MIRA INFORM REPORT

 

 

Report Date :

20.02.2013

 

IDENTIFICATION DETAILS

 

Name :

FAYSAL BANK LIMITED

 

 

Registered Office :

Faysal House, 1st Floor ST-2 Commercial Lane, Main Sharea Faisal Opp: Regent Plaza Hotel Karachi

 

 

Country :

Pakistan

 

 

Financials (as on) :

31.12.2011

 

 

Date of Incorporation :

03.10.1994

 

 

Legal Form :

Public Subsidiary

 

 

Line of Business :

Subject is engaged in corporate, commercial and consumer banking activities.

 

 

No. of Employees :

3,416

 

RATING & COMMENTS

 

MIRA’s Rating :

A

 

RATING

STATUS

PROPOSED CREDIT LINE

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

Fairly Large

 

Maximum Credit Limit:

USD 10.68 Million

Status :

Good

Payment Behaviour :

Regular

Litigation :

Clear

 

NOTES:

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

 

ECGC Country Risk Classification List – June 30th, 2012

 

Country Name

Previous Rating

(31.03.2012)

Current Rating

(30.06.2012)

Pakistan

B2

B2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 


 pakistan - ECONOMIC OVERVIEW

 

Decades of internal political disputes and low levels of foreign investment have led to slow growth and underdevelopment in Pakistan. Agriculture accounts for more than one-fifth of output and two-fifths of employment. Textiles account for most of Pakistan's export earnings, and Pakistan's failure to expand a viable export base for other manufactures has left the country vulnerable to shifts in world demand. Official unemployment is 6%, but this fails to capture the true picture, because much of the economy is informal and underemployment remains high. Over the past few years, low growth and high inflation, led by a spurt in food prices, have increased the amount of poverty - the UN Human Development Report estimated poverty in 2011 at almost 50% of the population. Inflation has worsened the situation, climbing from 7.7% in 2007 to more than 13% for 2011, before declining to 9.3% at year-end. As a result of political and economic instability, the Pakistani rupee has depreciated more than 40% since 2007. The government agreed to an International Monetary Fund Standby Arrangement in November 2008 in response to a balance of payments crisis. Although the economy has stabilized since the crisis, it has failed to recover. Foreign investment has not returned, due to investor concerns related to governance, energy, security, and a slow-down in the global economy. Remittances from overseas workers, averaging about $1 billion a month since March 2011, remain a bright spot for Pakistan. However, after a small current account surplus in fiscal year 2011 (July 2010/June 2011), Pakistan's current account turned to deficit in the second half of 2011, spurred by higher prices for imported oil and lower prices for exported cotton. Pakistan remains stuck in a low-income, low-growth trap, with growth averaging 2.9% per year from 2008 to 2011. Pakistan must address long standing issues related to government revenues and energy production in order to spur the amount of economic growth that will be necessary to employ its growing population. Other long term challenges include expanding investment in education and healthcare, and reducing dependence on foreign donors.

 

Source : CIA

 

 

 


 


Company name and address

 

FAYSAL BANK LIMITED

 

Faysal House, 1st Floor

ST-2 Commercial Lane, Main Sharea Faisal

Opp: Regent Plaza Hotel

Karachi,

Pakistan

 

Tel:

92-21-32795468

Fax:

92-21-32795225

www.faysalbank.com

 

Employees:

3,416

Company Type:

Public Subsidiary

Corporate Family:

5 Companies

Ultimate Parent:

Dar Al-Maal Al-Islami Trust

Traded:

Karachi Stock Exchange:

FABL

Incorporation Date:

03-Oct-1994

Auditor:

A F Ferguson & Co.

Financials in:

USD (In Millions)

Fiscal Year End:

31-Dec-2011

Reporting Currency:

Pakistan Rupee

Annual Sales:

153.8  1

Net Income:

14.8

Total Assets:

3,254.0  2

Market Value:

99.2

 

(01-Feb-2013)

 

 

Business Description

 

Faysal Bank Limited (the Bank) is a Pakistan-based banking company engaged in corporate, commercial and consumer banking activities. The Bank has a network of 257 branches, including 45 Islamic banking branches and nil sub-branch. The Bank operates through four segments: Corporate finance, which includes investment banking activities, such as mergers and acquisition, privatization, securitization, initial public offers (IPOs) and secondary private placement; Trading and sales segment includes fixed income, equity, foreign exchanges, funding, own position securities, lending and repos; Retail banking, which provides services to small borrowers, including loans, deposits, other transactions and balances with retail customers; and Commercial banking, which includes strategic partnership with corporate and SME sector to provide working capital financing, trade financing and cash management services, project finance, export finance, leasing, lending, and guarantees, among others. For the nine months ended 30 September 2012, Faysal Bank Limited interest income increased 1% to PKR21.59B. Net interest income after loan loss provision decreased 17% to PKR5.8B. Net income decreased 13% to PKR1.13B. Net interest income after loan loss provision reflects decrease in interest earning assets and increase in interest bearing liabilities.

 

 

Industry            

 

 

Industry

Commercial Banks

ANZSIC 2006:

6221 - Banking

NACE 2002:

6512 - Other monetary intermediation

NAICS 2002:

52211 - Commercial Banking

UK SIC 2003:

65121 - Banks

UK SIC 2007:

64191 - Banks

US SIC 1987:

6029 - Commercial Banks, Not Elsewhere Classified

 

 

 

 

 

Key Executives

 

Name

Title

Naveed A. Khan

President, Chief Executive Officer, Director

Syed Majid Ali

Chief Financial Officer

Zafar Abdullah

Company Secretary and Head of Legal of the Bank

Shahid Salim

Head - Internal Audit

Nasir Islam

Head of Compliance

 

 

Significant Developments

 

Topic

#*

Most Recent Headline

Date

Dividends

5

Faysal Bank Ltd Announces Dispatch of Bonus Shares

14-Dec-2012

* number of significant developments within the last 12 months

 

 

News

 

Title

Date

Islamabad Stock Exchange Closing Rate of Commercial Banks Sector dated 14-02-2013 - Press Release issued by Islamabad Stock Exchange
Pakistan Press International (228 Words)

14-Feb-2013

Islamabad Stock Exchange Closing Rate of Commercial Banks Sector dated 13-02-2013 - Press Release issued by Islamabad Stock Exchange
Pakistan Press International (228 Words)

13-Feb-2013

Islamabad Stock Exchange Closing Rate of Commercial Banks Sector dated 12-02-2013 - Press Release issued by Islamabad Stock Exchange
Pakistan Press International (228 Words)

12-Feb-2013

Islamabad Stock Exchange Closing Rate of Commercial Banks Sector dated 11-02-2013 - Press Release issued by Islamabad Stock Exchange
Pakistan Press International (228 Words)

11-Feb-2013

Quaid-e-Azam Trophy 2012-13 super eigth and bottom six stage day 4 of round 1 - Press Release issued by Pakistan Cricket Board
Pakistan Press International (733 Words)

9-Feb-2013

 

 

Financial Summary

 

As of 30-Sep-2012

 

Key Ratios

Company

Industry

Debt to Equity (MRQ)

1.91

 

Sales 5 Year Growth

24.27

9.28

Net Profit Margin (TTM) %

7.96

23.51

Return on Assets (TTM) %

0.39

0.88

Return on Equity (TTM) %

5.74

7.73

 

 

Stock Snapshot

    

 

Traded: Karachi Stock Exchange: FABL

 

As of 1-Feb-2013

   Financials in: PKR

Recent Price

10.45

 

EPS

1.38

52 Week High

12.70

 

Price/Sales

0.73

52 Week Low

8.00

 

Price/Earnings

6.62

Avg. Volume (mil)

0.28

 

Price/Book

0.50

Market Value (mil)

9,690.82

 

Beta

1.25

 

Price % Change

Rel S&P 500%

4 Week

3.47%

-0.23%

13 Week

12.50%

4.91%

52 Week

29.90%

-10.25%

Year to Date

-1.42%

-3.48%

 

1 - Profit & Loss Item Exchange Rate: USD 1 = PKR 86.34652
2 - Balance Sheet Item Exchange Rate: USD 1 = PKR 89.91

 

 

Corporate Overview

 

Location
Faysal House, 1st Floor
ST-2 Commercial Lane, Main Sharea Faisal
Opp: Regent Plaza Hotel
Karachi, Pakistan

 

Tel:

92-21-32795468

Fax:

92-21-32795225

 

www.faysalbank.com

Quote Symbol - Exchange

FABL - Karachi Stock Exchange

Sales PKR(mil):

13,276.7

Assets PKR(mil):

292,567.8

Employees:

3,416

Fiscal Year End:

31-Dec-2011

 

Industry:

Commercial Banks

Incorporation Date:

03-Oct-1994

Company Type:

Public Subsidiary

Quoted Status:

Quoted

 

President, Chief Executive Officer, Director:

Naveed A. Khan

 

 

Industry Codes

 

ANZSIC 2006 Codes:

6221

-

Banking

6230

-

Non-Depository Financing

6411

-

Financial Asset Broking Services

6229

-

Other Depository Financial Intermediation

 

NACE 2002 Codes:

6512

-

Other monetary intermediation

6522

-

Other credit granting

6713

-

Activities auxiliary to financial intermediation not elsewhere classified

6712

-

Security broking and fund management

 

NAICS 2002 Codes:

52211

-

Commercial Banking

522291

-

Consumer Lending

522120

-

Savings Institutions

522298

-

All Other Nondepository Credit Intermediation

523110

-

Investment Banking and Securities Dealing

522220

-

Sales Financing

522320

-

Financial Transactions Processing, Reserve, and Clearinghouse Activities

 

US SIC 1987:

6029

-

Commercial Banks, Not Elsewhere Classified

6036

-

Savings Institutions, Not Federally Chartered

6099

-

Functions Related to Depository Banking, Not Elsewhere Classified

6159

-

Miscellaneous Business Credit Institutions

6141

-

Personal Credit Institutions

6211

-

Security Brokers, Dealers, and Flotation Companies

6153

-

Short-Term Business Credit Institutions, Except Agricultural

 

UK SIC 2003:

65121

-

Banks

6713

-

Activities auxiliary to financial intermediation not elsewhere classified

6712

-

Security broking and fund management

6522

-

Other credit granting

 

UK SIC 2007:

64191

-

Banks

6619

-

Other activities auxiliary to financial services, except insurance and pension funding

6612

-

Security and commodity contracts brokerage

6492

-

Other credit granting

 

 

Business Description

 

Faysal Bank Limited (the Bank) is a Pakistan-based banking company engaged in corporate, commercial and consumer banking activities. The Bank has a network of 257 branches, including 45 Islamic banking branches and nil sub-branch. The Bank operates through four segments: Corporate finance, which includes investment banking activities, such as mergers and acquisition, privatization, securitization, initial public offers (IPOs) and secondary private placement; Trading and sales segment includes fixed income, equity, foreign exchanges, funding, own position securities, lending and repos; Retail banking, which provides services to small borrowers, including loans, deposits, other transactions and balances with retail customers; and Commercial banking, which includes strategic partnership with corporate and SME sector to provide working capital financing, trade financing and cash management services, project finance, export finance, leasing, lending, and guarantees, among others. For the nine months ended 30 September 2012, Faysal Bank Limited interest income increased 1% to PKR21.59B. Net interest income after loan loss provision decreased 17% to PKR5.8B. Net income decreased 13% to PKR1.13B. Net interest income after loan loss provision reflects decrease in interest earning assets and increase in interest bearing liabilities.

