Author Topic: SILK -- Silk Bank Ltd  (Read 81381 times)

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Offline SBM

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Re: SILK -- Silk Bank Ltd
« Sticky post on: July 03, 2015, 08:59:20 AM »
I hate waking up.

Pakinvestorsguide

Re: SILK -- Silk Bank Ltd
« Reply #-1 on: July 03, 2015, 08:59:20 AM »

Offline MAR

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SILK -- Silk Bank Ltd
« on: October 05, 2009, 10:44:11 AM »
Dear Moderator can you make a topic for SILK BANK and kindly give your expert opinion on the notice dated 4th Oct. 09 for proposed reduction of share capital. Is this beneficial to the shareholder. As per my understanding a shareholder with mere 100 shares will be left behind with only 20 shares @ reduced market price.

« Last Edit: February 05, 2012, 05:50:50 PM by M&M »

Offline Admin

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Re: SILK -- Silk Bank Ltd
« Reply #1 on: October 05, 2009, 12:48:56 PM »
i have not been able to find any such notice on kse.com.pk
do post a link

Offline MAR

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Re: SILK -- Silk Bank Ltd
« Reply #2 on: October 05, 2009, 12:55:37 PM »
i have not been able to find any such notice on kse.com.pk
do post a link

Its here:  http://www.kse.com.pk/notices-updates/detail2.php?id=4&nid=010871

Offline tariqmeh

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Re: SILK -- Silk Bank Ltd
« Reply #3 on: October 05, 2009, 12:57:16 PM »
Yes notice is on Express newspaper dated 4-10-9002

um@ir

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Re: SILK -- Silk Bank Ltd
« Reply #4 on: October 05, 2009, 01:04:48 PM »
The reduction on the share capital will reduce the book value. The posted link does not tell how this reduction will take place, only after that i would be in a position to give a detail reply.

They might buy from market to retire the capital or they might go for a tender offer. again the price would matter !

Offline Admin

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Re: SILK -- Silk Bank Ltd
« Reply #5 on: December 03, 2009, 11:35:59 AM »
03-DEC-09 SILK SilkBank Limited RIGHT ISSUE = 311% AT A DISCOUNT OF Rs.7.50/= PER SHARE

Offline Admin

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Re: SILK -- Silk Bank Ltd
« Reply #6 on: December 04, 2009, 09:21:05 AM »
Silkbank approves 2.8 billion rights shares issue at Rs 2.50 per share

KARACHI (December 04 2009): The Silkbank Board, in its meeting held on Wednesday, has approved a rights share issuance of rupees seven billion. This issuance will exceed the State Bank of Pakistan's minimum capital requirement of rupees six billion. The decision will ensure that the bank is adequately capitalised until the end of 2010.

The increase in capital will be through issuance of 2.8 billion right shares at the rate of 3.11 right shares for every one share held. This is subject to compliance by the bank of all necessary regulatory approvals. The capital injection by a further rupees seven billion will provide Silkbank adequate room for future growth. The bank aims at introducing a host of innovative products and services moving it closer towards a leadership role in the banking industry. The key sponsors of the Silkbank are Nomura Investments, Bank Muscat and IFC (World Bank Group).-PR

Offline Farzooq

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Re: SILK -- Silk Bank Ltd
« Reply #7 on: December 05, 2009, 09:57:37 AM »
Silkbank rights issue:

Silkbank has announced a PKR7bn issue of right share at a
price of PKR2.5/share. This translates into additional 2,800mn shares issued, reflecting
311% rights. The issue price of PKR2.5 indicates a discount of 32% to the book value
per share of PKR3.7. The issue will ensure adequate capitalization in light of SBP
requirements.
According to news reports, Bank of Muscat which owns 35% of the bank has decided
not to subscribe to the issue while the remaining three sponsors, namely IFC, Nomura
and the Sinthos Group (Sadeq Saeed and Shaukat Tarin family) will be subscribing.

