ASKARI BANK PROVIDING BETTER FINANCIAL SOLUTION TO FARMERS

The bank is providing financing support to farmers under the Askari Kisan Agri Finance Programme since 2004

TAHIR KHAN
June 25 - July 01, 2007

Askari bank was incorporated in Pakistan on October 9, 1991, as a public limited company. It commenced operations on April 1, 1992. The bank is listed on the Karachi , Lahore and Islamabad stock exchanges and its share has consistently remained amongst the highest quoted in the banking sector in Pakistan .

In this business environment, Askari Bank's deposit base by the end year 2006 reached Rs. 131.84 billion as compared to previous year end figure of Rs.118.80 billion showing an increase of 12%. In order to strengthen the deposit base of the bank a "Sustainable Long Term Deposit Stabilization Strategy" has been devised. On the other hand gross advances also increased by 16% to Rs. 102.72 billion as of December 31, 2006 from 88.40 billion at the close of the last year. While the credit expansion was strong as well as diversified and yielded better returns, banks non performing (NPLs) increased by Rs. 2037 billion to Rs. 3.66 billion mainly due to further downgrading of a few large exposures as reported in our earlier communications. These loans have been fully provided for up-to December 31, 2006. Nevertheless, concrete efforts are being made for regulation/recovery of the NPLs.

The principal factors contributing to the bank's continued good performance include an environment of macro economic stability in Pakistan economy and consistency in overall government policies. These, in turn have been supported by strong leadership form the State Bank of Pakistan in regulation and supervision of banking system. Its leadership has enabled banks to respond to the increasing financial needs of key sectors of the economy with development of new products and services.

Agriculture remains the backbone of Pakistan economy. The bank is providing financing support to farmers under the Askari Kisan Agri Finance Programme since 2004 through its branches. This segment of its credit portfolio has gained market acceptance in a short span of time. Askari bank signed an MOU with the Pakistan dairy development company (PDDC) for the development of the dairy industry in Pakistan . According to the MOU Askari bank will provide financing facilities to farmers, milk collecting agents and corporate entities for the purchase of equipment and machinery recommended by PDDC.

After operations of the Bank's Off-shore Banking unit in Bahrain , the management is now keen to open representative offices in the most vibrant centres of international finance and trade to promote both the brand name of Askari Bank and to capture the business opportunities emanating from international presence.

In recognition of quality service to the valued customers, the bank has received several awards from renowned national and international organizations. Performance in the field of consumer banking at international level won the bank "Best Retail Bank In Pakistan" award by the Asian Banker during last three consecutive years. The bank also received "2nd Consumer Choice Award 2005" in the category of best bank retail banking in Pakistan in the year 2006 by the consumer association of Pakistan . In addition to ensuring quality service, Askari bank has also been very successful in uplifting of corporate values in the banking industry. "Corporate Excellence Award" by management Association of Pakistan (MAP) and "Best Corporate Report" awards from The Institute of Cost and Management Accountants in Pakistan (ICMAP) for the year 2005 are a token of admiration thereof.

Besides Corporate and Investment Banking and Consumer Banking Services, Askari bank exceptionally regaled the needs of farmers and customers inclined towards Islamic system in banking sector.

AGRICULTURE CREDIT FINANCING:

Askari bank's agriculture credit schemes which were launched in June 2004, under the umbrella of agriculture credit division (ACD) continue to be an attractive product for meeting ON Farm and OFF Farm financial requirements of the farmers. The credit schemes were introduced under the title of " Askari Kissan Agri Finance Program (AKAFP)" with the objective of;

a) providing the financial assistance to small farmers
b) assuring adequate and timely availability of credit
c) facilitating effective water management system
d) encouraging and promoting mechanized farming
e) providing means for better access to markets
f) promoting livestock development
g) providing inputs finance for effective crop
h) providing inputs finance for effective crop management

The bank is extending short, medium and long term loans to the farmers for the crops, daily farming, poultry, fisheries, forestry and orchids. Loans are also provided for farm mechanization, transportation, marketing of agriculture produce, storage, land improvement and aabpashi The number of designated branches for agriculture credit increased form 12 to 46 and customer base by 90% as compare to last year. New dairy farming schemes were introduced for establishment of model dairy farms, milk collection centers, installation of milk cooling tanks and purchase of cattle etc.

The division remains proactively engaged in evolving policies and procedures for strengthening the credit framework for the benefit of stakeholders, and is determined to make its full contribution towards ensuring that Pakistan is a food and fiber surplus country.

PRODUCTS:

Askari kissan ever green finance
Askari kissan tractor finance
Askari kissan mechanization finance
Askari kissan aabpashi finance
Askari kissan farm and transport finance
Askari kissan live stock development finance Model dairy farm scheme

Model milk cooling tank scheme

ISLAMIC BANKING

During the year, Islamic banking was launched under the brand "Askari Islamic Banking", by opening dedicated 6 Islamic banking branches in major cities of the country. Further expansion is planned with improved capabilities for offering products conforming to the Shariah principles. Askari bank opens the door for halal banking solutions. Our objective is to put in place an efficient banking system supportive to economic justice and welfare of society in line with the shariah standards.

A comprehensive range of Islamic banking products and services is being offered, in order to meet customer's demand for shariah compliant banking in the following areas.

Islamic corporate banking
Islamic investment banking
Islamic trade finance
Islamic general banking
Islamic consumer banking

Islamic banking products have been approved by the bank's Shariah Advisor. As per Shariah requirements, funds and products of Islamic banking are managed separately from the conventional banking side. All funds obtained, invested and shared in halal modes & investments, under supervision of the shariah advisor.