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Standard Chartered Bank (Pakistan) Limited

3rd Quarterly Report July - September 2011

Leading the way


in Asia, Africa and the Middle East

Standard Chartered Bank (Pakistan) Ltd.


Points of Interest
The Bank opened its first branch in Karachi in 1863 The largest international Bank in Pakistan with 143 branches in 32 cities* One of the largest Multinational Corporations in the country The first international Bank to get an Islamic Banking license and to open the first Islamic Banking branch in Pakistan Credit Ratings of AA A / A1+ (long term and short term ratings respectively. Highest long term rating assigned by PACRA

to any private sector commercial bank)

Strong Recognition by Stakeholders


Best Bank in Pakistan Award for Excellence 2010 by Euromoney Best Place to Work Award 2010 - Financial Services Company by Pakistan Society for Human Resources Management Best Foreign Commercial Bank in Pakistan Award by FinanceAsia Best Foreign Exchange Provider Award from the Global Finance Magazine for 2011 Pakistan Deal of the Year - 2010 Award by the Asset Triple A Awards Best Country Deal - 2010 Award by the Islamic Finance News

Sustainability
As part of the Bank's Sustainability agenda, our efforts are noticeable in the field of Education, Preventable Blindness, HIV awareness among youth and disaster response efforts

What we stand for


Strategic Intent
, The world s best international Bank Leading the way in Asia, Africa and the Middle East

Brand Promise
Here for good

Values
We stand up for what we believe is right

Courageous

We deliver thoughtful, timely, high quality solutions

Responsive

We value our diversity and collaborate as one team

International

We continuously improve the way we work

Creative

We are reliable, open and honest

Trustworthy

Competitive Positioning
Collaborating to combine global capability and deep local knowledge to provide innovative solutions

Delivery

Building long term relationships with our customers and clients, delighting them with our service and solutions

Customers & Clients

Balancing the pursuit of growth with firm control of costs and risks

Discipline

Commitment to Stakeholders
A great place to work, enabling individuals to grow and teams to succeed

Our People

Trusted and caring, dedicated to being a force for good

Communities

A distinctive investment, delivering consistently superior performance

Investors

Demonstrating exemplary governance and ethics

Regulators

*As of June 30, 2011

Company Information
Board of Directors
Mr. Christos Papadopoulos Mr. Mohsin Ali Nathani Mr. Andrew James Hardacre Mr. Raheel Ahmed Mr. Najam I. Chaudhri Mr. Shahid Zaki Mr. Parvez Ghias Chairman Chief Executive Officer

Registered Office
Standard Chartered Bank (Pakistan) Limited P.O. Box No. 5556, I.I. Chundrigar Road Karachi 74000 Pakistan Tel: (021) 32450000 Fax: (021) 32414914

Main Office
Standard Chartered Bank (Pakistan) Limited P.O. Box No. 5556, I.I. Chundrigar Road Karachi 74000 Pakistan Tel: (021) 32450000 Fax: (021) 32414914

Company Secretary
Mr. Asif Iqbal Alam

Audit Committee of the Board


Mr. Najam I. Chaudhri Mr. Shahid Zaki Mr. Andrew James Hardacre Chairman Member Member

Website
www.standardchartered.com.pk

Auditors
M/s KPMG Taseer Hadi & Co Chartered Accountants

Registrar and Share Transfer Office


M/s T H K Associates (Pvt.) Limited Ground Floor, State Life Building No.3 Dr. Ziauddin Ahmad Road, Karachi Tel : (021) 111-000-322 Fax : (021) 35655595

Legal Advisors
Haidermota & Co Barristers at Law & Corporate Counselors

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3rd Quarterly Report 2011

01

Standard Chartered Bank (Pakistan) Limited

Directors Report
On behalf of the Board of Directors, I am pleased to present the Directors' Report of Standard Chartered Bank (Pakistan) Limited (SCBPL) along with its un-audited condensed interim financial statements for the period ended 30 September 2011. Economy Strong growth in remittances and decline in headline inflation have helped to sustain the recovery in Q3 2011 with the economy on track to achieve growth target of 4.2% in the current fiscal year FY12, up from 2.4% in FY11. However, downside risks remain due to floods in Sindh, a deepening energy crisis and weaker outlook for the main export markets in the US and EU. On the positive front headline inflation has declined to 10.5% in September 2011, down from 13.3% in June 2011 on account of tighter money supply and a strong build up in FX reserves. Overseas workers remitted USD 3.3 billion in Q3 2011, an increase of 24.6% y/y from USD 2.6 billion in corresponding period last year, helping to contain the C/A deficit and strengthen FX reserve position. This has given room for the central bank to ease policy rates in Q3 by 200bps. The move is expected to increase private investment spending and lower the governments funding costs; with the government aiming to increase investment spending to 4% of GDP in FY12 from 2.7% in FY11. Banks are well capitalized and highly liquid with ADR ratio at 56.7% by end June 2011 compared to 63% in the corresponding period last year. Operating Results and Business Overview Balance Sheet Paid-up capital Total equity Deposits Advances - gross Advances - net Investments - net 30 Sep 2011 (PKR millions) 38,716 52,790 235,417 172,090 150,783 107,501 Period ended 30 Sep 2011 (PKR millions) 19,622 9,888 236 9,498 3,639 5,859 3,768 31 December 2010 (PKR millions) 38,716 51,073 220,266 157,906 139,269 72,637 Period ended 30 Sep 2010 (PKR millions) 17,066 9,959 537 6,570 3,566 3,004 1,944

Profit and Loss Revenue Administrative expenses Other non mark-up expenses Operating profit (before provisions and tax) Provisions (net of recoveries) Profit before tax Profit after tax
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With stable revenue growth and disciplined cost base the Bank is gradually moving ahead resulting in improved performance. Though the economic situation remains challenging due to political, security and energy issues, we continue to stride ahead cautiously with a conservative and healthy balance sheet. Our profit before tax for the nine months ended September 2011 has almost doubled in comparison with the same period last year, to PKR 5.859 billion. Profit after tax has increased from PKR 1.944 billion to PKR 3.768 billion, while EPS has moved up from 50 paisas per share to 97 paisas per share. Net interest income has increased by 18% from PKR 12.66 billion to PKR 14.97 billion, while non interest income has grown by 6% to PKR 4.65 billion against PKR 4.41 billion in the comparative period. The revenue growth achieved by the Bank is primarily a function of our balance sheet strength, fostered by the mobilisation of low cost Current and Savings Accounts (CASA) on the consumer front and a prudent and quality build-up of wholesale and SME loan assets. CASA accounts for 82% of our deposit book and have surged to PKR 193.68 billion from PKR 174.29 billion, while we continue to shed expensive term deposits which are down by 9%. Wholesale gross loans have increased significantly, while SME lending book has registered a double digit growth. This is a direct result of our continuous focus on strengthening and deepening our customer relationships. The Bank's balance sheet is highly liquid with an AD ratio of 64% with surplus liquidity invested in short-term government bonds. Despite double digit inflation, costs (excluding Head Office expenses under the 'Advisory and Service Agreement') have increased by only 7%. Achieving cost discipline is our priority, as we aim to achieve efficiency to enable room for investment in our key initiatives, including intellectual capital and distribution network. We believe that these investments will play a pivotal role in augmenting the Bank's profitability in coming years, and hence are considered necessary in view of the envisaged benefits in the long term. Provisions against loans are slightly up by 2% from PKR 3.56 billion to PKR 3.64 billion. Our NPL ratio continues to hover around 15%, while our loss coverage ratio is as high as 85%. The year so far reflects improved performance, and we'll strive to carry on with the same momentum. We are highly liquid, well capitalised and delivering well against our strategies. We are cognizant of the difficulties posed by the current economic and political situation, and expect challenges on the road ahead, especially in terms of pressure on margins. However, we are vigilant on the risk management front, and well prepared to face these challenges. Credit Rating Pakistan Credit Rating Agency (PACRA) has rated the Bank as "AAA" (Triple A) - long term, and "A1+" (A One Plus) - short term. The outstanding listed subordinated Term Finance Certificates have also been assigned "AAA" rating. These ratings denote the lowest expectation of credit risk emanating from an exceptionally strong capacity for timely payment of financial commitments. Performance of the Group In compliance with section 236(5) of the Companies Ordinance, 1984, attached with this report are the consolidated condensed interim financial statements of SCBPL and its subsidiaries (the
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Group) namely - Standard Chartered Leasing Limited, Standard Chartered Services of Pakistan (Private) Limited and Standard Chartered Modarba, for the period ended 30 September 2011. Key highlights of the Group's performance are given below: 30 Sep 2011 (PKR millions) 38,716 53,930 235,216 157,882 107,126 31 December 2010 (PKR millions) 38,716 52,100 220,188 144,722 72,294

