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This report is about the financial section of NBP. This report describes the structure, functions, procedures and financial position of NBP. I spent two months internship in NBP Faqir Abad Branch Shakardara. The NBP Faqir Abad was established in 22nd Feb 1990.


In present day world, economy has started dominating every sphere of life and for the socio-economic growth of any country, monitory institutions are critical. In this context, banking sector plays a sheer ankle role. Banking sector is the backbone of the industrial sector, trade and commerce of the country, hence providing stimulus to overall development of the economy. The role of banks in the development of a country has greatly increased with the advent of modern tools and techniques in banking operations. Moreover intense competition among banks, the privatization of the financial institution and financial liberalization in general are gradually and continuously making the banking sector efficient and effective. In this era of ever going change and knowledge explosion, manifested by modern technology, banks are also adopting themselves to cope this change.

For Pakistan, being a developing country of third world banks are crucial to Pakistans economy, and especially in the case of KPK, where a huge amount of remittances came from abroad by population residing there. This makes a significant contribution to the economy of Pakistan in general and KPK in particular. My internship report is about NBP Faqir Abad Branch Shakardara. I spent two months. This report is a sincere effort to jot down what has been observed and experienced during two months internship work with NBP. The NBP Faqir Abad was established in 22nd Feb 1990.



This study is the requirement not only for the completion of BBA(Hons) degree but also for acquiring some professionalism in an organization ,so that one can understand the actual practices of transactions and business of Banks. The primary purpose of this study is to analyze the strength and Weakness of finance Section of NBP Faqir Abad Branch Shakardara. Second purpose was to work in an organization and to compare the theory and application of the management knowledge in real life situation. Another purpose of this study was to improve personal skill i.e. human relation and Communication skills that are to interview and work with them. Similarly, the reports purpose was also to develop analytical skills by analyzing the working of the organization through financial analysis.


The internship of eight weeks is not long time for understanding the overall Organization functioning, however main emphasis of this study is on the working of NBP Faqir Abad branch and the functioning of this branch. .During this study, I was able to observe the operations and identify various problems, which the NBP Faqir Abad Branch Shakardara has to face. The Bank has been analyzed from administration, financial and operations points of view. The major emphasis was on the area of financial management of the bank, working of management of the bank and the study of the problems pertaining to the bank.


The data collected for analysis and review includes both primary and secondary data. Every nerve was strained to collect the quality information. The methods used for collecting primary and secondary data are as follows. 1.4.1 PRIMARY DATA

The data which is collected for the first time and exists in the raw form is called the primary data. The information, such as perceptions & attitudes of employees are the best obtained by talking to them by observing events peoples & objects or by administering questionnaires to the individuals such data gathered for research from the actual site of occurrence of events are primary data.

The examples of primary data are and it was done through; i. Personal observation. ii. Interviews with staff members. 1.4.2 SECONDARY DATA

The data gathered from existing resources are called secondary data. The information such as the background details of the bank can be obtained from available published records. The web site of the bank , its achieves & other sources, different type of written information such as bank policies, procedures & rule can be obtained from organizations records & documents. Data gathered through such existing source are secondary data. The examples of secondary data, done with the help of; i. Annual reports of the NBP. ii. Brochures. iii. News papers. iv. Manual of the banks. v. Internet.


The report has been divided into four sections, each section having subsections in it. The scheme of the report is as follows. 1.5-1 Section One This section includes:

Chapter 1: This chapter is about the introduction i.e. background of study, objectives of Study, scope of study, methodology of research, and the study scheme. 1-5-2 Section two This section presents a comprehensive review of the NBP. It includes Chapter 2 This chapter contains brief description of banking sector in Pakistan. Chapter 3: This chapter is about the organizational background and consists of definition and evolution of banking, banking sector in Pakistan. It also includes the introduction of NBP, its vision, mission, core values and objectives are discussed here. This chapter is about the organizational structure of the NBP and includes details about the NBP. Chapter 4 This chapter is about NBP Faqir Abad Shakardara. Section three This section includes two chapters Chapter 5 It contains the financial analysis of the Bank. Chapter 6 It contains SWOT Analyses. . Section four This section contains one chapter.

Chapter 7 It summarizes the findings based on the overall analysis of NBP and recommendations and conclusion based on the section three. Section five This section contains one chapter.

Chapter 8 This chapter includes implementation plan.


2.1 ORIGIN OF BANKING There are different opinions about the origin of the word Bank. According to some authors, the word Bank is derived from the Banco or Bancus which means a bench. It was because Jews merchants in Lombardy transacted their business of money exchange on benches. If the business of any merchant failed, his Banco was destroyed by the people. From this practice, the word bankrupt is evolved. According to another opinion, this word bank is derived from the German word Back which means joint stock fund. Later on, this word back was Italianized into Bank or Banke


The history of banking is traced to as early as 2000.B.C. The priests in Greece used to keep money and valuables of the people in temples. These priests thus acted as financial agents. The origin of banking is also traced to early goldsmith. They used to keep strong safes for storing the money and valuables of the people. The persons who had surplus money found it safe and convenient of deposit their valuables with them. The first stage in the development of modern banking, thus, was the accepting of deposit of cash from those persons who had surplus money with them.

The goldsmiths used to issue receipts for the money deposited with them, these receipts began to pass from hand to hand in settlement of transactions because people had confident in the integrity and solvency of goldsmiths. When it was found that these receipts were fully accepted in payment of debts; then the receipts were drawn in such a way that it entitled any holder to claim the specified amount of money from goldsmiths. A depositor who is to make the payments may now get the money in cash from goldsmiths. Or pay over the receipt to the creditor. These rece8pts were the earlier bank notes. The second stage in the development of bnka9in thus was the issue of bank notes. The goldsmiths soon discovered that all the people who had deposited money with them do not come to withdraw their funds in cash. They found that only a few persons presented the receipts for encashment during a given period of time. They also found that most of the money deposited with them was lying idle. At the same time; they found that they were being constantly requested for loan on good security. They thought it profitable to lend at least some of the money deposited with them to the needy persons. This proved quite a profitable business for the goldsmiths. They instead of charging safe keeping charges form the depositors began to give them interest on them money deposited with them. This was the third stage in the development of banking.


The Banking sector is an integral part of the countrys financial services industry. The sector witnessed a phenomenal growth in 2001-03 where deposits rose by almost 100%. There are 39 scheduled banks (including 11

foreign banks) operating in Pakistan. Competition is relatively high, especially after the challenging capital adequacy benchmarks set by the State Bank of Pakistan to nourish a stable banking system. Attracting foreign investment and winning profitable customers are the only options left to banks for survival. Opportunities for foreign banks, especially in consumer and retail banking, are greater than ever before. In the financial year of 2004-05, the banking sector experienced growth rates of 21% and 36% in its deposit and advances portfolio respectively, which in turn, has increased the banks stability as compared to the preceding year. A significant shift of focus from industrial lending to consumer products has allowed the banks to enjoy enormous spreads. However, the manufacturing sector is still enjoying the highest share in credit facilities extended by the banking industry. The industry is passing through a transitional period from long established patterrns and norms to the unknown land of threats and opportunities. And what will demarcate the banking organizations that will turn every change into an opportunity, taking the bull by the horns using the art of change management successfully from the losers. These are some of the daunting questions which will pose a challenge to the potential future banking brains but flowing are a few areas of banking industy where the wind of change is presently quite visible.

2.3.1. Increasing diversity within the commercial banking industry Diversity is making the head way at a rapid speed pattern of operations, market focus, advertising emphasis and use of information technology. Now the banks are inclined to build their organizations to look different from their market competitors by pursuing divergent and distinctive strategies and by introducing novel products and services through product differentiation. 2.3.2 Intensifying pressure of competition Competition is scaling new heights in the banking industry and it will gain further force. A number of factors are expanding the frontiers of competition in both funding and asset use. Competition for all kinds of savings will continue to deepen and broaden but constant consumer awareness about different markets; situations and alternatives will surely block the capacity of banks to collect savings at lower rates than said by their aggressive market competitors. On the other hand, market pressures will compel the banks to make loans in unknown areas loosening the rope of risk management. 2.3.3. Profit trends in banking industry Current key ratios indicate a striking upward trend in the banking industry with huge banking spreads, particularly during the last half decade.


2.3.4. Soaring loan losses Provision for loan losses is on the rise over the years. Troubled loans or non performing advances are regarded as a cancer for banking industry. It can be said that quality loans is the ultimate goal for bankers today. 2.3.5. Merger mania Merger game is going to take front seat in the world. A craze for giant banks is developing to benefit effectively from the future market openings and to tame ever increasing competition. But there are inherent constraints in this mania. The economies of scale vanish automatically after a certain level of expansion in the banking industry.


