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. The present Overview is, however, that of the BOP alone, without consolidation with its subsidiary.
Pacra, the public sector credit rating agency, has awarded the BOP with the credit rating of AA- (Double A Minus) for Long term and A1+ (A One Plus) for Short term. The BOP had a total of 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.
Total assets of BOP experienced 29 % increase from Rs 66 billion as on December 31, 2004 to Rs 85 billion as on June 30, 2005.
Investments declined by 10 % from Rs 16 billion (24% of Total Assets) as on December 31, 2004 to Rs 14 billion (17% of TA) as on June 30, 2005. Investment as on June 30, 2005 includes Rs 4 billion as Surplus on Revaluation of Investments (27% of total investment). Advances increased by 19% from Rs 39 billion (59% of TA) as on December 31, 2004 to Rs 47 billion (55% of TA) as on June 30, 2005.
Lending to Financial Institutions rose about seven-fold to nearly Rs 8 billion (9% of TA) as against Rs 1 billion (2% of TA) as on December 31, 2004. Borrowings from Financial Institutions on both these dates were only 4% of Total Assets.
BOP NPLs are shown at 2 % of Advances on June 30, 2005 (December 31, 2004: 3%). As compared to Equity NPLs are 11% on June 30, 2005 ( December 31, 2004: 15%). The provisions against doubtful loans work out to 1 % of Advances for 2005 (2004: 1 %). The provision made by the bank, however, is in excess of the prescribed requirement under Prudential Regulations. However, as some doubtful loans have the tendency to stay under cover for quite sometime due to different reasons, a prudent policy would be that the management makes higher general provision against doubtful loans along with critically examination of risk management procedures.
Total Liabilities as on June 30, 2005 amounted to Rs 58 billion (88% of TA), showing an increase of 28% over Rs 58 billion ( 87% of TA) as on December 31, 2004. This was largely due to 29 % increase in deposits to Rs 70 billion (82% of TA) over Rs 55 billion deposits as on December 31, 2004. BOP Equity as on June 30, 2005 amounts to Rs 11 billion (13% of TA), showing an increase of 39% over equity of Rs 8 billion (12% of TA) as on December 31, 2004.
It may be noted that Equity as on June 30, 2005 is inclusive of Surplus on Revaluation of Assets of Rs 4.9 billion (Rs 3.4 billion as on December 31, 2004). The stakeholders may consider reviewing this position.
As per the Directors' Report, the Board has approved an interim dividend for its shareholders in the form of 30% stock dividend. Apart from remunerating stakeholders this bonus issue shall make the bank in compliance with minimum paid-up capital requirement of Rs 2,000 million well before specified date of December 31, 2005.
Profit before tax of Rs 1,908 million for six months ended June 30, 2005 indicates 71% growth from last year corresponding period figure of Rs 1,117 million. Profit after tax of Rs 1,531 million shows increase of 73% over Rs 888 million, resulting in EPS of Rs 8.47. This is essentially ascribable to doubling of net mark-up income for the period under review at Rs 1,570 million compared to Rs 782 million for the corresponding period last year.
The depositors were paid by way of mark up expense only 35% of total mark up income for the period under review (0nly 25% for corresponding period last). Non-mark up income also contributed towards enhanced profitability and increased by 13 % to Rs 947 million (of which dividend income: Rs 725 million) compared to Rs 841 million (of which dividend income: Rs 534 million). BOP closed the current six months with ROE of 14% as against 11 % for the corresponding period last year. Performance statistics are given below.
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Performance Statistics (Rs, 000) (Audited)
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Balance Sheet (Unaudited) On December.31,
As on June 30 2005 2004
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Total Assets: 85,548,964 66,320,411
Cash, balances with banks: 12,538,279 7,697,808
Lending to financial institutions: 7,867,739 1,019,488
Investments-Net: 14,587,620 16,197,505
Advances-Net: 46,840,452 39,438,923
Borrowing from fin. Institutions: 3,027,676 2,831,605
Deposits, other accounts: 70,480,955 54,724,311
Total Liabilities: 74,649,174 58,481,328
Share Capital: 1,807,476 1,506,230
Reserves, Retained Earnings: 4,144,406 2,914,235
Surplus on Revalu. of Assets: 4,947,908 3,418,618
Total Equity: 10,899,790 7,839,083
Subordinated Loan: 0 0
Equity and Sub. Loans: 10,899,790 7,839,083
NPLs at end of period: 1,155,799 1,166,012
Contingencies & Commitments: 17,968,252 13,057,281
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Ratios:
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Cash and bank/Total Assets: 15% 12%
Investments/Total Assets: 17% 24%
Advance/Total Assets: 55% 59%
NPLs/Advances-Gross: 2% 3%
NPLs/Total Equity: 11% 15%
NPLs/Total Equity & S Loans: 11% 15%
Prov. required/Advances-G: 1% 1%
NPLs Prov. Req./Prov. Held: 119% 112%
Deposits/Total Assets: 82% 83%
Total Liabilities/Total Assets: 87% 88%
Total Equity/Total Assets: 13% 12%
Equity & S Loans/Total Assets: 13% 12%
Deposits/(Equity+S Loans)-X: 6.5 7.0
Advances/Deposits: 66% 72%
Investments/Deposits: 21% 30%
Contin.&Comm./(Equity+SL)-X: 1.65 1.67
Book Value Per Share: 60.30 52.04
Quoted Price (14-10-05) - Rs: 110.25 -
Price/Book Value Ratio: 1.83 -
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Income State. (HY June 30) 2005 2004
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Markup/interest earned: 2,404,372 1,043,386
Markup/interest expensed: 833,651 261,263
Net Markup/interest income: 1,570,721 782,123
Total non-markup income: 947,515 841,465
Admin expenses: 565,993 480,912
Profit before Taxation: 1,908,299 1,117,398
Profit after taxation: 1,531,417 887,945
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Ratios: (Half Yearly Basis)
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Net Markup Income/T. Assets: 1.8% 1.2%
Non-Markup Income/T. Assets: 1.1% 1.3%
Admin expenses/Total Assets: 0.7% 0.7%
Profit before Tax/T. Assets: 2.2% 1.7%
Profit after tax/Total Assets: 1.8% 1.3%
Profit after tax/Total Equity: 14.0% 11.3%
EPS- (HY end paid up) - Rs: 8.47 5.90
Price/Earnings Ratio: 13.01 -
Bonus Shares: 20% 25%
Cash Dividend: 0% 0%
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Cash flow Sum. (Half Year) 2005 2004
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Net Cash flow, Operations: 4,328,899 3,913,437
Net Cash flow, Investing: 2,161,572 -3,086,476
Net Cash flow, Financing: 0 0
Net Cash flow Position: 6,490,471 826,961
Cash and bank, beginning: 7,797,808 7,966,311
Cash and bank, end: 14,288,279 8,793,272
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COMPANY INFORMATION: Chairman: Shahzad Hassan Pervez; President: Hamesh Khan;
DIRECTOR: Salman Siddique; Director: Jahangir Siddiqui; Secretary to the Board: Azizul Hameed; Auditors: A.F. Ferguson & Co, Chartered Accountants; Head OFFICE: 7-Egerton Road, Lahore, Pakistan; Web Address: www.bop.com.pk