An Eye On The
Future!
Our Strategy
Moves On…
Last year I began my Review by saying that it was a very exciting
and satisfying moment for me as I briefed you on the performance
of Escorts Investment Bank. Exciting because the period under review
was my first full financial year as the President and CEO of the
Bank; Satisfying because the New Strategy, Escorts
Beyond 2001 that we had designed, and started implementing,
for the required Repositioning for Growth had completely transformed
our Bank into a vibrant, proactive, progressive and a very profitable
institution. Well, another full year
has now passed and you will certainly be glad to know that neither
the excitement, nor the satisfaction has receded. If anything, the
reasons I had quoted last year
are much more potent and valid today than they were last year.
The following Financial Highlights are a good reflection of the
overall progress made:
Financial Highlights (As at June 30, 2004)
| Audited Figures |
...........Rupees
in Million |
Sr.#
|
Description |
June
2004 |
June
2003 |
Growth |
Growth
% |
| 1 |
Profit Before Tax |
83 |
73 |
10 |
14 |
| 2 |
Profit After Tax |
74 |
58 |
16 |
28 |
| 3 |
Shareholder's Equity |
370 |
241 |
129 |
54 |
| 4 |
Deposits |
1,130 |
693 |
437 |
63 |
| 5 |
Morabaha Financing |
481 |
376 |
105 |
28 |
| 6 |
Investment in Govt. Securities |
478 |
814 |
336 |
(41) |
| 7 |
Total Assets |
2,742 |
2,027 |
715 |
35 |
| 8 |
Earnings Per
Share ...........Rs. |
3.05 |
2.69 |
0.36 |
13.4 |
| 9 |
Dividend
(Recommended by BOD) ....% |
15 |
15 |
0 |
0 |
The above figures show that our business is
in good shape, the prospects are improving steadily, and we have a
Winning Proposition.
Our Bank has continued to make progress both in Quantitative as well
as in Qualitative terms.
Higher standards, as I have emphasized in all my Reviews, is a phrase
that
reflects our Bank's commitment to the idea that in every circumstance
there is an opportunity to raise the bar. Last year we promised, and
delivered, higher standards of performance, for our customers and
shareholders. We produced strong revenue and net income gains in all
our major business lines, demonstrating Operational Efficiency and
a sound Organic Growth Strategy.
In terms of Value Addition we generated Rs.197
Million out of which 22.80 % has been recommended by the Board to
be distributed to the Shareholders,
representing Cash Dividend at the rate of Rs.1.5 per share of Rs.10.-
After this appropriation Rs. 29 million will also be retained in
business.
We also responded decisively to the State
Bank of Pakistan's (SBP) and Securities and Exchange Commission's
(SECP) call to the Financial Sector for raising standards of governance,
demonstrating our commitment to ethical conduct and our core
values of adhering to Best Business Practices.
Taking Capital Markets To The People!
Our strategic focus,
in essence, represents a transformation from Pseudo
Commercial Banking to genuine Investment Banking activities. This
transformation shall enable our Bank to establish itself as a Model
NBFC as designed and regulated by the Securities and Exchange Commission
of Pakistan.
Moving steadily in this direction we have set
up fully equipped Investment Services (Brokerage) Centers at Lahore,
Karachi and Islamabad.
Our Investment Services Center at Lahore
was inaugurated by Dr. Tariq Hasan, Chairman Securities and Exchange
Commission on May 25, 2004 and the latest
one at Karachi on July 14, 2004 when the Governor State Bank of
Pakistan,
Dr. Ishrat Husain addressed our Board of Directors. The presence
of the two top regulators on these occasions was a source of great
encouragement for the Management of Escorts Bank and was seen, by
the market, as an endorsement
of the Bank's strategy of Taking Capital Markets to the People.
The Bank's role as
a responsible corporate citizen, in the context of good corporate
governance was also appreciated.
Future Outlook
Moving forward, the competition
is expected to remain intense, partially fuelled by welcome changes
in the regulatory environment, aimed at making financial products
more transparent and easier for consumers to compare. This competition
makes us all better and stronger as the Financial Sector becomes
more sophisticated.
We are continuing to invest in new business
activities. The benefits from cost efficiencies across the enlarged
business portfolio have just started to accrue.
The share of Fee-Based Income in total revenues is steadily
increasing. Our income statements for the forthcoming periods
shall amply display this diversification of revenue streams.
We will continue to leverage innovative business models that
add value for our customers and shareholders.
There are two more areas we shall continue
to focus upon, namely, building quality Human Resource and a
thorough review of major work processes, seeking to rationalize
supporting Procedures, Internal Controls and Automation.
Achieving excellent results year after year
becomes an ever greater challenge, particularly, in today's
competitive financial markets. The clear sense of motivation,
purpose, discipline and involvement shown by the Bank's staff
and executives, together with their pride in their work and
loyalty to their profession and institution, remains our greatest
asset. It gives me the confidence that Escorts Bank will continue
to make good progress. I would just like to add one more guiding
principle for myself and my colleagues, and that is, "Humility
is a great virtue." This guiding principle should also
be implicit in our approach, at all times.
I take this opportunity to thank the
Chairman and the Board of Directors of our Bank for their guidance
and support, and the SBP and SECP for providing the necessary
enabling environment.
Sincerely,
Rashid Mansur
President & CEO
September 27,
2004
Lahore
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