Pakistan being a developing country and having a relatively low level of income, is required growth rate is low as there is hardly any savings. The standard of living along with the quality of life is the newer concept in Pakistan which emphasizes on individual aspects of human nature. These have led to foreign aids which have been the holding force to bridge the gap for us between our savings and investments. Nevertheless, these aids have become the drowning force for our country. By virtue of being a member of the most western aid consortium, the famous IMF occupies a pivotal role in our economies sphere by influencing our international financial transactions and creates the pace of our development policies. IMFs main objective for Pakistan is to maintain stable exchange rates, multi lateral credit system and international liquidity so as to recover the


country from its worst economic crisis. But Pakistans economic problem can mainly be aspired by internal development and avoidance of any major international role. Structure Of The Pakistani Banking Sector Has Substantially Changed In The Last Decade, Particularly Following The Privatization Of The StateOwned Banks. In 1990, The Banking System Was Dominated By Five Commercial Banks Which Were All State-Owned. The 1990 Amendments To The Banking Companies Ordinance Launched The Process Of Financial Sector Reforms By Allowing Privatization Of The State-Owned Banks. During The First Round Of Reform, Two Of The State-Owned Banks, Muslim Commercial Bank (MCB) And Allied Bank (ABL), Were Privatized Between 1991 And 1993. The Reforms Process Was Subsequently Delayed For Several Years And Resumed Significantly Only In The Early 2000s. With The Privatization Of The Third Large Bank, United Bank (UBL), In 2002, The Domination Of The State-Owned Banks Was Ended. As Of September 2003, The Asset Share Of Local Private Banks And Public Sector Commercial Banks Was 47 Percent And 41 Percent Respectively. Another Large State-Owned Bank, Habib Bank (HBL), Completed Its Privatization N Process In February 2004. As A Result Of This Privatization, The Share Of Banking System Assets Held By Public Sector Commercial Banks Decreased To Less Than 25 Percent. The Largest Bank In The Country, National Bank Of Pakistan (Nbp), With A Market Share Of Approximately 20 Percent, Remains State-Owned And Its Privatization Prospects Are Uncertain At This Stage, although the government divested approximately 25 percent of its capital in 2001-03.


The privatization of state-owned banks has been accompanied by the liberalization in the financial system and the openness to domestic and foreign competition. The number of commercial banks and various nonblank financial institutions grew rapidly in the early 1990s (the number of commercial banks increased to more than 40 by the year 1995). Worried by the health and soundness of the newly entering smaller banks, the authorities imposed a moratorium on the establishment of new banks in 1995, which still remains in force. In addition, the authorities sought to consolidate the banking sector by increasing the minimum capital requirement from PKr 500 million to PKr 750 million from end-December 2001 and to PKr 1 billion (around US$17 million) from end December 2002. EFFORTS HAVE BEEN MADE IN RECENT YEARS TO PROMOTE ISLAMIC BANKING SERVICES. IN PARTICULAR, THE STATE BANK OF PAKISTAN (SBP) EXEMPTED ISLAMIC COMMERCIAL BANKS FROM THE MORATORIUM ON THE ESTABLISHMENT OF NEW BANKS, AND THE FIRST FULLFLEDGED ISLAMIC BANK, MEEZAN BANK, WAS LICENSED IN 2002. SEVERAL CONVENTIONAL BANKS HAVE ALSO OPENED BRANCHES THAT PROVIDE ONLY ISLAMIC FINANCIAL SERVICES.


The North West Frontier Province is a land of geographical diversity ranging from glacial mountain ranges in the north to arid and semi arid


regions in the south. This geographical diversity holds a significant potential for development of agricultural, industry, forestry, hydro electricity and tourism. The Bank of Khyber is the first KPK. based bank and assists in the development of sound business in these areas of growth. There are about 22 Pakistani scheduled banks operating in the KPK having 1147 branches or about 15% of all the branches of scheduled Pakistani banks, in the country. In addition 3 foreign scheduled banks with a total of 3 branches are also operating in the province. Historically banks in the KPK have been able to mobilize substantial amount of the total deposits of the country. However their share of investment in the province has not been proportional as the development process has gathered pace over the years, investment within the province has also increased creating a demand for banking services. A large expatriate community from KPK residing overseas especially in the Middle East are also offering opportunities to banks operating in province.



This part comprised of companys profile. Introduction of national bank of Pakistan, its historical background, board of directors, financial information and achievements National bank of Pakistan maintains its position as Pakistan premier bank determined to set higher standards of achievements. T is the major business partner for the government of Pakistan with special emphasis on fostering Pakistans economic growth though aggressive and balanced lending policies, technologically oriented products and services offered through its large network of branches locally, internationally and representatives offices

3.1 HISTORICAL BACKGROUND OF BANKING IN PAKISTAN The history of banking system in Pakistan dates back to independence of Pakistan in August 1947 when various banks transferred their Head Quarters and funds to areas likely to fall in Indian banking system. According to various books there were 3106 branches of Indian scheduled banks in the undivided sub continent as on 1st March 1947 out of which only 487 branches were located in areas presently constituting Pakistan. However the number of scheduled banks drastically declined to 195 from 487 by 30th June 1948. At the time of partition there were only two banks having the honor to be the first commercial banks of Pakistan, namely Habib Bank Ltd, which


was set up in 1941 with its Head Office in India and the Australasia Bank Ltd, which was established in 1944 with its Head Office in Pakistan. After the partition, an expert committee was set up and this committee recommended that the Reserve Bank of India being the central Bank of the undivided India should continue to function as Central Bank of Pakistan and the Indian currency notes would continue to be legal tender in Pakistan till 30th September 1948. Subsequently it was set up and started functioning from 1st July 1948. Thus the history of Banking system in Pakistan started with the establishment of the State Bank of Pakistan which was inaugurated by Quaid-e-Azam Mohammad Ali Jinnah on 1st July, 1948. Consequently three banks were established which include Muslim commercial Bank Ltd. Bank of Bahawalpur in October 1948 and National Bank of Pakistan in 1949.


National Bank of Pakistan (the Bank) was established on November 9, 1949 under the National Bank of Pakistan Ordinance, 1949 in order to cope with the crisis conditions which were developed after trade deadlock with India and devaluation of Indian Rupee in 1949. Initially the Bank was established with the objective to extend credit to the agriculture sector. The normal procedure of establishing a banking company under the Companies Law was set aside and the Bank was established through the promulgation of an Ordinance due to the crisis situation that had developed with regard to financing of jute trade. The Bank commenced its operations from November 20, 1949 at six important jute centers in the then East Pakistan and directed its resources


in financing of jute crop. The Bank's Karachi and Lahore offices were subsequently opened in December 1949. The nature of responsibilities of the Bank is different and unique from other banks/financial institutions. The Bank acts as the agent to the State Bank of Pakistan for handling Provincial/Federal Government Receipts and Payments on their behalf. The Bank has also played an important role in financing the country's growing trade, which has expanded through the years as diversification took place. The various phases through which the bank went have been discussed in a sequence below: 3.2.1 Formative Phase 1950s When NBP was first formed it had authorized capital equivalent to the amount of Rs. 60 million. In 1950 shares of the bank were also floated and taken up and by 1951 NBP had started foreign exchange business. The ordinance that was passed at the time of inception of NBP was amended to include ordinary commercial banking business as well and by 1952 it was felt that the development of NBP was so immense that it should be considered as the agent of State Bank of Pakistan. Thus by May of 1952 NBP had taken over the Government treasury work from the former agent, Imperial Bank. The expansion of NBP was quite apparent by 1959 when it had 129 fully functioning branches as compared to the meager 17 in 1950. 3.2.2 Period of Expansion 1960s After the quick growth of the 50s NBP worked to establish itself as a sound and stable bank in the 60s. The expansion efforts were put into


force during these years and marketing efforts were made to target specific market segments. For example NBP directed its attention towards popularizing schemes among school and college students, industrial workers, and ladies. Under the School and College Banking scheme, introduced in 1962 all branches of NBP performed School Banking in the premises of selected schools. By December 1969 NBP had 720 branches, 713 at home and 7 in foreign countries. 3.2.3 Period of Organizational Development: 1970s The 1970s witnessed the nationalization of Pakistani commercial banks operating in the country. On January 1, 1974 National Bank of Pakistan along with 13 other scheduled Pakistani banks was nationalized by the promulgation of the Banks Nationalization Ordinance 1974. Shares not formerly held by the Government were acquired from the private holders after compensating them. The decade of the 70s saw major changes at NBP. In 1972 there was reorganization in the top management structure of the bank. This structure had remained unchanged since the inception of the bank and had originally been inherited from the old Imperial Bank of India. 3.2.4 Period of Consolidation: 1980s On February 10, 1980 the Government of Pakistan announced a three year plan for the implementation of an Islamic Economic System. The institutionalization of Zakat and introduction of interest free banking were the two most important measures directed to Islamize the economy. The


system was introduced by the nationalized commercial banks with effect from January 1, 1981. National Bank of Pakistan evolved and introduced a wholly separate and comprehensive procedure for banking under this system from branch level to Head office. Along with development activities of the bank, consolidation of branch network was pursued. NBP decided to delegate administrative and financial powers to Principal Offices and Zonal Offices. 3.2.5 Challenges and New Initiatives: 1990s-2003: With the geographical development of its branches, NBP has been able to take services to a much larger number of Pakistanis all over the country. Today it has more than 6 million accounts. It maintains a presence in all the major financial centers of the world through its 23 overseas branches and 5 representative offices. In 1995 NBP became the first bank in Pakistan with a deposit base which crossed the Rs. 200 billion mark to become the largest financial institute in the country. Total deposits of the bank have since risen to Rs. 362 billion 1 by end December 2002. NBP continues to render active help in provision of services like Hajj services, collection of utility bills, paying of pension to central/provincial government pensioners, as well as to civilian military pensioners and retired army personnel.



