.

1- YARN PRICE INCREASES
2- RESULTS: LOCAL COMMERCIAL RAND 
3-
ARIF HABIB INVESTMENT
4- REFORMS IN THE CAPITAL MARKETS
5- RECAPITALIZATION: CHANGING THE FORTUNE OF PROJECTS

.

LOCAL COMMERCIAL BANKS CONSOLIDATING THEIR POSITION

 

Administrative expenses on the rise mainly due to substantial investment in technology and expansion in branch network

 

By SHABBIR H. KAZMI
Mar 17 - 23, 2003

 

 

By this time most of the listed commercial banks have announced their financial results. Some of them have been looked into in Stock Watch section of PAGE in the previous issues and remaining will be covered in the forthcoming issues. The analysis of financial statements indicates a rising trend in administrative expenses, mainly due to substantial investment in technology and branch network. Despite the reduction in average lending rates, banks were able to maintain their spread, by reducing return on deposits. While there has been persistent and substantial increase in deposits, the credit offtake has remained low. It is a cause of concern but many banks are trying to overcome the issue by entering into consumer finance business.

Askari Commercial Bank has posted Rs 687 million profit after tax for the year 2002 as compared to a profit of Rs 550 million for the previous year. The Board of Directors also announced 20% dividend and issue of 5% Bonus Shares, subject to the approval of issue of Bonus Shares, by the SECP. The bank had distributed 20% dividend to its shareholders for the year 2002 and also issued 5% Bonus Shares. The Bank transferred Rs 137 million to statutory reserve and Rs 284 million to general reserve. EPS improved from Rs 5.31 for the year 2001 to Rs 6.34 for the year 2002.

Bank AL Habib has posted Rs 289 million profit after tax for the year 2002 as compared to a profit of Rs 246 million for the previous year but bid not announce any dividend. However, the Board of Director approved issue of 20% Bonus Shares. The bank had paid 5% final dividend and also issued 20% Bonus Shares at the end of year 2001. Though there was increase in total income, total expenditure also went up. Total income grew from Rs 2,949 million to Rs 3,478 million. Expenditure went up from Rs 2,398 million to Rs 2,858 million.

Faysal Bank has posted Rs 656 million profit after tax for the year 2002 as compared to a profit of Rs 410 million for the previous year and also announced 17.5% dividend. It had distributed 10% dividend to its shareholders for the year 2001. The improvement in profit was driven by higher income, going up from Rs 1,489 million to Rs 1,877 million. There was decrease in fee based income but increase in dividend income. Fee, commission and brokerage income went down from Rs 242 million to Rs 206 million. Dividend income grew from Rs 208 million to Rs 391 million. However, there was increase in non-mark up expenses, going up from Rs 534 million to Rs 622 million, mainly due to rise in administrative expenses. EPS improved from Rs 1.55 for the year 2001 to Rs 2.48 for the year 2002.

 

 

Metropolitan Bank has posted Rs 876 million profit after tax for the year 2002 as compared to a profit of Rs 743 million for the previous year and also announced 20% dividend. It did not distribute any dividend to its shareholders for the year 2002 but issued 25% Bonus Shares. The improvement in profit was driven mainly by higher income, going up from Rs 1,112 million to Rs 1,362 million. There was increase in fee based income and dividend income. Fee, commission and brokerage income went up from Rs 168 million to Rs 235 million. Dividend income grew from Rs 1.7 million to Rs 11 million. However, there was increase in non-mark up expenses, going up from Rs 369 million to Rs 485 million, mainly due to rise in administrative expenses. EPS improved from Rs 3.35 for the year 2001 to Rs 4.30 for the year 2002.

Prime Commercial Bank has posted Rs 176 million profit after tax for the year 2002 as compared to a profit of Rs 153 million for the previous year and also announced 10% dividend. It did not distribute any dividend to its shareholders for the year 2002. Total income went up from 603 million to Rs 822 million. However, there was increase in non-mark up expenses, going up from Rs 362 million to Rs 516 million, mainly due to rise in administrative expenses. EPS improved from Rs 1.51 for the year 2001 to Rs 1.74 for the year 2002.

Soneri Bank has posted Rs 350 million profit after tax for the year 2002 as compared to a profit of Rs 270 million for the previous year and also announced 10% dividend. It did not distribute any dividend to its shareholders for the year 2002 but issued 30% Bonus Shares. The improvement in profit was driven by higher income, going up from Rs 915 million to Rs 1,073 million. There was increase in fee based income but income from dealing in foreign currencies decreased. Fee, commission and brokerage income went up from Rs 111 million to Rs 133 million. Income from dealing in foreign currencies came down from Rs 348 million to Rs 184 million. Other income grew from Rs 77 million to Rs 175 million. However, there was increase in non-mark up expenses, going up from Rs 364 million to Rs 452 million, mainly due to rise in administrative expenses. EPS went down from Rs 3.47 for the year 2001 to Rs 3.44 for the year 2002 due to increase in issued capital.