantee by the state and rendered valuable service to the Netherlands trade up to the year 1795. Similarly in1690 the Bank of Hamburg came into existence in Hamburg with the similarly in 1690. The bank of Hamburg came into existence on Hamburg with the business of accepting deposits of fine silver or foreign money and to run account on these deposits. This Bank rendered great service to the merchants as well as countries it dealt with until with 1873 when it was merged with the Reich Bank. By the year 1700. The Bank of England was not only issuing notes butt also conducting account for customers. Its directors were conducting the business like that of limited companies. The Bank had the monopoly of issuing banking notes. Up to 1813 to there about England the main profit of bank was derived from the circulation of notes.
Banking in Pakistan:
At the time of independence there were 631 offices of scheduled banks in Pakistan of which 487 were located in West Pakistan alone, as new country without resources it was very difficult to run its own banking system immediately. Therefore the expert committee recommended that reverse bank of India should continue to function in Pakistan until 30th September 1948, so that problems of time and demand liability coinage currencies, exchange etc. Be settled between India and Pakistan. The non Muslims started transferring their funds and accounts to India. By the end of June 1948 the number of officers of scheduled banks in Pakistan declined from 631 to 225. There were 19 foreign banks with the status of small branch officers that were engaged
solely in export of crops from Pakistan, while there were only two Pakistani instructions, Habib bank of Pakistan, and Australia Bank. The customers of the bank are not satisfied with the uncertain condition of banking. Similarly the Reserve Bank of India was not in the favor of govt. of Pakistan decided to establish a full fledge central Bank. Consequently the Governor of Pakistan Quaid -I- Azam inaugurated the stat Bank of Pakistan assumed full control of banking and currency in Pakistan. The Banking structure in Pakistan comprises the following types. State Banks Commercial Bank of Pakistan Saving Banks. Co-operative Banks. Specialized credit institution. Up to December 31, 1973. There were 14 Pakistan commercial banks that functioned all over the country and in some foreign countries through a network of branches. All these commercial banks were nationalized in January 1, 1974. And were recognized and merged into the following five banks. National Bank of Pakistan. Muslim Commercial Bank Limited. Habib Bank Limited. Allied Bank Limited. United Bank Limited. The State Bank of Pakistan is the central bank of the country and was established on July 1. 1948. The separation of East Pakistan and its repercussion in the form of economics depression has caused a lot of difficulties to the banking system in Pakistan. The network of bank branches now covers cover a very large segment of national economy. The numbers of branches have increased appreciably and there is now on branch of bank for every 3000 heads of population
approximately. There is done reasonable growth in deposit from the establishment of Pakistan. Besides this growth specialized credit and financial institution have also developed over the years. The government of Pakistan in the late 90s introducing the need for the privatization of state owned banks and companies. The private sector has accepted the challenge and most of the banks are privatizing today. The state bank of Pakistan issues the shares of these periodically. Bank employees and other common can also purchase these shares and earn profit.
In April 2004 the Pakistan operations of Credit Agricole Indosuez were also amalgamated with and into NIB. In March 2005 Temasek Holdings of Singapore acquired 25% shareholding in NIB Bank, through Bugis Investments. This shareholding was further enhanced to over 70% (Seventy Percent) in June 2005 following an increase in Nibs paid up capital to Rs.3.4bn. NIB Bank has since grown rapidly from a base of 2 branches in 2003 to 45 in the 4th quarter of 2007. Total assets have grown from Rs.9bn in December 2003 to Rs.87bn (excluding acquisition of PICIC through rights) as of September 30 2007, a CAGR of 85%. Loan growth has been equally rapid, increasing from Rs.7bn to Rs.43bn in the same period (a CAGR of 64%), resulting from successes in both the commercial and consumer business. Deposits for the same period have grown at a CAGR of 95%, reaching Rs.45.3bn. 00` The overall client base of NIB has also witnessed a tremendous growth in the same period as of September 2007, from a few thousand to over one hundred thousand. NIB Bank's vision is to rank amongst the top 5 banks in the country. Therefore towards end of June 2007 it acquired majority shares of PICIC with the aim of merging PICIC and its commercial banking subsidiary PICIC Commercial Bank Limited into NIB. The acquisition was financed through the country's largest private sector rights issue, with resultant increase in NIBs paid up capital to Rs.21.4bn. The PICIC acquisition has bought with it another subsidiary "PICIC DFI" and an affiliate "PICIC Insurance". NIB already has a shareholding in NAFA, an Asset Management Company thus its asset management business will now also be increased, with diversification in the The legal merger of PICIC, NIB & PCBL took place on December 31, 2007, once all regulatory approvals were in place. Karajan Iqbal Hassan, supported by four business heads and ten business enabling function heads, leads NIB Bank. The merger has resulted in a vastly expanded network of 240 branches and total assets of over Rs.185bn. Consequently NIB has the second highest paid up capital of around Rs.27.5bn and ranks number 7 amongst commercial banks in terms of distribution network. The powerful franchise of the three merged entities has now been brought together to form a large and powerful bank. Going forward management is confident that the combined bank will be a top performer delivering a wide range of financial services through an extensive branch network. The asset management arms and insurance affiliate are also expected to perform well and provide an attractive dividend stream.
Travelers Cheques, Saving Certificates, Home Loans, Online Banking etc.Nibs advances and loan portfolio grew by 11.62% to Rs.10.220 billion.Credit rating by PACRA (Pakistan Credit Rating Agency) rated NIB BANK as AA for long term and A1+ for short term. Both ratings are investment grade and denote very high credit quality and very low expectation of credit risk Bank is in the process of acquiring a 15% stake in banking company in Bangladesh. This acquisition will not only help NIB in promoting bilateral trade with Bangladesh, but also help in the initiation of business with other countries. NIB invests heavily in the technological development and advancement of various procedures. It has achieved efficiency through automation and computerization of banking activities. IT department of NIB has developed PIBAS, which is an advanced computer program. NIB BANK is working on a program to increase its ATM installations. It also expects to be online with SWIFT soon.
Headquarters Rawalpindi, Pakistan Lt. Gen. Waseem Ahmed Ashraf, Key people Chairman M. R. Mehkari Products Banking & CEO
Rs 1.10 billion PKR (2009)[1] Rs 9.03 billion PKR (2009)[1] Rs. 254,32 billion PKR (2009)[1] 7,279 (2009)[1]
Askari Bank is the only bank with its operational Head Office in the twin cities of RawalpindiIslamabad, which have relatively limited opportunities as compared to Karachi and Lahore. This created its own challenges and opportunities, and forced us to evolve an outward-looking strategy in terms of our market emphasis. As a result, we developed a geographically diversified assets base instead of a concentration and heavy reliance on business in the major centers of Karachi and Lahore, where most other banks have their operational Head Offices.
Model town Lahore Branch is the new born branch of Askari bank in this residential area. In a short span of time of one year this branch increase their business remark
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Best Presented Annual Accounts by (ICAP) and (ICAMP). 2000, 2001and 2002. The Best Presented Annual Accounts by South Asian Federation of Accountants (SAFA), in the SAARC region The Best Consumer Banking Award 2006 by the Consumer Association of Pakistan. 2007 The Best Retail Banking Award 2009 by Pakistan Guarantee Export Corporation Ltd. 2009
"Best Corporate Report Award for the year 2009" by ICAP & ICMAP. 2009.
Over the years, Askari Bank has proved its strength as a leading banking sector entity, by achieving the following firsts in Pakistani banking. I. First Pakistani Bank to offer on-line real time banking on a countrywide basis. II. First Bank with a nation-wide ATM network III. First Bank to offer Internet Banking services IV. First Bank to offer E-Commerce solutions
Our Mission:
To improve the quality of life for millions
Our Values:
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Passion
Respect
I appreciate different viewpoints I am receptive to the diversity of ideas I treat others as I would want to be treated I look after the community in which we live and work I contribute to the care and comfort of those around me
Integrity
I do what I say I am honest and forthright I never compromise my values I am open and honest in all my dealings I have the courage to stand up for what I believe to be true
Excellence
I strive for better I exceed expectations I am constantly improving I always try to get it right the first time I produce error free, superior quality work
Fairness
I am impartial I judge on merit I dont expect favours I listen to both sides I reward what you do not who you are
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Our Mission:
To be the leading private sector bank in Pakistan with an international presence, delivering quality service through innovative technology and effective human resource management in a modern and progressive organizational culture of meritocracy, maintaining high ethical and professional standards, while providing enhanced value to all our stakeholders, and contributing to society.
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with matters other than those involving policy and applications for financial assistance. The following gentlemen presently comprise NIB Bank ltd Board of Directors: Mr. Francis Andrew Rozario Mr. Mahmudul huq Bhuiyan Mr. syed Aamir Zaidi Mr. Thomas Patrick Sodano Mr. Tan Soo Nan Mr. Willie Wai Kong Chan Mr. Phua Kok Kim Mr. Khawaja Iqbal Hassan
MANAGERIAL CHART:
NIB is equipped with very strong and experienced human resource structure consisting of financial/ investment analysts, marketing experts/economists, engineers, chartered accountants, cost accountants, financial accountants and legal experts. NIB has traditionally been hiring individuals from renowned educational institutions and professionals with rich work experience so as to have a superior blend of experts and strategists to manage the affairs of the Corporation. Nibs staff turnover is comparatively low which shows the compatibility of its compensation policies for holding competent work force according to their professional caliber. NIB continues to pay special emphasis on the training of its professional staff and avails to the maximum possible extent the training opportunities offered by the World Bank, ADB, ADFIAP, ADFIMI, etc. along with training programs available within Pakistan.
ORGANIZATIONAL CHART :
Organizational chart is a diagram that represents the positions & relationship within an organization that reveals the companys organizational structure...
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President / CEO
Group Leader
Cluster Manager
Manager
Relationship Manager
Operation Manager
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3) Maj. Gen. (R) Saeed Ahmed Khan 4) Mr. Zafar Alam Khan Sumbal 5) Mr. Muhammad Riyazul Haque 6) Mr. Shahid Mahmud 7) Mr. Ali Noormahomed Rattansey, FCA 8) Dr. Bashir Ahmad Khan 9) Mr. Tariq Iqbal Khan, FCA
Audit Committee
1) Dr. Bashir Ahmad Khan(Chairman) 2) Mr. Ali Noormahomed Rattansey, FCA 3) Mr. Tariq Iqbal Khan, FCA
Company Secretary
1) Mr. M. A. Ghazali Marghoob, FCA
Auditors
1) F. Ferguson & Company Chartered Accountants Legal Advisors
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Executive committee
Corporate
Investment Group
Consumer Banking
H.R.M
IT Dept
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Offerings to Customers
The Consumer and Small Enterprises segment offers various banking services, such as lending, deposits, and distribution of insurance products to individual and small businesses through retail banking and alternate distribution network. The Small and Medium Enterprises, and Commercial segment provide funded and non-funded credit facilities, deposit products and transaction services to manufacturing, trade, wholesale, and service sectors. This segment also offers trade finance; export and import finance, such as letter of credit, shipping guarantees, finance against trust receipt, and finance against imported merchandise; and guarantees. The Treasury segment offers foreign exchange services. The companys also provides capital market services, including money market services, and treasury marketing services. It has 223 branches. NIB Bank Limited was incorporated in 2003 and is based in Karachi, Pakistan. NIB Bank Limited is a subsidiary of Bugis Investments (Mauritius) Pte. Limitted.
(A)Personal Banking:
Personal Banking offers you a wide array of NIB products and services made available in your local community. At NIB we believe that people who live and work in proximity with you understand your needs better. Being embedded within your local community, we are aware of your daily challenges and are prepared to provide you financial solutions. So come bank at NIB Personal Banking because we know that nobody understands you better than your Personal Banker.
