A

LOCALLY EMBEDDED

Mo Pakistan St ney an Ban da kin grd & Fin Ch anc art e er ed Ba nk

INTE NATIONAL BAN!

S C

Standard Chartered Bank

"MONE Y BAN!IN# & FINANCE$

S%&'itted By(

Bilal Yasir +92345-8703330

Standard Chartered Bank

"MONE Y BAN!IN# & FINANCE$

STANDA
O-E
-IE.

C)A

TE ED

BAN! *PA!ISTAN+ LIMITED , A

LOCALLY

EMBEDDED INTE NATIONAL BAN!

Standard Chartered was formed in 19 9 thro!"h a mer"er of two #anks$ %he Standard Bank of British So!th &fri'a( fo!nded in 18 3( and the Chartered Bank of )ndia( &!stralia and China( fo!nded in 1853* Both 'om+anies were keen to 'a+itali,e on the h!"e e-+ansion of trade and to earn the handsome +rofits to #e made from finan'in" the mo.ement of "oods #etween /!ro+e( &sia and &fri'a* The Chartered bank was fo!nded #0 1ames 2ilson followin" the "rant of a 3o0al Charter #0 4!een 5i'toria in 1853* Chartered o+ened its first #ran'hes in 6!m#ai 7Bom#a08( 9olkata and Shan"hai in 1858( followed #0 :on" 9on" and Sin"a+ore in 1859* The Standard Bank was fo!nded in the Ca+e ;ro.in'e of So!th &fri'a in 18 2 #0 1ohn ;aterson* )t was a 'ommen'ed #!siness in ;ort /li,a#eth( in 1an!ar0 18 3* )t was +rominent in finan'in" the de.elo+ment of the diamond fields of 9im#erle0 from 18 7 and later e-tended its network f!rther north to the new town of 1ohannes#!r" when "old was dis'o.ered there in 1885* )t e-+anded in So!thern( Central and /astern &fri'a and( #0 1953( had 00 offi'es* )n 19 5( it mer"ed with the Bank of 2est &fri'a( e-+andin" its o+erations into Cameroon( <am#ia( <hana( =i"eria and Sierra >eone* ?rom the earl0 1990s( Standard Chartered has fo'!sed on de.elo+in" its stron" fran'hises in &sia( &fri'a and the 6iddle /ast* )t has 'on'entrated on 'ons!mer( 'or+orate and instit!tional #ankin" and on the +ro.ision of treas!r0 ser.i'es areas in whi'h the <ro!+ had +arti'!lar stren"th and e-+ertise*

STANDA YEA

C)A

TE ED BAN! IN

PA!ISTAN(

OF SET/P

Standard Chartered is the lar"est international Bank in ;akistan* )n ;akistan it esta#lished o+erations in 9ara'hi in 0ear 18 3* )n 200 Standard Chartered Bank a'@!ired ;akistanAs Bnion Bank* Cn 30 De'em#er 200 ( Standard Chartered mer"ed Bnion Bank with its own s!#sidiar0* &fter the a'@!isition of Bnion Bank the new entit0 Standard Chartered Bank 7;akistan8 >imited was in'or+orated as a s!#sidiar0 of Standard Chartered ;>C* Standard Chartered Bank 7;akistan8( to 'reate ;akistanAs si-th lar"est #ank*

Standard Chartered Bank

"MONE Y BAN!IN# & FINANCE$

N/MBE

OF

ANC)ES

%he #ank has a network of o.er 174E #ran'hes in 41 'ities in ;akistan addin" 154 #ran'hes and 33 'ities o.er last fo!r 0ears* Standard Chartered em+lo0s a workfor'e of o.er 9(000 em+lo0ees in its ;akistan o+erations* Standard Chartered Bank has a network of o.er 200 &%6s a'ross ;akistan* Standard Chartered has a network of o.er 1( 00 #ran'hes and o!tlets and 5(500 &%6s in more than 70 'o!ntries and territories a'ross the "lo#e( makin" it one of the worldAs most international #anks*

PE

FO MANCE

&s one of the worldAs most international #anks( Standard Chartered em+lo0s 70(000 +eo+le( re+resentin" with 125 nationalities( worldwide* %his di.ersit0 lies at the heart of the BankAs .al!es and s!++orts the BankAs "rowth as the world in'reasin"l0 #e'omes one market* 2ith stron" or"ani' "rowth s!++orted #0 strate"i' allian'es and a'@!isitions and dri.en #0 its stren"ths in the #alan'e and di.ersit0 of its #!siness( +rod!'ts( "eo"ra+h0 and +eo+le( Standard Chartered is well +ositioned in the emer"in" trade 'orridors of &sia( &fri'a and the 6iddle /ast* Standard Chartered deri.es o.er 90 +er 'ent of +rofits from &sia( &fri'a and the 6iddle /ast* Ser.in" #oth Cons!mer and 2holesale Bankin" '!stomers worldwide( the Bank 'om#ines dee+ lo'al knowled"e with "lo#al 'a+a#ilit0 to offer a wide ran"e of inno.ati.e +rod!'ts and ser.i'es as well as award-winnin" sol!tions* %r!sted a'ross its network for its standard of "o.ernan'e and 'or+orate res+onsi#ilit0( Standard Chartered takes a lon" term .iew of the 'onse@!en'es of its a'tions to ens!re that the Bank #!ilds a s!staina#le #!siness thro!"h so'ial in'l!sion( en.ironmental +rote'tion and "ood "o.ernan'e* Standard Chartered is also 'ommitted to all its stakeholders #0 li.in" its .al!es in its a++roa'h towards mana"in" its +eo+le( e-'eedin" e-+e'tations of its '!stomers( makin" a differen'e in 'omm!nities and workin" with re"!lators* Standard 'hartered #ank is the first international #ank to "et an )slami' #ankin" li'ense and to o+en the first )slami' #ankin" #ran'h in ;akistan*

