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Al-Faysal Investment Bank




                  INTRODUCTION

It gives us pleasure to introduce Al Faysal Investment Bank
Limited (AFIBL), a member of the Dar Al Maal Al Islami
Group (DMI).
AFIBL was incorporated in 1991 with an authorized capital of
Rs.500 million, later enhanced to Rs 1.0 billion. Today it is
the largest investment Bank in Pakistan with paid up capital
of Rs.978.7 million and total equity of over Rs. 24.5 billion.
AFIBL’s share is listed on the national bourses and today it
has the largest market capitalization compared to any
investment Bank in the country.


     AFIBL has had a very successful track record and
performance. The operating profit of Rs 434 million in 1999
was 14% higher as compared to 1998.               Despite the
depressed market conditions and constraints in the financial
sector, AFIBL reported an increase of 6.5% in profit after tax
from Rs. 170 million to Rs 181 million in 1999.


     AFIBL’s parent institution Dar Al Maal Al Islami is based
in Geneva, Switzerland. DMI has a paid up capital in excess
of US$ 347 million and total assets of over US$ 1 billion. It
also manages fiduciary funds of US$ 3.5 billion. The DMI

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Al-Faysal Investment Bank




Group spans the European, Asian and African continents by
virtue of a sophisticated network of financial institutions
acting as a vital nexus between the business houses of the
Orient and West.       The synergy that drives from such a
multifarious network is our strength.          Today DMI’s cross
border commitments to Pakistan are in excess of US $ 700
million.


       AFIBL has a vast network of sister concerns in the
Middle East.     Two prominent institutions; Faysal Islamic
Bank    of   Bahrain   E.C.   (FIBB)   and    Islamic   Investment
Company of the Gulf E.C Bahrain (IICG) were merged to
form the Shamil Bank of Bahrain E.C. in June 2000. AFIBL
and its parent have been honored by having as their
chairman, HRH Prince Mohammed Al Faisal Al Saud, son of
late King Faysal of Saudi Arabia.


       AFIBL has been assigned an Entity Credit Rating for
long term of AA+ (A One Plus).               The rating has been
conducted by the Pakistan Credit Rating Agency (Pvt.)
Limited which is an affiliate of IBCA Limited of UK. This is
one of the highest credit rating that any financial institution
has received in the country.




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Al-Faysal Investment Bank




      The phenomenal growth of AFIBL in a short period has
been achieved through its multifaceted contributions to all
spheres of Banking activities.    Its fine sense of the market
and its close watch on the rapidly changing economic
horizon have been incorporated in a proactive and dynamic
flexibility that grants us the competitive edge to formulate
solutions for the most complex financial problems of our
sophisticated clients.


     AFIBL has been a major provider and arranger of debt
and equity finance for power plants, refineries, pipelines, oil
terminals,     cement         plants,      fertilizer    projects,
telecommunication        companies,     chemical   projects,   and
transport projects.       We attach a list of some of our
accomplishments to date, which are unparalleled in this
market.


     AFIBL has strong relationship with local corporations,
government and various institutions, which are carrying out
major trade and commerce of the country. Our leadership in
corporate finance activities is evident from the growth on
our revenues over last seven years.




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Al-Faysal Investment Bank


     In 1997 AFIBL’s after tax profit of RS 319 million was
more than the combined profits of the 9 investment Banks
operating and registered in Pakistan.         AFIBL has a balance
sheet footing of Rs.24.5 billion, which is not only larger than
all investment banks but also greater than many other local
& foreign commercial Banks. The balance sheet has growth
at a remarkable rate of 58% over the last 8 years.
                        AFIBL has shown the capability and
commitment     to   locate    international    investors    with   an
appetite for the Pakistan market.       Due to its strong bonds
with the Middle East, its principals and their customers,
AFIBL has been in the past able to efficaciously arrange
funding for numerous sources.


     AFIBL has also forged Strategic Alliances with world-
renowned    institutions     for   providing    a   vital   link   to
international markets and facilitating the arrangement and
placement of equity & debt.        As such we have an enviable
record in raising funds for the infrastructure projects. AFIBL
has appointed as the Financial Advisor for the privatization
of Industrial Development Bank of Pakistan.             AFIBL and
Goldman Sachs were short-listed as Financial Advisor for
privatization of PTCL to a strategic investor in 1995.         Also,
AFIBL with Kleinworth Benson, Regent Pacific and Alliance
Capital was short, listed for Financial Advisor of Privatization


Business Institution                                               4
Al-Faysal Investment Bank


Fund.    AFIBL Price Water House and Indosuez W. I Carr
have been short listed for sale of GOP shareholding in Attock
Refinery Limited & Pakistan Oil Field Limited.


     AFIBL has a team of highly trained and experienced
Corporate Finance specialists. We offer an array of services
both for the Corporate as well as individual clients.   These
includes:




        INVESTMENT PRODUCTS AND

            PORTFOLIO MANAGEMENT

            Local And Foreign Currency Deposits.
     
