corporate briefing presentation october 25, 2019 at ... · mr. muhammad mohsin ali-since jun 09,...

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First Credit and Investment Bank LimitedCorporate Briefing Presentation

October 25, 2019At Pakistan Institute of International Affairs

At 4:00 pm

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Corporate Briefing1. History and Profile 2. Governance 3. Investment Banks- Problems / Challenges and

FCIBL Standing4. Financial Performance5. Operations at FCIBL6. Permitted Business under IFS License7. Conclusion

First Credit and Investment Bank Limited

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History and ProfileFCIBL was Established in 1989-90 as Joint Venture of

NDFC and WAPDA with the name of First Credit &Discount Corporation (Pvt) Ltd (FCDC)The initial capital was Rs. 10 million equally

contributed by NDFC and WAPDA. Subsequently, in1995-96 with Right of issue of Rs. 25 million itscapital became Rs. 35 million.Prime function of FCDC was to develop primary and

secondary market of WAPDA Bonds.Till 2004 FCDC handled various issues of WAPDA /

CAA Bonds worth more than Rs.30.0 Billions in thecapacity of advisor, arranger, market maker, payingagent, underwrite and trustee.


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History and ProfileIn 2006 renamed as FCIBL.During 2006 it expanded its mandate & scope by

obtaining License to provide Investment Finance Services (Investment Banking).During 2008-9, it got its shares listed on Karachi

Stock Exchange by floating IPO of Rs. 250 million.An Investment Bank having credit rating of

(By VIS Credit Rating Company –December 28, 2018)

Long Term Rating

A-

Short Term Rating

A2


Outlook‘Stable ‘

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GovernanceBoard of DirectorsThe Board of FCIBL consists of seasoned bankers andexperienced professionals suitably diversified into NonExecutive, Independent and Executive Directors.

1. Mr. Rehmat Ali Hasnie - Chairman Board ofFCIBL / Non Executive Director

2. Mr. Muhammad Ikram Khan – NonExecutive Director


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Governance3. Mr. Asad Ullah Saleem - Non Executive

Director

4. Mr. Naveed Asghar Chaudhry – NonExecutive Director

5. Mr. Muhammad Naeemuddin- Independent/ Non Executive Director


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Governance6. Mr. Muhammad Iqbal Hussain –

Independent / Non Executive Director

7. Mr. Muhammad Ameen – Independent /Non Executive Director

8. Mr. Muhammad Mohsin Ali President and CEO of FCIBL


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Mr. Rehmat Ali Hasnie-Since Aug 26, 2017Mr. Rehmat Ali Hasnie is the Chairman ofFCIBL and nominee of NBP. Currently, heis the Group Chief of InvestmentBanking Group and SEVP at NBP. Mr.Hasnie has over 25 years of financialmarkets experience and holds Masters

Degree in (Development Banking) from Washington DC,USA. He is Chartered Wealth Manager and Fellow of theAmerican Academy of Financial Management since July2006.


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Mr. Muhammad Ikram Khan-Since July 08, 2018Mr. Muhammad Ikram Khan is a non-executivedirector and nominee of WAPDA. He iscurrently serving as Member Finance, WAPDA.He has more than 30 years of experience inthe fields of budget, accounts and audit. Healso holds an LL.B degree and qualified PublicFinancial Management Certification fromHarvard University USA.

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Mr. Asad Ullah Saleem-Since June 10, 2014Mr. Asad Ullah Saleem is a non-executivedirector and nominee of NBP. He iscurrently Executive Vice President inNBP. He is MBA from LUMS,International Certificate in Banking Risk& Regulation (ICBRR) from USA, and gold

medalist in M.A Economics. He has about 22 years ofdiverse experience in central banking, banking policy &regulations, FIs management, corporate banking and riskmanagement.