 

More Business Descriptions

Provision of Islamic banking services. The DMI group, headed by HRH Prince Mohamed Al Faisal Al Saud, is registered in the Bahamas with main offices in Geneva, Switzerland. The DMI group has been the leading contributor to the development of Islamic banking in the world, particularly with regard to promoting new modes of investment compatible with Islamic Shariah

Retail, Commercial & Investment Banking Services

Faysal Bank Limited (Faysal Bank) is a Pakistan-based full service banking institution that provides consumer, corporate and investment banking services to its customers. The bank provides a variety of consumer banking products and services that include deposit accounts, home loans, car loans and other consumer loans. Through corporate banking, the bank provides corporate finance, SME finance, agricultural finance and trade finance. In addition, it also provides cash management services and treasury and capital market services. Its investment banking provides investment advisory services and also facilitates arrangement of syndications, mergers, acquisitions, commercial papers and underwriting arrangements. Faysal Bank conducts its business operations through four segments namely, Corporate Finance, Trading and Sales, Retail Banking and Commercial Banking. The corporate finance segment is provides a wide range of investment banking activities which include acquisitions, privatization, underwriting, securitization, Initial Public Offers (IPOs) and secondary private placements. Through Trading and Sales segment, the bank provides fixed income, equity, foreign exchanges, funding, own position securities, lending and repos to its customers. Under Retail Banking segment, the bank provides a wide range of financial services to consumers, small and medium enterprises (SMEs) and agriculturists. The retail banking products include loans, deposits and other retail services. The Commercial Banking segment provides a variety of loans and deposit products for its corporate customers. The bank principally offers a wide range of innovative products and services to small borrowers and corporate customers. The products include deposit products, consumer loans, corporate investment banking services and other services. The services of Commercial Banking segment includes strategic partnership with corporate and SME sector entities to provide working capital financing, trade financing and cash management services, project finance, export finance, leasing, lending, guarantees, bills of exchange and deposits.Under deposit services, the bank offers a variety of saving accounts namely, Faysal Savings Account, Faysal Sahulat, Basic Banking Account, Rozana Munafa Plus Account, Faysal Moavin Account, Faysal Premium Account, Faysal Izafa Account, Mahfooz Sarmaya and FCY Savinsg Plus Account. The bank also provides car finance, house finance, Faysal Finance and other finance facilities for its small borrowers. The corporate and investment banking products and services consist of corporate finance, SME finance, agricultural and trade finance, treasury and capital market services and cash management services. In addition, the bank also provides other services which include PocketMate Visa Debit Card, travellers cheques, transfer of funds, safe deposit lockers and non-stop banking. As of December 2011, the bank operates through 257 branches, out of which 45 are solely dedicated Barkat Islamic Banking branches.

Faysal Bank Limited (Faysal Bank) is a banking institution based in Pakistan. The bank provides consumer, corporate and investment banking services to customers. Faysal Bank conducts its business operations through four segments namely, Corporate Finance, Trading and Sales, Retail Banking and Commercial Banking. The bank offers a wide range of consumer banking products and services such as deposit accounts, car loans, home loans and other consumer loans. Corporate banking division of the bank provides finance to corporate customers, small and medium sized businesses, agricultures and traders. It also provides treasury and capital market services and cash management services to its customers. Through investment banking, the bank offers advisory services and facilitates the arrangements of commercial papers, mergers and acquisitions, syndications and underwriting arrangements amongst many others. Faysal Bank is headquartered in Karachi, Pakistan.The bank reported interest income of (Pakistan Rupee) PKR 28,825.45 million during the fiscal year ended December 2011, an increase of 46.24% over 2010. The net interest income after loan loss provision of the bank was PKR 8,511.11 million during the fiscal year 2011, an increase of 137.12% over 2010. The net profit of the bank was PKR 1,280.30 million during the fiscal year 2011, an increase of 7.56% over 2010.

Commercial Banking

 

Financial Data

 

Financials in:

PKR(mil)

Revenue:

13,276.7

Net Income:

1,280.3

Assets:

292,567.8

Long Term Debt:

44,092.2

Total Liabilities:

273,354.7

Date of Financial Data:

31-Dec-2011

1 Year Growth

35.4%

7.6%

9.4%

 

 

Market Data

 

Quote Symbol:

FABL

Exchange:

Karachi Stock Exchange

Currency:

PKR

Stock Price:

10.5

Stock Price Date:

02-01-2013

52 Week Price Change %:

29.9

Market Value (mil):

9,690,815.0

SEDOL:

6332451

ISIN:

PK0070501017

Equity and Dept Distribution:

held. 09/2007, Scrip Issue,25 new shares for every 100 shares held.03/2009, Scrip Issue, 15 new shares for every 100 shares held.11/2010, Scrip Issue, 20 new shares for every 100 shares held.11/2011, Scrip Issue, 12.5 new shares for for every 100 shares held. 11/2012,Bonus Issue,12.5 new shares for every 100shares held

 

 

Shareholders

 

Major Shareholders

Ithmaar Bank BSC (67%) Dar Al Maal Al Islami Trust (DMI), Switzerland (42.9%)

 

 

Key Corporate Relationships

 

Auditor:

A F Ferguson & Co.

Bank:

Amex, Standard Chartered, Citibank NA

Auditor:

A F Ferguson & Co., KPMG Taseer Hadi Khalid and Co.

 

 

The Strategic Initiatives report is created using technology to extract meaningful insights from analyst reports about a company's strategic projects and investments.

 

 

Strategic Initiatives

 

 

Key Organizational Changes

A statement by Mr. Syed Naseem Ahmad, the chairman of Faysal Bank is given below. The following statement has been taken from the bank’s 2011 annual report. The end of 2011 marked the culmination of one year of Faysal Bank s acquisition of RBS Pakistan It was a year full of challenges not only because of the economic environment but also, and more importantly, because of the need to successfully tackle the issues of merger. It was a rewarding experience to see our strategic intent being fulfilled, placing us amongst the key players in Pakistan s banking industry. We continued to grow during the year with 27 new conventional banking branches in 10 new cities and the addition of 32 Barkat Islamic banking branches

 
We continued to grow during the year with 27 new conventional banking branches in 10 new cities and the addition of 32 Barkat Islamic banking branches. In addition, the bank ventured into new specialised markets. As a result Faysal Bank has set a unique example of turning losses into profits in the very first year of acquisition of RBS Pakistan. Merged loss of the two banks of PKR 789 million was turned into profit of PKR 1.3 billion — an outstanding achievement!.

 

 

Corporate Structure News

 

Faysal Bank Limited
Total Corporate Family Members: 5

 

Company Name

Company Type

Location

Country

Industry

Sales
(USD mil)

Employees

Dar Al-Maal Al-Islami Trust

Parent

 

 

 

 

 

Ithmaar Bank B.S.C.

Subsidiary

Manama

Bahrain

Commercial Banks

129.9

248

Merger with First Leasing Bank BSC(c) proposed/announced.See corporate structure news on Dar Al-Maal Al-Islami Trust for details

Faysal Bank Limited

Subsidiary

Karachi

Pakistan

Commercial Banks

153.8

3,416

Shamil Bank of Bahrain B.S.C.

Subsidiary

Manama

Bahrain

Commercial Banks

 

251

Faisal Private Bank (Switzerland) SA

Subsidiary

Geneva

Switzerland

Commercial Banks

 

 

 

 

 

Competitors Report

 

CompanyName

Location

Employees

Ownership

MCB Bank Ltd.

Lahore, Pakistan

10,199

Public

National Bank of Pakistan

Karachi, Pakistan

14,413

Public

United Bank Limited

Karachi, Pakistan

12,563

Public

 

 

Board of Directors

 

 

 

Name

Title

Function

Syed Naseem Ahmad

 

Non-Executive Chairman of the Board

Chairman

Biography:

Mr. Syed Naseem Ahmad is Non-Executive Chairman of the Board of Faysal Bank Limited. He is Chairman of the Recruitment, Nomination and Remuneration Committee of the Bank.

Shahid Ahmad

 

Non-Executive Independent Director

Director/Board Member

 

Biography:

Mr. Shahid Ahmad has been Non-Executive Independent Director of Faysal Bank Limited since 2003. He acts as Member of the Bank's Risk Management Committee. In addition, he serves as Member of Recruitment, Nomination and Remuneration Committee at Faysal Bank Limited.

Mohammed A Rehman Bucheerei

 

Director

Director/Board Member

 

Hassan Mohammed Mahmood Hassan

 

Non-Executive Independent Director

Director/Board Member

 

Biography:

Mr. Hassan Mohammed Mahmood Hassan is Non-Executive Independent Director of Faysal Bank Limited. He is Member of the Audit Committee and the Recruitment, Nomination and Remuneration Committee of the Bank.

Mohamed A.R. Hussain

 

Non-Executive Independent Director

Director/Board Member

 

Biography:

Mr. Mohamed A.R. Hussain is Non-Executive Independent Director of Faysal Bank Limited. He is Chairman of the Risk Management Committee of the Bank.

Naveed A. Khan

 

President, Chief Executive Officer, Director

Director/Board Member

 

Biography:

Mr. Naved A. Khan is President, Chief Executive Officer and Executive Director of Faysal Bank Limited. He has over 23 years of work experience, with 20 years of broad-based and varied Corporate and Investment banking experience. Before joining Faysal Bank, he was associated with ABN AMRO Pakistan as CEO with the primary responsibility of strategic management of the banks local franchise and its businesses. He has also been associated in senior management positions with Bank of America, Pakistan. He has international work experience with General Electric / RCA (USA) for the company's Pacific Rim operations and holds an MBA from Butler University, School of Business (Indianapolis, USA). He is currently Chairman of ECH Task Force — State Bank of Pakistan, Board Member of Rotary Club of Karachi Metropolitan, Board Member on Export Processing Zones Authority, Board Member at the Virtual University of Pakistan, Chairman Academic Board — IBP, Director Karachi Shipyard and Engineering Works and Board Member of Pakistan Stone Developing Company. He is Member of the Recruitment, Nomination and Remuneration Committee and Chairman of the Management Committee, Asset & Liability Committee, Compliance Committee, IT Steering Committee, Investment Committee and Enterprise Risk Management Committee of the Bank.

Education:

Butler University, MBA

Compensation/Salary:125,554,000

Compensation Currency: PKR

Tariq Iqbal Khan

 

Director

Director/Board Member

 

Muhammad Maqbool

 

Non-Executive Director

Director/Board Member

 

Biography:

Lt. Gen. (Retd.) Muhammad Maqbool is Non-Executive Director of Faysal Bank Limited. He is Member of the Audit Committee of the Bank.

Farooq Rahmatullah

 

Non-Executive Independent Director

Director/Board Member

 

Biography:

Mr. Farooq Rahmatullah is Non-Executive Independent Director of Faysal Bank Ltd. He is Member of the Recruitment, Nomination and Remuneration Committee of the Bank.

Graham Roderick Walker

 

Executive Director

Director/Board Member

 

Biography:

Mr. Graham Roderick Walker has been Executive Director of Faysal Bank Ltd since September 10, 2007. He is Chairman of the Audit Committee of the Bank.

Age: 65

 

 

Executives

 

Name

Title

Function

Naveed A. Khan

 

President, Chief Executive Officer, Director

Chief Executive Officer

Biography:

Mr. Naved A. Khan is President, Chief Executive Officer and Executive Director of Faysal Bank Limited. He has over 23 years of work experience, with 20 years of broad-based and varied Corporate and Investment banking experience. Before joining Faysal Bank, he was associated with ABN AMRO Pakistan as CEO with the primary responsibility of strategic management of the banks local franchise and its businesses. He has also been associated in senior management positions with Bank of America, Pakistan. He has international work experience with General Electric / RCA (USA) for the company's Pacific Rim operations and holds an MBA from Butler University, School of Business (Indianapolis, USA). He is currently Chairman of ECH Task Force — State Bank of Pakistan, Board Member of Rotary Club of Karachi Metropolitan, Board Member on Export Processing Zones Authority, Board Member at the Virtual University of Pakistan, Chairman Academic Board — IBP, Director Karachi Shipyard and Engineering Works and Board Member of Pakistan Stone Developing Company. He is Member of the Recruitment, Nomination and Remuneration Committee and Chairman of the Management Committee, Asset & Liability Committee, Compliance Committee, IT Steering Committee, Investment Committee and Enterprise Risk Management Committee of the Bank.

Education:

Butler University, MBA

Compensation/Salary:125,554,000

Compensation Currency: PKR

Muhammad Abadullah

 

Head-Centralized Operations

Operations Executive

 

Zafar Abdullah

 

Company Secretary and Head of Legal of the Bank

Company Secretary

 

Syed Majid Ali

 

Chief Financial Officer

Finance Executive

 

Biography:

Mr. Syed Majid Ali is Chief Financial Officer of Faysal Bank Limited. He is Fellow member of the Institute of Chartered Accountants. He has over 18 years of experience, progressively responsible in the Accounts and Finance disciplines of banking with exposure in I.T. and HR activities. He has been associated as CFO with Emirates Bank International and Saudi Pak Commercial Bank, as well as KPMG as Partner. He is Member and Secretary of Management Committee and Member of the Asset & Liability Committee, Compliance Committee, IT Steering Committee, Investment Committee and Enterprise Risk Management Committee of the Bank.

