FINANCIAL ANALYSIS ON

ASKARI COMMERCIAL BANK

LIMITED
PRESENTED BY
SYED SUBHAN SHAH
MUHAMMAD SARMAD
SHAFI ULLAH
 INTRODUCTION
ACBL was incorporated on October, 09, 1991.
commenced its operations in April, 1992 as a
Public Limited Company.
 Askari bank has expended in to a nationwide
presence of 200 branches, 199 in Pakistan
and 1 in Azad Kashmir.
 CONT…
 18 Islamic banking branches,
 An offshore Banking unit in Bahrain.
 A shared network of over 800 online ATMs
covering all major cities in Pakistan.
Askari Commercial Bank is pioneer in Mobile
ATM facility started in 2005 dedicated to
serving the urban consumer market.
 CONT…
 ACBL has a correspondent Bank network in more
than 95 countries with about 167 banks.
 The registered office of the bank is situated at
AWT plaza, The Mall, Rawalpindi.
 CREDIT RATING OF ACBL (PACRA)

• A1+ for obligation supported by the higher

capacity for timely repayment.
• AA rating denote a very low expectation of
credit risk, they indicate very strong capacity for
timely payment of financial commitments.
 FINANCIAL RATIOS ANALYSIS
The following types of ratios are frequently
used:
• Liquidity Ratios
• Profitability Ratios
• Solvency Ratios
• Financial leverage Ratios
• Credit Risk Ratios
 Liquidity Ratios
• Earning Asset to Total Assets: Years 2006 (‘000) 2007 (‘000 2008 (‘000)

(Earning Asset / Total Assets) * 100 Earning 147,344,027 163,687,402 181,895,045

Assets
• Advances to Deposit Ratio: Total Assets 166,033,588 182,171,885 206,191,138

TOTAL ADVANCES/TOTAL DEPOSITS*100 Results 89% 90% 88%

• Yield on Earning Assets:

Years 2006 (‘000) 2007 (‘000) 2008 (‘000)
(Net Profit after Tax / Earning Assets) * 100
Total 99,179,372 100,780,162 128,818,242
Advances
Liquidity Ratios
Total 131,839,283 143,036,707 167,676,572
100% 2.00%
Deposits
Asset to Asset
Results 75.22 70.45 76.82
80% 1.50%
60% Advance to Deposit
1.00% Years 2006 (‘000) 2007 (‘000) 2008 (‘000)
40%
0.50% Yeild on Earning
20% Net Profit 2,249,974 2,681,012 386,225
Assets
0% 0.00%
After Tax
2006 2007 2008 Earning 147,344,027 163,687,402 181,895,045
Assets
Years
Results 1.53 % 1.64% 0.21%
 Profitability ratios
• Return on Equity (ROE): • Return on Assets:
Years 2006 (‘000) 2007 (‘000) 2008 (‘000)
ROA= Net income/Total Assets
ROE=
Net Income
Net income/Total
2,249,974 2,681,012 386,225
Years 2006 (‘000) 2007 (‘000) 2008 (‘000)
Net Income 2,249,974 2,681,012 386,225
Equity 11,053,230 12,265,987 12,971,363
Total
Total Assets 166,033,588 182,171,885 206,191,138
Equity
ACBL Ratio 20.27% 21.86% 2.98% ACBL Ratio 1.35% 1.47% 0.18%
Industry 27.0% 25.0% 12.0% Industry 3.5% 3.7% 1.7%
Ratio Ratio
 SOLVENCY RATIOS
• Equity to Asset Ratio: • EQUITY TO DEPOSIT RATIO:
(Total Equity / Total Deposits)
Total Equity / Total Assets)

Years 2006 (‘000) 2007 (‘000) 2008 (‘000) Years 2006 (‘000) 2007 (‘000) 2008 (‘000)

Total Equity 11,053,230 12,265,987 12,971,363 Total Equity 11,053,230 12,265,987 12,971,363

Total Assets 166,033,588 182,171,885 206,191,138 Total 131,839,283 143,036,707 167,676,572

Deposits

Results 6.6% 6.7% 6.2% Results 8.3% 8.5% 7.7%

 Leverage Ratios
• Owner’s Equity-to-Total Asset • Owner’s Equity-to-Fixed Asset
Ratio Ratio
Owner's E quity-to-T otal As s et Owner's E quity-to-F ixed As s ets R atio
R atio
60
2.5
58

2 56
54
1.5 52
50
1
48
0.5 46
44
0
2006 2007 2008
2006 2007 2008

Years 2006 (‘000) 2007 (‘000) 2008 (‘000) Years 2006 (‘000) 2007 (‘000) 2008 (‘000)
Share 2,004,333 3,006,499 4,058,774
Share 2,004,333 3,006,499 4,058,774
holder’s
holder’s
Equity
Equity
Total Fixed 3,810,331 5,128,428 8,266,458
Total Assets 166,033,588 182,171,885 206,191,138
Assets
Results 1.20 1.65 1.96 Results 52.60 58.62 49.09
•
Credit Risk Ratios
Nonperforming assets to loans •ANNUAL PROVISION FOR LOAN LOSSES TO EQUITY CAPITAL

Years 2006 (‘000) 2007 (‘000) 2008 (‘000) Years 2006 (‘000) 2007 (‘000) 2008 (‘000)

Net NPLs 3,656,297 6,907,591 11,689,417 Provisions 1,128,137 3,920,240 3,824,778

Total loans 99,179,372 100,780,162 128,818,242 Equity 9,619,066 12,099,645 12,034,895

Capital

Results 0.04 0.07 0.09 Results 0.12 0.32 0.32

• NON-PERFORMING ASSETS TO EQUITY CAPITAL

Years 2006 (‘000) 2007 (‘000) 2008 (‘000) 1

0.9
0.8 Non-Performing
Net NPLs 3,656,297 6,907,591 11,689,417 0.7 loans to equity
0.6 capital
0.5 Annual Provision
Equity 9,619,066 12,099,645 12,034,895 0.4 for loan losses to
0.3 equity capital
Capital
0.2 Non-Performing
0.1 Assets to equity
Results 0.38 0.57 0.97 0 capital
2006 2007 2008 Peer
Group
 ASSET QUALITY
• Non-Performing loans to Advances • Provision to Non-Performing Loans:
Years 2006 (‘000) 2007 (‘000) 2008 (‘000) Years 2006 (‘000) 2007 (‘000) 2008 (‘000)

NPLs 3,656,297 6,907,591 11,689,417 Provisions 1,128137 3,920,240 3,824,778

Advances 99,179,372 100,780,162 128,818,242 NPLs 3,656,297 6,907,591 11,689,417

Results 0.04 0.07 0.09 Results 0.3 0.6 0.3

0.1 0.7
0.6
0.08
0.5 Non-Performing Loans
0.06 0.4 to Advances
0.04 0.3 Provisions to Non-
0.2 Performing Loans
0.02
0.1
0 0
2006 2007 2008
 CONCLUSION
• The year 2007 was a volatile year for the banking
sector in terms of profitability.
• The bank is either not very efficient at collecting
the outstanding loans or has a very liberal loans
distribution policy.
• bank may face considerable credit risk from its
loan defaulters.
• The liquidity of the bank has maintained a
consistent trend.
• The solvency of the company has been
successfully maintained over the year.