Sie sind auf Seite 1von 163

INTERNSHIP REPORT ON ASKARI BANK LTD

(Tufail Road Branch)

Submitted by:

SARA NAEEM BBA (Hons) 345

Session:

2009-2013

Department Of Management Sciences

Lahore College for Women University Lahore

INTERNSHIP REPORT

INTERNSHIP REPORT

LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

INTERNSHIP REPORT ON ASKARI BANK LTD (TUFAIL ROAD BRANCH)

Submitted by:

Sara Naeem BBA-8 345

Year of submission: 2013 Supervisor: Miss Malahat Jatoi

Department Of Management Sciences Lahore College for Women University Lahore

LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

INTERNSHIP REPORT ON ASKARI BANK LTD (TUFAIL ROAD BRANCH)

Submitted by SARA NAEEM

Supervisor MISS MALAHAT JATOI

Registrar Dr. S.E BENJAMIN

LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

DECLARATION
An Internship report submitted to the department of Management sciences, Lahore College For Women University, Lahore in partial fulfillment of the requirement for the degree of BBA / MBA

LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

DEDICATION
I dedicate my report to my parents and my teachers who helped me in the completion of such a lengthy and complicated project.

LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

PREFACE

The main purpose of the internship is to fulfill the academic requirements of my study. It encourages learning with emphasis on assigned projects. Besides this, the other purpose is to give a comprehensive review of ACBL. The most important point in an Internship Program is that the student should spend their time in a true manner and with the spirit to learn practical orientation of theoretical study framework. This report is about my internship that I have undergone at Askari Commercial Bank Limited Tufail Road Branch from 30th July 2012 to 11th September 2012. During my internship I was able to learn practical aspect of business, and get good working experience.

LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

TABLE OF CONTENTS
Chapter
1

Topic INTRODUCTION
HISTORY & BACKGROUND VISSION / MISSION STATEMENT CORPORATE PHILOSOPHY

Pg no

3 6 8

MANAGEMENT SYSTEM
ORGANIZATIONAL CHART CORPORATE PROFILE MANAGEMENT HIERARCHY MANGERIAL POLICIES CREDIT RATING 19 11 13 15 16

MARKETING MIX
PRODUCT PRICE PLACE PROMOTION 22 41 48 53

LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

FIANANCIAL STATEMENT ANALYSIS


TREND/ HORIZONTAL ANALYSIS VERTICAL ANALYSIS FINANCIAL RATIO ANALYSIS 59 63 67

SWOT ANALYSIS
STRENGTH WEAKNESS OPPORTUNITY THREAT 111 114 115 117

TRAINING PROGRAMME
DIVISIONAL OR DEPARTMENTAL DETAIL ACTIVITIES OF INTERN
121 142

PROBLEMS AND RECOMMENDATIONS CONCLUSION


LIST OF ANNEXURE
152

LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

EXECUTIVE SUMMARY

The comprehensive study of Askari bank helps to suggest the organizational wide plans that determine the long run success of the organization, finding new ways to add value, flexibility, and developing unique skills and ideas to manage people. After analyzing one can explain that how a bank can provide diversified products & services to the customers in order to provide them maximum utility. The purpose of Askari bank is to provide professional integrity, customer satisfaction and teamwork. To achieve sustained growth and profitability in all areas of business. This report is a comprehensive study to know the potential of Askari bank. Askari Commercial Bank is one of the leading banks in Pakistan, which is growing rapidly. Economy of Pakistan specially banking sector is developing very fast, so there are opportunities in banking sector. Askari bank was incorporated in Pakistan on October 9, 1991, as a public limited company. It commenced its operations on April 1, 1992, and is principally engaged in the business of banking, as defined in the banking companies ordinance, 1962. The bank is listed on the KARACHI, LAHORE AND ISLAMABAD Stock Exchanges and its share is currently the highest quoted from among the new private sector banks in Pakistan.

LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

CHAPTER # 1 INTRODUCTION
HISTORY AND BACKGROUND VISSION AND MISSION STATEMENT CORPORATE PHIILOSOPHY

2 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

HISTORY AND BACKGROUND


Pakistan Armed Forces has established several organizations such as Army Welfare Trust (AWT), Fauji Foundation and Shaheen Foundation for running industrial and commercial enterprises. These organizations have been established with the aim to provide employment for ex-servicemen, besides creating job opportunities for others. The story of AWT is that of perseverance, innovation, business acumen and going beyond the frontiers in agriculture, cement, pharmaceuticals, leasing, insurance, banking, energy, information technology and many other diverse fields. Being a subsidiary business unit, Askari Bank Limited is powered by Army Welfare Trust (AWT).

21 years of banking
Askari Bank was incorporated in Pakistan on October 9, 1991, as a public limited company. It commenced operations on April 1, 1992, and is principally engaged in the business of banking, as defined in the Banking Companies Ordinance, 1962. The Bank is listed on Karachi, Lahore and Islamabad Stock Exchanges and its share is currently the highest quoted from among the new private sector banks in Pakistan. Askari Bank has expanded into a nationwide presence of 245 branches / sub-branches, including 31 dedicated Islamic banking branches, and a wholesale bank branch in the Kingdom of Bahrain. A shared network of 5,319 online ATMs covering major cities of Pakistan, internet banking (i-net) and call centers operating on 24/7 basis supports the alternate delivery channels for customer service. As at December 31, 2011 the Bank had equity of Rs. 17.8 billion and total assets of Rs. 343.8 billion, with 919,096 banking customers, serviced by our 5,994 employees. Askari Investment Management Limited and Askari Securities Limited are subsidiaries of Askari Bank primarily engaged in managing mutual funds and share brokerage, respectively.

Askari Commercial Bank Limited was the first bank in Pakistan to offer Internet banking Services and B2B e-commerce (Business to Business electronic Commerce) solutions for merchants looking to purchase on credit. Askari Bank is the only bank with its operational head office in the twin cities of Rawalpindi-Islamabad, which have relatively limited opportunities as compared to Karachi and Lahore. This created its own challenges and opportunities, and forced as to evolve an outward-looking strategy in terms of Askari market emphasis. As a result, Askari developed a geographically diversified assets base instead of a concentration and heavy reliance on business in the major commercial centers of Karachi and Lahore, where most other banks have their operational Head offices.

3 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

ACHIEVEMENTS AND AWARDS


Askari Bank continues its success in competition. Over the years, ACBL has received several awards for the quality of its banking service to individuals and corporate. These include:

Euro money and Asia money


Award for 1994, 1996 & 1997

Commercial Bank of the Year


Award for 1994 & 96 By Asia money magazine

Best Presented Accounts


Ranking prizes awarded from 1997 to 2002 By South Asian Federation of Accountants (SAFA)

Best Presented Annual Accounts


Award for 2000, 2001and 2002 By the Institute of Chartered Accountants in Pakistan (ICAP), and the Institute of Cost and Management Accountants in Pakistan (ICAMP)

Best Corporate Report


1st prize awarded for 2000, 2001, 2003 & 2004 By Institute of Chartered Accountants of Pakistan (ICAP) and institute of Cost & Management of Accountants of Pakistan (ICMAP)

The Best Bank in Pakistan


Award for 2001 & 2002 By Global Finance Magazine

Best Consumer Internet Bank in Pakistan


Award for 2002, 2003 & 2004 By Global Finance magazine

Corporate Excellence
Awards for 2002, 2003, 2004 & 2005 The Management Association of Pakistan (MAP)

4 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

Best Retail Bank in Pakistan


Award 2004 & 2005 By The Asian Banker

Best Corporate / Institutional Internet Bank in Pakistan


Award for 2004 By Global Finance magazine

Best Commercial Bank


Consumer Choice award 2005 By The Consumers Association of Pakistan

The Best Consumer Banking


Award for 2005, 2006 & 2007 By the consumer Association of Pakistan

The Best Retail Banking Award 2008


Award for 2008 By Pakistan Guarantee Export Corporation Ltd.

The Best Corporate Report Award


For the year 2008 By ICAP & ICMAP

The Best Annual Report Award


For the year 2010 By ICAP & ICMAP

The Best Presented Accounts Award 2010 - 2nd Runner Up-Joint


For the year 2010 By South Asian Federation of Accountants Over the years, Askari Bank has proved its strength as a leading banking sector entity, by achieving the following firsts in Pakistani Banking: First Bank to offer on-line real-time banking on a country-wide basis. First Bank with a nation-wide ATM network. First Bank to offer Internet Banking Services First Bank to offer e-commerce solutions First bank to offer i-net banking

5 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

VISION AND MISSION STATEMENT

Our vision:

To be the bank of first choice in the region

Our mission:
To be the leading private sector bank in Pakistan with an international presence, delivering quality service through innovative technology and effective human resource management in a modern and progressive organizational culture of meritocracy, maintaining high ethical and professional standards, while providing enhanced value to all our stakeholders, and contributing to society. The VISION to be the bank of first choice in the region demands continuous strive for creation of business opportunities with innovation while maintaining the core values to meet the commitment to all banks stakeholders. The range of the products aims to serve the diverse customer base that comprises of corporate, SMEs, individual savers, households and, farmers. At the same time, the people are constantly engaged in assessing customer needs and market dynamics to realign the products and the priorities to attain brand recognition and competitive edge. ACBL are reshaping its portfolio of businesses by investing in higher growth areas, extending and developing the core competencies and moving out of weak and non core segments.

6 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

OUR THINKING
Our thinking, in the light of our mission statement, holds great regards to building relationships with our stakeholders as well as maintaining our values.

Inspiring Ethical Values


Integrity is the most valued standard in whatever one do. ACBL understands that the commitment to satisfy customers needs that must be fulfilled within a professional and ethical framework. The intrinsic values, which are the corner stones of the corporate behavior, are:

Commitment
Customers

Integrity
Investors

Fairness
Regulators

Teamwork
Employees

Service
Communities

Inspiring Customer Relationship


Askari Banks client relationship with the managers are well equipped and well trained to provide the most efficient and personalized service to the customers. Askari Bank is proud of its pioneering role in providing the most modern and technologically advanced services to its 984,485 relationships.

Inspiring Investors Confidence


ACBL believes that the bottom line of any business is creating shareholder value. To gain their trust and confidence, it believes in providing the investors timely, regular and reliable information on the activities, structure, financial situation, and performance.

Our Inspiring Regulators


We firmly believe in regulatory discipline and harmony of our corporate objectives with regulatory framework. Our business methodologies are designed to ensure compliance with directives of all our regulators.

Inspiring Employee Relationship


The bank strongly believes that the interest of the Bank and the employees are inseparable. ACBL try to create a we culture where there is mutual trust and respect for each other. The bank is committed to develop and enhance each employees skills and capabilities through extensive inhouse and external training programs and job rotations. In order to ensure meritocracy, the appraisal system is purely performance based.

7 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

CORPORATE PHILOSOPHY
From knowing our customers requirements to understanding employee needs, from utilizing modern technology to making responsible social contributions, from enhancing stake-holders value to practising corporate ethics.... We are continuously and consistently striving to address newer challenges with a single motivation: the power to inspire and be inspired

Our Objectives
To achieve sustained growth and profitability in all areas of business. To build and sustain a high performance culture, with a continuous improvement focus. To develop a customer-service oriented culture with special emphasis on customer care and convenience. To build an enabling environment, where employees are motivated to contribute to their full potential. To effectively manage and mitigate all kinds of risks inherent in the banking business. To maximize use of technology to ensure cost-effective operations, efficient management information system, enhanced delivery capability and high service standards. To manage the Bank's portfolio of businesses to achieve strong and sustainable shareholder returns and to continuously build shareholder value. To deliver timely solutions those best meet the customers financial needs. To explore new avenues for growth and profitability.

Strategic Planning
To comprehensively plan for the future to ensure sustained growth and profitability. To facilitate alignment of the Vision, Mission, Corporate Objectives and Corporate Philosophy, with the Business Goals and Objectives. To provide strategic initiatives and solutions for projects, products, policies and procedures. To provide strategic solutions to mitigate weak areas and to counter threats to profits. To identify strategic initiatives and opportunities for profit. To create and leverage strategic assets and capabilities for competitive advantage.

Code of Business Principles:


Our Code of Business Principles is to: 8 LAHORE COLLEGE FOR WOMEN UNIVERSITY Deliver solutions that meet customers financial needs Build and sustain a high performance culture

INTERNSHIP REPORT

INTERNSHIP REPORT

Build trusted relationships with all stakeholders Build and manage the Banks portfolio of businesses to achieve strong and sustainable shareholder returns Create and leverage strategic assets and capabilities for competitive advantage

Business Ethics and Conduct


Askari Bank seeks to maintain high standards of service and ethics enabling it to be perceived as impartial, ethical and independent. In addition to the general guidelines, the following are the salient features of the Banks code of ethics and conduct. Presence of a corporate culture that seeks to create an environment where all persons are treated equitably and with respect. Employees must carry out their responsibilities in a professional manner at all times. They must act in a prudent manner and must avoid situations that could reflect unfavorably on themselves, the Bank or its customers. Employees must commit to the continued development of the service culture in which the Bank consistently seeks to exceed customers expectations. Fairness, Truthfulness and Transparency govern our customer relationships in determining the transactional terms, conditions, rights and obligations. Employees must safeguard confidential information which may come to their possession during the discharge of their responsibilities. Respect for customers' confidential matters, merits the same care as does the protection of the Bank's own affairs or other interests. Employees must ensure that know your customer principals are adhered by obtaining sufficient information about the customers to reasonably satisfy ourselves as to their reputation, standing and the nature of their business activities. Employees must avoid circumstances in which their personal interest conflicts, or may appear to conflict, with the interest of the Bank or its customers. Employees must never use their position in the Bank to obtain an advantage or gain. Employees must not enter into an agreement, understanding or arrangement with any competitor with respect to pricing of services, profit rates and / or marketing policies, which may adversely affect the Bank's business. Employees must not accept gifts, business entertainment or other benefits from a customer or a supplier / vendor, which appear or may appear to compromise commercial or business relationship. Employees must remain alert and vigilant with respect to frauds, thefts or illegal activities committed within the Bank premises.

9 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

CHAPTER # 2 MANAGEMENT SYSTEM


ORGANIZATIONAL CHART CORPORATE PROFILE MANAGEMENT HIERARCHY POLICY FORMATION PROCESS MANAGERIAL POLICIES CREDIT RATING

10 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

ORGANIZATIONAL CHART

Hierarchy at Tufail Road Branch


11 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

Hierarchy at Tufail Road Branch

BRANCH MANAGER

FOREIGN EXCHANGE\TRADE DEPT CLEARING OPERATION MANAGER CASH DEPARTMENTNT

CREDIT DEPT

CUSTOMER SERVICE

INCHARGE GENERAL BANKING

ACCOUNT OPENING

REMITTANCES

NON-CLERICAL STAFF

12 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

CORPORATE PROFILE
Board of Directors
Lt. Gen. Waseem Ahmed Ashraf Lt. Gen. (R) Zarrar Azim Mr. Shaharyar Ahmad Brig (R) Muhammad Shiraz Baig Brig (R) Asmat Ullah Khan Niazi Mr. Muhammad Najam Ali Mr. Muhammad Afzal Munif Mr. Tariq lqbal Khan Chairman Chairman Executive Committee President & Chief Executive Director Director Director Director Director (NIT Nominee)

Company Secretary
Mr. Saleem Anwar

Audit Committee
Brig (R) Asmat Ullah Khan Niazi Brig (R) Muhammad Shiraz Baig Mr. Kashif Mateen Ansari Chairman Member Member

Auditors
A.F.Ferguson & Co. Chartered Accountants

Legal Advisors
Rizvi, Isa, Afridi & Angell

Shariah advisor
Dr. Muhammad Tahir Mansoori

13 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

Main Offices
REGISTERED \HEAD OFFICE

AWT Plaza, the MALL P.O. BOX. NO: 1080 Rawalpindi: 46000 Pakistan. Tel: 92-51-9063000 Fax: 92-51-9272455 E-mail: Webmaster@Askaribank.com.pk REGISTRAR\SHARE TRANSFER OFFICE

THK Associate (PVT) Limited Ground Floor. State Life Building 3 Dr.Ziauddin Ahmad Road, Karachi 75530 P.O. box 8533, Karachi. WHOLESALE BANK BRANCH, BAHRAIN

14 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

MANAGEMENT HIERARCHY

President (CEO)

Senior Executive Vice President

Executive Vice President

Senior Vice President

Vice President

Assistant Vice President

Branch Manager

Assistant Branch Manager

Operations Manager

Officers Grade I,II

Clerical And Non-clerical Staff

15 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

MANAGERIAL POLICIES
Askari banks policies can be divided under the following heads: A. FINANCIAL POLICIES B. PROCUREMENT POLICIES C. MARKETING POLICIES D. PROMOTIONAL POLICIES E. LENDING POLICIES F. PERSONAL POLICIES

Each of these policies is discussed below briefly.

