JINNAH UNIVERSITY FOR WOMEN

Alishba Khan
Aqsa Arshad
Jawairia Sami Mallick
Bba-3A
Financial Management
Final Project Report

Submitted To
Mrs. Faiza Maqbool
Submitted Date
02-Aprail-2018
TABLE OF CONTENT

ACKNOWLEDGMENT
I would like to express my deepest appreciation to all those who provided me the possibility to complete
this report. A special gratitude I give to our course instructor, Mrs. Faiza Maqbool, whose contribution in
suggestions and encouragement, helped me to coordinate my project especially in writing this report

INTRODUCTION
This report is consist of financial analyzing and computation of four banks , in which one of
them we considered as our star company which financial performance we are going to compare
with others.

The briefly introduction of those banks are as follow:

1. SONERI BANK (STAR COMPANY):

Soneri Bank Limited is a Pakistan bank based in. Soneri Bank Limited was incorporated in
Pakistan on 28 September 1991 as a public limited company under the Companies Ordinance,
1984 It is a mid-size bank having about o 288 branches including 16 Islamic banking
branches (2015: 266 branches including 16 Islamic banking branches) in Pakistan. Soneri Bank,
strive to offer the most vibrant range of products and services to exceed their customer’s
expectations.

Their commitment to the customers is to leverage their brand promise “Roshan Har Qadam” by
constantly innovating their products suite to best match the personal and business needs of
customers, including Commercial, Retail & Corporate and Islamic segments. With corporate
vision "To better serve the customers to help them and the society grow”, and their mission "To
provide innovative and efficient financial solutions to our customers" they serve them with
excellent solutions and constantly raise our performance standards .

The bank operates in four segment corporate finance, trading and sales, retail banking and
commercial banking .Corporate finance includes syndicated financing and services provided in
connection with mergers and acquisitions, underwriting, privatization, securitizations, debt,
equity, syndication, Initial public offers (IPO) and secondary private placement. Trading and sale
segment includes fixed income, equity, foreign exchange, commodities, credit, funding, own
position securities, brokerage debt and prime brokerage. Retail banking segment includes retail
lending and deposit, banking services, private lending and deposit, trust and estates investment
advice and merchant/ commercial/ corporate cards. Commercial banking includes project
finance, real estate, export finance, trade finance, factoring and leasing. The essence of the
bank’s business philosophy is to cater to the banking requirements of small & medium sized
entrepreneurs, providing them qualitative & competitive services with emphasis on encouraging
exports. Nearly forty percent of their credit portfolio is related to export financing and credit
decisions which has taken within 48 hours.

2. MCB BANK
MCB Bank Limited, is one of the oldest and leading banks in Pakistan. It was incorporated on
July 9 in 1947. MCB Bank was nationalized along with other private banks in 1974 as part of
Government of Pakistan's economic reform movement and was later privatized in 1991. The
Bank has journeyed a remarkable tenure of more than half a century of competitively edged
and well positioned heights of success by deploying quality banking, heads on technological
developments, professionally leading management and prudent and ethical work
methodologies.

MCB Bank in one of the largest foreign banks in Sri Lanka; the first bank in Pakistan to launch
Global Depository Receipts (GDR) in 2006 and has strategic foreign partnership with Maybank of
Malaysia which holds 20% shares in MCB Bank through its wholly owned subsidiary Mayban
International Trust (Labuan) Berhad since 2008.

The Bank is versed as one of the oldest and most responsible Banks in Pakistan and has played
pivotal role in representing the country on global platforms while being one of the few
institutions that are recognized and traded in the international market.

MCB Bank is actively involved in various CSR activities as well and constantly strives to
contribute towards the country’s betterment. It has played a key role in enhancing the role and
value of service and technology in the banking industry through its customer centric objectives.
The Bank has also been acknowledged though prestigious recognition and awards by
Euromoney, World Finance, MMT, Asia Money, SAFA (SAARC), The Asset Triple A, Finance Asia,
NFEH, CFA, Pakistan Centre of Philanthropy and The Asian Banker.