            Funds Management
     
            Money Market Operations
     
             Capital Market Operations, Equity Participation,
     
     Underwriting, Pre IPO Placements


            Guarantees
     




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Al-Faysal Investment Bank



Financing
           Morabaha Financing
     
           Project Financing
     
           Islamic Redeemable Capital (TFCs)
     
           Arrangement & Syndication
     



Advisory Services
           Corporate & Finance Restructuring
     
           Mergers, Acquisition & Divestitures
     
           Privatization
     
           Debt Structuring
     
           Raising Foreign Investment
     
           Identification of Joint Venture Partners
     
            Feasibility, Market & Industry Studies
     
            Capital Market & Funds Management Advisory
     
     Services


      As an investment Bank, we are able to offer excellent
rates on our certificates of deposits.   Our rates match the
very best in the industry.     The tenor of such COIs ranges
from one month to five years. New products and investment
schemes are also constantly in the pipeline. We also make




Business Institution                                      6
Al-Faysal Investment Bank


investment plans tailored to address the specific needs of
our valuable clients.
       In a short time AFIBL has achieved a unique position
among the financial institutions of the country.                  Our
commitment to progress is evident from the latest annual
accounts, which are enclosed for your information.
Morabaha Service




     The Bank extends Short, Medium & Long Term (project
     Finance)    financing      through   the   Islamic    mode    of
     financing    primarily     MORABAHA.Morabaha          financing
     represents more than two thirds of the Bank’s total
     assets portfolio.
     The Bank thus has an asset portfolio of varying terms,
     short term – one year or less, to long term project
     finances – up to seven years. While the Bank focuses
     on cash flow based financing, all financing is secured
     through additional collateral’s as allowed and /or
     required by the state Bank of Pakistan.
     Security    collateral’s    vary   from    charge    on   assets
     (Mortgage on Land & Building, Hypothecation of Fixed
     & Current Assets and Hypothecation of Receivables),
     scuritization of Receivables, Bank Guarantees, Cash

Business Institution                                               7
Al-Faysal Investment Bank




     Deposits       (Pak     Rupee & Foreign          Currency),       under
     structured       transactions,     the    Bank       manages      larger
     funding requirements.


     Larger     funding        requirements         are    met        through
     syndicated arrangements comprising of consortium of
     more than one financial institution.
     Exposure Detail:
     Short & Medium Term              Over Rs 11 billion
     Long Term                              Over Rs 5 billion
     The Bank can also arrange Redeemable Capital (TFC)
     that is Shariah compatible. Both Listed and Non-Listed
     TFCs     are     managed        through      private       and    public
     placements (with specific benefits).
     In order to meet additional financing requirements of
     the    clients    the    Bank    facilitates     financing       through
     Leasing arrangements. For this purpose the Clients of
     the     Bank      facilitates     financing       through        leasing
     arrangements.            For    this    purpose      the    Bank    has
     developed strategic partnership with some of the
     leading Leasing arrangements.               For this purpose the
     Bank has developed strategic partnership with some of
     the leading Leasing Companies in the country.




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Al-Faysal Investment Bank




                   DEPARTMENTS
        ADMINISTRATION
  
        CARPORATE FINANCE
  
        CREDIT ADMIN
  
        PRIVATE CLIENT SERVICES
  
        OPRATIONS
  
        CAPITAL MARKETES
  
        TREASURY
  
        PERSONAL
  
        INFORMATION TECHNOLOGY
  
        FINANCIAL CONTROL
  
        INTERNAL AUDIT
  
        RISK MANAGEMENT
   




Business Institution              9
Al-Faysal Investment Bank



Administration
     Administration is Branch function reporting to the
     respective Regional Head. It comprises of teams at the
     three locations facilitating the core activities of the
     bank.       Administration         is     responsible      for      all
     administrative       issues        from        house       keeping,
     maintenance, transport, communications, protocol and
     other associated activities.



Corporate Finance
     Corporate Finance represents the major part of the
     front office of the bank (the other being private client
     services) and is the main Revenue Generator.                       The
     Department        comprises    a        team    of     qualified     &
     experienced professionals reporting directly to the
     respective Regional Heads.          The total strength of the
     department is 10 people at the three locations.                    The
     department is responsible for marketing the Banking
     Services and for Relationship Management. Corporate
     Finance undertakes transactions directly & through
     Syndication.      Complete scope of services including
     Financing, Guarantees, Advisory, Privatization, Mergers




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Al-Faysal Investment Bank


     &   Acquisitions       etc   are     all   under     taken     by   the
     Department.
     Investments in projects is made through direct funded
     facilities in the shape of term loans or indirectly
     through         Syndicated           arrangements,             through
     underwriting            of           public           issues         of
     stocks/shares/securities, short term and long term
     participation     Term       Certificates     and     Term     Finance
     Certificates.
     The financing is provided at market competitive rates.
     Both fixed and variable rate facilities are offered.
     The   department         also      undertakes        contingent     risk
     exposure based on non-funded facilities like Bank
     Guarantees and Counter Guarantees.
     The department undertakes a multitude of corporate
     financial services, including: acting as advisor and
     financial agents for clients in obtaining bank loans,
     syndicated loans, export credits etc
     Private placement of debt and equity in domestic and
     foreign   markets       adviser      with     regard    to     financial
     restructuring     as    well    as     preparation      of     resource
     mobilization      adviser       with        regard     to      financial
     restructuring     as    well    as     preparation      of     resource
     mobilization plans




Business Institution                                                      11
Al-Faysal Investment Bank


             Adviser with regard to mergers, acquisitions and
     
     divestitures.
           Advisory with regard to privatization of state owned
     
     enterprises.
              Preparation of feasibility studies, market and
     
     industry studies etc.
           Financial intermediary.
     



Credit Admin
         The credit admin department comprises of three units
one in support of each branch. Each unit is headed by a unit
head reporting to the respective regional head at the branch
level.    The total strength of the credit admin function is 9
persons. The credit admin department is responsible for the
post approval formalities including legal documentation,
creation of security, post disbursement monitoring, remedial
asset     management.       Additional   responsibilities   include
management & regulatory reporting and audit.