Over the past two sessions SILK has seen an increase in trading volumes as well as
price appreciation of 41%. However, we feel that the news has been priced in and the
stock should revert to former levels given stretched valuations; it is trading at 1.6x its
current book which is significantly above average PBR multiple for 3rd tier banking
stocks.
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Toshi

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Re: SILK -- Silk Bank Ltd
« Reply #8 on: December 26, 2009, 06:05:27 AM »
Bank: SILKBANK LTD - Analysis of Financial Statements Financial Year 2009-9M'09

OVERVIEW (December 26 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% of the bank for around 260 million dollars or $0.47 per share (Rs 29.3 equivalent per share). Under the new leadership, the bank will continue to focus on SME and consumer financing to increase profitability.

Silkbank Limited
Half yearly Income Statement H1'09

                                                   2009           2008
Mark-up/return/
interest earned                            2,881,262      2,141,283
Mark-up/return/
interest expensed                          2,789,625      1,902,976
                                              91,637        238,307
Provisions against NPL & Advances            279,026        433,792
Provision/reversal against                   (4,060)        (6,489)
 consumer finance
(Reversal) / provision for diminution
in the value of investments - net              1,598        (4,827)
Impairments of available for sale assets                          -
Bad debts written of directly                101,893          1,011
                                             378,457        423,487
Net markup interest
income after provisions                    (286,820)      (185,180)
Non markup/interest income
Fee commission and brokerage income          179,367         76,567
Dividend income                               18,942         14,127
Income from dealing in
foreign currencies                            71,572         28,866
Gain on sale of securities-net                67,045         16,202
unrealized loss on revaluation
on investments held for trading              (2,041)              -
Other income                                  60,586         43,217
Total non markup non interest income         395,471        178,979
                                             108,651        (6,201)
Non markup interest expense
Administrative expense                    1,196,726         798,353
Other(reversals) provisions write off              -
Unrealized loss on revaluation
of investmentas held for trading                   -
Other charges                                 15,911            317
Total non markup interest expense          1,212,637        798,670
                                         (1,103,986)      (804,871)
Amortization of deferrd costs                      -
Extraordinary items                                -
Loss before income tax expense           (1,103,986)      (804,871)

Recent performance 9M09:

Silk Bank's loss after tax stands at Rs 1.33 billion for the 9-month period ending September 2009. The net mark-up income registered a marginal decline of 4.35%, however, the interest expense rose by 1.97% for the same period, resulting in the net mark-up interest to decline. The non-mark-up income registered a sizable growth of 38% (Rs 538.164 million). Dealing in foreign currencies favourably impacted the bank's revenues, so did brokerage charges and sale of securities.

The bank displays a prudent behaviour in its expenses, as strong signs of cost saving and minimizing operational expenses have been seen. Therefore, the loss for the 9-month period ending September 2009 shows a decline of 33%. The sharp rise in total net interest/mark-up income can be attributed to collection of previously declared non-performing loans, which had been offset with sizeable provisioning charges.

Therefore, the reversal of these provisions to the tune of Rs 407.2 million (negative growth of 124%) has effectively transformed the net interest income after provisioning. The impairment expenses of available-for-sale securities (Rs 131.38 million) fails to impact the net negative provisioning on the back of collection of doubtful accounts. The non-interest income also shows a healthy growth of 36% to Rs 538.16 million, mainly due to gains on dealing in foreign currencies (growth of 67.03%) in the wake of declining rupee and from gains on sales of securities, which stood at Rs 82.3 million, almost 3 times higher than FY08. Administrative expenses showed a decline in the wake of company's policy to cut costs and achieve operational efficiency, resulting in a net decline of 2.67%.

Non-performing loans for the period show a decline of 6% and stood at Rs 12.13 billion.

Investments, as a component of earning assets have shown a growth of 33% from the previous year to stand at Rs 19.72 billion. Government securities ie Market Treasury Bills and PIBs comprise 90% of the investments. Advances show a modest gain of 6.90% to stand at Rs 33.121 billion but still represent the major chunk of earning assets at 62% of the earning asset during 9M09. Lending to financial institutions declined by a good 40% to stand at Rs 816.65 million representing 2% of the total earning assets. However, the ADR has fallen to 70% for the 9-month period of FY09 as compared to 75.72% in 2008, because the advances rose by 4.90% (to Rs 323.21 billion) and deposits grew by 16.29% (to Rs 47.729 billion) in 9m period of 2009.

