Student Name:

Ammar Arif Subhan

Reg No: 21463

Bank Name:

Askari Bank Limited

Analysis for the year Dec 31, 2018 and Dec 31, 2017

Attachment:

One Page of Balance Sheet and one page of Income Statement

  

Background:

Askari Bank was incorporated in Pakistan on October 9, 1991. Askari has a wide network of 534
branches spread all over the country with 440 conventional branches and 94 Islamic branches.  

Majority shareholding of around 73% rests with the Fauji foundation and other associated
companies and around 14% with the general public.
CAMEL Evaluation:
 

Capital:

Paid up capital in 2018 is 12,602,602,000 which was constant in 2017. The capital is 0.26 times
more than the MCR of Rs. 10 Bn.

It is very less as compare to other banks which may lead to liquidity problems, such as the bank
will not be able to increase its assets by giving advances or loans since its capital is only 0.26
times more than the minimum requirement of MCR stated by state bank of Pakistan.

If the bank does not take corrective action on time or neglect this then later the state bank will
not allow the bank to increase its capital by issuing more shares and also there is a risk that SBP
will halt the operations of the bank.

The Capital adequacy ratio (CAR) of Askari bank in 2018 is 12.51% while in 2017 it was 12.09%,
if the bank does not make strategies to increase its CAR ratio, it won’t be able to increase its
assets through giving advances and loans hence affecting its growth.
Asset:

 Total Assets of Rs. 706,532,042,000 (Rs. 662,691,395,000 as on 2017), grew by 6.61% in

FY 2018, comprise 85.40% Loans and Investments, 7.54% Liquid Assets (Cash, Due From,
and Government Securities), and 7.06% other / Fixed Assets.

 Loan tenor comprised 66.53% Short Term (ST; up to 1 year) and 33.47 % Long Term.

 Asset quality improvement is evident with sustained reduction of the ratio of Non-
Performing Loans (NPLs) to Gross Loans from 9.40% FYE 2017 to 7.21% in FYE 2018.

 NPLs coverage (Provisioning / NPLs) also improved from 93.30% in FYE 2017 to 94.20%
in FYE 2018.

Management:

 President: Mr Abid Sattar

He is serving as President since 9th August 2018. Mr Abid Sattar has over 35 years of rich and
diversified experience covering corporate, institutional, retail and consumer banking, both in
Pakistan and overseas. Prior to joining Askari, he was based in Singapore heading International
Business for Asia and Africa Regions for Habib Bank Limited. During his previous assignment at
HBL Pakistan, he has held the positions of Head of Global Operations and Head of Retail and
Consumer Banking. His earlier experience includes senior level positions with Citibank, Standard
Chartered and Chase Manhattan banks.

Mr. Sattar has a proven track record of leading and building efficient and excellent teams. He is
well known for hiring talent, maintaining highest standards of compliance while expanding and
growing businesses.

He holds Masters in Economic and Politics of Development from Cambridge University, UK and
is a Gold Medalist in MBA Finance from the Punjab University, Lahore.
Earnings:

 Core Interest Income increased from Rs. 16,195,255,000 in FYE 2017 to Rs.
18,609,958,000 in 2018.

 Non Fund based income increased from Rs. 610,8354,000 in FYE 2017 to Rs.
5,621,593,000 in 2018.

 Administration expense increased from Rs. 14,948,796,000 in FYE 2017 from Rs.
16,240,514,000 in FYE 2018.

 Profit before Tax reduced from Rs. 8,491,802,000 to Rs. 6,879,455,000 in 2018.

 There was no extraordinary income in years 2017 & 2018.

Liquidity:

 Funding sources comprise 91% Deposits, 7.83% State Bank of Pakistan (SBP) / Inter Bank
Borrowings, 2.3% Equity, and 3.14% Other Liabilities.

 Deposit Composition comprises Current 28.67 %, saving 55.18 % and Term 16.15 %.

 Liquid Asset / Total Asset Ratio deplete from 42.78% in 2017 to 39.47% in 2018.

 Advances to deposit ratio (ADR) in 2017 49.2 and 59.81 in 2018.

Rating:
Based on the three parameter of deposits, advances and profits,

The rating of the bank is as follows:

 Item wise score:

Heads Amount Score

Deposits 573,635,856,000 5
Advances 343,107,147,000 5
Profit 4,431,278,000 5

 Total Score: 15

 Rating relating to total score: “B”

Conclusion:

Based on the Scorecard Rating, Askari Bank Ltd has a total score of 15 giving it a rating of B
grade.