May 20 -June 02, 2002
Mr. Zaigham Mahmood Rizvi, Managing Director of
Pakistan Kuwait Investment Company (Pvt.) Limited (Pak Kuwait) gave a
briefing about the various measures being adopted by the Company to
maintain its strategic position, as well as initiatives being
undertaken by Pak Kuwait to act as a catalyst to assist in revival of
investment activities in Pakistan.
The Company is actively involved in a number of
diversified activities, which include short/long term finance, project
finance, leasing, local capital market and Treasury operations, as
well as advisory activities, including privatization, debt/equity
syndications, bond issues mergers/acquisitions, and other advisory
activities.
During the year 2001, Pak Kuwait has made
considerable progress towards achieving its medium-term strategic
objectives. Key achievements include balance sheet growth (both in the
loan and deposit portfolios), successful implementation of an equity
market investment strategy and prudent risk management. Operating
profit during this period increased 44% from Rs. 685 million in FY2000
to Rs. 984 million in FY2001. The initiatives and prudent approach
adopted by Pak Kuwait resulted in operating profit of Rs. 984 million,
this was the highest in the history of the Company and a growth in
balance sheet occurring by Rs. 905 million (9%) against a net worth of
more than Rupees 4 billion. Pak Kuwait continues its highly impressive
record of dividend pay-outs. An interim dividend of Rs. 165 million
out of the first quarterly accounts of the year 2002 was paid along
with the dividend of Rs. 200 million declared for the year 2001.
During the year ended December 31, 2001, Pak Kuwait
sanctioned 60 credit facilities in the total amount of Rs.3.0 billion
and disbursements stood at Rs. 2.6 billion, registering an
appreciation of 28% in amounts sanctioned and 25% in disbursements, in
diversified sectors.
Cognisant of the need to maintain and improve asset
quality, particularly in view of the stagnant economic environment,
efforts were made to diversify the client base and book new loans.
Carefully targeted marketing resulted in the loan portfolio of Pak
Kuwait being well diversified. Due to strict credit controls and
project monitoring, loan portfolio quality has been maintained despite
the difficult economic environment.
The Company has undertaken several initiatives to
streamline internal processes through the introduction of Digital
Archiving of records and via ISO-certification. This would enable Pak
Kuwait to establish a strong organizational foundation, documentation
and manualization for improvement of internal management and control
systems required to meet international standards.
Pak Kuwait has promoted Islamic mode of financing
in the country. The Company has made a concerted effort to move
towards offering financing facilities via introduction of Shariah
compliant instruments, along with the conventional financing products.
Moreover, in order to achieve its long-standing vision of establishing
an Islamic bank, Pak Kuwait sponsored Al Meezan Investment Bank Ltd in
1997, whose mandate is to conduct investment banking purely on the
basis of Shariah. By the grace of Allah (SWT) the Islamic investment
bank has now been converted to and is operational as the country's
premier Islamic Bank - Meezan Bank Limited, which would conduct
banking operations based entirely on Islamic principles.
Other companies sponsored by Pak Kuwait include A1
Meezan Investment Management Ltd. (an investment advisory company), Al
Meezan Mutual Fund (a Rs.250 million closed ended Mutual Fund).
Additionally, Pak Kuwait has taken the initiative for investment and
promotion of Information Technology in Pakistan via establishment of
Al Meezan Education Development Services and floatation of an
Information Technology venture capital fund in the name of TMT-PKIC
Fund. Pak-Kuwait is committed to being in the forefront of such
transactions in the future.
In view of the policy decision by the Government of
Pakistan to encourage small and medium sized businesses, Pak Kuwait
set-up a Micro Finance Cell as a pilot project to survey the market,
in addition to financing to small and medium enterprises.
Pak Kuwait has established the Micro Finance Cell
to offer financial services for the benefit of disadvantaged section
of the population. This Cell will design products and provide
financial assistance to Micro Entrepreneurs for initiating or
expanding income generating activities in commercial, industrial,
agricultural and service sector. The Cell will promote formation and
capacity building of community based micro-finance institutions.
While initiating and expanding income-generating
activities, the Cell will collaborate with welfare associations and
other institutions which are close to potential customers. It will
provide a variety of support services, which would include, motivating
and organizing the poor, extending financial training, helping build
backward and forward linkages. The Cell will give priority to people
below poverty line, 'special persons' and women. The Cell will also
guide and encourage skilled workers and educated unemployed youth to
start their own careers as micro entrepreneurs. The Micro Finance Cell
will initially serve the Customers residing in Karachi, particularly
in the rural areas and Goths adjacent to Karachi.
Pak Kuwait envisages playing a dynamic role in the
area of Micro Finance. Mr. Zaigham Mahmood Rizvi, the Managing
Director of Pak Kuwait has stated that Micro Finance can play a major
role in employment generation and poverty alleviation.
Micro Finance Cell was formally launched on 6th of
May 2002 by disbursement being effected to its first two customers,
who have migrated to Karachi from Kohlo, Baluchistan. Presently they
buy cloth from the market and sell in rural areas of Katror, Lasbela,
Thatta, etc.
The Company continues to fulfil its
responsibilities towards making useful contribution to social,
charitable, educational and public welfare causes. Pak Kuwait has
allocated Rs. 6.00 million towards the 'Trust Fund' established by the
President of Pakistan for human development projects related to
poverty alleviation, provide basic health care facilities and primary
education programs.
It is a matter of pride for Pak Kuwait that the
Company is the first 'AAA' (triple A) rated financial institution in
Pakistan with the highest medium to long term credit rating as well as
the highest short term rating of A1 + (A one plus). This rating has
been reaffirmed for the third consecutive year by JCR-VIS Credit
Rating Company Limited. Mr. Zaigham Mahmood Rizvi, the Managing
Director of Pak Kuwait has stated that achievement of this rating
would enable Pak-Kuwait to meet new challenges for an improved
benchmark. The reaffirmation of Pak-Kuwait's 'AAA' (triple A) credit
rating is recognition of the institution's strength. Insha Allah this
rating will be maintained in the future.
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