Yousaf Hussain

 

Head - Special Asset Management

Finance Executive

 

Biography:

Mr. Yousaf Hussain is Head of Special Asset Management of Faysal Bank Limited. He was previously Head of Corporate Banking (North) at Faysal Bank. He has been with Faysal Bank since August 2008 and has contributed significantly to the franchise through his support on various strategic level initiatives and ramping up the Corporate Banking Business in the North region. Overall, he has 18 years of professional experience, primarily at ABN AMRO Bank within the Corporate/Credit and Transaction Banking functions. His experience also includes senior assignments at Samba Bank, Mashreq Bank, Motorola, Mobilink and Siemens Pakistan. In addition to being an electrical engineer, he has done his Masters in Business Administration from LUMS. He is Member of Management Committee and Member of the Asset & Liability Committee of the Bank.

Shahid Salim

 

Head - Internal Audit

Accounting Executive

 

Nauman Ansari

 

Head Corporate and Investment Banking

Investment Executive

 

Biography:

Mr. Nauman Ansari is Head Corporate and Investment Banking of Faysal Bank Limited. He has 15 years of Credit, Corporate and Investment Banking experience, having been associated with Standard Chartered Bank (Pakistan), Bank of America (Pakistan), ABN AMRO (in Pakistan, Middle East and Asia Pacific regions), Fortis Bank (Middle East) and Crescent Commercial Bank (Pakistan). He holds a Bachelors of Science degree in Business Studies from the United States of America. He is Member of Management Committee and Member of the Asset & Liability Committee, IT Steering Committee, Investment Committee and Enterprise Risk Management Committee of the Bank.

Education:

USA, BS (Business Studies)

Salman Ahmed Usmani

 

Head - Treasury and ECM

Treasurer

 

Biography:

Mr. Salman Ahmed Usmani is Head of Treasury and ECM of Faysal Bank Limited. He has experience of over 22 years in both the multinational and local banking sector, with experience in Treasury and Risk Management, Asset and Liability Management, Strategic Planning, Corporate Restructuring, Strategic Negotiations, Acquisitions and Strategic Alliances and International Operations. Prior to joining Faysal Bank Limited, he was associated with MCB Bank Limited as Global Treasurer and Head Investment Banking Group. His past experience has been with organizations such as ANZ Grindlays, American Express, Bank of America, Mashreq Bank and United Bank Limited. He is Member of Management Committee and Member of the Asset & Liability Committee, Investment Committee and Enterprise Risk Management Committee of the Bank.

Mehreen Amin

 

Head - Human Resources

Human Resources Executive

 

Biography:

Ms. Mehreen Amin is Head of Human Resources of Faysal Bank Limited. She possesses over 26 years of work experience, in the areas of I.T. and HR. She has been professionally associated in senior positions with multinationals such as G.D. Searle UK, Shell Pakistan and Reckitt Benckiser, where she was the HR Regional Director (for the Africa Middle East region). In her last assignment at ABN AMRO Pakistan, she was the Head of Human Resources. She is the Member of the Board of Governors of Pakistan Society for Training & Development. She is Member and Secretary of Asset & Liability Committee and Member of Management Committee, Compliance Committee, IT Steering Committee, Investment Committee and Enterprise Risk Management Committee of the Bank.

Anwer Umed Ali

 

Head-IT

Engineering/Technical Executive

 

Ahmed Kamran

 

Head of Services

Engineering/Technical Executive

 

Education:

Karachi University, Masters (International Relations)

Nasir Islam

 

Head of Compliance

Legal Executive

 

Biography:

Mr. Nasir Islam is Head of Compliance of Faysal Bank Limited. He was previously Acting Company Secretary and Head of Legal. Mr. Islam is Chartered Accountant with 18 years of experience. His first assignment was as Manager Finance in ANZ Grindlays in Karachi from where he was posted at the ANZ HO in Melbourne, Australia as Manager Commercial Banking System (CBS) Project. He returned to Pakistan in 2000 as Manager Audit and joined ABN Amro Bank as Audit Manager, and in 2004, he was appointed as Country Head of Compliance. He is Member of Management Committee, Asset & Liability Committee, IT Steering Committee and Enterprise Risk Management Committee and Member and Secretary of Compliance Commitee of the Bank.

Bashir A Shaikh

 

Chief Risk Officer

Insurance Executive

 

Aarij Ali

 

Head - Retail Banking

Other

 

Biography:

Mr. Aarij Ali is Head of Retail Banking of Faysal Bank Limited. He has over 25 years of banking experience in various capacities within Retail, Consumer, Corporate and Operations areas. He has also handled business support projects related to HRD, Technology and Strategy Development. He holds a Masters of Business Administration from the Institute of Business Administration, Karachi. Prior to joining Faysal Bank, he has been associated with ANZ Grindlays, MCB Bank and Saudi Pak Commercial Bank. He is Member of Management Committee and Member of the Asset & Liability Committee, IT Steering Committee and Enterprise Risk Management Committee of the Bank.

Education:

Institute of Business Administration, Karachi, MBA

Zafar Baig

 

Head - Strategic Development

Other

 

Biography:

Mr. Zafar Baig is Head of Strategic Development of Faysal Bank Limited. He had been previously associated with ABN AMRO (Pakistan) and RBS (Pakistan) since 1996, holding the position of CFO. He has experience in activities across all Finance functions, including Asset & Liability Management,Taxation and Management Information, along with exposure in business planning, Merger & Acquisition and Integration activities. Prior to joining the bank in 1996, he was associated with HSBC (Pakistan) and brings over 15 years of experience in banking industry. He is Member of Management Committee and Member of the Asset & Liability Committee, Compliance Committee, and IT Steering Committee of the Bank.

Fouad Farrukh

 

Head - Islamic Banking

Other

 

Suhail Khan

 

Chief Risk Officer

Other

 

Biography:

Mr. Suhail Khan is Chief Risk Officer of Faysal Bank Limited. Prior to joining Faysal Bank, he was responsible for UK Institutional Sales as an Executive Director with Fortis Investments. He started his banking career with ABN AMRO (Pakistan) in 1996 as a Corporate Relationship Manager and then led a team in the Credit Portfolio Management function of the bank. In 2002, he moved to ABN AMRO (UK) where he served as the Global Business Manager for Investment Banking (Energy & Resources Sector) and Asset Management franchises. He brings with him over 14 years of diversified experience in financial services, both in local and foreign markets. He holds an MBA in Finance from IBA (Karachi) and is a Chartered Financial Analyst (CFA). He is Member of Management Committee and Member of the Asset & Liability Committee, Compliance Committee, IT Steering Committee, Investment Committee and Enterprise Risk Management Committee of the Bank.

Education:

Institute of Business Administration, Karachi, MBA (Finance)

 

 

Significant Developments

 

 

Faysal Bank Ltd Announces Dispatch of Bonus Shares

Dec 14, 2012


Faysal Bank Ltd announced that 12.5% interim bonus shares for the third quarter ended September 30, 2012 have been dispatched on December 12, 2012 to all entitled shareholders.

Faysal Bank Ltd Not To Pay Q3 2012 Dividend

Oct 30, 2012


Faysal Bank Ltd announced that no cash dividend was declared or recommended for the third quarter ended September 30, 2012.

Faysal Bank Ltd Not To Pay Q2 2012 Dividend

Aug 29, 2012


Faysal Bank Ltd announced that no cash dividend was declared for the second quarter ended June 30, 2012.

Faysal Bank Limited Not to Pay Q1 2012 Dividend

Apr 23, 2012


Faysal Bank Limited announced that no cash dividend was declared or paid for the first quarter ended March 31, 2012.

Faysal Bank Limited Not to Pay Dividend

Feb 29, 2012


Faysal Bank Limited announced that it will not pay dividend for the fiscal year ended December 31, 2011.

 

 

 

News

 

Islamabad Stock Exchange Closing Rate of Commercial Banks Sector dated 14-02-2013 - Press Release issued by Islamabad Stock Exchange
Pakistan Press International (228 Words)

14-Feb-2013

Islamabad Stock Exchange Closing Rate of Commercial Banks Sector dated 13-02-2013 - Press Release issued by Islamabad Stock Exchange
Pakistan Press International (228 Words)

13-Feb-2013

Islamabad Stock Exchange Closing Rate of Commercial Banks Sector dated 12-02-2013 - Press Release issued by Islamabad Stock Exchange
Pakistan Press International (228 Words)

12-Feb-2013

Islamabad Stock Exchange Closing Rate of Commercial Banks Sector dated 11-02-2013 - Press Release issued by Islamabad Stock Exchange
Pakistan Press International (228 Words)

11-Feb-2013

Quaid-e-Azam Trophy 2012-13 super eigth and bottom six stage day 4 of round 1 - Press Release issued by Pakistan Cricket Board
Pakistan Press International (733 Words)

09-Feb-2013

Islamabad Stock Exchange Closing Rate of Commercial Banks Sector dated 08-02-2013 - Press Release issued by Islamabad Stock Exchange
Pakistan Press International (218 Words)

08-Feb-2013

Quaid-e-Azam Trophy 2012-13 Super Eight and Bottom six day 3 of round 1 - Press Release issued by Pakistan Cricket Board
Pakistan Press International (535 Words)

08-Feb-2013

Quaid-e-Azam Trophy 2012-13 Super Eight and Bottom six day two of round 1 - Press Release issued by Pakistan Cricket Board
Pakistan Press International (364 Words)

07-Feb-2013

Islamabad Stock Exchange Closing Rate of Commercial Banks Sector dated 07-02-2013 - Press Release issued by Islamabad Stock Exchange
Pakistan Press International (228 Words)

07-Feb-2013

Morocco: Country eyes first Islamic bank
Adnkronos International, Rome, Dar Al Hayat (Lebanon) (98 Words)

13-Jul-2012



Articles

 

Faysal Bank, auto dealers ink accord
Daily Times (Lahore, Pakistan) (136 Words) (1 Page)

01-Jan-2013

Faysal Bank inks MoU with auto-dealers to acilitate clients
The Financial Daily (190 Words) (1 Page)

27-Dec-2012

Pakistan : UNIONPAY DEBIT CARD introduced by FAYSAL BANK
TendersInfo News (159 Words) (1 Page)

01-Sep-2012

BUSINESS PERISCOPE : Faysal Bank launches Debit Card
Daily Times (Lahore, Pakistan) (167 Words) (1 Page)

31-Aug-2012

Pakistan : 1,500,000 SHARES sold by FAYSAL BANK LIMITED
TendersInfo News (151 Words) (1 Page)

06-Jun-2012

Stallions lift Faysal Bank Super-8 T20 Cup
Daily Times (Lahore, Pakistan) (336 Words) (1 Page)

03-Apr-2012

Faysal Bank National Super-8 Twenty20 Cup
Daily Times (Lahore, Pakistan) (247 Words) (1 Page)

01-Apr-2012

Faysal Bank Super-8 T20 Cup: Zebras ease to 8-wicket win over Wolves
Daily Times (Lahore, Pakistan) (227 Words) (1 Page)

28-Mar-2012

Faysal Bank National Super-8 T20 Cup
Daily Times (Lahore, Pakistan) (245 Words) (1 Page)

27-Mar-2012

Faysal Bank Super-8 T20 Cup: Wolves beat Panthers by 2 wickets
Daily Times (Lahore, Pakistan) (118 Words) (1 Page)

26-Mar-2012


Annual Income Statement

 

Financials in: USD (mil) 

Except for share items (millions) and per share items (actual units)           

 

31-Dec-2011

31-Dec-2010

31-Dec-2009

31-Dec-2008

31-Dec-2007

Period Length

12 Months

12 Months

12 Months

12 Months

12 Months

UpdateType/Date

Updated Normal
31-Dec-2011

Restated Normal
31-Dec-2011

Updated Normal
31-Dec-2009

Reclassified Normal
31-Dec-2009

Updated Normal
31-Dec-2007

Filed Currency

PKR

PKR

PKR

PKR

PKR

Exchange Rate (Period Average)

86.346516

85.183279

81.692096

70.718347

60.729836

Auditor

A F Ferguson & Co.

A F Ferguson & Co.

KPMG Taseer Hadi & Co.

KPMG Taseer Hadi & Co.

Taseer Hadi Khalid & Co.