EDIT

ATIN#

;akistan Credit 3atin" &"en'0 7;&C3&8 has maintained the BankFs lon"-term and short-term ratin"s G&&&H 7%ri+le &8 G&1+H 7& Cne ;l!s8 res+e'ti.el0 in 2008* %he BankFs o!tstandin" two listed( s!#ordinated %?Cs are also assi"ned G&&&H ratin"* %hese ratin"s denote the lowest e-+e'tation of 'redit risk emanatin" from an e-'e+tionall0 stron" 'a+a'it0 for timel0 +a0ment of finan'ial 'ommitments*

E0TE

NAL

A/DITO

Standard Chartered Bank

"MONE Y BAN!IN# & FINANCE$

%he a!dit 'ommittee has s!""ested the name of 6Is 9;6< %aseer :adi J Com+an0( Chartered &''o!ntants as e-ternal a!ditors of the #ank for the ne-t term* %he retirin" a!ditors( #ein" eli"i#le( offer themsel.es for re-a++ointment till the 'on'l!sion of ne-t &nn!al <eneral 6eetin"*

Standard Chartered Bank

"MONE Y BAN!IN# & FINANCE$

#ANI1ATIONAL

ST

#ANO# AM OF

STANDA

/CT/ E

C)A

TE ED

BAN!

BALANCE S)EET

BALANCE S)EET ANALYSIS

;akistanAs #ankin" se'tor has remained remarka#l0 resilient( des+ite +ress!res emanatin" from weakenin" ma'roe'onomi' en.ironment* /nhan'ed 'a+ital re@!irement sin'e last 'o!+le of 0ears has res!lted in 'onsolidation within the ind!str0 whi'h we e-+e't to 'ontin!e in the near f!t!re* Ca+ital ade@!a'0 of the

Standard Chartered Bank

"MONE Y BAN!IN# & FINANCE$

#ankin" s0stem was 11*8K at end-Se+A08* %ier 1 'a+ital ratio of the #ankin" s0stem was 9*7K* :owe.er( 'hallen"es remain in terms of =;>s emanatin" from some of the more le.era"ed se'tors* %otal assets of the #ank "rew to ;93 2 4* #illion from last 0earAs ;93 255*5 #illion mainl0 d!e to in'reased lendin" in wholesale #ankin"* %otal net loans and ad.an'es in'reased #0 a++ro-imatel0 5K to ;93 125* 0 #illion from ;93 119*54 #illion while de+osit #ase was mar"inall0 red!'ed #0 1*5K to ;93 174*5 #illion 'om+ared to ;93 177*2 #illion last 0ear* %he #ank 'ontin!es to maintain ade@!ate li@!idit0* %he ad.an'es to de+osit ratio as at De'em#er 31( 2008 was 72K*

Standard Chartered Bank

"MONE Y BAN!IN# & FINANCE$

OFIT AND LOSS

ACCO/NT

Standard Chartered Bank

"MONE Y BAN!IN# & FINANCE$

OFIT AND

LOSS

ACCO/NT

ANALYSIS(

C.erall re.en!e of the Bank "rew #0 3K to ;93 23*0 #illion for the 0ear ended De'em#er 31( 2008 as a"ainst ;93 22*3 #illion in 2007* =et 6ark-!+ I )nterest in'ome of ;93 1 *4 #illion was mar"inall0 hi"her than last 0ear* 2holesale #ankin" =et 6ark !+ I )nterest in'ome was 57K hi"her than last 0ear +rimaril0 d!e to an in'rease in its ad.an'es +ortfolio* %his "rowth was offset #0 a red!'tion in the 'ons!mer #ankin" interest in'ome as at De'em#er 31( 2008* Cons!mer #ankin" ad.an'es has red!'ed +rimaril0 d!e to the de'ision of the #ank to #e e-tra +r!dent on #oth se'!red and !nse'!red +rod!'ts* =on mark-!+ I interest in'ome was 8K hi"her than last 0ear +rimaril0 d!e to in'rease in Cons!mer #ankin" in'ome on a''o!nt of .al!e added 2ealth mana"ement +rod!'ts* Des+ite do!#le di"it inflation and si"nifi'ant in.estment in te'hnolo"0( #ran'h network and infrastr!'t!re( non mark-!+ e-+ense ha.e in'reased onl0 #0 4K to ;93 12* 2 #illion 'om+ared to last 0ear ;93 12*1 #illion* )n line with o!r "rowth strate"0 the distri#!tion network was f!rther enhan'ed #0 33 #ran'hes* %otal network now stands at 174 #ran'hes in 41 'ities 'om+ared to 141 #ran'hes last 0ear* ?or 'on.enien'e of o!r '!stomers 40 &%6s and Cash De+osit 6a'hines 7CD68 were also added d!rin" the 0ear !nder re.iew* ;rofit after ta- of the '!rrent 0ear was ;93 earnin"s of ;93 0*1 +er share* 30 million res!ltin" in #asi'Idil!ted

