Last week, Fauji Fertiliser Bin Qasim provided details about its plans to diversify into the meat, dairy and power generation sectors.
The ambitious plans by the company can be said to have been made partly plausible by the recent stream of income from its parent company’s banking subsidiary, Askari Bank Ltd (AKBL).
In a span of less than a year, AKBL has gone from being a loss-making entity saddled with bleeding assets, to a financial institution that has started contributing to its parent company’s diversification pursuits.
A consortium of three companies — Fauji Foundation, Fauji Fertiliser Company (FFCL) and Fauji Fertiliser Bin Qasim (FFBL) — cumulatively holds a 71.91pc stake in the bank. The bank, in turn, directly owns an asset management company and also has majority shareholding in a brokerage firm.
The mid-sized bank, with Rs409.5bn in assets by September, was acquired by the Fauji consortium from the Army Welfare Trust in June 2013. For the remainder of 2013, the bank’s management embarked on a drive to clean up the balance sheet by realising billions of rupees worth of sour loans and investments as non-performing, and then booking adequate provisions against them.
Once the exercise was complete by early 2014, the bank was able to join the rest of the industry as a profit making entity.
