Mybank Limited (Mybank) was incorporated in Pakistan on October 7, 1991 as a public limited company under the Companies Ordinance, 1984. Mybank's registered office is based in Quetta with principal place of business in Karachi. Its shares are quoted on Karachi and Lahore stock exchanges.
According to the notes to the financial statements, currently the bank's medium and long term credit rating is "A-" (Single A Minus) and its short term rating is "A-2" (A Two) with a stable outlook.
The bank is engaged in commercial banking and related services as described in the Banking Companies Ordinance, 1962 and operates through 50 branches (2005: 50 branches) in Pakistan. Total staff strength as on December 31, 2006 was 969 including 53 temporary/on contractual basis (2005: 978 employees including 54 temporary/on contractual basis).
The authorised capital of Mybank is Rs 7 billion, comprising 700 million shares of Rs 10/- each. As on December 31, 2006 the paid up capital of Rs 3.086 billion was held by 10,004 shareholders, of which the individuals hold nearly 23% shares. Iqbal Alimohamed owns 46.65% of total shares. Danish Iqbal has 5.67% voting interest. Suliman Ahmed Said Al-Houqani holds 11.24% of the total shares. Mirza Ghulam Mujtaba, a director of the bank, has 9.78% voting interest. The rest of the shares are distributed among a number of corporate entities including banks and DFIs.
According to note 36 to the financial statements, Capital Adequacy Ratio of the bank as on December 31, 2006 was 19.25% (2005: 18.86%) as against prescribed minimum equivalent to 8% of the risk weighted assets of the banking company. The position appears comfortable.
Mybank saw 54% increase in its Total Assets to Rs 26.549 billion as on December 31, 2006 compared to Rs 17.219 billion on December 31, 2005. During the period under review, Advances increased by 45% to Rs 13.487 billion (2005: Rs 9.294 billion), slight drop in Investments to Rs 2.961 billion (2005: Rs 3.258 billion) and 49% increase in Deposits to Rs 19.169 billion (2005: Rs 12.857 billion).
As percentage of Total Assets, Deposits are near normal at 72% (2005: 75%), whereas Equity including Surplus on Revaluation of Assets is 19.1% of Total Assets (2005: 14.8% of TA). During the year paid up capital was raised through right issue offering 50 shares (2005: 35 shares) for every 100 shares held at face value of Rs 10/- each. This has brought bank's compliance with SBP requirement of Rs 3 billion minimum paid up share capital (net of losses) and has demonstrated stakeholders' commitment to the bank.
Mybank's Advances as on December 31, 2006 at Rs 13.487 billion are 51% of Total Assets (2005: 54% of TA). Advances are high in Wholesale and Retail Trade (30.39%) and Textile 15.65%) though these are widely distributed in other sectors.
As on December 31, 2006, gross NPLs at Rs 1,011 million (2005: Rs 1,313 million) are somewhat high. In percentage terms gross NPLs on December 31, 2006 were 7.3% of gross Advances (2005: 13.5% of GA). On net basis, NPLs as on December 31, 2006 work out to 4.5% (2005: 9.6%). Provision has been made as required. However, the bank has to remain vigilant as to the NPLs.
Total mark up income of Mybank for the year ended December 31, 2006 increased by 64% to Rs 1,686 million compared to Rs 1,026 million for the previous year. However, mark up expense for the period increased by 168% to Rs 866 million (2005: Rs 323 million). This reduced the profitability margins. However, as substantially lower provision was made this year for doubtful loans, the profit margins hovered around the level of the previous year. The net mark up income (after mark up expensed and provisions) for the year under review increased by 56% to Rs 782 million (2005: Rs 501 million).
The bank saw handsome increase in non-mark up income whereas Administrative expense saw only 13% increase during the year under review. Thus, the bank had pre-tax Profit of Rs 612 million (2005: Pre tax profit Rs 211 million). The year 2006 was closed with After-tax Profit at Rs 493 million (2005: Rs 274 million). ROE for the year works out to 9.7% (2005: 10.7%). The bank declared 5% cash dividend which is for the first time in its history. Performance statistics are given below.
