January 24, 2002	Thursday	Ziqa’ad 9, 1422

LAHORE, Jan 23: The National Bank of Pakistan (NBP) will issue five per cent more shares for public subscription in the first week of February, said bank chief Ali Raza after signing a Rs195 million loan facility for the Saigols Qingqi Motors Ltd (SQML) here on Wednesday.

SQML managing director Li Shu represented his organization at the signing ceremony which was also attended by Chinese ambassador to Pakistan Lu Shulin.

Talking to reporters, Ali Raza said that 10 per cent shares of the bank earlier offered to the public were subscribed by sixfold.

He, however, admitted that the share value in the stock market was lower than expected. “But the political and economic conditions of the country prevailing during the concluding quarter of the last calendar year were to be blamed for it,” he added.

Out of the total loan amount, Rs45 million would be extended to the SQML as working capital while the rest of the amount, Rs150 million, would be the long-term financing.

Denying that the loan had been a soft one, Raza said it had been extended at 15 per cent mark-up rate. However, he said that it was a relatively soft credit line in that the company had earlier obtained fund on 23-24 per cent mark-up from a leasing company.

He said banks were extending soft credit lines (at about 10 per cent mark-up) to the companies which enjoyed good financial health and were showing strength in their balance sheets and in their growth potential.

“You cannot expect a loan at lower interest rates with a bad balance sheet,” he emphasized.

About reducing the mark-up rate after the State Bank cut the discount rate by one per cent, he said the local capital market was not so developed and efficient that it could ensure same level of discount and lending rates.