Commercial Banks: METROPOLITAN BANK LIMITED - Half Year Ended June 30, 2006 (Un-audited)
Metropolitan Bank Limited (MetroBank) was incorporated in Pakistan on August 3, 1992 as a public limited company, under the Companies Ordinance, 1984. MetroBank commenced banking operations from October 21, 1992, with primary focus on retail banking and trade finance.
With time, other financing products were added including launching of consumer financing in 2005. The bank is listed on all three stock exchanges in the country. The Board of the bank is a blend of experienced bankers, industrialists and businessmen.
Through press advertisements, published on October 9, 2006, the merger of Habib Bank AG Zurich Pakistan Operations and MetroBank has been announced effective October 26, 2006. The draft scheme of amalgamation of Habib Bank AG Zurich Pakistan Operations with and into Metropolitan Bank Limited along with change in name of the bank to "Habib Metropolitan Bank Limited" was approved by the shareholders of the bank in their Extra Ordinary General Meeting held on July 13, 2006. The draft scheme of amalgamation along with name change application has been submitted to the State Bank of Pakistan for their approval.
For the sixth consecutive year, MetroBank continues to enjoy "AA+" (Double A Plus) credit rating for long term and "A1+" (A One Plus) rating for short term, assigned by Pacra. However, in anticipation of the proposed merger of Pakistan Branches of Habib Bank AG Zurich with Metropolitan Bank Limited, the ratings of MetroBank are placed on Rating Watch by PACRA, reportedly as per standard practice adopted in such cases.
As on June 30, 2006, MetroBank operated 51 branches (December 31, 2005: 51 branches with 1,143 employees) including an Islamic Banking Branch, which is said to be fully capable of catering the customers seeking Sha'ria compliant products. The key financial figures of the Islamic Banking Branch as on June 30, 2006 are: Islamic Banking Fund Rs 50 million, Deposits Rs 409 million, Ijarah financing Rs 322 million, Murabaha financing Rs 221 million, Profit before taxation Rs 8 million, and Contingent liabilities Rs 113 million.
The authorised capital of MetroBank is Rs 6 billion, comprising 600 million shares of Rs 10 each. As on December 31, 2005 the paid up capital was Rs 1.560 billion, held by 2,033 shareholders, of which 1,927 individuals held nearly 22% shares.
National Investment Trust owned nearly 20% shares. Twenty six foreign investors owned nearly 43% of the shares. The rest of the shares were distributed among a number of corporate entities including banks and DFIs. On June 30, 2006 the paid up capital stood at Rs 2.080 billion, raised to this level through issue of bonus shares.
MetroBank saw 16% increase in its total assets to Rs 93 billion as on June 30, 2006 compared to Rs 80 billion on December 31, 2005. Increases are seen in Investments (19 %), Advances (9%), Lending to Financial Institutions (82%) and Other Assets (19%). This increase in Total Assets has been managed largely through 6% increase in Deposits and 57% increase in the Borrowings from Financial Institutions. Of the total, MetroBank has 89% investments in Available for Sale Securities (2005: 77%).
MetroBank's Advances as on June 30, 2006 were at Rs 47.560 billion (51% of Total Assets) compared to Rs 43.463 billion (55% of TA) as on December 31, 2005. As on June 30, 2006, gross NPLs are only Rs 101 million (December 31, 2005: Rs 89 million). In percentage terms gross NPLs on June 30, 2006 were 0.2% of gross Advances (2005: 0.2% of GA). On Net basis, NPLs are 0.02% of Advances (2005: 0.03% of Advances). On this basis it is concluded that MetroBank has excellent control on credit risk. It may be noted that MetroBank has made full provision against NPLs according to the SBP criteria.
Total mark up income of MetroBank for the first six months of 2006 increased by 68% to Rs 3.094 billion compared to Rs 1.841 billion for the corresponding six months of the previous year. Net mark up income (after mark up expensed and provisions) for the six months period under review increased by 23% to Rs 1.150 billion (corresponding six months of 2005: Rs 0.935 billion). Total mark up-interest expense represented 61 % of total mark up income for six months ended June 30, 2006, compared to 48% for the corresponding six months of 2005. The payout to the Depositors has improved but it is considered still low.