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Performance Statistics (Audited)
(Rs Million)
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Balance Sheet (As on Dec. 31) 2006 2005
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Total Assets: 26,549 17,219
Cash, balances with banks: 3,212 1,815
Lending to fin- institutions: 4,031 1,534
Investments-Net: 2,961 3,253
Advances-Net: 13,487 9,294
Borrowing from fin. Institutions: 1,625 1,340
Deposits, other accounts: 19,169 12,857
Total Liabilities: 21,484 14,670
Net Assets: 5,065 2,549
Share Capital: 3,086 2,057
Reserves & Un-app. Profit: 842 434
Equity: 3,928 2,491
Surplus on Revalue, Assets: 1,137 58
Equity incl. Revalue Surplus: 5,065 2,549
Advances-Gross: 13,894 9,713
Gross NPLs: 1,011 1,313
Total Provision: 407 419
Conting. & Commitments: 14,863 6,087
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Ratios:
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Cash & bank/Total Assets: 12% 11%
Investments/Total Assets: 11% 19%
Advance-Net/Total Assets: 51% 54%
NPLs/Advances-Gross: 7.3% 13.5%
NPLs-net/Advances-net: 4.5% 9.6%
Provisions./Advances-Gross: 2.9% 4.3%
Deposits/Total Assets: 72% 75%
Total Liabilities/Total Assets: 81% 85%
Total Liabilities/Total Equity-X: 4.2 5.8
Total Equity/Total Assets: 19.1% 14.8%
Deposits/Equity-Times: 3.8 5.0
Advances/Deposits: 70% 72%
Investments/Deposits: 15% 25%
Conting. & Comm./Equity-Times: 2.93 2.39
Book Value Per Share: 16.41 12.39
Quoted share price (9-04-07) - Rs: 25.40 -
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Income Statement: 2006 2005
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Markup-interest earned: 1,686 1,026
Markup-interest expensed: 866 323
Net Markup-interest income: 820 703
Provisions and write offs: 38 202
Net mark up income (aft. Prov.): 782 501
Total non-markup income: 452 249
Income bef. Admn. Exp.: 1,234 750
Admin Expenses, etc: 611 539
Profit/(Loss) before Taxation: 623 211
Current & deferred tax: 130 -63
Profit/(Loss) after taxation: 493 274
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Ratios: (Annual Basis)
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Markup earned/Total Assets: 6.4% 6.0%
Net Markup Income/TA: 3.1% 4.1%
Net markup (aft. Prov.)/TA: 2.9% 2.9%
Non-Markup Income/TA: 1.7% 1.4%
Income before Admn. Exp./TA: 4.6% 4.4%
Admin Expenses/TA: 2.3% 3.1%
Profit/(Loss) before Taxation/TA: 2.3% 1.2%
Profit/(Loss) after Taxation/TA: 1.9% 1.6%
Profit/(Loss) after Tax/T. Equity: 9.7% 10.7%
EPS- (year-end paid up) - Rs: 1.60 1.33
Price/earnings ratio - Times: 15.90 -
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Cash flow Summary: 2006 2005
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Net Cash flow, Operations: 53 147
Net Cash flow, Investing: 418 -1,341
Net Cash flow, financing: 926 533
Change in Net Liquidity: 1,397 -661
Net Liquidity at beginning: 1,815 2,476
Net Liquidity at end: 3,212 1,815
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COMPANY INFORMATION: : Chairman: Iqbal Alimohamed; Vice Chairman: Sohail Muzaffar; President & CEO: Muhammad Bilal Sheikh; Director: Danish Iqbal; Company Secretary: Ms. Mona Sultan, FCMA, CFA; Auditors: M/s M. Yousuf Adil Slaeem & Co, Chartered Accountants; Registered & Head Office: Regal Chowk, Jinnah Road, Quetta; Central Office: 10th Floor, Business & Finance Centre, Opp. State Bank of Pakistan, I.I. Chundrigar Road, Karachi; Web Address: www.mybank.com
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