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Saudi Pak is professionally managed and is a well-capitalized financial institution of Pakistan

From Shamim Ahmed Rizvi
Islamabad
Mar 25 - 31, 2002

Saudi Pak Industrial and Agricultural Investment Company (Pvt) Limited (Saudi Pak) continued steadfastly to play its role in accelerating industrial development in Pakistan and stepped up its operational activities in 2001 despite difficult economic conditions. The overall amount of financing and investments approved during the year doubled to Rs.2,815 million from Rs.1,390 million in the previous year. Disbursement of funds rose by 14.4 per cent to Rs.1,690 million in the current year from Rs.1,477 million during the corresponding period. Similarly loan recoveries stood at Rs.1,299 million up by 6.8 per cent from Rs.1,216 million in 2000.

Saudi Pak was established in 1981 under an agreement signed between the Government of Kingdom of Saudi Arabia and the Government of Islamic Republic of Pakistan, primarily to promote industrial development in Pakistan. Its initial paid-up capital of Pak Rupees one billion has since been doubled to Rupees two billions and is held in equal proportion by the two governments.

As regards the financial results of the company, net profit increased by 13.8 per cent to Rs.177.226 million from Rs.155.743 million in the previous year. Total income amounted to Rs.890.8 million in 2001. This is 19.5 per cent lower than 2000 owing among others to a sharp fall in income from US dollar denominated securities.

The landmark event in the year 2001 was acquisition of controlling interest in a commercial bank by Saudi Pak. This acquisition is part of the policy of the company to diversify its activities within the ambit of financial services side by side with organic growth. The objective is to derive the benefits of synergy and cater the growing and varied needs of its customers under one umbrella. The bank has since adopted the name of Saudi Pak Commercial Bank Limited and has been carrying on normal banking activities. The bank has paid up capital of Rs. 1,500 million and is listed on Stock Exchange. It has its main office in Karachi and a network of 20 branches operating in the major cities of the country. The bank mobilizes deposits of all types and provides full range of funded and non-funded financing facilities to its customer. Similar strategics investment was made in 1997 to acquire controlling interest in a leasing company which is the fifth largest leasing company in Pakistan. It declared cash dividend of 12.5 per cent for the year ended June 30, 2001.

Saudi Pak offers a wide range of financial products and services to medium and large industrial projects both in the private and public sectors. Over the years, it has enhanced the scope of its product mix from project financing to equity investments, leasing, underwriting, guarantees, money market operations, investments in TFCs and consultancy and advisory services.

Saudi Pak financing is governed solely by commercial considerations. It maintains rigorous standards of evaluation for scrutiny of projects for financing and to identify sound and profitable investment opportunities. Saudi Pak is professionally managed and is a well-capitalized financial institution of Pakistan.

Saudi Pak's long term and short term entity rating was assessed in the middle of 2001 by JCR-VIS Credit Rating Company Limited. Long term entity rating was assessed to be AA+ (Double A Plus) and short term rating at A1+ (A One Plus) with stable outlook.