The Bank currently carries entity risk rating of AAA (long term) and A1+ (short term) which is the
highest category rating by Pakistan Credit Rating Agency (PACRA).

Media Center
3. UBL :
The decision to establish UBL was taken in June 1959 and the company was registered on July
24, 1959. United Bank Limited started the operations on 7 November 1959 with its first branch
namely McLeod Road now I.I Chundigarh Road at Karachi .On 9thNovember 1959 the Gazette of
Pakistan notified and included UBL in its list of scheduled banks operating in Pakistan.

In 1969 the Management of Union Bank Ltd. Incorporated in former east Pakistan, was handed
over to UBL, which was later emerged with UBL in early seventies. The Bank continued its
operations as private banking company until 31st December 1973 when it was nationalized, in
the large nationalization process in the government of Zulfiqar Ali Bhutto, A Bank, like the
society it serves should be dynamic as banking is about people customers with their needs and
opportunities and staff with skills, experience and resources. UBL has shown dynamism since its
inception.

There have been many changes in the structure, functions and the services provided. These
changes reflect the changing requirements of our developing economy as a whole and those of
Industry, Commerce and private Individuals.
On October 19th2002, biggest event occurred in the history of UBL. As UBL was privatize.
The Government handed over the management of UBL, the third largest bank of the countr y to
the successful bidder Consortium of Abu Dhabi Group (UAE) and Bestway Holding Ltd. (UK). The
sales agreement for the transfer of 51% shares was signed by Privatization Minister Altaf M. Saleem and
Bestway Holding, Sheikh Nahayan Mubarak Al Nahayan at a ceremony.

United Bank Limited (UBL) is a Pakistani commercial bank based in Karachi, Pakistan. It is one of
the largest bank in the private sector, the Bank operates a network of over 1,385 branches
across Pakistan and 19 branches overseas. With a customer base of over 4 million, it leads the
banking and financial services sector in Pakistan. Customers across the world have 24/7 access
to the bank via UBL's internet banking facilities.

The bank has an asset base in excess of $15 billion, a global workforce of almost 13,000 people
and a diversified client base covering a broad spectrum of segments and industries across the
globe. UBL provides a complete array of services in wholesale and retail banking through its
network of branches and presence across 12 countries in four continents including
the UAE, Bahrain, Qatar, Yemen, UK, Switzerland, China, Oman, US, Tanzania, Iran and Pakistan.
 FIVE YEARS’ VERTICAL ANALYSIS
STATEMENT OF FINANCIAL POSITION
TH
BALANCE
BALANCE SHEET AT SHEET
AS 30TH AS AT 30 DECEMBER
DECEMBER (RS IN(RsMILLION)
IN MILLION.)
Assets 2017 2016 2015 2014 2013
Cash and balances with treasury banks 19,431 18,279 16,718 15,776 12,673
Balances with other banks 1,151 823 1,635 575 707
Lending’s to financial institutions 6,544 5,537 3,094 604 2,988
Investments-net 117,429 117,884 108,846 75,716 46,703
Advances-net 164,293 125,306 112,002 107,968 97,534
Operating fixed assets 6,581 5,138 4,957 5,014 3,734
Deferred tax assets-net 0 0 0 0 103
Other assets 6,706 5,554 6,090 7,522 4,792
Total Assets 322,135 278,521 253,342 213,175 169,23
4

LIABILITIES AND EQUITY

Deposits &other Account 227,348 209,925 184,847 162,964 140,439

Borrowing 64,584 38,905 39,876 25,825 10,485

Bill Payable 4,895 4,164 3,077 3,063 2,718
Other Liabilities 2868 3,101 2,933 2,864 2,309
Deferred Tax Liabilities 936 1,138 1417 1,420 -
Sub-ordinated Loans 2998 2,999 3000 - -
Total Liabilities 303,629 260232 235,150 196,136 155,951

