Listed banks’ profits jump to Rs 14.55b

Staff Report

KARACHI: Cumulative after-tax profit of the top five commercial banks listed on the stock exchange has improved 78 percent to Rs 14.55 billion in 2003 against Rs 8.16 billion in 2002, despite the low interest rate scenario in the country, said a research report prepared by Arif Habib Securities, a local brokerage house.

The report attributed the improvement to the aggressive marketing in consumer financing, and capital gains in portfolio investments by the banks amid low interest rates conditions and limited borrowing by the central bank through government papers.

Sajid Bhanji, an analyst at Arif Habib Securities, said after witnessing a decade of stagnant growth, commercial banks posted improved earnings for the year ended December 31, 2003.

Apart from a few, all banks not only posted improved performance but also reported record earnings depicting substantial growth in their bottom line, he said.

The report said all the 17 commercial banks listed at the stock exchange have announced their 2003 results and the aggregated result announced by the commercial banks painted a very rosy picture where these banks have registered almost 80 percent growth in the bottom line.

Among the listed banks, almost all the banks reported substantial growth in their earnings whereas out of 17 banks, 16 banks reported profits while only Bolan Bank’s bottom line landed in the red. It said profit-wise, the highest profits were declared by banking giant National Bank (NBP). The bank posted an after tax profit of Rs 4.198 billion in 2003, with an earning per share of Rs 10.23 per share.

Other banks that followed NBP include Muslim Commercial Bank (MCB) with Rs 2.230 billion net profit, Faysal Bank Rs 2.151 billion, Askari Bank with Rs 1.103 billion and Bank Al Habib posted an after-tax profit of Rs 1.012 billion in 2003, the report said.

Mr Bhanji said the profits reported by these five banks accounts for more than 70 percent of the profits of the entire commercial bank sector.

In terms of growth in the bottom line, the report said Bank Al Habib led from the front.

The bank posted a growth of 249 percent in the bottom line on a year-to-year basis, as the after-tax profit of the bank jumped to Rs 1.012 billion against Rs 289 million in 2002.

Other banks followed the trend including Faysal Bank which reported a growth of 227 percent in its bottom line, while Union Bank grew 162 percent and Bank of Punjab showed a 143 percent growth in the bottom line.

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