Standard Chartered Bank

"MONE Y BAN!IN# & FINANCE$

OD/CTS

;/3SC=&> B&=9)=<

C EDIT & DEBIT CA

DS

#ther Financial Services Ban ing Convenience !e,ards and (rivileges (riority Center -ocations

+ahaffuz Invest .n. Assure I%ra Education (lan Fa'ily Care Cash Cover (lus

ACCO/NTS & DEPOSITS

Credit Cards
Master Cash$ac Credit Cards Saadi% &ISA Credit Cards MasterCard &ISA Card Easy Credit Card A'erican Express Credit Cards A'erican Express Charge Card (IA Co)$randed Credit Card &ISA Shopping Card (lus +reasures Catalogue

Savings Accounts
Saving Account Supersave Account High Yield Account Easy Saver Account Bonus Saver Account Flex Account Mahana Izaafa Basic Ban ing Account !upee Current Account "tra Mile Account Foreign Currency Accounts Business Account Sahulat #nline Account Corporate Salary Account

LOANS & MO T#A#ES

For Credit Card Custo'ers

S'art /allet Cover for -ife Credit Cover (lus

Mortgages
Ho'e (urchase Ho'e Credit !eady Cash S,ift Finance
ANCE

-oans

IN-ESTMENTS
Mutual Funds Basics

Current Accounts

INS/

*e$it Cards

Mutual Funds #ffered

0S ABAMC# -i'ited 1ational Invest'ents +rust -i'ited Atlas Asset Manage'ent -i'ited Arif Ha$i$ Invest'ents Manage'ent -i'ited BMA Asset Manage'ent -i'ited

For Branch Ban ing Custo'ers

Secure -ife (lan Musta%$il +alee' !ishtey

P IO ITY BAN!IN#
+he !ight (artner (roduct (roposition &isa (latinu' *e$it Card

10

Standard Chartered Bank !upee +er' *eposits Interest !ates Mahana A'dani Certificates #verdrafts -oc ers

"MONE Y BAN!IN# & FINANCE$

2ASB Asset Manage'ent -i'ited

)S>&6)C B&=9)=< 2:C>/S&>/ B&=9)=<

S6/ B&=9)=<
Business Accounts

Accounts 3 *eposits
Saadi% Current Account Saadi% Sahulat #nline Account Saadi% Saver Saadi% +er' Account

+ransaction $an ing Financial Mar ets

+i4arat Classic Account +i4arat (lus Account Business (o,er Cash +oday Business Install'ent -oan 2issan Card !ang Hi !ang +ana Bana (har'a -ine Agri *eal

+rade and /or ing Capital

Corporate Finance (rincipal Finance

-oans

-oans and Mortgages

Saadi% Ho'e Financing Saadi% &ISA Credit Cards Saadi% &ISA Shopping Card Modara$a

Industry Specific Solutions

Credit 3 *e$it Cards

Modara$a

11

Standard Chartered Bank

"MONE Y BAN!IN# & FINANCE$

E0PLANATION

OF

CE

TAIN IMPO TANT ACCO/NTS

SA-IN# ACCO/NT(
Sa.in" &''o!nt is the latest addition to Standard Chartered Bank ;akistan >imitedFs e.er in'reasin" +ortfolio of +rod!'ts* %his +rod!'t 'om#ines a "ood rate of ret!rn( +rofit +aid o!t on a si--monthl0 #asis( and o!tstandin" ser.i'es offered #0 Standard Chartered Bank ;akistan >imited all-in-one* S2ecia3 Feat%res

/-'l!si.e #enefits of a Sa.in" &''o!nt$ ;rofit tier rate 5K +*a &;Y 6inim!m a.era"e #alan'e re@!irement is 3s* 100(000 )nter-#ran'h transa'tion fa'ilit0 amon" 1 2 #ran'hes a'ross ;akistan C!stomer Conta't Center ;rofit 'al'!lated on a minim!m #alan'e #asis

BASIC BAN!IN# ACCO/NT

/nLo0 an !nmat'hed 'om#ination of hi"h ret!rns and li@!idit0* )n addition( SCB nationwide network of &%6s offers '!stomer 24-ho!r 'on.enien'e in withdrawin" 0o!r f!nds( ens!rin" that mone0 works for them( as the0 wo!ld like it*