FINANCIAL POLICIES
The financial policies of any bank are the most important policies through which the whole banking activity is conducted. These policies are primarily conducted on: Source of funds Use of funds

SOURCE OF FUNDS:
The bank finance policy is acquiring funds from the following sources: Deposits of account holders. Interest on advances and loans granted to the borrowers. Income and commission from the services provided by the bank. Bank opens various types of accounts for its customers services are provided for earning. Interest income and commission bank providing the services to its customer.

USE OF FUNDS:
After the acquisition of the funds their acquisition becomes necessary. The bank seeks the best way for making investment to get more profit with the maximum security. The bank has an investment portfolio in which it allocate its funds for crediting to borrowers, investment in the 16 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

stock market, investment in the real estate property etc. for allocation of funds a bank has to follow some banking policies and the prudential regulations of SBP these are: A bank has to maintain liquidity with central bank, i.e. 25 %of its total deposits. A bank cannot invest all of its funds otherwise it will be difficult to meet urgent needs. A substantial part of funds is received from interest on loans and advances. Before granting a loan the bank analyzes and observes the borrower and conduct a complete ratio analysis. Bank prepares credit line for this purpose the major thing is granting an advance is the security offered by the borrower and its actual market value.

PROCUREMENT POLICIES
Procurement policies are more concerned with manufacturing organizations. In bank industry that is service industry procurement means the procurement of funds from various sources such as deposits. It involves attracting and holding the funds of the depositors. After the acquisition of funds, the bank invest the acquire funds. One alternative is to lend its money and earned interest markup or invest in govt. securities etc. as already mentioned in the above paragraph the major sources of funds for a bank are the deposit of the general and the other sources of income includes interest or markup charges received for various services offered by the bank to its clients. A bank tries to attract maximum no. Of accounts so that it can increase its deposits and these lending ability. In order to get maximum no. of accounts the staff of the bank must be efficient as compared to the other banks and the manager of the branch must take personal interest in attracting deposits. Good quality of the service is the key to success.

MARKETING POLICIES
Marketing policies are also one of the most important policies because they are related to the growth of the organization. Marketing for a bank would mean: 1. Creation of new product and services. 2. The bank marketing must be consumer oriented.

Following are the marketing policies of the ACBL. Keeping the track of latest development in the world and incorporating the latest and most modern equipment to make the banking procedures simple and easy for the customers. Development of products for the customers. Giving good services and maintaining good relations with the customers.

17 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

These policies can be implemented by providing the right product and service to the customer at the right place, at the right time, at the right price. It is necessary for the managers to keep in touch with consumers, observe their needs and develop products, which meet their needs.

PROMOTIONAL POLICIES
Public relation and advertising has assumed a great importance in the modern banking business. As for as promotional activities are concerned, the main objective of the bank is to inform the existing clients and other people about its new products or change in the existing services. ACBL establishes its purpose through: 1. Direct contact with customers. 2. Relation with business organizations. 3. Community relations.

LENDING POLICIES
Every bank has its own lending policies except for those, which are common for all the banks, i.e. the policies, which are imposed on all the commercial banks by the SBP, are known as prudential regulations. The lending policies of ACBL are as follows: The bank only invests in those sound and viable projects, which have good rate of return. Bank prefers to advance loan to their account holders. Loan is given to reliable person only. No political loan is sanctioned by bank. Any account holder can apply for running finance or demand finance. The manger appraises the past record of account holder and his credit worthiness. If he finds anything wrong he can refuse to sanction the amount. The bank while taking security prefers govt. Securities to shares. It also advances working capital loans.

PERSONAL POLICIES
Personal policies have an important role in the success of any organization. ACBL have its proper personal policies. Good personal policies motivate the employees towards hardworking. Following are the main personal policies of ACBL:

18 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

Selection of employees on merit Selection of capable employees. Attractive salary package for motivation of employees. To train and develop the future management of the bank. Every employee must have certain set of clearly defined duties Effective communication at al levels of the organization.

CREDIT STANDING
Askari bank has following credit rating by Pakistan Credit Rating Agency (PACRA) Long term: Short term: AA A1+

Definitions by PACRA: A1+: Obligations supported by the highest capacity for timely repayment. AA: Denote a very low expectation of credit risk. They indicate very strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events. A plus (+) appended to a rating denotes relative status within major rating categories. AA represents very high credit quality. AA ratings denote a very low expectation of credit risk. Also show very strong position of timely payments. A1+ shows obligations supported by the highest capacity for timely payments.

COMPETITORS
Banking industry is growing much fast. So Askari bank is facing a lot of competition in the market. There are following competitors: ABN Amro Bank al Falah (Pvt) Ltd Union Bank Ltd Soneri Bank Ltd Prime Commercial bank The bank of Punjab

19 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

Bank Al-Habib Ltd My bank Ltd Silk Bank Ltd NIB Ltd

20 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

CHAPTER # 3 MARKETING MIX


PRODUCT & SERVICES PRICE PLACE PROMOTION

21 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

PRODUCT & SERVICES


FUNCTIONS OF ACBL
There are following functions that Askari Bank performs:

Acceptance of deposits Advancing of loans Agency services General utility services Investment Overdraft facility Transfer of money Creation of credit Facilitates foreign trade Executor of the standing orders Acting as a trust

MARKET OFFERIGS
Askari Bank presents you an entire range of products... whether you are looking for high returns on your deposits, lockers for your valuables, liquidity for your business needs, loans to meet an emergency cash need, or financing for the purchase of an automobile, we have the solutions to your questions. In order to fulfill all the above mentioned functions, Askari bank is offering the following products and services to its customers. Branch banking Corporate and investment banking Consumer banking Agricultural banking Islamic banking Alternate delivery channels

Each of these products and services is explained along with other necessary details.

22 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

BRANCH BANKING
Askari bank provides comprehensive product menu range of innovative saving schemes in the form of Term Deposits and Saving accounts with competitive profit rates and financing options that provide convenient and flexible banking solutions to our valued customers, coupled with superior services by our friendly staff in order to give them an excellent banking experience.

MAHANA BACHAT

Askari Mahana Bachat account is a term deposit account designed for individuals with a short to medium term investment appetite. It offers customers the option of investing for one to three years tenures and has been designed keeping in view saving need of customers who want profit on a monthly basis. With competitive rates of return monthly on the 1st of every month and the option of getting a financing facility of up to 90%, Askari Mahana Bachat Account caters to customers savings needs without blocking their funds for a longer duration. Other details of this product are summarized in the table below:

FEATURES
Eligibility Balance Requirement Profit Amount

DETAILS
Pakistani Resident (Individuals Only). Minimum Rs. 50,000/- & Maximum Up to Rs.10,000,000 Earn Rs. 633/- per month on investment of every Rs. 100,000/for one year!" Earn Rs. 708/- per month on investment of every Rs. 100,000/for three years!

Expected Rate of Return:

1 Year Term: 7.6% p.a. 3 Years Term: 8.5% p.a.

23 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

PAISHGI MUNAFA

Askari Paishgi Munafa Account is a unique term deposit designed to meet the immediate financial needs of the individual investors/savers who want to invest their funds for a medium term lasting for 15 months tenure. The most significant feature of this product is that the customer receives the entire profit upfront at the time of placing the deposit in a way that the investors / savers can fulfill their financial needs of today without depleting their savings.

FEATURES
Eligibility Balance Requirement Profit Amount Benefits

DETAILS
Pakistani Resident (Individuals Only). Minimum Rs. 100,000/- or in multiples of Rs. 100,000/-. Rs. 9,375/- on a deposit amount of Rs. 100,000/- (expected rate of return 7.5 % p.a) 1. Financing Facility up to 80% of Principal amount. 2. Free Visa Debit Card issuance. 3. No Minimum Balance requirement in checking account

4. 2 Free Pay Orders in a month (Withholding Tax and other Government charges will be applicable as per Law). 5. No maximum limit for investment.

VALUE PLUS DEPOSIT

An Askari value plus rupee deposit account offers value and flexibility. This product promises greater financial freedom and security with matching flexibility. Now customers can open a Value Plus Account while enjoying the features of a normal checking account.

24 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

CURRENT ACCOUNT

Current account caters to the variety of financial needs of our diverse customer base with added benefits of free ATM card, cheque books, and issue of demand drafts/payorders and much more. These products include value plus current accounts, basic account with no minimum balance requirement.

FEATURES
Eligibility Balance Requirement

DETAILS
Pakistani Resident (Individuals Only). Individuals : Minimum Rs. 25,000/Business : Minimum Rs. 100,000/-

Minimum Monthly Average Individuals :Rs. 25,000/-* Balance Requirements Business : Rs. 100,000/-* Important features Issuance of Visa Debit Card. Annual and replacement fee would apply ATM Cash Withdrawal Insurance coverage up to daily cash withdrawal limit of the debit card from Askari Bank ATMs On-line fund transfer facility i-Net Banking facility SMS Alerts of ATM Cash withdrawal to Visa Debit Card holders. 24 hours world-wide Accidental Death & Permanent Disability insurance coverage to Debit Card / Visa Debit Card Holders. Rs. 500,000/- and Rs. 700,000/- for Classic and Gold Visa Debit Cards respectively Issuance of Pay orders / Demand drafts and cheque books

25 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

SAVINGS ACCOUNT

A range of savings account offered by the Bank to both individuals and institutional customers include Askari Special Deposit, Value Plus Savings besides normal savings account based on profit and loss sharing basis. Askari savings deposits offer attractive features and competitive returns and certain flexibility similar to current accounts.

FEATURES
Types of Value Plus Account Expected Rate of Return:

DETAILS
1- Saving Account. 2- Time Deposits Account. Savings A/C p.a Times deposit p.a (Min. deposit Rs. 25,000) p.a 3 months 6 months 1 year 6% 6.5% 7%

Important features

Free issuance of Debit Card. Free global accidental insurance coverage against debit card irrespective of balance in the account or age of the cardholder Free ATM Cash Withdrawal insurance. Free online funds transfer facility. Free Internet Banking Services. Facility of Supplementary Debit Cards. Monthly returns on saving deposits. Partial encashment facility for time deposits. Automatic roll-over facility for time deposits.

26

LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

INVESTMENT CERTIFICATES
Askari banks investment certificates provide the added security, investment and monthly return to the customers. These certificates are negotiable and transferable. These certificates are available for a three month period and profit is payable on a monthly basis through preprinted tearoff coupons.

FEATURES
Tenure Expected Rate of Return:

DETAILS
Three months First month Second month Third month 6% p.a

6.10% p.a 6.25% p.a

Important features

Free issuance and free encashment Account relationship with Askari Bank is not mandatory. No penalty on pre-mature encashment Negotiable and payable in Pakistan in Pak rupees only. No purchasing limit. Valid until encashed. Encashable at all Askari Bank branches. In case of loss / theft or damage, there is replacement / refund to the original purchaser Profit is payable on monthly basis through pre-printed coupons Encashment by third party.

27 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

RUPEE TRAVELERS CHEQUE

Askari bank offers its customers a widely accepted rupee traveler cheque, which eliminates all financial risks while travelling. It is a safe and secure way to make payments nationwide.

ISSUANCE
Desirous customer will submit the Application Form (duly filled/ signed) in any branch of Askari Bank Limited. After verification, branch will forward the form to Investment Products Unit. IPU will keep the record of the customer and system will automatically update that customers transaction.

ENCASHMENT
Original purchaser will approach the nearest branch. Purchaser will sign RTC on the face and branch will verify his signatures with the signature mentioned on CNIC before encashment of the same.

FEATURES
Eligibility Denominations Validity Charges Documentation

DETAILS
Any Literate individual customer Rs. 10,000/Until encashed Refund processing charges are Rs. 1,000/- and Issuance/Encashment are free For Issuance/ Encashment 1. Original CNIC. For Refund 1. Attested Copy of CNIC. 2. Application from original purchaser. 3. Purchase agreement (Form RTC 1). 4. Refund Application (Form 2-A). 5. Indemnity & Guarantee (Form 2B). 6. Lost Report Schedule (Form 2-C). 7. Voucher Copy for reissuance processing fee. 8. Copy of FIR( if lost amount is Rs. 50,000/- and above).

28 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

CORPORATE AND INVESTMENT BANKING


At Askari, we understand the unique business requirements of our corporate and institutional clients, and accordingly the Banks Corporate and Investment Banking Group (CIBG) strives to meet their expectations and through provision of customized and relationship based banking approach.

CORPORATE BANKING

Corporate banking works on a long term relationship based business model to provide a single point within the bank for meeting all business requirements of its corporate and institutional customers, including public sector enterprises, with the primary aim to enhancing customer service. Dedicated relationship managers for each of our corporate client ensure customer satisfaction, which remains top priority. Askari banks relationship oriented outlook focuses upon providing a complete array of tailored financing solutions that are practical and cost effective, some of which include: Working Capital Facilities Term Loans Structured Trade Finance Facilities Letters of Guarantee Letters of Credit Fund Transfers / Remittances Bill Discounting Export Financing Receivable Discounting

INVESTMENT BANKING

The Investment Banking Division (IBD) at Askari focuses on origination and execution of a full range of financial advisory and capital raising services to corporate and institutional clients as well as actively managing the banks proprietary investments in the local equity and debt capital markets.

29 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

Whether your company is seeking to access the local or cross border syndications and debt capital markets, project financing needs, advisory services related to M&A or the local equity capital markets for raising capital, we are well positioned to provide due assistance. We can create and tailor the right structured solutions for your business needs in order to enhance shareholders wealth and the market competitiveness

CONSUMER BANKING
Our consumer finance is focused on expanding target market and enhancing our portfolio through new and improved initiatives and products. Special attention is being given to business opportunities involving strategic alliances to earn sustainable returns, with greater emphasis on secured form of consumer lending and an aim to increase product offerings while improving and maintaining a quality of its risk asset portfolio. Consumer Banking Services Divisions products mainly comprise of:

Ask4 Car

It is a product for car financing for both new and used vehicles at affordable and competitive mark-up, easy processing without any hidden cost. A summary of the features of ASK4CAR is given below:

30 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

FEATURES New Vehicles


Mark-up

DETAILS
18% p.a for 3 Years 19% p.a for 4 Years 20% p.a for 5 Years Rs. 10,000/Until encashed Refund processing charges are Rs. 1,000/- and Issuance/Encashment are free For Issuance/ Encashment 1. Original CNIC. For Refund 1. Attested Copy of CNIC. 2. Application from original purchaser. 3. Purchase agreement (Form RTC 1). 4. Refund Application (Form 2-A). 5. Indemnity & Guarantee (Form 2B). 6. Lost Report Schedule (Form 2-C). 7. Voucher Copy for reissuance processing fee. 8. Copy of FIR (if lost amount is Rs. 50,000/- and above).