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(2)Savings Accounts:
NIB Gold Premier Account for your golden years
At NIB Bank, we value respect for elders. We believe that you have lived your life working hard and toiling for the future. Now it is time for you to sit back and reap profits on your hard work. NIB Gold Premier savings account will take away your financial worries. We will keep your money safe and give you a healthy profit of 10.00% . Account Features
Minimum Balance Requirement Maximum Balance Cap Profit Calculation monthly basis Profit Payment Profit Rate
Rs. 50,000 Rs. 10,000,000 Profit earned in daily balance and paid on Monthly (Annualized expected rate of profit)
(Up to Rs 10 Mln) 10% p.a. (Above Rs 10 Mln) 6%* p.a. (*On the incremental amount)
A single customer will be allowed to open only one account which can be either individual or in joint category (without the condition of secondary applicant to be a senior citizen) Eligibility Criteria Male/Female: above 55 years of age OR Female: widow (undertaking required)
(3)Term Deposit
Our wide range of term deposits is a perfect combination of liquidity and returns. You have the freedom to choose from the desired period from one month to one year & choose your profit frequency. Flexibility that is made to Order! Choose your tenure & Profit Frequency & Enjoy the certainty of your returns. Features & Benefits
Deposit Period from One Month to One Year Choice of Monthly, Quarterly, Semi-Annual or Annual Profit Payments Automatic renewal of deposit
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Checking account facilities with linked current account ATM Card, SMS Banking and 24 Hr Phone Banking services available Access your funds through a network of 179 online branches in 59 cities and 128 NIB ATMs across Pakistan 9AM 5PM Non stop Banking
Benefit you never knew existed! Avail Overdraft/Cash Secured Financing facility against TD! For further details, call 021-111-642-111 or visit your nearest NIB Branch
For deposits of PKR 3M & above , Treasury & Business to provide rates In case of premature encashment, the principal amount will be subject to profit adjustment Terms & Conditions Apply
(B)Commercial Banking
Commercial Banking Group began its operations in June 2006. Within a short span of time, it has developed business solution expertise in many areas. These include and are not limited to necessary infrastructure, management information systems and a competent human resource capability of 1000 plus employees. Through these resources, we offer a diverse range of products catering to private sector enterprises having an annual sales turnover between PKR 30 Million to PKR 1 Billion. We aim to become a dominant player in Pakistan with an aggressive growth trajectory fortified with teamwork and full inculcation of sales and credit programs. We know that delivering your everyday banking needs in the right way is critical to your success. We can do this and much more for you, with people who understand your business needs and ambitions. They also provide you with award-winning service and solutions. We are committed to helping your business succeed today and in the future. Once your business is established and growing, you need to work with people who understand your business banking needs and can help you achieve your ambitions. Talk to us, well support you every step of the way. In recent years Commercial Banking has concentrated on growth through improving service quality, investment in technology and people, utilizing its extensive branch network of 179 branches across Pakistan. We at NIB offer you the safest option to place your deposit (CA, SA & TD) at our branches, as we proudly claim to be the strongest bank of Pakistan with the highest paid up capital of 40 Billion. We offer you Chain Management Facility where you can speed up your business
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transactions with your buyers and suppliers via our counter and online transactional features coupled with superior service through any NIB branch across Pakistan. We at NIB provide you one window solution, where you can not just avail loans to cater your regular business or trade requirements but you can also enjoy chain management benefits through our extensive branch distribution footprints.
(1)Chain Management
In todays competitive market place, effectively managing cash flow can make a difference between success and failure. NIB offers a wide range of collection and payment services to meet your complex chain management needs through effective utilization of our wide-span distribution footprint. We help you manage payments received from your buyers and made to your suppliers by efficiently processing them to optimize your cash flow position and to ensure the effective management of your business operating funds. The flow of receivables and payables can also be seen through our customized and tailored solutions. Above all, our quick adaptation of the latest technology differentiates us from the other competing banks. At NIB, we offer you a complete range of chain management solutions. Our chain management solutions are there to support you through:
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Significant savings in time, decrease in interest costs. Less paper work & greater accounting accuracy. Quick business transactions with no hassle Creates more control over time & funds. Provides timely access to information. Results in faster reconciliation. Earns interest income or reduces interest expenses. Allows Corporations with subsidiaries worldwide to pool everything internationally so that the company can offset the debts with the surplus from various subsidiaries. The end result will transform treasury function as a profit centre by optimizing cash and putting it to good use.
Running Finance
At NIB we have got a great flexible business loan for your general business needs. You can use it for short-term finance, such as settling a bill or purchasing inventory, or for working capital growth. Under this type of financial accommodation the borrower is allowed withdrawal in the current account to the extent of the limit sanctioned. The facility is generally provided against pledge or hypothecation of goods or any other tangible security acceptable under the credit program. You would be required to adjust the advance periodically or within a specific period. The loan may be renewable annually depending upon the agreed terms.
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Tenor not more than 5 years from the date of disbursement to the date of final maturity, including the grace period. Has a clear purpose, strong financials, resourceful management, viable cash flow, properly perfected tangible security. Repayments: Principal equally distributed, divided by the number of months, will determine the installments, preferably quarterly stating from the final take down. A grace period of up to two years may be allowed before beginning repayment; depending upon the terms of the loan transaction.
(3)Transaction Solutions
Commercial Banking is focused on providing you with financial solutions and takes into account the parameters to provide exclusive and tailored product and services.
WE EXCEL AT
(4)Trade Finance
To support your global business needs, Commercial Banking offers you a full suite of trade finance solutions to facilitate as well as finance your trade transactions, be it international or domestic. Our years of experience in supporting businesses of similar nature mean we have the expertise and speed to handle your transactions. You will find our services fast, reliable and friendly. As business horizons expand internationally, life becomes more complicated. Our teams work hard to keep life simple. We are dedicated to:
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Working together to achieve your trade and treasury objectives. Supporting you every step of the way.
(a)Export
EXPORT NEGOTIATION
At NIB we negotiate your export bills drawn under the Letter of credit, if the documents are found to be strictly in terms with LC conditions and without any discrepancy.Alternatively, we negotiate under reserve, by cabling the LC to LC issuing bank for authorization to negotiate despite the discrepancies, and also send the documents to the LC issuing bank for approval and payment.All these facilities come to you at competitive rates and unmatchable turnaround time Documentation Concentrating your Documentary Collection activities with Commercial Banking, you can eliminate many of your exporting hassles.Not only will your international banking become much more uniform, you can experience fewer delays in receiving payment, effortlessly access collection information details, gain increased control over export receivables and efficient cash flow management.To help speed up your cash flows, NIB can purchase/discount your export receivables tied to your export bill collections subject to availability of credit limits.Documentary collections offer a simple, cost-effective and secure means of trading internationally.If your buyer does not issue DCs, collections offer the next safest alternative to open account trade.During a collection, banks act as intermediaries, ensuring that documents are only released against payment or acceptance.Collections offer the seller comfort that they
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will not lose control of the goods without payment or the promise to pay.Meanwhile from your buyers perspective, collections offer a simple and cheaper alternative to the DC and hence may enable you to negotiate better terms.NIB offers a choice of documentary collection methods, each offering you peace of mind while helping you to reduce costs by
Documents against payment (D/P) documents are released to importers upon payment. Documents against acceptance (D/A) documents are released to importers against their promise to pay.
LC ADVISING
You can always insist that your Letter of credit is advised through NIB Bank. At NIB you can assure that your export LC will always reach you on time. This will help you in better logistics management and enhanced accuracy in the preparation of documents. On request, we can pre-advise LCs by telephone and fax so that you can start arranging your shipment immediately without even having to collect the LC. With our expertise, we can explain complex LC terms to you and your staff. This will help you to prepare your documents easily and error free.
LC CONFIRMATION
When you are not comfortable with the credit standing of an LC opening bank or if you are worried about the political climate or credit risk of the buyers country, we are there to assist you with our LC confirmation services. Once we add our confirmation to the LC, you are assured of payment, subject to non-discrepant documents, irrespective of non-payment by LC opening bank. Even when LC does not provide for confirmation, we can assure you payment (silent confirmation) subject to certain conditions.
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So what are you waiting for? Ask your buyers for Freely Negotiable LCs so that you have the control and flexibility to select your favorite bank for managing your export receivables. With NIB Banks confirmation services, you can eliminate the foreign bank and country risks from your export collections.
BILLS PURCHASED
Do not worry when your exports are not covered under Letter of Credit. Against sanctioned credit limits, NIB Bank can purchase and pay you the discounted value of your invoice, immediately on shipment. The proceeds will be credited to your account if the export documents are presented before cut off time at your NIB Banks branch. Foreign bills purchased (on account) are a post shipment finance facility. In order to avail this facility a limit is approved at the request of the party. NIB Bank at an agreed rate of return extends this facility, which is allowed against export documents under collection. For these finances, NIB Bank preferably holds collateral securities. If the foreign bills are purchased against LC, we may extend financial accommodation through negotiation/discounting at prevailing exchange rate, of foreign documentary bill accompanied by the relevant documents of title to goods. For financing of export bills drawn under LC the branch shall ensure that.
The document has been drawn strictly as per the terms of the LC. All direct bank expenses, i.e. foreign correspondents charges; claimed by the opening bank/reimbursing bank, if any, shall be recoverable from the exporters unless it is expressed in the LC that the charges are on an openers account. Due care and necessary precautions are exercised before negotiating/discounting of documents. Reimbursement instructions in LCs shall be carefully studied before negotiating/discounting of documents.
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Inland bills (documentary/clean) purchased facility will be allowed to customers against Inland documentary bills, checks, draft etc. In case of dishonor of any such instrument, the related partys account shall be debited and simultaneously the drawer shall immediately be asked to arrange for sufficient funds in the account for adjustment thereof.
(b)Import
We offer a comprehensive range of import services. As a valued client of NIB Bank, you will be partnering with a trusted banking institution that is highly respected in the world of international finance and cross border transactions. Through our expertise and experience, we can structure and customize solutions suited to your specific business requirements.
LETTER OF CREDIT
Commercial Banking issues Import Letters of Credit on your behalf that gives you the advantage with your suppliers. We extend Sight Letter of Credit (DP) and Usance Letter of Credit (DA) facilities to your clients for undertaking transaction for the import of goods. Letter of Credit is widely used to give protection to the exporter against the buyers and the countrys risk. At NIB the LC is a payment undertaking given to the exporter by the importers bank. In effect, NIB backs the transaction with its own credit standing and reputation. We offer our customers a binding payment undertaking to pay the seller, provided that the seller can present documents representing the goods supplied.
DOCUMENTARY COLLECTION
Import documents received under Usance Letter of Credit (DA) are lodged in a funded account and are released against:
Acceptance of bill of exchange and execution of Trust Receipt. Pledge of imported goods. In case goods are pledged with NIB Bank, goods will be cleared through approved clearing & forwarding agent and delivery orders issued against cash receipts. Collateral security against mortgage of property, pledge of Government Bonds, Postal Deposit Certificates, Banks own Deposit Certificates etc. For relaxation in obtaining collateral security, approval of Branch Credit Committee will be required.
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(C)Corporate Banking
CORPORATE & INVESTMENT BANKING GROUP
Corporate Banking offers a full spectrum of banking products, from vanilla debt to more structured and solution-driven transactions, to meet the operational, financial and capitalraising needs of top-tier corporations and institutions. Investment Banking Investment Banking includes: Advisory services on transactions such as mergers and acquisitions, divestment, privatisation, corporate restructuring, debt rescheduling, business modeling etc. Raising money by issuing and selling securities, in the capital markets. Financial Institution Financial Institutions and Correspondent banking department coordinates the transactions between NIB and the other Financial Institutions (FIs) locally, regionally and internationally. The FIs department ensures that NIB maintains a competitive and profitable relationship with other financial institutions.
(1)Investment Banking
In July 2008, the Investment Banking business & team of Global Securities Pakistan Limited (Global) became a part of NIBs Corporate & Investment Banking Group. Global had been the leading investment banking player having successfully structured and executed some of the largest and most complex advisory and fundraising transactions in Pakistan. At NIB, Investment Banking is structured along two separate product lines which allow for product specialization and customized approach.
ADVISORY
The leading player in the domestic privatization, M&A, restructuring markets. Commands a significant market share of all privatization transactions in Pakistan including both strategic sale as well as capital markets transactions. Domestic Financial Advisor to the Privatization Commission for the privatization of PTCL which is the largest privatization transaction in the history of Pakistan. Executed two of the largest banking sector privatizations. Extensively worked with the PC on developing new transaction structures for strategic sales.
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The leading capital markets player in Pakistan having structured some of the largest and most innovative issues in Pakistan. Lead managed offer for sale of 7.5% GOP owned shares of HBL the largest IPO in the history of the country worth PKR 12,161 million. Lead managed the public offer for sale of up to 20% GoP owned shares of KAPCO the most successful equity offering in the country. Pioneered the development of the subordinated TFCs by banks. Executed two of the largest banking sector privatizations
DEAL CREDENTIALS
Our team includes seasoned professionals with an incomparable level of industry and product expertise. The extent of our expertise can be gauged from the deals we have structured and executed in sectors ranging from telecom, commercial and investment banking, refining, power, textiles, fertilizers, autos, petrochemicals, information technology and media. We ensure swift execution of transactions through the commitment of highly experienced senior resources and close working relationships with key regulators.