S2ecia3 Feat%res C!rrent a''o!nt( mandator0 introd!'ed #0 State Bank of ;akistan =on-+rofit #earin" 6inim!m Balan'e 3e@!ired$ =one &''o!nt Statements$ )ss!ed on ann!al #asis &''o!nt 'los!re$ )f #alan'e is =il for 180 da0s ?ees$ 6a-im!m 2 free de+osits J 2 free withdrawals allowed +er month* 73s 100 will #e 'har"ed after se'ond transa'tion8

12

Standard Chartered Bank

/PEE

"MONE Y BAN!IN# & FINANCE$

C/

ENT

ACCO/NTS

?or all '!stomer da0 to da0 transa'tions( o+en a C!rrent &''o!nt whi'h offer .ia 1 2 online #ran'hes and a relia#le 'o!ntr0 wide &%6 network* <et eas0 a''ess to f!nds as well as enLo0 the +ri.ile"es of ha.in" a 3!+ee C!rrent &''o!nt* S2ecia3 Feat%res

>o'al C!rren'0 %ransa'tion a''o!nt =on-+rofit #earin" 6inim!m Balan'e 3e@!ired$ ;93 5000 ?eat!res$ Bnlimited withdrawals and de+osits Cfferin"s$ 718 Che@!e#ook 728 5)S& de#it 'ard for lo'al '!rren'0 a''o!nts ?ollowin" Self Ser.i'e #ankin" fa'ilities +ro.ided at time of a''o!nt o+enin"$ )nternet Bankin" S6S Bankin" ;hone Bankin" Ser.i'es

0T

MILE C/

ENT

ACCO/NT

&n )deal sol!tion for +eo+le who want a %ransa'tional &''o!nt with 'ash reward on f!el s+end S2ecia3 Feat%res 6inim!m 6onthl0 &.era"e Balan'e 3e@!irement ;93 15(000 ?!el Cash Ba'k !+ to 30K De#it Card with no iss!an'e fee %ransa'tional 'on.enien'e thro!"h the !se of wide #ran'h network and self ser.i'e 'hannels

B/SINESS ACCO/NT
%ake '!stomer #!siness to soarin" new hei"hts with this a''o!nt* B!siness &''o!nt +ro.ides effi'ient( a''essi#le and 'on.enient transa'tional 'a+a#ilities of a world-'lass #ank with hi"hl0 'om+etiti.e 'har"es* &.ail of the #est transa'tional 'on.enien'e on B!siness &''o!nt$ :i"hl0 transa'tion '!rrent a''o!nt aimed at rewardin" the '!stomer for their hi"her a.era"e #alan'e maintained =on-+rofit #earin" 6inim!m Balan'e 3e@!ired$ 3s* 100(000

13

Standard Chartered Bank

"MONE Y BAN!IN# & FINANCE$

?eat!res$ Bnlimited withdrawals and de+osits Cfferin"s$ 718 Che@!e#ook 728 5)S& de#it 'ard for >o'al C!rren'0 a''o!nts

STANDA

C)A

TE ED

SAADI4 PA!ISTAN

Standard Chartered Saadi@( was esta#lished as a dedi'ated )slami' Bankin" Di.ision within Standard Chartered Bank 7;akistan8 >imited with an aim to meet the !ni@!e needs of its '!stomers Standard Chartered Saadi@ 'om+rises a team of @!alified +rofessionals who desi"n and str!'t!re )slami' finan'ial sol!tions and ens!re that the0 are in line with Shariah +rin'i+les on )slami' #ankin" and finan'e &t Standard Chartered it is reali,ed that '!stomers want +rod!'ts that are Shariah 'om+liant( and #0 introd!'in" these )slami' finan'ial sol!tions( we are f!lfillin" o!r +romise of #ein" res+onsi.e to o!r '!stomer needs* %hese +rod!'ts ha.e #een de.elo+ed !nder the "!idan'e of a dedi'ated Shariah &d.isor

TI5A

AT

CLASSIC ACCO/NT

%iLarat Classi' &''o!nt is a #!siness a''o!nt desi"ned for small #!sinesses with hi"h n!m#er of transa'tions* )ts low 'osts of transa'tions ena#le small #!sinesses to 'ond!'t their transa'tions witho!t worr0in" a#o!t the 'osts* 2ith a minim!m a''o!nt #alan'e of L!st 3s* 25(000I- a.ail free online #ankin" fa'ilit0 !+ to a ma-im!m of 3s* 1*5 6illion a da0( %iLarat Classi' &''o!nt offers low 'ost( 'on.enient and 'o!ntr0wide transa'tion 'a+a#ilit0*

S/)AL/T ONLINE ACCO/NT

Sah!lat Cnline &''o!nt has #een desi"ned to +ro.ide effi'ient( a''essi#le and 'on.enient transa'tional 'a+a#ilities of a world-'lass #ank with hi"hl0 'om+etiti.e 'har"es* S2ecia3 6eat%res =on-+rofit #earin"I>o'al C!rren'0 &''o!nt 6inim!m Balan'e 3e@!ired$ 3s 50(000 Char"es$ ;93 50 will #e 'har"ed if 6onthl0 &.era"e Balan'e not 6aintained

A-E A#E LENDIN# 789::;

ATE OF

STANDA

C)A

TE ED

BAN!