Down payment Charges Insurance Documentation

PERSONAL FINANCE

With unmatched financing features in terms of loan amount, payback period and most affordable monthly installments, Askari Banks personal finance makes sure that customer gets the most out of his/her loan; the product tenure ranges from one to five years and is designed primarily for salaried individuals.

31 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

FEATURES New Vehicles


Mark-up

DETAILS
18% p.a for 3 Years 19% p.a for 4 Years 20% p.a for 5 Years Rs. 10,000/Until encashed Refund processing charges are Rs. 1,000/- and Issuance/Encashment are free For Issuance/ Encashment 1. Original CNIC. For Refund 1. Attested Copy of CNIC. 2. Application from original purchaser. 3. Purchase agreement (Form RTC 1). 4. Refund Application (Form 2-A). 5. Indemnity & Guarantee (Form 2B). 6. Lost Report Schedule (Form 2-C). 7. Voucher Copy for reissuance processing fee. 8. Copy of FIR (if lost amount is Rs. 50,000/- and above).

Down payment Charges Insurance Documentation

MORTGAGE FINANCE

Whether our customer plans to construct a house, buy a constructed house, or renovates his/her house, Askari mortgage finance enables him/her to pursue their goal without any problems. Mortgage is a premium home financing product for customers belonging to upper, upper middle and middle income groups, residing in the urban areas of Pakistan. Purchase of Plot + Construction. Construction on Existing Plot. Purchase of House/ Apartment. Renovation of House/ Apartment.

32 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

VISA Debit Card

Askari Visa card enables customer access to convenient banking services; now customers can manage their accounts, withdraw cash, make purchases and transfer your funds through Askari Visa debit card, which also offers the convenience of a credit card without the hassle of monthly bills and interest charges. No minimum balance requirements for issuance or retention o VISA debit card. An eligible can apply for the debit card i.e. Classic or Gold.

FEATURES Distinct Features


Classic

DETAILS

Cash withdrawal Limit is 50,000, Shopping Limit 200,000 & Funds Transfer Limit 250,000. Cash withdrawal Limit is 100,000, Shopping Limit 250,000 & Funds Transfer Limit 300,000 Literate individual customer. Having Pak Rupee checking account under the category of Current, Saving, ASDA, Value Plus Accounts (Current & Saving) Basic Banking Account and Smart Cash etc., with credit balance and 'normal' status, may apply. No minimum balance requirements for issuance or retention of the VISA debit card. An eligible customer may apply for any of the debit cards i.e. Classic or Gold. A customer/staff is allowed to retain as many cards as number of accounts and is allowed to link multiple accounts with single debit card. Multiple accounts of same customer, maintained at different branches of Askari Bank, may also be linked with single VISA Debit Card

Gold Eligibility

33 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

MASTER CREDIT CARD

Askari bank offers a competitive suite of silver, gold and platinum Master Credit cards focusing on providing superior services, travel privileges, and shopping pleasures. It also offers reward points and transactional alerts through SMS as enhanced security feature.

FEATURES
Eligibility Age

DETAILS
Pakistani resident Basic Salaried: 21-61 years. SEB/SEP: 21- 65 years. Supplementary Min 18 Yrs.- No Max Age limit. Min 18 Yrs.- No Max Age limit.

AGRICULTURAL BANKING
The products and services for this category are specially designed for Pakistans crop farming, other farming and rural business segment, which offer improved and efficient delivery and control mechanism for meeting increased demand for credit by the farmers in easy, accessible and affordable manner.

KISSAN EVER GREEN FINANCE DETAILS


Pakistani individual Mortgaged charge on agri land through Zari Pass Book. Profit on credit balances will be paid on half yearly basis as declared by the bank on PLS savings accounts.

FEATURES
Eligibility Security Profit amount

34 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

FEATURES
Tenure Markup Insurance Benefits

DETAILS
Yearly Basis The mark-up is charged for the actual days the finance is utilized Refund processing charges are Rs. 1,000/- and Issuance/Encashment are free A special cheque book is issued to the farmer. Automatic renewal upon adjustment of entire Principal amount with mark-up once in a year. The account is farmer friendly which benefits the farmers both ways. If the account is in credit, it earns profit; otherwise it provides instant finance, to the farmer for his agriculture needs.

KISSAN TRACTOR FINANCE

FEATURES
Tenure Eligibility Benefits

DETAILS
5 years Pakistani individual The farmer will have privilege of availing non-funded facility at a reduced cost under this program on account of more equity participation. Good farmer bonus will be available to the borrower in case the loan is repaid as per terms of sanction. The farmers life & tractor will be insured against contingencies, which will provide comfort and piece of mind. Priority in delivery of tractor will be given by manufacturer as per arrangements with the bank

35 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

KISSAN LIVESTOCK DEVELOPMENT FINANCE FEATURES


Product type

DETAILS
To purchase Milch Animals, Goats, Sheep, Poultry and Fisheries without incurring extra expenditure because of availability at his farm. Pakistani Resident (Owner Farmers). The program will provide regular day to day income to the farmer to meet his own consumption and surplus to be marketed. This will revive / accelerate and supplement the income generating capacity. It will enhance the repayment capacity of the farmer.

Eligibility Benefits

KISSAN FARM MECHANIZATION FINANCE DETAILS


Finance for farm equipment, trailer, thresher, drills & rotavators etc. Pakistani Resident Under this program the farmer will get benefit of use of modern agricultural tools, implements and equipments which are cost and time effective. Improves per acre yield of agri crops and quality of agriculture produce to get good price in the market. Helps to match / compete with international standards for exportable agriculture produce.

FEATURES
Product type Eligibility Benefits

36 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

KISSAN AABPASHI FINANCE FEATURES


Product type

DETAILS
To finance installation of Tube-Wells (electric, diesel and solar energy units) water management equipments and water channel development etc. Pakistani Resident (owner of farm) Help farmers to make optimum use of limited water resources. To facilitate the farmer, to overcome the scarcity of water. To develop mechanical water resources, sprinkler and drip system etc. To avoid traditional / inefficient modes of irrigation and waste of available water. To manage natural / available resources through water management practices.

Eligibility Benefits

ISLAMIC BANKING
With the help of Shariah advisor and professional bankers, Askari Islamic Banking provides Riba free and Shariah Complaint solutions to various customer segments through a modest branch network in major cities of Pakistan. It offers following main products:

IJARAH VEHICLE FINANCE

Ijarah is a rental agreement, under which the usufructs of an asset are transferred to the client on agreed terms and conditions. It is a Shariah complaint mode of finance, adopted by Askari Islamic Banking to meet the vehicle financing needs of its Islamic customers. In Ijarah, as Bank is the owner of the vehicle and only transfers its usufruct to the customer, hence, customer is responsible for any risks and liabilities attached to the usage of the vehicle, while risks relating to ownership remain with the Bank throughout the Ijarah period. 37 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

DESCRIPTION
Expenses related to ownership Expenses related to use of asset Risk associated with ownership Risks associated with use of asset Third party liability in case of accident

RESPONSIBILITY
Bank Client Bank Client Client

HOME MUSHARAKAH

Askari Islamic Banking offers Shariah complaint home financing to purchase, construct, improve and transfer of property under the concept of Diminishing Musharakah. This means being able to cope with other financial commitment, while still having money left over for extras and unexpected expenses.

FEATURES
Askari Home Musharakah: How it Works?

DETAILS
Joint ownership is created in the property between Bank & Customer on the basis of the Musharakah Agreement. Banks share is divided into units and is given to the client on rent. Client promises to purchase Banks share (units) over the tenure of transaction. Client purchases the units every month and will eventually become the owner of the property. Rental amount will be adjusted according to the banks share (units) remaining in the property.

FEATURES

DETAILS

Askari Home Musharakah Askari Islamic Banking offers a convenient and easy way to buy your own home, with a financing of 85% of the property Purchase cost, upto Rs. 50 Million. 38 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

Features and Benefits

Shariah compliant. Prompt processing. Competitive rentals. Clubbing-of family income. Maximum financing limit: Up to Rs. 50 million. Financing tenure: 3 to 20 years. Documentation/ legal/ valuation/ income est. charges A Pakistani National Earning at least two times more than your monthly Car Ijarah rentals. Between 21 to 65 years. A permanent employment with atleast six months of service with present employer. A self employed individual with atleast 3 years of business track record. Income verification / documents required.

Eligibility

Documents required
Personal information Business / Professional Information Copy of CNIC. Two Passport size colored photographs of applicant. Copy of rental documents (if applicable). Copy of last paid utility bills (Electricity/ Gas/ Telephone). Bank statement last 6 months. Original or certified copy of recent pay slip. Employers certificate including date of joining/current designation/salary. Bank statement of business-last one year. Copy of management accounts (if applicable). 3 years proof of business (e.g. tax return / bank certificate). Partnership deed (in case of partnership)

Income Information

39 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

ALTERNATE DELIVERY CHANNELS

INTERNET(I.NET) BANKING

Askaris I.net banking assures convenient banking from the comfort of your home. Customers no longer have to wait in long and worrisome queues to request a financial transaction, 24/7 balance inquiry, statement of accounts, fund transfer, utility bills payment etc.

CALL CENTRE

Askaris call centre provides a single point of contact for all of its customers, yet offer unique and individualized services on real time information for its time-conscious customers; it is operated 24/7 and service customers for providing information of products and services, handling inquiries, attending requests. Following are the services available at call centre: Balance Inquiries, Account Statements ( read out and fax) Complaint handling for all sorts of complaints related to the bank. Funds transfer from one account to the other. Utility Bill payments for all utility companies listed with the Bank. Credit Card related queries and information.

AUTOMATED TELLER MACHINE

Askari bank is a member of two electronic ATM inter-bank connectivity platforms i.e. MNET and 1-limk. Through this shared network of online 5,319 ATMs including Askari banks 256 dedicated ATMs covering major cities in Pakistan supports the delivery channels for customer service. It provides services of ebanking and payment system products.

40 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

PRICE
PRICING STRATEGIES
The pricing strategies considered by Askari bank limited are: One price strategy Flexible price strategy For Priority Customers many of the charges are waived in order to facilitate them and provide them with high-class services. The bank staffs in higher posts are also in a position to waive some charges in order to oblige their customers. So the pricing strategies are adaptable and stern depending upon the type of the customer. The Bank offers deposits at competitive prices.

Pricing strategies used by Askari Bank vary among different products and services. However, the ultimate aim of each strategy being applied is to achieve organizational goals. When a new product or service is introduced in the market, Askari Banks top management first takes into account the marketing objective and only then the price for the new product or service is formulated. The top management also sets price in accordance with the pricing objectives that Askari Bank strives to achieve. The more clearer the company's objectives, the easier it is to set a price.

PRICING OBJECTIVES
The pricing strategies of Askari Bank clarify the road map to achieve the following pricing objectives: Survival Maximum current profit Maximum market share Maximum market skimming Product quality leadership

STEPS TO SET A PRICE


Setting an appropriate price for the product/service is quite a challenge as it should be so devised that it meets the expectations of both the customers and the bank. Askari commercial bank has different product and services. Each has been designed to cater the needs of a particular target market. Price is the only key which generates the revenue for the organization to achieve its financial objective.

41 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

Askari bank charges price according to the nature, its demand and cost of product. Higher price is charged for an innovative product while a competitive price is set for other products and services that Askari bank offers. The basic steps followed by Askari Bank while setting their price are:

SELECTING THE PRICING OBJECTIVE

DETERMINING THE CONSUMER'S DEMAND

ESTIMATING COST

ANALYZING COMPETITOR'S COST, PRICE AND OFFERS

SELECTING A PRICING METHOD

FINALIZING THE PRICE

42 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

PRICE AND PRICING STRATEGY OF SOME OF ASKARI BANKS PRODUCTS PRODUCT & SERVICE
ASKARI CAR FINANCE

STRATEGY
Competitive pricing

DETAIL
Prices are set at pace with competitors Prices are different for army and civilian customers

PERSONNEL FINANCE

Discriminative pricing

DEPOSIT MULTIPLIER

Premium pricing

Prices are artificially kept higher so as to encourage favorable customer perceptions Prices are set so as to ensure that a specific rate of return is earned on the investment ---------

ASKARI RUPEE TRAVELER CHEQUE AGRICULTURE FINANCE KISSAN TRACTOR FINANCE ISLAMIC BANKING

Target pricing

Product line pricing

Cost-plus pricing

Price = Cost of Production + Margin of Profit. Prices are charged at pace with that of competitors

Competitive pricing

ELECTRONIC BILL PAYMENT SERVICES

Market-oriented Pricing

Setting a price based upon analysis and Research compiled from the targeted market.

43 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

An overview of the detail of pricing methodology for Askari Banks products and services is given below:

UTILITY BILLS (PTCL, WAPDA, SNGPL)


Askari banks service charges are Rs 8 for the collection of utility bills on behalf of the concerned authorities.

SAFE DEPOSIT LOCKERS


The price for this product varies on the basis of locker selected by the customer. The table below presents a summary of how prices increase as does the size of locker

LOCKER SIZE
SMALL MEDIUM LARGE EXTRA LARGE XL (16x 16) Extra Large XXL(16x31)

PRICE CHARGED (Rs)


1,200 p.a 1,700 p.a 3,000 p.a 3,750 p.a 6,000 p.a

AUTO FINANCE
Competitive pricing strategy is used and the price includes both cost and profit margin. Processing Fee Rs.5, 000/- (Rs.2, 200/- non-refundable) Premature Termination Charges Up to 6.5% of the outstanding loan amount Balloon Payment 15% of the outstanding balance in a year subject to 3.25% charges on the amount being paid Cheque Return Charges Rs.600/Late Payment Charges Rs.600/-

44 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

AGRICULTURE BANKING
Processing Fee for following finances is 1% of the sanctioned facility amount. Askari Kissan Evergreen Finance. Askari Kissan Tractor Finance. Askari Kissan Farm Mechanization. Askari Kissan Livestock Development Finance Askari Kissan Aabpashi Finance Askari Kissan Transport Finance Askari Kissan Farm Storage Finance Askari Kissan Model Dairy Finance Askari Kissan Gold Fish Finance. Askari Kissan White Pearl Finance Askari Kissan Murghban Finance Askari Kissan Gulban Finance Askari Kissan Samar Bahisht Finance Asan Mali Sahulat.

Personal Finance
The prices for personal finance are different for civilian and army customers, the detail of which is given below:

PROCESSING FEE FOR CIVILIANS


CLEAN - 1.20% of loan amount min. Rs.2, 750/- (Including legal & documentation charges) SECURED 1.20% of loan amount max. Up to Rs.5, 500/- (Legal & documentation charges at actual)

PROCESSING FEE FOR ARMED FORCES PERSONNEL


CLEAN - 1.20% of loan amount min. Rs.1, 800/- (Including legal & documentation charges) SECURED - 1.20% of loan amount max. Up to Rs.5, 500/- (Legal & documentation charges at actual)

45 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

Smart Cash
The processing fee charged by Askari bank is: CLEAN - 1.20% of loan amount min. Rs.3, 500/- (Including legal & documentation charges) SECURED - 1.20% of loan amount max. Up to Rs.5, 500/- (Legal & documentation charges at actual)

Mortgage Finance
Following charges are to be paid by the Askari Banks customers: Processing Fee Rs.5, 500/- (Flat) Enhancement Charges Rs.5, 500/- (Flat) Late Payment Charges Rs.600/- per installment Premature Termination Charges

A) In Case of Early Settlement by the Borrower Charges Will Be


Applicable in the following manner: 1st Year: Unto 6% on outstanding balance 2nd Year: Up to 5% on outstanding balance 3rd Year: onwards: Up to 4% on outstanding balance.

