Askari bank Ltd

INTRODUCTION

 (Formerly Askari Commercial Bank) was incorporated in Pakistan on October 9, 1991, as a Public Limited Company.

 It started its operations during April 1, 1992.

 The bank principally deals with mainly banking, as defined in the Banking Companies Ordinance, 1962.

 The Bank is listed on the Karachi, Lahore & Islamabad Stock Exchanges and its shares are currently the highest quoted
from among the new private sector banks in Pakistan.

 Askari Bank has expanded into a nationwide presence of 136 branches, and an offshore banking Unit in Bahrain.

 A shared network of over 1,100 online ATMs covering

allmajor cities in Pakistan supports the delivery channels for customer service.

 As onDecember 31, 2005, the bank had equity of PKR 8.6 billion and total assets of PKR 145.1 billion, with over 600,000
banking customers, serviced by our 2,754 employees.

Mission

 To be the leading private sector bank in Pakistan with an international presence, delivering quality service through
innovative technology and effective human
resourcemanagement in a modern and progressive organizational culture of meritocracy,

 maintaining high ethical and professional standards, while providing enhanced value toall our stake-holders, and
contributing to society

FUNCTIONS

Services (take details of these services from annual report2014 shoaib)

 wide range of services to its customers

 Recognizes the importance of efficient business delivery and providing timely solutions.

Personal Banking

Mortgage Finance

Corporate & Investment Banking

Business Finance

ASKCAR - Car Finance

Travelers Cheques

Ask Smart

Profit / Markup Rates on Retail Products

Internet banking

Askari Bank has also introduced online banking. Customers are able to view their bank information and use their accounts for
money transfer and use other features.

Services:

Personal Finance:

ASKCARDS

Business Finance:
Auto Financing:

Travelers Cheques

Agriculture finance

Kissan Ever Green Finance

Kissan Tractor Finance

3. Analysis of Balance sheet and Income Statement:

Major Uses of
Bank

2010 2011 2012 2013 2014

Lending to FI

Investments

Advances

Sources of Bank:

Deposits

Borrowing from
FIs

Subordinated
Loans

Assets
 Overall Growth

Profit

2013: Operating profit of the Bank registered a healthy increase of 129 percent.

Reasons:

38.3 % rise in net interest income,

47.8 % jump in non-interest income,

Rise in operating expenses contained at 16.5 percent.

Improvement in net spread and business volumes

Prudently capitalizing on the available market opportunities while implementing austerity and cost control measures.

Profit before and after tax for the year 2014 remained at Rs.5.78 billion and Rs.4.01 billion respectively compared with the loss
before and after tax of Rs.8.44 billion and Rs.5.48 billion in 2013.

4. DUPONT MODEL

ROE = (Profit margin)*(Asset turnover)*(Equity multiplier) = (Net profit/Sales)*(Sales/Assets)*(Assets/Equity)= (Net

Profit/Equity)

ROE 2010 2011 2012 2013 2014

Net Profit 999,329/(27,952,162+ 1688204 1168640 -5,398,322/ 6,769,652

Margin
2,177,043) /35669272 /36,519,553 (27,960,505 /(34,604,210+
+3,598,444)
= 3.32% =4.7% = 3.2% 5,317,207)
= 17.11%
= 16.96%

Equity 314,744,552 343,756,306 353055627 394,827,495/ 447,082,545/

Multiplier
/16,004,142 /17776266 /19688006 18,728,888 23,707,061

=19.67 = 19.34 = 17.93 = 21.08 = 18.86

Asset (27,952,162+2,177,043 35669272/ 36,519,553 (27,960,505 (34,604,210+

Turnover ) /314,744,552 +3,598,444)
343,756,306 /353055627 5,317,207)
= 0.09573 /394,827,495
/447,082,545

5.

Profitability Ratios 2010 2011 2012 2013 2014

ROA=NI/ TA 999,329 1688204 1168640 -5398322 6,769,652

/314,744,552 /343,756,306 /353055627 /394,827,495 /447,082,545

= 0.32% = 0.49% = 0.31% = -1.37% = 1.51%

ROE=NI/Eq 999329 1,688,204 1168640 -5398322 6,769,652

/16,004,142 /17,776,266 /19688006 /18,728,888 /23,707,061

= 6.24% = 9.50% = 5.94% =-28.82% = 28.56%

Net Int Margin= Net 6,951,164 823,926 6740546 -2,506,059 11,571,308

Int Income/TA
/314,744,552 /343,756,306 /353055627 /394,827,495 /447,082,545

= 2.21% = 0.24% = 1.91% = -0.63% = 2.59%

Net Non Int (2,177,043- (2902921- (4117366- (3,598,444- (5,317,207-

Margin=Net Non Int
Inc/TA 7,855,071) 8726096)/ 9128185) 9,532,888) 11,107,102)

