Commercial Banks: FAYSAL BANK LIMITED - Half Year Ended June 30, 2005 (Unaudited)

Faysal Bank Limited (Faysal Bank), incorporated in Pakistan as a public limited company on October 3, 1994, is listed on the Karachi and Lahore Stock Exchanges. It started operations as a local commercial bank on January 1, 1995 by taking over the Pakistan operations of Faysal Islamic Bank of Bahrain, which had been present here since 1987.
On January 1, 2002, Al Faysal Investment Bank Limited merged with Faysal Bank and as a result, it now stands co-owned by companies of the Dar Al-Maal Al-Islami (DMI) Trust, Bahamas including Shamil Bank of Bahrain E.C. The remaining shareholders comprise of the general public, NIT and other Pakistani institutions.
Faysal Bank is engaged in commercial, consumer and investment banking activities. The bank enjoys "AA" rating for medium to long-term and "A1" for short term as certified by JCR VIS. It opened five new branches in the first half of 2005, bringing the entire network of retail banking outlets to 55 with its presence now in 20 cities of Pakistan.
According to the Directors' Review of operations for the first six months of 2005, Faysal Bank, as lead advisor and arranger for Attock Cement Pakistan Limited (ACPL) along with Habib Bank arranged Rs 2.5 billion syndicated financing through long-term morabaha for the expansion of ACPL's manufacturing facilities.
It also acted as lead advisor and arranger for putting together a Rs 7.247 billion syndicated financing package through a consortium of banks including Allied Bank, for acquisition of the National Refinery Limited by Attock Group.
The total assets of the bank show a robust growth of 19% from Rs 78 billion as of December 31, 2004 to Rs 93 billion as at June 30, 2005. The deposits increased from Rs 56 billion (72% of Total Assets) to 70 billion (75% of TA) reflecting growth of 24% while the financing portfolio grew from Rs 50 billion (64% of TA) to Rs 57 billion (61% of TA) showing a growth of 13%.
Investments on June 30, 2005 have risen by 47% to Rs 18 billion (20% of TA) compared to Rs 12 billion (16% of TA) as on December 31, 2004. Total equity was Rs 11 billion (12% of TA) as on June 30, 2005 compared to Rs 11 billion (13 % of TA) as on December 31, 2004. The equity includes about Rs 4 billion of Surplus on Revaluation of Assets.
Profit after tax for the half year ended June 30, 2005 shows a healthy growth of 68% to Rs 1,914 million as compared to Rs 1,140 million for the corresponding periods last year. ROE for the six months has risen to 17% compared to 11 % for the corresponding six months of 2004.
The above growth is attributable partly to the enhanced volumes of financing and investments but the main contributory factors are low pay out to the depositors. As a result the net mark-up income has doubled to Rs 1,476 million compared to Rs 708 million for the corresponding periods last year.
The restructuring of Pakland Group's outstanding has resulted in reversal of Rs 337 million in provision for diminution in value of Investments. This has further boosted net mark-up income after provisions for the period. The non-mark-up income increased by 8% to RS 1,347 million from Rs 1,250 million during the corresponding period last year. Performance statistics are given below.

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Performance Statistics       (Rs, million)   (Audited)

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Balance Sheet                  (Unaudited)  On Dec.31,

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As on June 30                        2005         2004

Total Assets:                      93,178       78,538

Cash, balances with banks:          8,423        8,612

Lending to financial institutions:  5,200        4,417

Investments-Net:                   18,176       12,334

Advances-Net:                      57,280       50,542

Borrowing from fin. Institutions:   7,882        8,478

Deposits, other accounts:          70,033       56,460

Total Liabilities:                 82,013       68,324

Share Capital:                      3,204        2,913

Reserves, Retained earnings:        4,233        3,338

Surplus on Revaluation of Assets:   3,728        3,963

Total Equity:                      11,165       10,214

Subordinated Loan:                      0            0

Equity and Sub. Loans:             11,165       10,214

NPLs at end of period:              2,485        2,422

Contingencies and Commitments:     52,496       46,467

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Ratios:

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Cash and bank/Total Assets:             9%         11%

Investments/Total Assets:              20%         16%

Advance/Total Assets:                  61%         64%

NPLs/Advances-Gross:                    4%          5%

NPLs/Total Equity:                     22%         24%

NPLs/Total Equity and sub. Loans:      22%         24%

Provision required/Advances Gross:      1%          2%

NPLs Prov. Req./Provision Held:       142%        105%

Deposits/Total Assets:                 75%         72%

Total Liabilities/Total Assets:        88%         87%

Total Equity/Total Assets:             12%         13%

Equity and S. Loans/Total Assets:      12%         13%

Deposits/(Equity+S.Loans)-X:          6.3          5.5

Advances/Deposits:                     82%         90%

Investments/Deposits:                  26%         22%

Contin.& Comm./(Equity+SL)-X:        4.70         4.55

Book Value Per Share:               34.85        35.06

Quoted Share Price (16-9-05) - Rs:  55.70            -

Price/Book Value Ratio:              1.60            -

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Income State. (HY end June 30)       2005         2004

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Mark-up/interest earned:             2,673        1,159

Mark-up/interest expensed:           1,197          451

Net Mark-up/interest income:         1,476          708

Total non-mark-up income:            1,347        1,250

Admin expenses:                       706          539

Profit before Taxation:             2,408        1,419

Profit after taxation:              1,914        1,140

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Ratios: (Half Yearly Basis)

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Net Mark-up Income/Total Assets:       1.6%        0.9%

Non-Mark-up Income/Total Assets:       1.4%        1.6%

Admin expenses/Total Assets:          0.8%        0.7%

Profit before Taxation/Total Assets:  2.6%        1.8%

Profit after taxation/Total Assets:   2.1%        1.5%

Profit after tax/Total Equity:       17.1%       11.2%

EPS-(HY end paid up) - Rs:           5.97         3.91

Price/Earnings Ratio:                9.32            -

Proposed bonus Shares:                 15%          0%

Cash dividend:                         15%         20%

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Cash flow Summary (Half Year)        2005         2004

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Net Cash flow from Operations:      6,449        1,407

Net Cash flow from Investing:      -5,859          449

Net Cash flow from financing:        -717         -525

Net Cash flow position for period:   -127        1,331

Cash and bank at beginning:         8,550        3,501

Cash and bank at end of period:     8,423        4,832

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COMPANY INFORMATION: Chairman: H.R.H. Prince Mohamed Al Faisal Al Saud; President and CEO: Farook Bengali; Director: Khalid Abdulla Janahi; Country GM, Commercial Banking: Khalid S. Tirmizey; Country GM, Investment Banking: Mohammad Khan Hoti; Company Secretary & Legal Advisor: Mohammad Siddique Memon; Registered Office: Trade Centre, I.I. Chundrigar Road, Karachi; Auditors: Taseer Hadi Khalid & Co, Chartered Accountants; Web Address: www.faysal.com
Copyright Business Recorder, 2005