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Mr. Naveed Asghar Chaudhry-Since Apr 22, 2017Mr. Naveed is a non-executive director andnominee of WAPDA. He is currently working asGM Finance, WAPDA. He is Fulbright Scholarand MS in Finance and MA in Economics fromGeorgia State University, USA and an MBAfrom ANU, Australian. He joined Civil Servicesof Pakistan through 27th common course andpossesses more than 18 years of professionalworking experience.


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Mr. Muhammad Naeemuddin-Since Apr 04, 2014Mr. Naeemuddin is non-executive,independent director. He is also theChairman of HRR Committee of FCIBL. He isM.A. Economics and B.A. (Hons) Economicsfrom University of Karachi. He is a seasonedbanker having more than 35 years of vastexperience in financial sector of Pakistan,mainly in various capacities at NBP.


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Mr. Muhammad Iqbal Hussain-Since Apr 25, 2015

Mr. Iqbal Hussain is non-executive,independent director. He is also the Chairmanof Risk Management Committee of FCIBL. Heholds M.A Economics from University ofPunjab and M.Sc. in Defense and StrategicStudies. He has over 36 years of experience ofworking at senior levels in federal governmentservice.


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Mr. Muhammad Ameen-Since Jun 10, 2014Mr. Ameen is also a non-executive,independent director. He is also theChairman of Audit Committee of theBoard of FCIBL. He has above 40 yearsof experience. He is BE (Mechanical)from NED University Karachi and MBAFinance IBA Karachi.


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Mr. Muhammad Mohsin Ali-Since Jun 09, 2017Mr. Mohsin Ali is the President andChief Executive of FCIBL. He is a Fellowmember of the ICMAP and member ofthe Institute of Capital Market. He hasabout 30 years of diversifiedexperience in various organizations

including more than 25 years in the financial sector.Earlier he has served FCIBL as CFO & Company Secretaryfor more than 20 years.


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GovernanceFirst Credit and Investment Bank Limited

COMMITTEES OF THE BOARDThere are three Committees of the Board of FCIBL asfollows;1. The Audit Committeea) Mr. Muhammad Ameen – Chairmanb) Mr. Naveed Asghar Chaudhry – Memberc) Mr. Muhammad Naeemuddin – Member

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2. The HR & Remuneration Committeea) Mr. Muhammad Naeemuddin – Chairmanb) Mr. Muhammad Ikram Khan – Memberc) Mr. Asad Ullah Saleem – Memberd) Mr. M. Iqbal Hussain – Membere) Mr. Muhammad Mohsin Ali – Member

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3. The Risk Management Committeea) Mr. M. Iqbal Hussain – Chairmanb) Mr. Asad Ullah Saleem – Memberc) Mr. Naveed Asghar Chaudhry – Memberd) Mr. Muhammad Mohsin Ali – Member

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Internal Control and ComplianceFCIBL maintains high standards of governance,internal control and risk assessment framework.Comprehensive policies and procedures have beenapproved by the Board covering all major spheres ofoperations and are reviewed and updated as per thechanging requirements. The Compliance functionensures that all new and existing rules andregulations, applicable to the Company, are fullycomplied with. The Company’s Internal Auditdepartment works independently under the directsupervision of Audit Committee of the Board.

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Due to sound internal control and compliance function

• no adverse finding / penalty is imposed on FCIBL

• FCIBL has never defaulted to any of its financialcommitment

• FCIBL has never asked for any waiver/ write off orrestructuring from its creditors / depositors.

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Environmental and Corporate Social ResponsibilityFCIBL is fully aware of its environmental andCorporate Social Responsibilities and is ready tosupport social and environmental causes of thecountry. FCIBL also maintains compliance to allgovernmental and internal health, safety and theenvironment measures. Facilities and conducts ofoperations are designed in a way that avoids riskto human health, safety and the environment.FCIBL has also been contributing toward socialcause.

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There are three major problems / challenges thatInvestment Banks in Pakistan has been facing since lastmany years.