Financial performance (FY06-FY08)

In FY08, Silk Bank declared a loss of Rs 2014 million with an earnings per share of Rs 2.83, considerably lower (33.76%) than previous year's loss of Rs 3041 million and loss per share of Rs 6.25. Due to the losses, the bank did not pay any dividend.

The net interest income of the bank improved by 54.10%, from a loss of Rs 2.773 billion to Rs 1.273 billion. This is mainly because during FY08, the bank's provisioning against the NPLS and Advances declined significantly (47%) to Rs 1.663 billion.

The non-mark-up income witnessed a decline of 50.50% to Rs 384.5 million mainly on the back of declining fee commission and brokerage income, which went down 49% to Rs 188.6 million. Other non-mark-up earning items also did not yield any impressive returns in FY08.

Composition of earning assets:

The losses for the past 2 years can partially be explained by the dwindling size of the earning assets, which have shown a decline consistently over the period FY07-FY08. During FY07, the bank's overall earning asset base declined by 10.13% to stand at Rs 44.57 billion, which further slipped modestly by 0.22% to stand at Rs 44.476 billion in FY08. During the same period, lending to financial institutions increased by 63.90% (F08 Rs 1.376 billion), investments registered a decline of 32% to stand at Rs 12.012 billion and advances grew by 20.14% to Rs 31.09 billion.

It is worth noticing that the advances grew by a significant amount although the deposits fell by 3.11% during the same period to stand at Rs 41.056 billion against previous year's Rs 42.374 billion. As of 2008, the bank has deposits of Rs 41.056 billion; 3.22% lower than the previous year. The remunerative, interest expense bearing deposits of 2008 are Rs 34.419 billion, representing almost 84% of the total deposit base. This is mainly due to the fact that Pakistani banks are attracting more fixed and term deposits due to banks eagerness for raising longer term deposits to match their assets maturity profiles whereas due to decline in consumer financing, the demand for consumer short to medium term financing has been wary.

Earning ratios:

Silk Bank's Return on Assets has shown an improvement, from a loss of 3.63% in FY08 to 2% for the 9m FY09. This decrease in loss can be attributed to a significant reduction (33%) of loss after tax for the same period. The total assets of the bank registered a declined of 24% in 9m FY09. This has also impacted the Return on Assets. The return on equity recovered to -40% in 9m FY09 from 45.87% in FY08, due to a decline of about 22% in net equity. This can be attributed to the constant accumulated loss carried forward by the bank for some time.

Asset quality: The bank faced non-performing loans of Rs 12.113 billion during the 9m FY09, 6% down against FY08. Provisioning for NPLs, however, declined 47% from previous year to stand at Rs 1,663,314,000. The provisions to NPLs ratio was -3% in the year FY08 as compared to 51% in FY07. The drop in provisioning ratio is attributed to the sharp rise in the net markup income after provisioning for FY09.

The issue of rising NPLs can be attributed to the economic downturn, the power crisis and the subsequent industrial crisis, which has rendered many borrowers incapable to meet their financial obligations. However the company is putting in considerable efforts to alleviate the issue of NPLs and has made significant recovery.

Liquidity:
The ratio of earning assets to total assets shows a slight improvement in the 9m FY09, ie, 81% as compared to 79.83% in FY08. The trend towards earning assets displays a shift from investments and more towards advances. The decline in earning assets is mainly attributed to the 13% decline in investments. As mentioned earlier, this is due to the shift towards consolidating the advances component of the earning assets.

The advance to deposit ratio shows a decline over the period 9m FY09 to 70% as compared to 75.72% in FY08. This is mainly because the advances have risen by 20.14% whereas the deposits have fallen by 3.11% because the bank has large amounts of fixed deposits, which enables them to extend advances, particularly in the long term advances, which stood at Rs 17.923 billion, 31.20% higher than previous year's Ra 13.661 billion. Whereas short-term deposits for FY08 stood at Rs 20.26 billion; which grew at a comparatively slower rate of 14.13%. Overall, the figures indicate that the bank is striving to maintain a good ADR by making more and more advances, but the issue of default and non-performing loans remains a challenge.