Balance Sheet Paid-up capital Total equity Deposits Advances - net Investments - net

Profit and Loss Revenue Administrative expenses Other non mark-up expenses Operating profit (before provisions and tax) Provisions (net of recoveries) Profit before tax Profit after tax Appreciation and Acknowledgment

Period ended 30 Sep 2011 (PKR millions) 19,926 10,022 239 9,665 3,661 6,003 3,879

Period ended 30 Sep 2010 (PKR millions) 17,278 10,073 541 6,664 3,559 3,105 2,022

We take this opportunity to express our gratitude to our customers and business partners for their continued support and trust. We offer sincere appreciation to the State Bank of Pakistan for their guidance and cooperation extended to the Bank. Finally, we are also thankful to our associates, staff and colleagues for their committed services provided to our valued customers. On behalf of the Board

Mohsin Ali Nathani Chief Executive Islamabad: 26 October 2011

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3rd Quarterly Report 2011

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Standard Chartered Bank (Pakistan) Limited

Condensed Interim Un-Consolidated Financial Statements

For the nine months period ended 30 September 2011

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Standard Chartered Bank (Pakistan) Limited

Condensed Interim Un-Consolidated Statement of Financial Position


As at 30 September 2011
September 30, December 31, 2011 2010 (Un-Audited) (Audited) (Rupees in '000)

Notes ASSETS Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating fixed assets Intangible assets Deferred tax assets Other assets LIABILITIES Bills payable Borrowings from financial institutions Deposits and other accounts Sub-ordinated loans Other liabilities NET ASSETS REPRESENTED BY: Share capital Reserves Unappropriated profit Surplus on revaluation of assets - net of deferred tax

6 7 8

25,805,722 1,950,712 10,475,409 107,500,565 150,783,251 6,431,807 26,479,043 2,889,824 21,551,293 353,867,626

24,087,842 821,931 30,421,885 72,637,401 139,269,413 6,601,893 26,681,268 3,393,322 18,008,022 321,922,977

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4,531,939 29,281,247 235,417,293 699,200 31,148,209 301,077,888 52,789,738

5,691,864 15,914,343 220,265,762 1,135,900 27,841,964 270,849,833 51,073,144

38,715,850 3,421,171 7,393,739 49,530,760 3,258,978 52,789,738 11

38,715,850 2,667,488 6,716,831 48,100,169 2,972,975 51,073,144

CONTINGENCIES AND COMMITMENTS

The annexed notes 1 to 18 form an integral part of these condensed interim un-consolidated financial statements.

Christos Papadopoulos Chairman


06 3rd Quarterly Report 2011

Mohsin Ali Nathani Chief Executive


www.standardchartered.com.pk

Najam I. Chaudhri Director

Shahid Zaki Director

Standard Chartered Bank (Pakistan) Limited

Financial statements and notes

Condensed Interim Un-Consolidated Profit and Loss Account (Un-audited)


For the nine months period ended 30 September 2011
Three months Nine months Three months Nine months period ended period ended period ended period ended September 30, September 30, September 30, September 30, 2010 2011 2011 2010 (Restated) (Restated) ---------------------------(Rupees in '000)-------------------------8,171,689 (2,902,523) 5,269,166 (767,097) 79,588 (130,189) (817,698) 4,451,468 23,417,287 (8,444,047) 14,973,240 (3,629,328) 356,740 (366,708) (3,639,296) 11,333,944 6,902,349 (2,733,644) 4,168,705 (685,991) 127,955 (688) (463,637) (1,022,361) 3,146,344 20,562,889 (7,902,492) 12,660,397 (2,758,499) 485,441 (688) (1,292,390) (3,566,136) 9,094,261

Notes

Mark-up / return / interest earned Mark-up / return / interest expensed Net mark-up/ return / interest income Provision against non-performing loans and advances Recovery of amounts written off Provision for diminution in the value of investments Bad debts written off directly Net mark-up / return / interest income after provisions NON MARK-UP / NON INTEREST INCOME Fees, commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of securities Unrealized gain on revaluation of investments classified as held for trading Other income Total non mark-up / non interest income NON MARK-UP / NON INTEREST EXPENSES Administrative expenses Other provisions / assets write offs Other charges Total non mark-up / non interest expenses Extra-ordinary / unusual items PROFIT BEFORE TAXATION Taxation - current - prior years - deferred PROFIT AFTER TAXATION

790,037 523,671 274,418 12,623 (34,288) 1,566,461 6,017,929 (2,791,952) (63,941) (2,855,893) 3,162,036 3,162,036 (743,708) (364,707) (1,108,415) 2,053,621 Rupees 0.53

2,482,099 1,469,146 466,706 132,619 97,895 4,648,465 15,982,409 (9,887,690) (80,617) (155,514) (10,123,821) 5,858,588 5,858,588 (1,743,720) (346,455) (2,090,175) 3,768,413 Rupees 0.97

792,403 426,293 198,007 6,782 (15,655) 1,407,830 4,554,174 (3,623,210) (11,748) (16,099) (3,651,057) 903,117 903,117 (232,148) (84,389) (316,537) 586,580 Rupees 0.15

2,687,301 1,121,055 545,749 75,251 (23,336) 4,406,020 13,500,281 (9,958,938) (456,181) (81,566) (10,496,685) 3,003,596 3,003,596 (656,946) (402,511) (1,059,457) 1,944,139 Rupees 0.50

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BASIC/ DILUTED EARNINGS PER SHARE

The annexed notes 1 to 18 form an integral part of the condensed interim unconsolidated financial statements.

Christos Papadopoulos Chairman

Mohsin Ali Nathani Chief Executive

Najam I. Chaudhri Director


www.standardchartered.com.pk

Shahid Zaki Director


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Standard Chartered Bank (Pakistan) Limited

Condensed Interim Un-Consolidated Statement of Comprehensive Income (Un-audited)


For the nine months period ended 30 September 2011
September 30, 2011 September 30, 2010 (Restated)

(Rupees in '000) Profit for the period 3,768,413 1,944,139

Other Comprehensive Income: Surplus / (deficit) on revaluation of 'Available for Sale' financial assets Surplus / (deficit) on revaluation of fixed assets Actuarial gain / (loss) on defined benefit plans Deferred tax on acturial gain / (loss) Total comprehensive income for the period

(i) (ii)

3,768,413

1,944,139

(i) Surplus / deficit on revaluation of 'Available for Sale' securities is presented under a separate head below equity as 'surplus / deficit on revaluation of assets' in accordance with the requirements specified by the State Bank of Pakistan vide its BSD circular 20 dated 04 August 2000 and BSD circular 10 dated 13 July 2004. (ii) Surplus on revaluation of fixed assets is presented under a separate head below equity as 'surplus / deficit on revaluation of assets' in accordance with the requirements of section 235 of the Companies Ordinance, 1984.