B) Up To 10% of the Outstanding Balance, In Case Of Balance


Balloon Payment allowed up to a maximum of 20% of the outstanding balance in a year Additional balloon Payment be up to 5.5% charges on the amount being paid Balloon Payment Rs.250/- per cheque

Business Finance
Customers utilizing this product have to bear the following charges 46 LAHORE COLLEGE FOR WOMEN UNIVERSITY Processing Fee Rs.5, 500/- (Flat) Renewal Fee Rs.5, 500/- (Flat) Enhancement Charges Rs.5, 500/- (Flat)

INTERNSHIP REPORT

INTERNSHIP REPORT

Cheque Return Charges Rs. 600/- (per cheque) Late Payment Charges 21% of the overdue am Premature Termination Charges Up to 6% of the limit.

47 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

PLACE
The map below shows how the network branch of Askari bank is distributed in different areas of Pakistan along with their number in each of the cities.

MAIN OFFICES
48 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

Askari bank divides the geographical area of Pakistan into 3 regions namely:

NORTH REGION (Khyber Pakhtunkhwa & Jammu and Kashmir) SOUTH REGION (Sindh and Balochistan) CENTRAL REGION (Punjab)

City : Rawalpindi
CONTACT NUMBERS: Manager (ops)

Region: North
Manager 9063200 / 9273178

9063198 / 9273177 FAX NO: 9273175 / 9273180 / 9273181 EMAIL: b0001@askaribank.com.pk

PABX NO. : 9063158 BRANCH CODE: 0001

ADDRESS : Askari Bank Limited AWT Plaza Branch Rawalpindi

City : Karachi
CONTACT NUMBERS: Manager (ops) 021-32628711 FAX NO: 021-32625154 / 021-32631176 EMAIL: ADDRESS : b0002@askaribank.com.pk

Region: South
Manager 021-32624714/ 021-32631178 PABX NO. : 021-32630731-33 0002

BRANCH CODE:

Saima Trade Tower I.I.Chundrigar Road

49 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

City : Peshawar
CONTACT NUMBERS: Manager (ops) 091-5260439 FAX NO: 091-5276391 EMAIL: ADDRESS : b0004@askaribank.com.pk

Region: North
Manager 091-5271653 PABX NO. :
091-9212433-6

BRANCH CODE:

0004

Fakhar-e-Alam Road, Peshawar Cantt

City : Quetta
CONTACT NUMBERS: Manager (ops) 081-3836051 FAX NO: EMAIL: ADDRESS : 081-2845602 b0003@askaribank.com.pk M. A. Jinnah Road, Quetta.

Region: South
Manager 081-2833333 PABX NO. : 081-2843751-4 0003

BRANCH CODE:

City : Lahore
CONTACT NUMBERS: Manager (ops) 042-99203633 FAX NO: EMAIL: ADDRESS : 042-99203351 b0006@askaribank.com.pk

Region: Central
Manager 042-99203081 PABX NO. : 042-99203673-7 0006

BRANCH CODE:

7-A, Shahrah-e-Aiwan-e-Tijarat

50 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

City : Islamabad
CONTACT NUMBERS: Manager (ops) (051) 2271799 FAX NO: (051) 2271797 EMAIL: ADDRESS : b0008@askaribank.com.pk

Region: South
Manager (051) 2871144 PABX NO. : (051) 2271794-6 0008

BRANCH CODE:

24-D, Rasheed Plaza, Jinnah Avenue, Blue Area, P.O. Box 1499

City : Faisalabad
CONTACT NUMBERS: Manager (ops) 041-9201003 FAX NO: EMAIL: ADDRESS : 041-9201006 b0009@askaribank.com.pk University Road Faisalabad

Region: Central
Manager 041-9201001 PABX NO. : 9201008-11 0009

BRANCH CODE:

City : Gujranwala
CONTACT NUMBERS: Manager (ops) 055-9200859 FAX NO: EMAIL: ADDRESS : 055-9200858 b0012@askaribank.com.pk

Region: Central
Manager 055-9200857 PABX NO. : 055-9200855-56 0012

BRANCH CODE:

Opposite General Bus Stand G.T Road Gujranwala

51 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

City : Multan
CONTACT NUMBERS: Manager (ops) 061-9201388 FAX NO: 061-9201395 EMAIL: ADDRESS : b0013@askaribank.com.pk 64-A, Abdali Road, Multan.

Region: Central
Manager 061-9201399 PABX NO. : 061-9201391-4 0013

BRANCH CODE:

City : Bahawalpur
CONTACT NUMBERS: Manager (ops) (062)-9255323 FAX NO: EMAIL: ADDRESS : (062)-9255324 b0025@askaribank.com.pk

Region: South
Manager (062)-9255325 PABX NO. : (062)-9255322-4 0025

BRANCH CODE:

1-Noor Mahal Road Bahawalpur

52 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

PROMOTION
Askari Bank uses a combination and coordination of promotional techniques to develop a unified promotional strategy under the concept of Integrated Marketing Communication. Like many other organizations, Askari Banks promotional strategy is aimed at convincing customers to buy its products and also to remain a loyal long-term customer.

Objective Of Promotional Strategies


The objective behind various promotional tools used by Askari Bank is to: Create Product Awareness Develop Potential Customers Interest Provide Information Stimulate Demand. Reinforce The Brand

PROMOTIONAL STRATEGIES Advertising


Askari Bank has been using non-personal, paid promotional advertisements often using mass media outlets to deliver the marketers message. Advertising in News Papers and Television is used as a marketing tool by Askari Bank. However it is often used when a new product is introduced.

Bill Board
Another source used by Askari Bank to convey its message is billboards, which are placed in the main urban areas near the airports and high traffic areas.

Broachers:
The Bank publishes various brochures for the general guidance of the customers. These include the Schedule of Bank Charges, VISA Card Information, and Savings & Term Deposit Information, Pension account information etc.

Personal Selling:
Personal selling is also a norm at the Bank. The branch has well learned sales executives i.e., Business alumnae. Personal selling is used both for attracting individual and corporate clients.

53 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

Internet
Askari commercial bank use internet as a promotion tool to convey the message to the target audience all the information related to product and service and the organization is available on the internet

Social Marketing
ACBL has made generous contribution in the area of sport culture poverty woman & child care health & medical science human development and scientific research ACBL sponsored international squash tournaments were professional from all over the world participated Askari commercial has also sponsored other sports tournament include Golf at both amateur and professional level the bank has also contribute toward awareness program for AIDS water conservation and blindness and has promoted the country 's cause on international forum by cosponsoring the first interactive encyclopedia of Pakistan.

Public Relations
The most popular tool use by the banker and manger to increase their deposit crate awareness and loyalty public relation s also tool of promotion.

Publicity
This type of promotion uses third-party sources, and particularly the news media, to offer a favorable mention of the marketers company or product without direct payment to the publisher of the information. For example media cover any Tournament that is sponsored by ACBL.

54 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

CHAPTER # 4 FINANCIAL STATEMENT ANALYSIS


HORIZONTAL ANALYSIS VERTICAL ANALYSIS FINANCIAL RATIO ANALYSIS

55 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

BALANCE SHEET
ASSETS (Rs in millions)
Cash and balances with treasury banks Balance with other banks Lending to other financial institutions Investments Advances Operating fix assets Other assets TOTAL ASSETS

2009
19,386 8,364 4,614 67,046 135,034 9,262 10,621 254,327

2010
22,565 3,785 9,172 102,260 152,784 9,988 14,190 314,745

2011
26,168 6,235 1,592 133,757 150,711 9,349 15,945 343,756

LIABILITIES
Bills payable Borrowings Deposits and other accounts Subordinate loans Deferred tax liabilities Other liabilities TOTAL LIABILITIES Net assets Share capital Reserves Unappropriated profit 56 LAHORE COLLEGE FOR WOMEN UNIVERSITY 2,945 19,300 205,970 5,995 334 4,833 239,378 14,949 5,073 7,183 886 3,090 25,555 255,937 5,993 86 8,081 298,740 16,004 6,427 7,691 702 2,756 17,273 291,503 6,990 83 7,734 325,980 17,776 7,070 8,136 1,302

INTERNSHIP REPORT

INTERNSHIP REPORT
1,806 14,949 1,184 16,004 1,267 17,776

Surplus on revaluation of assets net of tax TOTAL CAPITAL

TOTAL LIABILITIES AND CAPITAL

254,327

314,745

343,756

INCOME STATEMENT

RUPEES IN MILLION
Markup / return / interest earned Markup / return / interest expensed Net markup / interest income

2009
22,587 13,554 9,033

2010
27,329 17,937 9,392 2,319 383 297 6,328

2011
32,766 22,700 10,067 1,630 122 44 8,236

Provision against nonperforming loans and advances 2,324 Impairment loss on AFS investment Provision for impairment in the value of investments Net markup /interest income after provisions Non markup/interest income Fee, commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of investments net Unrealized gain on revaluation of investments Other income Total nonmarkup / interest income 57 1,308 163 538 144 (2) 404 2,555 431 77 6,118

1,271 210 731 213 376 2,800

1,194 289 772 307 340 2,903

LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

Non markup/interest expenses: Administrative expenses Other charges Total nonmarkup / interest expenses Profit before taxation Taxation current prior years deferred 6,996 34 7,030 1,642 562 120 (147) 1,108 1.79 7,813 42 7,855 1,273 330 0 943 1.34 8,639 87 8,726 2,413 833 (48) 1,628 2.30

Profit after taxation Basic / diluted earnings per share Rupees

58 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

HORIZONTAL ANALYSIS

Balance Sheet
ASSETS (Rs in millions)
Cash and balances with treasury banks Balance with other banks Lending to other financial institutions Investments Advances Operating fix assets Other assets TOTAL ASSETS

2009 (%)
21 111 3 88 5 12 18 23

2010 (%)
16 (55) 99 53 13 8 34 24

2011 (%)
16 65 (83) 31 (1) (6) 12 9

LIABILITIES
Bills payable Borrowings Deposits and other accounts Subordinate loans Deferred tax liabilities Other liabilities TOTAL LIABILITIES Net assets Share capital Reserves 59 LAHORE COLLEGE FOR WOMEN UNIVERSITY 14 27 23 100 2471 2 24 15 25 (6) 5 32 24 0 (74) 67 25 7 27 6 (11) (32) 14 17 (3) (9) 9 11 10 6

INTERNSHIP REPORT

INTERNSHIP REPORT
170 9 93 (16) 13 (34) 86 11 7

Unappropriated profit Surplus on revaluation of assets net of tax TOTAL CAPITAL

TOTAL LIABILITIES AND CAPITAL

15

11

PERCENTAGE GROWTH IN ASSETS AND LIABILITIES


The total assets have increased by 23% in 2009, 24 % in 2010 and 9% in 2011. This increase in total assets from 2009 to 2010 is mainly attributed to 99% increase in lending to financial institution 13% increase in advances 34% increase in other assets The meager increase in total assets by 9 % from 2010 to 2011 is the result of a moderate changes in the following balance sheet accounts: 65% increase in balances with other banks Decrease in lending to financial statements 12 % increase in other assets On the other hand total liabilities have increased approximately in same ratio as to 24 % in 2009, 25% in 2010 and by 9% in 2011. The management focuses on the non-current assets. The current liabilities have also increased with a greater proportion compare to long term liabilities.

SHARE CAPITAL RESERVE AND TOTAL OWNER EQUITY


Share capital has increased by 25% in 2009, 27 % increase in 2010 and 9 % increase in 2011 and it shows an increase in the value of bank. Reserves have increased by 6% in the year 2010 and 2011 which is also good sign. The total owners equity has decreased from 34% in 2010. Whereas a drastic increase of 93% in 2011 has been a great come back.

60 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

Income Statement
RUPEES IN MILLION
Markup / return / interest earned Markup / return / interest expensed Net markup / interest income

2009
23 27 17

2010
21 32 4 0 (11) 286 3

2011
20 27 7 (30) (68) (85) 30

Provision against nonperforming loans and advances (39) Impairment loss on AFS investment Provision for impairment in the value of investments Net markup /interest income after provisions Non markup/interest income Fee, commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of investments net Unrealized gain on revaluation of investments Other income Total nonmarkup / interest income Non markup/interest expenses: Administrative expenses Other charges Total nonmarkup / interest expenses Profit before taxation 61 18 213 19 256 4 (6) (38) 291 (109) 18 (6) 100 15015 67

(3) 29 36 48 (82) (7) 10

(6) 38 6 45 (100) (10) 4

12 24 12 (22)

11 104 11 90

LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT
3138 (340) (237) 187 (41) (100) (100) (15) 153 (14039) 73

Taxation current prior years deferred

Profit after taxation

Markup Expenses
Markup expenses have increased from 17 %, 4%, and 7% in the year 2009, 2010 and 2011 respectively which shows the management ability to control financial cost. And is a healthy sign for the banks management.

Net Mark-Up Income/Gross Profit


The net markup income/gross profit reduced to 3% in 2010 from 67% in 2009 which is a negative sign. Whereas in the year 2011, an increase of 30% shows a regain of net markup.

Non Markup/Non Interest Income


Total operating income has increased from 10% in 2010 which is regained after Askari Bank showed a 6% decrease in 2009. On the other hand 4% increase was reported in the year 2012.

Net Income
Net income increased by 73% in 2011 which is a healthy sign for the bank. Whereas, 15 % decrease was seen in the year 2010.

62 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

VERTICAL ANALYSIS Balance Sheet ASSETS (Rs in millions)


Cash and balances with treasury banks Balance with other banks Lending to other financial institutions Investments Advances Operating fix assets Other assets TOTAL ASSETS

2009 (%)
8 3 2 26 53 4 4 100

2010 (%)
7 1 3 32 49 3 5 100

2011 (%)
8 2 0 39 44 3 5 100

LIABILITIES
Bills payable Borrowings Deposits and other accounts Subordinate loans Deferred tax liabilities Other liabilities TOTAL LIABILITIES Net assets Share capital Reserves 63 LAHORE COLLEGE FOR WOMEN UNIVERSITY 1 8 86 3 0 2 100 6 34 48 1 9 86 2 0 3 100 5 40 48 1 5 89 2 0 2 100 5 40 46

INTERNSHIP REPORT

INTERNSHIP REPORT
6 7 100 4 7 100 7 12 100

Unappropriated profit Surplus on revaluation of assets net of tax TOTAL CAPITAL

VERTICAL ANALYSIS OF BALANCE SHEET


A vertical analysis of balance sheet of Askari Bank shows that the Bank has financed its fixed assets more than the current assets. And the assets have been financed mostly be long term liabilities and a little by capital which goes in the favor of owners.

PERCENTAGE GROWTH IN ASSETS AND LIABILITIES


Cash and cash Balances with other banks have decreased from 8% in 2009 to 7% in 2010 and then increased by 8% in 2011. Investments have increased during 2009 to 2011 from 26% to 39% respectively. Advances decreased to 44% in 2011 from 53% in 2009. On the other hand current liabilities have increased more than the long term liabilities. Bills payable remained constant during the three years. Deposits have decreased from 89% in 2009 to 86% in 2010 and 2011.

SHARE CAPITAL RESERVE AND TOTAL OWNER EQUITY


Share capital was reported to constitute 40 % of owners equity in 2009 and 2011 which is good sign because it represents the increased profitability of the bank. However, it decreased to 34% in 2011. Reserves have increased by 48 % in 2011 and 2010. The total owners equity has decreased from 7% in 2011 to 12% in 2009 which is not good as it represents the growth of the bank.

