Local Commercial Banks.
The subsequent move to liquidate the foreign currency deposits liability, which accounted for a large share of deposits in the banking industry, escalated the cost of deposits in the banking system. After the same time, lack of suitably secure lending opportunities in the uncertain economic climate and the resultant high liquidity in the inter bank market sharply curtailed the income stream of banks. Country's foreign exchange reserves dipped to a low of US$400 million with exchange rate moving to US$1 Rs. 65 in the open market. Foreign trade contracted sharply, while industrial and commercial activity also stood heavily curtailed during the fiscal year 1997-98.
Moreover, the central bank in an effort to preserve precious foreign exchange introduced a two tier exchange rate system and imposed import compression methods (cash margins) to improve the balance of payments position. This strategy was successful with imports falling almost 20 per cent during the 1st half of the current fiscal year. The current account position improved significantly as a result. However, the fall in imports brought about other structural problems. Since the primary revenue earner for the government is import tariff, the fall in imports resulted in a sharp drop in revenue. Efforts to supplement this drop by expanding the tax base has not been successful and the government has been forced to cut development expenditure. As a result of the culmination of the above factors, the economy has gone into a slow down and is in recession.
There are 14 local Commercial Banks on the list of Karachi Stock Exchange at present. The total Paid-up of these Banks stood at Rs. 9598.60 million and Free Reserves and Surplus at Rs. 7432.64 million. General Breakup Value per Rs. 10/- worked out to Rs. 17.74. High Break-up Values in the descending order as compared to preceding year were as follows:
Break-up Value Per Share (per Rs. 10) of Commercial (Rs. in million) 1998 1997 Metropolitan Bank 27.48 27.65 Bank Al-Habib 26.78 25.79 Bank of Punjab 23.18 23.75 MCB 19.87 19.43 Askari Com. 19.64 18.89 Soneri Bank 19.37 23.05 Faysal Bank 17.67 19.86 Union Bank 15.43 17.29 Prime Commercial 13.52 15.93
It will be seen from the above table almost all the companies registered downward trend in their Break-up Values except Bank Al-habib and Askari Commercial. Bank Al-Habib showed an increase of 3.83 per cent on its Breakup Value over the last year due to increase in its reserves from Rs. 521.12 million to Rs. 636.79 million during the period under review despite increase in its Paid-up capital from Rs. 330.OO million to Rs. 379.50 million. Similarly, Askari Commercial registered an increase of 3.97 per cent in its Break-up Value over the previous year due to increase in its reserves by 13.76 per cent in 1998. The highest decline of 15.97 per cent in Break-up Value from the above table was recorded by Soneri Bank from 23.05 to Rs. 19.37 due to increase in its Paid-up capital from Rs. 379.50 million to Rs. 500.94 million during the period under review. It was followed by Prime Commercial Bank from Rs. 15.93 to Rs. 13.52 due to decline in its reserves from Rs. 400.17 million to Rs. 237.19 million in 1998.
The total income in terms of markup and discount earned, fees, commission and brokerage, profit from sale of investments, dividend income less cost of deposits, borrowings etc. stood at Rs. 16.244 billion during the period under review. Top local commercial banks as per income during 1998 were as under:
Top Commercial Banks According to Income (Rs.in million) 1998 1997 MCB 8381.55 9126.32 Askari Com. 1520.86 1398.54 Metropolitan 872.39 719.28 Faysal Dank 840.67 1346.50 Union Bank 778.22 702.20 Bank Al-Habib 743.81 748.87 Bank of Punjab 635.10 771.80 Soneri Bank 608.15 675.40
EARNING PER SHARE
The total profit after-tax of these local banks stood at Rs. 1497.24 million. The average earning per share of these Banks worked out to Rs. 1.56 in 1998. The highest earning per share was at Rs. 5.35 of Bank Al-Habib, followed by Askari Commercial Bank at Rs.5.02, and Soneri Bank at Rs.2.90. The high earning per share in the descending order as compared to preceding year were as follows:-
Earning Per Share (Rs.10) of Commercial Banks (Rs. in million) 1998 1997 Bank Al-Habib 5.35 6.02 Askari Corn. 5.02 3.31 Soneri Bank 2.90 4.52 MCB 2.19 1.31 Bank of Punjab 1.59 2.31 Prime Commercial 1.25 1.90 Gulf Commercial 1.03 -1.61
Out at 14 local commercial banks, 9 have declared cash/stock dividend during the year 1998 as compared to 7 in the preceding year. The highest dividend of 42 per cent (10% cash plus 32% stock) was declared by Bank Al-Habib, followed by 33.33 per cent (stock) by Metropolitan, 20 per cent (cash) by Askari Commercial Bank during the period under review.
BANKING VITAL STATISTICS (Rs. in million) 1994-95 1995-96 1996-97 1997-98 Shceduled Banks (Nos.) 45 47 46 46 Foreign Banks (Nos.) 20 22 21 21 Scheduled Banks' Branches (Nos.) 8400 8523 8597 8040 Foreign Banks' Branches (Nos.) 74 83 85 81 Pakistani Banks' Branches Abroad (Nos.) 124 126 122 119 Deposits of Scheduled Banks (Rs. in billion) 670.7 696.7 743.6 839.9 Foreign Banks' Share In Deposits (%) 18.9 18.9 22.3 21.6 Advances of Scheduled Banks [*] (Rs. in billion) 413.8 474.7 552.5 644.1 Foreign Banks' Share in Advances [*] (%) 14.7 16.5 18.1 17.7 Total Assets/Liabilities of Scheduled Banks (Rs. in billion) 1647.6 1498.8 1616.6 1587.6 (*.)Including bills purchased and discounted Source: National Bank of Pakistan
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|Date:||Aug 1, 1999|
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