Investment Banks in Pakistan

Bank is a financial institution, where the transactions are taken place. Of the
notable banks is commercial banks which operate under the regulations
passed by state bank of Pakistan (SBP). Including many other banks there is
a list of banks which help the customers to increase the capital, which are
better known as investment banks. Thus an investment bank is a financial
institution which helps customer, government and the corporations to invest
capital. This can be done through under writing as the customers or clients
agent in the issuance of securities. Other than that an investment bank also
helps those companies which are involved in mergers and it also provide
services like, market making and equity securities.

The investment banks vary from the commercial banks and the other retail
banks is that, investment banks do not take deposits however the
commercial banks take deposits. Therefore there is a great difference
between these categories of banks, for this reason united states have
separated both kinds of banks.

Major Investment Banks in Pakistan

Following are the major investment banks in Pakistan:
1. Escorts Investment Bank Limited
EIB limited has come a long way since it was established in 1996, to
become one of the most progressive Investment Banks in Pakistan in
terms of Products and Services offered, Assets size and Return on
Equity
2. First Credit & Investment Bank Limited
FCIB is playing a vital role as a prime financial institution engaged in
promoting development and growth of business entities by providing a range
of both fund and non-fund based facilities and advisory services.

3. First Dawood Investment Bank Limited

Dawood Capital Management is a leading investment advisory and

asset management company, managing assets for institutional and
individual clients. DCM is the manager of Dawood Money Market Fund
(DMMF) and First Dawood Mutual Fund (FDMF)

4. IGI Investment Bank Limited

IGI Investment Bank Limited was incorporated in 1990 as a joint
venture of the Packages Group, American Express Bank and the
International Finance Corporation (IFC).
5. Innovative Investment Bank Limited
Innovative Investment Bank Limited provides cash deposit, finance
leasing, and housing finance services. The company was formerly
known as Innovative Housing Finance Limited and later changed its
name to Innovative Investment Bank Limited in February, 2008. It
operates as a subsidiary of Innovative Global Business Group Ltd.
6. Security Investment Bank Limited
Security Investment Bank Limited (SIBL) is a public limited company
incorporated in Pakistan under the Companies Ordinance, 1984. These
activities include making short-term investments in government
securities, shares, lending, borrowing, placements, promissory notes,
bankers acceptance and other money market instruments.
7. Trust Investment Bank Limited
Trust Bank is one of the largest investment banks in the country with
branches in Punjab, Sind and NWFP. Trust Bank holds one of the largest
lease portfolios in the country, while offering a range of financial
products & services i.e. Trade Finance, Factoring, Term Loans,
Investment Advisory services, Syndication and Trusteeship services
etc. The bank offers a wide range of fixed term deposits and services
to help institutions manage their funds and optimize returns.

The products and services offered by First Credit & Investment Bank Limited
(FCIB) are discussed in detail below:

Vision

Be a preferred investment bank enhancing value for the stakeholders and

contributing to the
National goals.

Mission
Contributing through innovative financing and investment in quality portfolio,
advisory services delivered in an environment of trust and customer confidence
supported by a team of professionals.

Introduction
FCIB is a joint venture company of National Bank of Pakistan (NBP) and Water
& Power Development Authority (WAPDA). It was incorporated on August 31,
1989 as First Credit & Discount Corporation (Pvt.) Limited (FCDC), a private limited
company under the Companies Ordinance 1984 with the objective of catalyzing
development of Pakistans capital market; especially the corporate debt instrument
market. Initially the company successfully managed a number of bonds issues for
Water and Power Development Authority (WAPDA) and Civil Aviation Authority. In
November 2003 the company was converted to a public limited company.
Subsequently in 2004 it acquired an Investment Banking Services license from
the Securities and Exchange Commission of Pakistan (SECP) and was renamed as
First Credit and Investment Bank Limited (FCIB). FCIB made an initial public offering
of Rs. 250 million in August 2008 and has been listed on the Karachi Stock
Exchange.
FCIB is playing a vital role as a prime financial institution engaged in promoting
development and growth of business entities by providing a range of both fund and
non-fund based facilities and advisory services.