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Al-Faysal Investment Bank




              Private Client Services

A person at the three locations represents private client
services (PCS). PCS is focused towards meeting the banking
requirements of high net worth individuals.    The customer
base comprises of over 150 customers.




                       OPERATIONS
The operations department provides the required back office
support facilitating all disbursement and receipts with regard
to transactions.   The department comprises a team of 10
persons distributed at the three offices.   Operations are a
branch function reporting to the respective regional heads.




Business Institution                                       13
Al-Faysal Investment Bank




                          Capital Market
The capital markets department operates out of Karachi, the
main business center of the country.               The department
undertakes the required capital market activities for the
bank including:
Trading     in   listed     securities,   both   equity   and    other
instruments
 Providing professional analysis of securities
 Issuing long term certificates of deposit or investment,
  underwriting of stocks and shares, participation term
  certificates etc.
 Managing portfolios
 Providing margin loans, capital market reports, reverse
  reports etc
 Offering cash management accounts




                              Treasury
The treasury function is handled out of Karachi.             Inter and
Intra bank lending & borrowing is the domain of the
treasury.        The      department      undertakes   the   following
activities for the bank:


Business Institution                                               14
Al-Faysal Investment Bank


    Issuing short term paper, certificates of deposit or



    investment.
    Trading in commercial paper, government securities,



    promissory notes, banker’s acceptance etc.
    Assisting in issue of commercial paper



    Acting as broker in call money market cash & fund



    management for clients.




Personnel

The personnel function is located at Islamabad and is
headed by the regional head – north, Mr. khalid Pervaiz.
The department is responsible for developing the personnel
policies and undertakes human resource planning and career
development.      In this regard various arrangement of in-
house training programs and assigning personnel to various
training programs and seminars is undertaken. In addition
the department manages the employment records of all the
employees.




Business Institution                                    15
Al-Faysal Investment Bank



               Information Technology
The      information    technology   department,   headed      by
Mr.Usman Hameed, has a team of six IT professional based
in Karachi, Lahore and Islamabad.
Operations of the bank are automated under ORACLE /
developer 2000 based systems, which run under SCO UNIX
platform. Microsoft products are used for the automation of
the office/ time / mail management systems.          UNIX and
windows NT based networks are installed at all branches.
Approximately 100 workstations are installed in the bank.




                       Financial control
Financial control department is headed by Mr. Mansoor H.
Hamdani, who is a chartered accountant with over 30 years
varied     experience.       Besides   financial   control     the
responsibility of corporate secretary is also vested with Mr.
Hamdani.
The head office function is based in Islamabad.              Other
executives of the department includes a manager (based in
Karachi) and two deputy managers with a total strength of
seven persons.



Business Institution                                           16
Al-Faysal Investment Bank


The department is responsible for managing the books of
accounts, budgeting, annual general meetings, and matters
pertaining to the board of directors & shareholders.




Internal audit
                        Internal audit reports directly to the
bank’s president as well as the group head office in Geneva.
IA undertakes an independent audit of the banks operations
on a regular basis with a special focus towards verifying
operational conformity with the banks policies, procedures
and guidelines.    In addition conformance with the SBP &
other regulatory policies are also examined.
IA operates out of Karachi and is headed by Mr. Kamran
Mukhtar.


                  Risk Management
The risk management department is headed by Mr. Khalid
Qayyum, country risk head.        Risk management is a head
office function reporting directly to the bank’s president.
Risk department is primarily responsible for outlining the
banks investment/ exposure policies based upon the risk
assessment    under    changing    market   conditions.    All
investment/ exposure proposals prepared by the Branches

Business Institution                                       17
Al-Faysal Investment Bank


are evaluated independently by the risk department and
recommended to the management for further approvals.
     In addition to the risk management of the banks
     operations the department deals manages the reporting
     requirements of the regulatory bodies.




                   Bank Guarantees
     Non funded facilities comprising of Bank Guarantees
     and Indemnities constitute the Contingent Liability of
     the Bank.    These comprise the major source of Fee
     based income for the Bank.        Bank Guarantees are
     issued in the form of Bid Bonds, performance Bonds,
     surety Bonds and for financing.
     The Guarantees are issued for varying time periods. As
     a minimum the Guarantees are issued for a single
     quarter   while   the   maximum    exposure   under    a
     guarantee is over 10 years. The Bank Guarantees are
     secured through collateral’s as allowed and are required
     by the State Bank of Pakistan.
     The security collateral’s vary from charge on Assets
     (Mortgage on Land & Building, Hypothecation of Fixed
     & Current Assets and Hypothecation of Receivables),

Business Institution                                       18
Al-Faysal Investment Bank




     counter Bank Guarantees, Cash deposits (Pak Rupee &
     Foreign Currency), pledge of shares, lie on Stock etc.
     The bank’s Per Party Limit, for the non-funded facilities,
     as defined by the state bank of Pakistan, stands at
     approx. RS 450 million (the funded exposure can be up
     to RS 300 million).        Larger requirements are met
     through Syndicated arrangements comprising of more
     than one financial institution.
     Exposure Detail:       Nearly Rs 3 billion




           Certificates of Investment


Regular certificates of investment (roci)
     This scheme is designed to cover the vast majority of
     those depositors who wish to invest their funds for a
     fixed period of time and get higher returns.
     Features:
         The minimum deposits requirements is Rs. 50000
     
         The tenors are one month of five years.
     