Net Assets 18,505 18,289 18,192 17,039 13,283

Represented by
Share capital-net of discount 11,025 11,025 10,023 10,023 10,023
Reserves 1,752 1,424 1,049 934 618
Un-appropriated profit 3,665 3,496 4,264 3,150 1,810
Surplus on revolution on asset 2,063 2,344 2,856 2,932 832
Total Equity 18,505 18,289 18,192 17,039 13,283

Total Liabilities & Equity 322,135 278,521 253,342 213,17 169,234

5
 VERTICAL ANALYSIS OF BALANCE SHEETAT AT 30TH DECEMBER (RS. IN MILLION)
ASSETS 2017 2016 2015 2014 2013
Cash and balances with treasury banks 6% 7% 7% 7% 7%
Balances with other banks 0% 0% 1% 0% 0%
Lendings to financial institutions 2% 2% 1% 0% 2%
Investments-net 36% 42% 43% 36% 28%
Advances-net 51% 45% 44% 51% 58%
Operating fixed assets 2% 2% 2% 2% 2%
Deferred tax assets-net 0% 0% 0% 0% 0%
Other assets 2% 2% 2% 4% 3%
Total Assets 100% 100% 100% 100% 100%

LIABILITIES AND EQUITY

Deposits &Other Account 71% 75% 73% 76% 76%

Borrowing 20% 14% 16% 12% 13%
Bill Payable 2% 1% 1% 1% 2%
Other Liabilities 1% 1% 1% 1% 2%
Deferred Tax Liabilities 0% 0% 1% 1% 0%
Sub-Ordinated Loans 1% 1% 1% 0% 0%
Total Liabilities 94% 93% 93% 92% 92%

Net Assets 6% 7% 7% 8% 8%

Represented By
Share Capital-Net Of Discount 3% 4% 4% 6% 6%
Reserves 1% 1% 0% 0% 0%
Un-Appropriated Profit 1% 1% 2% 1% 1%
Surplus On Revolution On Asset 1% 1% 1% 1% 0%
Total Equity 6% 7% 7% 8% 8%

Total Liabilities & Equity 100% 100% 100% 100% 100%

 FIVE YEARS’ VERTICAL ANALYSIS
STATEMENT OF PROFIT & LOSS ACCOUNT
Mark-Up/Interest/Return/Interest 2017 2016 2015 2014 2013
Earned
Mark-Up / Return / Interest Earned 18,505 17,524 18,320 16,906 13,639
Fee, Commission, Brokerage And 1,829 1,576 1,809 1,939 1,600
Exchange Income
Capital Gain And Dividend Income 1,399 1,131 1,284 535 623
Other Income 41 29 57 35 22
Total Income 21,774 20,260 21,470 19,415 15,884

PROFIT & LOSS ACCOUNT AS AT 30TH DEC

Mark-Up/Interest/Return/Interest
Expense
Mark-Up / Return / Interest 11,846 10,680 10,722 10,626 8,751
Expensed
Operating Expenses 7,031 6,479 6,123 5,798 4,868
Provisions 66 24 1,029 549 735
Taxation 1,188 1,198 1,383 860 493
Total Expenses 20,131 18,381 19,257 17,833 14,847

Profit After Taxation 1,643 1,879 2,213 1,582 1,037

 Mark-Up/Interest/Return/Interest 2017 2016 2015 2014 2013
Earned
Mark-Up / Return / Interest Earned 85% 86% 86% 87% 86%
Fee, Commission, Brokerage And 8% 8% 8% 10% 10%
Exchange Income
Capital Gain And Dividend Income 6% 6% 6% 3% 4%
Other Income 0% 0% 0% 0% 0%
Total Income 100% 100% 100% 100% 100%

VERTICAL ANALYSIS OF PROFIT & LOSS ACCOUNT AS AT

30TH DEC

Mark-Up/Interest/Return/Interest
Expensed
Mark-Up / Return / Interest 54% 53% 50% 55% 55%
Expensed
Operating Expenses 32% 32% 29% 30% 31%
Provisions 0% 0% 5% 3% 5%
Taxation 5% 6% 6% 4% 3%
Total Expenses 92% 91% 90% 92% 93%