64 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT Income statement

RUPEES IN MILLION
Markup / return / interest earned Markup / return / interest expensed Net markup / interest income

2009
100 60 40

2010
100 66 34 8 1 1 23

2011
100 69 31 5 0 0 25

Provision against nonperforming loans and advances 10 Impairment loss on AFS investment Provision for impairment in the value of investments Net markup /interest income after provisions Non markup/interest income Fee, commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of investments net Unrealized gain on revaluation of investments Other income Total nonmarkup / interest income Non markup/interest expenses: Administrative expenses Other charges Total nonmarkup / interest expenses 65 31 0 31 6 1 2 1 0 2 11 2 0 27

5 1 3 1 0 1 10

4 1 2 1 0 1 9

29 0 29

26 0 27

LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT
7 2 1 (1) 5 5 1 0 3 7 3 0 5

Profit before taxation Taxation current prior years deferred

Profit after taxation

VERTICAL ANALYSIS INCOME STATEMENT


The vertical analysis of the income statement of Askari Commercial Bank Ltd shows that the markup income is taken as 100% because it is the primary source and the real objective of the operations of the bank.

MARKUP EXPENSES
Markup expenses have increased from 60% in 2009 to 69% in 2011 which is not a good sign.

NET MARK-UP INCOME/GROSS PROFIT


The net markup income/gross profit has reduced to 9% in 2011 from 10% in 2010 which is a negative sign and it is due to no control over markup expenses. It was reported to be 11% in 2011.

NON MARKUP/NON INTEREST INCOME


Total operating income is 27% in 2011 and 29% in 2010 and 31% in 2009, which is a negative sign.

NET INCOME
Net income of the bank has shown a 5 % increase in 2011 from 3% in 2010. Whereas, it was 5% in 2009, the same as in year 2011.

66 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT FINANCIAL RATIO ANALYSIS

LIQUIDITY RATIOS
Liquidity ratios attempt to measure a company's ability to pay off its short-term debt obligations. This is done by comparing a company's most liquid assets (or, those that can be easily converted to cash), to its short-term liabilities. They show the number of times the short term debt obligations are covered by the cash and liquid assets. If the value is greater than 1, it means the short term obligations are fully covered.

CURRENT RATIO
The current ratio is a popular financial ratio used to test a company's liquidity by deriving the proportion of current assets available to cover current liabilities. The concept behind this ratio is to ascertain whether a company's short-term assets (cash, cash equivalents, marketable securities, receivables and inventory) are readily available to pay off its short-term liabilities (notes payable, current portion of term debt, payables, accrued expenses and taxes ). In theory, the higher the current ratio, the better. Current Ratio = Current assets Current liabilities

Ratio
Current assets (Rs. in 000) Current liabilities (Rs. in 000) Current ratio INTERPRETATION:

2009
206,901,500 167,871,813 1.23

2010
203,336,207 206,743,943 0.98

2011
254,582,770 136,886,195 1.86

2009: For every Re.1 in current liability, Askari bank has Re.1.23 in its current assets. 2010: For every Re.1 in current liability, Askari bank has Re.0.98 in its current assets. 2011: For every Re.1 in current liability, Askari bank has Re.1.86 in its current assets.

67 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT CURRENT RATIO

2.5 2 1.5 1 0.5 0 2009 2010 2011 RATIOS

TIME SERIES ANALYSIS: The greater the value of this ratio, the more capable the firm is to payback its short term obligations. In the year 2010, current ratio decreased by 0.25 in comparison to the year 2009. This shows a decrease in the Askari banks liquidity which is contributed by the following changes in currents assets: a moderate increase in cash and balances with other treasury banks. While the portion of currents liabilities showed a significant increase decrease in balances with other banks, a high increase in bills payable and borrowings. Current ratio showed an increase of 0.88 in the year 2011 in relation to the year 2010. This improvement in the banks liquidity and hence solvency is due to a significant increase in the current assets portion of cash and balances with treasury banks, balances with other banks, investments whereas the current liabilities were decreased due to bills payable, borrowings, deferred tax liabilities.

68 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT QUICK RATIO

The quick ratio is a measure of a company's ability to meet its short-term obligations using its most liquid assets (near cash or quick assets). Quick assets include those current assets that presumably can be quickly converted to cash at close to their book values. The ratio tells creditors how much of the company's short term debt can be met by selling all the company's liquid assets at very short notice. We calculate this ratio as under:Quick ratio = Current assets inventory Current liabilities

Ratio
Quick assets (Rs. in 000) Current liabilities (Rs. in 000) Quick ratio

2009
206,002,395 167,871,813 1.23

2010
202,109,923 206,743,943 0.97

2011
253,128,226 136,886,195 1.85

INTERPRETATION: 2009: For every Re.1 in current liability, the company has Re.1.23 in its current assets (excluding prepaid expenses.). 2010: For every Re.1 in current liability, the company has Re.0.97 in its current assets (excluding prepaid expenses). 2011: For every Re.1 in current liability, the company has Re.1.85 in its current assets (excluding prepaid expenses).

69 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

QUICK RATIO
2 1.5 1 RATIOS 0.5 0 2009 2010 2011

TIME SERIES ANALYSIS: In the year 2010, quick ratio decreased by an amount of Rs.0.26 in comparison to the previous year. This decrease is attributed to moderate increase in advances, cash and balances with other treasury banks, balances with other banks thereby leading to a moderate increase in the banks quick assets. While the portion of currents liabilities showed a significant increase decrease in balances with other banks, a high increase in bills payable and borrowings. The year 2011 showed an increase of Rs.0.88 in the quick ratio. So, Askari bank has been able to best meet its short-term obligation in the year 2011 with its most liquid assets. This significant improvement in the quick ratio in the year 2011 is attributable to the following changes in quick assets: a very moderate decrease in advances, a high increase in other quick assets. The current liabilities, on the other hand, significantly decreased mainly due to a considerable decrease in borrowings and bills payable.

70 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT WORKING CAPITAL

Working capital is the amount by which the value of a company's current assets exceeds its current liabilities. Working capital measures how much in liquid assets a company has available to build its business. The number can be positive or negative, depending on how much debt the company is carrying. In general, companies that have a lot of working capital will be more successful since they can expand and improve their operations. Companies with negative working capital may lack the funds necessary for growth. We calculate it as under:

Working =

capital Current assets - current liabilities

Ratio
Current assets (Rs. in 000) Current liabilities (Rs. in 000) Working capital

2009
206,901,500 167,871,813 39,029,687

2010
203,336,207 206,743,943 (3,407,736)

2011
254,582,770 136,886,195 117,696,575

INTERPRETATION: 2009: Askari has been able to pay off its short term liabilities. 2010: Askari has been not able to pay off its short term liabilities. 2011: Askari has been able to pay off its short term liabilities.

71 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT WORKING CAPITAL

140,000,000 120,000,000 100,000,000 80,000,000 60,000,000 40,000,000 20,000,000 0 -20,000,000

RATIOS

2009

2010

2011

TIME SERIES ANALYSIS: Positive working capital in the year 2009 and 2011 means that the Askari is able to pay off its short-term liabilities. Negative working capital in the year 2010 means that Askari currently is unable to meet its short-term liabilities with its current assets. The positive figures of 2009 and 2011 are mainly due to high increase in the quick assets portion of the current assets, particularly in the year 20011. But in the year 2010, quick assets decreased moderately, leading to a decrease in current assets. But the current liabilities increased immensely, causing current liabilities to exceed current assets.

72 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT TOTAL CAPITALIZATION RATIO

Total capitalization ratio indicates the leverage/debt component of a firm. It also tests the soundness of capital structure of a company. Higher share of share holders equity in the Capital Structure shows the better solvency position of a company. This ratio supports the company growth and operations. A low equity share will be risk for the creditors of the company. We calculate this ratio as under:Total capitalization ratio = Long term debt Long term debt + Stockholders equity

Ratio
Long term debt (Rs. in 000) Long term debt + stockholders equity (Rs. in 000) Total capitalization ratio

2009
71,506,561 84,649,249 84%

2010
91,996,467 106,817,045 86%

2011
189,093,845 205,602,627 92%

INTERPRETATION: 2009: The banks long term debt constituents 84% of the capital structure. 2010: The banks long term debt constituents 86 % of the capital structure. 2011: The banks long term debt constituents 92% of the capital structure.

73 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT TOTAL CAPITALIZATION RATIO

1.2 1 0.8 0.6 0.4 0.2 0 2009 2010 2011 RATIOS

TIME SERIES ANALYSIS: Ideally, a lower total capitalization ratio depicts a better liquidity position. Higher the ratio means higher portion of debt comprises of long term credit financing than equity financing. The bank total capitalization ratio increases from 2009 to 2010 but declines in 2011. It means that each year the bank had higher risks and chances of bankruptcy. In the years 2009, 2010 and 2011, long term debt and stockholders equity have shown a remarkable increase in each subsequent year. This shows that ABL prefers debt financing over equity financing in maintain its capital structure.

74 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

ACTIVITY RATIO
An activity ratio is a metric which determines the ability of a company to convert its balance sheet accounts into revenue. Activity ratios measure company sales per another asset account. Activity ratios measure the efficiency of the company in using its resources. Since most companies invest heavily in accounts receivable or inventory, these accounts are used in the denominator of the most popular activity ratios. Activity ratios are critical in evaluating a company's fundamentals because, in addition to expressing how well a company generates revenue, activity ratios also indicate how well the company is being managed.

TOTAL ASSETS TURNOVER RATIO


Asset turnover measures a firm's efficiency at using its assets in generating sales or revenue - the higher the number the better. It also indicates pricing strategy: companies with low profit margins tend to have high asset turnover, while those with high profit margins have low asset turnover. This ratio is calculated as: Total asset turnover = Sales Total assets

Ratio
Net sales (Rs. in 000) Total asset (Rs. in 000) Total assets turnover

2009
22,586,736 254,327,446 0.089

2010
27,328,908 314,744,552 0.087

2011
32,766,351 343,756,306 0.095

INTERPRETATION: 2009: Askari bank turned over its assets 0.089 times. 2010: Askari bank turned over its assets 0.087 times. 2011: Askari bank turned over its assets 0.095 times.

75 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT TOTAL ASSETS TURNOVER RATIO

0.1
0.095 0.09 RATIOS 0.085 0.08 2009 2010 2011

TIME SERIES ANALYSIS: In the year 2010, a very minor decrease of .002 was seen in the total asset turnover of Askari bank than the previous year. This decrease in asset turnover is explained by the ratio in which the total assets and net sales increased in the year 2010. Net sales increased by 21% whereas the total assets increased by 24%. This increase in total assets has been contributed by investments. Total asset turnover increased from 0.087 to 0.095 in the year 2010 and 2011 respectively. This immense increase is the result of great increase in the total asset account titles investments and advances. Net sales also increased in a high proportion in the year 2011 leading to an efficient management of assets.

76 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT FIXED ASSET TURNOVER RATIO

Fixed asset turnover ratio compares the sales revenue a company to its fixed assets. This ratio indicates the productivity of fixed assets in generating revenues. If a company has a high fixed asset turnover ratio, it shows that the company is efficient at managing its fixed assets. Fixed assets are important because they usually represent the largest component of total assets. An increasing trend in fixed assets turnover ratio is desirable because it means that the company has less money tied up in fixed assets for each unit of sales. A declining trend in fixed asset turnover may mean that the company is over investing in the property, plant and equipment. This ratio is calculated as: Fixed asset turnover = Sales Total fixed assets

Ratio
Net sales (Rs. in 000) Fixed assets (Rs. in 000) Fixed assets turnover

2009
22,586,736 9,261,609 2.44

2010
27,328,908 9,987,963 2.74

2011
32,766,351 9,348,815 3.5

INTERPRETATION: 2009: Askari bank turned over its fixed assets 2.24 times. 2010: Askari bank turned over its fixed assets 2.74 times. 2011: Askari bank turned over its fixed assets 3.5 times.

77 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

FIXED ASSET TURNOVER


4 3 2 RATIOS 1 0 2009 2010 2011

TIME SERIES ANALYSIS: An increasing trend can be seen in the fixed asset turnover ratio. A higher fixed-asset turnover ratio shows that the bank has been more effective in using the investment in fixed assets to generate revenues as ABL has been able to maintain its fixed assets to a figure of approximately 9,000,000 but net sales figures raised each year.

78 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

DEBT RATIOS
A ratio that indicates what proportion of debt a company has relative to its assets or equity. The measure gives an idea to the leverage of the company along with the potential risks the company faces in terms of its debt-load. A debt ratio of greater than 1 indicates that a company has more debt than assets/equity; meanwhile, a debt ratio of less than 1 indicates that a company has more assets than debt/equity. Used in conjunction with other measures of financial health, the debt ratio can help investors determine a company's level of risk.

DEBT ASSET RATIO


The debt/asset ratio shows the proportion of a company's assets which are financed through debt. If the ratio is less than one, most of the company's assets are financed through equity. If the ratio is greater than one, most of the company's assets are financed through debt. Companies with high debt/asset ratios are said to be "highly leveraged," and could be in danger if creditors start to demand repayment of debt. It is calculated by using the formula: Debt asset ratio = Total debt Total assets

Ratio
Total liabilities (Rs. in 000) Total assets (Rs. in 000) Debt asset ratio INTERPRETATION:

2009
239,378,374 254,327,446 0.94

2010
298,740,410 314,744,552 0.95

2011
325,980,040 343,756,306 0.95

2009: Askari has financed 94% of its assets with debts. 2010: Askari has financed 95% of its assets with debts. 2011: Askari has financed 95% of its assets with debts.

79 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

DEBT ASSET RATIO


0.955 0.95 0.945 RATIOS 0.94 0.935 2009 TIME SERIES ANALYSIS: A debt ratio of greater than 1 indicates that a company has more debt than assets and a debt ratio of less than 1 indicates that a company has more assets than debt. ABL has been maintaining a debt ratio of less than 1 over the three years which shows that ABL has more assets than debt which is satisfactory indicating that the company is less leveraged. 2010 2011

80 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT DEBT EQUITY RATIO

The debt-to-equity ratio is a measure of the relationship between the capital contributed by creditors and the capital contributed by shareholders. Debt-to-equity ratio is the key financial ratio and is used as a standard for judging a company's financial standing. It is also a measure of a company's ability to repay its obligations. When examining the health of a company, it is critical to pay attention to the debt/equity ratio. If the ratio is increasing, the company is being financed by creditors rather than from its own financial sources which may be a dangerous trend. Lenders and investors usually prefer low debt-to-equity ratios because their interests are better protected in the event of a business decline. Thus, companies with high debt-to-equity ratios may not be able to attract additional lending capital. Formula for this ratio is as under: Debt equity ratio = Total debt Total stockholders equity

Ratio
Total liabilities (Rs. in 000) Total stockholders equity (Rs. in 000) Debt equity ratio

2009
239,378,374 13,142,688 18.21

2010
298,740,410 14,820,578 20.16

2011
325,980,040 16,508,782 19.75

INTERPRETATION:
2009: Askari bank has Rs.18.21 in debt for every Rs. 1 of stockholders equity. 2010: Askari bank has Rs.20.16 in debt for every Rs. 1 of stockholders equity. 2011: Askari bank has Rs.19.75 in debt for every Rs. 1 of stockholders equity.

81 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT DEBT EQUITY RATIO

21 20 19 RATIOS 18 17 2009 2010 2011

TIME SERIES ANALYSIS: It gives a comparison of how much of the business was financed by owner's equity and how much was financed through debt or liabilities. Debt-equity ratio rose from 18.21 in 2009 to 20.16 in the year 2010. However, it decreases to 19.75 in 2011. In 2010, total liabilities increased significantly due to increase in bills payable, borrowings while a moderate increase was seen in these accounts in 2011. Total equity, on the other hand, increased immensely in each year. If a lot of debt is used to finance increased operations (high debt to
equity), the company could potentially generate more earnings than it would have without this outside financing. If this were to increase earnings by a greater amount than the debt cost (interest), then the shareholders benefit as more earnings are being spread among the same amount of shareholders. However, the cost of this debt financing may outweigh the return that the company generates on the debt through investment and business activities and become too much for the company to handle. This can lead to bankruptcy, which would leave shareholders with nothing.

