KARACHI, Sept 6: The after-tax profit of commercial banks listed at the Karachi Stock Exchange (KSE) during six months (Jan-June 2003) recorded a surge of 117 per cent.

In terms of figures, the profit increased from Rs1.590 billion to Rs3.351 billion.

“Most banks displayed increases in operating expenses because a majority of them have expanded their network of bank branches,” according to a report compiled by a researchers at Capital One securities.

The banking environment has become highly competitive since a large number of amendments made in the prudential regulations allowing the banks to extend services for consumers.

The commercial banks have also lowered interest rates on their products by significantly to lure the consumers.

“Attractive car financing and housing finance schemes could be attributed major reasons for high profits recorded by banks,” the report said. Banks also received dividend income that was through investment in listed securities and particularly the investment made in NIT units.

Askari Commercial Bank recorded profit of Rs526 million during Jan-June 2003 as compared to Rs334 million during the same period last year followed by Bank Al-Habib whose profits surged to Rs364 million from Rs267 million as compared to last fiscal.

Similarly, Bank of Punjab posted a profit of Rs406 million as compared to Rs222 million, while Bolan Bank’s profit came down to Rs2 million from the previous Rs8 million.

The profits of Faysal Bank rose to Rs943 million from Rs314 million; KASB Bank Rs19 million as compared to losses in last fiscal 2002’s two quarters; Metropolitan Bank declared an after-tax profit of Rs270 million as against previous year’s Rs204 million; Meezan Bank registered profit of Rs92 million which remains same as compared to the previous year.

PICIC recorded a profit of Rs242 million as compared to Rs99 million in last fiscal’s first two quarters; Prime Bank posted profit of Rs141 million as against Rs101 million previously; Soneri Bank recorded profit of Rs206 million as compared to Rs117 million last fiscal; and Union Bank posted growth of profit of Rs239 million as compared to only Rs1 million in last fiscal’s two quarters.

“Principal drivers of income in 1Q-FY03 were investment in government equities and dividend income on government securities and mutual funds and higher spreads,” the Capital One analysts observed.—APP