Public Sector Commercial Banks: THE BANK OF PUNJAB - Quarter ended March 31, 2005 (Un-audited)

The Bank of Punjab (BOP) was constituted pursuant to the Bank of Punjab Act, 1989 and was given the status of a scheduled bank by the State Bank of Pakistan on September 19, 1994. BOP is principally engaged in commercial banking and related services through its 254 branches in Pakistan and Azad Jammu and Kashmir.
It is listed on Lahore, Karachi and Islamabad Stock Exchanges and its majority shares are held by the Government of Punjab. Punjab Modaraba Services (Private) Limited is a fully owned subsidiary of BOP.
M/s Pacra has awarded the BOP with the credit rating AA- (Double A Minus) for Long term and A1+ (A One Plus) for Short term, based on its financial results for 2004.
BOP had total 3,144 employees on December 31, 2004. As agriculture is the backbone of economy, BOP has given priority to its development/growth and a large number of schemes have been introduced to provide financial support to the farmers in all sub sectors of agriculture. The SMEs and consumer finance are other areas of special interest to the bank.
The total assets of BOP increased by 4 % from Rs 66 billion as on Dec. 31, 2004 to Rs 69 billion as on March 31, 2005. Investments, nearly one-fourth of total assets, on both these dates hovered around Rs 16 billion, comprising Available for Sale Securities (25 % of total), Held to Maturity Securities (49% of total) and Surplus on Revaluation of Investments (26% of total). The Advances increased by 5% from Rs 39 billion as on Dec. 31, 2004 to Rs 41 billion (60% of total assets) as on March 31, 2005.
The liquidity constraints along-with expected rise in cost of deposits and inter bank borrowing rates might compel banks including BOP to adopt more selective approach in credit expansion. Composition of Advances of BOP in relative terms as on Dec. 31, 2004 and March 31, 2005 is presented below.

============================================================

Advances (Rs in 000)            (Un-audited)       (Audited)

                               March 31, 05  December 31, 04

                                 % of Total       % of Total

============================================================

1- Loans, cash credit, etc:           92.7%            93.3%

2- Net investment in finance lease:    5.6%             5.2%

3- Bills Discounted:                   2.7%             2.3%

Sub-total:                           101.0%           100.8%

4- Financing of COT:                   0.2%             0.5%

Sub-total:                           101.3%           101.3%

5- Provisions for doubtful loans:     -1.3%            -1.3%

TOTAL:                               100.0%           100.0%

============================================================

Surprisingly, BOP deposits declined from Rs 55 billion (83% of total assets) as on Dec. 31, 2004 to Rs 53 billion (76 % of total assets) as on March 31, 2005. This decline was, however, made good through more Borrowings from Financial Institutions which increased from Rs 3 billion as on Dec. 31, 2004 to Rs 6 billion as on March 31, 2005. Shareholders Equity rose to Rs 8.96 billion (13% of total assets) as on March 31, 2005 from Rs 7.8 billion (12% of total assets) as on Dec. 31, 2004. Equity as on March 31, 2005, however, is inclusive of Surplus on Revaluation of Assets of Rs 4 billion (Rs 3.4 billion as on Dec. 31, 2004). The stakeholders are urged to review this position.
Net mark up income of BOP for the quarter ended March 31, 2005 increased by 83 % to Rs 675 million from Rs 369 million for the corresponding quarter last year. Non mark up income for the quarter under review increased by 45 % to Rs 156 million as against Rs 107 million for the corresponding quarter last year. These factors raised BOP's Pre-tax profit to Rs 565 million for the three months period ended March 31, 2005 from Rs 245 million for the corresponding period last year. Profit after tax for the quarter under review more than doubled to Rs 364 million from Rs 147 million for the quarter ended March 31, 2004. Return on Equity for the current quarter works out to 4.1 % which is impressive. Performance statistics are enclosed.

=====================================================================

Performance Statistics (Rs in 000)     (Un-audited)         (Audited)

=====================================================================

(Balance Sheet)                     On December 31,   As on March 31,

                                              2005               2004

=====================================================================

Total Assets:                           69,065,439         66,320,411

Cash, balances with banks:               5,504,307          7,697,808

Investments-Net:                        15,962,189         16,197,505

Advances-Net:                           41,365,780         39,438,923

Deposits, other accounts:               52,761,137         54,724,311

Total Liabilities:                      60,196,050         58,481,328

Share Capital:                           1,506,230          1,506,230

Reserves, Retained earnings:             3,277,788          2,914,235

Surplus on Revaluation of Assets:        4,085,371          3,418,618

Total Equity:                            8,869,389          7,839,083

Subordinated Loan:                               0                  0

Equity and Sub. Loans:                   8,869,389          7,839,083

Contingencies and Commitments:          12,615,414         13,024,507

---------------------------------------------------------------------

Ratios:

---------------------------------------------------------------------

Cash and bank/Total Assets:                      8%               12%

Investments/Total Assets:                       23%               24%

Advance/Total Assets:                           60%               59%

NPLs/Advances-Gross:                             3%                3%

Provisions/Advances-Gross:                       1%                1%

Provision Required/Provision Held:             100%              100%

Deposits/Total Assets:                          76%               83%

Total Liabilities/Total Assets:                 87%               88%

Total Equity/Total Assets:                    12.8%             11.8%

Equity and Sub. Loans/Total Assets:           12.8%             11.8%

Deposits/(Equity + Sub-Loans)-X:               5.9                7.0

Advances/Deposits:                              78%               72%

Investments/Deposits:                           30%               30%

Conting.& Comm./(Equity + SL)-X:              1.42               1.66

Book Value Per Share:                        58.88              52.04

Quoted Share Price (22-7-05): - Rs           81.20                  -

Price/Book Value Ratio:                       1.38                  -

---------------------------------------------------------------------

Income Statement (Q end March 31):            2005               2004

---------------------------------------------------------------------

Markup/interest earned:                  1,023,338            489,682

Markup/interest expensed:                  340,373            120,832

Net Markup/interest income:                682,965            368,850

Net mark up income after provisions:       674,603            368,795

Total non-markup income:                   155,758            107,152

Net markup and non markup income:          830,361            475,947

Admin expenses:                            265,208            230,599

Profit before Taxation:                    565,153            245,348

Profit after taxation:                     363,553            146,848

---------------------------------------------------------------------

Ratios: (Quarterly basis)

---------------------------------------------------------------------

Net Markup Income/Total Assets:                1.0%              0.6%

Net markup income after Pro./TA:               1.0%              0.6%

Non-Markup Income/Total Assets:                0.2%              0.2%

Net markup, non markup income/TA:              1.2%              0.7%

Admin expense/Total Assets:                    0.4%              0.3%

Profit before Taxation/Total Assets:           0.8%              0.4%

Profit after taxation/Total Assets:            0.5%              0.2%

Profit after tax/Total Equity:                 4.1%              1.9%

EPS- (year-end paid up) - Rs:                 2.41               0.97

Price Earning Ratio:                         33.64                  -

---------------------------------------------------------------------

Cash Flow Summary                                         (Rs in 000)

---------------------------------------------------------------------

Net cash flow from operations:          -2,183,292           -303,339

Net cash flow from investing:              869,791           -662,215

Net cash flow from financing:                    0                  0

Net cash flow position for period:      -1,313,501           -965,554

Cash, cash equivalent, end of period:    6,484,307          7,000,757

=====================================================================