(D)Financial Institutions
The FI and Correspondent Banking dept facilitates NIBs different business segments involved in international trade and advises them on the competitive rates for their different options. This advice is culled from the research undertaken by the FI and Correspondent Banking Department in order to ensure the profitability of the positions taken by NIB in the NostroVostro accounts market. This research takes into consideration variable market trends and the major events occurring at the time. The FI and Correspondent Banking dept also arranges for large ticket credit facilities for the bank. Depending on the financial requirements of the client, FI and Correspondent Banking will offer a variety of services ranging from structured financing to syndicate financing. The FI and Correspondent banking dept also acts as a consultant to the various departments within the bank and clients who are in the process of market study or setting up a business plan.
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(a)Shipping Guarantees
At the request of the importer, NIB issues a shipping guarantee in favor of the concerned shipping company to enable the importer to obtain delivery of goods without submission of the relevant bill of lading. The shipping guarantee will be issued after obtaining the following
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Upfront proper documentation of the client. Standard indemnity from client stating irrevocably and unequivocally to accept the documents with or without discrepancies. An undertaking from the client to bear any exchange fluctuation difference in addition to all other charges.
(D)GUARANTEES
To protect you against currency fluctuation, Commercial Banking provides services to hedge against foreign exchange risks for foreign currency payments expected to be made or received by you. In the normal course of business we issue the following guarantees
(E)PERFORMANCE GUARANTEE
At the request of the customer, NIB Bank issues a performance guarantee, guaranteeing completion of work or supplies, as per terms of contract.
(F)BID BOND
NIB Banks issues bid bond in lieu of deposit of earnest money against bids for tenders.
(G)LETTER OF CREDIT
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Stand-by letter of credit is used as a substitute for the commonly used performance bond. This type of letter of credit may be issued to cover non-trade transactions and to guarantee performance of a contractor as supplier.
Instrument obligates NIB Bank to pay the guaranteed amount or the adjusted part thereof, without any dispute regarding improper use of the advance funds. Guarantee shall become operative only upon receipt of the advance money by NIB Bank for credit to your account. (This clause is incorporated in the guarantee).
(J)RETENTION BOND
NIB Bank also provides Retention Bond facilities to its customers.
(F)Banking Network
An inter-bank network, also known as an ATM consortium or ATM network, is a computer network that connects the ATMs of different banks and permits these ATMs to interact with the ATM cards of non-native banks. While inter-bank networks provide capabilities for all ATM cards within the same network to use other banks' ATMs that belong to the same network, the services vary. For instance, when a person uses their ATM card at an ATM that does not belong to their bank, the basic services, such as balance inquiries and withdrawals are usually available. However, special services, such as the purchase of mobile phone airtime, may not accessible to ATM cardholders of banks other than the ATM cardholders of the acquirer (the bank that owns the ATM). Furthermore, banks may charge a fee to users of cards that do not come that are members of the network when their own bank's ATM is unavailable. from their own bank (in addition to any fees imposed by the bank of the card the person is using).
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Inter-bank networks are convenient because people can access the ATMs of other banks. NIB Bank, operating with the countrywide network of 240 branches plus an offshore until at end at 2009, commenced its operations in 2003. NIB Bank (Salam Segment) has a business interest spread across a wide range of economic and industrial sectors. NIB Bank offers a full range of services to the corporate, middle market and retail segments. The bank has established an image of efficiency and professionalism, attributable in part to its policy of maximum technology utilization offering facilities such as online real time banking, ATMs, telephone and Internet banking and cash management services. Off shore banking unit in Ukraine, established with the primary objective of capacity building of the bank, has started generating profits though the contribution is modest. The asset base of the bank has grown steadily over the years and the NIB Bank has emerged as one of the four local banks with assets base of over one billion rupees. While the bank continues to rely on organic growth, the management continues to explore the options of an acquisition that would lead to a quantum leap in the banks size. The new President subsequent to the completion of term of the previous one assumed the office. However except this change the senior management comprising experienced and distinguished bankers remains the same. While the new banking president has extensive banking services including two years at NIB Bank, he faces the daunting task of preserving the banks relative position in the fast changing sector dynamics. NIB Bank expanded its network mainly in the last quarter of 2007. The bank at the same time maintained the consistent growth during the year, which helped it in improving its system share. Although increasing concentration on consumer financing entails high risk, the continuing focus on personal loans to corporate employees and increasing focus on mortgage loans has enabled the bank to keep delinquencies in consumer portfolio at relatively lower risks. The banks in terms of both ROA and ROE, declined during 2007 primarily in the absence of one off sizeable capital gains realized during the year. However the performance based on core business showed the marginal improvement. Investment portfolio comprises 33% of total assets. The portfolio is predominantly
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concentrated in government securities (79%) with higher proportion of treasury bills, implying low interest rate risks.
Product lines
(A)CONSUMER BANKING
1. 2. 3. 4. 5. Ask 4 Car Personal Finance Mortgage Finance Credit Card Master Card
(B)BRANCH BANKING
1) 2) 3) 4) 5) 6) 7) 8) Askari Deposit Multiplier Account Askari Mahana Bachat Account: Askari Paishgi Munafa Account Value Plus Deposit Account Investment Certificates Askari Rupee Traveler Cheques Askari Roshan Mustaqbil Deposit Askari Paishgi Munafa
(C)AGRICULTURE BANKING
KISSAN EVER GREEN FINANCE KISSAN TRACTOR FINANCE
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KISSAN LIVESTOCK DEVELOPMENT FINANCE KISSAN FARM MECHANIZATION FINANCE KISSAN AABPASHI FINANCE
( D)ISLAMIC
BANKING
(E)CORPORATE BANKING
Working Capital Facilities Term Loans Structured Trade Finance Facilities Letters of Guarantee Letters of Credit Fund Transfers / Remittances Bill Discounting Export Financing Receivable Discounting
(A)CONSUMER BANKING
Alternative term for retail banking.( Savings accounts, consumer loans, credit cards, etc., and other such services provided to individuals. Also called consumer. See also corporate banking and wholesale. Our consumer finance is focused on expanding target market and enhancing our portfolio through new and improved initiatives and products. Special attention is being given to business opportunities involving strategic alliances to earn sustainable returns, with greater emphasis on secured form of consumer lending and an aim to increase product offerings while improving and maintaining a quality of its risk asset portfolio..
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(1)ASK 4 CAR:
The Askari bank also provided the service of Ask 4 car
Features Product Type: Mark-up: Down Payment: Charges: Insurance: Mark-up: Down Payment: Charges: Insurance:
Makes: Suzuki, Honda, Toyota & Hyundai (Please note 800 CC used vehicles are not allowed) Vehicle Age: Ownership Status: Third Registration in the name of AKBL (Registration in the cities where Askari Branches are located) Year of manufacturing not older than 5 years at the time of loan
Details Financing for New & Used Vehicles 18% p.a for 3 Year, 19% p.a for 4 Year & 20% p.a for 5 Year Minimum 15% & Maximum 60% As Per "Schedule of Bank Charges" Built in Insurance 20% p.a for 3 Year, 21% p.a for 4 Year Minimum 30% & Maximum 60% As Per "Schedule of Bank Charges" Built in Insurance
(2)PERSONAL FINANCE:
One can avail unlimited opportunities through Askari Banks Personal Finance. With unmatched financing features in terms of loan amount, payback period and most affordable monthly installments, Askari Banks Personal Finance makes sure that you get the most out of your loan. No matter what your need is, Askari Bank has more ways to serve you than ever before.
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Features pplicant/ Borrower: Age: Salary/ Income: Employment Status: Debt Burden:
Detail
Pakistani Resident (SEB/SEP cases are not entertained currently) Salaried: 21-61 years (maturity of loan at 61 yrs.) Rs. 30,000/-per month
1 Year Maximum 50% of the net disposable income Upto Maximum of Rs. 500,000/- (Subject to maximum of 50% DBR & Industry benchmark is maximum Rs. 1.000 M) 1 - 5 years Salaried: 19% p.a : Salaried: 21% p.a & Contract Employees 24.2% p.a Two (2) references with complete details (one should be relative) / As per "Schedule of Bank Charges"
Credit Limit: Tenor: Mark up : Secured Mark up Unsecured Reference: Processing Others Charges:
(3)MORTGAGE FINANCE
Ever since the inception of life, shelter has been rated among the primary needs of mankind. Owning a home for oneself still remains an exclusive dream for many. Askari Bank has made the realization of your dream to have a house of your very own possible. Whether you plan to build a house, tailor made to your requirements or buy a constructed house, Askari mortgage finance enables you to pursue your goal without any problems. Mortgage is a premium home financing product for customers aged between 23 65 years belonging to the upper, upper middle and middle income groups, residing in the urban areas of Pakistan
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Feature Age
Detail Primary Borrowers age Salaried Minimum age: 23 Years Maximum age: 60 Years at maturity
SEB/P
Co-borrower
Only Son and Spouse are allowed as Co-borrower. However, a blood relative is allowed in case of joint ownership in property:
Minimum age: 18 Years Maximum age: 65 years Income Rs. 35000/- per month
Surrogate
1. Rent Agreement has become a major source of additional income of our applicants. Therefore, to authenticate, all rent agreements will have to be supported by the title documents of that particular property.
a) Salaried Employees with a minimum service length of 2 years including present employer. Length of Employment )Self Employed Professionals Architects, Doctors/ Dentists, Engineers, Chartered Accountants and Consultants. Minimum 2 years in profession. c) Self Employed Business Individuals
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1. Minimum 3 years in same line of business 2. In family businesses only, where a Director was engaged in the business prior to being elevated to Director, or was made Director at least a year ago due to educational responsibilities/ engaged in other family related business, the same will also be considered. The business in such case must be 3 year old at least, and the Director applying for loan must have been in the same post for minimum of 1 year.
RODUCT CATEGORY Build a Loans) Buy a Home Buy a plot + Construction Renovation Home (Tranche
Loan amount calculation not to exceed the 50% of the total asset value OR 60% of Assets value, whichever is lower.
Askari Bank is committed to provide you innovative and competitive solutions to your banking needs in a more efficient and personalized manner. Your Bank enjoys a strategic competitive advantage over all domestic players by virtue of its leadership, large network and technological advancement. In line with our tradition of innovation, Askari Bank takes pride in announcing launch of Askari Bank's Debit Card. Askari Debit Card means freedom, comfort, convenience and security, so that you can have retail transactions with complete peace of mind. Askari Debit Card is your new shopping companion which enhances your quality of life by letting you do shopping, dine at restaurants, pay your utility bills, transfer funds, withdraw and deposit
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Debit Card
Cash withdrawal Limit is 50,000, Shopping Limit 200,000 & Funds Transfer Limit 250,000.
Gold
Cash withdrawal Limit is 100,000, Shopping Limit 250,000 & Funds Transfer Limit 300,000.
(5)MASTER CARD
.
