An Eye On The Future!

Our Strategy moves on…

I am delighted to update you on the performance of Escorts Investment Bank during the Half-Year Jul ~ Dec 2003. The fact that we have been able to design and implement a very successful business model is once again reflected in the following Financial Highlights:

Financial Highlights (As at Dec. 31, 2003)

* Half-Yearly Figures as at December 31, 2003 Reviewed by Auditors

The current Business Plan of Escorts Investment Bank, Escorts Beyond 2001
was launched in January 2002 after a thorough S.W.O.T Analysis of the Bank,
assessment of the Macro Economic and Financial Market trends and
An Eye On The Future!

Broad Policy Objectives:

	Value Creation for Shareholders on a Sustainable Basis.
	Shift from Pseudo Commercial Banking activities to genuine Investment Banking to address the issue of Legitimacy, and more importantly because we feel that Investment Banking is a high-end activity that is a better vehicle for achievement of our first Objective.
	Maintaining High Asset Quality.
	Good Governance & Best Business Practices.
	High Professional Efficiency and Constant Improvement Policy.

The Operational Policy:

Enhanced Service Portfolio ~ Focus on Investment Promotion

The Operational Policy of the Business Plan is focused on Enhanced Profitability
and Sustainable Growth through a broader range of Products & Services, Capacity Building in terms of Human Resource, Infrastructure, Systems Support and Risk Management Policies.


Why Investment Banking?

The Macro Economic Rationale:

More efficient, transparent, accessible and acceptable Stock Markets, in terms of capping Systemic Risk and efficient Settlement Process, owing to the following factors:

	The Financial Sector Reforms introduced by the State Bank of Pakistan.
	The Capital Markets Reforms initiated by the Securities and Exchange Commission of Pakistan.

	T+3 settlement
	Futures contracts markets
	Increase in net capital balance requirement
	Imposition of capital adequacy ratio
	Exposure limit margin
	Prohibition of insider trading
	Monitoring of variations in scrip-wise price movement, (e.g. circuit breaker), Turnover and deliveries
	Restriction on blank selling

The Commercial Dynamics:

Fresh opportunities for Institutions and Individuals to invest in Capital Markets due to the following reasons:

	Increased Corporate Profitability
	Excess Liquidity
	The Paradigm Shift in the Interest Rates Scenario putting a spotlight on the high costs of intermediation in the Commercial Banking Sector prompting the saving public to turn to Stock Markets, for better returns.
	Progress on Privatization.

	The abovementioned factors have created an atmosphere that now enables, inspires and encourages the Investment Banks of the country to play their real role of providing high-end services, related to Capital Markets.
	A Progressive and Proactive Institution like Escorts Bank can capture the existing Retail and Institutional Clientele in Brokerage Services and also create a New Demand for Retail Brokerage Services by creating awareness and by setting new standards in services offered.

Performance Review:

A Review of the Accounts for the periods following the launch of the Business Plan Escorts Beyond 2001, would reveal that substantial progress has been achieved in terms of:

	Total Assets
	Diversity of Assets
	Total Equity
	Net Profitability
	Diversity of Revenue Streams
	Level of Hedging against Volatility of Revenues
	Earning Per Share
	Return on Equity
	Efficiency Ratios
	Systems Development and Automation
	Human Resource
	Quality of Governance
	Brand Visibility and Market's Perception about EIBL
	Credit Rating Up-gradation

The Executive Management and the Staff of the Bank have all expressed their resolve to relentlessly pursue this path to progress. I place on records my sincere thanks to all members of my team. I also take this opportunity to express my gratitude to the Board of Directors, for their guidance and support.

With warm regard,
Sincerely,

Rashid Mansur
President & CEO

February 23, 2004
Lahore