Due to the amalgamation of two entities - Crescent Investment Bank Limited and Pakistan branches of Mashreq Bank psc, a new commercial bank Mashreq Bank Pakistan Ltd emerged. This is operating with 6 branches and intends to open 4 more branches in 2004.
The leadership in the bank has decided to go for an entirely new IT platform as the President of the bank Azmat Ashraf emphasised "an efficient information and delivery system, capable of providing modern banking services, is one of the core elements of growth".
During the period from 9 July 2003 to 31 December 2003, Mashreq Bank Pakistan Ltd earned after tax profit of Rs 110.72 million.
The name of the bank has been changed to Crescent Commercial Bank Ltd as it has become one of the constituent members of a large conglomerate Crescent Group which has diversified interests in textile, sugar, banking, leasing, modaraba, steel, jute, power generation, information technology and particle board.
Mashreq Bank Pakistan Limited is a commercial bank. After the publishing of its First Annual Report the name of the bank was changed to Crescent Commercial Bank Ltd.
The First Annual Report includes one year's account for the year ended on December 31, 2003.
The bank was incorporated on 12 November 2002 in the province of Sindh with its registered office situated at Bahria Complex-1 Karachi and Head Office at Sidco Avenue Centre Karachi. Both there are high rise and prestigious building, situated very close to the financial centre of Karachi.
Two banks Mashreq Bank psc and Crescent Bank Limited are the two merged entities of MashreqBank Pakistan Ltd (now Crescent Commercial Bank Ltd).
The bank's operations are being carried out through its six branches in Pakistan. President & Chief Executive Azmat Ashraf informed that during the forthcoming period, the bank will also concentrate on enhancing its presence in the market.
Four new branches are planned to be opened in the second half of year 2004, 2 in Karachi and 1 each in Sialkot and Faisalabad.
The credit company JCR-VIS has assigned to the bank a medium to long-term rating of BBB+ (Triple B plus) with 'stable' outlook and a short term rating of A-2 (A Two) to the bank.
The bank commenced business in July 2003 after amalgamation of aforesaid two entities. Both entities, for over one year, prior to the combination, had reduced their operations substantially constrained by the merger process.
The 'new' bank not only faced all the challenges associated with a new institution ie the risk management/corporate governance requirements and intensely competitive business environment but also those peculiar to a combination of two entities with different lines of businesses.
In addition, the bank, after evaluation of IT system of the two entities, and the new bank's business plans, has decided to go for an entirely new IT platform.
The president of the bank also emphasised, "It is our firm belief that an efficient information and delivery system, capable of providing modern banking services, is one of the core elements of growth." Some of the priorities of the bank for 2004 will include:
-- Improvement of long-term credit ratings.
-- Launching of consumer banking products
-- Marketing and awareness campaign for name change and consumer financing products to be combined.
-- ATM/Debit cards and SWIFT connectivity.
-- Enhancement of IT capabilities for delivery of modern banking products and services.
During the period from 9 July 2003 to 31 December 2003, the bank generated net mark-up income (before provisions) at Rs 45.53 million. After provisions the net mark-up income posted negative small figure of Rs 0.32 million.
The relatively large negative figure is due to provision for diminution in value of investments at Rs 57.64 million. But this negative figure was sharply reduced due writing back of Rs 11.62 million on account of reversal against non-performing loans and advances.
Net provisions against advances, investment and contingencies during the period amounted to Rs 46.52 million.
Major contributions towards the non-mark-up income was through capital gains on sale of investments and sale of fixed assets (real estate) to Rs 81.86 million and Rs 80.24 million respectively.
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Performance Statistics (Million Rupees)
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As At December 31 2003
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Share Capital-Paid-up: 1,475.61
Reserves & Profit: 350.30
Shareholders Equity: 1,825.91
Surplus on Revaluation of Assets: 20.83
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Liabilities
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Bills Payable: 77.95
Borrowings From Financial Institutions: 388.88
Deposits & Other Accounts: 3,478.17
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Liability Against Assets
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Subject To Finance Lease: 23.04
Other Liabilities: 314.56
Total Liabilities: 4,282.60
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Assets
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Cash & Balances Treasury Bank: 314.85
Balances With Other Banks: 158.86
Lending To Financial Institutions: 1,820.93
Investments: 1,365.88
Advances: 1,492.97
Other Assets: 611.08
Operating Fixed Assets: 361.01
Deferred Tax Assets: 3.76
Total Assets: 6,129.34
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Net Mark-up Interest Income
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After Provisions: (0.32)
Total Non Mark-Up/Interest Income: 191.91
Net Income: 191.59
Non Mark-Up/Interest (Expenses): (74.77)
Profit Before Taxation: 116.82
Profit After Taxation: 110.72
Earnings Per Share (Rs): 1.77
Share Price (Rs) Dated 14.06.2004: 14.20
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Financial Ratios
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Price/Earning Ratio: 8.02
Interest Margin (%): 60.00
Net Profit Margin (%): 57.69
Advances/Deposit Ratio (%): 42.92
R.O.E (%): 6.06
R.O.A (%): 1.81
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COMPANY INFORMATION: Chairman: Shamim Ahmed Khan; President & C.E.O: Azmat Ashraf; Company Secretary: Tariq Aleem; Registered Office: Ground Floor, Bahria Complex-1, 24 M.T. Khan Road Karachi; Head Office: 6th Floor, Sidco Avenue Centre Maulana Deen Muhammad Wafai Road Karachi.
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