Leasing Industry in Pakistan

The following sections contain brief description of the overall size of leasing sector in Pakistan and its performance over the last five years.

Trends of Aggregate Indicators
The trend of industry's aggregate indicators for the last five years are given below

Leasing Companies

	(All figures are in Million)
	1996	1997	1998	1999	2000
No. of Companies	30	33	33	32	32
Paid up capital	3,898	4,234	4,352	4,566	4,762
Retained Earning	2,746	3,234	3,359	3,305	3,441
Investment in Lease Finance	21,892	25,164	28,111	29,039	30,281
Investments	1,768	2,590	2,724	2,664	3,162
Borrowings	18,432	21,603	23,173	23,765	25,740
Revenues	4,090	5,046	5,315	5,528	5,704
Net Profit	922	906	610	451	573
Financial Charges	2,758	3,006	3,293	3,634	3,709
Operating Expenditure	926	959	1,198	1,294	1,368
Taxation	165	155	293	149	151
Cash Dividend	537	399	340	371	409

The number of companies and the paid up capital are the industries input parameters whereas revenues, profits, financial charges and investments are the output parameters indicating the extent of the benefits provided by the industry to the lessees, shareholders, banks etc.
The paid up capital has increased from Rs. 3.8 billion in 1996 to Rs. 4.7 billion in 2000, showing an increase of around 24% over the five-year period. Amongst the output parameters investment in Lease Finance increased from Rs.21 billion in 1996 to Rs.30 billion in 2000, maintaining its increasing trend in the five-year period and showing an overall increase of 43%.

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Profit, was showing a decreasing trend from 1996 to 1999. It has now increased in the year 2000 showing increase from Rs. 451 million to Rs. 573 million in 2000 an improvement of 20% in the year above. The revenues have grown from Rs. 4 billion in 1996 to Rs. 5.8 billion in 2000 which indicates an increase of 45% in the five-year period.

The above figures indicate that the leasing industry showed some what better results in 2000 as compared to 1999 as the net profit showed an increasing trend for the first time in the five year period and the total investment in lease finance grew by Rs. 1.2 billion as against 928 million in the previous year.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trends of Key Ratios

Leasing Companies
The following table show the key ratios of the Leasing industry:

Key Ratios	1996	1997	1998	1999	2000
Earning per share (Rs.)	2.13	1.67	1.40	0.79	0.92
Return on Equity (%)	13.99	11.88	7.91	5.73	6.58
Return on Investment (%)	3.33	2.81	1.79	1.25	1.36
Net Profit Margin (%)	22.56	17.69	11.48	8.16	9.31
Revenue per share (Rs.)	9.46	9.41	12.21	9.70	9.86
Time Interest Earned (X)	1.47	1.35	1.25	1.17	1.19
Financial Charges / Total Expenses (%)	71.44	72.76	69.99	71.57	70.32
Debt Leverage	3.20	3.23	3.42	3.60	3.84
:Leasing & Finance / Net worth (X)	3.40	3.43	3.59	3.57	3.84
Total Assets / Net Worth (X)	4.20	4.23	4.42	4.60	4.84
Current Ratio (X)	1.07	1.25	1.17	1.24	1.38
Financial Charges / Total Revenue (%)	-	-	-	65.73	63.78

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The key ratios of the leasing industry indicates that after a difficult year in 1999, the industry has some what stabilished in 2000 as the two key ratios i.e Net Profit Margin and Return on Investment, after showing a decline trend up till 1999 have shown a slight increase in 2000. Net Profit Margin increased from 8.16% to 9.3% while return on investment grew from 1.25% to 1.36%. This stablishing trend indicates that the efforts of the leasing industry to increase lease investments and to recover stuck up rentals have started to bear fruit.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STATISTICAL OVER VIEW OF LEASING
SECTOR IN PAKISTAN
(Leasing Companies & Leasing Modarabas)

CONSOLATED SECTOR WISE EXPOSURE OF LEASING SECTOR IN 1999-2000

ASSET WISE BREAK -UP OF LEASE DISBURSEMENT IN 1999-2000