Card Account" means the Askari MasterCard Account opened by the bank for the purpose of entering debits incurred by or for the amount of, and credits received by or for, the Cardholder and Supplementary Cardholder, if any, under these terms and includes, without limitation, all debits incurred resulting from any
conditions and
Charges and/or Liabilities arising out of or in connection with any Card Transaction or otherwise. "Card Transaction" means any Cash Advance or the amount charged by the Bank or any Merchant for any goods, services. benefits or reservations obtained by the use of the Card or the card numbers or in any other manner by the Cardholder and/or Supplementary Cardholder, including without limitation, mail, telephone or facsimile orders or reservations authorized or purported to have been authorized or made by the Cardholder
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and/or Supplementary Cardholder, regardless of whether a sale or other voucher or form is signed by the Cardholder or Supplementary Cardholder
CREDIT CARD Features Eligibility: Details Resident Pakistanis Basic Salaried: 21-61 years Age: SEB/SEP: 21- 65 years Silver Approved Cat. A B C NAC Perm. 30,000/30,000/35,000/40,000/Cont. 35,000/35,000/38,000/45,000/Supplementary Min 18 Yrs.- No Max Age limit Min 18 Yrs.- No Max Age limit Gold Perm. 50,000/50,000/55,000/60,000/Cont. 60,000/60,000/70,000/80,500/-
SEB/SEP Platinum Card Salaried Salary/ Income per Month: Employment Status: References: Debt Burden: Charges: 150,000/-
Avg. Bal. Rs. 120,000/- 400,000/- (For last 6 months bank statement)
Businessman 200,000/-
Salaried: 1 year & SEB: 1 year 1 relative + 1 associate not working in the same organization Maximum 50% of the net disposable income. (Including all facilities appearing in ECIB) As per schedule of charges Salaried Basic/Supply Balance Transfer 3.2% per month SEB/SEP 3.45% per month
Mark-up Rates:
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(B)BRANCH BANKING
Engaging in banking activities such as accepting deposits or making loans at facilities away from a bank's home office. Branch banking has gone through significant changes since the 1980s in response to a more competitive nationwide financial services market. Financial innovation such as internet banking will greatly influence the future of branch banking by potentially reducing the need to maintain extensive branch networks to service consumers
Term Deposit Pakistani Resident (Individuals Only) Minimum Rs. 50,000/- & Maximum Upto Rs. 10,000,000/10 Years
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Balance Minimum Rs. 50,000/- & Maximum Up to Requirement: Rs.10,000,000/- (In multiples of Rs. 25,000/-) Tenure: 1+3 Years Earn Rs. 842/- per month on investment of every Rs. 100,000/- for one year!" Profit Amount: Profit payment: Profit Rates: Servicing: Financing Limits: Earn Rs. 917/- per month on investment of every Rs. 100,000/- for three years! Monthly - 1st of every month Competitive Available at all Askari Bank branches Up to 90% of the principal amount
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(3)ASKARI PAISHGI MUNAFA ACCOUNT Askari Paishgi Munafa Account is a unique term deposit designed to meet the immediate financial needs of Individual investors who want to invest funds for a medium term. Now you dont have to wait the entire term to receive your profit. The most significant feature of this product is that the customer receives the entire profit upfront at the time of placement. So you can fulfill your financial needs today without depleting your savings. Salient features of the account are mentioned below.
Eligibility: Pakistani Resident (Individuals) Minimum Amount: Profit Amount: Tenure: Rs. 100,000/- or in multiples of Rs. 100,000/Rs. 12,000/- on a deposit amount of Rs.100,000/15 Months 1. Financing Facility up to 80% of Principal amount. 2. Free Visa Debit Card issuance. 3. No Minimum Balance requirement in checking account. 4. 2 Free Pay Orders in a month. (Withholding Tax and other Government charges will be applicable as per Law) Bene/fits: 5. No maximum limit for investment.
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(4)VALUE PLUS DEPOSIT ACCOUNT Askari Bank leads the way, yet again with the introduction of Askari Value Plus Rupee Deposit Accounts, which promise greater financial freedom and security, in an unmatched way.Now you can open a "Value Plus Account" while enjoying the flexibility of a normal checking account
Details
Value Plus Current, Saving & Time Deposits 1. Free issuance of Debit Card 2. Free global accidental insurance coverage against debit card irrespective of balance in the account or age of the cardholder
3. Free ATM Cash Withdrawal insurance 4. Free online funds transfer facility 5. Free internet banking services 6. Free of cost 24 hours global accidental insurance coverage up to Rs. 2 million 7. Facility of Supplementary Debit Cards 8. Monthly returns on saving deposits Why Askari Value Plus Account? 9. Partial encashment facility for time deposits 10. Automatic roll over facility for time deposits 11. Our un-matched service quality
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(5)INVESTMENT CERTIFICATES Askari Bank's Investment Certificates not only provide the added security, investment and monthly return to the customers. These certificates are negotiable and can be transferred to third party. Investment Certificates can be issued for a period of 3 months and profit is payable on monthly basis through pre-printed tear-off coupons.
Features Facility:
Details Investment Certificates 1. Free issuance and free encashment 2. Account relationship with Askari Bank is not mandatory 3. No penalty on pre-mature encashment 4. Negotiable and payable in Pakistan in Pak rupees only 5. No purchasing limit 6. Valid until encashed 7. Encashable at all Askari Bank Branches 8. Profit is payable on monthly basis through pre-printed coupons 9. In case of loss / theft or damage, there is replacement / refund to the original purchaser 10. Encashment by third party
Important Features:
11. There is no penalty on pre-mature redemption, except that profit coupon shall be valid only for completed month
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(5)ASKARI RUPEE TRAVELER CHEQUES Askari Bank Limited has always remained at forefront in introducing innovative and unique products in banking sector. Our financial instruments provide greater financial freedom and security in an unmatched way to our valued customers. Askari Bank offers you its "Rupee Traveler Cheques" eliminating all financial risks while traveling. So avoid risk of carrying cash through Askari Bank's Rupee Traveler Cheques
eatures Product Type Details
Any Literate individual customer (Account is not mandatory) Rs. 10,000/Until encashed Issuance Desirous customer will submit the Application Form (duly filled/ signed) in any branch of Askari Bank Limited. After verification, branch will forward the form to Investment Products Unit. IPU will keep the record of the customer and system will automatically update that customers transaction. Encashment Original purchaser will approach the nearest branch. Purchaser will sign RTC on the face and branch will verify his signatures with the signature mentioned on CNIC before encashment of the same.
Processing
Charges
Refund processing charges are Rs. 1,000/- and Issuance/Encashment are free.
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(6)ASKARI ROSHAN MUSTAQBIL DEPOSIT The Askari Roshan Mustaqbil Deposit is a saving plan created for individual investors who wish to invest now for a regular return at a later stage while keeping their principal amount intact. Now you can invest a substantial amount without having to block your entire savings like a regular Term Deposits. With Askari Roshan Mustaqbil Deposit you can invest in the form of monthly deposits for a period of five years and get paid back the same monthly deposit amount every month for the next five years while receiving their principal amount in full at the end of the tenure. With Askari Roshan Mustaqbil Deposit you can double your investment in a time period of ten years. An ideal account for customers who wish to plan for their retirement.
Features Product Type: Eligibility: Balance Requirement: Tenure: Profit payment: Profit Rates: Profit Rates: Servicing: Details
Term Deposit Pakistani Resident (Individuals Only) Minimum Rs. 5,000/- & Maximum Upto Rs. 50,000/- (In multiples of Rs. 5,000/-) 10 Years (5 + 5)
Monthly on completion of first 5 years Monthly - 1st of every month Competitive Available at all Askari Bank branches
Financing Limits:
(C) AGRICULTURE
BANKING
The production of food through the raising of crops and/or animals. The development of agriculture approximately 9,000 years ago is considered to be one of the most important
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revolutions in human thinking, one that made civilization possible. The trade of agricultural products, such as wheat or coffee, gave rise to the first exchanges. Even now, agricultural products are among the most important commodities that are traded.
Profit Earning Account Pakistani Resident (Individuals) Mortgaged charge on agri land through Zari Pass Book. Profit on credit balances will be paid on half yearly basis as declared by the bank on PLS savings accounts. Yearly Basis The mark-up is charged for the actual days.
Security:
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Product Type
Eligibility: Pakistani Resident (Owner as well as non-owner farmers.) Tenure: 5 Year. The farmer will have privilege of availing non-funded facility at a reduced cost under this program on account of more equity participation. Good farmer bonus will be available to the borrower in case the loan is repaid as per terms of sanction. The farmers life & tractor will be insured against contingencies, which will provide comfort and piece of mind. Benefits Priority in delivery of tractor will be given by manufacturer as per arrangements with the bank.
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earn additional income. This will further improve their cash flows to repay their other Loans / Revolving Credit on due date.
Details To purchase Milch Animals, Goats, Sheep, Poultry and Fisheries without incurring extra expenditure because of availability at his farm Pakistani Resident (Owner Farmers) The program will provide regular day to day income to the farmer to meet his own consumption and surplus to be marketed. This will revive / accelerate and supplement the income generating capacity.
Benefits:
Finance for farm equipment, trailer, thresher, drills & rotavators etc. Pakistani Resident (Individuals) Under this program the farmer will get benefit of use of modern agricultural tools, implements and equipments which are cost and time effective. Improves per acre yield of agri crops and quality of agriculture produce to get good price in the market.
Benefits:
Helps to match / compete with international standards for exportable agriculture produce.
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provides a ready alternative. Keeping in view the scarcity of water, which is the lifeblood of arable lands, Askari Bank has started a program for farmers, to finance installation of TubeWells (electric, diesel and solar energy units) water management equipments and water channel development etc., which will help farmers to make optimum use of limited water resources.
To finance installation of Tube-Wells (electric, diesel and solar energy units) water management equipments and water channel development etc., Pakistani Resident (owner of farmers) 1. Help farmers to make optimum use of limited water resources. 2. To facilitate the farmer, to overcome the scarcity of water. 3. To develop mechanical water resources, sprinkler and drip system etc. 4. To avoid traditional / inefficient modes of irrigation and waste of available water.
Benefits:
(D)ISLAMIC BANKING
ISLAMIC BANKING SERVICES
Islamic Banking was launched under the brand 'Askari Islamic Banking', by opening 6 dedicated Islamic Banking branches in major cities of the country. Further expansion is planned with improved capabilities for offering products conforming to the Shariah principles. Askari Islamic Banking opens the doors for Halal banking solutions. Our objective is to put in place an efficient banking system suuportive to economic justice and welfare of society in line with Shariah standards. A comprehensive range of Islamic Banking products and services is bieng offered, in order to meet customer's demand of Shariah Compliant Banking, in the following areas:
Islamic Corporate Banking Islamic Investment Banking Islamic Trade Finance Islamic General Banking Islamic Consumer Banking
Islamic Banking products have been approved by the Bank's Shariah Advisor. As per Shariah requirements, funds and products of Islamic Banking are managed separately from the Conventional Banking side. All funds obtained, invested and shared in Halal modes & investments, under supervision of the Shariah Advisor.
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(1)Ijarah Bi Sayyarah((IJARAH CAR FINANCING) Ijarah is a rental agreement, under which the usufructs of an asset is transferred to the client on pre-agreed terms and conditions. It is a Shariah Compliant mode of finance, adopted by Askari Islamic Banking to meet the Car Financing needs of its valued customers. e are Shariah Compliant and market competitive. Askari Islamic Banking deals in all kinds of new, locally assembled, as well as imported vehicles. Terms and conditions we offer are most flexible, with prompt processing time. Moreover, in order to enhance, customers convenience, we offer family income evaluation plan, where our valued clients can also avail Ijarah Bis Sayyarah facility for more than one vehicle.
(2)Home Musharakah Everyone wants to live in the best place that is comfortably affordable. This means being able to cope with other financial commitment, while still having money left over for extras and unexpected expenses. Askari Islamic Banking is pleased to offer Shariah Compliant Home Financing. We facilitate you to Purchase, Construct, Improve and Transfer of the property through Diminishing Musharakah Deposit Schemes Askari Bank are also provided the deposit schemes .In Islamic country may of people are to take the definite for this deposit scheme.
(E)CORPORATE BANKING
CORPORATE & INVESTMENT BANKING GROUP At Askari Bank, we understand the unique business requirements of our corporate and institutional clients, and accordingly the Corporate and Investment Banking Group (CIBG) strives to meet their expectations through provision of customized and relationship based banking approach. CIBG approach to provision of Askari Banks comprehensive and integrated, multi-product services is based upon a client-centric and distribution-focused business model, supported by a culture that prioritizes client relationships and economic returns. CIBG is specifically structured to provide dedicated banking services and products to its corporate customers through two key divisions. CORPORATE BANKING DIVISION The Corporate Banking Division (CBD) works on a long-term relationship based business model to provide a single point within the bank for meeting all business requirements of its corporate
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and institutional customers, including public sector enterprises, with the primary objective of enhancing customer service. Askari Banks Corporate Banking Division, we remain committed to providing you with innovative and integrated financial solutions to all your day to day and one time financing needs, as well as offering various products and services to maximize returns on your investments..
SERVICES
1. 2. 3. 4. 5. 6. 7. 8. 9.
Working Capital Facilities Term Loans Structured Trade Finance Facilities Letters of Guarantee Letters of Credit Fund Transfers / Remittances Bill Discounting Export Financing Receivable Discounting
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The way of electronic bill payment is in which include through ATM card and I-NET banking.