Profit After Taxation 8% 9% 10% 8% 7%

 FIVE YEARS’ HORIZONTAL ANALYSIS
STATEMENT OF FINANCIAL POSITION
2017 2017 2016 2016 2015 2015 2014 2014 2013
Assets (Rs. In VS (Rs. In VS (Rs. In VS (Rs. In VS (Rs. In
million) 2016 million) 2015 million) 2014 million) 2013 million)
Cash And 19,431 6% 18,279 9% 16,718 6% 15,776 24% 12,673
Balances With
Treasury Banks
Balances With 1,151 40% 823 -50% 1,635 184% 575 -19% 707
Other Banks
Lending’s To 6,544 18% 5,537 79% 3,094 412% 604 -80% 2,988
Financial
Institutions
Investments-Net 117,429 0% 117,884 8% 108,846 44% 76,716 62% 46,703
Advances-Net 164,293 31% 125,306 12% 112,002 4% 107,96 11% 97,534
8
Operating Fixed 6,681 28% 5,138 4% 4,967 -1% 6,014 34% 3,734
Assets
Deferred Tax - 0% - 0% - 0% - -100% 103
Assets-Net
Other Assets 6,706 21% 6,544 -9% 6,090 -19% 7,522 57% 4,792
Total Assets 322,134 16% 278,521 10% 253,342 19% 213,17 26% 169,234
5

Liabilities &
Equity
Deposits 227,348 8% 209,925 14% 184,847 13% 162,964 16% 140,439
&Other
Account
Borrowing 64,584 66% 38,905 -2% 39,876 54% 25,825 146 10,485
%
Bill Payable 4,895 18% 4,164 35% 3,077 0% 3,063 13% 2,718
Other Liabilities 2868 -8% 3,101 6% 2,933 2% 2,864 24% 2,309
Deferred Tax 936 -18% 1,138 20% 1417 0% 1,420 100 -
Liabilities %
Sub-Ordinated 2998 0% 2,999 0% 3000 100% - 0% -
Loans
Total Liabilities 303,629 17% 260232 11% 235,150 20% 196,136 26% 155,951
 2017 2017 2016 2016 2015 2015 2014 2014 2013
Equity (Rs. In Vs (Rs. In Vs (Rs. In Vs (Rs. In Vs (Rs. In
million) 2016 million) 2015 million) 2014 million) 2013 million)
Share 11,025 0% 11,025 19% 10,023 0% 10,023 0% 10,023
Capital-Net
Of Discount
Reserves 1,752 23% 1,424 36% 1,049 12% 934 51% 618
Un- 3,665 5% 3,496 -18% 4,264 35% 3,150 74% 1,810
Appropriated
Profit
Surplus On 2,063 -12% 2,344 -18 2,856 -3% 2,932 252% 832
Revolution
On Asset
Total Equity 18,505 1% 18,289 1% 18,192 7% 17,039 28% 13,283
 FIVE YEARS’ HORIZONTAL ANALYSIS
STATEMENT OF PROFIT AND LOSS
Mark- 2017 2017 2016 2016 2015 2015 2014 2014 2013
Up/Interest/Ret VS VS VS VS
urn/Interest 2016 2015 2014 2013
Earned
Mark-Up / 18,505 6% 17,524 -4% 18,320 8% 16,906 24% 13,639
Return / Interest
Earned
Fee, 1,600
Commission, 1,829 16% 1,576 -13% 1,809 -7% 1,939 21%
Brokerage And
Exchange
Income
Capital Gain And 1,399 24% 1,131 -12% 1,284 140% 535 -14% 623
Dividend Income
Other Income 41 41% 29 -49% 57 63% 35 59% 22
Total Income 21,774 7% 20,260 -6% 21,470 11% 19,415 22% 15,884