Product & Services

PRODUCTS OFFERED:

FCIB offers wide range of investment banking products and services to all sectors
with the aim of promoting investment and economic development in the country.
After obtaining the license from SECP, FCIB has undertaken various new activities
permissible under Investment Financial Services (IFS) license. To fund these
activities apart from its equity resources, various other channels including credit
lines and deposits from corporate clients are utilized. FCIB offers an ideal
combination of high returns, flexibility and security in its various deposit schemes
and long term and short term funding requirements of its clients. Details of these
products are attached herewith.

Fund Based Operations

Through its equity, term deposits from institutional investors and credit lines FCIB
undertake various investments and financing activities; these include;

Syndication/ Direct Financing Activities

FCIB provides short-term and long-term finance facilities to meet the capex and
working capital Requirements of commercial and industrial sector borrowers.
Financing activities are done mostly through syndication, against securities of
mortgage & hypothecation charge on fixed assets, receivables, demand promissory
notes, etc. of the customers.

Treasury/ Money Market Activities

A separate division for treasury operations is active in the money market. It makes
short-term placements utilizing FCIBs own resources and also seeks to exploit
arbitrage opportunities available in the market. The treasury department also
invests in equity and non-equity investment instruments.

 Equity Investments/Trading
FCIB seeks to optimize its earnings from the stock exchange through a combination
of capital gains from trading and dividend on its investments portfolio. However, the
size of FCIBs equity portfolio is small as it adheres to a conservative approach in
making investments in equity market.

Fixed Income /Debt Securities

FCIB participates in Initial Public Offerings (IPOs) and underwrites rated TFCs. These
instruments not only contribute to its revenue but are also used as underlined
securities for generating short-term funds from the market.

Finance Facilities against Mutual Fund Units

To diversify investment of FCIBs short term funds and generate better markup
spreads a new asset product in the form of financing against open end mutual funds
units issued and managed by SECP approved fund managers is proposed to be
introduced.
This product would be particularly attractive to individuals looking for tax
benefit/rebate as under Section 62 of the Income Tax Ordinance 2001 Investment
in Shares- tax rebate is allowed to individuals against their investment in shares.
This exemption is also available for open mutual funds, including Money Market
Schemes, which are quoted on any stock exchange in Pakistan subject to minimum
holding period of one year. Due to the rebate allowed on up to 10%of the taxable
income or 300,000/-, whichever is higher, the total return to tax payers on their
investment increases substantially. Even if a part of the invested funds are borrowed
at commercial rates the net return is quite attractive.
Prospective customers for the proposed product would be investors in money
market and stock fund managed by reputable listed Asset Management Companies.

Product Features:
The salient features of the proposed product are:

1.
It is aimed primarily at salaried and non-salaried individuals who are eligible
for income tax rebates against their investment in mutual funds
2.
The financed units along with the units purchased through own funds would
be pledged with FCIB.
3.

Financing up to 80% of investment in the fund units to be allowed.

4.
To be offered through reputed Fund Managers willing to participate in the
scheme on terms acceptable to FCIB
5.
Facility would be for a tenor of up to 15 months. Premature repayment would
be subject to penalties
6.
Markup to be recovered on quarterly basis through postdated cheques which
would be obtained prior to disbursement.
7.
The minimum and maximum financing amounts would be Rs.100, 000/(Rupees one hundred thousand only) and 2,000,000/- (Rupees two million only)
respectively
8.

Documents would be finalized in consultation with FCIBs legal advisor

Compliance with relevant SECP regulations and FCIB Credit Policy would be
observed

Fee Based Activities

Issuance Guarantees
Bed bonds
SBLC
Advisory Services
Corporate Finance and Advisory

Achievements

FCIB has successfully closed syndicated arrangements for Quetta Textile Mills
Limited, Pioneer Cement, Premier Systems (Bosicor Group) and Pak Electron
Limited. FCIB has acted as advisor and arranger of Term Finance Certificates of
Gharibwal Cement Limited. In addition, FCIB participates as underwriter of rated
TFC issues, listed equity instruments and also provides guarantees and standby
letters of credit to leading organizations.

FUTURE OUTLOOK:
In our institution we are well aware of the fast changing economic environment in
our country as well as abroad. The diversity of financial system requires innovative
business ideas to diversify and as result increase revenue streams with sound
investments. We at FCIB are making sound efforts in restoring and maintaining
reasonable quality of its assets in the vague of ongoing financial and economic
crisis following 2008.