Facility
I-net (Internet Banking Services) 1. Balance enquiry 2. Funds transfer 3. Statement of accounts 4. Change of password 5. Free payment of utility bills 6. Payment of school fee
Important Features
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CALL CENTER
Services on real time information for its time-conscious customers, as it will be available anytime-day or night. askari Bank has been one of the leading banks in the country for over a number of years now and has constantly come up with new services for its valued customers; being one of the first to start ATM and Internet Banking services. Striving for further customer satisfaction Askari Bank launched its Call Centre which became an efficient and effective medium to put information at their customer's fingertips. The Call Center provides a single point of contact for all of its customers, yet offer unique and individualized Following are the services available at Call Center:
1) Accounts or Cards that the customers choose themselves. 2) Balance Inquiries, Account Statements (read out and fax), and Complaint Handling for all sorts of complaints related to the bank. 3) Funds transfer from one account to the other. 4) Utility Bill payments for all utility companies listed with the Bank. 5) Cheque statuses and the facility to block or cancel a card (Debit or Pre-Paid) at any time; to name a few.
ATM Network:
Automatic teller machine askari bank are use the 233 total machines in all pakistan.with the help of this machine We are transfer the Money, Withdraw The Money and can Deposit the money.
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Horizontal Analysis
Comparison of two or more year's financial data is known as horizontal analysis, or trend analysis. It is the division of every expense item in a specific year by an identical expense item derived from the base year. Calculation enables measurement of changes in the comparative importance of expense items over the years. Also evaluates how expense items influences changes in sales.
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Horizontal Analysis
31-Dec
2007
2008
2009
2010
Assets
Cash and balances with treasury Lending to financial institutions Investments - net Advances - net Operating Fixed assets Other assets Total assets - net of provisions
Liabilities
Customer deposits Inter bank borrowings Bills payable Other liabilities Sub-ordinated loans Total Liabilities Share capital Reserves Un - appropriated profit / (loss) Equity - Tier I Surplus on revaluation of assets Total Equity
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Vertical Analysis
Vertical analysis is the procedure of preparing and presenting common size statements. Common size statement is one that shows the items appearing on it in percentage form as well as in dollar form. Each item is stated as a percentage of some total of which that item is a part.
Vertical Analysis
31-Dec
2007
2008
2009
2010
Assets
Cash and balances with treasury Lending to financial institutions Investments net Advances net Operating Fixed assets Other assets Total assets - net of provisions
Liabilities
97.20% 2.30%
81.60% 8.10%
83.80% 5.00%
81.70% 7.30%
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Bills payable Other liabilities Sub-ordinate loans Total Liabilities Share capital Reserves Un appropriated profit / (loss) Equity - Tier I Surplus on revaluation of assets Total Equity
1.50% 2.40%
1.60% 2.10%
1.30% 2.30%
92.40% 93.00% 2.30% 2.40% 1.40% 6.70% 0.80% 7.60% 1.80% 1.90% 2.25% 6.40% 0.60% 7.00%
Ratio Analysis
A tool used by individuals to conduct a quantitative analysis of information in a company's financial statements. Ratios are calculated from current year numbers and are then compared to previous years, other companies, or even the economy to judge the performance of the company. Ratio analysis is predominately used by proponents of fundamental analysis. Financial ratio analysis is used to find the success rates, advancements and potentials of a business
RATIO ANALYSIS
Return on Shareholders Equity
Formulas
(100 x Net Profit After Tax) Shareholders Equity
2009
17.0962
2010
20.7706
PROFITABILITY MEASURES Gross Profit Margin (100 x Gross Profit) Net Sales 69.3113 68.8620
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(100 x Net Profit After Tax) Net Sales Net Profit After Tax Outstanding Shares
37.7878 21.5089
38.8739 24.0065
TESTS OF INVESTMENT UTILISATION Assets turnover (times) NetSales Total Assets 0.0582 0.0689
TESTS OF FINANCIAL CODITION Current Ratio Current Assets Current Liabilities Debt/Equity Ratio Interest cover Total Debt Shareholders Equity EBIT Interest Expense 3.2585 3.2115 0.2426 0.2209 1.1702 1.1875
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62
100
100
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ASSETS Cash and balance with teasury bank Balances with other banks lending to fianancial instituations Investment Advance Other assets Operating fixed assets Total assets
LIABILITIES Bills payable Borowing from financial instituation Deposits and other accounts Liabilities againt asset subject to fianance lease Other liabilties Deferred tax liabilities Total liabilities NET ASSETS 147 106 108 78 116 0 109 191 52 87 128 22 84 157 123 311 100 100 100 100 100 0 100 100
FINANCIAL ANALYSIS (Ratio analysis, Horizontal & Vertical analysis of the organization for the Three Years)
Financial Analysis:
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Financial analysis is a process which involves reclassification and summarization of informationn through the establishment of ratios and trend. Financial analysis involves the use of various financial statements. Financial Statements: Financial Analysis involves the use of various financial statements. These statements do several things. 1: Balance Sheet: A summary of a firms financial position in a given date that shows Total assets = Total liabilities + Owner equity It summarizes the assets, liabilities and owner equity of a business at a moment in time, usually the end of a year or a quarter. Income Statement: A summary of a firms revenues and expenses over a specified period ending with net income or loss for the period. Income statement (Profit & Loss Statement) depicts a summary of the firms profitability
RATIO ANALYSIS
Ratio analysis is changing amount comparisons to ratios and then comparing those ratios to a known standard.
The financial analyst checks various aspects of a firms financial health to evaluate a firms financial condition and performance. A tool frequently used during these checkups is a Financial Ratio which relates two pieces of financial data by dividing one quantity by the other. We calculate ratios because in this way we get a comparison that may prove more useful than the raw numbers by themselves. The Ratio analysis of the Askari Bank for the five years from 2005 to 2009 years is given
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2010
2009
2008
-----------------------------(Rupees in 000)----------------------------
Profitability Ratios
42.10% 1.02% 3.06% 0.20% 1.768% 2.51% 76.83% 42.64% 1.13% 22.99% 1.54% 2.09% 15.19% 70.46%
Market Ratios
Earning per share(EPS) Dividend Yield ratio Dividend payout ratio Leverage Ratios
2.18% -
0.95% -
5.85% 11.75%
6.211% 9.22%
6.48% 9.35%
Financial Ratio, Return on Assets ratio Shareholder fund Current ratio CS/CL 10.49% 8.48% 10.0% N.A.T/T.A 0.435% 70.53% 0.183% 65.51% 1.47% 43.98%
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6000.00% 5000.00% 4000.00% 3000.00% 2000.00% 1000.00% 0.00% 2010 2009 2008 2007 2006 Gross spread atio Income expence ratio
30 25 20 15 10 5 0 2010 2009 2008 2007 2006 Return on equity ratio Return on assent ratio
8 7 6 5 4 3 2 1 0 2010 2009 2008 2007 2006 Profit after tax Lon/deposit ratio
Market Ratio
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80 60 40 20 0 2010 2009 2008 2007 2006 Earning per share Dividend payout ratio
Leverage Ratio
14 12 10 8 Total equity 6 4 2 0 2010 2009 2008 2007 2006 CAR
Financial ratio
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80 70 60 50 40 30 20 10 0 2010 2009 2008 2007 2006 Operating fixed assets Current ratio
Gross Spread ratio measure profit after deducting cost of goods sold. Gross spread
ratio carry out net markup income are divided by Gross markup income .So we found it Gross spread ratio ,In 2005 the ratio 51.28%and 2009 this ratio are decrease.
Income expense ratio as shows the percentage of expenses so it should be lower Income expense ratio is increased in 2009 as compared to 2006. ROE measure the return on owners total investment into the business. It should
be maximum. ROE has increased from 2005 to 2007 due to increase in EAT while ROE has decreased in 2009 due to decrease in EAT.
ROA has similar increasing trend as the ROE because EAT of the bank has increased from 2008 to 2009
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Loan deposit ratio are found of loan are divided by deposit we found the L.D.ratio
Loan deposit ratio has been the increasing trend due to increase in the banks deposits and advances portfolio.
Advance to Deposit are continue to change as camper to 20008 to 2009 this ratio Are decrease and changes are also affect the profitability of bank.
Profit before the taxs are continue change due to change the market and deposit position
As we are comper2007 to 2008 this ratio are increase but 2008 to 2009 this ratio are decrease
Market Ratios
These ratios are calculated to analyze the market position of a business.
EPS means Rupees earned per share by the company. It should be maximum. EPS
has an increasing trend from 2005 and2007 because of increasing trend in EAT Slight drop is observed in EPS in 2009
Dividend pay out ratio in which annual cash dividends divided by annual earning alternatively
Dividend per share divided by earnings per share. The ratio indicates the percentage of a Company earning that is paid out to shareholder out to shareholder in cash Dividend payout ratio are depended by the EAT it the value of EAT are increase then The dividend payout are ratio is increased in 2005 the because the value of EAT are So good in market value
70
Dividend Yield is anticipated annual dividend divided by the market price of the stock
The dividend yield in 2006 in decrease as compare 2005 but if we compare to 2007 they are Much batter,
Leverage Ratios
Leverage ratios used to calculate the financial leverage of a company to get an idea of the company's methods of financing or to measure its ability to meet financial obligations There are several different ratios, but the main factors looked at include debt, equity assets and interest expenses.
Total Equity to Liability Ratio The total equity to liability ratio is computed by simply dividing the total Equity of the firm by its Total liability.T.E2L.R=Total equity/Total Liability The total equity to liability ratio in this case for the year 2006 is increased as compare 2005 and This ratio are also change from some different reason. but the total equities of the Askari Bank show the constant growth. Capital adequacy ratio(CAR) are increased time to time in 2005 to 2006 this value Is decreased but in2009 this value increased
Financial Ratio
Financial ration is an index that relates two accountanting number And is obtained by dividend one number by the other . Financial ratio needed to evaluate financial Condition and performance and various aspects of a firm financial health. Return on Assets ratio we find out net income after tax are divided by total assets for bank
Then we know how much increased the bank assets this value or percentage are increased to2005 to 2007 But in 2008 this value are decreased if we compare 2009 this value are increased
71
Operating fixed assets to average Shareholder fund are change time to time when we are see this value 2005to compare2006 decreased but if we see the this value last 3 year value are increased so we say The asset and share holder value are increased . Current Ratio in which if current assets divided by current liabilities we find out the
Current ratio .it shows a firm ability to cover its current liabilities with its current assets .The value of Current ratio are 2005 to 2006 decreased but we see to 2007 to 2009 this value are increased. due to the Deposit and asset value increased.
HORIZONTAL ANALYSIS
HORIZONTAL ANALYSIS OF FIVE YEARS BALANCE SHEET
ASSETS
Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating assets Other assets fixed
2008
2007
2010
2009
2008
2007
13356
14879
21%
20%
(10%)
26%
8,364 4614
3,955 4480
3,497 14444
733
111%
13%
(57%)
32%
8393
28626 99179 3810
3% 88% 5% 19%
10,036 254,327
8964 206191
5535 182172
3813 166033
12% 23%
62% 13%
45% 10%
40% 14%
72
LIABILITIES
Bills payable Borrowings from financial institution Deposits and accounts other 2,946 19,300 2585 15190 2627 17553 1839 14964 14% 27% (2%) (13%) 43% 17% 40% 42%
205,970
167677
143037
131839
23%
17%
8%
11%
5,995
2996
2997
2999
100%
14,949
1,806
936
166
1434
93%
464%
(88%)
18%
14,949
12971
12266
11053
2010
2009
2008
2007
2010
2009
2008
2007
73
/ /
22,662
18,393
15,143
12597
23%
21%
20%
43%
13,629
10651
8686
6977
28%
23%
24%
63%
9,033
7743
6457
5620
17%
20%
15%
100%
Provision against loans and advances net Provision against lending to financial institutions Bad debts written off directly
2,324
3825
3920
1128
-39%
-2%
248%
77%
77
7600%
--
--
-103%
--
247
--
--
-100%
100%
--
--
4073
3921
1129
-28%
4%
247%
88%
6,118
3670
2536
4491
67%
45%
-44%
15%
Non Mark-up / Interest Income Fee, commission 1,308 and brokerage income Dividend income Income dealing foreign 163 from 538 in
1258
1073
1014
4%
17%
6%
21%
174
137
109
-6%
27%
26%
144%
873
655
584
-38%
33%
12%
64%
74
currencies Gain on sale of 144 securities Unrealized loss on revaluation of investments (2) classified as held for trading 37 2361
112
289%
-98%
2008%
12%
22
-2
-109%
1000%
200%
-100%
404
343
337
322
18%
2%
5%
56%
2,555
2707
4565
2139
-6%
-41%
113%
38%
6377
7101
6630
36%
-10%
7%
22%
5904
4789
3277
18%
23%
46%
26%
Other charges Total non mark-up / interest expenses Profit before taxation Taxation Current Prior years Deferred -
34
12
12
209%
--
100%
200%
7,030
5916
4801
3283
19%
23%
46%
27%
1,642
461
2300
3347
256%
-80%
-31%
17%
562
17
99
984
3206%
-83%
-90%
19%
120
(50)
(234)
--
-340%
79%
-100%
100%
(147) 534
1,108 2.18
75
share--Rupees
HORIZONTAL ANALYSIS
76
BALANCE
SHEET
Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating fixed assets Deferred tax assets Other assets Total assets Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance lease Deferred tax liabilities Other liabilities Net assets Share capital Reserves Unappropriated profit Surplus on revaluation of assets - net of tax -30 -20 -10 0 10 20 30 40 50 Series 3 Series 2 Series 1
77
ASSETS Cash and balances with treasury banks Balances with other banks Lendings financial institutions Investments Advances to
2009
2008
2007
2006
2009
2008
2007
2006
19,386
16030
13356
14879
8%
8%
7%
9%
8364
3955
3497
7333
3%
2%
2%
5%
4,614
4480
14444
8393
2%
2%
8%
5%
67,046 135,034
35678 128818
39431 100780
28626 99179
26% 53%
18% 62%
22% 55%
17% 60%
9,846
8266
5129
3810
4%
4%
3%
2%
Other assets
10036 254,327
8964 206191
5535 182172
3813 166033 .