Liquidity Issue :Non availability of borrowing lines from CommercialBanks

Competition :Throat-cut competition with Commercial Banks due toAbsence of level playing field

Human Resource :Scarcity of Investment Banking Professionals


Investment Banks- Problems / Challenges and FCIBL Standing

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• Since the global financial crises of 2008,business activities of almost all the investmentbanks had become dormant.

• Majority of investment banks incurred hugelosses during the ten years period of 2008-18aggregating to more than Rs.7.0 billion. FCIBL’snet loss during this period was less than 1% ofthe total.



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• Despite problems and challenges, FCIBL hasbeen sustainable in doing its business duringhard times. Its credit rating never went belowinvestment grade.

• FCIBL has been profitable since its inception in1989-90 except losses reported during threeyears (2010-13).



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• FCIBL built up its equity to more than Rs.400.0million through internal profits before going tolisting in August 2008.

• FCIBL is gradually expanding its businessactivities permissible under NBF regulatoryregime.


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• FCIBL has paid substantial Cash Dividend apartfrom Stock Dividend of Rs.365.0 million since itsinception.

• Recently it has declared Cash Dividend despitefacing challenges.



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Financial Performance Shareholders’ EquityAs at June 30, 2019

Rs. In million# of Shares Amount

Initial paid up capital (1989-90) 1.0 10.000Right Issue (1995-96) 2.5 25.000Bonus Issues (various years) 36.5 365.000Pre-IPO Capital 40.0 400.000IPO (August 2008) – (General Public) 25.0 250.000Paid-up capital 65.0 650.000Reserves 92.830Total 742.830Equity net of deficit on AFS Inv 718.592Break-up value per share (Rs.) 11.06

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Financial Performance (SOFP)Particulars June 30, 2019 June 30, 2018 June 30, 2017

EQUITY & LIABILITIESPaid up capital 650,000 650,000 650,000Reserves 92,830 83,093 73,948Deficit on AFS inv (24,238) (10,843) (8,021)

718,592 722,250 715,927Bank Borrowings 616,603 589,638 415,602Other Liabilities 50,106 15,475 23,779

1,385,301 1,327,363 1,155,308ASSETSInvestments 142,612 154,040 176,166Placements 420,000 430,000 464,000Financing 632,746 382,492 149,297Bank balances 36,263 209,077 219,306Other assets 153,680 151,754 146,539

1,385,301 1,327,363 1,155,308


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Financial Performance (Profit & Loss)Particulars June 30, 2019 June 30, 2018 June30, 2017

INCOME 116,844 102,649 79,945

OPERATING PROFIT 19,759 16,568 7,543

PROFIT BEFORE TAX

15,203 15,801 11,720

PROFIT AFTER TAX 9,517 9,189 7,132


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Operations at FCIBLFCIBL’s existing business activities consists mainlyof the following operations.

- Corporate & Investment Banking Activities- Treasury & Money Market Activities- Arbitrage Business- Capital Market Activities- Fee Oriented Business

FCIBL will further expand its core operations inperiods to come. The increased earning throughexpansion will also support to absorb initial costexpected to incur on new activities.


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Permitted Business under IFS License As permitted under the NBFC regulatory regime,FCIBL being the license holder of InvestmentFinance Services is also permitted to undertake;

Leasing Business Housing Finance Services Discounting Services Money Market Brokerage Business

FCIBL may explore above businesses at suitabletime in future.


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Conclusion FCIBL’s performance since its inception has been satisfactory.The Board and management has always adopted prudentapproach for It has in place sound internal controls, riskmanagement system and significant policies.

Despite many challenges being faced, FCIBL has been able tooperate at sustainable footings and has significant potential togrow further.

After a consolidation phase, FCIBL is in a position to gear upits operations in permitted activities.

With the support of Sponsors and Shareholders and under theguidance of Board of Directors, the management is confidentto expand its operations on horizontal and vertical format,improve its assets quality, infrastructure and build capacity tomeet the requirements of new challenges and opportunity.


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Thank You


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