Askari-AR-2014.Pdf
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For Askari Bank, our relationship with our clients is what matters the most. It is the foundation of our core belief – Pak Watan Hai Apni Jaan (Our Pakistan, Our Pride) – which has guided us through the last twenty- three years. In our cover, we pause and reflect on the essence of what makes us who we are. As Pakistanis, our indomitable spirit is our greatest strength; which has helped us endure and thrive in the most uncertain times. Today, it has become the stepping stone behind our illustrious journey – the enduring bond that unites and defines us for the past we share and the future we wish to create. Annual Report of Askari Bank Limited for 2014 CONTENTS 02 23 Years of Banking Unconsolidated Consolidated 03 Key Financial Highlights 04 Vision and Mission Financial Financial Statements 05 Pakistan’s Profile Statements of of Askari Bank 06 Products & Services Askari Bank Limited and its 10 Corporate Information Limited Subsidiaries 48 Statement of Internal Controls 12 Notice of 23rd Annual General 135 Auditors’ Report to the Meeting 49 Statement of Compliance Members 18 Management 51 Review Report to the Members 136 Consolidated Statement of 19 Organogram 52 Auditors’ Report to the Financial Position Members 20 Chairman’s Message 137 Consolidated Profit and Loss 54 Unconsolidated Statement of Account 21 President’s Review Financial Position 138 Consolidated Statement of 25 Corporate Social Responsibility 55 Unconsolidated Profit and Loss Comprehensive Income 26 Value Added Statement Account 139 Consolidated Cash Flow 27 Financial Review 56 Unconsolidated Statement of Statement 30 Financial Calendar Comprehensive Income 140 Consolidated Statement of 31 Share & Debt Information 57 Unconsolidated Cash Flow Changes in Equity 32 Horizontal & Vertical Analysis Statement 141 Notes to the Consolidated 35 Our Network 58 Unconsolidated Statement of Financial Statements 36 Six Years’ Statistics Changes in Equity 38 Directors’ Report 59 Notes to the Unconsolidated 202 Pattern of Shareholding Financial Statements 203 Correspondent Network 206 Unconsolidated Statement of Financial Position in US Dollars 207 Unconsolidated Profit and Loss Account in US Dollars 209 Form of Proxy 1 23 YEARS OF BANKING Askari Bank was incorporated in Pakistan on October 9, 1991, as a public limited company. It commenced operations on April 1, 1992, and is principally engaged in the business of banking, as defined in the Banking Companies Ordinance, 1962. The Bank is listed on Karachi, Lahore and Islamabad Stock Exchanges. Askari Bank has since expanded into a network of 321 branches / sub-branches, including 53 dedicated Islamic banking branches / sub-branch, and a wholesale bank branch in Bahrain. A shared network of over 9,000 online ATMs covering all major cities in Pakistan supports the delivery channels for customer service. As at December 31, 2014, the Bank had equity of Rs. 23.7 billion and total assets of Rs. 447 billion, with 955,156 banking customers, serviced by our 5,894 employees. Askari Investment Management Limited and Askari Securities Limited are subsidiaries of Askari Bank engaged in the business of managing mutual funds and share brokerage, respectively. 2 Annual Report of Askari Bank Limited for 2014 23 YEARS OF BANKING KEY FINANCIAL HIGHLIGHTS FOR 2014 Rupees in million 2014 2013 Growth% Total assets 447,083 394,827 13.2 Deposits 387,587 335,241 15.6 Advances - net 170,496 163,557 4.2 Investments 217,214 165,863 31.0 Shareholders’ equity 23,707 18,729 26.6 Operating profit 6,103 2,663 129.2 Profit / (loss) before taxation 5,781 (8,441) 168.5 Profit / (loss) after taxation 4,015 (5,480) 173.3 Capital adequacy ratio - percent 13.03 10.39 ~ Cash dividend per share - rupees 2.0 – – Market value per share - rupees 23.1 14.0 64.8 Net book value per share - rupees 18.8 14.9 26.6 Return on Core Equity Earnings Per Share 22.4%(2014) 2013: -32.1% Rs.(2014) 3.2 2013: Rs. -5.9 Return on Assets 64.5% Cost to Income Ratio 1.0%(2014) 2013: -1.5% (2014) 2013: 78.2% 3 VISION To be the bank of first choice in the region MISSION To be the leading bank in Pakistan with an international presence, delivering quality service through innovative technology and effective human resource management in a modern and progressive organizational culture of meritocracy, maintaining high ethical and professional standards, while providing enhanced value to all our stakeholders, and contributing to society 4 Annual Report of Askari Bank Limited for 2014 PAKISTAN’S PROFILE Country Statistics Land area - sq. km 796,100 Population - million 188 Population Growth - percent 1.95 Population Density - people / sq. km 236 Life expectancy - years 66 Literacy - percent 60 Economic Indicators At fiscal year end 2009-10 2010-11 2011-12 2012-13 2013-14 GDP Growth Rate - percent 