3.3.1GENERAL OUTLOOK After the elimination of Pakistan Banking Council, each bank was put under the supervision of an independent board of directors. Since the new organizational structure of the bank, National Bank of Pakistan constitutes a board of directors, and an executive committee as the governing bodies. The Head office is operationally in charge of central affairs including the delegation of powers and authority to 9 Regional Headquarters all over the country. These Regional Headquarters direct the functions of the 40 Zonal Offices and 12 Corporate Branches. The Head Office has 9 divisions that are further divided into wings. Board of Directors nominates the members of the executive committee and executive committee nominates divisional Heads. 3.3.2 BOARD OF DIRECTORS The members of the Board of Directors of National Bank of Pakistan are as follows: i) Syed Ali Rasa (Chairman & president) ii) Mr. Tariq Kirmani (Director) iii) Mrs. Haniya Shahid Naseem (Director) iv) Ms. Nazrat Bashir (Director) v) Mr. Ekhlaq Ahmed (Secretary Board of Directors)



Dr. Asif A. Brohi Chief Operating Officer , Head of Credit & Risk Management Shahid Anwar Khan SEVP & Group Chief, Operations Group Ziaullah Khan SEVP & Group Chief, Overseas Banking Group Dr. Mirza Abrar Bai SEVP & Group Chief Agriculture Finance Group Tariq Jamali SEVP & Group Chief, Commercial & Retail Banking Group Nadeem A. Ilyas SEVP & Group Chief, Compliance Group Syed Iqbal Ashraf SEVP Group Chief, Assets Recovery Group Muhammad Nusrat SEVP Group Chief, Corporate & Investment Banking Group Khalid Bin Shaheen SEVP & Group Chief, Treasury Mgt Group Imam Bakhsh Baloch N. B. Soomro Agha Fidaullah Shafique Ahmed Khan Ekhlaq Ahmed Fazal-ur-Rehman Muhammad Hanif Tahira Raza Aamir Sattar Faisal Mahmood SEVP & Group Chief, Global Home Remittance Mgt Group SEVP & Group Chief, Audit & Inspection Group SEVP , Special Assignments, President's Secretriate EVP/Group Chief, Special Assets Management Group EVP & Divisional Head, Islamic Banking Division EVP EVP & Secretary Board of Directors EVP & Head P&IR Division, HRM&A Group Tahira Raza EVP & Head SC & CSR Division, HRM&A Group EVP & Chief Information Officer /Head Of Information & Divisional Head (A) , PMO & Project Director CBA



3.3.3 HEAD OFFICE Head Office of the National Bank of Pakistan is situated at Karachi, the industrial capital of Pakistan, from where it controls all the affairs of the bank. The President of the bank chairs Head Office. A secretariat is also working at the Head Office level for the assistance of the president. The secretariat includes one Senior Executive Vice President as Advisor to the president. Head Office is rather a big body with a huge task. For smooth functioning of these matters, the whole head office is divided into twelve Departments & Groups. Each Department or group is under the control of a Senior Executive Vice President and Group Chief. 3.3.4 DOMESTIC NETWORK The domestic network of NBP consists of 9 Regional Offices, 40 Zonal Offices, 1,189 branches and 5 subsidiaries. 3.3.5 Subsidiaries The five subsidiaries of NBP are as under: i) ii) iii) iv) v) National Discounting Services Ltd. Taurus Securities Ltd. National Bank Modaraba Management Company Ltd National Agriculture Ltd. NBP Exchange Company Ltd


3.3.6 OVERSEAS NETWORK The Overseas network of National Bank of Pakistan consists of 15 overseas branches, 4 Representative Offices and 1 Subsidiary in Kazakhstan. 3.3.7 Overseas Branches The Overseas branches are in the following countries: i) ii) iii) iv) v) vi) vii) viii) ix) x) xi) xii) USA Germany France Hong Kong Japan South Korea Bahrain Egypt Bangladesh Kyrgyzstan Turkmenistan Pakistan EPZ 2 1 1 2 2 1 1 1 1 1 1 1

3.3.8 Representative Offices The four Representative offices are situated in USA, Peoples republic of China, Uzbekistan and Azerbaijan.


3.3.9 CORPORATE BRANCHES Despite being the premier commercial bank of the country the impact of NBP on the corporate banking sector has been marginal. The concept of corporate branches has now been made an integral part of the banks operational thrust. It aims at providing optimum performance and onestop shop service to the banks corporate and high network clients. The concept of corporate branch is based on a package of services aimed at full customer satisfaction across the entire spectrum of banking and financial service needs. The client is enabled to accomplish all his banking and financial requirements under one roof and with one contact. In this regard the functions of the corporate branch will revolve around an account/relationship officer. Each individual account will be opened with a minimum deposit of Rs. 5,000,000.


The most precise definition of product is anything capable of satisfying needs, including tangible items, services and ideas. In marketing, a product is anything that can be offered to a market that might satisfy a want or need. Since 1575, the word "product" has referred to anything produced. Since 1695, the word has referred to "thing or things produced. The economic or commercial meaning of product was first used by political economist Adam Smith. In general usage, product may refer to a single item or unit, a group of equivalent products, a grouping of goods or services, or an industrial classification for the goods or services. The


consumer banking products include personal accounts, credit cards, loans, investment products, treasury products and many more. The National Bank of Pakistan offering for sale several related products individually, which is commonly known as product lining. A product line is defined as A group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through same types of outlets, or fall within the given price ranges. The followings are the main consumer banking products of NBP. 3.4.1 DEPOSITS The National Bank of Pakistan offers to their clients a variety of Deposit Schemes with personalized services at competitive rates of interest. Any Pakistani citizen can open his/her account for any deposit scheme at any of its Branches strategically located throughout Pakistan. The Bank with its huge network of 1243 branches garners savings from both the rich and the poor in urban as well as rural areas. Even a poor farmer in a remote village, with his meager annual income, feels secure to safe keep his minuscule savings in National Bank of Pakistan, Because National Bank of Pakistan has a long heritage of trust and professional commitment. Deposit These are payable to the customer when ever they are demanded. When a banker accepts a demand deposit, he incurs the obligation of paying all cheques etc, drawn against him to the extent of the balance in the account. Because of their nature, these deposits are treated as current liabilities by the banks. Bankers in Pakistan do not allow nay profit on these deposits, and customers are required to maintain a minimum balance, failing which incidental charges are deducted from such accounts. This is because


Current Deposits may be withdrawn by the depositors at any time, and as such the bank is not entirely free to employ such deposits. Current Accounts/ Basic Banking accounts are opened, on proper introduction and submission of required documents along with initial deposit prescribed from time to time. Basic banking accounts are opened for an individuals (single or joint) only whereas current accounts are opened for individuals (single or joint) Charitable institution, provident and other funds of benevolent nature of local bodies, autonomous corporations, companies, associations, educational institutions, firms etc. and in all other cases where the accounts are to opened under the order of a competent court of law. No profit is paid on the balances of current/basic banking accounts. The bank is authorized to deduct service charges (incidental charges) on current accounts levied through its half yearly schedule of charges, in case the average balance falls below the minimum balance as prescribed by the bank. No balance maintenance condition is applied on basic banking account. PLS (Term Deposits) The PLS Term Deposit is non-interest bearing techniques. It is also called time liability because it is kept for a certain period of time by the bank. Initially this type of deposit was called as fixed deposits but after the islamization of banking system in 1985, its name has been changed from fixed to PLS Terms Deposit. deposit Deposits that can be withdrawn after a specified period of time are referred to as Fixed or Term Deposits. The period for which these deposits are kept by the bank ordinarily varies from three months to five years in


accordance with the agreement made between the customer and the banker. Profit/Return is paid to the depositors on all fixed or Time deposits, and the rate of profit/Return varies with the duration for which the amount is kept with the banker. By lending out or investing these funds, the bank earns more than the Profit/Return that it has to pay on them to the depositors. By giving an advance notice to the bank the deposit can be withdraw from the bank before the expiry of the period. Fixed deposit accounts have higher rate of interest as compare to other accounts. The rate of interest rises with the length of period and the amount of deposit. The bank grants to the depositor a fix deposit (FDR) which is not transferable to any other person. Foreign Currency Account Government of Pakistan has introduced many important reforms in Foreign Exchange Control in the country since February, 1990, for the purpose of strengthening the Foreign Exchange Reserves. One of these reforms relates to foreign currency accounts, which can be opened in United States Dollars, Pound Sterling, Euro and Japanese Yen in any of the authorized branches of commercial banks throughout the country. Foreign currency accounts are opened, on proper introduction and submission of required documents along with an initial deposit prescribed from time to time. Rates of return on foreign currency deposits are subject to fluctuation as determined in accordance with State Bank of Pakistan directives and will be paid on six monthly basis whereas the return on term deposit/SNTD will be paid on maturity or as prescribed by SBP. The bank shall have no responsibility for or liability to the account holders for any diminution due to taxes imposed or depreciation in the value of funds


credited to the account whether due to devaluation or fluctuation in the exchange rate or other wise. NBP Premium Amadani
Monthly Income Scheme

Earn up to 11% p.a. Minimum deposit of Rs. 20,000/- and a maximum deposit of Rs. 5,000,000/- for 5 years Free Demand Draft, Pay Order and Cheque Book* Convenience of NBP online Aasan Banking (for online banking customers) Free NBP Cash Card (ATM+Debit) Running finance facility up to 90% National Income Daily Account (NIDA) The scheme was launched in December 1995 to attract corporate customers. It is a current account scheme and is part of the profit and loss system of accounts in operation throughout the country. Rs. 2 Million is needed to open the account with no maximum limit. Profit is paid on a half-yearly basis on a monthly average balance. The rates of profit vary according to the slabs of deposit. On Deposits of Rs.2 million Rs.2,000 million, the rate fluctuates from 7.50% to 8.75%. It is a checking accountant there is no limit of withdrawals.


