Bank: SILK BANK LIMITED - Analysis of Financial Statements Financial Year 2006 - H Year 2009.

Silk Bank (formerly Saudi Pak Commercial Bank) came into existence when a consortium of investors, comprising of Bank Muscat SAOG, Nomura European Investments Limited and International Finance Corporation signed a share purchase agreement with the Saudi Pak investment group. On March 31, 2008 the consortium acquired 86.55% shares of the bank for around USD 260 million or $0.47 per share (Rs 29.3 per share). Under the new leadership, the bank will continue to focus on SME and consumer financing resulting in efforts of increased profitability.

RECENT PERFORMANCE (1H09) Silk Bank's loss after tax is up by 44% (HY) at Rs 1.108 billion (LPS: Rs 1.23) during the first 6 months of FY09. The net mark-up income registered a growth of 34.54%, however, the interest expense rose by 46.95% in 1H09. Non-mark-up income during the period registered a sizable growth of 121% (to Rs 395.471 million). The loss is mainly due to rising interest expenses, impairment charges, administrative expenses and re-branding charges. During HY09, the 61.65% decrease in the gross interest income can be attributed to a sharp surge in the interest expenses to the tune of 46.59% (Rs 1.902 billion). The impairment expenses of available for sale securities (Rs 101.893 million) drives up provisioning expense. The non-interest income in HY09, shows a healthy growth of 121% to Rs 395.471 million, mainly due to gains on dealing in foreign currencies due to rupee depreciation and from gains on sales of securities, which stood at Rs 67.045 million, almost 3 …