Auditor Opinion

Unqualified

Unqualified

Unqualified

Unqualified

Unqualified

 

 

 

 

 

 

    Interest & Fees on Loans

236.3

156.0

139.5

189.5

191.2

    Interest & Dividends on Investment Securities

96.0

70.6

64.8

-

-

    Fed Funds Sold/Securities Purch under Resale Agrmnt

0.9

3.9

2.5

-

-

    Interest on Deposits

0.6

0.4

0.8

-

-

    Other Interest Income

0.0

0.4

0.0

-

-

Interest Income, Bank

333.8

231.4

207.6

189.5

191.2

    Interest on Deposit

167.1

125.4

113.8

119.3

122.6

    Interest on Other Borrowings

60.1

38.0

32.4

-

-

Total Interest Expense

227.2

163.4

146.2

119.3

122.6

Net Interest Income

106.6

68.0

61.3

70.3

68.6

 

 

 

 

 

 

Loan Loss Provision

8.1

25.8

26.8

29.0

34.2

Net Interest Income after Loan Loss Provision

98.6

42.1

34.5

41.3

34.3

 

 

 

 

 

 

    Fees & Commissions from Operations

30.4

19.5

15.7

16.4

17.4

    Commissions & Fees from Securities Activities

7.2

3.9

8.1

16.9

19.6

    Dealer Trading Account Profit

-0.7

0.8

-0.6

0.0

0.0

    Investment Securities Gains

0.1

16.1

10.2

-1.9

17.6

    Other Revenue

10.2

6.8

1.0

1.3

0.9

Non-Interest Income, Bank

47.1

47.1

34.4

32.7

55.6

    Labor & Related Expenses

-59.8

-36.2

-25.1

-

-

    Depreciation Expense

-12.1

-7.8

-6.3

-

-

    Amortization of Intangibles

-1.5

-1.8

-1.2

-

-

    Other Unusual Expense

0.0

-0.3

0.0

-

-

    Other Expense

-55.1

-33.4

-20.2

-48.4

-46.4

Non-Interest Expense, Bank

-128.6

-79.5

-52.8

-48.4

-46.4

Income Before Tax

17.1

9.7

16.2

25.6

43.6

 

 

 

 

 

 

Total Income Tax

2.3

-4.3

1.3

9.6

7.1

Income After Tax

14.8

14.0

14.8

15.9

36.5

 

 

 

 

 

 

    Minority Interest

-

-

-0.1

-0.1

-0.1

Net Income Before Extraord Items

14.8

14.0

14.8

15.9

36.4

    Discontinued Operations

-

-

0.0

-

-

Total Extraord Items

-

-

0.0

-

-

Net Income

14.8

14.0

14.8

15.9

36.4

 

 

 

 

 

 

    Miscellaneous Earnings Adjustment

-

0.0

-

-

-

Total Adjustments to Net Income

-

0.0

-

-

-

Income Available to Common Excl Extraord Items

14.8

14.0

14.8

15.9

36.4

 

 

 

 

 

 

Income Available to Common Incl Extraord Items

14.8

14.0

14.8

15.9

36.4

 

 

 

 

 

 

Basic/Primary Weighted Average Shares

927.4

925.1

925.1

925.1

925.1

Basic EPS Excl Extraord Items

0.02

0.02

0.02

0.02

0.04

Basic/Primary EPS Incl Extraord Items

0.02

0.02

0.02

0.02

0.04

Diluted Net Income

14.8

14.0

14.8

15.9

36.4

Diluted Weighted Average Shares

927.4

925.1

925.1

925.1

925.1

Diluted EPS Excl Extraord Items

0.02

0.02

0.02

0.02

0.04

Diluted EPS Incl Extraord Items

0.02

0.02

0.02

0.02

0.04

Dividends per Share - Common Stock Primary Issue

0.00

0.00

0.00

0.00

0.02

Gross Dividends - Common Stock

0.0

0.0

0.0

0.0

21.8

Depreciation, Supplemental

12.1

7.8

6.3

5.6

5.3

Total Special Items

0.0

0.3

0.0

-

-

Normalized Income Before Tax

17.1

10.0

16.2

25.6

43.6

 

 

 

 

 

 

Effect of Special Items on Income Taxes

0.0

0.1

0.0

-

-

Inc Tax Ex Impact of Sp Items

2.3

-4.2

1.3

9.6

7.1

Normalized Income After Tax

14.8

14.1

14.8

15.9

36.5

 

 

 

 

 

 

Normalized Inc. Avail to Com.

14.8

14.1

14.8

15.9

36.4

 

 

 

 

 

 

Basic Normalized EPS

0.02

0.02

0.02

0.02

0.04

Diluted Normalized EPS

0.02

0.02

0.02

0.02

0.04

Amort of Intangibles, Supplemental

1.5

1.8

1.2

0.8

0.3

Rental Expenses

19.0

9.2

6.7

6.5

4.8

Advertising Expense, Supplemental

2.0

1.2

1.3

0.6

1.0

Bank Total Revenue

153.8

115.1

95.8

102.9

124.1

    Current Tax - Other

7.9

5.1

48.8

3.6

3.9

Current Tax - Total

7.9

5.1

48.8

3.6

3.9

    Deferred Tax - Domestic

-1.6

-5.5

-5.4

6.0

3.1

    Deferred Tax - Other

-4.0

-3.8

-42.1

0.0

0.0

Deferred Tax - Total

-5.6

-9.3

-47.5

6.0

3.1

Income Tax - Total

2.3

-4.3

1.3

9.6

7.1

Interest Cost - Domestic

0.5

0.4

0.3

0.2

0.2

Service Cost - Domestic

1.3

0.7

0.6

0.3

0.3

Prior Service Cost - Domestic

-

-

0.0

0.0

-

Expected Return on Assets - Domestic

-0.5

-0.3

-0.2

-0.1

-0.2

Actuarial Gains and Losses - Domestic

0.0

0.0

0.0

0.0

0.0

Domestic Pension Plan Expense

1.4

0.8

0.7

0.4

0.4

Defined Contribution Expense - Domestic

1.6

1.0

0.7

0.9

0.5

Total Pension Expense

3.0

1.9

1.5

1.3

0.9

Discount Rate - Domestic

13.00%

14.50%

12.75%

15.00%

10.00%

Expected Rate of Return - Domestic

13.00%

14.50%

12.75%

15.00%

10.00%

Compensation Rate - Domestic

13.00%

14.50%

12.75%

15.00%

10.00%

Total Plan Interest Cost

0.5

0.4

0.3

0.2

0.2

Total Plan Service Cost

1.3

0.7

0.6

0.3

0.3

Total Plan Expected Return

-0.5

-0.3

-0.2

-0.1

-0.2

 

 

Annual Balance Sheet

 

Financials in: USD (mil)

 

 

 

31-Dec-2011

31-Dec-2010

31-Dec-2009

31-Dec-2008

31-Dec-2007

UpdateType/Date

Updated Normal
31-Dec-2011

Restated Normal
31-Dec-2011

Updated Normal
31-Dec-2009

Reclassified Normal
31-Dec-2009

Updated Normal
31-Dec-2007

Filed Currency

PKR

PKR

PKR

PKR

PKR

Exchange Rate

89.91

85.645

84.325

79.125

61.625

Auditor

A F Ferguson & Co.

A F Ferguson & Co.

KPMG Taseer Hadi & Co.

KPMG Taseer Hadi & Co.

Taseer Hadi Khalid & Co.

Auditor Opinion

Unqualified

Unqualified

Unqualified

Unqualified

Unqualified

 

 

 

 

 

 

Cash & Due from Banks

198.6

205.3

92.4

123.9

171.7

    Interest-earning Deposits

58.7

65.1

13.6

-

-

    Total Investment Securities

1,037.2

1,007.2

668.6

455.0

510.6

Other Earning Assets, Total

1,095.9

1,072.4

682.2

455.0

510.6

    Total Gross Loans

1,840.5

-

-

-

-

    Loan Loss Allowances

-192.7

-

-

-

-

Net Loans

1,647.9

0.0

178.1

36.2

114.9

        Buildings

53.7

39.9

17.7

17.0

18.0

        Land/Improvements

39.1

30.0

6.0

5.8

7.4

        Machinery/Equipment

51.7

50.7

27.0

22.4

22.2

        Construction in Progress

6.4

2.2

0.8

3.0

6.5

    Property/Plant/Equipment - Gross

150.9

122.8

51.5

48.3

54.1

    Accumulated Depreciation

-57.8

-52.2

-21.1

-16.8

-15.6

Property/Plant/Equipment - Net

93.1

70.7

30.4

31.5

38.5

    Intangibles - Gross

37.8

38.0

4.8

2.9

2.7

    Accumulated Intangible Amortization

-10.2

-6.8

-2.1

-1.0

-0.4

Intangibles, Net

27.6

31.2

2.7

2.0

2.3

    LT Investment - Affiliate Companies

1.7

1.8

1.0

0.9

-

Long Term Investments

1.7

1.8

1.0

0.9

-

    Deferred Income Tax - Long Term Asset

57.7

58.6

15.2

0.0

-

Other Long Term Assets, Total

57.7

58.6

15.2

0.0

-

    Other Assets

131.6

1,681.4

1,142.2

1,096.7

1,453.2

Other Assets, Total

131.6

1,681.4

1,142.2

1,096.7

1,453.2

Total Assets

3,254.0

3,121.3

2,144.0

1,746.1

2,291.1

 

 

 

 

 

 

Accounts Payable

34.2

37.6

17.4

19.4

39.1

Accrued Expenses

9.7

14.4

5.2

3.8

3.1

    Non-Interest Bearing Deposits

548.9

-

-

-

-

    Interest Bearing Deposits

1,838.1

-

-

-

-

    Other Deposits

26.5

2,314.7

1,503.1

1,341.8

1,712.8

Total Deposits

2,413.5

2,314.7

1,503.1

1,341.8

1,712.8

    Dividends Payable

0.4

0.6

0.5

0.5

-

    Income Taxes Payable

0.0

5.7

7.9

5.8

8.9

Other Current liabilities, Total

0.4

6.3

8.4

6.4

8.9

    Long Term Debt

490.4

458.1

426.7

177.3

178.4

    Capital Lease Obligations

-

-

0.0

0.1

0.1

Total Long Term Debt

490.4

458.1

426.7

177.3

178.6

Total Debt

490.4

458.1

426.7

177.3

178.6

 

 

 

 

 

 

    Deferred Income Tax - LT Liability

0.0

0.0

0.0

31.4

43.7

Deferred Income Tax

0.0

0.0

0.0

31.4

43.7

Minority Interest

-

-

0.9

0.9

1.2

    Other Liabilities

92.1

97.3

30.4

28.6

41.3

Other Liabilities, Total

92.1

97.3

30.4

28.6

41.3

Total Liabilities

3,040.3

2,928.4

1,992.0

1,609.6

2,028.5

 

 

 

 

 

 

    Common Stock

91.7

85.3

72.2

66.9

85.9

Common Stock

91.7

85.3

72.2

66.9

85.9

Additional Paid-In Capital

0.4

0.3

0.0

-

-

Retained Earnings (Accumulated Deficit)

105.8

108.4

62.6

61.5

82.3

Unrealized Gain (Loss)

15.8

-1.5

17.2

8.0

94.3

    Other Equity

0.0

0.3

0.0

-

-

Other Equity, Total

0.0

0.3

0.0

-

-

Total Equity

213.7

192.9

152.0

136.5

262.6

 

 

 

 

 

 

Total Liabilities & Shareholders’ Equity

3,254.0

3,121.3

2,144.0

1,746.1

2,291.1

 

 

 

 

 

 

    Shares Outstanding - Common Stock Primary Issue

927.4

925.1

925.1

925.1

925.1

Total Common Shares Outstanding

927.4

925.1

925.1

925.1

925.1

Employees

3,416

3,547

1,931

1,749

1,394

Number of Common Shareholders

17,494

12,947

13,573

13,021

12,317

Accumulated Intangible Amort, Suppl.