3.4.2 ADVANCES National Bank of Pakistan plays a pivotal role in translating the government's development plans in terms of growth in industrial, commercial and agricultural sectors in Pakistan. Accordingly the Bank has formulated its Credit Policy under the guidelines of SBP-the Central Bank of Pakistan. NBP Saibaan The NBP Saibaan is retail product of the bank. It has different product items which are home purchase, home construction, home renovation and purchase of land plus construction. If anyone has a Home Finance Facility outstanding with another bank he can have it transferred to NBP through a hassle-free process. NBP Advance Salary The NBP Advance salary has been the flag-ship product for NBP. NBP Advance Salary, the leading personal loan product of the country, is maintaining its inimitability ever since it was launched. This was only possible due to its swift growth and remarkable loan disbursement of over 118 billion. You can avail up to 20 net take home salaries with easy repayment installments. Its hassle free acquisition with no prior formalities and easy availability in a short turn around time is attributed as the most distinguishing features of the product. The product is offered countrywide. The terms and conditions of NBP Advance salary is shown on next page:

29 Terms & Conditions Eligibility Permanent Employees of Govt., Semi-Govt., Autonomous, Semi Autonomous, Local & other bodies who are maintaining their Salary A/Cs at NBP. Repayment Direct deduction from Salary A/C Maximum Loan Amount Rs. 490,000/Security Employer will provide undertaking that borrowers Salary and end of service benefits will route through his/her Salary A/C maintained at NBP during the tenure of the loan and his/her end of service benefits are at least equal to the amount of Advance Salary required. NBPs Cash & Gold NBPs Cash & Gold, the customers meet their need for ready cash against their idle gold jewelry. The rate of mark up is 13% p.a. This product has following features. Facility of Rs. 7,000 against each 10 grams of net contents of gold. No maximum limits of cash Repayment after one year only gold ornaments acceptable Weight and quality of gold to be determined by NBP's appointed scruffs. Student loan scheme Pursuant to the announcement made by the Federal Finance Minister in his 2001-2002 budget speech, a Student Loan Scheme (SLS) for Education was launched by the Government of Pakistan in collaboration with major commercial banks of Pakistan (NBP, HBL, UBL, MCB and ABL). Under


the Scheme, financial assistance is provided by way of Interest Free Loans to the meritorious students who have financial constraints for pursuing their studies in Scientific, Technical and Professional education within Pakistan. The Scheme is being administered by a high powered committee comprising Deputy Governor, State Bank of Pakistan, Presidents of the commercial banks and representative of Ministry of Finance, Government of Pakistan. NBP Karobar Mera Apna Karobar Minimum down payment, 10% of asset price (5% for PCO & Telecaster) Tenure 1 to 5 years (for PCO 2 years) Grace period 3 months Maximum loan amount Rs. 200,000/ Age 18-45 years Mark-up (variable) 1 year KIBOR + 2.00% p.a. The customer will pay markup @ 6% p.a., rest will be borne by GOP* Life & disability insurance paid by GOP 3.4.3 CORPORATE ADVANCES Cash finance This is a very common form of borrowing by commercial and industrial concern and is made available either against pledge or hypothecation of goods, produce or merchandise. In cash finance, a borrower is allowed to


borrow money from the banker up to a certain limit, either at once or as and when required. The borrower prefers this form of lending due to the facility of paying markup/services charges only on the amount he actually utilizes. If the borrower does not utilize the full limit, the banker has to lose return on the un-utilized amount. In order to offset this loss, the banker may provide for a suitable clause in the cash finance agreement, according to which the borrower has to pay markup/service charges on at least on self or one quarter of the amount of cash finance limit allowed to him even when he does not utilize that amount. Running Finance This is the most common form of bank lending. When a borrower requires temporary accommodation his banker allows withdrawals on his account in excess of the balance which the borrowing customer has in credit, and an overdraft thus occurs. This accommodation is generally allowed against collateral securities. When it is against collateral securities it is called Secured Overdraft and when the borrowing customer cannot offer any collateral security except his personal security, the accommodation is called a Clean Overdraft. The borrowing customer is in an advantageous position in an overdraft, because he has to pay service charges only on the balance outstanding against him. The main difference between a cash finance and overdraft lies in the fact that cash finance is a bank finance used for long term by commercial and industrial concern on regular basis

32 Finance When a customer borrows from a banker a fixed amount repayable either in periodic installments or in lump sum at a fixed future time, it is called a loan. When bankers allow loans to their customers against collateral securities they are called secured loans and when no collateral security is taken they are called clean loans. The amount of loan is placed at the borrowers disposal in lump sum for the period agreed upon, and the borrowing customer has to pay interest on the entire amount. Thus the borrower gets a fixed amount of money for his use, while the banker feels satisfied in lending money in fixed amounts for definite short periods against a satisfactory security.

3.4.4REMITTANCES draft

Drafts drawn by one branch on another branch or on the Head Office of same bank or vice versa, are not cheques or bills, as these have no distinct drawer and drawee. Section 85-A reads: Where any draft, that is, an order to pay money, drawn by one office of bank upon another office of the same bank for a sum of money payable to order on demand, purports to be issued by or on behalf of the payee, the bank is discharged by payment in due course.

33 Travelers cheques They are generally issued for the convenience of person travelling abroad, but some Pakistani banks issue them in Pakistan currency also for use within the country as well. Before issuing, the bankers receive an amount equal to the face value of the cheques, and also charge a small commission. The travelers cheques are for fixed amount and are treated as Order cheques payable only to the purchaser whose specimen signature appears on each travelers cheque itself. Foreign currency travelers cheques are issued and encashed in accordance with the provisions of the Exchange Control Regulation Act, 1947. While making payment, the paying banker must insist that the holder signs in his presence. Letters of credit Letters of credit are very useful instruments in facilitating commercial relations between businessmen at various places. Letter of credit state the limit of the credit and the time during which it is held at the disposal of the grantee, but they are neither negotiable nor transferable. Letter of credit may be revocable. There are many kinds of letter of credit such as Revolving credit, Back to Back credit, Claused credit etc. NBP is committed to offering its business customers the widest range of options in the area of money transfer. If you are a commercial enterprise then our Letter of Credit service is just what you are looking for. With competitive rates, security, and ease of transaction, NBP Letters of Credit are the best way to do your business transactions

34 remittances To facilitate its customers in the area of Home Remittances, National Bank of Pakistan has taken a number of measures to: Increase home remittances beneficiaries. Mail transfer A Mail Transfer is a form of remittance in which the amount remitted by a customer or a non-customer is directly credited to the account of the beneficiary with another branch. Move your money safely and quickly using NBP Mail Transfer service. And NBP also offer the most competitive rates in the market. They charges Rs 50/- exchange rate and RS 75/- postage charges on issuing mail transfer. When the money is not required immediately, the remittances can also be made by mail transfer (MT). Here the selling office of the bank sends instructions in writing by mail to the paying bank for the payment of a specified amount of money. Debiting to the buyers account at the selling office and crediting to the recipients account at the paying bank make the payment under this transfer. NBP taxes mail charges from the applicant where no excise duty is charged. Postage charges on mail transfer are actual minimum Rs. 40/if sent by registered post locally Rs.40/- if sent by registered post inland on partys request. through the banking system. Meet the SBP directives/instructions for timely and prompt delivery of remittances to the

35 Telegraphic Transfer Telegraphic Transfer is a form of remittance, which is advised by telegram, telex or fax machines. The fundamental principles of such transfer are otherwise identical with the Mail Transfer. It is the message, which is sent from one branch to another on the order of payer to payee through wire. It is one of the quickest means to transfer fund through the use of telex/fax/internet or cable. Payment to the beneficiary is affected directly by the drawee office upon identification or through credit into beneficiarys bank account. As such remitting office is not required to issue any instrument payment to the remitter for delivery to the beneficiary. Pay Order NBP provides another reason to transfer your money using our facilities. NBP pay orders are a secure and easy way to move your money from one place to another. And, as usual, NBP charges for this service are extremely competitive. The charges of NBP are very low all over the Pakistan. It charges Rs 50/- for NBP account holders on issuing one payment order, and charges Rs 100/- for NBP non-account holders on issuing one payment order. It charges Rs 25/- for students on payment of fees of educational institutions. If some one want a duplicate of payment order they charges Rs 100/- for NBP account holders and Rs 150/- for non account holders. MI5


3.4.5MISCELLANEOUS Lockers National of Pakistan also provides lockers facility in the country. The lockers issued only to the depositors. No lockers are issued to any unknown person. The dual control system is used for lockers. The officer has master key to apply on the locker but he cannot open the locker of any person. The locker holder provides the bank has specimen signature. Whenever the locker holders come to open the locker, his signatures are verified by the officer and then will be able to open his locker. If the key of the locker is lost company providing these lockers breaks the locker and new lock is fitted in its locker and lock is destroyed in the presence of the locker holder and bank charges RS 1200 for that. In case the locker holder dies, the court opens his locker in the presence of his heir as mentioned in his will or and his belongings are given to them and the locker is closed. NBP cash card NBP Cash Card is a 24-hour direct access ATM/Debit card to your bank account, which lets you pay directly from your account as an alternative payment method to cash. The transaction is authorized and processed by entering PIN. The NBP Cash Card holders are able to transact at any of the 4000 + Merchants where Orix logo is displayed and can withdraw cash from NBP, 1-Link & M-NET ATMs across the country.

37 International banking National Bank of Pakistan is at the forefront of international banking in Pakistan which is proven by the fact that NBP has its branches in all of the major financial capitals of the world. Additionally, the Bank has recently set up the Financial Institution Wing, which is placed under the Risk Management Group.


The opening of an account is the establishment of banker customer relationship. Before a banker open a new account, the banker should determine the prospective customers integrity, respectability, occupation and the nature of business by the introductory references given at the time of account opening. Preliminary investigation is necessary because of the following reasons. Avoiding frauds Safeguard against unintended overdraft. Negligence. Inquiries about clients.

3.5.1 FORMAL APPLICATION: The customers are to fill in an account opening form. It is a formal request by a customer to the bank to allow him to have and operate the account.