           Profit will be paid at maturity for investments of
     
     under one year.        For investment of one year and
     above, the profit will be paid annually.

Business Institution                                          19
Al-Faysal Investment Bank


               Upon premature encashment after 90 days, profit
      
      on RCOI will be paid at the profit rate prevailing on the
      dates of issue and corresponding to the tenor of RCOI
      completed.
        Additional bonus rate over and above the expected

profit rate will be given to depositors with deposits of
following amounts.
       Rs. 10 MIO to 24.999 – 0.10%

       Rs. 25 MIO to 49.999 – 0.25%

       Rs. 50 MIO and above – 0.50%

 Zakat expectation certificate/ affidavit/ declaration, duly
    certified by Notary Public should be filled with the bank
    one more prior to the valuation date.
 Zakat (if applicable) will be calculated on the Zakat
    valuation date and principals and shall be deducted at the
    time of profit payment or encashment which ever is
    earlier.



Monthly Income Certificate of Investment:
                             (Micoi)
This scheme is designed for those depositors who wish to
earn a regular monthly income on their fixed investment.




Business Institution                                        20
Al-Faysal Investment Bank


Features:
 The minimum deposit requirement is Rs.500,000
 The tenors are one year to five years.
 Monthly profit will be paid to the depositors after
   deduction of withholding tax and any other levies (if
   applicable).
 Upon premature encashment after 90 days but before
   one year, profit will be paid at the RCOI profit rates
   prevailing at the date of issue of MICOI & corresponding
   to the tenor completed.       Any difference between the
   calculated profit amount and the profit already paid will
   be deducted from the principal.          However, profit on
   premature encashment after completion of 1,2,3 & 4
   years will be paid at the MICOI profit rates corresponding
   to the tenor of MICOI profit rates corresponding to the
   tenor of MICOI completed.
 Zakat exemption certificate/ affidavit/ declaration, duly
   certified y Notary Public, must be filed with the bank at
   the time of investment in MICOI completed.
 Zakat (if applicable) will be deducted @ 1/12th of the
   zakat   amount      every   month   on   principal   only,   as
   calculated on the 1st of Ramdan.




Business Institution                                            21
Al-Faysal Investment Bank


    Special Growth Certificate Of Investment
                            (Sgcoi)
This scheme is for those depositors who are willing to invest
on longer-term basis in order to get a huge rate of return at
the end of the period and have no interim requirement for
profit or income.

Features:
 The minimum deposit requirement is Rs.500, 000.
 The tenors are two years to five years.
 The initial investment will grow at special accelerated
     profit rate to become the maturity amount.
 Profit will be paid at the time of maturity only. No profit
     will be paid during the interim period.
 Upon pre-mature encashment before the completion of
     two years, profit on SGCOI will be paid at the profit rate
     of the RCOI prevailing on the date of issue and
     corresponding to the tenor completed.     However, profit
     on premature encashment of SGCOI after completion of



 2,3,4, & 5 years will be paid at the SGCOI profit rates
     corresponding to the tenor completed.




Business Institution                                        22
Al-Faysal Investment Bank


 Sakata exemption certificate/affidavit/declaration, duly
   certified by Notary Public, should be filed with the bank
   one month prior to the valuation date.
 Zakat (if applicable) will be charged only once, on the
   total   payable     amount   at   the    time   of   the
   encashment/maturity of SGCOI.




Business Institution                                     23
Al-Faysal Investment Bank


            AFIBL CERTIFICATES OF INVESTMENT (COI)
                                           SCHEME
                               RCOI                 SGCOI                      MICOI
                        REGULAR COI             SPECIAL       GROUTH       MONTHLY
                                                COI                        INCOME
PROFIT                  UP     TO    13.5 UP TO 13.34% UPTO                               13.14
RATE*                   % P.A                   P.A.                       P.A
                                                                           RS. 1,095
PROFIT AMOUNT(e.g.      RS .6,750               RS. 96,700
ON INVESTMENT OF RS.    EVERY SIX MONTH         AT MATURITY
                                                                           EVERY MONTTH
100,000 FOR FIVE YEAR

                        RS .50,000              RS. 100,000                RS.500,000
MINIMUM
INVESTMENT
AMOUNT
INVESTMENT TENOR        1    MONTH   TO     5                              1      YEAR      TO   5
                                                2 YEAR TO 5 YEAR

                        YEAR                                               YEAR
                                                ON MATURITY ONLY           MONTHLY
PROFIT FREQUENCY        EVERY SIX MONTH OR
                        AT     MATURITY     ,
                        WHICHEVER IS EARLIER



PREMATURE               ALLOWED                 ALLOWED                    ALLOWED
ENCASHMENT
                        THIS    SCHEME     IS   THIS SCHEME IS SPECIALLY   THIS      SCHEME      IS
                                                DESIGNED FOR CUSTOMERS     DESIGND    FOR    THOSE
                        DESIGNED          FOR
                                                WHO COULD INVEST FOR A     WHO WISH TO EARN A
                        CUSTOMERS         WHO
                                                LONGER TERM AND EXPECT     REGULAR         MONTHLY
                        COULD INVEST THEIR
                                                A HIGH RATE OF RETURN AT   INCOME     ON      THEIR
                        FUND FOR A FIXED
                                                THE MATURITY AND HAVE      INVESTMENT TO MEET
                        PERIOD AND EXPECT
                                                NO PERTICULAR NEED FOR     THEIR         REGULARLY
                        A HIGHER RETURN AT      A REGULAR RETURN.          RECURRING EXPENSES.
                        ACERTAIN
                        FREQUENCY.
*Expected rate of profit for a tenor of 5 years.




