Bank Al Falah offers 20pc of shares through IPO

According to Bashir A Tahir, Chief Executive of the Dhabi Group, 70 per cent shares of Habib Credit and Exchange Bank, formerly BCCI with a three branch network were acquired in the privatisation by the group from the Government of Pakistan in 1997, at a price of Rs38 per share. Later, in 2002 remaining 30 per cent were also acquired at a price of Rs27.85 per share in an opening bidding process.

After seven years of successful operations, Bank Al Falah Limited has grown phenomenally into a largest foreign bank operating in Pakistan with 59 branches across the country.

According to the balance sheet as at December 31, 2003, the bank which has a paid up capital of Rs2 billion, earned an operating profit of Rs3.6 billion, while its after tax profit was Rs2.123 billion marking a marathon jump of 376.40 per cent from previous year's profit of Rs445.679 million.

The bank reported deposits worth Rs76 billion which grew by 48.40 per cent from Rs51.684 billion during the year 2002. Advances amounting to Rs50.37 billion were given in 2003 comparing with Rs29.437 billion in 2002.

Tahir said that for the long term, Bank Al Falah Limited has a credit rating of AA- (double A minus) while for short term it is rated A1+ (A one plus).

Bashir A Tahir said that the bank which has a clean portfolio has its large interest in trade finance and short term lending. Bank Al Falah has emerged as number one bank in automobile financing while it is ranked 2nd best with biggest stake in house financing which it offered just in October 2003. The bank is pacing ahead in private, multinational and public sector banks with its enviable position as being the biggest issuer of credit cards in the country..

According to the guidelines of its Chairman Shaikh Hamdan bin Mubarak Al Nahyan, he said that the Bank is pursuing a philosophy of offering best interest rates to its customers coupled with efficient services without compromising on quality. This is what has been the secret behind the magnificent growth of the financial institution which was in net loss at the time of its sell-out.

"There was no compulsion on the part of management to issue an IPO comprising 20 per cent shareholding, but it was the desire of the Chairman Shaikh Hamdan bin Mubarak Al Nahyan, who wanted to enlarge the ownership of the financial institution, which has become a symbol of growth," Tahir said.

Tahir said that the management is seriously weighing its options to expand Bank's operations internationally and in the first phase Sri-lanka was the hottest choice as a business destination.

The members of the Board of Directors of the Bank Al Falah Ltd included Abdulla Khalil Al Mutawa, Abdulla Nasser Hawaileel Al Mansoori, Khalid Mana Saeed Al Otaiba, Ikram Ul Majeed Sehgal and Nadeem Iqbal Shaikh

'Saudi decision to raise oil output in their own best interest'

PARIS Opec kingpin Saudi Arabia's abrupt about-face on oil output on Monday, calling for an increase to counter criticism and ease crude prices that have hit 13-year highs, is in its own best interests, analysts said.

Deutsche Bank analyst Adam Sieminski said in London that the announcement was aimed at curbing criticism directed at Opec and Saudi Arabia - a US ally - and to avoid stunting global economic growth on which the kingdom's future oil revenues depend.

"I think they're doing what's in their own best interest," he summed up.

Saudi Oil Minister Ali Al Naimi had said earlier in Riyadh: "It is certain that the kingdom believes that increasing Opec's production ceiling is essential to keep supply and demand balance.

"We in the kingdom estimate the required increase of the ceiling to be no less than one and a half million bpd (barrels per day)," he added in a statement released by the oil ministry.

The announcement came in sharp contrast to comments by other members of the Organisation of Petroleum Exporting Countries over the past few weeks.

Those have generally laid the blame for soaring crude oil prices on geopolitical factors, poor stock management, market speculation and saturated refining capacity in the United States.

Now, the Saudi minister said: "It is apparent that demand, especially that of Asia, has and will continue to increase in the second half of this year."

The world's biggest oil producer had expected demand to fall back after the end of winter in the northern hemisphere, which led Opec to curb output to 23.5 million bpd on April 1, noted CDC Ixis research director Moncef Kaabi.

On Friday, however, crude prices shot past the symbolic $40 a barrel level, before settling back Monday on Naimi's comments. The last time crude prices were at that level was in October 1990, two months after Iraq's invasion of Kuwait.

"A lot of politicians are saying that 40-dollar oil is dangerous for the global economy," Sieminski said.

"Partly the Saudis are responding to that, but also to the fact that if there is a downturn in the global economy caused by these prices, eventually it hurts Saudi Arabia the most."

He recalled that Iran had sent a similar message a few days ago and that no one would suspect Teheran of seeking to please Washington. Such declarations remain largely psychological, moreover, since Opec has surpassed its own production quotas for several months.

As a result, the announced increase is more a matter of reconciling Opec's statements with actual production than of actually pumping more oil, analysts note.

"If Opec's curent production is not spoiling the market then increasing the quotas to get closer to production is a reasonable thing to do," Sieminski said.

The oil group's next meeting is scheduled for June 3 in Beirut, but its ministers are to discuss prices at an informal meeting on the sidelines of an energy summit planned for May 22-24 in Amsterdam.

Meanwhile, it remains to be seen if what is being considered a cosmetic announcement is enough to durably calm oil markets.

"It might take things off the boil for now, but the problems that are pushing prices higher are still there," Kaabi warned.