10.2

6.8

2.1

1.0

0.4

Total Capital Leases, Supplemental

74.3

101.5

0.0

0.1

0.1

Capital Lease Payments Due in Year 1

30.8

54.9

0.0

0.1

0.1

Capital Lease Payments Due in Year 2

10.9

11.6

0.0

0.0

0.0

Capital Lease Payments Due in Year 3

10.9

11.6

0.0

0.0

0.0

Capital Lease Payments Due in Year 4

10.9

11.6

0.0

0.0

0.0

Capital Lease Payments Due in Year 5

10.9

11.6

0.0

0.0

0.0

Capital Lease Payments Due in 2-3 Years

21.8

23.3

0.0

0.0

0.0

Capital Lease Payments Due in 4-5 Years

21.8

23.3

0.0

0.0

0.0

Pension Obligation - Domestic

4.2

3.2

2.7

2.1

2.0

Plan Assets - Domestic

4.1

2.9

2.0

1.4

1.6

Funded Status - Domestic

-0.1

-0.4

-0.7

-0.8

-0.4

Total Funded Status

-0.1

-0.4

-0.7

-0.8

-0.4

Discount Rate - Domestic

13.00%

14.50%

12.75%

15.00%

10.00%

Expected Rate of Return - Domestic

13.00%

14.50%

12.75%

15.00%

10.00%

Compensation Rate - Domestic

13.00%

14.50%

12.75%

15.00%

10.00%

Total Plan Obligations

4.2

3.2

2.7

2.1

2.0

Total Plan Assets

4.1

2.9

2.0

1.4

1.6

 

 

Annual Cash Flows

 

Financials in: USD (mil)

 

 

 

31-Dec-2011

31-Dec-2010

31-Dec-2009

31-Dec-2008

31-Dec-2007

Period Length

12 Months

12 Months

12 Months

12 Months

12 Months

UpdateType/Date

Updated Normal
31-Dec-2011

Reclassified Normal
31-Dec-2011

Reclassified Normal
31-Dec-2010

Updated Normal
31-Dec-2008

Updated Normal
31-Dec-2007

Filed Currency

PKR

PKR

PKR

PKR

PKR

Exchange Rate (Period Average)

86.346516

85.183279

81.692096

70.718347

60.729836

Auditor

A F Ferguson & Co.

A F Ferguson & Co.

KPMG Taseer Hadi & Co.

KPMG Taseer Hadi & Co.

Taseer Hadi Khalid & Co.

Auditor Opinion

Unqualified

Unqualified

Unqualified

Unqualified

Unqualified

 

 

 

 

 

 

Net Income/Starting Line

17.1

9.7

16.2

25.6

43.6

    Depreciation

12.1

7.8

6.3

6.3

5.6

Depreciation/Depletion

12.1

7.8

6.3

6.3

5.6

    Amortization of Intangibles

1.5

1.8

1.2

-

-

Amortization

1.5

1.8

1.2

-

-

    Unusual Items

-3.0

-0.1

-0.1

-0.2

-0.1

    Other Non-Cash Items

2.9

1.4

0.6

0.0

0.0

Non-Cash Items

-0.1

1.3

0.5

-0.1

-0.1

    Loan Loss Provision

10.3

25.4

26.8

30.3

34.3

    Other Assets

-218.3

70.8

-302.5

-18.3

-280.8

    Other Liabilities

267.9

20.2

525.1

37.4

368.9

    Other Operating Cash Flow

-15.0

-28.8

-46.3

-12.4

-9.9

    Investment Securities, Gains/Losses

-7.2

-3.9

-8.1

-41.9

-41.6

Changes in Working Capital

37.8

83.7

195.0

-4.8

70.8

Cash from Operating Activities

68.5

104.3

219.1

27.0

119.9

 

 

 

 

 

 

    Purchase of Fixed Assets

-13.4

-6.4

-9.6

-8.6

-10.5

Capital Expenditures

-13.4

-6.4

-9.6

-8.6

-10.5

    Sale of Fixed Assets

4.1

2.1

0.5

0.6

0.4

    Sale/Maturity of Investment

-

-

-

24.4

21.9

    Investment, Net

-65.4

-7.5

-224.6

-71.1

-122.1

    Other Investing Cash Flow

7.0

35.9

7.8

16.7

19.7

Other Investing Cash Flow Items, Total

-54.3

30.4

-216.3

-29.4

-80.1

Cash from Investing Activities

-67.7

24.1

-225.9

-38.0

-90.6

 

 

 

 

 

 

    Other Financing Cash Flow

-

0.0

-0.1

-0.1

-0.4

Financing Cash Flow Items

-

0.0

-0.1

-0.1

-0.4

    Cash Dividends Paid - Common

-0.1

-

0.0

-18.7

-17.5

Total Cash Dividends Paid

-0.1

-

0.0

-18.7

-17.5

    Long Term Debt, Net

-2.3

35.3

-0.1

-0.1

4.0

Issuance (Retirement) of Debt, Net

-2.3

35.3

-0.1

-0.1

4.0

Cash from Financing Activities

-2.4

35.3

-0.1

-18.8

-13.9

 

 

 

 

 

 

Foreign Exchange Effects

-

-

-

7.6

5.8

Net Change in Cash

-1.6

163.6

-7.0

-22.3

21.2

 

 

 

 

 

 

Net Cash - Beginning Balance

268.1

108.2

119.8

160.9

166.2

Net Cash - Ending Balance

266.5

271.8

112.8

138.6

187.4

Cash Taxes Paid

13.6

28.0

46.3

4.8

4.2

 

 

Annual Income Statement

 

Financials in: USD (mil) 

Except for share items (millions) and per share items (actual units)           

 

 

 

31-Dec-2011

31-Dec-2010

31-Dec-2009

31-Dec-2008

31-Dec-2007

Period Length

12 Months

12 Months

12 Months

12 Months

12 Months

UpdateType/Date

Updated Normal
31-Dec-2011

Restated Normal
31-Dec-2011

Updated Normal
31-Dec-2009

Reclassified Normal
31-Dec-2009

Updated Normal
31-Dec-2007

Filed Currency

PKR

PKR

PKR

PKR

PKR

Exchange Rate (Period Average)

86.346516

85.183279

81.692096

70.718347

60.729836

Auditor

A F Ferguson & Co.

A F Ferguson & Co.

KPMG Taseer Hadi & Co.

KPMG Taseer Hadi & Co.

Taseer Hadi Khalid & Co.

Auditor Opinion

Unqualified

Unqualified

Unqualified

Unqualified

Unqualified

 

 

 

 

 

 

    Return Earned

-

-

-

189.5

191.2

    Financing to Customers

235.0

155.4

138.2

-

-

    Financing to Financial Institutions

1.3

0.6

1.3

-

-

    Investments held for trading securities

3.0

1.0

0.0

-

-

    Investment available for sale securities

80.6

56.0

49.3

-

-

    Investments held to maturity securities

12.4

13.6

15.4

-

-

    On deposits with treasury bank and finan

0.6

0.4

0.8

-

-

    On securities purchased under resale agr

0.9

3.9

2.5

-

-

    On call money lendings

0.0

0.4

0.0

-

-

Total Revenue

333.8

231.4

207.6

189.5

191.2

 

 

 

 

 

 

    Return Expensed

-

-

-

119.3

122.6

    Deposits

167.1

125.4

113.8

-

-

    Securities sold under repurchase agreeme

16.0

10.5

15.8

-

-

    Other short term borrowings

19.8

14.8

7.1

-

-

    SBP borrowings

16.4

9.6

7.7

-

-

    Long term borrowings

0.0

0.1

0.0

-

-

    Sub-ordinated loans

8.0

3.1

1.8

-

-

    Provision/Non Performing Financings

3.8

22.4

24.1

21.8

29.6

    Provision/Consumer Financings

-0.9

-1.1

-0.3

-1.5

1.2

    Provision/Investment Diminution

4.7

3.4

3.1

8.6

3.4

    Bad Debt Writen-Off

0.4

1.1

0.0

0.0

0.0

Total Operating Expense

235.3

189.3

173.1

148.2

156.9

 

 

 

 

 

 

    Fees/Commission Income

20.5

13.4

10.8

11.5

12.3

    Dividend Income

7.2

3.9

8.1

16.9

19.6

    Foreign Currencies

9.9

6.1

4.9

4.9

5.2

    Gain on Sale of Securities

-3.0

15.7

10.1

-1.9

17.6

    Unrealised (Loss) on Revaluation

-0.7

0.8

-0.6

0.0

0.0

    Gain on disposal of fixed assets - net

3.0

0.3

0.1

-

-

    Other Income

10.2

6.8

0.9

1.1

0.7

    Salaries, Allowances & Staff Benefits

-59.8

-36.2

-25.1

-

-

    Depreciation

-12.1

-7.8

-6.3

-

-

    Amortisation

-1.5

-1.8

-1.2

-

-

    Administrative Expenses

-51.8

-32.2

-19.9

-46.2

-46.1

    Other Provisions

-2.6

-0.7

0.1

-1.4

-0.1

    Fixed assets written off

0.0

-0.3

0.0

-

-

    Other Charges

-0.7

-0.6

-0.4

-0.9

-0.2

    Share of Associates

-

-

0.1

0.1

0.2

Total Non-Interest Revenue

47.1

47.1

34.4

32.7

55.6

 

 

 

 

 

 

Total Non-Interest Expense

-128.6

-79.5

-52.8

-48.4

-46.4

 

 

 

 

 

 

Net Income Before Taxes

17.1

9.7

16.2

25.6

43.6

 

 

 

 

 

 

Provision for Income Taxes

2.3

-4.3

1.3

9.6

7.1

Net Income After Taxes

14.8

14.0

14.8

15.9

36.5

 

 

 

 

 

 

    Minority Interest

-

-

-0.1

-0.1

-0.1

Net Income Before Extra. Items

14.8

14.0

14.8

15.9

36.4

    Discontinued Operations

-

-

0.0

-

-

Net Income

14.8

14.0

14.8

15.9

36.4

 

 

 

 

 

 

    Adjustment

-

0.0

-

-

-

Income Available to Com Excl ExtraOrd

14.8

14.0

14.8

15.9

36.4

 

 

 

 

 

 

Income Available to Com Incl ExtraOrd

14.8

14.0

14.8

15.9

36.4

 

 

 

 

 

 

Basic Weighted Average Shares

927.4

925.1

925.1

925.1

925.1

Basic EPS Excluding ExtraOrdinary Items

0.02

0.02

0.02

0.02

0.04

Basic EPS Including ExtraOrdinary Item

0.02

0.02

0.02

0.02

0.04

Diluted Net Income

14.8

14.0

14.8

15.9

36.4

Diluted Weighted Average Shares

927.4

925.1

925.1

925.1

925.1

Diluted EPS Excluding ExtraOrd Items

0.02

0.02

0.02

0.02

0.04

Diluted EPS Including ExtraOrd Items

0.02

0.02

0.02

0.02

0.04

DPS-Common Stock

0.00

0.00

0.00

0.00

0.02

Gross Dividends - Common Stock

0.0

0.0

0.0

0.0

21.8

Normalized Income Before Taxes

17.1

10.0

16.2

25.6

43.6

 

 

 

 

 

 

Inc Tax Ex Impact of Sp Items

2.3

-4.2

1.3

9.6

7.1

Normalized Income After Taxes

14.8

14.1

14.8

15.9

36.5

 

 

 

 

 

 

Normalized Inc. Avail to Com.

14.8

14.1

14.8

15.9

36.4

 

 

 

 

 

 

Basic Normalized EPS

0.02

0.02

0.02

0.02

0.04

Diluted Normalized EPS

0.02

0.02

0.02

0.02

0.04

Advertisement Expenses

2.0

1.2

1.3

0.6

1.0

Depreciation

12.1

7.8

6.3

5.6

5.3

Amortisation of Intangibles

1.5

1.8

1.2

0.8

0.3

Rental Expenses

19.0

9.2

6.7

6.5

4.8

    Current Tax

4.5

2.8

14.3

2.2

4.7

    Prior Year Tax

3.3

2.3

34.6

1.4

-0.8

Current Tax - Total

7.9

5.1

48.8

3.6

3.9

    Deferred Tax - Domestic

-1.6

-5.5

-5.4

6.0

3.1

    Prior Year Tax

-4.0

-3.8

-42.1

0.0

0.0

Deferred Tax - Total

-5.6

-9.3

-47.5

6.0

3.1

Income Tax - Total

2.3

-4.3

1.3

9.6

7.1

Current Service Cost - Gratuity

1.3

0.7

0.6

0.3

0.3

Interest Cost - Gratuity

0.5

0.4

0.3

0.2

0.2

Expected Return on Assets - Gratuity

-0.5

-0.3

-0.2

-0.1

-0.2

Amort. Of Actuarial Gain/Loss-Gratuity

0.0

0.0

0.0

0.0

0.0

Prior Service Cost - Domestic

-

-

0.0

0.0

-

Domestic Pension Plan Expense

1.4

0.8

0.7

0.4

0.4

Defined Contribution Plans

1.6

1.0

0.7

0.9

0.5

Total Pension Expense

3.0

1.9

1.5

1.3

0.9

Discount Rate - Gratuity

13.00%

14.50%

12.75%

15.00%

10.00%

Expected Rate of Return - Gratuity

13.00%

14.50%

12.75%

15.00%

10.00%

Salary Increase Rate - Gratuity

13.00%

14.50%

12.75%

15.00%

10.00%

 

Annual Balance Sheet

 

Financials in: USD (mil)

 

 

 

31-Dec-2011

31-Dec-2010

31-Dec-2009

31-Dec-2008

31-Dec-2007

UpdateType/Date

Updated Normal
31-Dec-2011

Restated Normal
31-Dec-2011

Updated Normal
31-Dec-2009

Reclassified Normal
31-Dec-2009

Updated Normal
31-Dec-2007

Filed Currency

PKR

PKR

PKR

PKR

PKR

Exchange Rate

89.91

85.645

84.325

79.125

61.625

Auditor

A F Ferguson & Co.

