During the year under review this 19 branch commercial bank has seen radical change in its structure due to amalgamation and rightsizing. A major achievement of the bank was that of the successfully handling of floatation issue of Rs 1.340 billion of OGDC.
The transformation of loss into profitability was another commendable feat. The bank posted pre-tax profit at Rs 33.12 million as against pre tax loss at Rs 102.23 million booked in the preceding year.
After addition of profit of Rs 15.48 million generated by its subsidiaries, the profit before taxation increased to Rs 48.60 million. During the last one year the price of its share has also substantially improved.
The bank's deposit improved to Rs 5.451 billion from Rs 2.634 billion registering 106.9% growth over the previous year.
The core business of a bank are advances but lagged behind investment portfolio.
KASB Bank Limited (formerly Platinum Commercial Bank) was incorporated in Lahore on 13 October 1994.
The Bank obtained Certificate of Commencement of Business on 11 January 1995 and is engaged in commercial banking and relative services through 19 branches in different cities.
The bank has also SBP (State Bank of Pakistan) permit to open three more branches which enables management to expand branch network. They intend to open branches at Lahore Stock Exchange, Sialkot and Karachi.
The bank achieved a significant milestone on 26 December 2003 by opening of a branch at Karachi Stock Exchange and the branch has shown encouraging results.
During 2003, the year under review, there has been strategic move towards re-structuring of Khadim Ali Shah Bukhari & Co Ltd (KASB).
This move ultimately paved the way for its division and merger of one of its segments with the bank in the year under review.
The merger expanded the capital base to meet minimum requirement of SBP.
On the other hand KASB Securities (Pvt) Limited and KASB Technology Services became wholly-owned subsidiaries of the bank.
The second step towards further consolidation was aimed at the amalgamation of bank's another subsidiary KASB Leasing Ltd. After fulfilling the mandatory requirement, the leasing company also stands amalgamated with KASB Bank Ltd.
These mergers enables its clients to avail commercial and consumer banking services, lease financing, equity and debt securities, broking, investment banking and investment advice.
The directors also informed that the bank has started online banking website is also up and running. The information technology (IT) related enhancements are on the cards which include ATM, POS, e-banking etc.
The human resource area is witnessing radical turnover of workforce and the leadership in the bank emphasises that their policy of rightsizing is without any discrimination and is strictly for smooth conduct of the bank's business and future growth.
However, for those, who would have been separated might term the move as downsizing and that is tantamount to lay-off.
The situation is grim in the present scenario of soaring unemployment coupled with zooming cost of food and necessities of life.
This is the unfortunate ground reality. It hurts when one is unemployed. Hopefully the new professionals come up to the challenges of the enterprise.
The bank is listed on all the stock exchanges in the country. At present its share is trading at Rs 14.45 per share carrying 44.5% premium over the par value of Rs 10. During the last one year the bank's share price moved up from Rs 9 to Rs 15.50 per share.
The directors informed that the bank's subsidiary KASB Securities (Pvt) Ltd, successfully handled the floatation issue of Rs 1.340 billion of OGDC and that is a commendable achievement.
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Performance Statistics (Million Rupees)
December 31 2003 2002
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Share Capital-Paid-up: 1,293.47 616.00
Reserves: 150.89 145.89
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(Effects) of Fair Value Measurement of Capital
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On Amalgamation: (79.24) -
Accumulated (Loss): (149.21) (169.25)
Shareholders Equity: 1,215.91 592.64
Surplus on Revaluation of
Securities-Net Off Deferred Tax: 13.18 159.16
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Liabilities
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Bills Payable: 84.31 37.64
Borrowings From
Financial Institutions: 1,795.60 340.79
Deposits & Other Accounts: 5,450.97 2,639.70
Subordinated Loans: - 150.00
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Liabilities Against Assets
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Subject To Finance Lease: 38.08 5.62
Other Liabilities: 392.42 35.67
Deferred Tax Liabilities: - 75.38
Total Liabilities: 7,761.38 3,284.80
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Assets
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Cash & Balances Treasury Banks: 849.74 356.05
Balances With Other Banks: 121.55 131.55
Lending To Financial
Institutions: 3,042.62 521.38
Investments: 2,395.04 2,118.19
Advances: 1,804.28 490.03
Other Assets: 554.15 253.74
Operating Fixed Assets: 183.44 165.66
Deferred Tax Assets: 39.64 -
Total Assets: 8,990.46 4,036.60
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Net Mark-up Interest
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Income After Provisions: 191.94 30.34
Total Non Mark-Up Interest Income: 154.17 124.77
Net Income From Operations: 346.11 155.11
Non Mark-up/Interest(Expenses): (312.99) (257.34)
Profit Share From Subsidiaries etc 15.48 -
Profit/(Loss) Before Taxation: 48.60 (102.23)
Profit/(Loss) After Taxation: 25.05 (114.26)
Earnings (Loss) Per Share (Rs): 0.21 (1.85)
Share Price (Rs) Dated 14.06.2004: 14.45 -
Import & Export Business: 6,173 3,805
Number of Branches: 19 NA
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Financial Ratios
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Price/Earning Ratio: 68.81 -
Interest Margin (%): 54.66 22.81
Net Profit Margin (%): 7.23 (73.66)
Advances/Deposit Ratio (%): 33.10 18.56
R.O.E (%): 2.06 19.28
R.O.A (%): 0.28 2.83
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COMPANY INFORMATION: Chairman: Nasir Ali Shah Bukhari; President & Chief Executive: Ashraf N Irshaduddin; Company Secretary: Muhammad Nasir Jamal; Registered Office & Head Office: Business & Finance Centre I.I. Chundrigar Road Karachi.
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