PICIC moving ahead

The Pakistan Industrial Credit and Investment Corporation Ltd (PICIC) is a pioneer development finance institution and has played a key role in the development and creation of the industrial infrastructure in Pakistan.
To meet the challenges of the changing national and global business scenario, PICIC has embarked upon a five-year business diversification plan, "PICIC vision 2005." To implement its future plans, PICIC prepared "VISION 2005." In line with the first year's target, PICIC acquired 60% shares along with management control of the former Gulf Commercial Bank (now PICIC Commercial Bank Ltd) It acquired management rights of Investment Corporation of Pakistan (ICP) Lot B and SEMF Mutual Funds. PICIC has incorporated an Assets Management Company with a paid up capital of 3000 million. All the targets envisaged in PICIC vision 2005 were achieved upto December 2003.
They are aware that clients have diversified financial needs ranging from short-term to long-term investment, managing investment portfolio and above all hedging the risk.
However, they have to approach different service providers, which consume a lot of their time and energies. The vision aims to achieve diversification of business in related financial fields to make PICIC a "truly financial supermarket."
Pakistan Industrial Credit and Investment (PICIC) has acquired a licence for establishing a general insurance company in Pakistan, now PICIC Insurance Limited which will show an impressive performance.
The launching of a general insurance company will accomplish the ambitious plan of making PICIC, a "financial supermarket," as conceived by the managing director under his "Vision 2005" in 2000.
The next step will be to launch a life insurance company, for which planning is under way. PICIC has made its position in leasing, commercial banking, consumer banking, asset management and house financing business.
"The idea of a financial supermarket came to my mind after realizing the diversified financial needs of my clients ranging from short-term borrowing to long-term investment, managing investment portfolio and above all hedging the risk," he noted.
The management was now working on a new five-year plan "Vision 2008." Vision 2008 will identify new businesses for PICIC, including investment in modaraba capital, life insurance and the foundation of a university in affiliation with reputed educational institutions abroad.
It is very good of PICIC to indulge in activities like education as it is in the process of launching a full-fledged university of financial and management sciences in Karachi which would cater to the entire SAARC region.
In seven years, PICIC recovered Rs 26.17 billion at an average of Rs 3.7 billion a year. Not only was the haemorrhage stopped but fast recoveries pumped in additional resources.
It may be noted that until June 2003, PICIC had financed 2,010 industrial projects all over Pakistan with the gross financial assistance of Rs 38.412 billion.
PICIC had regained financial health and repaid its financial obligations and is now free of any interest-based obligation to the Government of Pakistan. PICIC's financial soundness can be judged from it current rating of "AA" and "A1+" by the Pakistan Credit Rating Agency (PACRA) for long-term and short-term respectively.
These rating denote a very low expectation of credit risk and also a very strong capacity for timely payment of financial commitments.
The rating also reflects the considerable improvement in the earning potential of the corporation, given the improving risk profile of loan and diversification in both the asset base, as well as the revenue base.
The financial statement of the last 18 months from June 2002 to December 2003 reflects extraordinary achievements.
PICIC recovered a record at Rs 7.413 billion. PICIC posted a substantial increase in total income of Rs 3.27 billion.
Expenses were put under control resulting in better operating profit which was Rs 1,430 billion in 18 months.
PICIC has so far disbursed approximately Rs 2.1 billion under lease financing since it entered into this field in 2001.
The corporation is also offering housing finance under an attractive programme "Home for Every One," besides providing small business loan, which enables the entrepreneurs to establish or expand small businesses and meet their working capital requirements effectively.
Similarly, PICIC Investment Loan enables to further optimise investment by pledging certificates of investment, "A" rated term finance certificates, mutual fund certificates, and shares of PICIC approved-listed companies registered with the Central Depository Company (CDC) and other Government Securities to meet immediate financial needs.
PICIC is contemplating to start investment advisory services in all its branches. Professionally qualified and experienced investment advisors will guide potential investors for investment in deposit schemes and assist in obtaining term-loan and lease financing.
PICIC Commercial Bank has already opened export facilitate in counters in all its branches. PICIC is also planning to launch two new closed-end Mutual Funds worth one billion rupee each to cater to the needs of all types of investors including Pensioners/ Widows/Senior citizens who desire regular income taking moderate risk and have been badly hit by the low interest environment.
PICIC has been short listed by the Privatisation Commission to participate in the bidding for the acquisition of National Investment Trust Limited (NIT). The achievements made by PICIC but there is no room for complacency. Achieving the new milestones was not possible without the dedicated efforts of each and every employee. But a lot more has to be done.
To achieve higher GDP growth rate more industrial units have to be established and the existing units have to be revamped to further improve the quality standards. Creation of new job opportunities is also a must for poverty alleviation.
PICIC was adjudged as the "Best Annual account Presenter" in the financial sector at the Institute of Chartered Accountants of Pakistan (ICAP) and the Institute of Cost and Management Accountants of Pakistan (ICMAP) awards, 2003 ceremony.
At the ceremony, Governor, State Bank of Pakistan, Dr Ishrat Husain gave away the awards to the Managing Director, PICIC, Mohammad Ali Khoja. PICIC's annual report for the year secured the 2nd position.
Pakistan Industrial Credit and Investment Corporation (PICIC) has declared a 12.5 percent interim cash dividend for the second quarter ended on June 30. This approval was given by the 268th Board of Director meeting which approved the financial statement of the corporation here on August 27.
The total cash dividend for half year comes to 25 percent. PICIC had already announced an interim cash dividend at a rate of 12.5 percent for the first quarter ended March 31.
The half yearly results exhibited excellent growth as the corporation posted a pre-tax profit of Rs 1.005 billion while profit after taxation has come to Rs 831.348 million for the period under review.
The earning per share of the corporation has more than doubled from Rs 2.39 in June 2003 to Rs 5.33 on June 30. Similarly, the total income surged from Rs 626.988 million in June 2003 to Rs 1.25 billion in the period under review.
The Pakistan Industrial Credit & Investment Corporation Ltd (PICIC) has achieved a 153.4 percent operating profit in the first half to June 30, 2004. As per accounts for the half year ended on June 30, 2004, PICIC's reserves are Rs 2155.8 million.
The equity of the Corporation is Rs 37l5 million. The operating profit of the Corporation increased from Rs 396.6 million during the six months ended on June 30, 2003 to Rs 1005.l million during the first six months of 2004 exhibiting a growth of 153.4%. These figures indicate the financial strength of PICIC.