Mark-
Up/Interest/Return
/Interest Expense
Mark-Up / Return / 11,846 11% 10,680 0% 10,722 1% 10,626 21% 8,751
Interest Expensed
Operating 7,031 9% 6,479 6% 6,123 6% 5,798 19% 4,868
Expenses
Provisions 66 175 24 -98% 1,029 87% 549 -25% 735
%
Taxation 1,188 -1% 1,198 -13% 1,383 61% 860 74% 493
Total Expenses 20,131 10% 18,381 -5% 19,257 8% 17,833 20% 14,847

Profit After Taxation 1,643 -13% 1,879 -15% 2,213 40% 1,582 53% 1,037
 RATIO ANALYSIS OF SONERI BANK
( PKR. IN MILLION)

1. CURRENT RATIO
Current Ratio = Current Assets /Current Laibilities
Current Assets 308,848
Current Liabilities 296,827
Current Ratio 1.04

Industry Average
Industry Average: Ind1+Ind2+Ind3+Ind4/4
Banks Current Ratio
Soneri 1.04
Ubl 1.05
Mcb 1.10
Askari 1.02
Industry Average 1.05

INTERPRETATION:
A bank has a 1.04:1 current ratio indicates that , for every Pkr.1 of current debt, a company has
Pkr.1.04 available to pay for the debt. Which means the company are more capable to paying off its
obligations, as it has a larger proportion of asset value relative to the value of its liabilities.

An industry has an average of 1.05 ,which means that a bank is at slightly worst condition than others.To
get rid from this condition a company could go to liquidify their inventories through sales
promotions,and that cash to repay short term debt therefore that decrease the proportion of
denominator ;current liabilities. company could also go to sale off their unproductive assets .
2. ROA:
ROA: Net Profit After Tax/Total Asset
Net Profit After Tax 1,643
Total Asset 322,134
ROA 0.51%

INDUSTRY AVERAGE
Industry Average:ind1+ind2+ind3+ind4/4
Banks ROA
Soneri 0.51%
UBL 1.26%
MCB 1.69%
Askari 0.80%
Industry Average 1.07%

INTERPRETATION :
A bank has. a 0.51% of ROA that indicates that the company's total asset 0.51% contributed to
generate its income. A ratio shows that a company is in the extremely worst condition that
means company are not performing well to convert its investment in asset into profit.
An industry average of ROA is 1.07% which means that a bank generated lower income than the
industry. To cope up with this situation a bank could go toward the maximize asset productivity
this can be cured by proper repair and maintenance or replacement of old assets.
3. ROE:
ROA: Net Profit After Tax/Total Asset
Net Profit After Tax 1,643
Total Equity 18,505
ROE 8.87%

INDUSTRY AVERAGE
Industry Average: ind1+ind2+ind3+ind4/4
Banks ROE
Soneri 8.87%
UBL 19.90%
MCB 16.45%
Askari 19.20%
Industry Average 16.10%

INTERPRETATION
A soneri bank has a 8.87% of ROE ratio that indicates that a its total equity 8.87% contributed
in generating net income. It illustrates that how uneffective the company is at turning the
cash put into the business into greater gains and growth for the company and investors.
An industry has a 16.10% average of ROE, by comparing 8.87% with 16.10% indicates that a
bank in extremely worst condition and not using equity financing to fund operations and grow
the company.
4. ROI:
ROI: Net Profit After Tax/Total Investment
Net Profit After Tax 1,643
Investment 117,429
ROI 1.39%

INDUSTRY AVERAGE
Industry Average:ind1+ind2+ind3+ind4/4
Banks ROI
Soneri 1.39%
UBL 2.32%
MCB 3.41%
Askrari 1.67%
Industry Average 2.20%
5. NET PROFIT MARGIN:
Net Profit Margin: (Net Profit After Tax / Interest Income)*100

Net Profit After Tax 1,643

Interest Income 18,505
Net Profit Margin 8.77%

INDUSTRY AVERAGE
Industry Average:ind1+ind2+ind3+ind4/4

Banks Profit Margin

Soneri 8.77%
UBL 23.71%
MCB 30.31%
Askari 14.52%
Industry Average 19.32%
6. PROFIT BEFORE TAX RATIO:
Profit Before Tax 1,643
Total Income 18,505
Profit Before Tax 8.77%