The annexed notes 1 to 18 form an integral part of the condensed interim un-consolidated financial statements.

Christos Papadopoulos Chairman


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Mohsin Ali Nathani Chief Executive


www.standardchartered.com.pk

Najam I. Chaudhri Director

Shahid Zaki Director

Standard Chartered Bank (Pakistan) Limited

Financial statements and notes

Condensed Interim Un-Consolidated Cash Flow Statement (Un-audited)


For the nine months period ended 30 September 2011
CASH FLOW FROM OPERATING ACTIVITIES Profit before taxation Dividend income Adjustments for: Depreciation Amortization Gain on disposal of fixed assets Unrealized gain on revaluation of investments classified as held for trading Other provisions / asset write offs Provision for diminution in the value of investments Lease rentals expense Provision against loans and advances - net of recoveries (Increase) / decrease in operating assets: Lendings to financial institutions Held for trading securities Advances Other assets Increase / (decrease) in operating liabilities: Bills payable Borrowings from financial institutions Deposits and other accounts Other liabilities Cash inflow before taxation Income tax paid Net cash generated from operating activities CASH FLOW FROM INVESTING ACTIVITIES Net investments Net investment in fixed assets (including intangible assets) Sale proceeds on disposal of fixed assets Net cash used in investing activities CASH FLOW FROM FINANCING ACTIVITIES Repayment of sub-ordinated Term Finance Certificates Dividend paid Payment of lease obligations Net cash used in financing activities Increase in cash and cash equivalents for the period Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD Cash and balances with treasury banks Balances with other banks 25,805,722 1,950,712 27,756,434 23,798,535 1,316,998 25,115,533 September 30, 2011 September 30, 2010 (Restated) (Rupees in '000) 3,003,596 3,003,596 420,405 287,774 (8,074) (75,251) 456,181 688 2,369 3,565,448 4,649,540 7,653,136 5,306,137 119,085 (4,651,996) (2,800,691) (2,027,465) (3,165) 949,946 15,509,706 (1,140,156) 15,316,331 20,942,002 (850,850) 20,091,152 (18,222,523) (132,829) 9,470 (18,345,882) (387,100) (2,369) (389,469) 1,355,801 23,759,732 25,115,533

5,858,588 5,858,588 327,341 202,225 (5,400) (132,619) 80,617 3,639,296 4,111,460 9,970,048 19,946,476 516,800 (15,153,134) (2,820,602) 2,489,540 (1,159,925) 13,366,904 15,151,531 3,282,643 30,641,153 43,100,741 (2,547,003) 40,553,738 (34,798,714) (157,298) 5,443 (34,950,569) (436,700) (2,319,808) (2,756,508) 2,846,661 24,909,773 27,756,434

The annexed notes 1 to 18 form an integral part of the condensed interim un-consolidated financial statements.

Christos Papadopoulos Chairman

Mohsin Ali Nathani Chief Executive

Najam I. Chaudhri Director


www.standardchartered.com.pk

Shahid Zaki Director


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Standard Chartered Bank (Pakistan) Limited

Condensed Interim Un-Consolidated Statement of Changes in Equity (Un-audited)


For the nine months period ended 30 September 2011
Share Capital Share Premium Statutory Reserve (Rupees in '000) Balance as at 31 December 2009 (restated) Total Comprehensive income for the period Profit for the nine months ended 30 September 2010 Other Comprehensive income Actuarial gain on defined plan - net of tax 38,715,850 Transactions with owners, recorded directly in equity Share based payment transactions (Contribution from holding Company) Payment against share based payment transactions (to holding Company) Transfer to statutory reserve Transferred from surplus on revaluation of fixed asset - net of deferred tax Balance as at 30 September 2010 (as restated) Total Comprehensive income for the period Profit for the three months ended 31 December 2010 Other Comprehensive income Actuarial gain on defined plan - net of tax Transactions with owners, recorded directly in equity Share based payment transactions (Contribution from holding Company) Payment against share based payment transactions (to holding Company) Transfer to statutory reserve Transferred from surplus on revaluation of fixed asset - net of deferred tax Balance as at 31 December 2010 Total Comprehensive income for the period Profit for the nine months ended 30 September 2011 Other Comprehensive income Actuarial gain on defined plan - net of tax Transactions with owners, recorded directly in equity Share based payment transactions (Contribution from holding Company) Payment against share based payment transactions (to holding Company) Transfer to statutory reserve Cash dividend (2010) Transferred from surplus on revaluation of fixed asset - net of deferred tax Balance as at 30 September 2011 38,715,850 1,036,090 753,683 2,385,081 3,768,413 3,768,413 85,527 (105,985) (20,458) (753,683) (2,322,951) 5,587 7,393,739 3,768,413 3,768,413 85,527 (105,985) (20,458) (2,322,951) 5,587 49,530,760 38,715,850 1,036,090 332,295 1,631,398 1,661,476 1,410 1,662,886 11,933 (106,976) (95,043) (332,295) 1,875 6,716,831 1,661,476 1,410 1,662,886 11,933 (106,976) (95,043) 1,875 48,100,169 38,715,850 1,036,090 388,828 1,299,103 35,800 (91,662) (55,862) (388,828) 5,671 5,479,408 35,800 (91,662) (55,862) 5,671 46,530,451 1,036,090 910,275 3,974,288 1,944,139 1,944,139 44,636,503 1,944,139 1,944,139 Unappropriated Profit Total

The annexed notes 1 to 18 form an integral part of the condensed interim un-consolidated financial statements.

Christos Papadopoulos Chairman


10 3rd Quarterly Report 2011

Mohsin Ali Nathani Chief Executive


www.standardchartered.com.pk

Najam I. Chaudhri Director

Shahid Zaki Director

Standard Chartered Bank (Pakistan) Limited

Financial statements and notes

Notes to the Condensed Interim Un-Consolidated Financial Statements (Un-audited)


For the nine months period ended 30 September 2011
1 STATUS AND NATURE OF BUSINESS Standard Chartered Bank (Pakistan) Limited ("the Bank") was incorporated in Pakistan on 19 July 2006 and was granted approval for commencement of banking business by State Bank of Pakistan, with effect from 30 December 2006. The ultimate holding company of the Bank is Standard Chartered Plc., incorporated in England. The registered office is at Standard Chartered Bank Building, I.I. Chundrigar Road, Karachi. The Bank commenced formal operations on 30 December 2006 through amalgamation of entire undertaking of Union Bank Limited and the business carried on by the branches in Pakistan of Standard Chartered Bank, a bank incorporated by Royal Charter and existing under the laws of England. The scheme of amalgamation was sanctioned by State Bank of Pakistan vide its order dated 4 December 2006. The Bank is engaged in the banking business as defined in the Banking Companies Ordinance, 1962 and has a total number of 143 branches in Pakistan (2010: 162 branches in Pakistan) in operation at 30 September 2011. Standard Chartered Bank (Pakistan) Limited has the following three subsidiaries. All of them are incorporated in Pakistan.
l l l

Standard Chartered Leasing Limited Standard Chartered Modarba Standard Chartered Services of Pakistan (Private) Limited

These condensed interim financial statements are separate financial statements of the Bank in which investments in subsidiaries are accounted for on the basis of direct equity interest rather than on the basis of reported results. Consolidated condensed interim financial statements are presented separately. 2 STATEMENT OF COMPLIANCE These condensed interim financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan for interim financial reporting. The disclosures in the condensed interim financial information do not include the information reported for full annual financial statements and should therefore be read in conjunction with the financial statements for the year ended 31 December 2010. 3 ACCOUNTING POLICIES The accounting policies adopted in the preparation of the condensed interim financial information are the same as those applied in the preparation of the annual financial statements of the Bank for the year ended 31 December 2010. Corresponding figures have been restated as necessary to account for the impact of change in accounting policy as disclosed in the annual financial statements for the year ended December 2010 relating to amendments issued by International Accounting Standards Board (IASB) in International Financial Reporting Standard (IFRS) 2: Share-based payment. 4 ACCOUNTING ESTIMATES The basis for the accounting estimates adopted in the preparation of the condensed interim financial information are the same as those applied in the preparation of the annual financial statements of the Bank for the year ended 31 December 2010. 5 FINANCIAL RISK MANAGEMENT The financial risk management objectives and policies adopted by the Bank are consistent with those disclosed in the annual financial statements of the Bank for the year ended 31 December 2010.