A F Ferguson & Co.

KPMG Taseer Hadi & Co.

KPMG Taseer Hadi & Co.

Taseer Hadi Khalid & Co.

Auditor Opinion

Unqualified

Unqualified

Unqualified

Unqualified

Unqualified

 

 

 

 

 

 

    Cash/Treasury Bank

173.0

167.5

86.4

112.8

111.5

    Foreign Currency Deposit Account

32.1

36.0

13.6

-

-

    Other Bank Balance

25.6

37.8

6.0

11.1

60.2

    Deposit Accounts

26.6

29.1

0.0

-

-

    Lending/Financing

0.0

0.0

178.1

36.2

114.9

    Investments

1,037.2

1,007.2

668.6

455.0

510.6

    Investments in associates

0.5

0.5

1.0

0.9

-

    Investments in Subsidiaries

1.2

1.3

-

-

-

    Advances

1,840.5

-

-

-

-

    Loan Loss Provisions

-192.7

-

-

-

-

    Advances

-

1,561.2

1,083.3

1,055.4

1,417.4

    Capital WIP

6.4

2.2

0.8

3.0

6.5

    Freehold Land

14.0

10.4

0.5

0.5

0.7

    Leasehold Land

25.1

19.6

5.5

5.3

6.8

    Buildings

2.6

5.7

0.5

0.5

0.7

    Building on Lease

36.0

0.0

-

-

-

    Leasehold Property

15.1

34.3

17.2

16.5

17.3

    Office Equipment

49.3

47.4

22.2

17.9

18.1

    Vehicles

2.4

3.3

4.8

4.4

3.9

    Vehicles - Finance Lease

-

-

0.0

0.2

0.3

    Depreciation

-57.8

-52.2

-21.1

-16.8

-15.6

    Software

9.4

8.2

4.8

2.9

2.7

    Customer Relationship

28.4

29.9

-

-

-

    Amortization

-10.2

-6.8

-2.1

-1.0

-0.4

    Deferred Tax

57.7

58.6

15.2

0.0

-

    Other Assets

131.6

120.2

58.9

41.3

35.8

Total Assets

3,254.0

3,121.3

2,144.0

1,746.1

2,291.1

 

 

 

 

 

 

    Bills Payable

34.2

37.6

17.4

19.4

39.1

    Deposits/Other

-

2,280.5

1,464.2

1,296.6

1,653.2

    Fixed deposits

1,089.0

-

-

-

-

    Saving deposits

738.6

-

-

-

-

    Current accounts Remunerative

10.6

-

-

-

-

    Current accounts Non-remunerative

525.0

-

-

-

-

    Margin accounts

23.8

-

-

-

-

    Accrued Expenses

9.7

14.4

5.2

3.8

3.1

    Current Taxation

0.0

5.7

7.9

5.8

8.9

    Security Deposits Against Finan. Lease

26.5

34.2

38.8

45.2

59.5

    Unclaimed dividends

0.4

0.6

0.5

0.5

-

    Other Liabilities

92.1

97.3

30.4

28.6

41.3

    Borrowings From Financial Ins.

441.5

404.4

414.9

164.6

162.2

    Sub-ordinated Loans

48.9

53.7

11.8

12.6

16.2

    Finance Lease

-

-

0.0

0.1

0.1

Total Long Term Debt

490.4

458.1

426.7

177.3

178.6

 

 

 

 

 

 

    Minority Interest

-

-

0.9

0.9

1.2

    Deferred Tax Liability

0.0

0.0

0.0

31.4

43.7

Total Liabilities

3,040.3

2,928.4

1,992.0

1,609.6

2,028.5

 

 

 

 

 

 

    Share Capital

91.7

85.3

72.2

66.9

85.9

    Share Premium

0.1

0.0

-

-

-

    Proposed shares to be issued on amalgama

0.0

0.3

0.0

-

-

    Statutory Reserve

37.7

47.1

43.2

43.0

51.6

    Reserve arising on amalgamation Revenue

0.3

0.3

0.0

-

-

    Non-Distributable Capital Reserve - gain

35.3

38.5

0.0

-

-

    Capital Market Reserve

-

-

4.6

4.9

6.3

    Unappropriated Profit

32.9

22.8

14.8

13.6

24.4

    Surplus Revaluation Of Assets

15.8

-1.5

17.2

8.0

94.3

Total Equity

213.7

192.9

152.0

136.5

262.6

 

 

 

 

 

 

Total Liabilities & Shareholders' Equity

3,254.0

3,121.3

2,144.0

1,746.1

2,291.1

 

 

 

 

 

 

    S/O-Common Stock

927.4

925.1

925.1

925.1

925.1

Total Common Shares Outstanding

927.4

925.1

925.1

925.1

925.1

Accumulated Amortization

10.2

6.8

2.1

1.0

0.4

Full-Time Employees

3,416

3,547

1,931

1,749

1,394

Number of Common Shareholders

17,494

12,947

13,573

13,021

12,317

Capital Lease Payable Within 1 Yr

30.8

54.9

0.0

0.1

0.1

Capital Lease Payable Within 5 Yr

43.5

46.5

0.0

0.0

0.1

Total Capital Leases

74.3

101.5

0.0

0.1

0.1

PV of Funded Obligations - Gratuity

4.2

3.2

2.7

2.1

2.0

FV of Plan Assets - Gratuity

4.1

2.9

2.0

1.4

1.6

Funded Status - Gratuity

-0.1

-0.4

-0.7

-0.8

-0.4

Total Funded Status

-0.1

-0.4

-0.7

-0.8

-0.4

Discount Rate - Gratuity

13.00%

14.50%

12.75%

15.00%

10.00%

Expected Rate of Return - Gratuity

13.00%

14.50%

12.75%

15.00%

10.00%

Salary Increase Rate - Gratuity

13.00%

14.50%

12.75%

15.00%

10.00%

 

 

Annual Cash Flows

 

Financials in: USD (mil)

 

 

 

31-Dec-2011

31-Dec-2010

31-Dec-2009

31-Dec-2008

31-Dec-2007

Period Length

12 Months

12 Months

12 Months

12 Months

12 Months

UpdateType/Date

Updated Normal
31-Dec-2011

Reclassified Normal
31-Dec-2011

Reclassified Normal
31-Dec-2010

Updated Normal
31-Dec-2008

Updated Normal
31-Dec-2007

Filed Currency

PKR

PKR

PKR

PKR

PKR

Exchange Rate (Period Average)

86.346516

85.183279

81.692096

70.718347

60.729836

Auditor

A F Ferguson & Co.

A F Ferguson & Co.

KPMG Taseer Hadi & Co.

KPMG Taseer Hadi & Co.

Taseer Hadi Khalid & Co.

Auditor Opinion

Unqualified

Unqualified

Unqualified

Unqualified

Unqualified

 

 

 

 

 

 

Net Income

17.1

9.7

16.2

25.6

43.6

    Depreciation

12.1

7.8

6.3

6.3

5.6

    Amortization

1.5

1.8

1.2

-

-

    Dividend Income

-7.2

-3.9

-8.1

-16.9

-19.6

    Securities Sale

-

-

-

-25.0

-22.0

    Workers Welfare Fund

0.4

0.2

0.0

-

-

    Provision/Non Performing Financing

3.8

22.4

24.1

22.1

29.6

    Provision/Consumer Financing

-0.9

-1.1

-0.3

-1.5

1.2

    Provision/Investment Diminution

4.7

3.4

3.1

8.4

3.4

    Provision/ Other Assets

2.6

0.7

-0.1

1.4

0.1

    Unrealised (Loss) on Revaluation

0.7

-0.8

0.6

0.0

0.0

    Sale/Fixed

-3.0

-0.3

-0.1

-0.2

-0.1

    Fixed assets written off

0.0

0.3

0.0

-

-

    Charged to defined Benifit Plan

1.4

0.8

-

-

-

    Bad Debts Write - Off

0.4

1.1

0.0

-

-

    Finance Charges On Leased Assets

-

-

0.0

0.0

0.0

    Exchange Gain

-

-

-

-7.6

-5.8

    Lending to Financial Institutions

0.0

190.4

-145.1

48.3

-27.5

    Trading Investments

-26.9

-24.5

-17.3

-0.3

0.4

    Advances

-170.7

-88.3

-119.6

-54.7

-242.9

    Other Assets

-20.7

-6.9

-20.5

-11.6

-10.9

    Bills Payable

-1.7

7.6

-0.9

-12.3

-34.7

    Borrowings/Financial

57.3

-52.7

268.8

42.9

-81.8

    Deposits

223.5

57.1

255.6

10.1

455.9

    Other Liabilities

-11.2

8.2

1.6

-3.2

29.5

    Contributed to gratuity Fund

-1.4

-0.8

-

-

-

    Income Tax Paid

-13.6

-28.0

-46.3

-4.8

-4.2

Cash from Operating Activities

68.5

104.3

219.1

27.0

119.9

 

 

 

 

 

 

    Investment/Securities

-118.3

3.5

-288.8

53.4

-122.1

    Net Investment in HTM Securities

52.9

-11.0

64.3

-124.5

0.0

    Net cash inflow on acquisition

0.0

32.2

0.0

-

-

    Dividend Income

7.0

3.7

7.8

16.7

19.7

    Securities Profit

-

-

-

24.4

21.9

    Capital Expenditure

-13.4

-6.4

-9.6

-8.6

-10.5

    Sale/Property/Equipment

4.1

2.1

0.5

0.6

0.4

Cash from Investing Activities

-67.7

24.1

-225.9

-38.0

-90.6

 

 

 

 

 

 

    Sub-ordinated Loan

-2.3

35.3

0.0

0.0

4.1

    Receipts Against Lease Obligation

-

-

-0.1

-0.1

-0.1

    Dividend Paid to Minority

-

-

-0.1

-0.1

-0.4

    Dividend Paid

-0.1

-

0.0

-18.7

-17.5

    Dividend Paid

-

0.0

-

-

-

Cash from Financing Activities

-2.4

35.3

-0.1

-18.8

-13.9

 

 

 

 

 

 

Foreign Exchange Effects

-

-

-

7.6

5.8

Net Change in Cash

-1.6

163.6

-7.0

-22.3

21.2

 

 

 

 

 

 

Net Cash - Beginning Balance

268.1

108.2

119.8

160.9

166.2

Net Cash - Ending Balance

266.5

271.8

112.8

138.6

187.4

    Cash Taxes Paid

13.6

28.0

46.3

4.8

4.2

 

 

Financial Health

 

Financials in: USD (mil) 

Except for share items (millions) and per share items (actual units)           

Key Indicators USD (mil)

 

Quarter
Ending
30-Sep-2012

Quarter
Ending
Yr Ago

Annual
Year End
31-Dec-2011

1 Year
Growth

3 Year
Growth

5 Year
Growth

Total Revenue1 (?)

46.6

48.76%

153.8

35.43%

22.19%

15.74%

Income Available to Common Excl Extraord Items1 (?)

6.6

24.89%

14.8

7.56%

4.52%

-14.59%

Basic EPS Excl Extraord Items1 (?)

0.01

24.88%

0.02

7.29%

4.43%

-14.63%

Capital Expenditures2 (?)

9.7

7.77%

13.4

112.42%

23.57%

6.64%

Cash from Operating Activities2 (?)

-152.0

-

68.5

-33.44%

45.80%

-

Free Cash Flow (?)

-157.9

-

52.9

-42.94%

54.27%

-

Total Assets3 (?)

3,179.7

10.65%

3,254.0

9.44%

28.41%

20.43%

Total Liabilities3 (?)

2,954.9

9.89%

3,040.3

8.99%

28.99%

21.87%

Total Long Term Debt3 (?)

430.1

25.16%

490.4

12.39%

46.47%

24.10%

Employees3 (?)

-

-

3416

-3.69%

25.00%

18.48%

Total Common Shares Outstanding3 (?)

