KARACHI, Nov 4: Faysal Bank Limited posted 6.3 per cent growth in after tax profit to Rs491.4 million for the nine months ended Sept 30, 2002, from Rs462.4 million in the corresponding period of the previous year. For third-quarter July-Sept 2002, the bank reported after tax profit at Rs177.0 million, up 9 per cent from taxed profit of Rs161.7 million in the similar period of 2001.
Directors’ review on the recently released accounts, mentioned that Faysal Bank had commenced business operations effective January 1, 1995, taking over six branches of Faysal Islamic Bank of Bahrain E.C., which had established its presence in Pakistan in 1987. On January 1, 2002, Al Faysal Investment Bank Limited stood merged with Faysal Bank Limited. “As a result of this merger, the bank is now co-owned by subsidiaries of the Dar Al Maal Al Islami (DMI) Trust including Shamil Bank of Bahrain E.C”, directors observed and added that the ultimate holding company of the bank was DMI Trust, Bahamas.
For the nine months ended Sept 30, 2002, the bank showed 18.9 per cent increase in net mark-up income to Rs780.7 million, from Rs657.2 million in the corresponding period a year ago. There was noted to be 38 per cent decrease in mark-up/return expensed, which amounted to Rs1,810 million, compared with Rs2,925 million in the same period of 2001. Mark-up/return earned decreased by a lower 27.7 per cent to Rs2,591 million, from Rs3,582 million in the same period of earlier year. The bank was clearly operating in the low interest rate scenario, but managed to increase the income spread.
The bottomline for the period under review would have been brighter but for the provision of Rs82.6 million against non-performing financing/lending; for the same period in 2001, the bank had written back a considerably taller sum of Rs120.8 million, which shored up the profit for that period.
The bank’s non mark-up income increased 30 per cent to Rs606.4 million for the nine months of the latest year from Rs466.3 million in the three quarters of the previous year. Improvement stemmed mainly from dividend income which more than doubled its contribution to Rs315.8 million, from Rs156.3 million. On two other non-core income heads, the earnings had declined: Fee, commission and brokerage income slipped 4 per cent to Rs145.3 million, from Rs150.6 million and income from dealing in foreign currencies dropped 11 per cent to Rs142.4 million, from Rs159.4 million. Administrative expenses increased 7 per cent to Rs406.7 million, from Rs378.5 million.
The after tax profit for the nine months to end-September 2002, produced earning per share at Rs1.86 on 264.8 million outstanding shares in the bank. The Faysal Bank stock is pretty liquid, with more than 47 million shares traded at the Karachi Stock Exchange in the nine months of 2002. The recent market price of the 10-rupee share stood at Rs13.30, which on the annualized EPS, produces the price-to-earnings ratio (P/E) ratio of 5.4x. The bank had distributed cash dividend at 10 per cent for 2001.
The balance sheet of Faysal Bank showed total assets at Rs33,785 million at end-September 2002. These included financing (advances) Rs19,298 million; investments Rs4,654 million; lending to financial institutions Rs4,082 million and cash and balances with treasury banks Rs1,803 million.
On the liabilities side, deposits and other accounts amounted to Rs24,195 million and borrowings from financial institutions Rs3,721 million. Paid-up capital of the bank stood at Rs2,648 million; reserves amounted to Rs1,316 million and unappropriated profit was Rs442 million. Including surplus of Rs191 million on revaluation of assets, the shareholders’ equity amounted to Rs4,597 million and yielded break-up value of the share at Rs17.36, which reflected discount of 30 per cent in the stock’s market price.
The quarterly report for period ended September 30, 2002, lists bank’s network of 20 branches, which include seven in Karachi inclusive of main branch; three in Lahore; two in Islamabad; and one each in Gujranwala; Faisalabad; Multan; Sialkot; Rawalpindi; Peshawar; Quetta and Mirpur (AK).