INDUSTRY AVERAGE
Industry Average:ind1+ind2+ind3+ind4/4
Banks Profit Before Tax
Soneri 28.51%
UBL 52.80%
MCB 51.30%
Askari 39.01%
Industry Average 39.01%
7. BASIC EARNING POWER
Basic Earning Power: (EBIT/Total Asset)*100

EBIT 14,677
Total Assets 322,134
Basic Earning Power 4.5%

INDUSTRY AVERAGE
Industry Average:ind1+ind2+ind3+ind4/4
Banks Basic Earning Power
Soneri 4.5%
UBL 4.5%
MCB 4.7%
Askari 3.85%
Industry Average 4.39%
8. NET OPERATING MARGIN:
Net Operating Margin: (EBIT / Interest Income)*100

EBIT 14,677
Interest Income 18,505
Net Profit Margin 79.3%

INDUSTRY AVERAGE
Industry Average: ind1+ind2+ind3+ind4/4

Banks Profit Margin

Soneri 78.3%
UBL 84.8%
MCB 84.6%%
Askari 69.8%
Industry Average 81.85%
9. PRICE TO EARNING RATIO
Price Earning Ratio: Price Per Share/Earning Per Share

Price Per Share 13.40

Earning Per Share 1.49
Price Earning Ratio 8.99 times

INDUSTRY AVERAGE
Industry Average: ind1+ind2+ind3+ind4/4

Banks Price Earning Ratio

Soneri 8.99 times
UBL 9.71 times
MCB 10.85 times
Askari 4.61 times
Industry Average 8.54 times
10.EARNING PER SHARE BEFORE TAX
Earning Per Share Before Tax: Net Profit Before Tax/ No of share issued

Net Profit Before Tax 2,831

No of share issued 11102.46
Earning Per Share Before Tax Rs.2.56

INDUSTRY AVERAGE
Industry Average: ind1+ind2+ind3+ind4/4

Banks Price Earning Ratio

Soneri Rs 2.56
UBL Rs. 32.8
MCB Rs. 26.17
ASKARI Rs. 6.73
Industry Average Rs. 17.07
11.EARNING PER SHARE AFTER TAX
Earning Per Share After Tax: Net Profit Before Tax/ No of share issued

Net Profit After Tax 1,643

No of share issued 11102.46
Earning Per Share Before Tax Rs.1.49

INDUSTRY AVERAGE
Industry Average: ind1+ind2+ind3+ind4/4

Banks Earning Per Share After Tax

Soneri Rs 1.49
UBL Rs. 20.76
MCB Rs. 18.95
ASKARI Rs. 4.17
Industry Average Rs. 11.34
12.PRICE CASH FLOW RATIO
Price To Cash Flow Ratio: Price Per Share/Cash Flow Per Share

 Cash Flow Per Share: Profit After tax + Non Cash expenses/No. Of Share Issued

Price Per Share 13.40

Cash Flow Per Share 2.18
Price To Cashflow Ratio 6.14 times

INDUSTRY AVERAGE
Industry Average: ind1+ind2+ind3+ind4/4

Banks Price To Cashflow Ratio

Soneri 6.14 times
UBL 8.81 times
MCB 10.28 times
ASKARI 3.58 times
Industry Average 7.21 times
13.MARKET TO BOOK RATIO
Market To Book Ratio : Market Price Per Share/Book Value Per Share

 Book Value Per Share: Common Equity/No. Of Share Issued

Price Per Share 13.40
Book Value Per Share 14.91
Market To Book Ratio 0.89 times

INDUSTRY AVERAGE
Industry Average: ind1+ind2+ind3+ind4/4

Banks Market To Book Ratio

Soneri 0.89 times
UBL 1.94times
MCB 1.84 times
ASKARI 0.88 times
Industry Average 1.39 times
14. NET INTEREST INCOME TO TOTAL INCOME
Net Interest Income To Total Income: Net Interest Income / Total Income

