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DIRECTOR'S REVIEW The Directors are pleased to present the un-audited financial statements
of the Bank for the third quarter ended March 31, 2005 and highlight some
important aspects of its operations. Operating Results The Profit before tax for the third quarter ended March 31, 2005 is Rs.
129.96 million compared to Rs. 114.52 million for the corresponding period last
year representing an increase of 13%. During the period the Management laid special emphasis on the non-fund
based activities of the Bank. As a result the non-fund based revenues have more
than doubled to Rs. 92.1 million. The fund-based revenues have also increased
by 17% to Rs. 255.71 million. The Rise in administrative and operating expenses is mainly attributable
to Equity Brokerage Division. This Division has become a major contributor to
the Bank's profitability. Due to continuous rise in interest rated, the
borrowing cost has increased which is largely compensated by corresponding
increase in the total fund-based revenues. Future Prospects The Management foresees tough timed ahead due to new regulations
applicable to shares trading. Recent increase of 1.5% in the discount rate will
also increase the borrowing cost. The Management expects to overcome this
challenge by making greater efforts in identifying and grasping high yielding
investment opportunities to maintain a steady growth in profits and to add
value to the shareholders' investment. Risk Management The Management is aware of the risk management requirement particularly
in equity brokerage and has instituted strict internal controls to safeguard
against the kind of upheavals recently witnessed in the stock market. Acknowledgement We take this opportunity to place on record our sincere appreciation for
the Securities and Exchange Commission of Pakistan, State Bank of
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