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Standard Chartered Bank (Pakistan) Limited

Notes to the Condensed Interim Un-Consolidated Financial Statements (Un-audited)


For the nine months period ended 30 September 2011
6 LENDINGS TO FINANCIAL INSTITUTIONS September 30, 2011 December 31, 2010

(Rupees in '000) Repurchase agreement lendings (Reverse Repo) Placements 2,222,235 8,253,174 10,475,409 6,457,638 23,964,247 30,421,885

INVESTMENTS

September 30, 2011

December 31, 2010

Investments by type Held for trading Market Treasury Bills Pakistan Investment Bonds Available for sale Market Treasury Bills Pakistan Investment Bonds Ordinary shares of unlisted companies Sukuk and Ijarah Bonds Subsidiaries Standard Chartered Services of Pakistan (Private) Limited Standard Chartered Modarba Standard Chartered Leasing Limited Investments at amortised cost Provision for diminution in the value of investments Investments (net of provisions) Surplus on revaluation of held for trading securities - net (Deficit) /surplus on revaluation of available for sale securities - net Total Investments

Held by Given as Total Held by Given as Total bank collateral bank collateral ---------------------------------- (Rupees in '000) -----------------------------

6,987,214 590,337

6,987,214 590,337

7,932,763 161,588

7,932,763 161,588

72,746,134 7,651,201 86,987 3,925,000

15,119,132 18,921 -

87,865,266 7,670,122 86,987 3,925,000

50,579,193 10,356,924 86,987 3,625,000

18,958 -

50,579,193 10,375,882 86,987 3,625,000

44,500 42,000 730,589 92,803,962

15,138,053

44,500 42,000 730,589 107,942,015

44,500 42,000 730,589 73,559,544

18,958

44,500 42,000 730,589 73,578,502

(133,157) 92,670,805

15,138,053

(133,157) 107,808,858

(133,157) 73,426,387

18,958

(133,157) 73,445,345

132,619

132,619

81,601

81,601

(438,775) 92,364,649

(2,137) 15,135,916

(440,912) 107,500,565

(886,824) 72,621,164

(2,721) 16,237

(889,545) 72,637,401

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3rd Quarterly Report 2011

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Standard Chartered Bank (Pakistan) Limited

Financial statements and notes

Notes to the Condensed Interim Un-Consolidated Financial Statements (Un-audited)


For the nine months period ended 30 September 2011
8 ADVANCES September 30, 2011 December 31, 2010

(Rupees in '000) Loans, cash credits, running finances, etc. - In Pakistan - Outside Pakistan Bills discounted and purchased (excluding treasury bills) - Payable in Pakistan - Payable outside Pakistan Advances - gross Provision for non-performing advances Advances - net of provision 158,725,262 158,725,262 5,964,522 7,400,233 13,364,755 172,090,017 (21,306,766) 150,783,251 147,338,159 147,338,159 3,133,517 7,434,767 10,568,284 157,906,443 (18,637,030) 139,269,413

8.1 Advances include Rs 25,207.495 million (31 December 2010: Rs 22,107.709 million) which have been placed under non-performing status as detailed below:
September 30, 2011
Provision Required Provision Held Overseas Domestic Overseas To tal Domestic To tal Domestic Overseas To tal ------------------------------------------------------------------------------ (Rupees in '000) -----------------------------------------------------------------------------Category of classification Classified Advances

OAEM Substandard Doubtful Loss

1,152,848 3,194,615 20,860,032 25,207,495

1,152,848 3,194,615 20,860,032 25,207,495

263,996 743,988 19,695,027 20,703,011 603,755

263,996 743,988 19,695,027 20,703,011 603,755 21,306,766

263,996 743,988 19,695,027 20,703,011 603,755 21,306,766

263,996 743,988 19,695,027 20,703,011 603,755 21,306,766

General Provision

25,207,495

25,207,495

21,306,766

31 December 2010
Classified Advances Domestic Overseas To tal Domestic -----------------------------------------------------------------------------Provision Required Provision Held

Overseas To tal Domestic Overseas To tal (Rupees in '000) ------------------------------------------------------------------------------

OAEM Substandard Doubtful Loss 2,113,942 2,141,058 17,852,709 22,107,709


General Provision

2,113,942 2,141,058 17,852,709 22,107,709 22,107,709

369,798 991,601 16,609,886 17,971,285 665,745 18,637,030

369,798 991,601 16,609,886 17,971,285 665,745 18,637,030

369,798 991,601 16,609,886 17,971,285 665,745 18,637,030

369,798 991,601 16,609,886 17,971,285 665,745 18,637,030

22,107,709

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Standard Chartered Bank (Pakistan) Limited

Notes to the Condensed Interim Un-Consolidated Financial Statements (Un-audited)


For the nine months period ended 30 September 2011
8.1.1 At 30 September 2011, the provision requirement has been reduced by Rs. 666.478 million (31 December 2010: Rs. 610.771 million) benefit of Forced Sale Value (FSV) of commercial , residential and industrial properties (land and building only) held as collateral, in accordance with the requirements specified by SBP BSD Circular 10 dated 20 October 2009. The said FSV benefit is not available for distribution of cash and stock dividend. 9 DEFERRED TAX ASSETS The Finance Act, 2010 amended the Seventh Schedule to the Income Tax Ordinance, 2001 whereby the limit for claiming provisions for advances and off balance sheet items in respect of Consumer and SME advances has been enhanced from 1% to 5% of gross Consumer and SME advances. In case of Corporate advances, the limit continues to be 1% of gross Corporate advances. The management carried out an exercise and based on that concluded that the Bank would achieve a deduction for provisions in excess of the limits prescribed by the Income Tax Ordinance, 2001 in future years. Accordingly, deferred tax asset of Rs. 2,266 million has been recognised on such provisions for income years 2009 upto nine months period ended September 30, 2011. The Seventh Schedule has been further amended through Finance Act, 2010 by introducing transitional provisions, whereby amounts provided for against irrecoverable or doubtful advances in tax year 2008 (income year 2007) and prior years, would be allowed in the tax year in which these advances are actually written off. The management considers that the amendment made vide Finance Act, 2009 in respect of provisions for bad debts being allowed at 1% of total advances is applicable for tax year 2010 (income year 2009), whereas for tax year 2009 (income year 2008), the provision for bad debts would continue to be allowed under the Seventh Schedule at the time of actual write-off. Accordingly, the deferred tax asset recognized upto December 31, 2008 relating to provisions for advances and off balance sheet items amounting to Rs. 4,240 million has been carried forward.

