UBL to launch Rs 500 million TFCs on August 9

United Bank would start initial public offer of Term Finance Certificates (TFCs) of Rs 500 million on August 9 and 10 which is the part of total Rs 2 billion TFCs the Bank has planned. The TFCs, which would be offered through stock exchanges, have a tenor of 8 years and would earn a fixed return of 8.45 percent per annum, payable semi-annually.
The details of the TFCs launching was presented at Karachi Stock Exchange auditorium and was explained through slides and other documents.
Aamer Karachiwalla, Group Chief Financial Officer of UBL, said that the Rs 2 billion TFCs would improve the capital adequacy and balance sheet of the bank.
On the domestic front, the Bank has already launched its consumer banking business. Increased investment is targeted in developing human resources, infrastructure and internal systems to support the aggressive consumer initiative and exploration of new avenues of revenue generation, he said.
The first step under this initiative is the launch of the Bank's ATM or Debit Card, branded as 'UBL Wallet'. Furthermore, UBL has plans to introduce a full suite of innovative consumer finance products designed to capture a significant share of the local consumer financing market and tap into the current growth in demand for such financing, he said.
He said that the Pre-IPO amount of Rs 1.5 billion has been successfully placed with 27 reputable institutions by the Advisors and Arrangers which are Aqeel Karim Dhedhi Securities (Pvt) Ltd, Faysal bank Limited and Elixir Securities Pakistan (Pvt) Ltd.
The TFCs are structured to redeem 0.25 percent of principal in the first 78 months and the remaining principal in three semi-annual instalments of 33.25 percent each, starting from the 84th month.
UBL is one of the largest commercial banks in Pakistan with assets of over Rs 190 billion, net assets of over Rs 13 billion and a solid track record of 44 years. UBL offers its services through a nation wide network of over 1,000 branches spread all over Pakistan and 15 overseas branches.
The bank earned Rs 4.3 billion pre-tax profits in 2003, a 59 percent increase over the previous year, and announced a dividend of 22.5 percent. This remarkable performance was based on a record growth of 38 percent in advances, which grew from Rs 72.8 billion in 2002 to Rs 100.2 billion in 2003 driven by growth in deposits from Rs 158.3 billion in 2002 to Rs 185.1 billion in 2003.