AIRLINK 191.00 Decreased By ▼ -5.65 (-2.87%)
BOP 10.15 Increased By ▲ 0.01 (0.1%)
CNERGY 6.75 Increased By ▲ 0.06 (0.9%)
FCCL 34.35 Increased By ▲ 1.33 (4.03%)
FFL 17.42 Increased By ▲ 0.77 (4.62%)
FLYNG 23.80 Increased By ▲ 1.35 (6.01%)
HUBC 126.30 Decreased By ▼ -0.99 (-0.78%)
HUMNL 13.80 Decreased By ▼ -0.10 (-0.72%)
KEL 4.75 Decreased By ▼ -0.01 (-0.21%)
KOSM 6.55 Increased By ▲ 0.18 (2.83%)
MLCF 43.35 Increased By ▲ 1.13 (2.68%)
OGDC 226.45 Increased By ▲ 13.42 (6.3%)
PACE 7.35 Increased By ▲ 0.34 (4.85%)
PAEL 41.96 Increased By ▲ 1.09 (2.67%)
PIAHCLA 17.24 Increased By ▲ 0.42 (2.5%)
PIBTL 8.45 Increased By ▲ 0.16 (1.93%)
POWER 9.05 Increased By ▲ 0.23 (2.61%)
PPL 194.30 Increased By ▲ 10.73 (5.85%)
PRL 37.50 Decreased By ▼ -0.77 (-2.01%)
PTC 24.05 Decreased By ▼ -0.02 (-0.08%)
SEARL 94.97 Decreased By ▼ -0.14 (-0.15%)
SILK 1.00 No Change ▼ 0.00 (0%)
SSGC 40.00 Decreased By ▼ -0.31 (-0.77%)
SYM 17.80 Decreased By ▼ -0.41 (-2.25%)
TELE 8.72 Decreased By ▼ -0.01 (-0.11%)
TPLP 12.46 Increased By ▲ 0.25 (2.05%)
TRG 62.74 Decreased By ▼ -1.62 (-2.52%)
WAVESAPP 10.35 Decreased By ▼ -0.09 (-0.86%)
WTL 1.73 Decreased By ▼ -0.06 (-3.35%)
YOUW 4.02 Increased By ▲ 0.02 (0.5%)
BR100 11,814 Increased By 90.4 (0.77%)
BR30 36,234 Increased By 874.6 (2.47%)
KSE100 113,247 Increased By 609 (0.54%)
KSE30 35,712 Increased By 253.6 (0.72%)

PICIC Commercial Bank Limited (PICIC Bank) was originally incorporated as a public limited company in Pakistan on December 27, 1993 as Schon Bank Limited, with initial paid up capital of Rs 500 million.
The bank received licence from the State Bank of Pakistan to undertake and carry on the business of banking in Pakistan on April 3, 1994. Later, Schon Bank, on acquisition by the investors from Oman, became Gulf Commercial Bank Limited (GCBL).
PICIC during 2001 acquired 30 million shares (60% controlling stake) of the bank. Subsequently, the name of the bank was changed to PICIC Commercial Bank Limited after approval by the shareholders in the annual general meeting held on April 21, 2001.
PICIC Bank is listed on the Karachi, Lahore and Islamabad Stock Exchanges. The bank operates 115 branches (2004: 95) in Pakistan and has obtained permission from State Bank of Pakistan to open additional 28 branches during the year 2006. The bank's rating assigned by JCR-VIS stands at "A+" (A One Plus) for medium to long term and "A1" (A One) for short term. The bank has a wholly-owned subsidiary, PICIC Exchange Company (Pvt) Limited, which is engaged in the business of dealing in foreign exchange. The present Overview, however, is that of PICIC Bank alone, without consolidation with its subsidiary.
The authorised capital of PICIC Bank is Rs 3 billion, comprising 300 million shares of Rs 10 each. As on December 31, 2005 the paid up capital is Rs 2.735 billion, which is held by 13,015 shareholders, of which 12,822 individuals hold 36.66% shares, including nearly 15% by S.A. S. A. Hoqani, a director. PICIC owns 164 million shares that translate into 60% interest in the bank. The rest of the shares are distributed among a number of corporate entities including banks and DFIs.
Total assets of PICIC Bank increased by 25% to Rs 65 billion on December 31, 2005 compared to Rs 52 billion on December 31, 2004. Investments saw only 4% increase to Rs 13.6 billion (21% of Total Assets). Advances as on December 31, 2005 were Rs 33 billion (51% of TA), registering 28% increase over previous Rs 26 billion (50% of TA). On December 31, 2005, 96% of the Advances are in local currency (2004: 91% of total advances). On this date, short term Advances are 72% (2004: 74%) yielding some ground to long term Advances at 28%. Major exposure of the bank is in Textiles, sugar, chemicals, construction, energy and other sectors, as detailed below.