2.6 3.6 3.8 3.7 4.1 Exports - USD Million 19,680 25,369 24,718 24,802 25,075 Imports - USD Million 31,132 35,796 40,371 40,157 41,630 Inflation - percent 10.1 13.7 11.0 7.4 8.0 Trade Balance - USD Million (11,452) (10,427) (15,653) (15,355) (16,555) Foreign currency reserves - USD Million 16,750 18,244 15,289 11,020 14,141 Exchange Rate - USD 85.51 85.97 94.55 99.66 98.80 Exchange Rate - Euro 104.82 124.54 118.99 130.18 134.94 Banking System At financial year end 2010 2011 2012 2013 2014 Net assets of banking system - PKR Billion 695 784 873 943 1,207 Total assets of banking system - PKR Billion 7,117 8,171 9,720 10,487 12,106 Capital adequacy ratio - percent 13.9 15.1 15.6 14.9 17.1 Advances / Deposits ratio - percent 61.6 53.6 52.2 49.5 48.2 Return on Assets (before tax) - percent 1.5 2.2 2.0 1.6 2.2 Return on Equity (before tax) - percent 15.5 23.0 21.2 17.9 24.3 KSE 100 index - points 12,022 11,348 16,905 25,261 32,131 KSE Market capitalization - PKR Billion 3,269 2,946 4,242 6,057 7,381 Source: Websites of Ministry of Finance - Govt. of Pakistan, the State Bank of Pakistan and Karachi Stock Exchange 5 PRODUCTS & SERVICES Branch Banking Current Account ASK Sona Card Through a branch network in major Current accounts cater to the ASK SONA CARD is a joint cities, towns and cantonments, variety of financial needs of our venture of Askari Bank Limited & made up of conventional, diverse customer base with added Fauji Fertilizer Company Limited corporate, consumer, Islamic, as benefits of free cheque book, issue (FFC), specially designed to well as agricultural banking service of demand drafts / pay-orders and create convenience and cater to branches, we aim to provide our much more. the business needs of FFC and customers with a wide array of its dealers. It is an innovative, offerings catering to their banking Savings Account electronic cash management needs. solution that replaces the existing Saving accounts offered by the conventional collections system. Bank to both individual and Askari Bachat Account It is a transaction specific debit institutional customers include card with plastic money features Askari Mahana Bachat Account Askari Special Deposit and normal which will replace the conventional is a term deposit designed for saving account based on profit and transfer of funds. individuals with a medium term loss sharing basis. Askari saving investment appetite. It offers deposits offer attractive features customers the option of investing and competitive returns and Askari Aasaan Money for one and two years tenures and certain flexibility similar to current Transfer has been designed keeping in view accounts. Aasaan Money Transfer is a service savings needs of customers who offered by Askari Bank providing want profit on a monthly basis. Rupee Traveler Cheques quick and free home remittances of With competitive rates of return overseas Pakistanis to beneficiaries paid monthly on the 1st of every Askari Bank offers customers a in Pakistan received through our following month and the option of widely accepted ‘Rupee Traveler arrangements of correspondent getting a financing facility of up to Cheques’, which eliminates all banks and exchange companies. 90 percent, Askari Bachat Account financial risks while traveling. It Aasaan Money Transfer is caters to customers saving needs is a safe and secure way to make completely cost free and is available without blocking their funds for a payments. for all citizens across the country. longer duration. Bancassurance Our Home Remittance Department Value Plus Current The Bank offers innovative has dedicated team of customer Deposit banking solutions with a touch service officers who are available of insurance in it by fusion of to respond to the queries of Askari Value Plus Current Account banking, wealth management and remitters and beneficiaries of the offers value and flexibility. This insurance products. In partnership remittances. product promises greater financial with Eastern Federal Union (EFU) freedom and security with Life and Jubilee Life Insurance matching flexibility. Now customers Corporate & Company Limited, the Bank offers (individuals) can open a “Value Investment Banking its customers with value added life Plus Current Account” to avail At Askari, we understand the insurance and wealth management the benefit of free life insurance unique business requirements of products tailored to suit their long coverage of upto Rs. 2 million, debt our corporate and institutional term financial requirements and card with two supplementary cards, clients, and accordingly the Bank’s protection plans through select I-Net facilities, SMS alerts, issuance Corporate and Investment Banking branches. of cheque books, payorders, Group (CIBG) strives to meet their demand drafts, with no minimum expectations through provision of balance requirements.