927.4

0.00%

927.4

0.25%

0.08%

0.05%

1-ExchangeRate: PKR to USD Average for Period

94.500734

 

86.346516

 

 

 

2-ExchangeRate: PKR to USD Average for Period

92.300693

 

86.346516

 

 

 

3-ExchangeRate: PKR to USD Period End Date

94.567713

 

89.910000

 

 

 

Banking Industry Specific USD (mil)

 

31-Dec-2011

31-Dec-2010

31-Dec-2009

31-Dec-2008

31-Dec-2007

 

Interest Income, Bank1 (?)

333.8

231.4

207.6

189.5

191.2

 

Total Interest Expense1 (?)

227.2

163.4

146.2

119.3

122.6

 

Loan Loss Provision1 (?)

8.1

25.8

26.8

29.0

34.2

 

Cash & Due from Banks3 (?)

198.6

205.3

92.4

123.9

171.7

 

Loan Loss Provision2 (?)

10.3

25.4

26.8

30.3

34.3

 

Total Deposits3 (?)

2,413.5

2,314.7

1,503.1

1,341.8

1,712.8

 

1-ExchangeRate: PKR to USD Average for Period

86.346516

85.183279

81.692096

70.718347

60.729836

 

2-ExchangeRate: PKR to USD Average for Period

86.346516

85.183279

81.692096

70.718347

60.729836

 

3-ExchangeRate: PKR to USD Period End Date

89.910000

85.645000

84.325000

79.125000

61.625000

 

Key Ratios

 

31-Dec-2011

31-Dec-2010

31-Dec-2009

31-Dec-2008

31-Dec-2007

Profitability

Pretax Margin (?)

5.13%

4.20%

7.78%

13.49%

22.79%

Net Profit Margin (?)

4.44%

6.04%

7.12%

8.37%

19.06%

Financial Strength

Long Term Debt/Equity (?)

2.29

2.38

2.81

1.30

0.68

Total Debt/Equity (?)

2.29

2.38

2.81

1.30

0.68

Management Effectiveness

Return on Assets (?)

0.46%

0.53%

0.76%

0.81%

1.73%

Return on Equity (?)

7.17%

8.11%

10.22%

8.31%

14.77%

Efficiency

Receivables Turnover (?)

0.18

-

0.88

1.46

1.29

Asset Turnover (?)

0.05

0.04

0.05

0.05

0.06

Market Valuation USD (mil)

P/E (TTM) (?)

8.15

.

Enterprise Value2 (?)

299.0

Price/Sales (TTM) (?)

0.69

.

Price/Book (MRQ) (?)

0.46

Enterprise Value/EBITDA (TTM) (?)

1.25

.

Market Cap1 (?)

99.2

1-ExchangeRate: PKR to USD on 1-Feb-2013

97.699894

 

 

 

2-ExchangeRate: PKR to USD on 30-Sep-2012

94.567713

 

 

 

 

 

Annual Ratios

 

Financials in: USD (mil) 

Except for share items (millions) and per share items (actual units)           

 

 

 

31-Dec-2011

31-Dec-2010

31-Dec-2009

31-Dec-2008

31-Dec-2007

Financial Strength

Long Term Debt/Equity (?)

2.29

2.38

2.81

1.30

0.68

Total Debt/Equity (?)

2.29

2.38

2.81

1.30

0.68

Long Term Debt/Total Capital (?)

0.70

0.70

0.74

0.57

0.40

Total Debt/Total Capital (?)

0.70

0.70

0.74

0.57

0.40

Payout Ratio (?)

0.00%

0.00%

0.00%

0.00%

59.82%

Effective Tax Rate (?)

13.38%

-43.92%

8.14%

37.72%

16.21%

Total Capital1 (?)

704.1

650.9

578.8

313.8

441.1

 

 

 

 

 

 

Efficiency

Asset Turnover (?)

0.05

0.04

0.05

0.05

0.06

Receivables Turnover (?)

0.18

-

0.88

1.46

1.29

Days Receivables Outstanding (?)

2,036.61

-

417.05

249.23

282.88

Revenue/Employee2 (?)

43,228

32,272

48,049

52,593

87,765

 

 

 

 

 

 

Profitability

Pretax Margin (?)

5.13%

4.20%

7.78%

13.49%

22.79%

Net Profit Margin (?)

4.44%

6.04%

7.12%

8.37%

19.06%

 

 

 

 

 

 

Management Effectiveness

Return on Assets (?)

0.46%

0.53%

0.76%

0.81%

1.73%

Return on Equity (?)

7.17%

8.11%

10.22%

8.31%

14.77%

 

 

 

 

 

 

Valuation

Free Cash Flow/Share2 (?)

0.06

0.11

0.22

0.02

0.12

Operating Cash Flow/Share 2 (?)

0.07

0.11

0.23

0.03

0.13

1-ExchangeRate: PKR to USD Period End Date

89.91

85.645

84.325

79.125

61.625

2-ExchangeRate: PKR to USD Average for Period

89.91

85.645

84.325

79.125

61.625

 

Current Market Multiples

Market Cap/Earnings (TTM) (?)

8.15

Market Cap/Equity (MRQ) (?)

0.46

Market Cap/Revenue (TTM) (?)

0.33

Market Cap/EBIT (TTM) (?)

0.45

Market Cap/EBITDA (TTM) (?)

0.43

Enterprise Value/Earnings (TTM) (?)

23.76

Enterprise Value/Equity (MRQ) (?)

1.33

Enterprise Value/Revenue (TTM) (?)

0.97

Enterprise Value/EBIT (TTM) (?)

1.31

Enterprise Value/EBITDA (TTM) (?)

1.25

 

 

 

 

 

 


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.54.29

UK Pound

1

Rs.84.09

Euro

1

Rs.72.44

 

INFORMATION DETAILS

 

Report Prepared by :

SDA

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

----

NB

New Business

----

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                 Payment record (10%)

Credit history (10%)                    Market trend (10%)                                Operational size (10%)

MIRA INFORM REPORT

 

 

Report Date :

20.02.2013

 

 

 

Tel. No. :

001-212-765 6518

 

IDENTIFICATION DETAILS

 

Name :

RAWAT GEMS LLC

 

 

Registered Office :

608 5th Avenue, Ste 402, New York, NY 10020

 

 

Country :

United States

 

 

Date of Incorporation :

13.01.2000

 

 

Legal Form :

LLC

 

 

Line of Business :

Importer, manufacturer, wholesaler and retailer of diamonds and precious stones.

 

 

No. of Employees :

3

 

RATING & COMMENTS

 

MIRA’s Rating :

B

 

RATING

STATUS

PROPOSED CREDIT LINE

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

Small

 

Status :

Small Company

Payment Behaviour :

No Complaints

Litigation :

Clear

 

 

 

NOTES:

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

 

ECGC Country Risk Classification List – June 30th, 2012

 

Country Name

Previous Rating

(31.03.2012)

Current Rating

(30.06.2012)

United States 

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 


 

United States - ECONOMIC OVERVIEW

 

The US has the largest and most technologically powerful economy in the world, with a per capita GDP of $48,100. In this market-oriented economy, private individuals and business firms make most of the decisions, and the federal and state governments buy needed goods and services predominantly in the private marketplace. US business firms enjoy greater flexibility than their counterparts in Western Europe and Japan in decisions to expand capital plant, to lay off surplus workers, and to develop new products. At the same time, they face higher barriers to enter their rivals' home markets than foreign firms face entering US markets. US firms are at or near the forefront in technological advances, especially in computers and in medical, aerospace, and military equipment; their advantage has narrowed since the end of World War II. The onrush of technology largely explains the gradual development of a "two-tier labor market" in which those at the bottom lack the education and the professional/technical skills of those at the top and, more and more, fail to get comparable pay raises, health insurance coverage, and other benefits. Since 1975, practically all the gains in household income have gone to the top 20% of households. Since 1996, dividends and capital gains have grown faster than wages or any other category of after-tax income. Imported oil accounts for nearly 55% of US consumption. Oil prices doubled between 2001 and 2006, the year home prices peaked; higher gasoline prices ate into consumers' budgets and many individuals fell behind in their mortgage payments. Oil prices increased another 50% between 2006 and 2008. In 2008, soaring oil prices threatened inflation and caused a deterioration in the US merchandise trade deficit, which peaked at $840 billion. In 2009, with the global recession deepening, oil prices dropped 40% and the US trade deficit shrank, as US domestic demand declined, but in 2011 the trade deficit ramped back up to $803 billion, as oil prices climbed once more. The global economic downturn, the sub-prime mortgage crisis, investment bank failures, falling home prices, and tight credit pushed the United States into a recession by mid-2008. GDP contracted until the third quarter of 2009, making this the deepest and longest downturn since the Great Depression. To help stabilize financial markets, in October 2008 the US Congress established a $700 billion Troubled Asset Relief Program (TARP). The government used some of these funds to purchase equity in US banks and industrial corporations, much of which had been returned to the government by early 2011. In January 2009 the US Congress passed and President Barack OBAMA signed a bill providing an additional $787 billion fiscal stimulus to be used over 10 years - two-thirds on additional spending and one-third on tax cuts - to create jobs and to help the economy recover. In 2010 and 2011, the federal budget deficit reached nearly 9% of GDP; total government revenues from taxes and other sources are lower, as a percentage of GDP, than that of most other developed countries. The wars in Iraq and Afghanistan required major shifts in national resources from civilian to military purposes and contributed to the growth of the US budget deficit and public debt - through 2011, the direct costs of the wars totaled nearly $900 billion, according to US government figures. In March 2010, President OBAMA signed into law the Patient Protection and Affordable Care Act, a health insurance reform bill that will extend coverage to an additional 32 million American citizens by 2016, through private health insurance for the general population and Medicaid for the impoverished. Total spending on health care - public plus private - rose from 9.0% of GDP in 1980 to 17.9% in 2010. In July 2010, the president signed the DODD-FRANK Wall Street Reform and Consumer Protection Act, a law designed to promote financial stability by protecting consumers from financial abuses, ending taxpayer bailouts of financial firms, dealing with troubled banks that are "too big to fail," and improving accountability and transparency in the financial system - in particular, by requiring certain financial derivatives to be traded in markets that are subject to government regulation and oversight. Long-term problems include inadequate investment in deteriorating infrastructure, rapidly rising medical and pension costs of an aging population, sizable current account and budget deficits - including significant budget shortages for state governments - energy shortages, and stagnation of wages for lower-income families.

 

Source : CIA

 


 

 

COMPANY NAME & ADDRESS

 

RAWAT GEMS LLC

 

Address:                        608 5th Avenue, Ste 402, New York, NY 10020 - USA

 

Telephone:                     +1 212-765-6505

 

Fax:                               +1 212-765-6518

 

Website:                                    www.rawatgems.com

 

Corporate ID#:                2461281

 

State:                            New York State

 

Judicial form:                  LLC  

 

Date incorporated:          01-13-2000

 

Stock Value:                  A LLC has no stock

 

Name of manager:           Kialash RAWAT

 

ACTIVITIES & OPERATIONS

 

IST

 

Business:

 

The Company is importer, manufacturer, wholesaler and retailer of diamonds and precious stones.

 

The Company will exhibit at the Hong Kong International Jewellery Show, on

5-9 March 2013.

 

EIN:                  -

 

Staff:     3

 

Operations & branches:

 

At the headquarters, we find a small workshop and office, on lease.

 

 

 

 

Enlarged view of image

 

 

SHAREHOLDERS & MANAGERS

 

Shareholders:

 

This is a RAWAT family owned Company.

 

 

Management:

 

Kialash RAWAT is the President, Director and CEO.

No antecedents available.

 

Jay MO is the Account Manager.

 

As far as we know, they are not involved in other local corporations.

 

 

Subsidiaries

And partnership:                        None

 

FINANCIALS

 

In United States, privately held corporations are not required to publish any financials.

 

On a direct call, nobody accepted to answer our questions.

We sent a fax but no answer received.

 

However, sales estimate for year 2011 is in the range of USD 500,000+

 

The business is said to be profitable.

 

Banks:  Bank of America

            592 5th Ave, New York, NY 10036

            Ph: 212-852-8870

 

                       

 

LEGAL FILINGS

 

Legal filings & complaints:

 

As of today date, there is no legal filing pending with the Courts.

