The dividend payout by some banks lower due to issue of bonus
By SHABBIR H. KAZMI
Mar 11 - 17, 2002
The financial results for the year 2001 released by
commercial banks indicates good results despite economic slow down,
barring a few. While meeting the enhanced capital requirement may not
pose a serious problem for most of the banks, dividend payout is
expected to be lower due to issue of bonus shares. However, this will
have a positive impact on future earnings of the banks as well as
improve their balance sheet footing.
Askari Commercial Bank
posted over one billion
rupee profit before tax and improved its payout compared to dividend
paid in year 2000. The Board of Directors approved payment of 20 per
cent dividend and issue of 5 per cent bonus shares subject to approval
of the SECP.
Bank Alfalah may rightly term year 2001, 'another
year of remarkable performance and another year of consistent growth'.
To substantiate their claim they can refer to, 47 per cent growth in
deposits, 24 per cent increase in advances, 31 per cent growth in profit
before tax and 44 per cent hike in profit after tax as compared to
previous year. At the end of the year equity of the bank also stood at
Rs 1.361 billion, a growth of 51 per cent over the previous year.
Faysal Bank has able to wipe out its accumulated
losses over the last two years. Over the last two years it not only
succeeded in cleaning its slate but also managed to pay 10 per cent
dividend (amounting to Rs 151 million) for the year 2001 by transferring
Rs160 million from contingency reserve. There was improvement in mark-up
as well as non-mark up income. The management was able to control
expenses, though there was slight increase in administrative expenses.
There was also improvement in basic earning per share — from Rs 1.53
to Rs 1.82.
Habib Bank earned Rs 2.2 billion profit before
tax for the year, almost double the amount posted for the previous year.
This was despite the fact that the bank made provisions amounting to Rs
2.6 billion as compared to Rs 1.2 for the year 2000. Profit after tax of
Rs 1.1 billion was more than double the amount posted for the previous
year. The bank also managed to curtail administrative expenses. Deposits
increased, though by 7.6 per cent only. There was also reduction in
non-performing loans. The bank has increased lending to SMEs. At the
same time, overseas operations improved and contributed to higher
profit. Yet another improvement in service was 61 ATMs, of its own, and
over 100 machines through sharing with other banks.
Metropolitan Bank posted Rs 742.7 million profit
before tax as compared to Rs 567.9 million profit for the year 2000. Out
of Rs 338 million profit after tax, Rs 200 million were appropriated for
issue of bonus shares. Rs 175 million bonus shares were also issued in
Muslim Commercial Bank is the largest private
sector bank and the third largest bank of Pakistan. The year 2001 was
yet another year of achievements. The bank posted over Rs 2.1 billion
profit before tax and total dividend payout for the year 2001 was 25 per
PICIC Commercial Bank (formally Gulf Commercial
Bank) completed the first successful year of operations since the
acquisition of by Pakistan Industrial Credit and Investment Corporation
(PICIC). The various structural and financial changes introduced,
yielded positive results. Some of the indicators of improvement were, a
hefty 153 per cent growth in profit before tax and 79 per cent increase
in deposits. The Board of Directors approved issue of 25 per cent bonus
shares and 40 per cent right shares to further improve the balance sheet
Platinum Bank incurred over Rs 87 million loss
before tax for the year as compared to Rs 145.7 million profit after tax
for the year 2000. Since the details are not given in the announcement
it is not possible to ascertain the reasons for posting loss.
Prime Commercial Bank was able to improve
earnings per share due to higher income, though there was also increase
in expenses. The bank posted Rs 241 million profit before tax as
compared to a profit of Rs 158.6 million for the previous year. Out of
Rs 152.6 profit after tax Rs 122 million were transferred to revenue
reserve and the Board of Directors preferred to skip dividend payment.
Union Bank posted a meager Rs 9.95 million profit
before tax for the year 2001. A closer look at the information reveals
interesting facts. Out of an interest income of Rs 597.5 million
provision against non-performing loans and advances amounted to Rs 197.6
million. While interest income amounted to Rs 597.5 million non-interest
income amounted to over one billion rupee. An interesting observation
was that out of total income of Rs 1,064.6 million, Rs 1,040 million
went towards administrative expenses.
Though, analysts term commercial bank performance
satisfactory, they also forecast about year 2002 to be a difficult year
due to shrinking spread. The central bank has been not only lowering
discount rate but also persuading commercial banks to curtail average
lending rates. Since the demand for funds has not increased
significantly, shrinking spread is affecting profitability of banks