14

3rd Quarterly Report 2011

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Standard Chartered Bank (Pakistan) Limited

Financial statements and notes

Notes to the Condensed Interim Un-Consolidated Financial Statements (Un-audited)


For the nine months period ended 30 September 2011
10 DEPOSITS AND OTHER ACCOUNTS Customers - Fixed deposits - Savings deposits - Current accounts (Non-remunerative) - Margin accounts - Special exporters' account Financial Institutions - Non-remunerative deposits 11 11.1 CONTINGENCIES AND COMMITMENTS Transaction-related contingent liabilities Guarantees issued favouring: - Government - Others 11.1.1 31,285,747 18,818,104 30,962,886 16,542,077 Notes September 30, 2011 December 31, 2010

(Rupees in '000) 41,733,368 98,789,898 92,983,216 571,671 733,303 234,811,456 605,837 235,417,293 45,968,703 90,401,741 81,552,663 951,052 930,283 219,804,442 461,320 220,265,762

11.1.1 Guarantees relating to Islamic Banking Business amount to Rs 2,157 million (2010: Rs 2,039 million). 11.2 Trade-related contingent liabilities Letters of credit 11.2.1 29,523,538 15,182,936

11.2.1 Letters of credit relating to Islamic Banking Business amount to Rs 7,935 million (2010: Rs 1,045 million). 11.3 Other contingencies Claims against the Bank not acknowledged as debt 11.4 Commitments in respect of forward foreign exchange contracts Purchase State Bank of Pakistan Other banks Customers Sale State Bank of Pakistan Other banks Customers 11.5 Commitments to extend credit The bank makes commitments to extend credit in the normal course of its business but these being revocable commitments do not attract any significant penalty or expense if the facility is unilaterally withdrawn. 19,823,250 29,359,441 12,394,701 44,343,903 2,219,538 19,914,750 17,348,621 15,368,507 2,176,875 33,108,590 1,290,420 12,843,565 12,432,208

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3rd Quarterly Report 2011

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Standard Chartered Bank (Pakistan) Limited

Notes to the Condensed Interim Un-Consolidated Financial Statements (Un-audited)


For the nine months period ended 30 September 2011
11.5 Derivative Instruments Product Analysis September 30, 2011 .....................................(Rupees in '000)..................................... Counterparties With Banks for Hedging Market Making With FIs other than banks Hedging Market Making With other entities for Hedging Market Making Total Hedging Market Making Interest Rate Swaps No. of Contracts 31 3 50 84 Notional Principal 40,368,694 1,032,667 63,132,216 104,533,577 FX Options No. of Contracts 82 82 164 Notional Principal

11,948,694 11,948,694 23,897,387

2010 *

Total Market Making

98

125,021,858

204

8,800,720

At the exchange rate prevailing at the end of the reporting period

Contracts with banks represent contracts entered with branches of Standard Chartered Bank, UK to obtain cover against the contracts with customers, except for 11 contracts with local banks having notional principal of Rs 17,304 million. Three months Period ended September 30, 2011 12 OTHER INCOME Income from Sri Lanka branch operations Rent on property Gain on disposal of fixed assets Loss on derivatives Others Nine months period ended September 30, 2011 (Rupees in '000) 9,266 29,249 5,400 (151,832) 205,812 97,895 Three months Nine months period ended period ended September 30, September 30, 2010 2010 (Rupees in '000) 4,136 13,650 1,590 (53,996) 18,965 (15,655) 9,499 22,218 8,074 (233,756) 170,629 (23,336)

8,927 505 (73,563) 29,843 (34,288)

16

3rd Quarterly Report 2011

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Standard Chartered Bank (Pakistan) Limited

Financial statements and notes

Notes to the Condensed Interim Un-Consolidated Financial Statements (Un-audited)


For the nine months period ended 30 September 2011
Three months Nine months Period ended period ended September 30, September 30, 2011 2011 (Rupees in '000) 80,617 Nine months Three months period ended period ended September 30, September 30, 2010 2010 (Rupees in '000) 11,748 11,748

13

OTHER PROVISIONS / ASSET WRITE OFF

Asset write offs Other provisions (Reversal) provision against receivable under cross currency swaps arrangements Overdue mark up suspended

80,617

11,748

103,127 341,306 444,433 456,181

14

TAXATION Standard Chartered Bank (Pakistan) Limited The return for income year 2010 (tax year 2011) is due for filing by 30 October 2011. The tax department amended the assessments for income years 2007 to 2009 (tax years 2008 to 2010 respectively) under section 122 (5A) of the Income Tax Ordinance, 2001, determining additional tax liability of approximately Rs. 6,009 million in the aggregate on account of various issues. Appeals against the amended assessment orders are pending before different appellate forums. The management considers that a significant amount of the additional tax liability is the result of timing differences and is confident that the issues in the above mentioned tax years will be decided in favour of the Bank at appellate forums. Consequently, no additional provision is required. The Tax Authorities have passed an order levying Federal Excise Duty amounting to Rs. 114 million on certain items. The Bank is contesting the order in the appeal. The Bank has paid Rs.100 million under protest and the balance demand is legally stayed till the decision of the appeal. Standard Chartered Bank Branch Operations The assessments have been finalized upto and including tax year 2006. The Banks / departmental appeals for the assessment / tax years 1976-77 to 2006 are pending before different appellate forums on various issues. The management expects favourable decisions in pending appeals and consequently, no additional provision is required. Union Bank Limited The tax assessments for the assessment years 1993-94 through tax year 2007 are pending at various appeal forums against certain disallowances. The management expects favourable decision in pending appeals and consequently, no additional provision is required.

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3rd Quarterly Report 2011

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Standard Chartered Bank (Pakistan) Limited

Notes to the Condensed Interim Un-Consolidated Financial Statements (Un-audited)


For the nine months period ended 30 September 2011
15 SEGMENT DETAILS WITH RESPECT TO BUSINESS ACTIVITIES Segment analysis with respect to business activity
September 30, 2011 Internal Income Net mark-up / return / interest income Non mark-up / non interest income Operating income Non mark-up / non interest expenses Internal non mark-up / non interest expenses Operating profit before provisions and taxation Direct write-offs / provisions against non-performing loans and advances - net of recoveries Provision for diminution in the value of investments Profit before taxation Other segment items: Depreciation of tangible fixed assets Amortisation of intangible assets Segment assets (gross) Segment non performing loans Segment provision required Segment liabilities Segment return on net assets (ROA) (%) Segment cost of funds (%) September 30, 2010 Internal Income Net mark-up / return / interest income Non mark-up / non interest income Operating income Non mark-up / non interest expenses Operating profit before provisions and taxation Direct write-offs / provisions against non-performing loans and advances - net of recoveries Provision for diminution in the value of investments - net Profit before taxation Other segment items: Depreciation of tangible fixed assets Amortisation of intangible assets Segment assets (gross) Segment non performing loans Segment provision required Segment liabilities Segment return on net assets (ROA) (%) Segment cost of funds (%) * ** (7,668,614) 12,724,994 2,474,203 7,530,583 3,291,845 4,238,738 597,823 688 3,640,227 65,613 54,990 292,558,159 12,494,182 10,809,076 114,236,196 1.73% 9.71% 7,668,614 (64,597) 1,931,817 9,535,834 7,204,840 2,330,994 2,967,625 (636,631) 354,792 232,784 55,835,295 8,621,546 7,509,536 165,877,253 -1.76% 5.29% 12,660,397 4,406,020 17,066,417 10,496,685 6,569,732 3,565,448 688 3,003,596 420,405 287,774 348,393,454 21,115,728 18,318,612 280,113,449 1.22% 6.88%
WholeSale Banking Consumer Banking Total

------------------- (Rupees in '000) ----------------(9,297,620) 15,719,981 2,824,959 9,247,320 3,138,864 64,891 6,043,565 2,088,891 3,954,674 41,815 38,334 318,084,804 15,265,222 13,035,884 120,059,108 1.73% 6.31% 9,574,562 (746,741) 1,823,506 10,651,327 6,984,957 212,051 3,454,319 1,550,405 1,903,914 285,526 163,891 57,514,078 9,942,273 8,270,882 181,018,780 5.17% 3.28% 276,942 14,973,240 4,648,465 19,898,647 10,123,821 276,942 9,497,884 3,639,296 5,858,588 327,341 202,225 375,598,882 25,207,495 21,306,766 301,077,888 2.21% 4.36%

** ***

** ***

These expenses reflect a change in methodology which has been implemented from financial year starting Jan 1, 2011. Segment ROA = Net income / (Segment assets - Segment provisions)

*** Segment cost of funds have been computed based on the average balances.

18

3rd Quarterly Report 2011

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Standard Chartered Bank (Pakistan) Limited

Financial statements and notes

Notes to the Condensed Interim Un-Consolidated Financial Statements (Un-audited)


For the nine months period ended 30 September 2011
Wholesale banking Deposits, trade and other lending activities for corporates and financial institutions. It also includes the overall management of treasury of the Bank, which entails various cash and interest risk management products for customers. The products include FX forwards, FX options and interest rate swaps. Consumer Banking Wealth management, deposits, mortgages, auto finance, unsecured lending (credit cards, personal loans etc.) and SME lending (including SME trade).

