The results of the year under review show rapid growth and can be termed astonishing. On almost all counts the performance was very high rather record highest of its career. Apart from conducive business environment, the leadership in the bank took several calculated initiatives. One of these was its realisation of capital gains from sizeable portfolio of securities.
The other was in-house development of banking software which is successfully catering to the needs of the bank.
Then there is rapid expansion in branch network from 57 branches to 70 branches. In line with the business trend in the banking industry, the bank also introduced Debit Cards, Telebanking and consumer lending products.
The bank has created enabling environment to avail of opportunities for the coming years such as ideal size of branch network, IT infrastructure, large handling of the international trade, cross section of customer base formation for both advances and deposits, the presence of skilled human resource to meet the challenges of capital and money market.
The bank's net profit improved to Rs 1.012 billion (2002: Rs 2.90 million).
Bank Al Habib Limited was incorporated in the province of Punjab on October 15, 1991 as a public limited company having its registered office in Multan with principal place of business being at I.I. Chundrigar Road Karachi. It is a scheduled bank principally engaged in the business of commercial banking.
Its shares are listed on all stock exchanges of the country. Bank Al Habib shares are trading at the market price of Rs 46.90 per share which is more than 4.5 times of the par value. During the last one-year the price of the share shot up to Rs 60.90 per share from Rs 22.85 per share registering 166.52% appreciation in the market value.
The substantial appreciation in the price of the share can be attributed to a number of reasons including the investors perception about the leadership in the bank which is scion of the pioneering Muslim bankers of South Asia.
The bank's financial fundamentals are robust as can be seen from the credit rating of the rating agency. Apart from bullish stock market which improved the market capitalisation of the banking sector, the investors' confidence in the bank also soared because of its improved profit distribution profile and its sound and dynamic strategy in the fund deployment.
This can be seen from earning a large amount of capital gain from its investment portfolio particularly from the government securities compared to other private sector banks opened in the decade of nineties, the bank has made aggressive expansion in its branch network. This has made enabling environment for the bank to improve its CRM (customer relationship management).
On the other hand it has taken also bold steps in developing its own in-house banking software. The directors emphasised that this is successfully catering to all its banking needs. It is obvious that in-house development of software would be relatively cheaper and at times it can be source of revenue if marketed.
Moreover the initiative in this area would pave the way to further expand the development and application of technology, mainly in the internet banking. The bank has already effectively launched Debit Cards and Telebanking.
The bank is operating with a network of 70 branches (2002: 57 branches) having its presence in all commercial centres nation wide. Its largest concentration is in Karachi with 33 branches followed by Lahore with 13 branches.
It has 37 branches in Sindh province and 28 branches in Punjab province and in all provincial capitals as well as federal capital.
The last count of shareholders of the bank, tabulated in the pattern of shareholding dated December 31, 2003, shows that bank's directors their spouses etc shareholding was to 12.9% of its total 108.20 million shares of Rs 10 each. Its associated company Habib Sugar Mills owned 1.66% of the stock.
The bank's 5175 individual shareholders owned 48.8% of the stock. NIT owned 17.54% of the bank's stock. Twenty-nine institutions in the financial sector owned 11.90% of its stock.
PACRA maintained its ratings which is AA for long term and A1+ for short term. During the year 2003, the period under review, deposits of the bank increased to Rs 46.178 billion (2000: Rs 34.240 billion) registering increase by Rs 11.938 billion or 34.9%.
Advances increased to Rs 35.231 billion (2000: Rs 23.775 billion) by Rs 11.456 billion or 48.2% over the preceding year's.
Foreign trade business considerably increased to Rs 104.9 billion as compared to Rs 73.0 billion registering an increase of Rs 31.9 billion. Revenue from non mark-up business continues to surpass from mark-up business.
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Performance Statistics (Million Rupees)
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December 31 2003 2002
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Share Capital-Paid-up: 1,082.03 865.62
Reserves & Profit: 1,643.94 956.24
Shareholders Equity: 2,725.97 1,821.86
Surplus on Revaluation of Assets: 464.86 769.83
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Liabilities
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Bills Payable: 1,224.76 979.77
Borrowings From
Financial Institutions: 6,790.67 10,410.36
Deposits & Other Accounts: 46,178.05 34,240.16
Other Liabilities: 447.44 557.94
Deferred Tax Liability: 316.46 657.21
Total Liabilities: 54,957.38 46,845.44
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Assets
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Cash & Balances Treasury Bank: 6,110.71 3,915.99
Balances With Other Banks: 544.55 409.97
Lending To Financial Institutions: 469.63 847.95
Investments: 14,109.22 18,831.34
Advances: 35,231.51 23,775.28
Other Assets: 941.48 1,032.54
Operating Fixed Assets: 741.11 624.06
Total Assets: 58,148.21 49,437.13
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Revenue, Profit & Pay Out
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Net Mark-up/Interest
Income After Provisions: 1,149.89 682.15
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Non Mark-up/Interest Income
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Fees, Commission &
Brokerage Income: 317.69 248.74
Dividend Income: 25.51 26.39
Income From Dealing
in Foreign Currencies: 187.01 240.65
Other Income: 901.08 185.52
Total Non Mark-up/
Interest Income: 1,431.29 701.30
Net Revenue: 2,581.18 1,383.45
Non Mark-Up/
Interest (Expenses): (1,068.19) 763.72
Profit Before Taxation: 1,512.99 619.73
Profit After Taxation: 1,012.31 289.73
Proposed (Dividend) Cash 10%
(2002: Nil) Per Share: (108.20) -
Reserve For Proposed (Issue)
of Bonus Shares @25% (2000:25%): (270.51) (216.41)
Earnings Per Share (Rs): 9.36 2.68
Share Price (Rs) on 26.04.2004: 46.90 -
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Financial Ratios
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Price/Earning Ratio: 5.01 -
Book Value Per Share: 25.19 21.05
Interest Margin (%): 52.34 28.84
Net Profit Margin (%): 39.21 20.94
Advances/Deposit Ratio (%): 76.29 69.44
R.O.E (%): 37.14 15.90
R.O.A (%): 1.74 0.59
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COMPANY INFORMATION: Chairman: Ali Raza D. Habib; Chief Executive & Managing Director: Abbas D. Habib; Directors: Anwar Haji Karim; Faiz N. Abdulali; Company Secretary: Mahmood S. Allarakhia; Registered & Head Office: 126-C, Old Bahawalpur Road Multan; Principal Office: Mackinnons Building, I.I. Chundrigar Road Karachi.
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