=====================================
Advances 2005
=====================================
Sectors (Rs million) %
=====================================
Textile: 7,834 24%
Cement: 745 2%
Construction: 779 2%
Chemicals: 1,385 4%
Energy: 999 3%
Financials: 376 1%
Sugar: 2,823 9%
Automobile: 908 3%
Shoes: 489 1%
Agri. Business: 296 1%
Others: 16,528 50%
Total: 33,162 100%
=====================================

PICIC Bank's equity as on December 31, 2005 stands at Rs 4.058 billion (6.2% of total assets) whereas gross NPLs on this date are Rs 0.586 billion (2% of Advances). However, it may be noted that PICIC Bank has made full provision (Rs 0.277 billion) against Gross NPLs according to the SBP criteria applicable on December 31, 2005. On net basis, NPLs are 1% of Advances.
The bank has to be vigilant in the monitoring of the Advances. As some doubtful loans have the tendency to stay under cover for sometime due to different reasons, a prudent policy would be that the management makes higher general provision coupled with periodic critical review of risk management procedures instituted to keep NPLs within acceptable level.
The increases in Cash, Investments and Advances as on December 30, 2005 compared to last year were made possible mainly through increase in Deposits. During 2005, Advances as % of Deposits were about right at 62% (2004: 59%). The depositors in a way are big stakeholders in the bank. Keeping the current low level of profit payout in view, the depositors deserve a word or two of appreciation like other stakeholders.
PICIC Bank achieved 69% increase in its profit after tax for the year ended December 31, 2005 to Rs 1.5 billion as compared to Rs 0.9 billion for the last year. This has been made possible by increases in net mark up income as well as non-mark up income comprising fees, commissions, etc ROE at 37% for the year is highly attractive compared to 25 % for the last year. The bank shares are currently traded at the stock exchanges at prices, more than two times of the book value as on December 31, 2005.
PICIC Bank, by 2007 should be a strong candidate to join 'the Rs 100 billion banks club', provided equity base is strengthened by rationalising dividend payouts and management stays focused as in the past. Performance statistics are given below.



==============================================================
Performance Statistics
==============================================================
Balance Sheet (Audited) (Rs million)
As on December 31, 2005 2004
==============================================================
Total Assets: 65,129 52,004
Cash, balances with banks: 6,735 4,287
Lending to financial institutions: 8,706 6,748
Investments-Net: 13,658 13,196
Advances-Net: 33,162 25,828
Borrowing from fin. Institutions: 5,680 3,207
Deposits, other accounts: 53,468 44,092
Total Liabilities: 61,071 48,478
Net Assets: 4,058 3,526
Share Capital: 2,735 1,823
Reserves, Un-app. Profit: 1,451 1,656
Surplus on Revaluation of Assets: -128 47
Total Equity: 4,058 3,526
Subordinated Loan: 0 0
Equity and Sub. Loans: 4,058 3,526
Advances- Gross: 33,439 26,103
Gross NPLs: 586 480
Total Provision: 277 275
Contingencies and Commitments: 20,605 16,052
--------------------------------------------------------------
Ratios:
--------------------------------------------------------------
Cash and bank/Total Assets: 10% 8%
Investments/Total Assets: 21% 25%
Advance-Net/Total Assets: 51% 50%
Gross NPLs/Advances-Gross: 2% 2%
NPLs- Net/Advances-Net: 1% 1%
NPLs/Total Equity: 14% 14%
NPLs Provision/Advances-Gross: 1% 1%
Deposits/Total Assets: 82% 85%
Total Liabilities/Total Assets: 94% 93%
Total Equity/Total Assets: 6.2% 6.8%
Equity and S. Loans/Total Assets: 6.2% 6.8%
Deposits/Equity-Times: 13.2 12.5
Advances/Deposits: 62% 59%
Investments/Deposits: 26% 30%
Contin.& Comm./Equity -Times: 5.08 4.55
Book Value Per Share: 14.84 19.34
Quoted Price (16-03-06) - Rs: 34.55 -
Price/Book Value Ratio: 2.33 -
--------------------------------------------------------------
Income Statement 2005 2004
--------------------------------------------------------------
Markup- interest earned: 4,172 2,337
Markup- interest expensed: 2,062 1,068
Net Markup- interest income: 2,110 1,269
Provisions and write offs: 10 -6
Net mark up after provisions: 2,100 1,275
Total non-markup income: 959 675
Total Income before Admn. Exp.: 3,059 1,950
Admin Expenses, etc: 1,153 824
Profit before Taxation: 1,906 1,126
Current & deferred tax: 402 230
Profit after taxation: 1,504 896
--------------------------------------------------------------
Ratios: (Annual Basis):
--------------------------------------------------------------
Markup earned/Total Assets: 6.4% 4.5%
Net Markup Income/Total Assets: 3.2% 2.4%
Net markup income (Prov.)/TA: 3.2% 2.5%
Non-Markup Income/TA: 1.5% 1.3%
Total Income before AE/TA: 4.7% 3.7%
Admin Expenses/TA: 1.8% 1.6%
Profit before Taxation/TA: 2.9% 2.2%
Profit after taxation/TA: 2.3% 1.7%
Profit after tax/Total Equity: 37.1% 25.4%
EPS- (year-end paid up) - Rs: 5.50 4.91
Price/Earnings Ratio: 6.28 -
Cash Dividend: 60% 15%
Bonus Shares: 20% 25%
--------------------------------------------------------------
Cash flow Summary: 2005 2004
--------------------------------------------------------------
Net Cash flow, Operations: 4,073 -6,974
Net Cash flow, Investing: -892 7,670
Net Cash flow, financing: -733 768
Change in Net Liquidity: 2,448 1,464
Net Liquidity at beginning: 4,287 2,823
Net Liquidity at end: 6,735 4,287
==============================================================

COMPANY INFORMATION: Chairman: Manzural Haq; President & CEO: Muhammad Bilal Sheikh; Director: Muhammad Ali Khoja; Company Secretary: Rahat Saeed Khan; Chief Financial Officer: Akbar A. Ladak; Legal Advisors: Mandviwalla & Zafar, Advocates; Auditors: KPMG Taseer Hadi & Co, Chartered Accountants; Registered and Principal Office: 2nd & 3rd Floor, Spenser Building, I.I. Chundrigar Road, Karachi, Pakistan; Web Address: www.picicbank.com.pk
Copyright Business Recorder, 2006

Comments

Comments are closed.