Corporate results: KASB Corp posts net loss of Rs12.5 million

Loss 36.2% higher than that incurred in six months of 2014

KARACHI:

The net loss of KASB Corporation in the second quarter of 2015 increased 103% to Rs9.1 million on a year-on-year basis.

According to financial accounts of the once-indomitable conglomerate released on Thursday, KASB Corporation posted a net loss of Rs12.5 million in January to June, which is 36.2% higher than its losses in the same period of 2014.

Following a regulatory action against one of its major subsidiaries, the group had already lost three-quarters of its subsidiaries by the end of 2014. From eight subsidiaries at the end of 2013, KASB Corporation was reduced to being the owner of only KASB Capital and KASB Funds by the end of 2014 with a shareholding of 78.2% and 46.1%, respectively.

KASB Corporation last published detailed accounts for the Jul-Sept quarter of last year, which makes it difficult to assess the company’s current assets position.

Income of KASB Corporation for the first six months of 2015 amounted to only Rs1.6 million, which reflects a decrease of 84% over the same period of 2014.

Before the onset of the crisis that has nearly dismembered KASB Corporation, it had total assets amounting to Rs7.4 billion with direct and indirect shareholdings in eight subsidiaries, namely KASB Bank (83.6%), KASB Funds (90%), KASB Invest (99.6%), KASB Capital (100%), KASB Securities (77.8%), KASB Modaraba (51.6%), My Solutions Corporation (100%) and Structured Venture (100%).



The State Bank of Pakistan (SBP) put KASB Bank, one of the most prominent subsidiaries of KASB Corporation, under a moratorium last year to find a buyer that could inject liquidity into it and meet capital adequacy requirements.

This was followed by BankIslami taking over KASB Bank in April. With a network of 105 branches, KASB Bank’s deposits were more than Rs57 billion at the time. The merger with another bank on the order of the apex regulator meant the entire direct and indirect shareholding of KASB Corporation in KASB Bank (83.6%) came to nought overnight.

Moreover, one of the most successful companies indirectly owned by KASB Corporation, KASB Securities, also became a victim of its parent company’s lack of capital adequacy. KASB Corporation owned KASB Bank which, in turn, controlled 77.1% stake in KASB Securities, one of the most prominent brokerage houses of the country, at the end of 2014.

KASB Securities ended up as a subsidiary of BankIslami after the latter took over the parent company (KASB Bank) of the brokerage house.

Published in The Express Tribune, August 28^th,  2015.

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