16

RELATED PARTY TRANSACTIONS Related parties comprise of Standard Chartered Plc., ultimate parent company, its other subsidiaries and branches, key management personnel, employees' retirement benefit funds and other associated undertakings. The transactions with related parties are conducted at commercial terms. The Bank also provides advances to employees at reduced rates in accordance with their terms of employment. The transactions and balances with related parties are summarised as follows: OUTSTANDING BALANCES Group September 30, 2011 December 31, 2010

(Rupees in 000)
1,884,804 112,827 8,253,174 13,922 12,486 7,770,036 172,701 5,680 838,598 994,602 356 200,390 6,703 1,494 469 125,190 96,636 239,423 824 19,463 10,491 7,279 758,120 1,633,622 93,610 23,964,247 12,890 4,867,708 19,059 128,720 23,327 885,244 1,004,935 563 77,874 520 1,126 117,187 42,834 50,921 885 19,097 231 831

Nostro balances with other subsidiaries and branches of the holding company Vostro balances with other subsidiaries and branches of the holding company Placements with other subsidiaries and branches of the holding company Deposits of group companies Due from group companies Due to holding company Due to group company Due from associated undertakings Interest receivable from group companies Inter-company derivative assets Inter-company derivative liabilities Other receivables

Overdrawn nostro balances with other subsidiaries and branches of the holding company

Subsidiaries

Deposits of subsidiaries Accrued interest receivable Other receivables Accrued interest receivable

Key management personnel

Loans and advances to key management personnel Deposits of key management personnel

Others

Deposits by staff retirement benefit funds Deposits by customers with common directorship Receivable from defined benefit plans Derivative asset Derivative liabilities

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3rd Quarterly Report 2011

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Standard Chartered Bank (Pakistan) Limited

Notes to the Condensed Interim Un-Consolidated Financial Statements (Un-audited)


For the nine months period ended 30 September 2011
Nine months period ended September 30, September 30, 2011 2010 (Rupees in 000)
2,225 21,672 25,144 29,177 2,895,583 400,200 3,633 36,313 99,750 1,402 41,619 30,918 54 3,348,340 395,137 145,537 56,848

PROFIT AND LOSS

Group Mark-up / interest expensed Mark-up / interest / income earned Fee and commission expense Fee and commission income Reimbursement of executive and general administrative expenses Payment to group company for direct sales services rendered Administrative expenses (including rent and other charges) Net loss on inter-company derivatives Royalty expense

Key management personnel

Mark-up / interest / income earned Mark-up / interest expensed Sale of vehicles Salaries and benefits Post retirement benefits

4,843 674 141,752 16,674

2,480 778 86 182,124 11,423

Subsidiaries

Mark-up / interest expensed Mark-up / interest / income earned Lease rentals paid Administrative expenses (including rent and other charges) Reimbursement of salaries

2,294 16,540 10,428 2,531

12,488 5,804 2,369 7,913 4,699

Others

Contribution to defined contribution plans - net of payments received Charge for defined contribution plans Net income for defined benefit plans Mark-up / interest expensed on deposits of staff retirement benefit funds Mark-up / interest expensed on deposits of customers with common directorship Remuneration / fee paid to non-executive directors Net loss / (gain) on derivatives

215,164 215,164 548 5,839 20 2,600 3,812

193,696 193,696 194 1,625 120,966 2,205 (16,691)

20

3rd Quarterly Report 2011

www.standardchartered.com.pk

Standard Chartered Bank (Pakistan) Limited

Financial statements and notes

Notes to the Condensed Interim Un-Consolidated Financial Statements (Un-audited)


For the nine months period ended 30 September 2011
16.1 Net movement in loans and deposits is summarised as follows: Net Net Balance as at Balance as at repayments / disbursement / 30 September 31 December withdrawals deposits 2011 2010 ------------------------------(Rupees in '000)---------------------------Loans and advances Key management personnel Others Deposits Group companies Subsidiaries Key management personnel Others 12,890 77,874 42,834 51,806 329,792 18,638,983 581,591 40,941,662 (328,760) (18,516,467) (527,789) (40,753,221) 13,922 200,390 96,636 240,247 117,187 77,995 (69,992) 125,190 -

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3rd Quarterly Report 2011

21

Standard Chartered Bank (Pakistan) Limited

Notes to the Condensed Interim Un-Consolidated Financial Statements (Un-audited)


For the nine months period ended 30 September 2011
17 ISLAMIC BANKING BUSINESS The Bank is operating with 15 (2010: 15 branches) Islamic Banking branches at the end of current period. BALANCE SHEET ASSETS Cash in hand Balances with and due from Financial Institutions Investments Financing and receivables - Murabaha - Diminishing Musharaka - Others Operating fixed assets Other assets LIABILITIES Deposits and other accounts - Current accounts - Savings accounts - Term deposits - Others Due to financial institutions Other liabilities NET ASSETS Represented by: Islamic Banking Fund Reserves Surplus / (deficit) on revaluation of assets - net CONTINGENCIES AND COMMITMENTS CHARITY FUND Opening balance Additions during the period / year Payments / utilization during the period / year Closing balance 18. 11 Note September 30, 2011 (Un-Audited) 118,620 1,290,922 3,939,710 3,300,083 10,261,761 204,163 13,766,007 196,667 892,106 20,204,032 December 31, 2010 (Audited) 113,723 557,362 3,624,892 1,758,147 7,552,373 28,196 9,338,716 211,224 582,735 14,428,652

(Rupees in '000)

8,108,241 3,671,823 3,506,957 89,475 15,376,496 866,000 1,160,846 17,403,342 2,800,690

5,381,984 2,222,316 3,440,267 417,692 11,462,259 805,000 444,835 12,712,094 1,716,558

200,000 2,585,980 14,710 2,800,690

200,000 1,516,666 (108) 1,716,558

3,738 (3,738) -

4,141 (4,141) -

DATE OF AUTHORIZATION These condensed interim unconsolidated financial statements were authorized for issue in the Board of Directors meeting held on 26 October 2011.

Christos Papadopoulos Chairman


22 3rd Quarterly Report 2011

Mohsin Ali Nathani Chief Executive


www.standardchartered.com.pk

Najam I. Chaudhri Director

Shahid Zaki Director

Standard Chartered Bank (Pakistan) Limited

Condensed Interim Consolidated Financial Statements

For the nine months period ended 30 September, 2011

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3rd Quarterly Report 2011

23

Standard Chartered Bank (Pakistan) Limited

Condensed Interim Consolidated Statement of Financial Position


As at 30 September 2011
September 30, 2011 (Un-Audited) ASSETS Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating fixed assets Intangible assets Deferred tax assets Other assets December 31, 2010 (Audited)

(Rupees in '000) 25,805,828 2,050,712 10,475,409 107,126,465 157,881,552 6,434,627 26,479,043 2,891,498 21,793,143 360,938,277 24,087,885 921,931 30,421,885 72,294,275 144,721,557 6,606,225 26,681,948 3,429,115 18,132,579 327,297,400

LIABILITIES Bills payable Borrowings from financial institutions Deposits and other accounts Sub-ordinated loans Other liabilities NET ASSETS REPRESENTED BY: Share capital Reserves Unappropriated profit Attributable to equity holders of the Bank Minority interest Surplus on revaluation of assets - net of deferred tax 38,715,850 3,548,322 7,553,340 49,817,512 851,242 50,668,754 3,260,998 53,929,752 38,715,850 2,785,229 6,838,790 48,339,869 787,227 49,127,096 2,972,973 52,100,069 4,531,939 29,281,247 235,216,163 699,200 37,279,976 307,008,525 53,929,752 5,691,864 15,914,343 220,187,888 1,135,900 32,267,336 275,197,331 52,100,069

The annexed notes 1 to 6 form an integral part of these condensed interim consolidated financial statements.