82 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT TIMES INTEREST EARNED RATIO

The times interest earned ratio indicates the extent of which earnings are available to meet interest payments. Higher value of times interest earned ratio is favorable meaning greater ability of a business to repay its interest and debt. Lower values are unfavorable. In general, times interest earned of 1.5 or below is unsafe. A ratio of 1.00 means that income before interest and tax of the business is just enough to pay off its interest expense. That is why times interest earned ratio is of special importance to creditors. They can compare the debt repayment ability of similar companies using this ratio. Other things equal, a creditor should lend to a company with high times interest earned ratio. It is also beneficial to create a trend of values of times interest earned. Its formula is as under: Net income + interest Interest

Time interest earned ratio =

Ratio
EBIT (Rs. in 000) Interest expense (Rs. in 000) Times interest earned ratio

2009
15,186,033 13,554,078 1.12

2010
19,209,752 17,936,616 1.07

2011
25,112,334 22,699,583 1.11

INTERPRETATION: 2009: Askari bank has earned 1.12 times its interest charges. 2010: Askari bank has earned 1.07 times its interest charges. 2011: Askari bank has earned 1.11 times its interest charges.

83 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

TIMES INTEREST EARNED RATIO


1.14 1.12 1.1 1.08 1.06 1.04 2009 TIME SERIES ANALYSIS: A lower times interest earned ratio means fewer earnings are available to meet interest payments. This ratio decreased in the year 2010 by 0.05 whereas an increase of 0.04 was reported in the year 2011. Although Askari bank was able to pay its interest obligation in these years but the banks ability to continue to service its debt is not satisfactory. 2010 2011 RATIOS

84 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

PROFITABILITY RATIOS
A class of financial metrics that are used to assess a business's ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time. For most of these ratios, having a higher value relative to a competitor's ratio or the same ratio from a previous period is indicative that the company is doing well. Profitability ratios are useful in fundamental analysis which investigates the financial health of companies.

NET PROFIT MARGIN


Net profit margin is the percentage of revenue remaining after all operating expenses, interest, taxes and preferred stock dividends (but not common stock dividends) have been deducted from a company's total revenue. Net profit margin is one of the most closely followed numbers in finance. Shareholders look at net profit margin closely because it shows how good a company is at converting revenue into profits available for shareholders. It is calculated as under: Net Profit Margin = Net income 100 Sales

Ratio
Net income (Rs. in 000) Net sales (Rs. in 000) Net profit margin

2009
1,097,507 22,586,736 4.86%

2010
943,177 27,328,908 3.45%

2011
1,627,698 32,766,351 4.97%

INTERPRETATION: 2009: 4.86 % of each dollar earned by Askari bank is translated into profits. 2010: 3.45 % of each dollar earned by Askari bank is translated into profits. 2011: 4.97 % of each dollar earned by Askari bank is translated into profits.

85 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

NET PROFIT MARGIN


6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 2009 2010 2011

RATIOS

TIME SERIES ANALYSIS: In the year 2010, net profit decreased by 1.41 % as the net income decreased although sales showed an increase in the corresponding year. Whereas an increase of 1.52% was recorded in the year 2011 probably because the net income increased. Askari bank has been most efficient in 2011 as it has been earning higher margin in the 2011 than in 2010 and 2009. So ICI has been most effective in 2011 in converting revenue into actual profits. Changes in net profit margin are endlessly scrutinized. In general, when a company's net profit margin is declining over time, a myriad of problems could be to blame, ranging from decreasing sales to poor customer experience to inadequate expense management.

86 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT RETURN ON EQUITY

The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. ROE is more than a measure of profit; it's a measure of efficiency. A rising ROE suggests that a company is increasing its ability to generate profit without needing as much capital. It also indicates how well a company's management is deploying the shareholders' capital. The higher the ROE, the better. ROE is expressed as a percentage and calculated as: Net income 100 Common stock equity

ROE =

Ratio
Net income (Rs. in 000) Total equity (Rs. in 000) Return on equity

2009
1,097,507 13,554,078 8.1%

2010
943,177 14,820,578 6.36%

2011
1,627,698 16,508,782 9.85%

INTERPRETATION:
2009: 8.1% of earnings result from each dollar of equity. 2010: 6.36% of earnings result from each dollar of equity. 2011: 9.85% of earnings result from each dollar of equity.

87 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

RETURN ON EQUITY
12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 2009 2010 2011

RATIOS

TIME SERIES ANALYSIS: This ratio is useful for comparing the profitability of the company to that of other firms in the same industry. In year 2009 ROE goes to 8.1% and in 2010 it goes down to 6.39% as the net profit decreases whereas total equity increases. Whereas in the year 2011, ROE increases to 9.85% . During the period 2009-2010, share capital increased significantly while a slight decrease in unappropriate profit caused only a slight increase in total equity of ABL. Net Income of ABL stunted to a great extent mainly due to increase in profit before taxation. In the year 2011, a high increase share capital and unappropriate profit led to an increase in total equity. The reason for increase in ROE during 2011 is the evident from the remarkable increase in net sales from Rs.943, 177 (2010) to 1,627,698 (2011).

88 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

GROSS PROFIT MARGIN


A financial metric used to assess a firm's financial health by revealing the proportion of money left over from revenues after accounting for the cost of goods sold. Gross profit margin serves as the source for paying additional expenses and future savings. Gross profit margin is a key measure of profitability by which investors and analysts compare similar companies and companies to their overall industry. The metric is an indication of the financial success and viability of a particular product or service. The higher the percentage, the more the company retains on each dollar of sales to service its other costs and obligations.

Gross profit margin =

Gross profit 100 Net Sales

Ratio
Gross profit (Rs. in 000) Net sales (Rs. in 000) Gross profit margin

2009
9,032,658 22,586,736 39.9%

2010
9,392,292 27,328,908 34%

2011
10,066,768 32,766,351 30.7%

INTERPRETATION: 2009: 39.9% of each sales rupee remained after Askari bank had paid for its market offerings. 2010: 34% of each sales rupee remained after Askari bank had paid for its market offerings. 2011: 30.7% of each sales rupee remained after Askari bank had paid for its market offerings.

89 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

GROSS PROFIT MARGIN


50.00%

40.00% 30.00%
20.00% 10.00% 0.00% 2009 TIME SERIES ANALYSIS: GPM falls from 39.9% to 34% indicating a decrease of 5.9% during the period 2009-2010. Net sales showed a moderate increase whereas gross profit increased moderately. This depicts a high increase in interest expense as well leading to lower profit margins. This ratio further decreased to 30.7%. Even though net sales and gross profit margin increased sufficiently during the period but the increase in interest is far higher. Interest expense has increased due to the mounting figures in borrowings under total liabilities. 2010 2011 RATIOS

90 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT RETURN ON ASSETS

Return on assets measures the amount of profit the company generates as a percentage of the value of its total assets. The profit percentage of assets varies by industry, but in general, the higher the ROA the better. Falling ROA is almost always a problem, but investors and analysts should bear in mind that the ROA does not account for outstanding liabilities and may indicate a higher profit level than actually derived. ROA = Net income 100 Total Assets

Ratio
Net income (Rs. in 000) Total assets (Rs. in 000) Return on assets

2009
1,097,507 254,327,446 0.43%

2010
1,273,136 314,744,552 0.40%

2011
2,412,751 343,756,306 0.70%

INTERPRETATION: 2009: 0.43% of earnings result from each dollar of assets that Askari bank controls. 2010: 0.40% of earnings result from each dollar of assets that Askari bank controls. 2011: 0.70% of earnings result from each dollar of assets that Askari bank controls.

91 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

RETURN ON ASSETS
50.00% 40.00% 30.00% 20.00% RATIOS

10.00% 0.00%
2009 2010 2011

TIME SERIES ANALYSIS: This ratio should be only used to compare companies in the same industry. The reason for this is that some industries are more asset-insensitive while some industries are less asset-insensitive. The higher ROA ratio indicates that the company is earning more money on less investment. The ROA of ABL has decreased to 0.40% in 2010 from 0.43% in 2009. However, ROA greatly rises in the year 2011 with a ratio of 0.70% which depicts that profitability of ABL increased during the year as ABL employed more of its assets, specifically investments, and a high return on fixed assets contributed to the increases in net sales and thus EBIT. All these events caused the net income to increase by almost twice its amount in 2010.

92 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

MARKET RATIOS
Market ratios measure investor response to owning a company's stock and also the cost of issuing stock. These are concerned with the return on investment for shareholders, and with the relationship between return and the value of an investment in companys shares.

EANRING PER SHARE


The term earnings per share (EPS) represents the portion of a company's earnings, net of taxes and preferred stock dividends, that is allocated to each share of common stock. Because the number of shares outstanding can fluctuate, a weighted average is typically used.

EPS =

Earnings available for common stockholders Total shares outstanding

Ratio
Earnings available to common stockholders (Rs. in 000) Total shares outstanding Earnings Per Share (Rs.)

2009
1,097,507 507,346,635 2.16

2010
943,177 642,743,940 1.48

2011
1,627,698 707,018,334 2.3

INTERPRETATION: 2009: Askari Bank earns Rs. 2.16 on each outstanding share of common stock. 2010: Askari Bank earns Rs. 1.48 on each outstanding share of common stock 2011: Askari Bank earns Rs. 2.3 on each outstanding share of common stock

93 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT EARNINGS PER SHARE

2.5 2 1.5 1 0.5 0 2009 2010 2011 RATIOS

TIME SERIES ANALYSIS: The EPS for the year ended December 31, 2010 was Rs.1.48, against the previous years Rs.2.16. And the EPS for year 2011 was Rs. 2.3 which depicts that ABLs earnings on each outstanding share were highest in 2011 in comparison to the previous years. The improvements primarily due to reduction in provision / write-off against NPLs during the year 2011.

94 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT DIVIDEND PER SHARE

The total amount a publicly-traded company pays in ordinary dividends over a given period of time divided by the average number of shares outstanding. Dividends per share give a potential investor an idea of how much he/she will receive in dividends if he/she buys a given stock. Total dividend paid Total shares outstanding

DPS =

Ratio
Dividend paid (Rs. in 000) Total shares outstanding Dividend Per Share (Rs.)

2009
825 507,346,635 0.0016

2010
293 642,743,940 0.00046

2011
219 707,018,334 0.00031

INTERPRETATION: 2009: Askari bank paid Rs. 2.16 on each outstanding share of common stock. 2010: Askari Bank earns Rs. 1.48 on each outstanding share of common stock 2011: Askari Bank earns Rs. 2.3 on each outstanding share of common stock

95 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

DIVIDEND PER SHARE


0.002 0.0015 0.001 0.0005 0 RATIOS

2009

2010

2011

TIME SERIES ANALYSIS: The Dividend per Share figure is used by investors and analysts as an indicator of a company's financial health and profitability. The DPS in 2009 is Rs. 0.016 that reflects shareholder have or will receive Rs. 0.016 for each share they own. DPS decreased to Rs. 0.00046 n the year 2010 and decreased to 0.00031 in the year 2011. Decreasing dividends is a negative signal to the market so this ratio needs sufficient improvement.

96 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT PRICE-EARNING RATIO

The price-to-earnings ratio (P/E) is a valuation method used to compare a companys current share price to its per-share earnings. The price-to-earnings ratio is a powerful, but limited tool. For investors, it allows a very quick snapshot of the companys finances without getting bogged down in the details of an accounting report.

E/P

Market price per share EPS

Ratio
Market price per share of common shares (Rs) EPS (Rs.) Price- Earnings Ratio

2009
27.30 2.18 12.52

2010
17.69 1.48 11.5

2011
10.03 2.30 4.36

INTERPRETATION: 2009: The investors are willing to pay Rs. 12.52 for each of Rs. 1 earning. 2010: The investors are willing to pay Rs. 11.5 for each of Rs. 1 earning. 2011: The investors are willing to pay Rs. 4.36 for each of Rs. 1 earning.

97 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

PRICE-EARNINGS RATI0
14 12 10

8
6 4 2 RATIOS

0
2009 2010 2011

TIME SERIES ANALYSIS: Investors were paying Rs. 1.02 less in 2010 than in 2009 for a share compared to the earnings of Askari bank that it generates per share because the market per share decreased in the year 2010 and so did the EPS. Similarly, investors paid Rs. 7.14 less in the year 2011 than in 2010 due a huge downfall in the market price and EPS.

98 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT DUPONT ANALYSIS

DuPont analysis examines the return on equity (ROE) analyzing profit margin, total asset turnover, and financial leverage. The DuPont Analysis is important determines what is driving a company's ROE; Profit margin shows the operating efficiency, asset turnover shows the asset use efficiency, and leverage factor shows how much leverage is being used. The method goes beyond profit margin to understand how efficiently a company's assets generate sales or cash and how well a company uses debt to produce incremental returns. Using these three factors, a DuPont analysis allows analysts to dissect a company, efficiently determine where the company is weak and strong and quickly know what areas of the business to look at (i.e., inventory management, debt structure, margins) for more answers. The measure is still broad, however, and is not a substitute for detailed analysis.

Ratio
Net income (Rs. in 000) Total assets (Rs. in 000) DuPont analysis

2009
1,097,507 254,327,446 0.43%

2010
943,177 314,744,552 0.30%

2011
1,627,698 343,756,306 0.47%

99 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

DUPONT ANALYSIS
0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2009 2010 2011

RATIOS

TIME SERIES ANALYSIS: The DuPont analysis looks uses both the income statement as well as the balance sheet to perform the examination. As a result, major asset purchases, acquisitions, or other significant changes can distort the ROE calculation. Many analysts use average assets and shareholders' equity to mitigate this distortion, although that approach assumes the balance sheet changes occurred steadily over the course of the year, which may not be accurate either ROA DuPont in the year 2009 was 0.43%, which decreased to 0.30% in 2010 and in 2011, the ratio increased to 0.47%. Since the banks net profit margin is in good position, its total assets turnover ratio is low thus resulting in a low return on assets.

100 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

RATIOS FOR BANKS EARNING ASSETS TO TOTAL ASSETS


Earning asset is an asset that produces money for a company without any work needing to be done. Earning assets include such things as stocks, bonds, certificates of deposit, and generally anything that earns interest or dividends. Earning assets total asset ratio is the ratio between the assets which generate income for the business to total assets owned by the business. The formula for calculating this ratio is: Earning assets to total assets = Earning assets Total assets

Ratio
Earning assets (Rs. in 000) Total assets (Rs. in 000) Earning assets to total assets

2009
161,967,407 254,327,446 64%

2010
151,267,791 314,744,552 48%

2011
216,059,094 343,756,306 63%

INTERPRETATION: 2009: 64% of the total assets that ABL controls are earning assets. 2010: 48% of the total assets that ABL controls are earning assets. 2011: 63% of the total assets that ABL controls are earning assets.

101 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT EARNING ASSETS TO TOTAL ASSETS

70% 60% 50% 40% 30% 20% 10% 0% 2009 2010 2011 RATIOS

TIME SERIES ANALYSIS: It is the ratio between the assets which generate income for the business to total assets owned by the business. Increase in the ratio depicts strength and good performance of the bank. The earning assets to total assets ratio computed for the years 2009, 2010, 2011 is 64%, 48%, 63% respectively. Earning assets of ABL are investments and advances (current portion only). The 16% increase in the period 2009-2010 is attributed to the increase in investment and advances, which increased earning assets of ABL by 6%. The total assets, on the other hand, increased by 24% in the same period due to massive increase in account lending to other financial institutions. This gap in the proportion in which both the account titles increased led to a decrease in the earning assets to total assets ratio. However, the banks management efficiency to utilize its assets increased during the period 2010-2011 as reflected by the 15% increase in the earning assets to total assets ratio. The credit for this huge increase in this ratio goes to 30% increase in earning assets in comparison to only 8% increase in the total assets.