3.5.2 OBTAINING INTRODUCTION: The bank before opening an account obtains introduction of the customer from an old customer. 3.5.3 SPECIMEN SIGNATURE: The customer gives the banker a specimen signature generally taken on a card specially designed for the purpose, and rules for the customer, full name and account number are entered on it. It expresses customers authority for the payment of cheques drawn on his banker. 3.5.4 MINIMUM INITIAL DEPOSIT: The customer must have to maintain the minimum amount with the bank according to the requirements. 3.5.5 QUALIFICATION OF A CUSTOMER: The relation of the banker and the customer is purely a contractual one. However, he must have the following basic qualifications He must be of the age of majority. He must be of sound mind. He must not be disqualified by law. The agreement should be made for lawful object, which create legal relationship. Not expressly declared void.



The different types of accounts being generally opened by a bank are as follows: 3.6.1 INDIVIDUAL ACCOUNTS The accounts opened in the name of one person are called individual or personal account. While opening the individual account, the details about following columns should be taken carefully: Occupation Address Special instructions Next of kin Copy of N.I.C.

3.6.2 PARTNERSHIP FIRMS ACCOUNT As per section 4 of the Partnership Act, 1932: Partnership is the relation between persons who have agreed to share the profits of the business, carried on by all or any of them acting for all. A partner is the agent of the firm having powers to execute transactions for the purpose of the business of the firm. A retiring partner has no liability so far as the transactions after retirement are concerned, if a notice of such retirement has been given to the bank. Otherwise, the retiring partner continues to be liable, even for finances made after his/her retirement.


In case of the death of a partner, the firm will be dissolved. The account should therefore, be closed and a new account will be opened with the remaining partners. The following procedure and documents should be taken: The names of all partners should be written in AOF. Specimen signatures of all partners. On SS card & on form A only authorized person(s) will sign. Letter of partnership should be obtained. If the firm wants to authorize manager to operate the account then they will sign the Form CD 55 and the bank will send Form 62 to all partners for confirmation. Partnership deed should be obtained (not necessary). 3.7.3 JOINT ACCOUNTS The account in the name of more than one person is called joint account. The account shall be operated on by: Any one singly or survivor or either or survivor(s). Any two or jointly or survivor(s). All jointly or survivor(s). The survivorship mandate should be taken. Signature of all partners at the specified places.

3.6.4 JOINT STOCK COMPANIES ACCOUNT All companies having been formed by incorporation under Companies Ordinance, 1984. It is an artificial person created by law and the assent of this artificial person is signified by means of a common seal and perpetual succession. Just like an individual, it can hold property and incur debits. It


can sue and can be sued in the same way as that of an individual. Bank is a joint stock company registered under companys act 1984. While opening the account of the company the following documents should be taken: Attested copy of the N.I.C of each Director. Copy of the Certificate of Incorporation. Copy of Memorandum and Articles of Association. Copy of the Resolution of the Board of Directors. List containing the names and signatures of the Directors. Copy of the Commencement of Business (in case of public limited company). Audited Balance Sheet.

3.6.5 ASSOCIATIONS, SOCIETIES & CLUBS ACCOUNTS Accounts are often opened in the names of non-trading institutions such as Clubs, association, schools, committee, funds and Unions. The following documents should be taken: Attested copies of N.I.C of all the office bearers. Certified Copy of the bye-laws or rules & regulations. Copy of the Resolution of the Governing Body/Managing Committee. Account opening form duly signed by the authorized persons. List containing the names, addresses and signatures of the Directors.


3.6.6 PROPRIETARY FIRMS ACCOUNT A firm owned by one person is called proprietary firm or solo proprietor. Only Current A/C is opened for the proprietary firms. The following procedure should be followed: Take the solo proprietorship form from the customer. The signature of the sole proprietor is obtained in his/ her personal capacity under the declaration. If He wants to give authority to some other person to operate the account He will sign the Form CD 55. In case of death of the proprietor, any authority given to any one will be ceased. 3.6.7 TRUST ACCOUNT A Trust has been defined in section 3 of Trust Act, 1882, in the following terms: A Trust is an obligation annexed to the ownership of property and arising out of a confidence proposed in and accepted by him for the benefit of another, or of another and the owner. Any person who is competent to contract may create a Trust which must be for a property transferable to the beneficiary. The account should be opened in the name of Trust and all the trustees should sign the accountopening form. The banker should examine the Instrument of Trust very carefully, and a copy of it should be kept on record.



The NBP Faqir Abad was established on 22nd Feb, 1990 under section 28(1) of banking Companys ordinance 1962. Under this section the NBP was allowed to open a new place of FAQIR ABAD SHAKARDARA subject to condition mention in the office letter No 623/850-1NBP-90.

The branch staff is consist of 10 employees Manager. The manager of the Branch is Mian Shahid Gul OGII MTO. The MTO of branch is Afaq Anwer OG II. Cashier The cashier of the branch is Akhter Mehmood OG II. Assistant Clerk Mr Ishfaq Ahmad is working as a Assistant Clerk in the branch. .Bank Guard Mr Farid Gul is working as a bank guard. Messenger The messenger of branch is Mr Abdul Manan.


Temporary Staff Abid hussain, Saleem khan and Imtiaz khan are working as a temporary staff.


National Bank of Pakistan maintains its position as Pakistans premier Bank determined to set higher standards of achievements. It is the major business partner for the Government of Pakistan with special emphasis on fostering Pakistans economic growth through aggressive and balanced lending policies, technologically oriented products and services offered through its large network of 1,189 (2001:1230) branches. National Bank classifies deposits on the basis of duration and purpose for which these are kept with the bank. The products offering by NBP Faqir Abad are following. 4.3.1 PLS (Saving Deposits) PLS means Profit and Loss sharing Account. Here the bank shares with the customer the profit or loss resulting from investment of customers funds along with the banks pool of funds. 4.3.2 National Income Daily Account (NIDA) It is a current account scheme and is part of the profit and loss system of accounts in operation throughout the country. Rs. 2 Million is needed to


open the account with no maximum limit. Profit is paid on a half-yearly basis on a monthly average balance. The rates of profit vary according to the slabs of deposit. 4.3.3 PLS (Term Deposits) The PLS Term Deposit is non-interest bearing techniques. It is also called time liability because it is kept for a certain period of time by the bank. Initially this type of deposit was called as fixed deposits but after the islamization of banking system in 1985, its name has been changed from fixed to PLS Terms Deposit. 4.3.4 Current Deposits A current account is that account which is payable on demand. A holder can withdraw the money on any date during working hours without giving any prior notice to the bank. That is why the bank has to keep sufficient funds to meet uncertain funds of the current account holder. 4.3.5 Call Deposit Account It means the deposit from which the money deposited can be withdrawn at any time by presenting receipt of call deposit issued from the bank. The purpose of these deposits is to serve as a guarantee provided by bank to any department either public or private in taking or giving tenders. This type of account is for the purpose of to participate in tender bid; contractors are required to deposit a certain amount or percentage of the tender amount along with the tender documents for which Call Deposit


Receipt are issued by Banks. Call deposit are return free. When a contractor requires such a receipt, He approaches his bank for the issuance of Call Deposit Receipt.

The branch offering three types of loans 4.4.1 NBP Advance salary. This is 100% secure loan. Usually interest rate on such type of loan nowadays is 18.50%. 4.4.2 Gold Finance This ia also 100% secure loan. Such type loan is given against gold when customer place gold with branch. 4.4.3 Agriculture loan. The branch also provides agriculture loans to customers. Usually interest rate on such type loan is 15.50%. Such type of loans is given for two purposes. a) Production purposes Production purpose means customer get loan from bank in order to plough his fields or in order to buy fertilizers for his field. Such type of loans is given for ONE year. b) Development purposes Development purposes means in order to buy tractors etc bank give loan to customer. Such type of loan is given usually for FIVE years.


Three types of Audit are done in branch. 4.5.1 Regional inspector audit. Such type of audit is done on monthly bases. 4.5.2 Surprise audit. Surprise audit is done after six months. 4.5.3 Annual audit. Annual audit is done at end of year.


Table .1 PLS saving Account. Total accounts Closed accounts Deceased accounts No profit accounts Zakat exempted accounts Staff accounts Customer accounts Operative accounts In operative accounts Dormant accounts W.H.Tax exempted accounts Lien marked accounts Salary accounts 8180 3955 12 24 2417 9 4216 2339 787 1099 0 22 404

Source; Primary data of NBP Shakardara Branch


Table .2Description Description Zero balance <5000 >5000 & <10000 >10000 & <20000 >20000& <50000 >50000& <75000 >75000& <100000 >100000& <500000 >500000& <1000000 >1000000 Total No of accounts 0 1117 622 421 462 214 122 424 38 9 4225 Balance amount 0 1,269,785.33 4,117,234.33 5,821,512.13 15,043,863.93 13,127,880.83 10,459,230.45 84,559,006.83 25,536,132.77 12,139,546.38 172,074,193.00

Source; Primary data of NBP Shakardara Branch Table.3 Current account Total accounts 1036 Closed accounts 1069 Deceased accounts 0 Staff accounts 8 Customer accounts 229 Operative accounts 105 In operative accounts 67 Dormant accounts 65 Lien marked accounts 0 Salary accounts 4 Source; Primary data of NBP Shakardara Branch Table .4 Description Description Zero balance <5000 >5000 & <10000 >10000 & <20000 >20000& <50000 >50000& <75000 No of accounts 67 73 30 13 19 07 Balance amount 0 113,818.58 208,562.91 187,640.48 630,137.32 430,604.174


>75000& <100000 >100000& <500000 >500000& <1000000 >1000000 Total

05 14 04 05 237

419,387.00 2,502,374.40 2,788,222.00 9,589,206.68 16,869,953.54

Source; Primary data of NBP Shakardara Branch Table .5 Advance salary accounts. Total account Closed account Deceased account Staff account Customer account 660 439 0 2 219

Source; Primary data of NBP Shakardara Branch


Table .6 Description Description Zero balance <5000 >5000 & <10000 >10000 & <20000 >20000& <50000 >50000& <75000 >75000& <100000 >100000& <500000 >500000& <1000000 >1000000 Total No of accounts 42 5 9 19 27 119 0 0 0 0 221 Balance amount 0 18,004.00 64,550.00 295,431.00 931,679.00 12,067,851.00 0 0 0 0 13,377,425.00

Source; Primary data of NBP Shakardara Branch


I have completed my practical training in NBP Faqir abad branch Shakardara (1743). For two months of the period of my training, I tried my best to study different things but it was difficult to done complete work in respect of all aspect of banking in all the departments during the period of 2 months internship training. However, I tried to deal in all the departments for the sake of practical knowledge. Major activities performed during my internship program are as follows:

Ist week
In the fist week I obtained general information regarding bank. I studied about checque the general for filling checque and obtain different


information about checque. I also became to know about the dormant and inoperative account. How accounts become dormant or inoperative. I also studied about different vouchers i.e. debt voucher, credit voucher, cash voucher, Transfer voucher etc.

