KARACHI, June 8: No plausible explanations are available for the withdrawal of Emirates Bank International from Pakistan market. The EBI Pakistan has been operating profitably, with 10 branches, for more than two decades.

A cursory glance of profit and loss account and balance sheet reveals that post-tax profit of Emirates Bank International Pakistan has slumped a mere Rs29.91 million in 2001 from Rs229.61 million in 2000, Rs305.20 million in 1999 and Rs350.35 million in 1998.

What is startling is the provision of Rs188.30 million made by the bank for bad loans in the year 2001. In previous years — the EBI Pakistan provided only a small sum of Rs3.61 million in 2000 for this purpose. It was Rs54.64 million in 1999 and Rs3.34 million for bad loans in 1998.

If market reports are to be believed than the EBI Pakistan suffered a severe, almost unbearable, financial blow from one of its Lahore based senior executive, who is son of a very senior military officer of the Pakistan Army. He got his employers stuck up in a scam of Rs280 million more than a year ago. The scam has been detected and two managers are still in prison.

Enquiries made on Saturday to seek explanation from the local top management revealed that four management personnel — Tom Gibbs, Brian Sneddon, Brian Gilbert and David Corrin — have been flown out of Pakistan “owing to political uncertainties and border situation”.

The balance sheet figures show the EBI Pakistan’s deposit increased to Rs14.32 billion in 2001 from Rs13 billion in 1998, showing an insignificant growth in four years. Advances, however, increased by more than 45 per cent to Rs9.12 billion in 2001 from Rs6.86 billion in 1998. Total investment net of repo transactions dropped to Rs1.40 billion in 2001 from Rs4.51 billion in 1998.

The bank increased its capital base from Rs922.517 million in 1998 to Rs1.20 billion in 2001. Its non-funded liabilities increased by over two times to Rs10.52 billion in 2001 from Rs5.07 billion in 1998.

A management committee that includes Feroze Ansari, Syed Majid Ali, Akbar Alam, Majid Hamid, Ms Saira Khan and Mohammad Idress, has been formed to look after the day to day operations till June 30 next. Union Bank has called an extraordinary meeting of its shareholders on June 29 to decide on amalgamation with the EBI Pakistan.

Efforts were made to reach Feroze Ansari by telephone on Saturday to seek explanation of the management’s decision to quit Pakistani market. Feroze Ansari neither attended telephone calls nor responded back.

“Is this acquisition or occupation?” an employee of the Emirates Bank International reported to have remarked on Friday when he saw his new bosses, escorted by two police mobiles and armed private security guards, approaching the local office near Mereweather Tower.

The new bosses represent a private Pakistani commercial bank — Union Bank — that is reported to have acquired all 10 branches of the Emirates Bank in Pakistan at a price of 18 million dollars.

Reports suggest that the State Bank has also given consent of this acquisition and final amalgamation is expected to take place after June 29.

Employees report a little unusual withdrawal from the Emirates Bank branches on Saturday following the breaking of news on Friday of the acquisition deal. “We are in process of informing our clients of the change of owners,” an employee said.

What is upsetting 514 employees of the EBI Pakistan is the fact that the Dubai based top management of Emirates Bank International did not offer any compensation package to them. The EBI Pakistan has 69 executives, 285 senior and junior officers and staffers and 160 on contracts.

An E-mail message on Friday said that the local management of the EBI had a detailed meeting with Abdul Wahid Al Fahim, GM-CB, and Shaukat Tareen, Chairman Union Bank.

“The focus of the meeting was the concerns of EBI staff regarding the sale transaction and its implications on their future,” the message said while conveying that “the staff will have a very flexible and positive package.”

On Saturday the employees were informed that a “thank you bonus” is being worked out. “Abdul Wahid Ali Fahim confirms that the bonus will be uniform across-the-board and shall be applicable both for permanent and contract staff.”

The bonus will be “very fair” is something very intriguing for the employees who say that Bank of America had offered an unusually attractive package to its employees when its three branches were taken over by the Union Bank.

The new management has also announced a voluntary separation package for those staff who do not wish to remain in the future set-up.