Christos Papadopoulos Chairman


24 3rd Quarterly Report 2011

Mohsin Ali Nathani Chief Executive


www.standardchartered.com.pk

Najam I. Chaudhri Director

Shahid Zaki Director

Standard Chartered Bank (Pakistan) Limited

Financial statements and notes

Condensed Interim Consolidated Profit and Loss Account (Un-audited)


For the nine months period ended 30 September 2011
Three months Nine months Three months Nine months period ended period ended period ended period ended September 30, September 30, September 30, September 30, 2011 2011 2010 2010 (Restated) (Restated) --------------------------(Rupees in '000)--------------------------Mark-up / return / interest earned Mark-up / return / interest expensed Net mark-up / return / interest income Provision against non-performing loans and advances Recovery of amounts written off Provision for diminution in the value of investments Bad debts written off directly Net mark-up / return / interest income after provisions NON MARK-UP / NON INTEREST INCOME Fees, commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of securities Unrealized gain on revaluation of investments classified as held for trading Other income Total non mark-up / non interest income NON MARK-UP / NON INTEREST EXPENSES Administrative expenses Other provisions / asset write-offs Other charges Total non mark-up / non interest expenses Extra-ordinary / unusual items PROFIT BEFORE TAXATION Taxation - current - prior years' - deferred PROFIT AFTER TAXATION Attributable to : Equity holders of the Bank Minority shareholders 8,394,099 (3,029,583) 5,364,516 (761,797) 79,588 234 (130,189) (812,164) 4,552,352 790,711 523,671 274,418 12,623 (32,039) 1,569,384 6,121,736 (2,847,414) (65,400) (2,912,814) 3,208,922 3,208,922 (755,253) (364,707) (1,119,960) 2,088,962 2,060,964 27,998 2,088,962 Rupees BASIC / DILUTED EARNINGS PER SHARE 0.53 24,016,088 (8,761,404) 15,254,684 (3,624,118) 356,740 (27,344) (366,708) (3,661,430) 11,593,254 2,489,579 1,469,146 466,706 132,619 113,082 4,671,132 16,264,386 (10,021,914) (80,617) (158,877) (10,261,408) 6,002,978 6,002,978 (1,777,043) (346,455) (2,123,498) 3,879,480 3,815,465 64,015 3,879,480 Rupees 0.99 7,153,603 (2,914,411) 4,239,192 (671,340) 127,955 (13,678) (463,637) (1,020,700) 3,218,492 794,909 426,293 198,007 6,782 (17,416) 1,408,575 4,627,067 (3,659,028) (11,748) (18,011) (3,688,787) 938,280 938,280 (233,552) (103,414) (336,966) 601,314 586,960 14,354 601,314 Rupees 0.15 21,235,728 (8,387,177) 12,848,551 (2,744,361) 485,441 (7,570) (1,292,390) (3,558,880) 9,289,671 2,695,037 1,121,055 545,749 75,251 (7,999) 4,429,093 13,718,764 (10,073,164) (456,181) (84,513) (10,613,858) 3,104,906 3,104,906 (660,951) (421,536) (1,082,487) 2,022,419 1,964,915 57,504 2,022,419 Rupees 0.51

The annexed notes 1 to 6 form an integral part of these condensed interim consolidated financial statements.

Christos Papadopoulos Chairman

Mohsin Ali Nathani Chief Executive

Najam I. Chaudhri Director


www.standardchartered.com.pk

Shahid Zaki Director


3rd Quarterly Report 2011 25

Standard Chartered Bank (Pakistan) Limited

Condensed Interim Consolidated Statement of Comprehensive Income (Un-audited)


For the nine months period ended 30 September 2011

September 30, 2011

December 31, 2010 (Restated)

(Rupees in '000)

Profit for the period Other comprehensive income: Surplus / (deficit) on revaluation of 'Available for Sale' financial assets (i) Surplus / (deficit) on revaluation of fixed assets (ii) Actuarial gain / (loss) on defined benefit plans (iii) Deferred tax on acturial gain / (loss) Total comprehensive income for the period Attributable to: Equity holders of the bank Minority shareholders

3,879,480

2,022,419

3,879,480 3,815,465 64,015 3,879,480

2,022,419 1,964,915 57,504 2,022,419

(i) Surplus / deficit on revaluation of 'Available for Sale' securities is presented under a separate head below equity as 'surplus / deficit on revaluation of assets' in accordance with the requirements specified by the State Bank of Pakistan vide its BSD circular 20 dated 04 August 2000 and BSD circular 10 dated 13 July 2004. (ii) Surplus on revaluation of fixed assets is presented under a separate head below equity as 'surplus / deficit on revaluation of assets' in accordance with the requirements of section 235 of the Companies Ordinance, 1984.

The annexed notes 1 to 6 form an integral part of these condensed interim consolidated financial statements.

Christos Papadopoulos Chairman


26 3rd Quarterly Report 2011

Mohsin Ali Nathani Chief Executive


www.standardchartered.com.pk

Najam I. Chaudhri Director

Shahid Zaki Director

Standard Chartered Bank (Pakistan) Limited

Financial statements and notes

Condensed Interim Consolidated Cash Flow Statement (Un-audited)


For the nine months period ended 30 September 2011
CASH FLOW FROM OPERATING ACTIVITIES Profit before taxation Dividend income Adjustments for: Depreciation Amortization Gain on disposal of fixed assets Unrealized gain on revaluation of investments classified as held for trading Other provisions / write offs Provision for diminution in the value of investments Lease rentals expense Provision against loans and advances - net of recoveries Decrease / (Increase) in operating assets Lendings to financial institutions Held for trading securities Advances Other assets Increase / (decrease) in operating liabilities Bills payable Borrowings from financial institutions Deposits and other accounts Other liabilities Cash inflow before taxation Income tax paid Net cash generated from operating activities CASH FLOW FROM INVESTING ACTIVITIES Net investments Net investment in fixed assets (including intangible assets) Sale proceeds on disposal of fixed assets Net cash used in investing activities CASH FLOW FROM FINANCING ACTIVITIES Repayment of sub-ordinated Term Finance Certificates Dividend paid Payment of lease obligations Net cash used in financing activities Increase in cash and cash equivalents for the period Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD Cash and balances with treasury banks Balances with other banks
The annexed notes 1 to 6 form an integral part of these condensed interim consolidated financial statements.