OF

PA!ISTAN

IS

14

Standard Chartered Bank

"MONE Y BAN!IN# & FINANCE$

DEPOSITS & AD-ANCES( DEPOSITS

De+osits from notes to the 'onsolidated finan'ial statements shows that fi-ed de+osits in'reased as of sa.in" de+osits in'reased similarl0( C!rrent a''o!nt de'reased #!t as we make 'on'l!sion o!t of it( de+osits of 2007 was "reater as 'om+ared to de+osits of 0ear 2008*

15

Standard Chartered Bank

"MONE Y BAN!IN# & FINANCE$

De+osits of "ro!+ 'om+anies in'reased #!t s!#sidiaries 'om+aniesF de'reases in 0ear 2008 as 0o! see a#o.e in #alan'e sheet for #oth 0ears*

AD-ANCES
&d.an'es are stated net of +ro.ision a"ainst non-+erformin" ad.an'es* S+e'ifi' and "eneral +ro.isions are made #ased on an a++raisal of the loan +ortfolio that takes into a''o!nt ;r!dential 3e"!lations iss!ed #0 SB; from time to time* S+e'ifi' +ro.isions are made where the re+a0ment of identified loans is in do!#t and refle't an estimate of the amo!nt of loss e-+e'ted* %he "eneral +ro.ision is for the inherent risk of losses whi'h( altho!"h the0 ha.e not #een se+aratel0 identified( are known from e-+erien'e to #e +resent in an0 loan +ortfolio* ;ro.ision made I re.ersed d!rin" the 0ear is 'har"ed to the +rofit and loss a''o!nt and a''!m!lated +ro.ision is netted off a"ainst ad.an'es* &d.an'es are written-off when there is no realisti' +ros+e't of re'o.er0* 2hen the Bank is the lessor in a lease a"reement that transfers s!#stantiall0 all of the risks and rewards in'idental to ownershi+ of an asset to the lessee( the a"reement is +resented within loss and ad.an'es*

%otal net loans and ad.an'es in'reased #0 a++ro-imatel0 5K to ;93 125* 0 #illion from ;93 119*54 #illion while de+osit #ase was mar"inall0 red!'ed #0 1*5K to ;93 174*5 #illion 'om+ared to ;93 177*2 #illion last 0ear* %he #ank 'ontin!es to maintain ade@!ate li@!idit0* %he ad.an'es to de+osit ratio as at De'em#er 31( 2008 was 72K*

Standard Chartered Bank

"MONE Y BAN!IN# & FINANCE$

17

Standard Chartered Bank

"MONE Y BAN!IN# & FINANCE$

IN-ESTMENT
Cne of the "reatest m0ths a#o!t in.estin" is that itFs onl0 for the .er0 wealth0* %he fa't is that 6!t!al ?!nds ha.e made it +ossi#le for an0one to in.est( e.en if it is a small amo!nt* )t is not how m!'h 0o! in.est( #!t how 0o! in.est that matters* %he first ste+ towards de.elo+in" an in.estment +lan is to !nderstand 0o!r needs* :ow lon" 'an 0o! afford to sta0 in.ested( how m!'h mone0 0o! need( how m!'h risk 0o! are 'omforta#le with and what are 0o!r "oals( are some @!estions that need to #e addressed at the onset* 2ith limited in.estment o+tions and a #oomin" #!t .olatile sto'k market( what is "ood for '!stomer hard earned in'ome is an im+ortant de'ision* Standard Chartered )n.estment Ser.i'es hel+ with the de'ision( on'e a"ain( a first s!'h ser.i'e to #e offered #0 an0 Bank in ;akistan* Sin'e 2004( Standard Chartered #ank is the first #ank to offer a di.erse +ortfolio of in.estment o+tions to its .al!ed '!stomers* Cfferin"s are desi"ned to +ro.ide '!stomer with an o++ort!nit0 to di.ersif0 hisIher in.estments( minimi,e risk and ma-imi,e ret!rnsM Investment options can be categorized into:
1* Government Securities:

%hese are iss!ed #0 <o.ernment of ;akistan and in'l!de S+e'ial Sa.in"s Certifi'ates 73 0ear in.estment8 and Defense Sa.in"s Certifi'ates 710 0ear in.estment8
2* Mutual Funds:

Standard Chartered Bank has +artnered with the leadin" in.estment ho!ses of ;akistan for distri#!tin" their m!t!al f!nds*