/ 314,744,552 343,756,306 /353055627 /394,827,495 /447,082,545

=-1.8% = -1.7% = -1.42% = -1.50% = -1.30%

Net Op Margin= 1,273,136 2,412,751 1729727 -8,440,503 / 5,781,413

394,827,495
EBT/TA /314,744,552 /343,756,306 /353055627 /447,082,545
= -2.14%
= 0.41% = 0.70% = 0.49 = 1.30%

Earning Base= (9,172,186 + (1,591,584+ (6319474+ (2,503,207+ (3,427,753+

133,756,712+
Earning Assets/TA 102,259,757 145378148 165,863,237+ 217,214,247+
150, 710, 709+
+152,784, 137 + +143726962+ 163,556,632 170,496,454+
7,145,152 +
7,441,717 + 6130141+ +6,197,476 10,625,232+
165,990) /
146,993) 343,756,306 193127) +275,287) 273,815)

/ 314,744,552 = 83.3% / 353055627 /394,827,495 /447,082,545

= 86.4% = 85.5% = 85.71% = 89.93%

Op Rev= [(27,952,162+ (32,766,351+ (32402187+ [(27,960,505 [(34,604,210+

+3,598,444)
[(Int Inc + Non. Int 2,177,043)- 2,902,921) 4117366) 5,317,207)-
Inc)- Non Int Exp]/TA - 9,532,888]
7,855,071] -8,726,096 -9128185 11,107,102]
/394,827,495
/314,744,552 /343,756,306 /353055627 /447,082,545
= 5.58%
= 7.08% = 7.84% = 7.76% =6.45%

Net Profit Margin= 999,329/ 1688204 1168640 -5,398,322/ 6,769,652

Net Profit/Sales (27,952,162+ /35669272 /36,519,553 (27,960,505 /(34,604,210+

+3,598,444)
2,177,043) =4.7% = 3.2% 5,317,207)
= 17.11%
= 3.32% = 16.96%

Equity 314,744,552/ 343,756,306 353055627 394,827,495/ 447,082,545/

Multiplier=TA/TE
16,004,142=19.67 /17776266 /19688006 18,728,888 23,707,061

= 19.34 = 17.93 = 21.08 = 18.86

Yield on earning 27,952,162 32,766,351 32,402,187/ 27,960,505 34,604,210

Assets=
Int Inc/Earning Assets /271,804,790= 10.3% /293,370,147 301,747,852 /(2,503,207+ /
(3,427,753
= 11.17% = 10.74% 165,863,237+ +
163,556,632 217,214,24
7+
+6,197,476
170,496,45
+275,287)
4+
= 8.26%
10,625,232
+

273,815)

= 8.61%

Cost of Borrowing on 17,936,616/ 22,699,583/ 22,973,781 19,363,188/ 22,710,924/

Int bearing liabilities=
(25,554,777+ (89523862+ /(1837337+ (24,545,879 (13,742,030
Int exp/Int bearing
Liabilities 5,992,500+ 141028007+ 17051 +3,994,400 +7,992,800

132,060,695+ 1507056+ +83,72617+ +82,583,524 +2,546,173

66,943,251 2059529+76145 6987300 +172,338,878 +10,560+

+437,397+ + 17273470+ +75647191+ +7,174,571 91,328,822

1,707,739+ 6990100)= 9381065 +2,038,062 +203,230,490

8.783%
26,508) +155646270) +25,349) +603,878)

= 7.71% = 8.91% =6.62% = 7.11%

Spread= YEA-CBIBL 0.103-0.0771 0.1117-0.08783 0.1074- 8.26-6.62 8.61-7.11

0.0891
= 2.6% = 2.4% = 1.64% = 1.50%
= 1.8%

Capital Risk 2010 2011 2012 2013 2014

Ratios

NPL/Gross 21,598,648 23645541 26518448 33,119,829 31,375,729

loans
&leases /168,435,763 /167379399 /162854710 /192,170,873 /198,665,519

= 12.82% = 14.13% = 16.28% = 17.24% = 15.79%

Charge off/ 450,347 572336 0/162854710 427 86,238

Gross loans
&leases /168,435,763 /167379399 =0 /192,170,873 /198,665,519

= 0.002674 = 0.00342

ALL/Gross 15,651,626 16668690 19127748 28,614,241 28,169,065

loans
/168,435,763 /167379399 /162854710 /192,170,873 /198,665,519

= 0.093 = 0.0996 = 0.1175

ALL/Equity 15,651,626/16004142= 16668690 19127748 28,614,241 28,169,065

Capital
0.978 /17776266 /19688006 /18,728,888 /23,707,061

= 0.9377 = 0.9715
 PLL/Gross 2319,280/168,435,763 1630123 2342473 9,853,603/ (83,198)
loans
&leases = 0.0138 /167379399 /162854710 192,170,873 /198,665,519