Net Interest Income 6,659

Total Income 9,928
Interest Income To Total Income 67%

INDUSTRY AVERAGE
Industry Average: ind1+ind2+ind3+ind4/4

Banks Interest Income To Total Income

Soneri 67.0%
UBL 68.9%
MCB 70.2%
ASKARI 76.2%
Industry Average 70.5%
15.NON -INTEREST INCOME TO TOTAL INCOME:
Non -Interest Income To Total Income: Non Interest Income / Total Income

Non Interest Income 3,269

Total Income 9,928
Interest Income To Total Income 32.9%

INDUSTRY AVERAGE
Industry Average: ind1+ind2+ind3+ind4/4

Banks Interest Income To Total Income

Soneri 32.9%
UBL 29%
MCB 29.7%
ASKARI 23.7%
Industry Average 28.85%
16.ADVANCE TO TOTAL DEPOSIT
Advance To Total Deposit: (Advances/Total Deposit) *100

Advances 164,293
Deposits 227,348
Advance To Total Deposit 72.26%

INDUSTRY AVERAGE
Industry Average: ind1+ind2+ind3+ind4/4

Banks Advance To Total Deposit

Soneri 72.26%
UBL 46.89%
MCB 48.46%
ASKARI 49.19%
Industry Average 44.2%

INTERPRETATION:
This ratio measure that the performance or efficiency of management in converting the
deposits in the advances. A c
17.NON PERFOMING LOANS TO TOTAL ADVANCES RATIO
NPLS To Total Advances Ratio: (Non -performing loan/advances) *100

NPLS 172,772
Advances 164,293
NPLS To Total Advances Ratio 5.92%

INDUSTRY AVERAGE
Industry Average: ind1+ind2+ind3+ind4/4

Banks NPLS To Total Advances Ratio

Soneri 5.92%
UBL 2.04%
MCB 10.3%
ASKARI 10.34%
Industry Average 7.15%

INTERPRETATION:
A bank has a 5.92% of non-performing loan ratio which indicate that 5.92% of loans are not
perform out of 100% outstanding loan.
An industry have an average ratio of 7.15 % which means that a bank is at an better condition
from the industry, but it can more better by making comprehensive strategic plans detailing
how t will deal with npls in a systematic way for all material loan positions above a certain
threshold and plans at a segment level for the remaining portfolio. Each plan should clearly
indicate key value drivers, risks, milestones, range of recoveries and time to recovery.
18.DEBT RATIO:
Debt Ratio: Total Liabilities/Total Assets

Total Debt 303,629

Total Assets 322,134
Debt Ratio 0.94

INDUSTRY AVERAGE
Industry Average: ind1+ind2+ind3+ind4/4

Banks Debt Ratio

Soneri 0.94:1
UBL 0.92:1
MCB 0.88:1
ASKARI 0.95:1
Industry Average 0.93:1

INTERPRETATION:
A company has a 0.94 :1 debt ratio that indicates the for every RS.1 asset the company have a
RS 0.94 worth of debt. This shows that a company has more assets than liabilities and could pay
off its obligations by selling its assets if it needed to. This is the least risky for the company.
Industry has an average Debt ratio of 0.93 which means that we have a more leverage than
others. To do better a situation a can take to reduce its debt to asset ratio is that of increasing
sales revenues and profitability. This can be achieved by raising prices, increasing sales or
reducing costs. The extra cash generated can then be used to pay off existing debt
The another measure to reduce the debt to asset ratio is that is more effective management of
inventory or sale of company unproductive assets that generate cash to pay off the debt and a
company could also issue a bond to finance its operation in future
19.DEBT TO EQUITY RATIO:
Debt To Equity Ratio : Total Liabilities/Total Equity

Total Debt 303,629

Total Equity 18,505
Debt To Equity Ratio 16.40

INDUSTRY AVERAGE
Industry Average: ind1+ind2+ind3+ind4/4
Banks Debt To Equity Ratio
Soneri 16.4
UBL 14.5
MCB 8.5
ASKARI 22.7
Industry Average 15.5