Mutual Fund Basics

& 6!t!al ?!nd is a +ool of mone0 that "i.es small in.estors a''ess to a welldi.ersified +ortfolio of e@!ities( #onds( and other se'!rities* /a'h shareholder +arti'i+ates in the "ain or loss of the f!nd* Shares are iss!ed and 'an #e redeemed as needed 7in the 'ase of an o+en-ended f!nd8* %he f!ndAs net asset .al!e 7=&58 is determined ea'h da0* /a'h m!t!al f!nd +ortfolio is in.ested to mat'h the o#Le'ti.e stated in its in.estment a"enda* Equity Funds &n e@!it0 f!nd is one that is in.ested mainl0 in 'om+an0 e@!it0 thro!"h the sto'k e-'han"e and is e-+osed to the risk of .olatilit0 asso'iated with the

18

Standard Chartered Bank

"MONE Y BAN!IN# & FINANCE$

e@!it0 market* &ltho!"h this f!nd is the riskiest within the "enre of m!t!al f!nds( it is also known to 0ield the ma-im!m 0ields and di.idends*

Fixed Income Funds & ?i-ed )n'ome ?!nd is one that in.ests in a.en!es whi'h offer fi-ed ret!rns o.er a set tenor* %hese f!nds are inherentl0 linked to the "eneral interest rate and are( therefore( !nlike the sto'k market( safe from drasti' fl!'t!ation* %he 'a+ital .al!e is more easil0 s!staina#le while the ret!rns are "enerall0 modest* :owe.er( a'ti.e f!nd mana"ement 'an 0ield ret!rns whi'h are hi"her than most fi-ed in'ome a.en!es in the market and therefore( it is an attra'ti.e in.estment a.en!e for in.estors with moderate risk a++etites*

Money Market Funds & 6one0 6arket ?!nd is one that in.ests in li@!id( short-term a.en!es whi'h offer fi-ed ret!rns o.er short +eriods* %hese f!nds are inherentl0 linked to the "eneral interest rate and are( therefore( !nlike the sto'k market( safe from drasti' fl!'t!ation* Bnderl0in" in.estment ma0 in'l!de se'!rities iss!ed #0 'or+orate #odies( s+read transa'tions( re.erse-re+o transa'tions( sele'ti.e e-+os!re in the C?S market( %erm ?inan'e Certifi'ates 7%?Cs8 and 'ommer'ial +a+er*

Balanced Funds %hese f!nds maintain a mi- within e@!it0 and fi-ed in'ome markets* %he in'lination of this mi- will #e di'tated #0 the f!ndFs strate"i' intent and mission statement* %his f!nd offers more mane!.erin" room to its f!nd mana"ers as the0 ha.e the o+tion to swit'h #etween market t0+es i*e* fi-ed in'ome a.en!es and 'a+ital markets* /ffe'ti.el0( the risk asso'iated to this 'ate"or0 lies somewhere #etween that of e@!it0 f!nds and fi-ed in'ome f!nds and the ret!rns also .a'illate 'orres+ondin"l0 #etween the ran"es of the two*

19

Standard Chartered Bank

"MONE Y BAN!IN# & FINANCE$

!e Bank classi"ies its investments as "ollo#s: a$ %eld "or trading %hese are se'!rities( whi'h are a'@!ired with the intention to trade #0 takin" ad.anta"e of short term market I interest rate mo.ements and are 'arried at market .al!e* %he s!r+l!s I defi'it arisin" as a res!lt of re.al!ation at market .al!e are taken to in'ome*

b$ %eld to maturity %hese are se'!rities with fi-ed or determina#le +a0ments and fi-ed mat!rit0 that are held with the intention and a#ilit0 to hold to mat!rit0* %hese are 'arried at amortised 'ost* c$ &vailable "or sale %hese are in.estments that do not fall !nder the held for tradin" or held to mat!rit0 'ate"ories and are 'arried at market .al!e* %he s!r+l!s I defi'it arisin" as a res!lt of re.al!ation at market .al!e is ke+t in a se+arate a''o!nt #elow e@!it0* d$ Subsidiaries )n.estments in s!#sidiaries are 'arried at amortised 'ost*

In<est'ent &y Seg'ent

20

Standard Chartered Bank

"MONE Y BAN!IN# & FINANCE$

BAN!IN# IND/ST

OFILE (

;akistan BanksF &sso'iation 7;B&8 re+resents the ;akistan Bankin" )nd!str0* /sta#lished in 1953( its main o#Le'ti.e is to 'oordinate the efforts of the #ankin" ind!str0( and to share a 'ommon .ision of +ro"ress and de.elo+ment with its mem#ers* ;B& 6em#ershi+ is instit!tionali,ed and is a.aila#le onl0 to the Banks o+eratin" in ;akistan* C!rrentl0 there are 48 mem#ers( 'ate"ori,ed into "ro!+s 7one of these "ro!+s is !nder formation8* )ts "o.ernin" #od0 is an /-e'!ti.e Committee 7/C8 'om+risin" of 14 mem#ers( re+resented #0 the Chief /-e'!ti.es of the res+e'ti.e mem#er instit!tions* ;B&Fs ;rin'i+al /-e'!ti.e is the Chairman of the /-e'!ti.e Committee( ele'ted +eriodi'all0 from within the /C* ;resentl0( ;B& has 10 f!n'tional S!# Committees( ea'h 'haired #0 a mem#er of the /-e'!ti.e Committee* 3emainin" mem#ers of the S!# Committees are rele.ant /-e'!ti.es of mem#er #anks* ?ind more a#o!t ;B& and its "o.ernan'e in the ;B& ;rofile Se'tion* ;arti'!lars of mem#ers s!'h as their 'or+orate and mana"ement +rofiles( #ran'h networks and finan'ial statements are a.aila#le in the ;B& 6em#ers Se'tion* C.er the 0ears the role of ;B& has #roadened 'onsidera#l0* )t is now referred to