= 0.0097391 = 0.0144

Gross 168,435,763/255,936,503 167379399 162854710 192,170,873 198,665,519

loans/ Total
Deposits = 65.8% /291502993 /306937216 /335,241,027 /387,586,620

= 57.4% = 53.1% =

NPL Trend: (15,222798-21,598,648) / (16291514- (18796160- (28,279,285- (27,801,250-

(T3-T1)/T1 21,598,648= -0.2952 33,119,829) 31,375,729)
23645541) /23645541 26518448)/26518448
/33,119,829 /31,375,729
= -0.3110 = -0.2912
= =

NPL/TA 21,598,648/314,744,552 23645541/343756306 26518448/353055627 28,279,285 31,375,729/

= 6.86% = 6.88% = 7.51% /394,827,495 447,082,545

= 7.16% = 7.02%

Expense Control
Measures Ratios
2010 2011 2012 2013 2014

Int exp/TA 17,936,616 22699583 22973781 19,363,188 22,710,924

/314,744,552 /343,756,306 /353055627 /394,827,495 /447,082,545

= 5.70% = 6.60% = 6.51% = 4.90% = 5.08%

Int exp/ Int 17,936,616/ 22,699,583/ 22,973,781/ 19,363,188/ 22,710,924/

bearing
Liabilities (25,554,777 (89523862+ (1837337+ 17051 (24,545,879 (13,742,030

+5,992,500+ 141028007+ +83,72617+ +3,994,400 +7,992,800

132,060,695+ 1507056+ 6987300 +82,583,524 +2,546,173

66,943,251+ 2059529+ +75647191+ +172,338,878 +10,560+

9381065+
437,397+ 76145 +7,174,571 91,328,822
155646270)
1,707,739+ +17273470 +2,038,062 +203,230,490
= 8.91%
26,508) +6990100) +25,349) +603,878)

= 7.71% = 8.78% =6.62% = 7.11%

Administrative 7812618 8639312 9039255 9,396,803 / 10,934,450

exp/ TA 394,827,495
/314,744,552 /343,756,306 /353055627 /447,082,545
= 2.38%
= 2.48% = 2.51% = 2.56% = 2.45%

Other Op. exp/ 42,453 86784 80297 22,571 / 125,696

TA 394,827,495
/314,744,552 /343,756,306 /353055627 /447,082,545
= 0.0057%
 = 0.014% = 0.025% = 0.023% =0.028%

Market Measures/
Market Risk
Ratios 2010 2011 2012 2013 2014

EPS:NI/No. of 1.48 2.00 1.54 - 6.32 3.19

Shares

MV of Stock

31st Dec

Liquidity Risk 2010 2011 2012 2013 2014

Ratios

Cash & Due (22,565,188 (26,168,181 (24,435,380 (26,104,822 (19,130,113

Deposits with
other banks/TA +3,784,862) +6,235,055) +8,863,586) +9,057,747) +7,068,111)

/ 314,744,552 /343,756,306 /353055627 /394,827,495 /447,082,545

= 8.37% = 9.43% = 9.43% = 8.91% = 5.86%

Govt. sec/TA 84,454,393 123,201,383 132,978,505 155,836,044 205,133,331

/314,744,552 /343756306 /353055627 /394,827,495 /447,082,545

= 26.83% = 35.84% = 37.67% = 39.47% = 45.88%

Cash asset & 3,784,862 26,168,181 24,435,380 (26,104,822 (19,130,113

Govt. Sec/TA
+22,565,188 +6,235,055 +8,863,586 +9,057,747 +7,068,111

+84,454,393 +123,201,383 +132,978,505 +155,836,044) +205,133,331)

/ 314,744,552 /343756306 /353055627 /394,827,495 /447,082,545

= 35.21% = 45.27% = 47.1% = 51.74%

= 48.38%

Net Loans/TA 152,784,137 150,710,709 143,726,962 163,556,632 170,496,454

/314,744,552 /343756306 /353055627 /394,827,495 /447,082,545

= 48.54% = 43.84% = 40.71% = 41.43% = 38.14%

Solvency and 2010 2011 2012 2013 2014

Capital Adequacy
Ratios
Equity Capital 16004142 17776266 19688006 18,728,888 23,707,061/
(Net Assets)/TA
/314,744,552 /343756306 /353055627 /394,827,495 447,082,545

= 5.10% = 5.17% =5.58% = 4.74% = 5.30%

TA/Equity 314,744,552 343756306 353055627 394,827,495 447,082,545

/16004142 /17776266 /19688006 /18,728,888 /23,707,061

= 19.666 =19.34 = 17.93 = 21.08 = 18.86

Total 298,740,410 325,980,040/ 333,367,621 376,098,607 423,375,484

Liabilities/Total
Equity /16004142 17,776,266 /19,688,006 /18,728,888 /23,707,061

= 18.666 = 18.34 = 16.93 = 20.08 = 17.86

CAR 10.36% 11.35% 11.81% 10.39% 13.18%

Conclusion & Recommendations