2nd week
In this week I learned about SC (Short Credit), how it is originated.

3rd week
In this week I learned bout SC responding, how it is realized. There are different charges i.e. PNT charges, FED charges and commission charges. After deduction of these charges the remaining money is transferred to the costumer account.

4th week
In this week I work in account opening department. In this department, I gain the practical knowledge about opening account. This department deals with opening and closing of accounts for its customers and all matters regarding thereof. I studied different rules and regulation regarding opening of account. I also become know that, what are the initial requirements for opening an account in NBP.


5th week
In this week I learned about Draft, how is prepared. I also studied about payment order.

6th week
In this account week I learned about MT (Mail Transfer). I studied about all the rules and work practically on it.

7th week
In this week I study rule for making TT (Telegraphic Transfer).

8th week
In this week I try my best to know about BBO. I set with concerned Officer of branch and study different entries.



Rupees Ratio simply means one number expressed in term of another. A ratio is a statistical yardstick by means of which relationship between two or various figures can be compared or measured. The term accounting ratio is used to describe significant relationship between figures shown on a balance sheet, profit and loss account or in any other part of accounting organization. Accounting ratio thus shows the relationship between the accounting data. 5.1 LIQUIDITY RATIOS 5.1.1 Current Ratio Current asset Current liabilities 2009 Current assets Current liabilities Current ratio 40,454,911 10,621,169 3.8 2008 146,269,075 10,219,061 14.3


GRAPH 1; Current ratio

16 14 12 10 8 6 4 2 0 2009 2008 2009 2008

INTERPRETATION This measure the company ability to fulfill its short term loan, the higher the current ratio it would enable the company to meet its short term obligation. In 2008 this ratio is 14.3 which are decreased to 3.8 in 2009. 5.2 PROFITABILITY RATIOS 5.2.1 Gross Profit Margin X 100

Gross profit Sale

2009 Gross profit Sale Gross profit margin 46,737,332 97,234,129 48.00%

2008 29,551,184 77,835,294 37.4%


GRAPH 2; Gross Profit Margin

50 40 30 20 10 0

2009 2008



INTERPRETATION This ratio is percentage of sales dollar left after subtracting the cost of good sold from net sale. The ratio above shows the increasing trend in the gross profit since the ratio has increased from 37.4% in 2008 to 48.00% in 2009. This ratio indicate that in 2008 37.4% of sale $ left after subtracting cost of goods sold from the sale amount and in 2009 this percentage raised to 48.00%. This show favorable indication


5.2.2 Operating Profit Margin EBIT Sale 2009 EBIT Sale Operating profit margin GRAPH 3; Operating Profit Margin
30 25 20 15 10 5 0 2009 2008 2009 2008

X 100

2008 23,249,286 77,835,294 29.8%

22,219,286 97,234,129 22.8%

INTERPRETATION This ratio is percentage of sales dollar left after subtracting the cost of good sold from net sale and all operating expenses from net sale. This ratio measures the percentage of sale dollars remaining after paying all operating expenses. This ratio indicates that in 2008 29.8% of sale amount is remain after subtracting all operating expenses and in 2009 this amount is decrease to 22.8%.


5.2.3 Net Profit Margin EBT Sale 2009 EBT Sale NET profit margin GRAPH 4; Net Profit Margin
20.5 20 19.5 19 18.5 18 17.5 2009 2008 2009 2008

X 100 2008 15,684,054 77,835,294 20.1%

18,099,042 97,234,129 18.6%

INTERPRETATION In this case the higher the ratio, it would be better for organization. If there is problem in Net profit margin it means interest and taxes are more organization should control it. The above result show that in 2008 this ratio is 20.1% which is decrease to 18.6%.The decreasing Net Profit trend shows the managements inefficiencies to control the operating costs and maximize the profit with the effective and efficient use of available resources in 2009 as compare to 2008.


5.2.4 Return on Assets EBT___ Total assets 2009 EBT Total assets Return on assets GRAPH 5; Return on Assets 22198843 945903279 2.34% 2008 23249286 820077201 2.83 % X 100

3 2.5 2 1.5 1 0.5 0 2009 2008 2009 2008

INTERPRETATION This measure how efficiently profit is being generated from the assets employed in the business. Generally the higher the firms total asset turn over, the more efficiently its assets have been utilized. As we see that the ratio has decline from 2.8% to 2.34% in 2009 which show low performance from previous year.


5.2.5 Return on Equity ____EAT______ Equity holder fund 2009 EAT Equity holder fund Return on equity GRAPH 6; Return on Equity
15 14.98 14.96 14.94 14.92 14.9 14.88 14.86 14.84 2009 2008 2009 2008

X 100 2008 15684054 104,451,205 15.0%

18099042 121,442,552 14.9%

INTERPRETATION This ratio shows the profit attributable to the amount invested by the owners of the business. It also shows potential investors into the business what they might hope to receive as a return. The ratio indicates that in 2008 the return on equity is 15.00% which is decreased in 2009 up to 14.9%. Although it is slight decrease but organization should take notice.


5.2.6 Earning Per Sharing Net earnings X 100

No. of outstanding shares 2009 Earning per share 16.82 2008 14.57

GRAPH 7; Earning Per Sharing

35 30 25 20 15 10 5 0 2009 2008 2009 2008

INTERPRETATION The earning per share ratio is main indicator for future investor; the EPS show an upward trend which indicates that the company is performing well increased the EPS from 14.57% to 16.82% with in one year. For investor main interested ratio is earning per share because he want to know that whether the investment will give me return.


5.2.7 Return on Investment EAT Total asset 2009 EAT Total assets Return on investment GRAPH 8; Return on Investment
1.93 1.925 1.92 1.915 1.91 1.905 1.9 2009 2008 2009 2008

X 100 2008 15684054 820077201 1.91 %

18099042 945903279 1.93%

INTERPRETATION The ROI is perhaps the most important ratio of all. It is the percentage of return on funds invested in the business by its owners. In short this ratio tells the owner whether or not all the effort put into business has been worthwhile. The result indicates that there is slight increase in ROI from 1.91% in 2008 to 1.93% in 2009 which is favorable indication.


5.3 LEVERAGE RATIOS 5.3.1 Debt to Total Assets Total debts__ Total assets 2009 Total debts Total assets Debt to total assets GRAPH 9; Debt to Total Assets 824460717 945903269 86.1% 2008 715625996 820077201 87.2% X 100

87.2 87 86.8 86.6 86.4 86.2 86 85.8 85.6 2009 2008 2009 2008

INTERPRETATION The total debt to total asset ratio shows that how much portion of asset are financed by debt capital. This ratio mentioned above is decreasing which is positive side for the organization. In 2008 87.2% of assets are backed by debt capital, which is decreased up to 86.1%. Generally this ratio is acceptable up to 30% and when increased from this level it will perceive more risk exposure.


5.3.2 Debt to Total Equity Total debts Total equity 2009 Total debts Total equity Debt to total equity GRAPH 10; Debt to Total Equity
6.86 6.84 6.82 6.8 6.78 6.76 6.74 2009 2008 2009 2008

2008 715625996 104,451,205 6.85

824460717 121,442,552 6.78

INTERPRETATION This ratio measures the company ability to meet its long term obligation. This ratio throws light on the long term solvency of a company. Minimum the value come from ratio it would be better for organization. More debts and less equity there will be more chances of insolvency and high risk. In 2008 this ratio is 6.85 which are decreased to 6.78 in 2009 although it is slight difference but still it is positive sign.


5.3.3 Debt Payout Ratio Total debts Net income 2009 Total debts Net income Debt payout ratio GRAPH 11; Debt Payout Ratio
45.6 45.58 45.56 45.54 45.52 45.5 45.48 45.46 45.44 2009 2008

X 100 2008 715625996 15684054 45.6%

824460717 18099042 45.5%

2009 2008

INTERPRETATION This ratio indicate that if businesses divert all his net income towards the payment of debt how much times all net income will fully paid the debt capital. This ratio is almost same in both years.


5.3.4 Proprietor ratio

Share holder equity Total assets

X 100 2009 2008 104,451,205 820077201 12.7%

Share holder equity Total assets Proprietor ratio GRAPH 12; Proprietor ratio

121,442,552 945903269 12.8%

12.8 12.78 12.76 12.74 12.72 12.7 12.68 12.66 12.64 2009 2008 2009 2008

INTERPRETATION This ratio means that how much portion of assets is financed by share holder capital. This is the measure of financial strength that reflects the portion of capital which has been funded by share holder. Ratio indicates that 12.7% of total assets in 2008 are supplied by share holder and in 2009 it is 12.8%.