102 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT RETURN ON EARNING ASSETS

This ratio measures the profitability situation of the bank in terms of the earnings assets employed by the bank instead of the total assets. Higher the value of this ratio, better the entity in generating return on the earning assets employed or utilized in sales. This ratio measures what percentage of earnings result from each dollar of earning assets the bank controls. We calculate this ratio as under:Return on earning assets = Net income Earning asset

Ratio
Net income (Rs. in 000) Earning assets (Rs. in 000) Return on earning assets

2009
1,097,507 161,967,407 0.68%

2010
1,273,136 151,267,791 0.84%

2011
2,412,751 216,059,094 1.12%

INTERPRETATION: 2009: 0.68% of earnings result from each dollar of earning assets that Askari bank controls. 2010: 0.84% of earnings result from each dollar of earning assets that Askari bank controls. 2011: 1.12% of earnings result from each dollar of earning assets that Askari bank controls.

103 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

RETURN ON EARNING ASSETS


1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% 2009 2010 2011 RATIOS

TIME SERIES ANALYSIS: In the year 2010, ABL was able to generate 0.84% earnings from its earnings assets employed in its business operations which has improved sufficiently from the previous years 0.68%. Earning assets were increased by 6% while the net income increased by 14%, which is twice more than the increase in earning assets. This ratio further increased to 1.12 %, an increase of 0.28% than the previous year. The ratio has increased due to a slight increase of 15% in the total earning assets in relation to a massive increase in net income by 89.5 % , which is a healthy sign for the bank as the ratio between the growing percentage of the two accounts in huge. In short, the increasing trend in the return on earning assets ratio shows the efficiency of ABLs management in translating its earning assets to earnings with each successive year.

104 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

INTEREST MARGIN TO EARNING ASSETS


Also known as net interest margin, it is the ratio of net interest income to invested earning assets. This ratio provides an indication of managements ability to control the spread between interest income and interest expense. This ratio makes use of interest margin which is calculated by deducting the banks interest earned from its interest expense. So this ratio takes into account three aspects: the interest income generated by the bank, interest expense paid by the bank to its lenders or creditors and earning assets employed by the bank in its business operations. We calculate it as under: Interest margin Interest margin to earning assets = Earning assets

Ratio
Interest margins (Rs. in 000) Earning assets (Rs. in 000) Interest margin to earning assets

2009
9,032,658 161,967,407 5.58%

2010
9,392,292 151,267,791 6.2%

2011
10,066,768 216,059,094 4.66%

INTERPRETATION: 2009: ABL has earned 5.58% more money after paying interest expenses than was earned from earning assets that it controls. 2010: ABL has earned 6.2% more money after paying interest expenses than was earned from earning assets that it controls. 2011: ABL has earned 4.66% more money after paying interest expenses than was earned from earning assets that it controls.

105 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

INTEREST MARGIN TO EARNING ASSETS


7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 2009 2010 2011 RATIOS

TIME SERIES ANALYSIS: A positive interest margin to earning assets means the investment strategy pays more interest than it costs. The net Interest margin can be expressed as a performance metric that examines the success of a firms investment decisions as contrasted to its debt situations. A negative Net Interest Margin indicates that the firm was unable to make an optimal decision, as interest expenses were higher than the amount of returns produced by investments. During the time period 2009-2010, total liabilities increased significantly by 20% due to large increase in borrowings and bills payable. Moreover, interest expense increased by 24 % as a result of huge increase in total liabilities. Earning assets increased by 6% only and hence the interest margin to earning assets rose from 5.58% to 6.2%. Considering the time period 2010-2011, total liabilities increased moderately by 8% where a decrease in the borrowings and bills payable could be seen. Moreover, interest expense increased by 7.6 % as a result of increase in total liabilities. Earning assets increased by 15% and hence the interest margin to earning assets falls from 6.2% to 4.66%. This decrease is explained by the gap between growth rates of the two accounts: interest expense and earning assets.

106 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT EQUITY CAPITAL TO TOTAL ASSETS

The equity capital to total assets ratio is one of the standard formulas used to ascertain the overall financial stability of a company. It is a ratio used to help determine how much shareholders would receive in the event of a company-wide liquidation. The ratio, expressed as a percentage, is calculated by dividing total shareholders' equity by total assets of the firm, and it represents the amount of assets on which shareholders have a residual claim. The figures used to calculate the ratio are taken from the company's balance sheet. A company that has relatively few assets that are completely owned and controlled by the company, but has outstanding debt that is equal to or exceeds the worth of the assets, would not be considered a good investment. At the same time, a company with a strong body of assets and relatively little debt may be a very good investment. However, it is important to note that low debt and strong assets may also indicate a company that is very conservative and may be opposed to growth strategies. We calculate this ratio as under:Total equity Equity capital to total assets Total assets =

Ratio
Total equity (Rs. in 000) Total assets (Rs. in 000) Equity capital to total assets

2009
13,142,688 254,327,446 5.17%

2010
14,820,578 314,744,552 4.70%

2011
16,508,782 343,756,306 4.8%

INTERPRETATION: 2009: In the event of liquidation, all shareholders of ABL would receive 5.17% of total assets. 2010: In the event of liquidation, all shareholders of ABL would receive 4.70% of total assets. 2011: In the event of liquidation, all shareholders of ABL would receive 4.8% of total assets.

107 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

EQUITY CAPITAL TO TOTAL ASSETS


5.30% 5.20% 5.10% 5.00% 4.90% 4.80% 4.70% 4.60% 4.50% 4.40% 2009 2010 2011

RATIOS

TIME SERIES ANALYSIS: The decrease in equity to capital ratio from 5.17% to 4.7% for the years 2009 and 2010 respectively is attributed to the 19% increase in total assets and 11% increase in total equity leading to lower cushion available for stockholders of ABL in the event of liquidation. The increase in both the balance sheet accounts is connected to the significant increase in cash and balance with treasury banks, investments and share capital. The slight increase in equity to capital ratio from 4.7% to 4.8% for the years 2010 and 2011 respectively is attributed to the 8.4% moderate increase in total assets and 10% increase in total equity leading to a slightly higher cushion available for stockholders of ABL in the event of liquidation. The increase in both the balance sheet accounts is connected to the significant increase in cash and balance with treasury banks, cash and balances with other banks, investments and share capital.

108 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

SUMMARY
LIQUIDITY RATIOS ABL was best able to meet its short term obligations in the order: 2011, 2009, and 2010. Although ABL holds a strong liquidity position but 2011 proved to be the best year in terms of ability ABL to pay off its obligations as they come due. ACTIVITY RATIOS

ABL has been more efficient in the year 2011 than in 2009 and 2010 in translating its resources in to revenues. ABL has managed its fixed assets most efficiently in 2011 although net income has increased each year but the growth rate of the net income and total assets has been huge in the year 2011 in comparison to the last 2 years. Another reason was that ABL stepped in to Ibanking which greatly increased its sales along with the increase in sales contributed by additional working hours in some of the branches in ABL. DEBT RATIOS

ABLs debt ratio depicts that the year 2011 was the best in terms of proportion of debt financing used to generate profits, whereas this proportion is decreases in 2010 than in 2009. And the increasing trend in times interest ratio also shows lower solvency risk for ABL in each subsequent year. PROFITABILITY RATIOS

2011 proved to be the best year in terms of the ABLs ability to convert its various balance sheet accounts into profits. This shows that in the year 2011, ABL has been better able to control its earning assets, anticipating new technologies and better implementation of sales strategies. MARKET RATIOS

Market value of ABL as computed against current share price has shown a remarkable increasing trend depicting that ABL is generating more earnings in each successive year on each of its outstanding shares. However, the dividend per share shows a decreasing trend which reflects that ABL has retained most of its earnings to reinvest in the business. BANK RATIOS

ABL has been impressively successful in managing its earning assets each year, however, 2011 shows the best results. As ABL prefers debt financing over equity financing so the proportion of equity in financing total assets has decreased each year. Moreover, as liabilities have increased each year so has the interest margin. 109 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

CHAPTER # 5 SWOT ANALYSIS


STRENGHTS WEAKNESSES OPPURTUNITIES THREATS

110 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

SWOT ANALYSIS
SWOT analysis is one of the most expedient technique or tool used in the Strategic Management process for conducting the situation analysis of an organization. The proper analysis of the firm is given in the form of Strengths, Weaknesses, Opportunities and Threats (SWOT) the company presently facing or can be forecasted for the future. It is a common approach to make assessments in terms of internal and external environment of the organization, and to formulate strategies analyzing its internal strengths and weakness, external opportunities and threats, coming up is the SWOT analysis for the ABL. Such an analysis is very important for the management in retaining the strength, overcoming the weaknesses, capitalizing over the emerging market opportunities, and carving ways to successfully tackle with the threats and ultimately converting them in the strengths for the organization.

STRENGTHS
First we analyze the strengths of ABL that are as follows:

COMPUTERIZATION
The main strength of ABL Limited is that all of its branches are fully computerized and they have latest softwares available to keep the records of their customers account and other important information up-to-date. It reduces manual work and provides good customer services.

WELL-KNITTED BRANCH NETWORK


ABL has a well-knitted and adequately equipped branch networking system that efficiently covers both the domestic and international markets. ABL has the largest branch networking in Pakistan comprising of 245 branches/sub branches.

LARGEST PRIVATE BANK


ABL is one of the largest private banks with deposit base of Rs.167.68 billion/- showing constant growth over the period 1999 till day and with many online branches in major cities of Pakistan.

CUSTOMERS FEEDBACK
Customers are allowed to give suggestions regarding banking services. If there is any complaint by the customer the bank authorities investigates the reasons for complaint. Complaint monitoring system is excellent at ABL that shows bank values more to its customers.

INTERNATIONAL MARKETS
ACBL is actively participating in international markets and has recently introduced credit cards in UAE, Bahrain and Qatar, being backed by 24 hours call center out of UAE.

THE ABL ATM SWITCH-NET


111 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

I.T group of ABL has been able to create the largest network for secure electronic financial transactions in Pakistan.

INFORMATION SYSTEM
ABL has also invested heavily in information technology resources, which has now allowed bank to develop one of the most comprehensive and advanced system available. With the help of this system ABL has now achieved an online status via real time facilities and features available through nationwide network. With the team of highly qualified professionals, ABL is able to use its real time system resources to provide customers with comprehensive account of their transaction on a daily basis. ABL is one of those few banks who are reaping the benefits of electronic transaction.

LEADERSHIP IN ATMS
With over 5,319 online ATMs network ABL is again an undoubted industry leader with connectivity extended to above than twenty five cities of Pakistan. ABL ATMs not only serve 24 hours cash convenience but also improve on the counter services and turnaround time at cash counters.

WORLDWIDE MASTER CARD


The ABL ATMS Master Card has become a global service furthering the convenience to the customers. Traveling customers can access their accounts from a large number of internationally deployed ATMs and point of sale unit.

STRONG REPUTE
ABL is a subsidiary of ARMY WELFAE TRUST (AWT) so it has a strong army background and it definitely adds to its prestige and provides it an edge over the competitors.

EASY ACCESS
ABL has a widespread network providing easy access to its customers where ever they are. ABL has a network of 245 branches extended throughout Pakistan. ABL branches are located in the commercial area, so that the customers face no problems in reaching to the bank.

TRANSPIRANCY OF ACCOUNTS
ABL has won several national awards in recognition to the transparency with which it presents its annual reports. The annual financial statement are prepared by the bank in accordance with the international accounting standard and are also published quarterly and half yearly accounts to provide information to their stakeholders for taking well informed decisions.

112 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

INCORPORATING NEW IT PRACTICES


ABL management is quite prepared to adopt the latest advancements in technology resulting in revolution in the banking operations such as check clearing process, computer based teller equipment and electronic funds transfers among the others.

PHONE BANKING SERVICE


In order to save their customers time, ABL provides the good Phone banking service that is very attractive especially for those customers who dont have time to personally visit to the bank.

SOCIAL RESPONSIBILITY
The organizations showing concern for the people, ethics, and environment enjoy good public reputation and are able to reap the benefits in the long run. ABL management is quite sensitive to this issue.

PERSONALIZED SERVICES
ABL offers personalized services of the staff to the employees. The management of the bank believes in customer oriented banking rather than the product oriented banking. The products and services designed by the bank are specifically tailored to the individual needs of its customers.

CUSTOMER ORIENTED BANKING


ABLs vision is to be the bank of first choice. In order to achieve its vision, ABL offers the very highest levels of personalized banking to match customers unique status. The priority banking centers of the bank offer an unmatched where the customer receives highly privileged services in a highly elegant environment. It gives the chance of experiencing new standards in banking. Designed especially for those who appreciate only the finest things in life.

INTERNET BANKING
ABL is the first bank to introduce i-banking which provides convenience to our customers by enabling them to gain access to their account and carry out any transaction sitting at home.

MOBILE ATM BUS SERVICE


ABL has launched its Mobile ATM Bus Service, which is the Pakistans First Mobile ATM Bus Service. No other bank has taken initiative of mobile ATM Bus yet.

113 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

WEAKNESSES
The weaknesses of ABL are listed as:

IRREVOCABLE DEBTS
Due to risks such as political economy and legal the bank has suffered losses the main reason was piling up to of large amount of irrevocable debts.

TRADITIONAL WAYS OF RECORDING TRANSACTIONS


The bank has still some of the traditional ways of operations in this advanced technological environment. ABL has use computerized accounting system but, still the bankers use to make their entries in the accounting register also. For example account opening registers, manual checking of vouchers.

INDIVIDUAL DIFFERENCES
In Askari Bank the individual difference has strong impact on the organizations performance due to wrong criteria of selection of employees. So with the passage of time individual differences start increasing which undermine the goodwill of the organization.

LACK OF PROPER EQUIPMENT AND PROCEDURES


No availability of sophisticated equipments in branches and lengthy credit processing and documentation procedures.

POOR MARKETING CAMPAIGN


Banks marketing department is not very strong. Accumulated losses pushed the bank to cut down its promotional activities in order to reduce expenses for last few years. The advertising media used by Askari bank for publicity include mostly newspapers and journals. But the most powerful and effective media is of television through which people in Pakistan as well as outside Pakistan can have instant information about new products and developments of ABL.

JOB ROTOTATION
The employees of ABL are constantly subjected to job rotation. It keeps back from gaining complete know-how about a particular department.

CENTRALIZED MANAGEMENT PRACTICES


The management system in ABL is quite centralized leaving all the decision-making activities to the upper management only. Employee empowerment is also over looked due to such management policy. I personally observed that delay occurred in the operations of the employees only due to the fact that they had not got any instructions from the head office. 114 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

LACK OF TRAINING PROGRAMS


There is no specific training program arranged for the new recruiters. They have to learn based on their observations and also their mistakes. It takes a bit time for the fresh one to learn the banking the result is huge amount of blunders, mistakes etc. resulting in monetary and nonmonetary losses for the bank. There is pressure not only on the new learner but also on the person placed upon with this responsibility.

LOW JOB SATISFACTION


Understanding and the effective management of the human resources is the most difficult challenge faced not only by the bank but by all the organizations. Even though the people have been sacrificed in the new organizational developments, it is becoming clear that the true lasting competitive advantage comes through human resources and how they are managed. ABL seems to not focusing on this highly critical issue as the job satisfaction level of the employees working at ABL, was quite low.