September 30, 2011

September 30, 2010 (Restated) (Rupees in '000) 6,002,978 3,104,906 6,002,978 3,104,906 422,545 287,774 (8,074) (75,251) 456,181 7,570 2,369 3,551,310 4,644,424 7,749,330 5,306,137 119,085 (4,790,533) (2,848,575) (2,213,886) (3,165) 849,946 15,437,164 (740,897) 15,543,048 21,078,492 (852,621) 20,225,871 (18,333,587) (133,092) 9,470 (18,457,209) (387,100) (2,369) (389,469) 1,379,193 23,827,483 25,206,676 23,798,600 1,408,076 25,206,676

328,062 202,225 (5,400) (132,619) 80,617 27,344 3,634,086 4,134,315 10,137,293 19,946,476 448,989 (16,794,081) (2,931,070) 670,314 (1,159,925) 13,366,904 15,028,275 5,012,640 32,247,894 43,055,501 (2,579,744) 40,475,757 (34,722,141) (155,827) 5,443 (34,872,525) (436,700) (2,319,808) (2,756,508) 2,846,724 25,009,816 27,856,540 25,805,828 2,050,712 27,856,540

Christos Papadopoulos Chairman

Mohsin Ali Nathani Chief Executive

Najam I. Chaudhri Director


www.standardchartered.com.pk

Shahid Zaki Director


3rd Quarterly Report 2011 27

Standard Chartered Bank (Pakistan) Limited

Condensed Interim Consolidated Statement of Changes in Equity (Un-audited)


For the nine months period ended 30 September 2011
Share Capital Share Statutory Premium Reserve Unappropriated Profit (Rupees in '000) Balance as at 31 December 2009 - restated Total Comprehensive income for the period Profit for the nine months ended 30 September 2010 Other Comprehensive income Acturial gain on defined plan - net of tax Transactions with owners, recorded directly in equity Share based payment transactions (Contribution from holding Company) Payment against share based payment transactions (to holding Company) Transfer to statutory reserve Transferred from surplus on revaluation of fixed asset - net of deferred tax Balance as at 30 September 2010 (as restated) Total Comprehensive income for the period Profit for the three months ended 31 December 2010 Other Comprehensive income Acturial gain on defined plan - net of tax Transactions with owners, recorded directly in equity Share based payment transactions (Contribution from holding Company) Payment against share based payment transactions (to holding Company) Transfer to statutory reserve Dividend paid to minority shareholders Transferred from surplus on revaluation of fixed asset - net of deferred tax Balance as at 31 December 2010 Total Comprehensive income for the period Profit for the nine months ended 30 September 2011 Other Comprehensive income Acturial gain on defined plan - net of tax Transactions with owners, recorded directly in equity Share based payment transactions (Contribution from holding Company) Payment against share based payment transactions (to holding Company) Transfer to statutory reserve Dividend paid to minority shareholders Cash dividend (2010) Transferred from surplus on revaluation of fixed assets - net of deferred tax Balance as at 30 September 2011 38,715,850 38,715,850 38,715,850 38,715,850 1,036,090 1,036,090 1,036,090 1,036,090 1,016,257 392,983 1,409,240 339,899 1,749,139 763,093 2,512,232 4,049,209 1,964,915 1,964,915 35,800 (91,662) (55,862) (392,983) 5,671 5,570,950 1,699,497 1,410 1,700,907 11,933 (106,976) (95,043) (339,899) 1,875 6,838,790 3,815,465 3,815,465 85,527 (105,985) (20,458) (763,093) (2,322,951) 5,587 7,553,340 44,817,406 1,964,915 1,964,915 35,800 (91,662) (55,862) 5,671 46,732,130 1,699,497 1,410 1,700,907 11,933 (106,976) (95,043) 1,875 48,339,869 3,815,465 3,815,465 85,527 (105,985) (20,458) (2,322,951) 5,587 49,817,512 772,504 57,504 57,504 830,008 18,939 18,939 (61,720) 787,227 64,015 64,015 851,242 45,589,910 2,022,419 2,022,419 35,800 (91,662) (55,862) 5,671 47,562,138 1,718,436 1,410 1,719,846 11,933 (106,976) (95,043) (61,720) 1,875 49,127,096 3,879,480 3,879,480 85,527 (105,985) (20,458) (2,322,951) 5,587 50,668,754 Total Minority Interest Total

The annexed notes 1 to 6 form an integral part of these condensed interim consolidated financial statements.

Christos Papadopoulos Chairman


28 3rd Quarterly Report 2011

Mohsin Ali Nathani Chief Executive


www.standardchartered.com.pk

Najam I. Chaudhri Director

Shahid Zaki Director

Standard Chartered Bank (Pakistan) Limited

Financial statements and notes

Notes to the Condensed Interim Consolidated Financial Statements (Un-audited)


For the nine months period ended 30 September 2011
1. STATUS AND NATURE OF BUSINESS Standard Chartered Bank (Pakistan) Limited ("the Bank") was incorporated in Pakistan on 19 July 2006 and was granted approval for commencement of banking business by State Bank of Pakistan, with effect from 30 December 2006. The ultimate holding company of the Bank is Standard Chartered Plc., incorporated in England. The registered office is at Standard Chartered Bank Building, I.I. Chundrigar Road, Karachi. The Bank commenced formal operations on 30 December 2006 through amalgamation of entire undertaking of Union Bank Limited and the business carried on by the branches in Pakistan of Standard Chartered Bank, a bank incorporated by Royal Charter and existing under the laws of England. The scheme of amalgamation was sanctioned by State Bank of Pakistan vide its order dated 4 December 2006. The Bank is engaged in the banking business as defined in the Banking Companies Ordinance, 1962 and has a total number of 143 branches in Pakistan (2010: 162 branches in Pakistan) in operation at 30 September 2011. Standard Chartered Bank (Pakistan) Limited has the following three subsidiaries. All of them are incorporated in Pakistan.
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Standard Chartered Leasing Limited Standard Chartered Modaraba Standard Chartered Services of Pakistan (Private) Limited

These condensed interim financial statements are consolidated financial statements of Standard Chartered Bank (Pakistan) Limited and its subsidiaries ("the Group"). 2 STATEMENT OF COMPLIANCE These condensed interim consolidated financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan for interim financial reporting. The disclosures in the condensed interim consolidated financial information do not include the information reported for full annual consolidated financial statements and should therefore be read in conjunction with the consolidated financial statements for the year ended 31 December 2010. 3 ACCOUNTING POLICIES The accounting policies adopted in the preparation of the condensed interim consolidated financial information are the same as those applied in the preparation of the annual consolidated financial statements of the Bank for the year ended 31 December 2010. Corresponding figures have been restated as necessary to account for the impact of change in accounting policy as disclosed in the annual consolidated financial statements for the year ended December 2010 relating to amendments issued by International Accounting Standards Board (IASB) in International Financial Reporting Standard (IFRS) 2: Share-based payment.

www.standardchartered.com.pk

3rd Quarterly Report 2011

29

Standard Chartered Bank (Pakistan) Limited

Notes to the Condensed Interim Consolidated Financial Statements (Un-audited)


For the nine months period ended 30 September 2011
4 ACCOUNTING ESTIMATES The basis for the accounting estimates adopted in the preparation of the condensed interim consolidated financial information are the same as those applied in the preparation of the annual consolidated financial statements of the Bank for the year ended 31 December 2010. 5 FINANCIAL RISK MANAGEMENT The financial risk management objectives and policies adopted by the Bank are consistent with those disclosed in the annual consolidated financial statements of the Bank for the year ended 31 December 2010. 6 DATE OF AUTHORIZATION These condensed interim consolidated financial statements were authorized for issue in the Board of Directors meeting held on 26 October 2011.

Christos Papadopoulos Chairman


30 3rd Quarterly Report 2011

Mohsin Ali Nathani Chief Executive


www.standardchartered.com.pk

Najam I. Chaudhri Director

Shahid Zaki Director

A simple cataract operation altered this boy ,s life forever


Seeing is Believing is Standard Chartered's global commitment of working towards eliminating Avoidable Blindness. Under this programme, in Pakistan, the Bank has achieved significant milestones:
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Helping people change lives

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So far 200,000 eye sights have been restored* Initiating Pakistan Urban Paediatric Eye Care Programme which will screen 1.7 million less privileged children for visual impairments by 2015 Being the first Bank in the country to hire visually impaired staff Organised a country wide programme through which 20,000 Lady Healthcare workers have been trained to provide Primary Eye Care at the community level

It costs only PKR 1,876 to sponsor a Cataract Operation. To give someone the invaluable Gift of Sight, log on to www.standardchartered.com.pk or call 111-002-002.
*As of December 2010