Commercial Banks: NDLC-IFIC BANK LIMITED - Half Year Ended June 30, 2005 (Unaudited)
NDLC-IFIC Bank Limited (NIB), a scheduled commercial bank, incorporated in Pakistan is listed on all the stock exchanges in the country. NIB commenced banking and related operations on October 03, 2003, as a result of amalgamation of the former National Development Leasing Corporation Limited (NDLC) and the former Pakistan Branches of International Finance Investment and Commerce Bank Limited (IFIC).
Further, the SBP had in early 2004 sanctioned a scheme of amalgamation by virtue of which Pakistan branches of Credit Agricole Indosuez (CAI) were amalgamated with and into NIB. The number of employees at the end of 2004 was 403. NIB has 16 operating branches (2004: four branches) and expects to reach a total of 27 branches at the year end.
According to the notes to the financial statements, during the period over 213 million shares of Rs 10 each had been allotted to M/s Bugis Investments (Mauritius) Pte Limited at the premium of Rs 3 per share. Bugis Investments is said to be a wholly owned indirect subsidiary of Temasek Holdings of Singapore. By virtue of which NIB has now become a subsidiary of Bugis Investments. The shares issued to Bugis Investments constitute 63 % of the total paid up capital of NIB at Rs 3.362 billion as on June 30, 2005.
The level of share capital places NIB among one of the most well-capitalised banks in the country. One big consequence, according to the Directors Report, of the share capital increase is an improved rating by PACRA as at June 30, 2005. NIB's long term rating has improved two notches to A+ (A One Plus) from A- previously. The short term rating is upgraded to A1 (A One).
NIB's total assets as on June 30, 2005 increased by 43 % to Rs 23.7 billion compared to Rs 16.5 billion as on December 31, 2004. Investments and Advances saw the biggest increase during the six months. Investments increased nearly four-fold to Rs 4.5 billion (19% of total assets) on June 30, 2005 compared to Rs 1.2 billion (7% of TA) on December 31, 2004. Advances increased by 32% to Rs 15.4 billion (65% of TA) on June 30, 2005 compared to Rs 11.7 billion (71% of TA) on December 31, 2004. The increases reflect the enhanced level of banking activities.
The increased level of operations of NBI was financed through increased liabilities as well as total equity. Total liabilities increased 29% to Rs 19.6 billion (83% of TA) on June 30, 2005 compared to Rs 15.2 billion (92% of TA) on December 31, 2004. Of this, Deposits constituted the biggest item increasing by 34 % to Rs 14.3 billion (60% of TA) from Rs 10.6 billion (64% of TA) as on June 30, 2004.
Total equity rose to Rs 4.1 billion (17% of TA) on June 30, 2005 compared to Rs 1.4 billion (8% of TA) on December 31, 2004. This has been possible solely due to fresh injection of paid up capital of Rs 2.132 billion along with share premium of Rs 0.640 billion.
Mark up income is the major income component of NIB for the six months ended June 30, 2005. Total mark up income was Rs 646 million during the period under review compared to Rs 349 million for the corresponding period last year. However, net mark up income for the period was subdued due to slightly higher mark up expenses at Rs 426 million (66% of total mark up income) compared to Rs 183 million (52% of total mark up income) for the corresponding period last year. During the half year ended June 30, 2005, NIB posted a profit before tax of Rs 7.4 million. Profit after tax for the half year was Rs 42.4 million due to tax credits.
NIB is presently showing relatively low profitability due to large expenses associated with opening of new branches. Otherwise, it appears to be getting ready to make its mark in the banking sector. NIB has to consider a breather to further amalgamations and endeavour to carve a niche market for itself in the financial sector of Pakistan. Performance statistics are given below.
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Performance Statistics (Rs, million) (Audited)
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Balance Sheet (Unaudited) On Dec.31,
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As on June 30 2005 2004
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Total Assets: 23,743 16,557
Cash, balances with banks: 1,473 1,284
Lending to financial institutions: 1,685 1,813
Investments-Net: 4,564 1,188
Advances-Net: 15,465 11,737
Borrowing from fin. Institutions: 4,785 4,159
Deposits, other accounts: 14,300 10,648
Total Liabilities: 19,604 15,193
Share Capital: 3,362 1,229
Reserves, Retained earnings: 831 149
Surplus on Revaluation of Assets: -54 -14
Total Equity: 4,139 1,364
Subordinated Loan: 0 0
Equity and Sub. Loans: 4,139 1,364
NPLs at end of period: 950 951
Contingencies and Commitments: 20,398 14,931
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Ratios:
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Cash and bank/Total Assets: 6% 8%
Investments/Total Assets: 19% 7%
Advance/Total Assets: 65% 71%
NPLs/Advances-Gross: 6% 8%
NPLs/Total Equity: 23% 70%
Provision required/Advances Gross: 4% 5%
NPLs Prov. Req./Provision Held: 102% 100%
Deposits/Total Assets: 60% 64%
Total Liabilities/Total Assets: 83% 92%
Total Equity/Total Assets: 17.4% 8.2%
Equity and S. Loans/Total Assets: 17.4% 8.2%
Deposits/(Equity+S.Loans)-X: 3.5 7.8
Advances/Deposits: 108% 110%
Investments/Deposits: 32% 11%
Contin.& Comm./(Equity+SL)-X: 4.93 10.95
Book Value per Share: 12.31 11.10
Quoted Share Price () - Rs: 23.75 -
Price/Book Value Ratio: 1.93 -
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Income State. (HY end June 30) 2005 2004
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Markup/interest earned: 646 349
Markup/interest expensed: 426 183
Net Markup/interest income: 220 166
Total non-markup income: 84 45
Admin expenses: 278 145
Profit before Tax: 7 12
Profit after Tax: 42 77
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Ratios: (Half Yearly Basis)
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Net Markup Income/Total Assets: 0.9% 1.0%
Non-Markup Income/Total Assets: 0.4% 0.3%
Admin expenses/Total Assets: 1.2% 0.9%
Profit before Tax/Total Assets: 0.0% 0.1%
Profit after tax/Total Assets: 0.2% 0.5%
Profit after tax/Total Equity: 1.0% 5.6%
EPS- (HY end paid up) - Rs: 0.12 0.63
Price/Earnings Ratio: 190.11 -
Cash dividend: 0.0% 0.0%
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Cash flow Summary (Half Year) 2005 2004
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Net Cash flow from Operations: 908 -1,023
Net Cash flow from Investing: -3,492 1,428
Net Cash flow from financing: 2,772 0
Net Cash flow position for period: 188 405
Cash and bank at beginning: 1,288 348
Cash and bank at end of period: 1,476 753
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COMPANY INFORMATION: Chairman: Francis Andrew Rozario; Ex-Chairman: Shuaib Ahmed; (resigned w.e.f. July 31, 2005); President and CEO: Khawaja Iqbal Hassan
Director: S.M. Saleem; Legal Advisors: Rizvi, Isa, Afridi & Angell, Advocates and Corporate Counsellors; Auditors: M. Yousuf Adil Saleem & Co, Chartered Accountants
Registered Office: 99, P&O Plaza, I. I. Chundrigar Road, Karachi; Head Office: National Insurance Building, Korangi Road, Karachi; Web Address: www.nibpk.com
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