Updated Aug 17, 2002


During the week market continued to move sideways but managed to avoid any massive slide. MCB and Faysal Bank announced half yearly results, but failed to trigger substantial buying. Now all eyes are set on the financial results of HUBCO and PSO.
The various announcements made by the SECP kept the attention of leading  brokers away from


the market. The two major announcements were, the composition of boards of stock exchanges and directorship of brokers on listed companies.

In the coming week the market is expected to remain stable, at least, or register some gains. Does the forecast for bumper sugarcane crop means an improvement in fundamentals or an alarm? This depends on the GoP's decision about export of sugar.


The bank has posted Rs 1,510 million profit before tax for the first half of year 2002. It recorded nearly 87 per cent increase in profit after tax during this period, a rise from Rs 448.9 million for the first half of last year to Rs 837.6 million for the period under review. Earnings per share went up from Rs 3.70 to Rs 6.92 only. However, the Board of Directors abstained from announcing any interim dividend. The bank had issued 10 per cent bonus shares in April this year. According to some analysts, the increase in profit was due to improvement in spread as compared to previous year. Another factor contributing to higher profit was the cut in tax rates for the banks. The bank registered Rs 15 billion increase in deposits, raising the total deposits to Rs 169.5 million. Earning assets increased from Rs 152.6 million to Rs 166.5 million.


The company is on the path of sustained recovery that is evident from improvement in earnings per share. EPS improved from Rs 0.83 for the first half of year 2001 to Rs 2.13 for the period under review. The half yearly financial results show that it had an accumulated loss of over Rs 176 million as on June 30, 2001. Whereas as on June 30, 2002 its accumulated profit was Rs 69 million. The key factors responsible for the turn around are, efforts to increase sales and stringent controls on costs. Sales went up from Rs 1,109.7 million to Rs 1,230.4 million. Cost of sales increased from Rs 750.6 million to Rs 782 million. Selling and administrative expenses went up from Rs 322.9 million to Rs 338.6 million.


The bank managed to improve its EPS due to improvement in mark-up as well as non-mark-up income. Profit before tax for the half year ending June 30, 2002 was Rs 664 million compared to that of Rs 712 million for the corresponding period of last year. Profit after tax improved from Rs 300 million to Rs 314 million. However, it is necessary to point out that profit for the year 2001 was high mainly due to write-back of provisions worth over Rs 94 million. Whereas the bank made provision worth Rs 55 million against non-performing loans during the year 2002. Non mark-up increased mainly due to higher dividend income, an increase from Rs 129.5 million to Rs 228.5 million.


The company managed to improve its profit before tax for the year 2002 as compared to that of year 2001. It would have posted higher profit had it not made huge provisions. While the provisions for the year 2001 amounted Rs 8.3 million the provisions made during year 2002 exceeded Rs 41 million. This included provisions over Rs 15.58 million against Pakland TFCs. Income went up from Rs 193.6 million to Rs 261.4 million. Expenses increased from Rs 137.5 million to Rs 163 million. EPS improved from Rs 1.91 for the year 2001 to Rs 2.36 for the period under review. The Board of Directors also approved 10 per cent dividend and issue of 5 per cent bonus shares.


The bank released its financial results for the year ending December 31, 2001. This indicates an overall improvement in the performance of bank as compared to previous year. Net mark-up/interest after provision improved from a negative Rs 742.6 million to a negative Rs 226 million. Non mark-up/interest income also came down from a negative Rs 596 million to a negative Rs 237 million. However, non mark-up/interest expense went up from Rs 271 million to Rs 512 million. The EPS improved from a negative Rs 16.74 for the previous year to a negative Rs 2.81 for the year under review. However, the main source of concern is its accumulated losses amounting to Rs 973 million as on December 31, 2001.


The company released its half yearly results indicating an improvement as compared to previous year. The company managed to bring down its loss before tax, from Rs 2,776 million to Rs 1,425 million. The story started with increase in sales leading to a gross profit of Rs 125 million as compared to a gross loss of Rs 921 million. Financial expenses also came down from Rs 1,619 million to Rs 1,305 million. The results for the full year are expected to improve further.