Business Institution                                                                        24
Al-Faysal Investment Bank



COMPARISON OF AFIBL COI’s

WITH NAIONAL SAVINGS SCHEMES
                     ALFAYSAL              NATIONAL              AFIBL
                     BANK                  SAVINGS               PROFIT
                                                                 HIGHER BY
ON             AN    RATEP.A   NETPROFIT   RATEP.A   NETPROFIT

INVESTMENT     OF
RS 100,000
MONTHLY PROFIT       13.14%      RS.986    12.48%     RS.936     RS.   50     PER
SCHEME(5-                                                        MONTH
YEARS)
                                                                 RS.   417    PER
HALF-YEARLY PROFIT   13.15%     RS.5,917   11%       RS.5,500
SCHEME (3-YEARS)
                                                                 HALF-YEAR
GROWTH                                                           RS.3,030  AT
                     19.34%    RS.87,030   16.8%     RS.84,000

SCHEME(5-YEAR)
                                                                 MATURITY


NOTE: Net Profit amounts have been calculated after

                                                   currently@10%
deduction      of     withholding          tax                               p.a.,
wherever applicable




Business Institution                                                           25

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Alfaisal Bank

  • 1. Al-Faysal Investment Bank INTRODUCTION It gives us pleasure to introduce Al Faysal Investment Bank Limited (AFIBL), a member of the Dar Al Maal Al Islami Group (DMI). AFIBL was incorporated in 1991 with an authorized capital of Rs.500 million, later enhanced to Rs 1.0 billion. Today it is the largest investment Bank in Pakistan with paid up capital of Rs.978.7 million and total equity of over Rs. 24.5 billion. AFIBL’s share is listed on the national bourses and today it has the largest market capitalization compared to any investment Bank in the country. AFIBL has had a very successful track record and performance. The operating profit of Rs 434 million in 1999 was 14% higher as compared to 1998. Despite the depressed market conditions and constraints in the financial sector, AFIBL reported an increase of 6.5% in profit after tax from Rs. 170 million to Rs 181 million in 1999. AFIBL’s parent institution Dar Al Maal Al Islami is based in Geneva, Switzerland. DMI has a paid up capital in excess of US$ 347 million and total assets of over US$ 1 billion. It also manages fiduciary funds of US$ 3.5 billion. The DMI Business Institution 1
  • 2. Al-Faysal Investment Bank Group spans the European, Asian and African continents by virtue of a sophisticated network of financial institutions acting as a vital nexus between the business houses of the Orient and West. The synergy that drives from such a multifarious network is our strength. Today DMI’s cross border commitments to Pakistan are in excess of US $ 700 million. AFIBL has a vast network of sister concerns in the Middle East. Two prominent institutions; Faysal Islamic Bank of Bahrain E.C. (FIBB) and Islamic Investment Company of the Gulf E.C Bahrain (IICG) were merged to form the Shamil Bank of Bahrain E.C. in June 2000. AFIBL and its parent have been honored by having as their chairman, HRH Prince Mohammed Al Faisal Al Saud, son of late King Faysal of Saudi Arabia. AFIBL has been assigned an Entity Credit Rating for long term of AA+ (A One Plus). The rating has been conducted by the Pakistan Credit Rating Agency (Pvt.) Limited which is an affiliate of IBCA Limited of UK. This is one of the highest credit rating that any financial institution has received in the country. Business Institution 2
  • 3. Al-Faysal Investment Bank The phenomenal growth of AFIBL in a short period has been achieved through its multifaceted contributions to all spheres of Banking activities. Its fine sense of the market and its close watch on the rapidly changing economic horizon have been incorporated in a proactive and dynamic flexibility that grants us the competitive edge to formulate solutions for the most complex financial problems of our sophisticated clients. AFIBL has been a major provider and arranger of debt and equity finance for power plants, refineries, pipelines, oil terminals, cement plants, fertilizer projects, telecommunication companies, chemical projects, and transport projects. We attach a list of some of our accomplishments to date, which are unparalleled in this market. AFIBL has strong relationship with local corporations, government and various institutions, which are carrying out major trade and commerce of the country. Our leadership in corporate finance activities is evident from the growth on our revenues over last seven years. Business Institution 3
  • 4. Al-Faysal Investment Bank In 1997 AFIBL’s after tax profit of RS 319 million was more than the combined profits of the 9 investment Banks operating and registered in Pakistan. AFIBL has a balance sheet footing of Rs.24.5 billion, which is not only larger than all investment banks but also greater than many other local & foreign commercial Banks. The balance sheet has growth at a remarkable rate of 58% over the last 8 years. AFIBL has shown the capability and commitment to locate international investors with an appetite for the Pakistan market. Due to its strong bonds with the Middle East, its principals and their customers, AFIBL has been in the past able to efficaciously arrange funding for numerous sources. AFIBL has also forged Strategic Alliances with world- renowned institutions for providing a vital link to international markets and facilitating the arrangement and placement of equity & debt. As such we have an enviable record in raising funds for the infrastructure projects. AFIBL has appointed as the Financial Advisor for the privatization of Industrial Development Bank of Pakistan. AFIBL and Goldman Sachs were short-listed as Financial Advisor for privatization of PTCL to a strategic investor in 1995. Also, AFIBL with Kleinworth Benson, Regent Pacific and Alliance Capital was short, listed for Financial Advisor of Privatization Business Institution 4
