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Report Date : |
29.04.2014 |
IDENTIFICATION DETAILS
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Name : |
BANK AL-HABIB LIMITED |
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Registered Office : |
126-C, Old Bahawalpur Road, Multan |
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Country : |
Pakistan |
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Financials (as on) : |
31.12.2012 |
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Date of Incorporation : |
1991 |
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Com. Reg. No.: |
0025432 |
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Legal Form : |
Public Limited
Company |
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Line of Business : |
Subject is engaged in providing Commercial Banking
and related services in Pakistan |
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No. of Employees : |
2,200 - 2,400 |
RATING & COMMENTS
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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 |
|
Status : |
Good |
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Payment Behaviour : |
Regular |
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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 – March 31, 2014
|
Country Name |
Previous Rating (31.12.2013) |
Current Rating (31.03.2014) |
|
Pakistan |
B2 |
B2 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
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Low Risk |
A2 |
|
Moderately Low Risk |
B1 |
|
Moderate Risk |
B2 |
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Moderately High Risk |
C1 |
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High Risk |
C2 |
|
Very High Risk |
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 was 6.6% in 2013, 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. 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 following two years, 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 about 3.5% per year from 2008 to 2013.
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 and rapidly urbanizing population, more than
half of which is under 22. Other long term challenges include expanding
investment in education and healthcare, adapting to the effects of climate
change and natural disasters, and reducing dependence on foreign donors.
|
Source
: CIA |
BANK AL-HABIB LIMITED
|
Registered Address |
|
126-C, Old Bahawalpur Road, Multan, Pakistan |
|
Tel # |
92 (61) 111-786-110, 4580314 - 16 (3 Lines) |
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Fax # |
92 (61) 4582471 |
|
a. |
Nature of Business |
Engaged in providing Commercial Banking and
related services in Pakistan |
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b. |
Year Established |
1991 |
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c. |
Registration # |
0025432 |
With a network of
308 branches (2011: 290 branches), 82 sub-branches (2011: 61) and 02 representative
offices (2011: 02).The branch network of the Bank includes a wholesale branch
in the Kingdom of Bahrain (2011: 01), a branch in Karachi Export Processing
Zone (2011: 01) and 13 Islamic Banking branches (2011: 11).
|
Ernst & Young Ford Rhodes Sidat Hyder (Chartered Accountants) |
|
Subject Company
was established as a Public Limited Company in 1991 and is listed at stock
exchanges of Pakistan |
|
Names |
Designation |
|
Mr. Ali Raza D. Habib Mr. Abbas D. Habib Mr. Anwar Haji Karim Mr. Shameem Ahmed Mr. Imtiaz Alam Hanfi Mr. Murtaza H. Habib Mr. Qumail R. Habib Mr. Syed Mazhar Abbas Mr. Manzoor Ahmed Mr. Safar Ali Lakhani |
Chairman CEO / Managing Director Director Director Director Director Director Director Director Director |
|
Categories |
Percentage (%) |
|
Individuals Investment Companies Insurance Companies Joint Stock Companies Financial Institutions Modaraba Companies Mutual Funds Foreign Companies Pension Funds Others |
59.16 0.00 8.44 6.08 5.12 1.96 10.08 3.12 0.28 5.76 |
|
(1) Habib Sugar Mills
Limited, Pakistan. (2) Habib Insurance
Co. Limited, Pakistan. |
Engaged in providing Commercial Banking and
related services in Pakistan. The bank also handles treasury transactions for
the Government of Pakistan (GOP) as an agent to the State Bank of Pakistan (SBP).
Currently bank offer services including Demand Drafts, Swift System, Letter of
Credit, Pay Order, Mail Transfer,
Foreign Remittance, Short Term Investment, Equity Investment, Commercial
Finance, Trade Finance, International Finance & Home Finance
2,200 - 2,400
The economy was
challenged by the rise of inflationary expectations due to reduction in
electricity subsidy, withdrawal of tax exemptions and enhancement of tax
levied. Some of the fiscal measures, namely the two-phased electricity tariff
increase in the first half of the fiscal year along with increase in sales tax
and income tax rates, contributed to inflationary pressure. However, some of
the other fiscal measures implemented by the government are expected to impact
the inflation outlook of FY14 - and alleviate inflationary pressures - by
reducing budgetary borrowings from the banking system. Trade deficit is
expected to increase to 7 percent of the GDP - with the quantum of the deficit
projected to USD 17.7 Bill in FY14. This estimate accounts for the anticipated
augmentation of 6 percent in export receipts due to the recently adopted GSP
Plus status and the growth of an approximate 8 percent in import payments
driven by an expected increase in domestic industry activity. The relaxation in
monetary policy played a role in the growth in private sector credit and thus,
signs of economic stimulation have been sighted. However, worsening inflation
outlook prompted the SBP to increase the policy rate by 50 basis points twice
in the year under review - once in September and then again in November.