 

Secured debts summary (UCC):   None

 

COMPANY CREDIT HISTORY

 

Trade references:

 

Date reported:                February 2013

High credit:                    USD 600

Now owing:                    0

Past due:                      0

Last purchase:               January 2013

Line of business:            Office supply

Paying status:               On terms

 

Date reported:                February 2013

High credit:                    USD 4,000+

Now owing:                    0

Past due:                      0

Last purchase:               January 2013

Line of business:            Payroll

Paying status:               As agreed

 

Date reported:                February 2013

High credit:                    USD 300

Now owing:                    0

Past due:                      0

Last purchase:               January 2013

Line of business:            Telecommunications

Paying status:               On terms

 

Domestic credit history:

 

Domestic credit history appears as follow:

 

Monthly Payment Trends - Recent Activity

 

Date

Balance

Current

Up to 30 DBT

31-60 DBT

61-90 DBT

>90 DBT

08/12

$800

100%

0%

0%

0%

0%

09/12

$800

100%

0%

0%

0%

0%

10/12

$900

100%

0%

0%

0%

0%

11/12

$900

100%

0%

0%

0%

0%

12/12

$900

100%

0%

0%

0%

0%

01/13

$900

100%

0%

0%

0%

0%

 

National Credit Bureaus gave a satisfying credit rating.

 

 

International credit history:

 

Payments of imports are currently made on terms.

 

Other comments:

 

 

The Company maintains a regular business.

 

The bank confirmed an account on 4 figures high.

 

The Company is in good standing.

This means that all local and federal taxes were paid on due date.

 

The risk is low.

 

 

Our opinion:

 

A business connection may be conducted.

 


 

DIAMOND INDUSTRY – INDIA

 

-          From time immemorial, India is well known in the world as the birthplace for diamonds.  It is difficult to trace the origin of diamonds but history says that in the remote past, diamonds were mined only in India. Diamond production in India can be traced back to almost 8th Century B.C.  India, in fact, remained undisputed leader till 18th Century when Brazilian fields were discovered in 1725 followed by emergence of S. Africa, Russia and Australia.

-          The achievement of the Indian diamond industry was possible only due to combination of the manufacturing skills of the Indian workforce and the untiring and unflagging efforts of the Indian diamantaires, supported by progressive Government policies.

-          The area of study of family owned diamond businesses derives its importance from the huge conglomerate of family run organizations which operate in the diamond industry since many generations.

-          Some of the basic traits of family run business enterprises include spirit of entrepreneurship, mutual trust lowers transaction costs, small, nimble and quick to react, information as a source of advantage and philanthropy.

-          Family owned diamond businesses need to improve on many fronts including higher standard of corporate governance, long-term performance – focused strategies, modern management and technology.

-          The diamond jewellery industry in India today may be more than Rs 60000 mil and is rated amongst the fastest growing  in the world. Indi ranks third in the world in domestic diamond consumption.

-          Utmost caution is to be exercised while dealing with some medium and large diamond traders which are usually engaged in fictitious import – export, inter-company transactions, financially assisted by banks. In the process, several public sector banks lost several hundred million rupees. They mostly diverted borrowed money for diamond business into real estate and capital markets.

-          Excerpts from Times of India dated 30th October 2010 is as under –

DIAMOND SAGA – DIRTY DOZEN STUCK WITH 2K CR DEBT

This could be the biggest credibility crisis the Indian diamond industry has ever faced. Fifteen banks run the risk of losing Rs 2000 crore lent to a dozen diamond firms in Surat. Until about two months ago, they had not repaid  these dues. Bankers believe many diamantaires borrowed money during the economic downturn two years ago and diverted funds to businesses like real estate and capital markets. Many of themselves made money from these businesses but their diamond companies have gone sick and declared insolvency.

-          Most of the money borrowed from the banks in the name of their diamond business has been diverted in real estate and the share market. The banks are not in a position to seize their properties because in many cases, these were purchased in the name of their relatives and friends.

 

 

 


 

 

Standard & Poor’s

United States of America Long-Term Rating Lowered To 'AA+' Due To Political Risks, Rising Debt Burden; Outlook Negative

Publication date: 05-Aug-2011 20:13:14 EST


 

·        We have lowered our long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA' and affirmed the 'A-1+' short-term rating.

·         We have also removed both the short- and long-term ratings from CreditWatch negative.

·        The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics.

·        More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.

·        Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government's debt dynamics any time soon.

·        The outlook on the long-term rating is negative. We could lower the long-term rating to 'AA' within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.

 

TORONTO (Standard & Poor's) Aug. 5, 2011--Standard & Poor's Ratings Services said today that it lowered its long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA'. Standard & Poor's also said that the outlook on the long-term rating is negative. At the same time, Standard & Poor's affirmed its 'A-1+' short-term rating on the U.S. In addition, Standard & Poor's removed both ratings from CreditWatch, where they were placed on July 14, 2011, with negative implications.

 

The transfer and convertibility (T&C) assessment of the U.S.--our assessment of the likelihood of official interference in the ability of U.S.-based public- and private-sector issuers to secure foreign exchange for

debt service--remains 'AAA'.

 

We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.

 

Our lowering of the rating was prompted by our view on the rising public debt burden and our perception of greater policymaking uncertainty, consistent with our criteria (see "Sovereign Government Rating Methodology and Assumptions ," June 30, 2011, especially Paragraphs 36-41). Nevertheless, we view the U.S. federal government's other economic, external, and monetary credit attributes, which form the basis for the sovereign rating, as broadly unchanged.

 

We have taken the ratings off CreditWatch because the Aug. 2 passage of the Budget Control Act Amendment of 2011 has removed any perceived immediate threat of payment default posed by delays to raising the government's debt ceiling. In addition, we believe that the act provides sufficient clarity to allow us to evaluate the likely course of U.S. fiscal policy for the next few years.

 

The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements,

the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.

 

Our opinion is that elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. public debt burden in a manner consistent with a 'AAA' rating and with 'AAA' rated sovereign peers (see Sovereign Government Rating Methodology and Assumptions," June 30, 2011, especially Paragraphs 36-41). In our view, the difficulty in framing a consensus on fiscal policy weakens the government's ability to manage public finances and diverts attention from the debate over how to achieve more balanced and dynamic economic growth in an era of fiscal stringency and private-sector deleveraging (ibid). A new political consensus might (or might not) emerge after the 2012 elections, but we believe that by then, the government debt burden will likely be higher, the needed medium-term fiscal adjustment potentially greater, and the inflection point on the U.S. population's demographics and other age-related spending drivers closer at hand (see "Global Aging 2011: In The U.S., Going Gray Will Likely Cost Even More Green, Now," June 21, 2011).

 

Standard & Poor's takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.'s finances on a sustainable footing.

 

The act calls for as much as $2.4 trillion of reductions in expenditure growth over the 10 years through 2021. These cuts will be implemented in two steps: the $917 billion agreed to initially, followed by an additional $1.5 trillion that the newly formed Congressional Joint Select Committee on Deficit Reduction is supposed to recommend by November 2011. The act contains no measures to raise taxes or otherwise enhance revenues, though the committee could recommend them.

 

The act further provides that if Congress does not enact the committee's recommendations, cuts of $1.2 trillion will be implemented over the same time period. The reductions would mainly affect outlays for civilian discretionary spending, defense, and Medicare. We understand that this fall-back mechanism is designed to encourage Congress to embrace a more balanced mix of expenditure savings, as the committee might recommend.

 

We note that in a letter to Congress on Aug. 1, 2011, the Congressional Budget Office (CBO) estimated total budgetary savings under the act to be at least $2.1 trillion over the next 10 years relative to its baseline assumptions. In updating our own fiscal projections, with certain modifications outlined below, we have relied on the CBO's latest "Alternate Fiscal Scenario" of June 2011, updated to include the CBO assumptions contained in its Aug. 1 letter to Congress. In general, the CBO's "Alternate Fiscal Scenario" assumes a continuation of recent Congressional action overriding existing law.

 

We view the act's measures as a step toward fiscal consolidation. However, this is within the framework of a legislative mechanism that leaves open the details of what is finally agreed to until the end of 2011, and Congress and the Administration could modify any agreement in the future. Even assuming that at least $2.1 trillion of the spending reductions the act envisages are implemented, we maintain our view that the U.S. net general government debt burden (all levels of government combined, excluding liquid financial assets) will likely continue to grow. Under our revised base case fiscal scenario--which we consider to be consistent with a 'AA+' long-term rating and a negative outlook--we now project that net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 79% in 2015 and 85% by 2021. Even the projected 2015 ratio of sovereign indebtedness is high in relation to those of peer credits and, as noted, would continue to rise under the act's revised policy settings.

 

Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act. Key macroeconomic assumptions in the base case scenario include trend real GDP growth of 3% and consumer price inflation near 2% annually over the decade.

 

Our revised upside scenario--which, other things being equal, we view as consistent with the outlook on the 'AA+' long-term rating being revised to stable--retains these same macroeconomic assumptions. In addition, it incorporates $950 billion of new revenues on the assumption that the 2001 and 2003 tax cuts for high earners lapse from 2013 onwards, as the Administration is advocating. In this scenario, we project that the net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 77% in 2015 and to 78% by 2021.

 

Our revised downside scenario--which, other things being equal, we view as being consistent with a possible further downgrade to a 'AA' long-term rating--features less-favorable macroeconomic assumptions, as outlined below and also assumes that the second round of spending cuts (at least $1.2 trillion) that the act calls for does not occur. This scenario also assumes somewhat higher nominal interest rates for U.S. Treasuries. We still believe that the role of the U.S. dollar as the key reserve currency confers a government funding advantage, one that could change only slowly over time, and that Fed policy might lean toward continued loose monetary policy at a time of fiscal tightening. Nonetheless, it is possible that interest rates could rise if investors re-price relative risks. As a result, our alternate scenario factors in a 50 basis point (bp)-75 bp rise in 10-year bond yields relative to the base and upside cases from 2013 onwards. In this scenario, we project the net public debt burden would rise from 74% of GDP in 2011 to 90% in 2015 and to 101% by 2021.

 

Our revised scenarios also take into account the significant negative revisions to historical GDP data that the Bureau of Economic Analysis announced on July 29. From our perspective, the effect of these revisions underscores two related points when evaluating the likely debt trajectory of the U.S. government. First, the revisions show that the recent recession was deeper than previously assumed, so the GDP this year is lower than previously thought in both nominal and real terms. Consequently, the debt burden is slightly higher. Second, the revised data highlight the sub-par path of the current economic recovery when compared with rebounds following previous post-war recessions. We believe the sluggish pace of the current economic recovery could be consistent with the experiences of countries that have had financial crises in which the slow process of debt deleveraging in the private sector leads to a persistent drag on demand. As a result, our downside case scenario assumes relatively modest real trend GDP growth of 2.5% and inflation of near 1.5% annually going forward.

 

When comparing the U.S. to sovereigns with 'AAA' long-term ratings that we view as relevant peers--Canada, France, Germany, and the U.K.--we also observe, based on our base case scenarios for each, that the trajectory of the U.S.'s net public debt is diverging from the others. Including the U.S., we estimate that these five sovereigns will have net general government debt to GDP ratios this year ranging from 34% (Canada) to 80% (the U.K.), with the U.S. debt burden at 74%. By 2015, we project that their net public debt to GDP ratios will range between 30% (lowest, Canada) and 83% (highest, France), with the U.S. debt burden at 79%. However, in contrast with the U.S., we project that the net public debt burdens of these other sovereigns will begin to decline, either before or by 2015.

 

Standard & Poor's transfer T&C assessment of the U.S. remains 'AAA'. Our T&C assessment reflects our view of the likelihood of the sovereign restricting other public and private issuers' access to foreign exchange needed to meet debt service. Although in our view the credit standing of the U.S. government has deteriorated modestly, we see little indication that official interference of this kind is entering onto the policy agenda of either Congress or the Administration. Consequently, we continue to view this risk as being highly remote.

 

The outlook on the long-term rating is negative. As our downside alternate fiscal scenario illustrates, a higher public debt trajectory than we currently assume could lead us to lower the long-term rating again. On the other hand, as our upside scenario highlights, if the recommendations of the Congressional Joint Select Committee on Deficit Reduction--independently or coupled with other initiatives, such as the lapsing of the 2001 and 2003 tax cuts for high earners--lead to fiscal consolidation measures beyond the minimum mandated, and we believe they are likely to slow the deterioration of the government's debt dynamics, the long-term rating could stabilize at 'AA+'.


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.54.28

UK Pound

1

Rs.84.09

Euro

1

Rs.72.44

 

INFORMATION DETAILS

 

Report Prepared by :

NLM

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

----

NB

New Business

----

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                 Payment record (10%)

Credit history (10%)                    Market trend (10%)                                Operational size (10%)

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