5.4 EFFICIENCY RATIOS 5.4.1 Current Asset Turnover X 100 2009 Sales Current assets Current asset turnover 97,234,129 40,454,911 2.40 2008 77,835,294 146,269,075 0.53

Sales__ Current assets

GRAPH 13; Current Asset Turnover

2.5 2 1.5 2009 1 0.5 0 2008



INTERPRETATION This ratio measures the efficiency in asset management. It expresses the relationship between sales and assets, showing the speed with which these assets generate sales. Generally the higher the ratio it is better for organization. in 2008 this ratio is 0.53 which is increased to means organization is in better in asset management as compare to previous year.



Fixed Asset Turnover X 100

Sale______ Fixed assets

2009 Sale Fixed asset Fixed asset turnover GRAPH 14 ;Fixed Asset Turnover
400 350 300 250 200 150 100 50 0 2009 2008 2009 2008

2008 77,835,294 24,271,964 320.6%

97,234,129 25,200,870 385.8%

INTERPRETATION The result obtained after calculation shows that in 2008 it is 320.6% which is increased to 385.8% in 2009. it means that organization is good in fixed asset management as compare to previous year.


5.4.3 Total Asset Turnover sSale ____ Total assets 2009 Sale Total assets Total asset turnover 97,234,129 945903269 10.2% 2008 77,835,294 820077201 9.4% x100

GRAPH 15; Total Asset Turnover

10.2 10 9.8 9.6 9.4 9.2 9 2009 2008 2009 2008

INTERPRETATION This ratio indicates that how efficiently the total assets are utilized by the business. The above result interpret that 10.2% of sale is earned by every single rupee of the total assets in 2008 which is decline to 9.4% in 2009 although it is slight difference but this is a good indication that business has improved the utilization of assets.



The SWOT analysis is done by the organization for the environmental scanning. The strength and weaknesses and opportunities and threats are analyzed by organization from the external environment. NBP SWOT analysis is given below:

The available internal resources and working that organization does well is called its strengths and unique skills are known as core competency. A National Bank brand image is its major strength. It has always been considered as the pillar of the country's economic scenario asset wise or balance sheet wise. Its image, work force, network and reputation have created a sentimental and emotional attachment of the people with the bank. 6.1.1Core competency NBP provides excellent financial and social services as compared to other major banks of Pakistan because it also focus on social aspects with the commercial aspects by targeting the low income groups as well Government institute. It provides the facility of government receipts and payments, utility bills collection, NBP advance salary and karobar schemes.


National bank has a wide network as compared to other banks in Pakistan both in rural and urban areas. Hence easy access to the customers at their residential localities through a high number of branches 6.1.3 Corporate Image National bank of Pakistan is a respectable institute having good public image. 6.1.4 Convenient for Govt. servants Convenience for armed forces personnel and government servants as all salaries of such categories are serviced by NBP. It is consider being a trustworthy and highly secure bank as it is also holds a large number of government accounts

6.1.5Strategic Top Management Fortunately NBP has got from time to time best top management. Currently the NBP a lot Chairman and as well as President S. Ali Raza Sahid he is the person who has saved the life of the organization and contributed


6.2 WEAKNESSES 6,2,1 Online branches National bank is in the process of up gradation of its branches to online. The major obstacle behind this is that national bank has covered a large geographical area while other banks are enjoying facility of online branches due to limited branch network 6,2,2 ATM branches Limited customers are availing the facility of ATM as compared to other banks. 6,2,3 R &D on Regional level R& D is the back bone of any organization regarding expansion and up gradation. National bank has the R& D department at head office level but on the region level it does not exists 6.2.4 up gradation of branches Modernization of branches is the main stream of today financial market. Slow pace has been seen regarding this in national bank of Pakistan. The branches lack proper focus on the infrastructure while the other banks like Bank Alfalah which is the trend setter in this regard.


6.2.5 Implementation of Modern Technology No implementation of modern technology which has rendered it unable to compete with the rest of the competitive and advanced commercial banks who are presently using the latest technology. 6.2.6 Staff colleges As national bank of Pakistan is expanding its network, it is compulsory to have at least one staff college at regional level to produce better human resource for new branches to be opened. 6.2.7 Poor Advertisement I keenly observe this that as compared to other banks. NBP is very poor in advertising itself and institution, which works a lot in the development of the country, but unfortunately in the business community most of the people are in award of it.

6.3 OPPORTUNITIES 6.3.1 Islamic banking Nowadays customers are giving preference to Islamic banking as compared to conventional banking therefore; all the major banks of the country are trying to tap this market segment.


6.3.2 Increase in market share National bank can further increase its market share by adopting mass marketing and promotional strategies. 6.3.3 Introduction of technology Today the banks in financial markets are adopting cut throat competition. National bank has all the resources to upgrade the existing branches, which is also the need of time tp provide maximum customer services and grab a major market share. 6.3.4 Increase in profit Expansion is a key to profit and through expansion we can achieve economies of scale that is reducing cost which will ultimately boost up our revenues 6.3.5 Increase in customer base With more and more online and ATM branches, we can attract new customer segments. 6.3.6 Availability of complaint cells The NBP should establish a complaint cell and suggestion boxes, so that customers as well as the employees are able to submit their complaints and suggestions which can further improve our customers services and upcoming strategies. 6.3.7 Goodwill and Better Image NBP has advantage of generating more deposits and attracting valuable customers due to its better image in the business community. NBP has


also advantage of increasing credit lines. This is only due to good dealing and better image that NBP has directly acquired those lines of credit from abroad that are only acquired by it, this better image can help further NBP in explanation of its activities. 6.4 THREATS 6.4.1 Competitors National Bank of Pakistan competitors like HBL which has a wide network of branches and all of their branches are online and they are giving national bank a though time and National bank has to work hard to compete with its competitors in the long run. 6.4.2 Political Factors As major decisions regarding National Bank of Pakistan are affected by political factors so political changes are major threats for NBP 6.4.3 Government Interference Government policies also affect the performance and major decisions of the whole organization. 6.4.4 Technological Threats Now a days technology is changing rapidly in the world. To cope with these changes, NBP has to become a trend setter by adopting those


technologies rather than the trend follower. Technology like online banking, mobile banking, ATM facilities, direct marketing etc 6.4.5 Globalization Pakistan financial market is facing a severe competition by interventions of foreign banks in the market. Foreign banks are coming with the modern technology, innovative products, excellent corporate and brand image, and high customer loyalty which is a major threat to NBP.
During my internship period at NBP Shakardara, I found out certain problems, which are written below which need proper attention of the top management:

These are given below:

1. IT system

This age is the age of information technology. Today the world has become a local village and the fastest mediums of communication are adopted all the world. And it is a fact that more the latest technology and methods of work as adopted more will be the productivity. In NBP Shakardara the IT system is not efficient. There is no Net facility the staff face problem while sending data to its region and there is shortage of computers. There is only one computer available for carrying on the business of the bank.

2. Evening Banking


I observed that the bank is closed for public dealing in after 12:30PM and then the staff do their own banking jobs.

3. Staff Shortage: I discussed with bank personnel and they gave their views about staff shortage. They told me that staff is very short and all the staff is overloaded with work. Thats why the staff posted in the branch has to face many problems to finish its daily work. 4. Counter for Females There is no counter for female. The women in Shakardara are very reserve in nature and are also pardah observing thats why they hesitate to come in the bank and those who come hesitate to talk with male staff. 5. Building In shakardara there are two banks one is NBP and another is HBL. I personally observed that most of people of shakardara prefer NBP as Compare to HBL. The biggest reason is, that the resident of shakardara are mostly government servants and salaried persons, and all of us know that NBP is consider to trustworthy and highly Secure bank as is also holds a large number of Govt accounts. As all people depends on NBP but still there is no proper building of Branch. The building of branch is very small and people face problems.


6. Promotion: I observed those employees; particularly officers are not satisfied with promotion policies. There is no clear-cut promotion policy of National Bank.



After analysis of organization, the following results are obtained 1. The current ratio of NBP show decreasing trend. This ratio is decreased in 2009 as compare to previous year. This ratio measure the company ability to fulfill its short term loan it means that organization must improves it. 2. The gross profit ratio shows the increasing trend in the gross profit in 2009 as compare to previous year. This ratio is percentage of sales dollar left after subtracting the cost of good sold from net sale. 3. The operating profit margin of the NBP has decreased in 2009 as compare to 2008 which means that the organization should decreased the expenses to over come this problem. 4. Net profit margin is decreased in 2009 as compare to 2008. The decreasing Net Profit trend shows the managements inefficiencies to control the operating costs and maximize the profit with the effective and efficient use of available resources in 2009 as compare to 2008.


5. The return on asset ratio measure how efficiently profit is being generated from the assets employed in the business. The result obtained after calculation show decreasing trend in 2009.altough it is slight difference but organization should take action to improve.

6. In 2009 the return on equity ratio is decrease in 2009 as compare to previous year which is not favorable indication. 7. The earning per share ratio is main indicator for future investor; the EPS show an upward trend which indicates that the company is performing well. 8. The result obtained from return on investment ratio indicates that there is slight increase in ROI in 2009 which is favorable indication. This ratio tells the owner whether or not all the effort put into business has been worthwhile. 9. As for as debt to total asset is concerned it show decreasing trend in 2009 which is positive side for the organization. 10. The debt to total equity ratio is decreased in 2009 as compare to previous year. It is also a good sign organization must improve further. 11. The proprietor ratio is the measure of financial strength that reflects the portion of capital which has been funded by shareholder. The result obtained is almost similar in both years.


