PAKISTANS BANKING INDUSTRY REVIEW Pakistani Banking sector is gaining the equilibrium that was lost a couple of years

back but is still restrained despite having a large under-banking population. However, a swift development can not be predicted due to unstable political, economical & global circumstances, being the Front Line state in War against Terrorism had cost Pakistan a lot more than America or even Afghanistan. The first quarter had make out the best out of it by showing incremental changes in Assets @ 11.7% YoY, Loan 5.2% YoY, Deposits 13.5% YoY & a massive 27.9% YoY in Investments, ROA had jumped from 1.8% to 2.2%, ROE to 22.4% from 17.8% & keeping in view the momentum of IBIT i.e. Pkr- 39.0 Billion in 1st Qtr chances are there that 2011 may recover the banking industry from a 4 year sluggish Revenue generation. Despite these aloft trend in Deposit Base & Financial Soundness Indicators, same time Non Performing Loans are preventing reparation of the economy increasing from 4.2% to 5.7% of the total Loans in QoQ analysis of March 2011. Advances to Deposit Ratio had also declined from 66.4% to 61.5% (QoQ analysis) indicating the decline of Tier 1 capital-to-weighted risk assets at 11.4% in March 2011 to 11.8 in December 2010 resulting in slight recovery of Capital to Asset ratio that is at its lowest in last 4 years. Further indicators released by the State Bank of Pakistan suggests Banking Sector will be smooth in the Medium Term, but the endangered bankruptcy of US Government may shatter all the hopes as Pakistan is fiscally dependent on Funds from IMF & aid from its Donor Countries. If this support is stopped at any time Country may face bankruptcy, in these circumstances Local Commercial Banks may intervene & handle the situation. INVESTMENT SUMMARY Standard Chartered Bank (Pakistan) Limited has 167M free float shares, SCB (Pak) Ltd had ruled Banking Industry for several years & the most recent Award of Best Bank in Pakistan by Euromoney is evident of its strong hold & deep roots in the country, the same way Finance Asia awarded with Best Foreign Commercial Bank in Pakistan, Asset Triple A awards crowned with Pakistan Deal of the Year 2010. Management plans to expand its branch network by year 2011 & Market Penetration strategy will be adopted so as to reach the maximum population of the country & to strengthen the deposit base of the Bank. COMPANY PROFILE Standard Chartered Bank (Pakistan) Limited is Countrys Largest International Bank with a history of around 150 years in the region. SCB holds the tag of first international Bank to start Islamic Banking in the country. Pakistan Credit Rating Agency Limited had awarded SCB with AAA rating in Long Term & A1+ in Short Term Banking Procedures. SCB is maintaining a rapidly growing network of 162 branches. Companys Authorized Capital is Pkr-40,000 M & Paid Up Capital is PKR-38,716M (yet to be converted in US$). SCB UK holds 98.99% of Companys total shares. SCB has contributed well in the fields of Education, preventing Blindness, HIV Awareness & disaster response efforts. FINANCIAL HIGHLIGHTS Assets of the Bank witnessed stable growth and were positioned at Pkr-322.00Bln, despite poor economic & social conditions of Pakistan SCB successfully amplified its deposit base with 7% & stood at Pkr-220 Bln, EBIT remained stabalised at Pkr-23.00Bln. Return on Equity stood at 7.30% & Return on Asset at 1.14%, the best figures management withdrew since 2006. Expense/Income Ratio stood at higher side at 57%, higher administrative cost is a key to earn maximum profit in the region so management has been willingly spending enough so as to attract new customers. Price per earnings ratio is expected to increase from 0.93 to 1.20 in 2011 due to expected stable & incremented growth in earnings.

VALUATION & PER SHARE DATA We foresee vibrant growth in Standard Chartered Bank (Pakistan) Limited, effective managerial decisions had lead SCB to have the best financial results since Year 2006. Keeping in view the Quaterly results of Sep-2011 consistent growth in EBIT, Deposits, Advances, EPS are signals of Banks healthy performance, therefore stabilized & augmented growth is projected. Buy Strong Buy Hold Strong Hold Duration (No of Days): Sale Strong Sale Duration (No of Days):