4% 100%
4% 100%
3% 100%
2% 100%
LIABILITIES
Bills payable Borrowings from financial institution Deposits and other accounts 2,946 2585 182172
166033
1%
1%
1%
1%
19,300
15190
17553
14964
8%
7%
10%
9%
205,970
167677
143037
131839
86%
81%
78%
79%
78
5,995
2996
2997
2999
3%
2%
2%
2%
-2% 100% 6%
-3% 94% 6%
-2% 93% 7%
-2% 93% 7%
NET ASSETS
14,949
REPRESENTED BY: Share capital Reserves Unappropriated profit 5,073 7,183 886 13,143 Surplus on revaluation of assets net of deferred tax 4059 7667 309 12035 3007 6948 2145 12100 2004 5815 1800 9619 34% 48% 6% 88% 2% 4% -6% 2% 4% 1% 7% 1% 4% 1% 6%
1,806
936
166
1434
12%
--
--
1%
14,949
12971
1226
11053
10%
6%
7%
7%
2010
2009
2008
2007
2010
2009
2008
2007
/ /
22,662
18394
15143
12597
100%
100%
100%
100%
13,629
10651
8686
6977
60%
58%
57%
55%
9,033
7743
6457
5620
40%
42%
43%
45%
79
income
Provision against loans and advances net Provision against lending to financial institutions
2,324
3825
3920
1128
10%
21%
26%
9%
77
--%
--
--
--
--
247
--
--
--
1%
--
--
4073
3921
1129
13%
22%
26%
9%
6,118
3670
2536
4491
27%
20%
17%
36%
Non Mark-up / Interest Income Fee, commission 1,308 and brokerage income Dividend income 163
1258
1073
1014
5.8%
6.9%
7.1%
8.0%
174
137
109
0.7%
1%
0.9%
0.9%
Income from dealing in 538 foreign currencies Gain on sale of 144 securities Unrealized loss on revaluation of investments (2) classified as held for trading
873
655
584
2.4%
4.8%
4%
4.6%
37
2361
112
0.6%
0.2%
16%
0.9%
22
(2)
--
0.1%
--
--
Other income
404
343
337
322
1.8%
2%
2%
2.6%
80
non / /
2,555
2707
4565
2139
11%
15%
30%
17%
6377
7101
6630
38%
35%
47%
53%
5904
4789
3277
31%
32%
32%
26%
34 Other charges Total non mark-up / interest expenses Profit before taxation Taxation Current Prior years Deferred 12 12
0.2% 6 -----
7,030
5916
4801
3283
31%
32%
32%
26%
1,642
461
2300
3347
7%
3%
15%
27%
562
17
99
984
2.5%
---
1%
--
120
(50)
(234)
---
0.5%
--
-2%
1%
(147)
108
(246)
113
-0.7%
1%
-2%
9%
534
75
(381)
1097
2.0%
0%
-3%
18%
1,108
386
2,681
2250
4.9%
25
18%
18%
81
82
120 Other assets 100 operating fixed assets 80 Advance investment Lending to financial institution Balance with other banks 20 Cash and balance with treasury banks 2010 2009 2008 2007 2006
60
40
120 surplus on revaluof assets unappropriated profit2 80 reserves share capital2 60 other liabilities deferred tax liabilities 40 sub-ordinated loans deposits and other accounts 20 borrowings bills payable 0 2010 2009 2008 2007 2006
100
83
ASSETS
2010
2009
2008
2007
2006
Cash and balances with treasury banks Balances with other banks Lending to financial institutions Investments Advances Performing Non-performing - net of provision
61,160,678
50,069,965
57,526,451
48,939,840
34,074,786
5,407,470 23,162,130
7,497,174 22,805,341
4,191,128 24,781,723
14,034,476 29,572,070
12,717,100 17,867,552
67,260,338
63,026,944
342,663,339 361,863,689 293,373,007 243,237,819 11,428,374 9,275,986 5,981,729 4,072,074 354,091,713 371,139,675 299,354,736 247,309,893
201,152,095 3,658,375
16,943,950 11,740,697
Borrowings from financial institution Deposits and other accounts Sub-ordinated loans - unsecured Deferred tax liability net
289,226,299 3,999,192 -
84
Other liabilities
14,489,343
16,265,478
13,316,657
9,275,034
558,807,328 561,209,723 487,702,927 393,456,820 NET ASSETS 60,936,723 43,862,759 42,421,404 29,863,387
1.12.3 REPRESENTED BY: Share capital Reserves Unappropriated profit 11,128,907 18,959,537 22,187,802 52,276,246 Surplus on revaluation of assets net of deferred tax 8,660,477 10,117,188 15,501,513 16,604,076 42,222,777 1,639,982 8,093,750 10,261,958 15,653,703 34,009,411 8,411,993 6,475,000 8,298,873 12,429,853 27,203,726 2,659,661 5,180,000 6,225,461 7,350,813 18,756,274 2,911,996
60,936,723
43,862,759 42,421,404
29,863,387
21,668,270
Mark-up / return / interest earned Mark-up / return / interest expensed Net mark-up / interest income
60,857,035 28,163,787
51,919,229 24,061,790
41,045,543 16,936,187
32,991,603 12,126,809
20,158,860 6,045,948
32,693,248
27,857,439
24,109,356
20,864,794
14,112,912
Provision against loans and advances net Provision against lending to financial institutions Provision for diminution in value of investments - net Bad debts written off directly
9,623,204
4,509,956
1,689,467
1,972,936
1,277,002
560,852
945,342
2,219,815
(6,303)
74,573
112,666
1,485,976
1,367,514
935,123
269,349
38,140
85
8,097,285 19,760,154
928,820 23,180,536
343,922 20,520,872
1,427,808 12,685,104
Non Mark-up / Interest Income Fee, commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of securities Unrealized loss on revaluation of investments classified as held for trading Other income Total non mark-up / return / interest income 3,297,839 11,669,561 31,747,435 1,866,034 10,679,614 30,439,768 1,617,563 8,992,351 32,172,887 738,330 6,948,388 27,469,260 1,210,202 5,013,032 17,698,136 629,418 (3,006.00) 200,804 (19,547.00) 849,367 (15,755) 280,864 (3,335) 382,419 (780) 606,347 1,213,881 587,989 1,795,319 548,782 827,328 837,338 659,726 202,343 675,109 5,925,082 6,249,015 5,165,066 4,435,465 2,543,739
Non Mark-up / Interest Expenses Administrative expenses Other provisions / write offs - net Workers' welfare fund Other charges Total non mark-up / interest expenses Profit before taxation 14,034,501 13,874,424 18,498,199 16,264,692 9,481,648 16,608,561 642,274 397,547 64,552 17,712,934 15,519,634 450,390 336,999 258,321 16,565,344 13,420,977 236,281 17,430 13,674,688 25,980 11,204,568 7,066 8,216,488 10,952,275 226,313 7,874,013 335,409
86
9,192,687
16,604,076 25,796,763
Profit available for appropriation Earnings per share basic and diluted
26,049,777
8.26
8.26
10.38
14.62
9.19
2006
2007
2008
2009
2010
1.71%
2.24%
1.59%
1.38%
1.48%
2.06%
2.83%
2.10%
1.72%
1.88%
27.46%
31.71%
19.81%
19.00%
14.09%
Total assets have grown this year by Rs.20 billion (up 3%) to Rs.640 billion over the corresponding period last year, with investments increasing by 20% to Rs.138 billion. Askari Bank was able to maintain the return on average assets of 1.5%, the same level as of last year. Deposits grew by 2% to Rs.504 billion. Whereas low cost deposits increased by 14%, this was offset by a 12% reduction in expensive deposits. Profit after taxation increased by 14% to Rs.9.488 billion resulting in an increase in return on deposits from 1.72% in FY08 to 1.88% in FY09. Equity of the bank has risen by more than 50% to Rs.67.318 billion in FY09. There was a
87
huge increase in surplus on revaluation of assets from Rs.1.64 billion in FY08 to Rs.9.12 billion in FY09. This resulted in a decrease in return on equity from 19% in FY08 to 14% in FY09. Over the years, Askari Bank 's yield on earning assets has been increasing but at the same time the cost of funding them has also risen. Yield on earning assets improved from 10.24% in FY08 to 12.04% in FY09. The cost of funding earning assets increased from 4.73% in FY08 to 5.55% in FY09.
88
2006
2007
2008
2009
2010
4072074 5981729 9275986 254670 308271 377945 4072074 5981729 9275986 254670 308271 377945 4072074 5981729 9275986 254670 308271 377945
Provision to NPL
Non Loans
Performing
NPL Growth
3658375 210153
11428374 262080
NPL to Advances
3658375 210153
11428374 262080
The bank's non-performing loans in FY09 exceeded the level of NPLs in FY08. It grew from Rs.27.839 billion in FY08 to Rs.39.101 billion in FY09. There has been a major increase in NPLs in the consumer and commercial business and this factor can affect the future profitability of the bank. Askari Bank 's rising NPLs are in line with the banking industry trend. NPLs have risen mainly in the agriculture and consumer sectors. Managing credit risk is the main challenge faced by Askari Bank. Consumers have 21% and the textile sector 16% of total advances of the bank. Tight monetary policy, rising inflation are decreasing the debt serving ability of the consumers while the textile sector's performance has been dismal. Non-performing loans to advances ratio increased from 7.5% to 10.8% over the year. Provisions to NPLs also increased from 16.2% to 24.7%. Formulas DEBT MANAGEMENT RATIOS Debt to equity
Debt Total Equity
2006
2007
2008
2009
2010
89
Debt to asset
Debt Asset
0.94%
0.93%
0.92%
0.93%
0.89%
Askari Bank had successfully stabilized its debt to equity ratio until FY05. It had fallen after that due to rise in equity base. It then increased during FY08 due to a 15% increase in the total liabilities of the company with a less than proportionate increase (3.4%) in the equity base of the bank. However, it again decreased from 12.79 to 8.51 in FY09. This decrease is a result of increase in equity by 38% over the previous year with only an increase of 2% in total liabilities. Deposits time capital decreased from 10.25 to 8.88 due to the increase in assets by 6%. Debt to asset also decreased from 0.93 to 0.89 as a result of increased assets. Formulas LIQUIDITY RATIOS
Advance to Deposit
2006
2007
2008
2009
2010
Advance Deposit
67.17%
72.42%
74.27%
75.80%
74.26%
7.15% Total Interest Income Total Earning Assets Earning Assets Assets 81.27%
9.70%
9.33%
10.24%
12.04%
80.33%
82.95%
84.33%
79.73%
Liquidity of the bank has slightly decreased as compared to last year. About 80% of the total assets of the bank are comprised of its earning assets (lending to financial institutions, investments and performing advances) as compared to 83% in FY08. Performing advances forming a major chunk of the earning assets showed a 3% declined from last year to Rs.349.715 billion. Total deposits increased marginally by 2% to Rs.504 billion primarily due to the bank's conscious strategy of shedding expensive deposits. Expensive deposits decreased by Rs.27 billion to Rs.197 billion at year-end 2010. As a result, the proportion of current and savings account deposits in total deposits (CASA) increased to 67% (Domestic CASA at 75%) at yearend 2010 from 59% at 2009. Deposits this year saw a change in mix relying more on low-cost deposits to form the deposit base. Domestic low-cost deposit mix improved from 60% in 2009 to 66% in 2010. As a result of shedding domestic high cost fixed deposits by 12%, market share
90
decreased from 9.6% in December 2009 to 8.8% in December 2010. Advances were rationalized during the year leading to a reduction in fresh lending to stand at Rs.362 billion, lower by 4% as compared to the corresponding period last year. Lending in the consumer and corporate portfolio was controlled as a result of liquidity constraints, attributing to this decrease. The market share concurrently dropped from 9.2% in December 2009 to 8.8% in December 2010. The advances to deposits ratio decreased from 77% in December 2009 to 72% in December 2010. Formulas SOLVENCY RATIO
Equity to assets Equity to Deposits Earning assets to deposits (%) Equity Total Assets Equity Deposits Earning Asset Deposits 6.24% 7.51% 97.52% 7.05% 8.25% 8.00% 9.82% 7.25% 9.75% 10.51% 11.26%
2006
2007
2008
2009
2010
The solvency position of ASKARI BANK improved in FY07. Equity to asset ratio and equity to deposit ratio increased in 2008 because the equity of the bank increased as 161.875 million ordinary shares were issued, raising the share capital of the bank from Rs.6.5 billion in FY06 to Rs.8.1 billion in FY07. Along with the share capital, the reserves of the bank increased to Rs.10.3 billion. The earning assets to deposits ratio had increased because the earning asset (excluding non performing advances) of the bank has been growing at a faster pace than the deposits. During FY08, the equity to deposit and equity to asset ratios were more or less maintained, however, the earning assets to deposit ratio decreased because the deposit base increased by a major 21% while earning assets experienced a less than proportionate increase of 16% because of a decrease in investments. For FY09, equity to assets showed a major jump from 7.25% to 10.51%. Equity of the bank increased from Rs.49.4 billion to Rs.67.3 billion mainly due to the increase in unappropriated profits and reserves. Equity to deposits also increased from 9.75% in FY08 to 10.51% in FY09. The deposit base increased by 4% while equity increased by 38%. Earning assets to deposits showed a major decline back to the level of FY06 due to the decrease in performing advances, which forms a major part of the earning assets.
