Commercial Banks: MYBANK LIMITED - (Formerly Bolan Bank Limited) Half Year Ended June 30, 2006 (Un-audited)
Mybank Limited (formerly Bolan Bank Limited) was incorporated on October 7, 1991 as a public limited company under the Companies Ordinance, 1984. Mybank's registered office is based in Quetta, Balochistan with principal place of business in Karachi, Sindh. The bank shares are quoted on Karachi and Lahore Stock Exchanges.
The bank is engaged in commercial banking and related services and operates 50 branches (2005: 50 branches) spread all over Pakistan and Azad Kashmir. Currently, its medium and long term credit rating by Pacra is "A-" (A Minus), while the short term rating is "A-2" (A-Two).
As on December 31, 2005 Mybank's paid up capital was Rs 2.057 billion, which was held by 9,993 shareholders. Iqbal Alimohamed held 28% of the shares. Danish Iqbal owned 17 % shares. Sulieman Ahmed Said Al-Houqani held 13% shares. The rest of the shares were distributed among a number of corporate entities including banks and DFIs. There has been no change in the total paid up capital which on June 30, 2006 was still Rs 2.057 billion.
However, according to the Directors Review, the Board of Directors announced 50% Right Issue at Par in the 97th Meeting held on August 25, 2006 in compliance with the SBP directives issued vide BSD Circular No 6 of October 28, 2005 regarding the minimum paid up capital requirement of up to Rs 3.000 billion by December 31, 2006.
Mybank saw 25% increase in its total assets to Rs 21 billion as on June 30, 2006 compared to Rs 17 billion on December 31, 2005. Increases are seen in Advances (13%), Lending to Financial Institutions (111%) and Operating Fixed Assets (164%). On June 30, 2006, the Investments saw 6% decrease to Rs 3 billion. Of the total, Mybank has 73% investments in Available for Sale Securities (2005: 17%).
Mybank's Advances as on June 30, 2006 were at Rs 10.5 billion (49% of Total Assets) compared to Rs 9.2 billion (54% of TA) as on December 31, 2005. As on June 30, 2006, gross NPLs were Rs 1.128 billion (December 31, 2005: Rs 1.313 billion). In percentage terms gross NPLs on June 30, 2006 were 10% of gross Advances (2005: 14% of GA). On Net basis, NPLs are 7% of Advances (2005: 10% of Advances).
It may be noted that Mybank has made full provision against NPLs according to the SBP criteria. However, as some doubtful loans have the tendency to stay under cover for sometime due to different reasons, a prudent policy for Mybank would be that the management remains extra vigilant in the appraisal, monitoring and classification of all loans.
This increase in Total Assets has been managed largely through 22% increase in Deposits and manifold increase in the Surplus on Revaluation of Assets. According to the Directors' Review, the Board of Directors approved the revaluation of bank's properties on June 30, 2006. The valuation was done by a professional valuator on the approved panel of valuators of the Pakistan Banks Association. The bank owned properties are revalued for the first time since its incorporation and the overall surplus arising out of this exercise amounts to Rs 1.261 billion. Required certification in accordance with BSD Circular No 12 of August 25, 2004 of the State Bank of Pakistan has been obtained from bank's external auditors.
Total mark up income of Mybank for the first six months of 2006 increased by 69% to Rs 794 million compared to Rs 469 million for the corresponding six months of the previous year. Net mark up income (after mark up expensed and provisions) for the six months period under review increased by only 14% to Rs 379 million (corresponding six months of 2005: Rs 333 million). Total mark up-interest expense represented 48 % of total mark up income for six months ended June 30, 2006, compared to 24% for the corresponding six months of 2005. The payout to the Depositors has improved but it is considered still very low.
Non-mark up income of the bank for the six months ending June 30, 2006 was 85% higher at Rs 211 million as against Rs 126 million for the corresponding six months of 2005. The six months under review were closed with After-tax Profit at Rs 222 million (corresponding six months of 2005: Rs 186 million), registering an increase of 36%. ROE for the six months is at 8.5% (corresponding six months of 2005: 7.5%). Performance statistics are given below.
According to the Directors Review, the bank plans to grow the balance sheet size significantly. Paradigm shift in deposits and profitability is of immense importance among other strategic initiatives. Substantial resources in terms of human efforts are being applied towards settlement of past misdeeds; classified/non-performing loans.