  • 5. Al-Faysal Investment Bank Fund. AFIBL Price Water House and Indosuez W. I Carr have been short listed for sale of GOP shareholding in Attock Refinery Limited & Pakistan Oil Field Limited. AFIBL has a team of highly trained and experienced Corporate Finance specialists. We offer an array of services both for the Corporate as well as individual clients. These includes: INVESTMENT PRODUCTS AND PORTFOLIO MANAGEMENT Local And Foreign Currency Deposits.  Funds Management  Money Market Operations  Capital Market Operations, Equity Participation,  Underwriting, Pre IPO Placements Guarantees  Business Institution 5
  • 6. Al-Faysal Investment Bank Financing Morabaha Financing  Project Financing  Islamic Redeemable Capital (TFCs)  Arrangement & Syndication  Advisory Services Corporate & Finance Restructuring  Mergers, Acquisition & Divestitures  Privatization  Debt Structuring  Raising Foreign Investment  Identification of Joint Venture Partners  Feasibility, Market & Industry Studies  Capital Market & Funds Management Advisory  Services As an investment Bank, we are able to offer excellent rates on our certificates of deposits. Our rates match the very best in the industry. The tenor of such COIs ranges from one month to five years. New products and investment schemes are also constantly in the pipeline. We also make Business Institution 6
  • 7. Al-Faysal Investment Bank investment plans tailored to address the specific needs of our valuable clients. In a short time AFIBL has achieved a unique position among the financial institutions of the country. Our commitment to progress is evident from the latest annual accounts, which are enclosed for your information. Morabaha Service The Bank extends Short, Medium & Long Term (project Finance) financing through the Islamic mode of financing primarily MORABAHA.Morabaha financing represents more than two thirds of the Bank’s total assets portfolio. The Bank thus has an asset portfolio of varying terms, short term – one year or less, to long term project finances – up to seven years. While the Bank focuses on cash flow based financing, all financing is secured through additional collateral’s as allowed and /or required by the state Bank of Pakistan. Security collateral’s vary from charge on assets (Mortgage on Land & Building, Hypothecation of Fixed & Current Assets and Hypothecation of Receivables), scuritization of Receivables, Bank Guarantees, Cash Business Institution 7
  • 8. Al-Faysal Investment Bank Deposits (Pak Rupee & Foreign Currency), under structured transactions, the Bank manages larger funding requirements. Larger funding requirements are met through syndicated arrangements comprising of consortium of more than one financial institution. Exposure Detail: Short & Medium Term Over Rs 11 billion Long Term Over Rs 5 billion The Bank can also arrange Redeemable Capital (TFC) that is Shariah compatible. Both Listed and Non-Listed TFCs are managed through private and public placements (with specific benefits). In order to meet additional financing requirements of the clients the Bank facilitates financing through Leasing arrangements. For this purpose the Clients of the Bank facilitates financing through leasing arrangements. For this purpose the Bank has developed strategic partnership with some of the leading Leasing arrangements. For this purpose the Bank has developed strategic partnership with some of the leading Leasing Companies in the country. Business Institution 8
  • 9. Al-Faysal Investment Bank DEPARTMENTS ADMINISTRATION  CARPORATE FINANCE  CREDIT ADMIN  PRIVATE CLIENT SERVICES  OPRATIONS  CAPITAL MARKETES  TREASURY  PERSONAL  INFORMATION TECHNOLOGY  FINANCIAL CONTROL  INTERNAL AUDIT  RISK MANAGEMENT  Business Institution 9
  • 10. Al-Faysal Investment Bank Administration Administration is Branch function reporting to the respective Regional Head. It comprises of teams at the three locations facilitating the core activities of the bank. Administration is responsible for all administrative issues from house keeping, maintenance, transport, communications, protocol and other associated activities. Corporate Finance Corporate Finance represents the major part of the front office of the bank (the other being private client services) and is the main Revenue Generator. The Department comprises a team of qualified & experienced professionals reporting directly to the respective Regional Heads. The total strength of the department is 10 people at the three locations. The department is responsible for marketing the Banking Services and for Relationship Management. Corporate Finance undertakes transactions directly & through Syndication. Complete scope of services including Financing, Guarantees, Advisory, Privatization, Mergers Business Institution 10
  • 11. Al-Faysal Investment Bank & Acquisitions etc are all under taken by the Department. Investments in projects is made through direct funded facilities in the shape of term loans or indirectly through Syndicated arrangements, through underwriting of public issues of stocks/shares/securities, short term and long term participation Term Certificates and Term Finance Certificates. The financing is provided at market competitive rates. Both fixed and variable rate facilities are offered. The department also undertakes contingent risk exposure based on non-funded facilities like Bank Guarantees and Counter Guarantees. The department undertakes a multitude of corporate financial services, including: acting as advisor and financial agents for clients in obtaining bank loans, syndicated loans, export credits etc Private placement of debt and equity in domestic and foreign markets adviser with regard to financial restructuring as well as preparation of resource mobilization adviser with regard to financial restructuring as well as preparation of resource mobilization plans Business Institution 11
