Pakistan helps Dar al-Maal back to profit

16 June 1995
FINANCE

Assets rose 37 per cent to $917 million in 1994, mainly due to an increase in short-term investments and account receivables. Short-term investments, which include trading securities, such as murabaha investments and equities, rose 18 per cent to $501 million.

Massaref accounts, also rose sharply to $526 million in 1994, up from $331 million a year earlier. This includes customer deposits, amounts due to banks, and some off balance sheet funds from the bank's fund managing operations.

The main increase in income came from the bank's sale of shares in two Pakistan subsidiaries. DMI sold a 40 per cent stake in Faysal Bank, and 11.5 per cent of the shares in the investment institution Al Faysal Investment Bank. The bank says this provided a one-off boost to profits, although further divestiture may go ahead in 1995, depending on market conditions.

A booming Pakistan stock exchange boosted profits in 1994. However, DMI officials say future profits in Pakistan are likely to be adversely affected by the collapse in value of Karachi shares since the start of year. The Karachi Stock Exchange (KSE) index has lost almost 30 per cent of its value since January.

DMI cut its administrative expenses by 5 per cent to $53 million in 1994, mainly through reducing staff numbers.

Two of DMI's Bahrain operations also reported a strong performance in 1994. Faisal Islamic Bank reported profits up 46 per cent to $16.1 million (MEED 21:4:95) Islamic Investment Company of the Gulf recorded a sevenfold increase in profits to $11.9 million (MEED 31:3:95).

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