KARACHI, Sept 26: On Thursday, Pakistan Industrial Credit & Investment Corporation Limited (PICIC) announced the financial results and appropriations for the year ended June 30, 2002. The board had met a day earlier but due to the marathon meeting that continued till 7 in the evening, the announcement at KSE came up in the morning on Thursday.

The board has proposed cash dividend at 15 per cent tied to stock bonus at 18.5 per cent for 2002 — both recording improvement over the earlier year’s cash payout at 12 per cent and bonus issue at 15 per cent. In an accompanying press statement, PICIC stated that the total dividend at 33.5 per cent was the “highest so far declared by any bank and financial institution during 2002”.

The results were greeted at the market with one rupee increase in the price of the stock that closed on Rs23.90 with trading seen in 2.24 million shares on Thursday. At the last count on June 30, 2001, some 2,221 individuals had stake of 11.3 per cent in PICIC; institutional investment was considerable with 15 insurance companies holding 32.5 per cent and 36 financial institutions 35.2 per cent shares.

PICIC that claims to be the largest private sector development finance institution with around Rs2 billion in equity, posted growth of 26 per cent in after tax profit to Rs450.9 million for the year 2002, from Rs358.4 million the year ago. However, the numbers show that much of the increase in after tax profit was the result of reversal of Rs71.2 million in respect of amortization of deferred cost, compared with the charge of Rs60.5 million last year. On the operating basis, the Corporation showed 28 per cent decrease in profit to Rs381.1 million, from Rs529.0 million the previous year. Earning per share, after tax worked out at Rs5.32 for the year under review, which placed the stock on 4.5 times the earnings.

The corporation noted in its press release that income from lending and investment had risen by 135 per cent to Rs381.1 million, from Rs162.3 million in 2001. Income from advances increased 25 per cent to Rs1.2 billion, from Rs984 million and income from investments jumped 56 per cent to Rs521.0 million, from Rs334.4 million in 2001.

PICIC was established in the fifties by local and foreign investors in collaboration with the World Bank. The aim: to provide development finance to the private sector. The corporation boasts of having financed over 1,200 industrial units all over the country, with gross assistance of over Rs35 billion. During the year under review, PICIC said it had sanctioned Rs2.7 billion for 21 projects in sectors that included textile, fertilizer, sugar and cement. Working capital financing of the corporation rose 30.2 per cent to Rs1.3 billion in 2002, from Rs959 million in 2001. In addition, Rs1.5 billion were approved under lease finance during the year and Rs850 million were disbursed to 125 lease contracts. PICIC said it was focusing on social sector through lease financing, due to which it had set a target of Rs2 billion for lease financing during 2002-03. During the year under review, recoveries of Rs3.8 billion were made, compared to Rs3.3 billion last year. “The corporation has recovered Rs19 billion within the span of six years”, PICIC said in its press release.

Banking operations of PICIC recorded deposit growth of 86 per cent to Rs6.7 billion at end-June 2002. Cost of funds was said to have reduced by 1.64 per cent and its benefit was passed on to the borrowers. Under its industrial revival campaign, PICIC sold out 38 projects through liquidation, of which 15 projects were in full operations under the new corporate set up, the corporation said in its statement.

PICIC is one of the four prospective bidders for controlling stake in NIT (Pakistan’s largest mutual fund with Rs20 billion in assets). Other three in the run are: ABAMCO, Arif Habib Securities and the First Habib Modaraba. In the bidding for ICP Mutual Funds-lot-A, conducted by the Privatization Commission last Saturday, PICIC lost to ABAMCO Limited — another rapidly growing, well run asset management company in the private sector.