21

Standard Chartered Bank

"MONE Y BAN!IN# & FINANCE$

#0 the State Bank of ;akistan in form!lation of re"!lations for the #ankin" ind!str0( and has #een entr!sted with the f!n'tion of re"!latin" and monitorin" 'ertain ser.i'es +ro.ided to the #ankin" ind!str0 #0 o!tside ser.i'e +ro.iders* %hese ser.i'e +ro.iders in'l!de N;rofessional 5al!ersF( who are e.al!ators allowed to a++raise the .al!es of assets 'ollaterali,ed to #anks( and Se'!rit0 &"en'ies offerin" se'!rit0 ser.i'es to the Bankin" )nd!str0* ?or details .isit the ;B& ;anels Se'tion* ;akistan BanksF &sso'iation was 'onstit!ted as a ;ri.ate >imited Com+an0 on 31st 6ar'h 1953* )ts 'ontrollin" #od0 is the /-e'!ti.e-Committee( whi'h +resentl0 'om+rises of fo!rteen mem#ers* /a'h mem#er of the /-e'!ti.e-Committee is the Chief /-e'!ti.e of a mem#er ?inan'ial )nstit!tion* %he /-e'!ti.e-Committee is ele'ted #0 the ;B& mem#ers for a +eriod of one 0ear* =ow( the term of the /-e'!ti.e Committee r!ns from 1an!ar0 1 of the 0ear to De'em#er 31 of that 0ear* &fter a++ointment( the /-e'!ti.e-Committee mem#ers ele't its Chairman and two 5i'e Chairmen* %he Chairman of the /-e'!ti.e Committee is the Chairman of ;B&* ;B& Chairman is the ;rin'i+al /-e'!ti.e of ;B&* %he /-e'!ti.e Committee holds meetin"s on a re"!lar #asis to dis'!ss( resol.e( and e-e'!te the on"oin" iss!es +!t !+ to ;B&* %hese meetin"s are !s!all0 held on'e a month( #!t de+endin" on the re@!irement( the0 are also held more fre@!entl0*

Bein" a ;ri.ate >imited Com+an0( ;B& also holds &nn!al <eneral 6eetin"s( and( as +er need( /-tra Crdinar0 <eneral 6eetin"s to 'arr0 o!t #!siness re@!ired to #e done therein !nder the law( and as re@!ired #0 its 'harter 7&rti'les of &sso'iation8* ;B& has ten f!n'tional S!#-Committees to handle res+e'ti.e iss!es* %he Chairman of ea'h S!#-Committee is a mem#er of the /-e'!ti.e-Committee* %hese S!#-Committees in'l!de the followin"$ ;B& S!#-Committee for &''o!ntin" and %a-ation ;B& S!#-Committee for &"ri'!lt!ral ?inan'e ;B& S!#-Committee for Basel ))( Cor+orate <o.ernan'e J Com+lian'e

22

Standard Chartered Bank

"MONE Y BAN!IN# & FINANCE$

;B& S!#-Committee for Cons!mer Bankin" ;B& S!#-Committee for Credit J ;r!dential 3e"!lations ;B& S!#-Committee for <eneral Bankin"( C+erations J )*%* ;B& S!#-Committee for :*3* J %rainin" ;B& S!#-Committee for )slami' Bankin" ;B& S!#-Committee for S6/ I =B?)S ;B& S!#-Committee for %reas!r0 J Ca+ital 6arkets

%hese S!#-Committees meet as and when re@!ired to deal with the iss!es fa'ed #0 ;B& on the +arti'!lar as+e'ts 'on'ernin" the S!#-Committees* ;B& mem#ershi+ is o+en to the ?inan'ial )nstit!tions o+eratin" in ;akistan* )t '!rrentl0 has 48 mem#ers* %he mem#ers are #roadl0 'ate"ori,ed into followin" si- "ro!+s$ =ationali,ed Commer'ial Banks and <o.ernment Cwned Banks ;ri.ati,ed Banks De.elo+ment ?inan'ial )nstit!tions Small and 6edi!m /nter+rise 7"ro!+ !nder formation8 ;ri.ate Banks ?orei"n Banks

23

Standard Chartered Bank

"MONE Y BAN!IN# & FINANCE$

F/T/

O/TLOO!