12. The current asset turn over ratio show increasing trend in 2009 as compare to 2008 which is again a positive sign for organization. 13. The fixed asset turn over ratio also increase in 2009 as compare to previous year. It means that organization has utilized its fixed assets better in 2009. 14. The total asset turn over ratio increase in 2009 as compare to previous year although it is slight increases but this is compare to 2008 again its is positive sign. 15. In case of NBP Limited customers are availing the facility of ATM as compared to other banks. There is on Branch of NBP in Peshawar city heaving ATM Mashine.The major obstacle behind this is that national bank has covered a large geographical area while other banks are enjoying facility of online branches due to limited branch network 16. Modernization of branches is the main stream of today financial market. The NBP branches lack proper focus on the infrastructure while the other banks like Bank Alfalah which is the trend setter in this regard. 17. In case of NBP there is no implementation of modern technology which has rendered it unable to compete with the rest of the good indication that business has utilized its total assets efficiently as


competitive and advanced commercial banks who are presently using the latest technology. 18. I keenly observe this that as compared to other banks NBP is very poor in advertising which is key factor in order to compete in the market.

1. As operating profit of organization decreases in 2009 it means that there is problem in general and administrative expenses In order to overcome this problem organization must reduced its general and administrative expense. 2. The Net profit margin of NBP is also decline in 2009 as compare to 2008. in order to improve the net profit margin ratio the organization should reduced interest expenses and taxes. Due to increase in the interest expenses and taxes the net profit margin is affected. Hence organization should reduce interest expenses by using their own equity and in order to reduce taxes organization should use such method of deprecation which reduces taxes. 3. The return on investment ratio also decreased in 2009. It means organization is not using their assets efficiently hence organization should check it that where is fault and try to remove in order to improve in future.


4. The return on equity ratio also decreases although there is slight decrease in this ratio but organization should take notice of it because this ratio is very important. 5. National bank has covered a large geographical area thats why most of its branches are not online. The NBP should consider this deficiency and remove its in future in order to compete in market. 6. Incase of NBP there is no ATM facility. ATM facility should be provided in future. 7. NBP should introduce modern technology because rests of the banks are using modern technology for conveniences of customer. So in order to operate and capture market the NBP should implement modern technology if NBP did not do this they will loose the market. 8. As national bank of Pakistan is expanding its network, it is compulsory to have at least one staff college at regional level to produce better human resource for new branches to be opened 9. Advertising plays a key role in successful business. NBP is very poor in advertising. In order to compete in market NBP should focus on advertising to aware ordinary people about its products. 10. Nowadays customers are giving preference to Islamic banking as compared to conventional banking therefore NBP should introduce Islamic banking.


During my internship period I observed certain problems in NBP Faqirabad Shakadara. The recommendations are given below; i. Proper IT system should be introduced in NBP Faqir abad Shakardara. As there is no net facility the staff faces problems whiling sending data to its region. Apart from this computer must be pervaded to branch because there is deficiency of computers. I suggest that computer should b on every counter of the branch and they should interlink together (net Working) so various services provided by branch can provide in more efficient and fast way. ii. More staff should be hired because in NBP Shakardara branch shortage of staff is serious problem because all tha staff are over loaded with work. Hence the number of staff in branch should be increased so that they can meet customer requirement quickly and efficiently.
iii. The counter for female should be introduced because women in Shakardara are very reserve in nature and are also pardah observing thats why they hesitate to come in the bank and those who come hesitate to talk with male staff. iv. Proper building should be constructed for branch because the existing building of branch is very small. v. I suggest that there should be a clear cut policy about the promotion of employees particularly for officers and they must aware of it that is polices must be communicated. When polices are communicated to employees than they can perform their task efficiently and will utilize their full efforts.



There are so many recommendations which I have given in the previous chapter. Among these recommendations I give implementation of most important. There are two implementation for NBP and two for NBP Faqir abad Shakardara. 8.1 ATM FACILITY

It is mentioned in the previous chapter that NBP should provide ATM facility in Branches. NBP will provide this facility first all in major cities. In order to implement following steps will be taken.

1. Steps to be taken o First of all NBP will consult the ATM manufacturing company. 2. Resources The resources required are o Monetary Funds o Time o Management o ATM manufacturing company o Human Resource


o Technicians 3. Fund Required First of all NBP will provide ATM facility to 50 Branches. The price of one ATM machine = 10000000

Total charges on 50 machines 4, Timeline

= 10000000* 50 = 500 million

The time required will be about 1.5 years.

It is also mentioned in recommendation that NBP is poor in advertisement. So in order to implement this following step will be taken. 1. Steps to be taken o Consult the Ad Making Companies. First of all use the electronic media and print media


2. Resources The resources required are o Monetary Funds o Time o Management o Human Resource o Ad Making Companies o TV channels & newspapers

3. Fund Required About 50 million Pakistani Rupees will be Required. 4. Timeline The time required will be about 1 year.


It is mention in recommendation that NBP Faqir abad Shakardara should introduce female staff because woman in Shakardara are very reserve in nature and also pardah observing. To implement this following steps to be taken.


1. Steps to be taken o Published Add in newspapers for the vacancy of female staff, o conducting interview o selection of staff 1. Resources The resources required are o o o o Monetary Funds Time Management Human Resource

4. Fund Required As advertisement of job will be done only in KPK therefore fund require is not so much about 50000 Pakistani Rupees will be Required. 2. Time The time required will be about 3 months

It is also mention in recommendation that IT system of NBP Faqir abad Shakardara is not efficient. There is no Net Facility and only one Computer in Branch. To implement is steps should be taken are following.


1. Steps to be taken o NBP will consult IT Companies. 2, Resources The resources required are o Monetary Funds o Time o Management o Human Resource 3. Fund required Price of one computer Total no of counters Net Facility charges Transportation charges Total fund required 4. Time The time required will be about 3 months = 20000 =6 = 10000 = 2000 = 132000

Total price of computers = 20000*6 = 120000



S.No 1 2 3 Name Mian Shahid Gul Akhtar Mehmood Afaq Anwar Khattak Designation Manager Cashier MTO


o Van Horne James C and JR Wachowicz John M. (1998). Financial management. Prentice Hall Publication. Page 126-150 o Block, Stanley B and Hirt Geoffrey A (1994). Foundations of Financial Management. Page 121-148 o S Kevin professor of commerce university of Kerala Trivandrum portfolio management page no 44 48 o Nasir, M Saeed.(1998).banking of currency and finance. Pakistan kitab markaz o Kenney, R. D and S. Y. Mc Mullen. (1978). 6th Edition. Financial Statements: Form, Analysis, and Interpretation. London: IrwinDorsey International

Van Horne, J. C, and J. M. Wachowicz. 10th Edition. (1998). Fundamentals of Financial Management. New York: Prentice-Hall international, Inc

o National Bank of Pakistan, statement of asset and liabilities, statement of profit and loss (2008, 2009) o National Bank of Pakistan, Annual report (2008, 2009) o Html o o,financialanalysis/ o o o



Balance sheet At December 31, 2009 Rupees in 000 Assets
Cash and balance with treasury bank Balance with other banks Lending to financial institution Investment net Advance net Operating fixed assets Deferred tax asset Other assets

116,668,514 28,786,397 19,683,526 217596,037 475,338,439 25,200,870 3,064,459 59,565,027

106,778,346 39,490,729 17,139,081 171,204,890 314,076,390 24,271,964 3,203,565 44,912,236

Total assets Liabilities

Bills payable Borrowing Deposits and other accounts Liabilities against assets subject to finance lease Other liabilities

10,621,169 44,828,138 726,513,013 42,629 42,455,768

10,219,061 40,044,291 625,349,269 25,274 39,988,101

Total liabilities Net assets Owners Equity

Share capital Reserves Unappropriated profit Total equity to share holder of bank Minority interest Surplus on revolution of assets

824,460,717 121,442,552
10,763,702 23,395,059 53,346,954 96,505,355 110,930 96,616,285 24,826,267

715,625,996 104,451,205
8,969,751 20,476,863 53,567,323 83,013,937 112,699 83,126,636 21,324,569




Profit and loss account For the year ended Dec 31, 2009 Rupees 000 2009
Mark up/return/interest earned Mark up/return/interest expanse Net mark up /interest income Provision against non performing loan and advance Provision for diminution in the value of investment net Provision against off balance sheet obligation Bad debts written off directly Net mark up/interest income after provision Non mark up / interest income Fee commission and brokerage income Dividend income Income from dealing with foreign currencies Gain on sale and redemption of securities net Unrealized gain on revolution of investment classified as hold for trading Share of (losses)/profit from joint venture Share of profits from associates net of tax Other income Total non mark up/interest income Non markup interest expense Administration expense Other provision Other charges 78,124,796 39,448,291 38,676,505 11,148,773 651,282 20,234 11,820,292

61,151,818 23,877,804 37,274,014 10,634,367 371,729 4000 11,010,096



8,996,,973 1,896,8217 3,103,673 4,593,041 2335 (41,715) 5,238 552,950 19,109,333 45,965,546 22,816,665 628,391 321,947 22,198,834

7,985,547 2,887,314 4,021,064 367,118 1707 128,533 6290 1,255,903 16,683,476 42,947,394 18,363,344 751,403 583,361 23,249,286


Total non mark up / interest expense Extra ordinary / unusual item



Profit before Taxation

Taxation Current Prior year Deferred 9,261,621 (4,137,307) (1,024,513) 4,099,801 11,797,821 (1813) (4,230,776) 7,565,232

Profit after taxation

Basic earning per share