Investment/Investment Company: ORIX INVESTMENT BANK LIMITED - Year ended 30-06-2005
The investment bank has substantially increased its portfolios of investments long term finances and fund placements with financial institutions. It has recorded all time high revenue as source of revenue has been diversified as well as the bank made full use of growing economy.
According to the directors, the national economic forecast for the current year remains optimistic. The growth is expected to exceed 7%. The bank's diversification strategy developed over the last few years, would enable it to reap the benefits of the economy's growth and further broaden the scope of its products and services for higher returns to the shareholders.
The company's net profit after taxation amounted to Rs 166.33 million as against Rs 115.80 million posted in the previous year. Provision for losses on short term loans and term finances amounted to Rs 28.15 million (2003-04: Rs 33.85 million) and provision for L.T. Loans and Term finances amounted to Rs 48.58 million (2003-04: Rs 20.88 million).
Orix Investment Bank Pakistan Limited was incorporated as a public limited company in Pakistan under the name of Orix Investment Finance Company Pakistan Limited. The company is licensed to carry out investment finance services as NBFC (Non-Banking Finance company) under the Non-Banking Finance Companies (Establishment and Regulations) Rules 2003 issued by the SECP (Securities and Exchange Commission of Pakistan).
The investment bank was listed on Karachi Stock Exchange in 1996. Its shares are also quoted on Lahore Stock Exchange.
On 2nd Septmeber 2005, price of the share was quoted at Rs 25 per share carrying Rs 15 per share premium over the par value of Rs 10. During the lasxt one year price of the share peaked at Rs 27.80 per share. It shows inherent strength of the company as not much market value decreased after the sudden pitfall of the stock market.
According to pattern of its share holding on June 30, 2005, individual investors owned 29.10% of the bank's total 33 million shares. The company was sponsored by Orix Corporation Japan and Orix Leasing Pakistan Limited. These two companies own 35% of the company's stock. Three foreign investors owned 12.61% of the company's stock. The company has 1289 individuals shareholders who own 29.10% of the company's stock.
The company is a corporate member of Karachi Stock Exchange and is engaged in brokerage services since April 15, 2004. Stock Exchange membership card and room has been booked at Rs 43.95 million. The directors report that the addition of the equity brokerage to its services has also borne fruit.
The tenth AGM of Orix Investment Bank is scheduled on September 16, 2005. Some of the items on its Agenda is the approval of cash dividend @20% and bonus stock dividend @10%.
Based on the results for the year ended June 30, 2004 Pakistan Credit Rating Agency (PACRA) has maintained the company's long term and short-term entity ratings at 'A' (Single A) and 'A1' (A one) respectively.
During the fiscal year 2004-05, the company posted all time high revenue at Rs 476.26 million (2003-04 Rs 326.67 million) registering impressive growth of Rs 150.19 million or 46.6% over the previous year's gross revenue.
The bank has diversified its sources of revenue and this is one of the main reasons that the bank has made substantial increase in the revenue.
It has also been reported that despite shift competition from the commercial bank, Orix Investment Bank has succeeded in expanding its fund leased and advisory businesses. The directors exphasised that the central feature of the company's Annual Report is that the bank made full use of a growing economy and it has been able to avpoid the pitfalls of a capricious stock market.
A competitive and liberal banking system and improving regulatory framework have also contributed to the growth of the bank's business and profit.
The profit before tax of the company increased to Rs 176.74 million from Rs 163.22 million by 8.2% over previous year's.
The borrowing cost of the bank went up from 97.50 million to Rs 163.46 million because of increase in the size of investments and escalations in the interest rates.
The long term finances were booked at RS 873.76 million on 30th June 2005 as compared to Rs 544.46 million on the same date last year showing increase by Rs 323.30 million.
Sort term investment portfolio amounted to Rs 1.985 billion as against Rs 1.133 billion in June 2004 showing slight dip. But fund placements with financial institutions (short term) swelled to Rs 699.24 million as against Rs 596.46 million.
Admin and operating expenses were relatively on much higher side. However the earning per share shot up by Rs 1.53 per share to Rs 5.04 per share from Rs 3.51 per share.
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Performance Statistics (Million Rupees)
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June 30 2005 2004
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Share Capital-Paid-up: 330.00 330.00
Reserve & Profit: 321.49 185.16
Shareholders Equity: 651.49 515.16
(Deficit) on Revaluation
of Securities-net: (20.00) (12.97)
L.T Certificates of Deposit: 58.24 51.20
L.T Loans: 583.33 300.00
Current Liabilities: 2,043.83 2,190.15
Tangible Fixed Assets: 16.67 12.01
Fixed Assets Intangible: - 0.47
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Stock Exchange
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Membership Card & Room: 43.95 43.95
L.T Loans & Term Finance-Net: 428.99 265.09
L.T Security Deposits: 3.85 2.74
Deferred Taxation: 48.92 44.14
Current Assets: 2,774.51 2.675.14
TOTAL ASSETS: 3,316.89 3,043.54
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REVENUE, PROFIT & PAY OUT
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Income from Term Finance &
Funds Placement: 147.60 111.03
Income from Investments: 201.68 162.02
Fee, Commission & Brokerage: 126.69 53.97
Other Income: 0.29 (0.35)
TOTAL INCOME: 476.26 326.67
Financial (Charges): (163.46) (97.50)
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Administrative &
Operating (Expenses): (108.50) (62.57)
(Provision) for Losses
on Term Finance: (27.56) (3.38)
Total (Expenditure & Provision): (229.52) (163.45)
Profit before Taxation: 176.74 163.22
Profit after Taxation: 166.33 115.80
Earning Per Share (Rs): 5.04 3.51
Share Price (Rs) on 02/09/05: 25.00 -
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Financial Ratios
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Price/Earning Ratio: 4.96 -
Book Value Per Share: 19.74 15.61
Price/Book Value Ratio: 1.27 -
Current Ratio: 1.36 1.22
Net Profit Margin (%)... 34.92 35.44
R.O.A.(%)...: 5.01 3.80
R.O.C.E.(%)...: 13.06 13.57
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COMPANY INFORMATION: Chairman: Kunwar Idris; Managing Director & Chief Executive: Naim Farooqui; Company Secretary: Intisar H. Alvi; Registered Office: Overseas Investors Chamber of Commerce Building Talpur Road Karachi-74000; Web Address: www.orixbank.com Head Office: 2nd Floor, Islamic Chamber of Commerce Building St. 2/A Block No 9, Clifton Karachi 75600.
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