  • 12. Al-Faysal Investment Bank Adviser with regard to mergers, acquisitions and  divestitures. Advisory with regard to privatization of state owned  enterprises. Preparation of feasibility studies, market and  industry studies etc. Financial intermediary.  Credit Admin The credit admin department comprises of three units one in support of each branch. Each unit is headed by a unit head reporting to the respective regional head at the branch level. The total strength of the credit admin function is 9 persons. The credit admin department is responsible for the post approval formalities including legal documentation, creation of security, post disbursement monitoring, remedial asset management. Additional responsibilities include management & regulatory reporting and audit. Business Institution 12
  • 13. Al-Faysal Investment Bank Private Client Services A person at the three locations represents private client services (PCS). PCS is focused towards meeting the banking requirements of high net worth individuals. The customer base comprises of over 150 customers. OPERATIONS The operations department provides the required back office support facilitating all disbursement and receipts with regard to transactions. The department comprises a team of 10 persons distributed at the three offices. Operations are a branch function reporting to the respective regional heads. Business Institution 13
  • 14. Al-Faysal Investment Bank Capital Market The capital markets department operates out of Karachi, the main business center of the country. The department undertakes the required capital market activities for the bank including: Trading in listed securities, both equity and other instruments  Providing professional analysis of securities  Issuing long term certificates of deposit or investment, underwriting of stocks and shares, participation term certificates etc.  Managing portfolios  Providing margin loans, capital market reports, reverse reports etc  Offering cash management accounts Treasury The treasury function is handled out of Karachi. Inter and Intra bank lending & borrowing is the domain of the treasury. The department undertakes the following activities for the bank: Business Institution 14
  • 15. Al-Faysal Investment Bank Issuing short term paper, certificates of deposit or  investment. Trading in commercial paper, government securities,  promissory notes, banker’s acceptance etc. Assisting in issue of commercial paper  Acting as broker in call money market cash & fund  management for clients. Personnel The personnel function is located at Islamabad and is headed by the regional head – north, Mr. khalid Pervaiz. The department is responsible for developing the personnel policies and undertakes human resource planning and career development. In this regard various arrangement of in- house training programs and assigning personnel to various training programs and seminars is undertaken. In addition the department manages the employment records of all the employees. Business Institution 15
  • 16. Al-Faysal Investment Bank Information Technology The information technology department, headed by Mr.Usman Hameed, has a team of six IT professional based in Karachi, Lahore and Islamabad. Operations of the bank are automated under ORACLE / developer 2000 based systems, which run under SCO UNIX platform. Microsoft products are used for the automation of the office/ time / mail management systems. UNIX and windows NT based networks are installed at all branches. Approximately 100 workstations are installed in the bank. Financial control Financial control department is headed by Mr. Mansoor H. Hamdani, who is a chartered accountant with over 30 years varied experience. Besides financial control the responsibility of corporate secretary is also vested with Mr. Hamdani. The head office function is based in Islamabad. Other executives of the department includes a manager (based in Karachi) and two deputy managers with a total strength of seven persons. Business Institution 16
  • 17. Al-Faysal Investment Bank The department is responsible for managing the books of accounts, budgeting, annual general meetings, and matters pertaining to the board of directors & shareholders. Internal audit Internal audit reports directly to the bank’s president as well as the group head office in Geneva. IA undertakes an independent audit of the banks operations on a regular basis with a special focus towards verifying operational conformity with the banks policies, procedures and guidelines. In addition conformance with the SBP & other regulatory policies are also examined. IA operates out of Karachi and is headed by Mr. Kamran Mukhtar. Risk Management The risk management department is headed by Mr. Khalid Qayyum, country risk head. Risk management is a head office function reporting directly to the bank’s president. Risk department is primarily responsible for outlining the banks investment/ exposure policies based upon the risk assessment under changing market conditions. All investment/ exposure proposals prepared by the Branches Business Institution 17
  • 18. Al-Faysal Investment Bank are evaluated independently by the risk department and recommended to the management for further approvals. In addition to the risk management of the banks operations the department deals manages the reporting requirements of the regulatory bodies. Bank Guarantees Non funded facilities comprising of Bank Guarantees and Indemnities constitute the Contingent Liability of the Bank. These comprise the major source of Fee based income for the Bank. Bank Guarantees are issued in the form of Bid Bonds, performance Bonds, surety Bonds and for financing. The Guarantees are issued for varying time periods. As a minimum the Guarantees are issued for a single quarter while the maximum exposure under a guarantee is over 10 years. The Bank Guarantees are secured through collateral’s as allowed and are required by the State Bank of Pakistan. The security collateral’s vary from charge on Assets (Mortgage on Land & Building, Hypothecation of Fixed & Current Assets and Hypothecation of Receivables), Business Institution 18
