PRUDENTIAL COMMERCIAL BANK

Jul 20 - 26, 1996

One of the newer private banks, saw rapid growth over both the last six months and the past year; a significant factor being the initial spur in growth of a new entity.

Total deposits rose 240% from a year ago but growth slowed in the last six months as the deposit base expanded by just under 25% from January to June this year. Although, Prudential does offer a wide array of deposit products, we imagine that the difficulty of raising deposits (which we discussed above) would apply to Prudential as well. The largest contribution to total deposits came from savings deposits which accounted for 48%.

Advances followed a similar pattern. There was a massive 327% increase collectively from end June 1995 to end June 1996, but growth was much slower in the last six months at only 17.5%, after the initial portfolio was built-up.

Pre-tax profits for the six month period were at Rs 55 million; 3337% higher than last year and increasing by 57% from January. After-tax profit was at Rs 25 million, 25% up from six months ago and more than 4000% up from a year ago.

Interest income was the largest source at Rs 137.5 million, up from just Rs 9 million end June 1995, ad non-interest income was also up from Rs 0.5 million to Rs 38 million. Although non-interest income came largely from commission, exchange an d brokerage (95%), there was also a dramatic 10521% increase under "other receipts".

On the expenditure side, both interest expenses and non-interest expenses rose significantly; the former rose from Rs 2 million to Rs 77 million and the latter rose from Rs 0.5 million to Rs 38 million. The salary bill rose more than 844% year-on-year and the Chief Executive also took more than 100% pay rise.

Key ratios: after-tax return on total assets is at 0.71%, and after tax profits as a proportion of deposits is at 1.47%.

Prudential's results, while strong, followed a pattern of very rapid growth in the early months and slowed considerably in the last six months.