Introduction to Report
3. SME Banking
As the first and largest Islamic Bank in Pakistan, we are proud to be providing financial solutions for the needs of the Small and Medium Enterprise Sector (SME) in the country.
SMEs are categorized in Pakistan as Trading and Service concerns employing maximum
50 staff and having total assets (excluding land and building) of Rs. 50 million (max) and the Manufacturing concerns employing maximum 250 staff and having total assets (excluding land and building) of Rs.100 Million (max). The growth in the SME sector in Pakistan in recent years has been a major contributor to the growth in the national economy. Meezan Bank is committed towards developing tailored financial solutions and expanding our footprint in the SME sector.
The ranges of products are:
• Working Capital Finance
• Project Financing, Expansion or BMR Requirments
• Islamic Export Refinance Facility
• Trade Related Services
Small & Medium Enterprise (SME) You are a SME Banking Customer if:
• Your annual sales turnover is upto Rs. 300 million
• You need funded and non-funded lines of upto Rs. 75 million
5.2 INVESTMENT BANKING
Realizing the increasingly diverse needs of our customers for advisory and structured finance transactions, a specialized department focusing on Investment Banking is funtioning at Meezan Bank. The Investment Banking department provides unique structuring by using complex Shariah structures for transactions so as to meet customer's commercial needs. Meezan Bank as torchbearer of Islamic Banking has been making significant contribution in the Investment Banking industry by playing leading roles in business transactions.
Key Services
• Syndications & Structured Finance
• Project Financing
• Financial Advisory Services
5.4 ASSET MANAGEMENT
Al Meezan Investment Management Limited (Al Meezan), the asset management and investment advisory arm of Meezan Bank Limited, specializes in the development and management of Shariah compliant investment solutions. Al Meezan Investments has one of the longest and the most successful track record of managing mutual funds in the private sector, spanning over fourteen years.
Al Meezan is presently managing eight funds and an administrative plan i.e. Al Meezan Mutual Fund Limited (AMMF) - a closed end equity fund; Meezan Islamic Fund (MIF) - an open-end equity fund; Meezan Balanced Fund (MBF) - a closed end balanced scheme;
Meezan Islamic Income Fund (MIIF) - Pakistan’s first Shariah compliant open end income fund - Meezan Tahaffuz Pension Fund (MTPF) - a Voluntary Pension Scheme, Meezan Capital Protected Fund-I (MCPF-I) - Pakistan’s first Shariah compliant open end capital protected fund, Meezan Mahana Kharch Account (MMKA) - an administrative plan of MIIF to provide monthly income, Meezan Cash Fund (MCF) - Pakistan’s first Shariah compliant open end money market fund and Meezan Sovereign Fund (MSF) - Pakistan’s first Shariah compliant open end government securities fund.
The total size of these eight funds under management as at March 31, 2010 is over PKR 18.2 billion as compared to PKR 13.5 billion at the corresponding date last year. The increasing size of assets under management manifests the ability of the professional fund management team to consistently out-perform the peers and consequently build upon the investor confidence.
Al Meezan is ranked among the best performing asset management companies in Pakistan. The fund wise break up of net assets as at March 31, 2010 is as under:
NET ASSETS
Meezan Balanced Fund 1,319
Meezan Capital Protected Fund-I 633
Meezan Sovereign Fund 536
Meezan Tahaffuz Pension Fund 246
Al Meezan has also achieved Management Quality Rating “AM2”, assigned by JCR-VIS.
AM2 is currently the highest Management Quality Rating assigned by JCR-VIS to any Asset Management Company. This rating denotes high management quality rating with a stable outlook. Al Meezan’s funds carrying equity exposures including Meezan Islamic Fund and Al Meezan Mutual Fund have befen amongst the top performing funds in their respective categories for the calendar year 2009.
The Shariah Advisor of Meezan Bank Limited, also being the Shariah Advisor of Al Meezan, supervises the operations in order to ensure Shariah compliance of the funds. In addition to the service quality, Shariah compliance and impressive performance in terms of returns to investors, Al Meezan also complies with the global best practices in asset management and has voluntarily adopted “Asset Manager Code of Professional Conduct”
from CFA Institute, USA. Hence it has the distinction of being the first asset management company in Pakistan to comply with the global best practices in asset management.
Units of all open end funds are available at the offices of Al Meezan and all branches of Meezan Bank Limited (MBL) across Pakistan. For the convenience of investors, Al Meezan has placed dedicated investment officers at the selected branches of MBL. These officers provide guidance and assist the investors in meeting their investment objectives.
5.5 ISLAMIC FINANCIAL ADVISORY SERVICES
Meezan Bank has extensive experience and expertise in developing and advising on the creation of Shariah-compliant financial products and services. The main objective of Meezan Bank’s Islamic Financial Advisory function is to assist Financial Institutions develop Islamic banking alternatives by sharing our expertise, research and success stories. This function works under the guidance of Shariah Supervisory Board which comprises of renowned Islamic Scholars from both Pakistan and abroad. This function primarily focuses on the following:
• Product Development and Product Refinement
• Islamic Capital Market Advisory Services
• Establishing and Managing Islamic Market Indices
• Advisory Services to Start-up Firms
• Shariah-Compliant Corporate Restructuring
• Internal and External Training Sessions
• Shariah Audit, Compliance & Strengthening Internal Controls
Shar’iah Screening Criteria
For any stock to be Shar’iah compliant, it must meet all six key criteria as below.
1. Business of the Investee Company 2. Interest Bearing Debt to Total Assets 3. Non-Compliant Investments to Total Assets 4. Non-complaint Income to Total revenue 5. Illiquid Assets to Total Assets
6. Net Liquid Assets/Share Vs Market Price/Share