Banks: FAYSAL BANK LIMITED - Half Year Ended June 30 2004

Faysal Bank Ltd was incorporated as a public limited company on October 3, 1994 in the province of Sindh having its registered office located at Trade Centre, I.I. Chundrigar Road Karachi. It was listed at Karachi Stock Exchange in 1995 and its shares are also quoted on Lahore Stock Exchange. Faysal Bank Ltd is engaged in commercial, consumer and investment banking activities. The bank is operating with a network of 40 branches having its presence in country in almost all prominent commercial centres and capitals of provinces, Azad Kashmir and Federal Capital Islamabad.
On 24th December 2004, the closing price of its share was recorded at Rs 34.90 which is more than three times of the par value of Rs 10.
During last one year the price of the share appreciated from Rs 28.35 to Rs 41.75 per share.
The bank has an excellent track record of profit distribution in terms of regularity and good pay outs. In 2002 the cash dividend pay out rate was @17% which improved to cash dividend @45% and @10% bonus stock dividend. During Q2 of the FY 2003-04, the interim dividend (cash) pay out was @20%.
The bank took over the Pakistan operations of Faysal Islamic Bank of Bahrain, operating in Pakistan since 1987 and commence business as a total commercial bank in 1995. On January 1, 2002, at Al Faysal Investment Bank Ltd (AFIBL) merged with Faysal Bank and as a result the Bank now stands co-owned by subsidiaries of the Dar Al Mal Islamic (DMI) Trust Bahamas.
The Balance Sheet footing of the Bank has crossed US $1 billion as at close of the half year.
Deposits and financing registered a growth of 36% and 28% respectively. Investment in shares has been reduced by Rs 1,771 million in line with SBP posting to gradually limit the exposure in equities.
However to maintain investment income and to meet the SBP reserve requirements, the Bank has increased its investment in NIT units, Term Finance Certificates and other securities.
Despite the aforementioned reorganisation of investment portfolio, the Bank has an unrealised surplus on revaluation of investments at Rs 2,893 million showing an increase of 22% over the 2003 level of Rs 2,369 million.
The Bank results show a healthy increase in its profit after tax for the quarter and half year ended June 30, 2004 by 90% and 21% respectively as compared to corresponding period last year. This growth is attributable to increase in both the bank's financing income and non-mark-up income. Bank's financing to SMEs gained momentum. The bank also launched Agricultural Finance Scheme, joined 1-link network of ATMs and launched its Debit Card. JCR-VIS assigned to Bank Credit Rating AA for the medium to long term and A1 for the short term.

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Performance Statistics                (Million Rupees)

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Balance sheet                                  -As At-

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                                  June 30  December 31

                                     2004         2003

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Share Capital-Paid-up:           2,912.63     2,647.85

Reserves & Profit:               2,724.71     2,432.44

Shareholders Equity:             5,637.34     5,080.29

Surplus on Revaluation

 of Assets-Net:                  2,892.99     2,368.86

Liabilities:

Bills Payable:                     719.96       430.86

Borrowings From Banks &:

Financial Institutions:          4,156.03     6,529.81

Deposits & Other Accounts:      42,543.26    31,332.17

Liabilities Against Assets

Subject to Finance Lease:           16.88        16.40

Other Liabilities:               2,363.26     1,848.01

Total Liabilities:              49.799.39    40,157.25

Assets

Cash & Bank Balances

 With Treasury Banks:            3,406.29     2,866.28

Balance With Other Banks:        1,425.97       648.66

Lending to Financial

 Institutions:                   1,781.34       872.13

Investments:                    11,397.74    11,424.75

Financing:                      37,731.28    29,419.97

Other Assets:                    1,237.49     1,183.32

Operating Fixed Assets:          1,090.59     1,030.35

Deferred tax Assets-Net:           264.02       160.94

Total Assets:                   58,329.72    47,606.40

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Profit & Loss A/c For the

 Half Year Ended June 30             2004         2003

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Income, Profit & Pay Out

Mark-Up/Return Earned:           1,158.82     1,087.30

(Mark-Up/Return Expensed:         (450.73)    (562.75)

(Provision)/Reversals/(With off):   (0.82)      355.85

Net Mark Up Income

 After Provisions:                 707.27       168.70

Fee, Commission &

 Brokerage Income:                 146.75       117.91

Dividend Income:                   538.77       480.97

Income From Dealing in

 Foreign Currencies:                62.42        57.28

Gain on Sale of Investments:       498.48       562.03

Unrealised Surplus:                  0.28            -

Other Income:                        2.92         0.93

Total Non-Mark-up Income:        1,249.62     1,219.12

Total Income:                    1,956.89     1,387.82

Total Non-Mark-up (Expenses):     (538.07)    (350.40)

Profit Before Taxation:          1,418.82     1,037.42

Profit After Taxation:           1,139.58       943.42

Earning Per Share (Rs):              3.91         3.24

Share Price (Rs) Dated 14/12/04:    34.90            -

Price/Earning Ratio:                 8.92            -

Book Value Per Share:               19.35        19.19

Price/Book Value Ratio:              1.80            -

Spread Margin (%):                  61.11        48.24

Financing/Deposits Ratio (%):       88.69        93.90

Net Profit Margin (%):              58.23        67.98

R O A (%):                           1.95         1.98

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