91
2006
2007
2008
2009
2010
2.92% 3.68
2.11% 4.87
1.84% 2.77
2.31% 8.31
3.90% 3.42
Board of Directors recommended a cash dividend of Rs.2.50 per share i.e 25% and bonus issue of 10% for the year ended December 31, 2010. The cash dividend in FY08 was Re 1 per share ie 10%. This resulted in an increase in dividend yield from 2.31% in FY08 to 3.90% in FY09. Dividend cover reduced from 8.31 to 3.42 times due to the higher DPS in FY09.
2006
2007
2008
2009
2010
13.00
18.40
5.80
7.5
Market
Value
3.70
3.40
1.00
1.1
Book Value
Price-to-earnings ratio increased by 29% from 5.80 in FY08 to 7.50 in FY09. This was due to the increase in share price from Rs.43.3 to Rs.64.1. Market to book ratio increased from 1.00 to 1.10 over the year.
92
Financial Highlights Macro economic vulnerabilities continued in 2010, with the first half of the year witnessing high inflation and interest rates, liquidity pressures and loss of business confidence. However, gradual signs of stability have emerged with most key indicators reflecting positive trends including reduction in inflation, contained government borrowings, contraction in external imbalances and easing of the monetary policy stance. Despite this fragile operating environment, ASKARI BANK has achieved profit after tax of Rs.9.5 billion, which is 12% higher than the corresponding period last year translating into earnings per share of Rs.8.56 (December 2009: Rs.7.51). The Board of Directors is pleased to recommend a cash dividend of Rs.2.50/- per share i.e. 25% and bonus issue of 10% for the year ended December 31, 2010 Strong top line performance Net interest income before provisions grew by 16% to Rs.33.2 billion from the same period last year reflecting an increase in Net Interest Margins of 40 basis points to 6.5% in 2010 and 8% increase in average interest-earning assets. The increase in benchmark rates and asset yields was partially offset by the full year impact of 5% minimum rate of return on savings deposits. Net provisions at Rs.13.5 billion are up by 64% from the corresponding period last year primarily due to higher provisioning on the corporate and international portfolios. Net provisions also include Rs.1.1 billion impairment losses booked on equities. However, the key point to note is the declining trend in NPL formation and an increase in coverage ratio from 68% to 71% in the subsequent quarters from June 2010. Non-interest income continued its steady growth by 18% to Rs. 13.0 billion which is a testament to ASKARI BANK's diverse income streams. Even though fee and exchange income declined year on year, this was offset by strong growth in capital gains and derivatives income.
93
Fee and commission income decreased by 7% to Rs.6.7 billion due to reduction in consumer and corporate lending, however, this was partially compensated by higher commodity commission and income from increased trade activity. Exchange income declined from Rs.1.7 billion to Rs.1.3 billion as we were able to capitalize on the significant exchange rate volatility in 2009. This year our emphasis has been more on servicing existing clientele where spreads have reduced due to aggressive competition. Capital gain increased to Rs.697 million reflecting the strong performance of the stock market in 2010 which was up 63% on a yoy basis. In addition, derivative income contributed a healthy Rs.1.7 billion to the non interest income. Strong grip on costs and efficiency With a strong focus on cost efficiencies, we have restricted the increase in administrative expenses to only 7% over the corresponding period last year. This is in spite of significant inflationary pressures with average 2010 inflation coming in at 13.9%. Nearly half of this increase is attributed to increases in premises expenses due to higher utilities and insurance expenses across our branch network. Personnel costs are only up 12% which was a result of headcount reduction by 979 (6%) to 14,254 due to efficiency improvements, process restructuring initiatives and reduction in consumer lending. International operating expenses are flat yoy in dollar terms. However, the impact of rupee devaluation accounts for nearly half of the increase in our overall administration expenses. Given this backdrop, we have managed to achieve considerable cost efficiency during the year. Sustained business drivers Total assets have grown this year by Rs.20 billion (up 3%) to Rs.640 billion over the corresponding period last year, with investments increasing by 20% to Rs.138 billion.
94
Deposits grew by 2% to Rs.504 billion. Whereas low cost deposits increased by 14%, this was offset by a 12% reduction in expensive deposits. Advances have been rationalized by 4% to Rs.362 billion. We were successful in maintaining a return on average assets (ROAA) of 1.5%. Spread analysis & Key Ratios Spreads and key operating ratios for the bank are shown below:
Focus on Liability Management Total deposits increased marginally by 2% to Rs.504 billion primarily due to the Bank's conscious strategy of shedding expensive deposits. Expensive deposits decreased by Rs.27 billion to Rs.197 billion at year-end 2010. As a result, the proportion of current and savings account deposits in total deposits (CASA) increased to 67% (Domestic CASA at 75%) at yearend 2010 from 59% at 2009. Deposits this year saw a change in mix relying more on low cost deposits to form the deposit base. Domestic low cost deposit mix improved from 60% in 2009 to 66% in 2010. As a result of shedding domestic high cost fixed deposits by 12%, our market share decreased from 9.6% in December 2009 to 8.8% in December 2010. Advances were rationalized during the year leading to a reduction in fresh lending to stand at Rs.362 billion, lower by 4% as compared to the corresponding period last year. Lending in the consumer and corporate portfolio was controlled as a result of liquidity constraints, attributing to this decrease. The market share concurrently dropped from 9.2% in December 2009 to 8.8% in December 2010. The advances to deposits ratio decreased from 77% in December 2009 to 72% in December 2010.
95
96
ASSETS Cash and balances with treasury banks Balances with other banks Lending to financial institutions Investments Advances Performin g Nonperforming net of provision
2010
2009
2008
2007
2006
2010
2009
2008
2007
61,160,678
50,069,965
57,526,451
48,939,840
34,074,786
18.13
-14.89
14.93
30.37
5,407,470
7,497,174
4,191,128
14,034,476
12,717,100
-38.64
44.10
-234.86
9.39
23,162,130
22,805,341
24,781,723
29,572,070
17,867,552
1.54
-8.676
-19.33
39.58
136,145,524
116,328,288
115,585,646
67,260,338
63,026,944
14.56
0.648
41.81
6.29
342,663,339
361,863,689
293,373,007
243,237,819
201,152,095
11,428,374
9,275,986
5,981,729
4,072,074
3,658,375
354,091,713 Operating fixed assets Deferred assetnet Other assets tax 21,925,669
371,139,675 18,021,445
299,354,736 16,943,950
247,309,893 5,234,463
204,810,470 4,449,324
19.34 5.99
17.39 69.11
17.19 14.10
11,740,697 530,124,33 1
LIABILITIES Bills payable Borrowings from financial institution Deposits and other accounts Sub-ordinated loansunsecured 5,147,259 5,194,449 6,079,341
35,144,823
44,195,886
59,103,350
38,544,920
21,790,480
-25.75
-33.73
34.78
43.47
492,036,103
483,560,062
400,974,539
335,077,873
289,226,299
1.72
17.08
16.43
13.68
11,989,800
11,993,848
5,996,696
5,998,344
3,999,192
-0.03
50.00
-0.03
33.33
97
14,489,343 558,807,328
0 33.10 132.37
NET ASSETS
60,936,723
8,660,477
1,639,982
8,411,993
2,659,661
2,911,996
60,936,723
43,862,759
42,421,404
29,863,387
21,668,270
Mark-up / return / interest earned Mark-up / return / interest expensed Net mark-up / interest income Provision against loans and advances net Provision against lending to financial institutions Provision for diminution in value of investments - net
60,857,035
51,919,229
41,045,543
32,991,603
20,158,860
117.215
126
124
164
28,163,787
24,061,790
16,936,187
12,126,809
6,045,948
117.048
142
140
201
32,693,248
27,857,439
24,109,356
20,864,794
14,112,912
234.263
269
264
364
9,623,204
4,509,956
5,493,226
1,972,936
1,277,002
213.377
82
278
154
560,852
945,342
2,219,815
(6,303)
74,573
112,666
42.587
(35,218)
(8)
66
98
1,485,976
1,367,514
935,123
269,349
38,140
108.663
146
347
706
12,615,374 Net mark-up / return / interest income after provisions Non Mark-up / Interest Income Fee, commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of securities Unrealized loss on revaluation of investments classified as held for trading Other income Total non mark-up / return / interest income 31,747,435 11,669,561 3,297,839 (3,006.00) 20,077,874
8,097,285
6,422,046
2,316,858
1,427,808
364.626
(34,990)
617
927
19,760,154
17,687,310
18,547,936
12,685,104
-130
35,259
(353)
(563)
5,925,082
6,249,015
5,165,066
4,435,465
2,543,739
94.816
121
116
174
606,347
587,989
548,782
837,338
202,343
103.122
107
66
414
1,213,881
1,795,319
827,328
659,726
675,109
67.614
217
125
98
629,418
200,804
849,367
280,864
382,419
313.449
24
302
73
(19,547.00)
(15,755)
(3,335)
(780)
15.378
124
472
428
1,866,034
1,617,563
738,330
1,210,202
176.730
115
219
61
10,679,614
8,992,351
6,948,388
5,013,032
771.109
708
1,301
1,248
30,439,768
26,679,661
25,496,324
17,698,136
641
35,967
948
685
Non Mark-up / Interest Expenses Administrative expenses Other provisions / write offs - net Workers' welfare fund Other charges
16,608,561
15,519,634
13,420,977
10,952,275
7,874,013
107.016
116
123
139
642,274
450,390
236,281
226,313
335,409
142.604
191
104
67
1,482 1,788
67 294
368 574
99
interest expenses Profit before taxation Taxation - Current - Prior years - Deferred
14,034,501
13,874,424
13,004,973
14,291,756
9,481,648
248
34,179
654
111
9,192,687
16,604,076
15,653,703
12,429,853
3,274,439
106.071
65
60
25,796,763 Profit available for appropriation Earnings per share basic and diluted
23,986,823
20,832,443
9,468,232
9,223,471
2.897
33,918
(347)
(677)
26,049,777
24,239,841
20,895,471
9,562,686
9,317,619
103
34,319
(280)
(577)
8.26
8.26
10.38
14.62
9.19
100
61,160,678
50,069,965
57,526,451
48,939,840
34,074,786
9.869
8.28
10.85
11.56
9.82
5,407,470
7,497,174
4,191,128
14,034,476
12,717,100
0.873
1.24
0.79
3.32
3.66
23,162,130
22,805,341
24,781,723
29,572,070
17,867,552
3.737
3.77
4.67
6.99
5.15
136,145,524
116,328,28 8
115,585,64 6
67,260,338
63,026,944
21.968
19.23
21.80
15.89
18.16
11,428,374
9,275,986
5,981,729
4,072,074
3,658,375
354,091,713 Operating fixed assets Deferred tax asset net Other assets
371,139,67 5 18,021,445
299,354,73 6 16,943,950
247,309,89 3 5,234,463
204,810,47 0 4,449,324
57.135
61.34
56.47
58.42
59.01
21,925,669
3.538
2.98
3.20
1.24
1.28
11,740,697 530,124,3 31
2.21 100.0 0
LIABILITIES Bills payable Borrowings from financial institution Deposits and other accounts Sub-ordinated loans unsecured Deferred tax liability net 5,147,259 5,194,449 6,079,341
4,560,649
4,159,964
0.921
0.93
1.25
1.16
1.28
35,144,823