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Performance Statistics (Un-audited) (Rs, million)
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Balance Sheet As June 30, As Dec. 31,
2006 2005
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Total Assets: 21,470 17,219
Cash, balances with banks: 1,965 1,815
Lending to financial institutions: 3,235 1,534
Investments-Net: 3,056 3,253
Advances-Net: 10,534 9,294
Borrowing from fin. Institutions: 1,260 1,340
Deposits, other accounts: 15,684 12,857
Total Liabilities: 17,598 14,669
Net Assets: 3,872 2,550
Share Capital: 2,057 2,057
Reserves & Un-app. Profit: 554 435
Sub total-Equity: 2,611 2,492
Surplus on Revalue, Assets: 1,261 58
Equity incl. Revalue Surplus: 3,872 2,550
Subordinated Loan: 0 0
Equity & Sub. Loans: 3,872 2,550
Advances-Gross: 10,957 9,712
Gross NPLs: 1,128 1,313
Total Provision: 423 418
Conting. & Commitments: 13,002 6,112
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Ratios:
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Cash & bank/Total Assets: 9% 11%
Investments/Total Assets: 14% 19%
Advance-Net/Total Assets: 49% 54%
Gross NPLs/Advances-Gross: 10% 14%
Gross NPLs/Total Equity: 43% 53%
Net NPLs/Advances-Net: 7% 10%
Provision/Advances-Gross: 4% 4%
Deposits/Total Assets: 73% 75%
Total Liabilities/Total Assets: 82% 85%
Total Equity/Total Assets: 18% 15%
Equity & SLoans/T. Assets: 18% 15%
Deposits/Equity-Times: 6.0 5.2
Advances/Deposits: 67% 72%
Investments/Deposits: 19% 25%
Conting.& Comm./Equity-X: 4.98 2.45
Book Value Per Share: 12.69 12.11
Quoted Price (06-10-06) - Rs: 19.50 -
Price/Book Value Ratio: 1.54 -
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Income Statement (6M) 2006 2005
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Markup- interest earned: 794 469
Markup- interest expensed: 382 111
Net Markup- interest income: 412 358
Provisions and write offs: 33 25
Net mark up income (aft. Prov.): 379 333
Total non-markup income: 211 126
Income bef. Admn. Exp.: 590 459
Admin Expenses, etc: 296 257
Profit before Taxation: 294 202
Current & deferred tax: 72 16
Profit after taxation: 222 186
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Ratios: (6-Month Basis)
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Markup earned/Total Assets: 3.7% 2.7%
Net Markup Income/TA: 1.9% 2.1%
Net markup (aft. Prov.)/TA: 1.8% 1.9%
Non-Markup Income/TA: 1.0% 0.7%
Income before AE/TA: 2.7% 2.7%
Admin Expenses/TA: 1.4% 1.5%
Profit before Taxation/TA: 1.4% 1.2%
Profit after taxation/TA: 1.0% 1.1%
Profit after tax/Total Equity: 8.5% 7.5%
EPS- (Period-end paid up) - Rs: 1.08 0.90
Price/Earnings Ratio: 18.07 -
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Cash flow Summary (6M) 2006 2005
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Net Cash flow, Operations: -52 660
Net Cash flow, Investing: 250 -1,047
Net Cash flow, financing: -48 0
Change in Net Liquidity: 150 -387
Net Liquidity at beginning: 1,815 2,476
Net Liquidity at end: 1,965 2,089
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COMPANY INFORMATION: Chairman: Chairman: Iqbal Alimohamed; Vice Chairman: Sohail Muzaffar; President and CEO: Muhammad Bilal Sheikh; Director: Danish Iqbal; SEVP: Mamnoon Ahmed Alvi; Chief Financial Officer: Faisal Jan Sarhindi; Company Secretary: Ms Mona Sultan; Auditors: M. Yousuf Adil Saleem & Co, Chartered Accountants; Head Office/Registered Office: Regal Chowk, Jinnah Road, Quetta, Pakistan; Central Office: 10th Floor, Business & Finance Center, Opp: State Bank of Pakistan, I.I. Chundrigar Road, Karachi; Web Address: www.mybankltd.com
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