INTERPRETATION
A company has a 16.4 :1 debt to equity ratio that means that company financed its operation
more than debt as compared to equity and a company is in the worst condition.
A company have a higher ratio than the industry which is a risky because it shows that the
investors haven’t funded the operations as much as creditors have. In other words, investors
don’t have as much skin in the game as the creditors do. This could mean that investors don’t
want to fund the business operations because the company isn’t performing well. Lack of
performance might also be the reason why the company is seeking out extra debt financing .
20.MARKET DEBT RATIO
Market Debt Ratio: Total Debt/Total Debt + Market Value Of Equity
∴Market Value OF Equity = No. Of Share Issued*Market Price Per Share

Debt Ratio 303,629

Market Value Of Equity 14773
Market Debt Ratio 0.95

INDUSTRY AVERAGE
Industry Average: ind1+ind2+ind3+ind4/4

Banks Market DebtDebt Ratio

Soneri 95%
UBL 88%
MCB 82%
ASKARI 96%
Industry Average 90%

INTERPRETATION:
It is indicated by the amount of longterm debt proportionately to the value which the market
attributes to the equity capital of the company. A company has a market debt ratio of 95 % ,it is
quite alarming situation for a company which means that for roughly Rs.10 of debt there is only
Rs.1 of market value of equity and this is very risky for the debt-holders.
21.TIMES INTEREST EARNED (TIE)
Times Interest Earned: EBIT/Interest

EBIT 14,677
Interest Expense 11,846
Times Interest Earned 1.23 Times

INDUSTRY AVERAGE
Industry Average: ind1+ind2+ind3+ind4/4

Banks Times Interest Earned

Soneri 1.23 Times
UBL 1.79 Times
MCB 1.97 Times
ASKARI 0.79 Times
Industry Average 1.45

INTERPRETATION:
The company has a 1.23 TIE which means that a company’s income is 1.23 times higher than its
interest expense for the year. The 1.23 TIE shows that the company are in less riskier position
therefore, creditors likely allow them to get more credit to expand its business.

The industry average of TIE is 1.45 which means that the bank has a lower TIE than the industry
which is a slightly worst condition for a company. To better this situation a company the
company could issue more bonds or look to take out a bank loan to grow its earnings potential.
22.TOTAL ASSET TURNOVER (TATO) :
Total Asset Turn Over: Sales / Total Assets

Sales 18,505
Total Assets 322,134
Total Asset Turnover 0.57

INDUSTRY AVERAGE
Industry Average: ind1+ind2+ind3+ind4/4

Banks Total Asset Turn Over

Soneri o.57
UBL 0.53
MCB 0.55
ASKARI 0.55
Industry Average 0.55

INTERPRETATION:
A bank has total asset turn over ratio of 0.57 which indicates that each rupee of asset generates
0.5 Rupees of sales. A bank debt are higher than the industry average which means that
company efficiently uses its assets to generate sales and it is favorable condition for company.
This will give the investors and creditors an idea of how a company is managed and uses its
assets to produce products and sales.
23.EQUITY MULTIPLIER
Equity Multiplier: Total Asset / Total Equity

Total Asset 322,134

Total Equity 18,505
Equity Multiplier 17.4

INDUSTRY AVERAGE
Industry Average: ind1+ind2+ind3+ind4/4

Banks Equity Multiplier

Soneri 17.4
UBL 15.7
MCB 2
ASKARI
Industry Average 16.68

INTERPRETATION:
A bank has equity multiplier ratio of 17.4 :1, This means that company debt level are extremely
high and company is in the worst condition. A company’s assets 17.4:1 financed by the debt
than by equity. Therefore, the firm is considered to be highly leveraged and more risky for
investors and creditors. This also means that current investors own less of the company assets
than current creditors.
A company ratio is higher than then the industry leverage indicates that company taking too
much risk than its competitors and should have to concentrate to finance its assets by its equity
rather than bear more interest cost.