& "rowin" and d0nami' #ankin" se'tor is essential for e'onomi' "rowth in ;akistan( as "rowth in the #ankin" se'tor and the real e'onom0 m!t!all0 reinfor'e ea'h other* %he #ankin" se'tor 'onstit!tes the 'ore of the finan'ial se'tor in ;akistan* ;ri.ate se'tor in.estment and 'ons!m+tion sho!ld #e seen as the ke0 dri.ers of the e'onom0 and m!st #e s!++orted #0 "rowin" finan'ial intermediation and ser.i'es( in'l!din" not onl0 #anks #!t also non-#ank finan'ial instit!tions( and de#t se'!rities and the sto'k market* %he "rowth in #ankin" s0stem has #een dri.en #0 rise in de+osits to 3s4*1 trillion and ad.an'es to 3s3*3 trillion* Banks as +rofita#le .ent!res ha.e attra'ted 'lose to o.er O4 #illion of forei"n dire't in.estment d!rin" 200 -2008* &lmost half the assets of #anks are now owned #0 forei"n #anks that are introd!'in" inno.ation and te'hnolo"i'al im+ro.ements* 3e'a+itali,ation and +r!dent lendin" s!++orted #0 stron" re"!lator0 and s!+er.isor0 framework ha.e lowered net non-+erformin" loans to histori'al lows* )n line with international trends( SB; introd!'ed Basel )) and #anks ha.e hi"her 'a+ital ade@!a'0 le.els --well a#o.e the minim!m le.el for the se'tor as a whole* Des+ite e'onomi' sho'k and stress in sto'k market( the #ankin" s0stem in the first @!arter of the fis'al 0ear 2009 has shown an in'rease in +rofita#ilit0 of the #ankin" s0stem* Central #ankFs +oli'ies( re"!lations and s!+er.ision s0stems ha.e #een s!#stantiall0 transformed and #arrin" one area 7i*e* non'om+lian'e with 'onsolidated s!+er.ision +rin'i+les +ro"ress on whi'h is also !nderwa08 SB; re"!lator0 and s!+er.isor0 framework is now in line with the international #est +ra'ti'es and norms* )m+ro.ed mana"ement #ro!"ht hi"h +rofita#ilit0( re'ord low non-+erformin" loans 7=;>s8 and 'a+ital ade@!a'0 le.els well a#o.e re"!lator0 re@!irements* Des+ite s!''essf!l e-+ansion in re'ent 0ears( the #ankin" se'tor 'ontin!es to ha.e a lar"e +otential for f!rther "rowth( di.ersifi'ation and finan'ial stren"thenin"* De+osit #ase rose to 3s 4*1 trillion and "ross ad.an'es to 3s 3*3 trillion #0 Se+tem#er 2008* S!++orted #0 the "rowin" finan'ial intermediation +ro'ess( #anksF a""re"ate +rofita#ilit0 rose from 3s 3*3 #illion in 2005 to 3s 73*3 #illion #0 2007 and 3s 4 *0 #illion for half 0ear 2008* 3e'a+itali,ation and +r!dent lendin" has lowered #anksF net non-+erformin" loans 7=;>s8 to aro!nd 2*0 +er'ent* BanksF 'a+itali,ation and @!alit0 of assets ha.e hel+ed raise the risk wei"hted 'a+ital ade@!a'0 ratio to 12*1 +er'ent( well a#o.e the re"!lator0 minim!m of 8*0 +er'ent*

24

Standard Chartered Bank

"MONE Y BAN!IN# & FINANCE$

&"ri'!lt!re lendin" has re'ei.ed a si"nifi'ant #oost with the #ankin" s0stem meetin" its tar"et of 3s 200 #illion set for 2007I2008* %his notwithstandin"( o!tstandin" a"ri'!lt!re ad.an'es a''o!nt for onl0 K of total ad.an'es and the '!rrent flow of 'redit meets onl0 45K of the se'torFs 'redit re@!irements* SB;Fs strate"0 for a"ri'!lt!re 'redit seeks to do!#le the n!m#er of #orrowers from 2 million to 4 million and to meet 75-80K of the a"ri'!lt!re 'redit re@!irements within 3 to 5 0ears*

SB; has en'o!ra"ed a re.ol.in" three-0ear 'redit s'heme !nder whi'h farmers 'an #orrow for one 0ear and 'ontin!e to #orrow witho!t +ro.idin" do'!mentation ea'h 0ear* <!idelines ha.e #een iss!ed for lendin" to the li.esto'k( fisheries and horti'!lt!re s!#se'tors and +ro"rams are #ein" la!n'hed for the dair0 se'tor* )n addition( a Small farmer s+e'ial finan'in" s'heme has #een +romoted #ased on "ro!+ #ased lendin" and a Cro+ loan ins!ran'e s'heme has #een str!'t!red whi'h is now #ein" offered #0 some ins!ran'e 'om+anies* &"ri'!lt!re 'redit #ased on )slami' +rin'i+les will #e +romoted and 'a+a'it0 #!ildin" +ro.ided to farmers and #ankers in re"ional lan"!a"es*

25