SOLVENCY RATIOS
: The solvency position of the bank has improved considerably in 9m FY09 from FY08. The equity to assets ratio stood at 7.89% against 4.06% of FY07. Similarly the equity to deposits ratio improved from FY07's 5.15% to 10.70% in FY07. The improvement in solvency position can be attributed to the improvement in share capital of 80% as a result of new injections in the equity. However it should be noted that the new injections have still not enabled the bank to maintain the Minimum capital requirement of Rs 5 billion and it faces a shortfall of Rs 2.128 billion.

The earning asset to deposit ratio has increased marginally to 1.083 in FY08 from 1.05 in FY08. This is because of the un-proportionate variations in the earnings assets and deposits. Also, the shortfall in meeting the MCR has resulted in the bank to make efforts improving its capital adequacy through improving the equity side of its balance sheet.

FUTURE OUTLOOK:
Economic growth of the country is still under stress due to severe power shortages, rising electricity rates, high prices of petroleum products, terrorism and a volatile law and order situation. These factors have affected the economy at both micro and macro-level and had a negative impact on the profitability and growth of almost all businesses. However, there are also signs of gradual economic recovery. The rate of inflation is under control and is expected to continue the downward trend during the remaining part of 2009, with a single digit inflation forecast for 2010.

Foreign currency reserves are at a high of US $14.7 billion with remittances from Pakistanis living abroad showing a healthy and rising trend depicting the confidence they have in the future of the economy of Pakistan. The bank has continued to implement its strategy in the third quarter of 2009 of recovering non-performing loans. Total cash recovery from NPL parties stood at Rs 1.017 billion by the end of the nine-month period that ended on September 30, 2009.

The bank has been assigned a long-term entity rating "A-" (A Minus) and short-term rating of "A-3" (A-Three) by JCR-VIS Credit Rating Agency. The rating has been put under "Rating Watch - Developing" status on account of capital plan to be met by December end 2009, as allowed by the SBP.

COURTESY: Economics and Finance Department, Institute of Business Administration,

Offline arifsaeed

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Re: SILK -- Silk Bank Ltd
« Reply #9 on: January 20, 2010, 12:23:20 PM »
right approved or not and what is date for XR

Offline Admin

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Re: SILK -- Silk Bank Ltd
« Reply #10 on: January 20, 2010, 12:27:46 PM »
right approved or not and what is date for XR

not approved yet

Offline suneelahmed

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Re: SILK -- Silk Bank Ltd
« Reply #11 on: January 20, 2010, 12:56:58 PM »
everyone knows who own this bank, so it will be approved, ofcourse. then!!!!

Offline arifsaeed

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Re: SILK -- Silk Bank Ltd
« Reply #12 on: January 20, 2010, 01:19:34 PM »
farooq bhai what is ur opinion i want to buy at this rate should i or not

Offline Admin

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Re: SILK -- Silk Bank Ltd
« Reply #13 on: January 20, 2010, 01:23:18 PM »
farooq bhai what is ur opinion i want to buy at this rate should i or not

worth buying but will take its time to move

Offline arifsaeed

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Re: SILK -- Silk Bank Ltd
« Reply #14 on: January 20, 2010, 01:30:04 PM »
thank u boss

Offline suneelahmed

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Re: SILK -- Silk Bank Ltd
« Reply #15 on: January 20, 2010, 01:46:27 PM »
farooq bhai kis rate per entry lene chahye. thanks

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Re: SILK -- Silk Bank Ltd
« Reply #16 on: January 20, 2010, 01:56:30 PM »
farooq bhai kis rate per entry lene chahye. thanks

current levels are safe

Offline Tezihunt

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Re: SILK -- Silk Bank Ltd
« Reply #17 on: January 21, 2010, 08:50:15 PM »
Right Issue 311% of Silk Bank approved by SECP as per KSE Notice dated 21/01/2010 last date for the entitlement of Right shares will be announced soon.
Rally expected

« Last Edit: January 21, 2010, 08:52:35 PM by Tezihunt »
Markets exist because of differences of opinion among investors.

Offline co2

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Re: SILK -- Silk Bank Ltd
« Reply #18 on: January 22, 2010, 02:12:45 AM »
where u see  dis  one  :letsparty:
An investor without investment objectives is like a traveler without a destination.  ~Ralph Seger

Offline rehman11

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Re: SILK -- Silk Bank Ltd
« Reply #19 on: January 22, 2010, 03:07:25 PM »
I bought it around 4.60rs
my target is 5.50rs

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