Corporate Finance

Auto Car Leasing

Presented To:
Mr. Noman Moeen

Presented By:
Ali Riaz
Mubashar Ali Shan
Shahzad Ahmad Khan
Ghulam Jillani
 Our Mission
“Establish Islamic banking as banking
of first choice...”

Our Vision
“To be a premier Islamic bank...”
 MEEZAN BANK CAR IJRAH
  
 HISTORY OF MEEZAN BANK
 
 
• Meezan Bank is Public Listed Company, first
incorporated on January 27, 1997.
•  
• It is started operations as Islamic Investment
Bank in August 1997 same year.
•  
• In January, 2002, in an historic initiative,
Meezan Bank was granted the Nations first full-
fledged commercial banking license dedicated
to Islamic Banking, by the
State Bank of Pakistan
 CAR IJRAH

Car Ijarah is Pakistan’s first "Interest Free"

car financing based on the Islamic financing
mode of Ijarah (Islamic leasing).

• Meezan Bank’s Car Ijarah is a car rental

agreement, approved by Meezan Banks Shariah
Board

• Under Ijarah, all ownership-related risks lie with

the Bank while all usage related risks lie with the
user

Ease of acquiring any new locally assembled car

   No upfront Insurance Payment
   No advance Rental
 Car Ijarah also features Used Vehicles

Used Car Selection Criteria

• The second hand car selected should be from its first

owner.

• The vehicle should not be older than 5 years.

• The minimum security deposit for a vehicle up to 2

years of age is 20%, while minimum security deposit
for a vehicle over 2 years of age is 30%.

• At the time of termination of the Ijarah agreement, the

vehicle should not be more than 8 years old.

• Maximum Rs. 1 million & Minimum 0.25 million

Only for local assembled cars

 Key Features

• Low monthly rental

• Rental paid after delivery, not in advance

• Fastest processing and delivery

• Tracker option available

• Minimum deposit as low as 20%

• All types of cars

 Conclusion
• The Car Ijarah business was launched four years
ago and now stands at Rs. 3,150 million.

• The Bank has financed over 10,000 vehicles till

June 30, 2008. Growth has been steady during
this period.

• Healthy portfolio management and risk

diversification is clear across the portfolio, with
54% of the car ijarah.

• cases resting in the 3 year tenure, 18% in 4

years, and 28% in 5 years. Furthermore, over
50% of financing is done.
• In the 800 – 1,000cc category, the most stable
middle market consumer financing, with light
commercial vehicles.

• and imported units at 6% and 4% respectively.

• The non-performing portfolio presents another

Meezan Bank milestone at 0.5% of the total
principal outstanding.
 NBP Vision

“To be an Institutional and Excellence

which will create and maintain an
environment of state of art
management system professional
and innovation”

“Attain the status of Most

Professionally and profitably run
modaraba among its competitors”
 MISSION

“The Fundamental Mission is to Seek the

Pleasure of Allah Through Making Humble
Contribution in the Transformation of our
Mercantile, Financial System and Business
Dealings in Accordance with the Principal
Enshrined in the Sharia”
 History

• First National Bank Modaraba Company

Limited (a wholly owned subsidiary of
National Bank of Pakistan).

• Incorporated in Pakistan Under the

Companies Ordinance 1984.

• FNBM Start the Car Financing Business

Operations on December 04,2003.
CRITERIA FOR CAR IJARAH.
• NIC CARD

• INCOME CERTIFICATE FOR SALARIED

PERSONS AND BUSINESSMAN

• INSTALLMENT MUST BE 1/3 OF HOME TAKE

INCOME.

• LEASE 3-TO-4 YEARS.

• INSTALLMENT = COST OF VEHICLE+

MARKUP
 MODE OF PAYMENTS.

• Monthly

• Quarterly

• Through post dated cheques

• In case of delay of installment LEGAL

ACTION can be taken
 Key Features

• Low monthly and Quaterly rental

• Rental paid in advance

• Fastest processing and delivery

• Tracker option not available

• Minimum deposit as low as 10%

(contd.)
• Only new and local assembled cars
with parts availability in local market

• For second hand cars, they only

deals in LUXURY CARS

• Net Investment in Car IJARAH is

Rs. 965,093,293
 Interest Charging Criteria

Formula:

KIBOR + Interest Rate

Current Rates:
KIBOR is 16%
And
Int. Rate is 4%
 Market Share

PORTFOLIO MARKET SHARE IS 23%

Car Financing Market Share:

• In industrial Sector 65%

• In Public Sector 25%
• Others 10%
 Conclusion
• First National Bank Modaraba is a multi-
purpose, perpetual and multi-dimensional
Modaraba formed under Modaraba
Companies Ordinance 1980

• The Car Ijarah business was launched five

years ago

• 100% subsidiary of National Bank of

Pakistan
 History of Escorts Investment
Bank Limited
• Public limited company incorporated in
Pakistan under the Companies Ordinance,
1984.

• The Company was incorporated in

Pakistan on 15 May 1995 and started its
commercial operations on 16 October
1996.

• Started car leasing in 2001

 Mission Statement
To build Escorts Investment Bank
Limited into an elite institution
comparable with, if not better than
any
top quality local or foreign financial
institution operating in Pakistan,
in terms of a progressive corporate
culture and an autonomous,
committed
and dedicated Executive
 Vision Statement
Value addition for our stakeholders
through enhanced business activity
and emphasis on better Risk
Identification and Management as
opposed to Risk Avoidance.
 Value Statement
• We are combine and working like a chain.
• Encouraging self-development.
• We hold high expectations.
• We provide exceptional long lasting
services.
• Consistent entertainment service and
production quality.
 Network
Head Office:

Escorts House
26 – Davis Road, Lahore
Tel: (042) 637 1931 - 34
Fax: (042) 637 5950
Email: mailmanager@escortsbank.net
Web site: www.escortsbank

Continue…
Branch Offices:

Karachi Office:
Ground Floor, Bharia Complex I
Moulvi Tamizzudin Khan Road
Tel: (021) 563 6061 - 63
Fax: (021) 563 6075
Email: karachi@escortsbank

Islamabad Office:
32 - West Sohrab Plaza,
Jinnah Avenue, Blue Area, Islamabad
Tel: (051) 287 4601 - 03
Fax: (051) 287 4604
Email: islamabad@escortsbank.
CRITERIA FOR CAR LEASING
• NIC CARD

• PROPERTY PAPERS WITH 3 WITH YEARS

RESIDENCY OR BUSINESS

• INCOME STATEMENT FOR LAST 1 YEAR

• INSTALLMENT MUST BE 1/4 OF HOME TAKE

INCOME.

• LEASE UPTO FIVE YEARS.

• INSTALLMENT = COST OF VEHICLE+

MARKUP RATE+INSURANCE
PREM
 Key Features
• Financing Local, Imported, new and
used cars

• Highly economical rates

• Fast track approvals

• Low monthly, Quarterly and Semi-

Annually rental

• Rental paid after delivery

• Delivery depends upon dealers

• Rate of return ranges from 11.36% to

17%

• Min. deposit is 10% & Max. is 61.53%

• Max loan payment is Rs.3,500,000

• Net Investment in Car Leasing is

Rs.53,761,296

• Zero termination charges

 Conclusion
• Public limited company incorporated in
Pakistan under the Companies Ordinance,
1984.

• They started car leasing 7 years ago in

2001.

• Offering local, imported, used and new cars.

• Offering economical rates with minimum

documentation.

• The Bank has financed over 6250 vehicles