Pakistan Kuwait Investment Company

Oct 08 - 14, 2001

Pak Kuwait Investment Company is a Joint Venture between the Governments of Pakistan and Kuwait. State Bank of Pakistan (SBP) holds 50 percent shareholding of Pak-Kuwait on behalf of the Government of Pakistan and the remaining 50 percent is held by Kuwait Investment Authority (KIA) on behalf of the Government of Kuwait.

The company was established in 1979 with a paid up capital of Rs. 250 million contributed equally by the two joint partner venture. Over the years, Pak Kuwait has formed strong business relationship with institutions in Pakistan and the Gulf region. The active involvement of Pak Kuwait's Board members from Kuwait also points to the fact that they value Pak Kuwait's success.

It is the first financial institution in Pakistan's history to be awarded the AAA rating for medium to long-term by DCR-VIS Credit Rating Company, affiliate of Duff and Phelps Credit Rating Company. The credit rating was reaffirmed in the year 2000 by JCR-VIS.

Major Areas of Activities Following are the major activities of the company:

Corporate Finance Operation

Corporate Finance and Marketing Department is responsible for establishing and maintaining relationships with clients for funded and advisory business. The activities undertaken by the department are:

•Providing Long Term Financing, Short to Medium Term Financing, Lease Financing Syndications, Debt, Lease & Equity Private Equity Placement, Underwriting Services, Guarantee or Counter Guarantee Services, Financial Advisory Services
•Soliciting, developing and maintaining relationships
•Selling credit/non-credit based products and services
•Maximizing profitability to meet the financial targets/goals
•Implementing the Company's income budget
•Ensuring adherence/achievement of revenue targets
•Keeping a very close watch on the dynamics of the market risk parameters
•Forming liaison with the Risk Management Department in screening of target markets and customers

Treasury Operation

Treasury Department of the company was established in 1992 and has been effective as an independent function with objective to strengthen the company's fund management, money market operations, foreign currency deposits and SWAP transactions. The main functions include:

•Management of assets and liabilities
•Arranging funds for financing the company's assets
•Placement of surplus funds under COI's and other modes available with commercial banks
•Trading in Government securities for making spreads i.e., Treasury Bills, PIB's, FIB's etc.
•Accept foreign currency deposits
•Accept Pak Rupee deposits under Certificate of Investments
•Offer Pak Rupee loan against Pak Rupee Certificate of Investments and foreign currency deposits

Capital Markets Operation

Capital Markets department works with the objective of increasing the participation of Pak Kuwait in the securities markets of the country and thereby contribute to profitability of the company. The function includes: Management of resources assigned to capital markets. Achievement of tax efficient sources of income, i.e. Capital gains and dividends. Reduction of risk through diversification.

Advisory Operation

Development of fee based sources of income through investment advisory business. Encouraging stock market activities by extending co-operation in Initial Offerings, Pre Initial Public Offerings, Underwriting and sponsoring mutual funds.

Credit Monitoring Operation

The Credit Monitoring Operation undertakes the core function of documentation of transaction, monitoring of asset portfolio and application of MIS and reporting to State Bank of Pakistan. It is responsible for restructuring rescheduling and financial packaging for stuck-up credit/loan facilities.

Our most valuable service remains the timely delivery of customers credit requirement to meet their onwards financial commitments. Another essential service has been the timely compliance of the reporting procedure and deployment of the Management Information System [MIS] for systematic flow of credit related information.

Risk Management Operation

Risk Management function covers the risks, which Pak Kuwait is exposed to. The primary function is to manage Credit risk, which is all the more important in view of the prevailing macro environment.

Pak Kuwait operates under strict criteria and all credits are carefully screened by Risk management, Credit Committee and Senior Management. Only those credits which meet Pak Kuwait criteria are initiated. The portfolio is diversified with exposure in Fertilizer, Pharmaceutical, Textile, Cement, Energy Sectors, etc.

PAK KUWAIT INVESTMENT COMPANY - AT A GLANCE

Rs. in millions

2000

1999

1998

1997

1996

1995

Total Equity

3,969

3,870

3,320

3,182

2,650

2,268

Total Assets

9,882

11,420

21,169

35,947

19,900

12,952

Net Profit Before Provision

685

442

763

882

557

420

Net Profit

298

800

288

806

532

426

Total Dividends

200

250

200

275

150

150