Non-mark up income of the bank for the six months ending June 30, 2006 was 86% higher at Rs 631 million as against Rs 340 million for the corresponding six months of 2005. The six months under review were closed with After-tax Profit at Rs 838 million (corresponding six months of 2005: Rs 523 million), registering an increase of 60%. ROE for the six months at 14.3% (corresponding six months of 2005: 10.4%) is considered highly satisfactory. Performance statistics are given below.
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Performance Statistics (Un-audited) (Rs, million)
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Balance Sheet As June 30, As Dec 31,
2006 2005
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Total Assets: 92,766 79,666
Cash, balances with banks: 6,044 6,264
Lending to financial institutions: 9,967 5,463
Investments-Net: 27,250 22,809
Advances-Net: 47,560 43,463
Borrowing from fin. Institutions: 22,627 14,429
Deposits, other accounts: 60,022 56,713
Total Liabilities: 86,301 74,007
Net Assets: 6,465 5,659
Share Capital: 2,080 1,560
Reserves & Un-app. Profit: 3,792 3,473
Sub total-Equity: 5,872 5,033
Surplus on Revalue, Assets: 593 626
Equity incl. Revalue Surplus: 6,465 5,659
Subordinated Loan: 0 0
Equity & Sub. Loans: 6,465 5,659
Advances-Gross: 48,137 43,984
Gross NPLs: 101 89
Total Provision: 577 521
Conting. & Commitments: 49,243 42,871
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Ratios:
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Cash & bank/Total Assets: 7% 8%
Investments/Total Assets: 29% 29%
Advance-Net/Total Assets: 51% 55%
Gross NPLs/Advances-Gross: 0.2% 0.2%
Net NPLs/Advances-Net: 0.02% 0.03%
Gross NPLs/Total Equity: 2% 2%
Total Provision/Advances-G: 1.2% 1.2%
Deposits/Total Assets: 65% 71%
Total Liabilities/Total Assets: 93% 93%
Total Equity/Total Assets: 6.3% 6.3%
Equity incl. Surplus, S Loans/TA: 7.0% 7.1%
Deposits/Equity-Times: 10.2 11.3
Advances/Deposits (ADR): 79% 77%
Investments/Deposits: 45% 40%
Conting.& Comm./Equity-X: 8.39 8.52
Book Value Per Share: 28.23 32.26
Quoted Price (10-10-06) - Rs: 80.50 -
Price/Book Value Ratio: 2.85 -
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Income Statement (6M) 2006 2005
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Markup- interest earned: 3,094 1,841
Markup- interest expensed: 1,887 888
Net Markup- interest income: 1,207 953
Provisions and write offs: 57 18
Net mark up income (aft. Prov.): 1,150 935
Total non-markup income: 631 340
Income bef. Admn. Exp.: 1,781 1,275
Admin Expenses, etc: 565 472
Profit before Taxation: 1,216 803
Current & deferred tax: 378 280
Profit after taxation: 838 523
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Ratios: (6-Month Basis)
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Markup earned/Total Assets: 3.3% 2.3%
Net Markup Income/TA: 1.3% 1.2%
Net markup (aft. Prov.)/TA: 1.2% 1.2%
Non-Markup Income/TA: 0.7% 0.4%
Income before AE/TA: 1.9% 1.6%
Admin Expenses/TA: 0.6% 0.6%
Profit before Taxation/TA: 1.3% 1.0%
Profit after taxation/TA: 0.9% 0.7%
Profit after tax/Total Equity: 14.3% 10.4%
EPS- (Period-end paid up)-Rs: 4.03 3.35
Price/Earnings Ratio: 19.98 -
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Cash flow Summary (6M) 2006 2005
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Net Cash flow, Operations: 4,340 3,693
Net Cash flow, Investing: -4,560 -4,167
Net Cash flow, financing: 0 0
Change in Net Liquidity: -220 -474
Net Liquidity at beginning: 6,264 7,007
Net Liquidity at end: 6,044 6,533
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COMPANY INFORMATION: Company Information: Chairman: Anwar H. Japanwala; President & CEO: Kassim Parekh; Executive Director: Mohamedali R. Habib; Company Secretary: Fuzail Abbas; Auditors: Ford Rhodes Sidat Hyder & Co, Chartered Accountants; Registered/Head Office: Spencer's Building, I.I. Chundrigar Road, Karachi-74200; Web Address: www.metrobank.com.pk
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