|
Changes in regulatory
frame work |
|
Mergers
and Acquisitions |
|
Shift
in the interest rate scenario (fall and rise) |
|
Shrinking
of spreads in conventional activities |
During the process some of the Investment Banks were converted
into small Commercial Banks while some others merged to comply
with the increased minimum capital requirement.
The Board and Executive Management of the Escorts Bank remained
committed to
its core Business and boldly and proactively unfolded its Five
Year Business Plan
Escorts Beyond 2001. The Plan was
based on a custom-tailored Investment Banking Model. This strategy
included diversification of Revenue Streams within the NBFC Structure.
The Business Model received appreciation from the Governor State
Bank
of Pakistan (SBP) and the Chairman of the Securities and Exchange
Commission of Pakistan (SECP), and the Financial Sector in general.
|
One of
the major strategic decisions taken was the establishment
of our Capital Markets Division, through acquisition
of memberships at Lahore and Karachi Stock Exchanges
and projected opening up of a number of Investment Services
Centers with a view of Taking Capital Markets to
the People. The aim is to promote awareness among
the Retail Investors and
help them make informed investment decisions, on the
one hand and on the other hand, to promote a culture
of Good Corporate Governance and Best Business
Practices in the Brokerage Business. |
|
The
start of financial year 2004 witnessed the beginning
of the rise in the interest rates which resulted in
drying-up of the lucrative returns in Treasury Operations
and shrinking of spreads in conventional lending. |
|
With
the benefit of hindsight, we can now say that the above
results could not have been achieved had Escorts Bank
stuck to its old line of limited pseudo commercial
banking activities. |
The following steps have also been taken to support the Business
Plan:
|
Enhancement
of the Shareholders Equity through a forty(40) percent
Right Issue (announced in the Board Meeting dated February
21, 2005) |
|
Procurement
of a fully automated, real-time online software system.
The new system is expected to be fully operational within
one month's time. The new system provides Automated
Locks necessary to confine trades within prescribed
margins and approved parameters on a real-time, pre-trade
basis, tools for better monitoring of clients, scripts
and settlement exposures and strict controls through
a well designed Authority Management System. |
|
Streamlining
of System of Internal Controls |
|
Establishment
of a specialized Compliance Department for our Capital
Markets Division. |
 |
Special
Training and Awareness Sessions have been planned for
our KATS/LOTS Operators and Traders so as to ensure
that there is no gap between our "Corporate Commitment"
pertaining to our Professional Moral and Ethical Imperative
and the "Frontline Practice". We would also
suggest and contribute toward any initiation of an ongoing
Training and Certification Program for Traders that
could be organized collectively by the Investment Banking
/ Brokerage Industry possibly under the patronage of
SECP. |
We feel that the above measures coupled with the new Exposure
Management Measures being considered by the SECP and the country's
Stock Exchanges shall
go a long way in improving the image, performance and stability
of our Capital Markets.