Further, in September 2013, the SBP linked the minimum rate of return on
average balances held in saving deposits with the interest rate corridor. Designed
to ensure that deposit rates respond more strongly to policy rate changes, and
geared towards deposit mobilization and growth in deposits, this measure will
increase the banking sector's cost of deposits. The Karachi Stock Exchange
registered a growth of 15% during the year 2013 mainly due to foreign investors
responding to the confidence building measures of Government for the equity
markets.
Habib Esmail, founder of Habib Group, started his career in Bombay in
1891 at the age of 13 on a salary of Rs. 5 per month in a firm that dealt in
copper and brass utensils. He worked day and night, arriving before the shop
opened, staying till late in the night, and then walking home to save money on
conveyance. No wonder that in the short span of five years, at the age of 18,
he was made a partner in the firm. Even at that young age, he had established
an excellent reputation for honesty, hard work, fair play, trustworthiness,
humility. These values continue to guide the activities of Habib Group to this
day. During the next 17 years, he captured over 60 percent of the local
utensils business and diversified into export of copper, cotton scrap iron and
manganese ore, selling to East Africa, Italy, France and Great Britain. Being a
person of great insight, he sent his representatives to Europe in 1912 and
established branch offices in Genoa and Vienna. Simultaneously, he initiated
business relationships with Japan and China.
His reputation for honesty and fair play was so well known that his
customers and local merchants would leave their surplus funds with him for
safe-keeping and investment, thus establishing the foundation of the family's
banking business. In 1921, he started Habib & Sons. The firm traded in
cotton, oil seeds, and bullion and acted as a merchant bank. It eventually
became the flagship of the family and the parent family and the parent company
of Habib Bank Limited. Habib Bank Limited was established in Bombay in 1941 by
the sons of Habib Esmail. The bank had over 30 branches operating in India at
the time of partition. Quaid-e-Azam Mohammad Ali Jinnah reposed confidence in
the bank by opening his personal account. On the creation of Pakistan in 1947,
and following the advice of the Quaid-e-Azam, Habib Family shifted all of its
businesses including Habib Bank to Pakistan. The bank played a vital role in
meeting the financial and banking needs of Pakistan. It continued to record
tremendous growth and progress and emerged as the leading private-sector
commercial bank in Pakistan when it was taken over by the Government of
Pakistan along with all other Pakistani banks on January 1, 1974. In 1991, the
government again decided to allow the private sector to establish commercial
banks in the country. Dawood Habib Group was amongst the first to be granted
permission to set up a new bank under this policy. Bank AL Habib Limited was
incorporated in October 1991 by the grandsons of Habib Esmail and started
operations in January 1992. Although Bank AL Habib commenced operations in
1992, it embodies the same high standards of integrity, prudence, and trust
which have characterized Habib Family's banking operations in Pakistan and
abroad for about 70 years. The bank is particularly conscious of the trust
reposed in it by the depositors, and its prime duty is to protect and honour
this trust all times. Guided by the values taught and practiced by Habib Esmail
more than a century ago, the bank has continued to grow and progress in all
areas of its operations. In a short span of 20 years, the Bank's assets have
grown to more than Rs. 380 billion, with a network of 420 branches and
sub-branches, a Wholesale Branch in the Kingdom of Bahrain, and Representative
Offices in Dubai, Istanbul and Beijing, China.
The Pakistan Credit Rating Agency (PACRA) has maintained long term and
short term entity ratings of Bank AL Habib Limited at "AA+" (Double A
Plus) and "A1+" (A One Plus), respectively. The ratings of listed,
unsecured subordinated TFC issue of PKR 1,500mln and two privately placed,
unsecured subordinated TFCs issues of PKR 2,000mln and PKR 3,000mln have also
been maintained at "AA" (Double A). These rating denote a very low
expectations of credit risk emanating from a very strong capacity for timely
payment of financial commitments.The rating reflect Bank AL Habib's strong
performance, exceptional asset quality, and stable financial profile. The
rating draw comfort from Bank's experienced management team that, while staying
prudent in its practices, has built deep rooted relationship with its customers-borrowers
as well as depositors. The rating incorporates the bank’s ability to capitalize
on its expanding branch network augmenting deposit mobilization. The management
continued to place deposits in liquid investments while seeking diversification
in its advances portfolio at the same time.
Bank will
continue to enhance its market share in the country's trade / commercial
activity by servicing & enhancing its customer base.
|
Currency |
Unit |
Pakistani Rupee |
|
US Dollar |
1 |
Rs. 99.50 |
|
UK Pound |
1 |
Rs. 167.00 |
|
Euro |
1 |
Rs. 137.25 |
Bank
Al Habib Limited
has its headquarters in Karachi, Pakistan. The bank provides both commercial and
public sector banking services. Bank enjoys good reputation in Pakistan as well
as in abroad. Subject can be considered for moderate business engagements.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.60.50 |
|
|
1 |
Rs.101.69 |
|
Euro |
1 |
Rs.83.62 |
INFORMATION DETAILS
|
Analysis Done by
: |
RAS |
|
|
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|
Report Prepared
by : |
NNA |
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%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.