44,195,886
59,103,350
38,544,920
21,790,480
6.289
7.88
12.12
9.80
6.70
492,036,103
483,560,06 2
400,974,53 9
335,077,87 3
289,226,29 9
88.051
86.16
82.22
85.16
88.89
11,989,800
11,993,848
5,996,696
5,998,344
3,999,192
2.146
2.14
1.23
1.52
1.23
2,232,344
0.46
101
Other liabilities
14,489,343 558,807,328
2.593 100.000
2.90 100.0 0
2.73 100.0 0
2.36 100.0 0
1.91 100.00
NET ASSETS
60,936,723
REPRESENTED BY: Share capital Reserves Unappropriate d profit 11,128,907 18,959,537 22,187,802 10,117,188 15,501,513 16,604,076 42,222,77 7 8,093,750 10,261,958 15,653,703 34,009,41 1 6,475,000 8,298,873 12,429,853 27,203,72 6 5,180,000 6,225,461 7,350,813 18,756,27 4 21.289 36.268 42.443 23.96 36.71 39.32 100.0 0 23.80 30.17 46.03 100.0 0 23.80 30.51 45.69 100.0 0 27.62 33.19 39.19
100.000
100.00
8,660,477
1,639,982
8,411,993
2,659,661
2,911,996
60,936,723
43,862,75 9
42,421,40 4
29,863,38 7
21,668,27 0
102
2007
2006
2010
2009
2008
2007
2006
Mark-up / return / interest earned Mark-up / return / interest expensed Net markup / interest income
60,857,03 5
51,919,229
41,045,54 3
32,991,603
20,158,860
186.14 6
186.37 5
170.24 7
158.12
142.84
28,163,78 7
24,061,790
16,936,18 7
12,126,809
6,045,948
86.146
86.375
70.247
58.12
42.84
32,693,24 8
27,857,43 9
24,109,3 56
20,864,79 4
14,112,91 2
272.29 1
272.74 9
240.49 5
216.24
185.68
Provision against loans and advances net Provision against lending to financial institutions Provision for diminution in value of investments - net Bad debts written off directly
9,623,204
4,509,956
5,493,226
1,972,936
1,277,002
76.282
55.697
85.537
85.16
89.44
560,852
4.446
945,342
2,219,815
(6,303)
74,573
112,666
7.494
27.414
(0.098)
3.22
7.89
1,485,976
1,367,514
935,123
269,349
38,140
11.779
16.889
14.561
11.63
2.67
8,097,285
6,422,046
2,316,858
1,427,808
100.00 0
100.00 0
100.00 0
100.00
100.00
20,077,87 4
19,760,15 4
17,687,3 10
18,547,93 6
12,685,10 4
103
Fee, commission 5,925,082 and brokerage income Dividend income Income from dealing in foreign currencies 606,347
6,249,015
5,165,066
4,435,465
2,543,739
50.774
58.513
57.438
63.83
50.74
587,989
548,782
837,338
202,343
5.196
5.506
6.103
12.05
4.04
1,213,881
1,795,319
827,328
659,726
675,109
10.402
16.811
9.200
9.50
13.47
Gain on sale of 629,418 securities Unrealized loss on revaluation of investments (3,006.00) classified as held for trading
200,804
849,367
280,864
382,419
5.394
1.880
9.445
4.04
7.63
(19,547.00 )
(15,755)
(3,335)
(780)
(0.026)
(0.183)
(0.175)
(0.05)
(0.02)
104
3,297,839
1,866,034
1,617,563
738,330
1,210,202
28.260
17.473
17.988
10.63
24.14
11,669,56 1
10,679,614
8,992,351
6,948,388
5,013,032
100.00 0
100.00 0
100.00 0
100.00
100.00
31,747,43 5 Non Markup / Interest Expenses Administrat ive expenses Other provisions / write offs net Workers' welfare fund Other charges Total non mark-up / interest expenses Profit before taxation Taxation Current Prior years Deferred 16,608,56 1
30,439,76 8
26,679,6 61
25,496,32 4
17,698,13 6
15,519,634
13,420,97 7
10,952,275
7,874,013
93.765
93.687
98.145
97.748
95.83
642,274
450,390
236,281
226,313
335,409
3.626
2.719
1.728
2.020
4.08
397,547
336,999
2.244
2.034
64,552
258,321
17,430
25,980
7,066
0.364
1.559
0.127
0.232
0.09
17,712,93 4
16,565,344
13,674,68 8
11,204,568
8,216,488
100.00 0
100.00 0
100.00 0
100.000
100.00
14,034,50 1
13,874,42 4
13,004,9 73
14,291,75 6
9,481,648
6,930,585
6,090,351
5,075,600
3,412,791
498,748
70.753
14.12
435,072
442,667
45,225
78,614
0.938
2.23
(984,119)
(915,884)
1,365,508
2,955,254
28.309
83.66
5,541,304
4,602,383
4,823,524
3,532,616
100.000
100.00
9,192,687
8,333,120
8,402,590
9,468,232
5,949,032
100.000
64.50
16,604,07 6
15,653,703
12,429,85 3
3,274,439
64.365
65.260
59.666
35.50
105
25,796,76 3 253,014 Profit available for appropriati on Earnings per share basic and diluted
23,986,823
20,832,44 3
9,468,232
9,223,471 94,454
100.00 0
100.00 0
100.00 0
100.000
100.00
26,049,77 7
24,239,84 1
20,895,4 71
9,562,6 86
9,317,6 19
8.26
8.26
10.38
14.62
9.19
106
As seen from the table, the growth rates for almost all of the components have been lower than their industry averages for FY09. On the contrary, ASKARI BANK outperformed the industry averages in FY08. VERTICAL COMMON SIZE (%) BALANCE SHEETS VERTICAL ANALYSIS
107
120 Other assets 100 operating fixed assets 80 Advance investment Lending to financial institution Balance with other banks 20 Cash and balance with treasury banks 2009 2008 2007 2006 2005
60
40
120 surplus on revaluof assets unappropriated profit2 80 reserves share capital2 60 other liabilities deferred tax liabilities 40 sub-ordinated loans deposits and other accounts 20 borrowings bills payable 0 2009 2008 2007 2006 2005
100
Analytical Remarks: In this section of Investments include certain approved / government securities which are held by the Bank to comply with the Statutory Liquidity Requirement determined on the basis of the Bank's demand and time liabilities as set out under section 29 of the Banking Companies Ordinance, 1962.
In this segment Available for sale" Market Treasury Bills and Pakistan Investment Bonds are eligible for rediscounting with the State Bank of Pakistan (SBP). The market value of Pakistan
108
Investment Bonds and Market Treasury Bills classified as 'held to maturity' as at December 31, 2010 amounted to Rs. 1,659.166 million and Rs. 1,436.673 million (2008: Market Treasury Bills Rs. 237.70 and Pakistan Investment Bonds Rs. 1,990.67 million) respectively. Investment of the Bank in Adamjee Insurance Company Limited is carried at cost amounting to Rs. 943.600million (2008: Rs. 943.600million) as at December 31, 2010 in accordance with the treatment specified in International Accounting Standard (IAS) 28 "Accounting for Investments in Associates". The market value of the investment in Adamjee Insurance Company Limited as at December 31, 2010 amounted to Rs. 3,032.786 million (2008: Rs. 10,671.631 million). The Karachi Stock Exchange (Guarantee) Limited (KSE) placed a Floor Mechanism on the market value of securities based on the closing prices of securities prevailing as on August 27, 2010. Under the Floor Mechanism, the individual security price of equity securities could vary within normal circuit breaker limit, but not below the floor price level. The mechanism was effective from August 28, 2010 and remained in place until December 15, 2010. Consequent to the introduction of Floor Mechanism by KSE, the market volume declined significantly during the period from August 27, 2010 to December 15, 2010. There were lower floors on a number of securities at December 31, 2010. The equity securities have been valued at prices quoted on the KSE on December 31, 2010 without any adjustment as allowed by the State Bank of Pakistan (SBP) BSD Circular Letter No. 2 dated January 27, 2010. Furthermore, SBP BSD Circular No. 4 dated February 13, 2010 has allowed to follow Securities and Exchange Commission of Pakistan (SECP) notification vide SRO 150 (1)/2010 dated February 13, 2010 allowing that the impairment loss, if any, recognized as on December 31, 2010 due to valuation of listed equity investments held as Available for Sale to quoted market prices may be shown under the equity. The amount taken to equity including any adjustment/effect for price movements shall be taken to Profit and Loss Account on quarterly basis during the year ending December 31, 2010. The amount taken to equity at December 31, 2010 shall be treated as a charge to Profit and Loss Account for the purposes of distribution as dividend. The impairment loss based on market values as at December 31, 2010 has been determined at Rs 4,893.731 million. In view of the Floor Mechanism as explained above and current economic conditions in the country, the management believes that these are rare circumstances and the plunge in equity markets cannot be considered to be a fair reflection of equity values. Accordingly, the management on the basis of their estimates and prudence has made a provision of Rs. 2,591.635 million against the above amount. Therefore, full recognition
109
of impairment for Available for Sale equity securities through Profit and Loss account will not reflect the correct financial performance of the Bank. At December 31, 2010 market value of quoted investments was Rs. 83,847.918 million (2008: Rs. 113,041.129 million) while the book value of unquoted investments was Rs. 13,959.421 million (2008: Rs. 9,391.098 million). Investments include Pakistan Investment Bonds amounting to Rs. 232.60 million (2008: Rs. 232.60 million) earmarked by the SBP and National Bank of Pakistan against TT / DD discounting facilities and demand note facilities sanctioned to the Bank. In addition, Pakistan Investment Bonds amounting to Rs. 5 million (2008: Rs. 5 million) have been pledged with the Controller of Military Accounts on account of Regimental Fund account. Certain approved / Government securities are kept with the SBP to meet statutory liquidity requirements calculated on the basis of domestic demand and time liabilities. Comments on Horizontal Analysis of Last Five Years Balance Sheet: Comments with Respect to Assets side of Balance Sheet:
The horizontal analyses of the balance sheet show that the total assets of the bank have increasing trend through out the period from 2006 to 2010. The above figures are obtained by considering the 2006 as base year and these were 15%, 32%, 58% and 71% in 2006, 2007, 2008 and 2010. Now we see that what assets items conclude these figures and on what basis in the following interpretation: Cash and bank balances with treasury banks increase in 2007 and 2008 by 36 and 67% but stable in 2010 with the figure of 66%. This head includes the cash and bank balances in hand in local and foreign currency, with State Bank of Pakistan, with other central banks, with National Banks and in shape of prize bonds. The movements in these accounts conclude changes in the net figures and net cash and bank balances increased 66% for the period. Lending to financial institutions calculations shows that they have the decreasing tendency in the period and were at (9%) in 2006, 92% in 2007, (90%) and (63%) in 2008 and 2010. In this period banks gains a big share of market so that the lending to financial intuitions head have the declining trend. Investment was at 3% in 2006 as compared to 2006 and at (6%) after declining in 2007. The figure was at 68% in 2008 after increase of 74% and in 2010 it decrease to 43%. The major
110
reasons for change are movements in investment in federal government securities, term finance certificates, debentures, bonds and participation term certificates and other investments. The change in advance shows that they increased 60% up to 2010 from 2006 and according to horizontal analyses the figures were 31%, 44%, 59% and 91% from the 2006 to 2010 respectively. This change was due to change in loans,