  • 19. Al-Faysal Investment Bank counter Bank Guarantees, Cash deposits (Pak Rupee & Foreign Currency), pledge of shares, lie on Stock etc. The bank’s Per Party Limit, for the non-funded facilities, as defined by the state bank of Pakistan, stands at approx. RS 450 million (the funded exposure can be up to RS 300 million). Larger requirements are met through Syndicated arrangements comprising of more than one financial institution. Exposure Detail: Nearly Rs 3 billion Certificates of Investment Regular certificates of investment (roci) This scheme is designed to cover the vast majority of those depositors who wish to invest their funds for a fixed period of time and get higher returns. Features: The minimum deposits requirements is Rs. 50000  The tenors are one month of five years.  Profit will be paid at maturity for investments of  under one year. For investment of one year and above, the profit will be paid annually. Business Institution 19
  • 20. Al-Faysal Investment Bank Upon premature encashment after 90 days, profit  on RCOI will be paid at the profit rate prevailing on the dates of issue and corresponding to the tenor of RCOI completed. Additional bonus rate over and above the expected  profit rate will be given to depositors with deposits of following amounts. Rs. 10 MIO to 24.999 – 0.10%  Rs. 25 MIO to 49.999 – 0.25%  Rs. 50 MIO and above – 0.50%   Zakat expectation certificate/ affidavit/ declaration, duly certified by Notary Public should be filled with the bank one more prior to the valuation date.  Zakat (if applicable) will be calculated on the Zakat valuation date and principals and shall be deducted at the time of profit payment or encashment which ever is earlier. Monthly Income Certificate of Investment: (Micoi) This scheme is designed for those depositors who wish to earn a regular monthly income on their fixed investment. Business Institution 20
  • 21. Al-Faysal Investment Bank Features:  The minimum deposit requirement is Rs.500,000  The tenors are one year to five years.  Monthly profit will be paid to the depositors after deduction of withholding tax and any other levies (if applicable).  Upon premature encashment after 90 days but before one year, profit will be paid at the RCOI profit rates prevailing at the date of issue of MICOI & corresponding to the tenor completed. Any difference between the calculated profit amount and the profit already paid will be deducted from the principal. However, profit on premature encashment after completion of 1,2,3 & 4 years will be paid at the MICOI profit rates corresponding to the tenor of MICOI profit rates corresponding to the tenor of MICOI completed.  Zakat exemption certificate/ affidavit/ declaration, duly certified y Notary Public, must be filed with the bank at the time of investment in MICOI completed.  Zakat (if applicable) will be deducted @ 1/12th of the zakat amount every month on principal only, as calculated on the 1st of Ramdan. Business Institution 21
  • 22. Al-Faysal Investment Bank Special Growth Certificate Of Investment (Sgcoi) This scheme is for those depositors who are willing to invest on longer-term basis in order to get a huge rate of return at the end of the period and have no interim requirement for profit or income. Features:  The minimum deposit requirement is Rs.500, 000.  The tenors are two years to five years.  The initial investment will grow at special accelerated profit rate to become the maturity amount.  Profit will be paid at the time of maturity only. No profit will be paid during the interim period.  Upon pre-mature encashment before the completion of two years, profit on SGCOI will be paid at the profit rate of the RCOI prevailing on the date of issue and corresponding to the tenor completed. However, profit on premature encashment of SGCOI after completion of   2,3,4, & 5 years will be paid at the SGCOI profit rates corresponding to the tenor completed. Business Institution 22
  • 23. Al-Faysal Investment Bank  Sakata exemption certificate/affidavit/declaration, duly certified by Notary Public, should be filed with the bank one month prior to the valuation date.  Zakat (if applicable) will be charged only once, on the total payable amount at the time of the encashment/maturity of SGCOI. Business Institution 23
  • 24. Al-Faysal Investment Bank AFIBL CERTIFICATES OF INVESTMENT (COI) SCHEME RCOI SGCOI MICOI REGULAR COI SPECIAL GROUTH MONTHLY COI INCOME PROFIT UP TO 13.5 UP TO 13.34% UPTO 13.14 RATE* % P.A P.A. P.A RS. 1,095 PROFIT AMOUNT(e.g. RS .6,750 RS. 96,700 ON INVESTMENT OF RS. EVERY SIX MONTH AT MATURITY EVERY MONTTH 100,000 FOR FIVE YEAR RS .50,000 RS. 100,000 RS.500,000 MINIMUM INVESTMENT AMOUNT INVESTMENT TENOR 1 MONTH TO 5 1 YEAR TO 5 2 YEAR TO 5 YEAR YEAR YEAR ON MATURITY ONLY MONTHLY PROFIT FREQUENCY EVERY SIX MONTH OR AT MATURITY , WHICHEVER IS EARLIER PREMATURE ALLOWED ALLOWED ALLOWED ENCASHMENT THIS SCHEME IS THIS SCHEME IS SPECIALLY THIS SCHEME IS DESIGNED FOR CUSTOMERS DESIGND FOR THOSE DESIGNED FOR WHO COULD INVEST FOR A WHO WISH TO EARN A CUSTOMERS WHO LONGER TERM AND EXPECT REGULAR MONTHLY COULD INVEST THEIR A HIGH RATE OF RETURN AT INCOME ON THEIR FUND FOR A FIXED THE MATURITY AND HAVE INVESTMENT TO MEET PERIOD AND EXPECT NO PERTICULAR NEED FOR THEIR REGULARLY A HIGHER RETURN AT A REGULAR RETURN. RECURRING EXPENSES. ACERTAIN FREQUENCY. *Expected rate of profit for a tenor of 5 years. Business Institution 24
  • 25. Al-Faysal Investment Bank COMPARISON OF AFIBL COI’s WITH NAIONAL SAVINGS SCHEMES ALFAYSAL NATIONAL AFIBL BANK SAVINGS PROFIT HIGHER BY ON AN RATEP.A NETPROFIT RATEP.A NETPROFIT INVESTMENT OF RS 100,000 MONTHLY PROFIT 13.14% RS.986 12.48% RS.936 RS. 50 PER SCHEME(5- MONTH YEARS) RS. 417 PER HALF-YEARLY PROFIT 13.15% RS.5,917 11% RS.5,500 SCHEME (3-YEARS) HALF-YEAR GROWTH RS.3,030 AT 19.34% RS.87,030 16.8% RS.84,000 SCHEME(5-YEAR) MATURITY NOTE: Net Profit amounts have been calculated after currently@10% deduction of withholding tax p.a., wherever applicable Business Institution 25