OPPORTUNITIES
These are positive external environmental factors affecting the ABL:

EXPANSION OPPURTUNITIES
ABL growing business requires further expansion of branch network which would, in return, open great opportunities for ABL for the expansion of its business. ABL can also extend its network in other countries. Increasing the product range to fulfill customer requirements and ATM network, ABL can expand its 24 hours cash facilities to other cities of the country in order to meet growing market demand. ABL as a largest Pvt. Bank can also increase its market share by producing good, market oriented and customer needs satisfying products.

NEW MODES OF BANKING SERVICES


Askari Bank is now looking into new ways of providing banking services to its customers. New concept of mobile banking has been introduced by the bank, which will prove to be remarkable success in the field of consumer banking.

OPPORTUNITIES IN LOAN BUSINESS


Askari bank is an active player in the loan business. Its strength in loaning stems from its ability to forge strong relationships not only with borrowers but also with bank investors. Bank can capture more markets by introducing new products for business community, as it is the only group, which can contribute more towards increasing the assets of the bank.

115 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

FOREIGN REMITTAMCES AND TRADE


Foreign remittances are another area as present worldwide control system over transfer of currencies through illegal channels has facilitated the area for the banks. Foreign Trade is the focus of quite a lot banks. It has become an ideal bank for the importers and exporters but still a lot of opportunities are yet to be discovered.

RECRUITING PROFESSIONALS
There is a large pool of free MBA graduates who can be hired to achieve professionalism on its organizational culture.

TARGETTING THE COMPUTER LITERATE SEGMENT


Now computer literacy rate is increasing and its really big opportunity for Askari Bank that when public will have more knowledge about computers than they will be more attractive to the innovative products of Askari bank.

GROWING DEMAND IN LEASING BUSNESS


Increasing need and potential of leasing in Pakistan provide ABL an opportunity to utilize its skills and efficiencies in leasing business as well.

TECHNOLOGICAL ADVANCEMENTS
IT has become the future of many organizations in this 21st century. ABL also has an opportunity to expend its new technological advancement like, Tele banking and Internet banking facilities in order to serve the customers more efficiently.

FOREIGN INVESTMENT
Due to efficient and experienced management group, ABL can also improve well and expend its foreign operation successfully. It is external opportunity for Askari commercial bank to avail it and take a competitive edge and create a strong identity worldwide.

BRANCHES IN REMOTE AREAS


ABL can expand its market segmentation geographically by extending its banking services to remote areas where the banking needs of people have not been previously met.

OFFERING ISLAMIC BANKING IN ALL BRANCHES


Currently, ABL entertains Islamic Banking in only a few of its branches. By offering its Islamic Banking services in all of its branches, ABL can definitely have an edge over its competitors. 116 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

INCREASING CUSTOMER DEPOSITS


It is opportunity for Askari commercial bank to steady increase customer deposit by adopting new marketing and promotion scheme and lunch new scheme for their customer.

USE OF ATM AS A CREDIT CARD


It can be an opportunity for ABL to introduce ATM also as a credit card which will invite a different segment and which will improve profitability. They can also cut costs in this way.

E-BANKING
ABL should emphasize on E - Banking. In which Bank can design a universal account like other foreign banks, to enhance online facilities.

TARGETTING ILLITERATE SEGMENT


Illiterate people are also an opportunity for ABL in regarding this service. ABL can serve these people by giving instructions in Audio and in Urdu. They can a l s o h a v e instructions written in Urdu on card or even they can have a display in Urdu. This way they can increase their target market, market share and profitability.

THREATS POLITICAL INSTABILITY


Political instability is also threat for the bank because instability leads to lower business. The same situation is prevailing in Pakistan.

INFLATION
In our county, the rate of inflation is increasing along with the unemployment. So due to increase in price of the products, the savings of the nation is decreasing with passage of time. So it is threat for the banking sector. In the future, the deposits of the bank will decrease.

COMPETITION BY FOREGN BANKS


Increase in competition due to increasing number of foreign banks offering highly specialized and attractive services.

CHANGING TRENDS IN IT

117 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

Growing global technological advancements and adaptation of modern style of management in banking sector.

PROMTIONAL ACTIVITIES OF COMPETITORS


Extensive promotional campaigns run by competitors are another threat for ABL.

COMPETITION BY LOCAL BANKS


As the ABL leading in the domestic commercial banking sector in Pakistan, as such there are no close competitors of ABL but every commercial bank is the competitor for each other. But mainly these are Habib Bank Limited, Bank Al-Falah, MCB etc. they are threats for ABL. At any time they can capture the clients of ABL by providing any benefit more than that.

LOW ATTRACTION FOR INVESTORS


As the banking procedures are complicated that is why general public takes interest into other options of investments like in shares of companies and in Term Finance Certificates.Being a commercial bank, ABL faces considerable competition in attracting deposits from individuals or small investors.

HIGH EMPLOYEES TURNOVER


Employee satisfaction level is very low in ABL due to stiff managerial policies. Thus, its employees shift to other organizations whenever they get an opportunity resulting in high turnover which is not a healthy sign for the bank. If this continues in the long run, then ABL may lose its repute.

RECRUITMENT PROCEDURES
ABL high employee turnover creates a need for fresh recruitment. Recruitment is a quite expensive, time-consuming and complicated procedure.

HIGH CHARGES
The charges of the services that the bank receives from the customers are higher than their competitors. So it loses many customers for this reason. The schedules of charges indicate that the fees charged by the bank on the various services it provides are extremely high. It may result in decrease in the number of its existing customers.

LESS EXPERIENCED STAFF


ABL is short of experienced and well trained staff owing to high turnover. Majority of the staff working in the bank branches is quite young and inexperienced. If the bank fails to bring down 118 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

its high employees turnover, then it would be lacking the most important resources of any organization i.e. the experienced staff.

EXPENSE BASE
The expense base will be a major threat to the ATM because it will impact the need to spend in order to modernize ABLs customer interface. Expenditure has to be incurred on B ranch rationalization and computerization. This expenditure is essential, given poor infra structure at Branch level resulting from years of underinvestment. Because 90million is sufficient money to invest to open an ATM there should be a strong expense base to support the expansion of ATM.

LEGAL REGULATION
Frequent change in government policies creates new challenges for the top management. ABL also faces such threats particularly when policies regarding taxation are subjected to changes. It is always threat for commercial banks. Because SBP is the role authority of Government, which monitors all commercial banks affairs, whenever it feels any regulation, it imposes without consideration of commercial banks plans etc.

The SWOT analysis is a mirror image of the banks present conditions. The management can elaborate strategic plans for capitalizing the available opportunities. ABL is continuously introducing new innovative products so as to cope with changing environment. It has a diversifiable culture. It has been leader of introducing many new ideas, products which are earning a lot for the bank and this struggle is still continuous with same acceleration. No bank has given such a comprehensive motive so if we want to look at the future of Askari bank they are going to touch new horizons of technology.

119 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

CHAPTER # 6 TRAINING PROGRAM


DEPARTMENTAL DETAIL

ACTIVITIES OF THE INTERN

120 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

Departmental Detail
GENERAL BANKING DEPARTMENT
Account opening Remittance Department Cash Department

Clearing Department

PRIVILEGE BANKING DEPARTMENT


Online banking

Lockers FOREIGN EXCHANGE DEPARTMENT


Import Department Export Department Foreign Currency Department

CREDIT DEPARTMENT ACCOUNTS DEPARTMENT IT DEPARTMENT

121 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT ACCOUNT OPENING DEPARTMENT

FUNCTIONS
Providing account opening form according to the customer's requirements, Guide the customer about the requirements of the account opening and form filling Check the forms whether they are correctly completed or not Preparing checklist Stamping on the form Maintaining account opening register Pasting of forms in register after release from general banking in charge Issuance of cheque books Issuance of accounts maintenance certificate Closure of account Verification of signature in case of cheque presented before releasing of account opening from SS card is not yet scanned

ACCOUNT OF GENERAL CUSTOMERS


Minor account Illiterate person account Individual account Joint Account

ACCOUNTS OF SPECIAL CUSTOMER


Sole Proprietorship Account Partnership Account Limited Companys Account Agents Account Joint Stock Company Account Agency Account Clubs, Societies /Association Accounts Trusts Local Bodies Etc. Executors & Administrators Account

122 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

TYPES OF ACCOUNTS
The customer can open his bank account in order to deposit or withdraw amount. The bank offers different types of accounts which are as follow:

Current account (CD) Saving account (PLS) Askari special deposit account (ASDA) Basic banking account (BBA)

Code: 0101 Code: 0110 Code: 1165 Code: 01021

ACCOUNT OPENING PROCEDURE


The general procedure of account opening is same but the document required to open the account is different according to type of account. Information at the time of opening of account, the bank officer must assure that customer has the following characteristics: The customer must have the age of majority, it means he must be the age of 18 according to law. The customer must be of sound mind. The customer must not be insolvent and bankrupt. The customer must not be debarred under any law from entering into any contract. Also the bank officer must take proper information from the customer about his means, line and place of business.

1) Account Opening Form (AOF) The bank officer must assure that the customer fills each and every column of account opening form correctly with all necessary details. The specific information about the business or occupation of the customer is recorded in the form. 2) Introduction of Accounts It is a most important column of AOF. Without the proper introduction, the new account cannot be opened. The bank officer consider following precaution in this respect. The introducer should come with the prospective customer to the bank so there will be no doubt about the identity of customer. If the introducer does not come then bank officer must take extreme care about his signature verification. Introducer having doubtful dealing with the bank should be discreetly declined. Current account holders can be introducer of both types of deposits but saving bank account holder cannot be the introducer of current account holder. But in exceptional

123 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

cases they can introduce when saving account holder maintain substantial balance and they are old and operative accounts. The staff member can become introducer if they personally known to the prospective customer.

3) National Identity Card The bank officer check that number of national identity card is correctly recorded in the AOF and a copy of national identity card is kept in record by the bank. 4) Specimen Signature Card (SS CARD) The bank officer takes signature of customer on AOF and specimen signature card. Latterly, this card is scanned in the computer and whenever customer makes any transaction in this account then his signature is verified by it. 5) Undertaking Forms There is different type of undertaking which are taken by the bank at the time of opening the account, two of them are: Sign differ form Vernacular form 6) Sign Differ Form This form was filled by the client at the time of opening the account, if the initial which was made on the computerized identity card is different from the one which is made on the account opening form. This is actually the declaration which is given by the client that the client used different signature for operating account from the one that was made on CNIC. 7) Vernacular Form This form was filled by the customer, if the client used the thumb impression in order to operate account and also in case if the initials was shaky, mean there is slightly difference every time in signature. This is also the sort of undertaking which was taken by the bank in order to protect itself. It was clearly mentioned on this that in such cases if any fraud occurs than banker is not responsible for this. 8) Letter of Thanks After the opening of account, the bank sends this letter to the account holder address. There are different purpose of this letter, some of them are 124 LAHORE COLLEGE FOR WOMEN UNIVERSITY To create goodwill To make sure that all the problems are solved efficiently and effectively

INTERNSHIP REPORT

INTERNSHIP REPORT

The most basic purpose is to verify the account holder address, the bank send this letter to the account holder address and if the result was not accurate the letter was again received by the bank and then again verify the address from the account holder and again send till that the account holder not receive that letter. The bank is not issued the cheque book till the address was not verified.

9) Issuance of Cheque Book The customer fills the Form A for issuance of cheque books along with the AOF. The requisition slip is duly signed then bank officer enters cheque book series on it. The officer enters the issuance of cheque book in register. To minimize the misappropriation bank stamps the account number on each leaf of cheque book. Bank Charges Rs.2 per leaf. ACBL issue 25 t0 100 leaves cheque books. If cheque book is lost then customer fill the From B for resonance of cheque book. Bank Charge Rs.100 for resonance.

ACCOUNTS NOT IN USE


The following accounts are considered as accounts not in use by Askari bank and the account holder is not allowed to carry out any transaction unless and until some legal procedure is followed: 1) Inoperative Accounts Accounts which are not in use for 1 year are considered as operative accounts. 2) Dormant Accounts Accounts which are not in use for 6 months are considered as dormant accounts 3) Inactive Account If there is no transaction in any account within 6 months then account will become inactive. Now the account will be active only by crediting some amount.

CLOSURE OF ACCOUNT
In order to close the account, the account holder needs to fulfill the form by the name of closure of account. With this form the client also need to give back his cheque book that he holds due to his account. After collecting the cheque book and verifying all the things, the bank cancel the cheque numbers and close the customer account on his request. The bank will charge Rs.100 for closure and remaining balance in the applicants account will be paid to account holder.

125 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT REMITTANCE DEPARTMENT

The remittance department deals with the transfer of money from one place to another. This department deals with the local currency transfer only. ACBL provides these services to both customers & non-customers

FUNCTIONS
Managing issuance of demand drafts Pay orders Travelers cheque Mail transfer Managing Call deposit receipts CDR Intercity clearing Outward bills for collection (OBC) Credit card advance Cancellation of pay order & demand draft

INSTRUMENTS OF THE REMITTANCES DEPARTMENTS


4) DEMAND DRAFT A demand draft is an instrument, which is drawn by one bank upon another bank for a specific sum of money payable on demand. It is made by the bank and given to the purchaser against cash or cheque. If two banks are involved, then one bank sends a DD to another bank. But in customer Bank case the customer sends his DD to the receiver. Charges of DD are taken from the system according to the amount. The following transaction is recorded in recognition to demand draft: Customers a/c..Dr DD during day.Cr DD during dayDr M.O..Cr 5) PAY ORDER Pay order issued from one branch only be payable from the same branch. It is normally issued for payment in the same city. 126 LAHORE COLLEGE FOR WOMEN UNIVERSITY Fill the application form. Issue pay order after recovering cheques. Do necessary vouchering.

INTERNSHIP REPORT

INTERNSHIP REPORT

Make entry in PO issue register. All pay order shall be crossed" payees account only".

Amount Charges Up to 1million Above 1million PO Issue Entries in the Askari Banks system: Customers a/cDr PO during dayCr At day end: PO during day..Dr B/P...Cr After presentation: B/P..Dr M.O..Cr Rs.65 (for admission fee Rs.25) Nil

6) INTERCITY CLEARING
In intercity clearing, clearing between cities are done. For example in Karachi, branch of Askari bank exists, ASKARI branch Lahore sends the cheque through NIFT to main branch which will further sends to Askari bank Karachi branch for clearing and at the same process they send back the advice. If it returns, Rs.65 will be charged. 7) OUTWARD BILLS FOR COLLECTION If in any city, Askari branch doesnt exist, then Askari Bank stamps OBC and directly sends it to that banks branch for clearing. 8) CALL DEPOST RECEIPT CDRs are used for the purpose of tendor notice, zakat deduction, taking part in the bidding, for getting Govt. tendor in favor of customer name. In this process, payment is secured and if approved then lodged in clearing.

127 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

For participating in the bidding process, deposit Rs. 5,000 and the following entries will be passed: Customers A/cDr CDR...Cr

On approval of contractor request CDR..Dr M.O.Cr

On rejection of CDR CDRDr Customers A/c.Cr

9) TRAVELERS CHEQUES Askari travelers cheques are a valuable financial service of ACBL. They are issued to settle all your business transaction and customer can travel without any pocket load. It is safest substitute for cash, easily refundable in case of theft and loss. Askari bank issues the traveler cheques denomination of Rs. 10,000. Askari traveler cheques are issued against cash cheque or debit to customer account. It is issued on purchase agreement form and 3 copies are prepared. One is sent to head office, the second one for record of bank and third one for the custom. No service charges are taken on it. Any branch of ACBL can make payment of Askari traveler cheque. It can be drawn by another bank through collection. It can be encased form the issuing branch but not on issuing date. If these cheques are enchased within seven days then customer will receive 0.2% commission.

CASH DEPARTMENT
All physical movement of cash in the bank is made through the cash department. Normally cash department performs following functions: 128 LAHORE COLLEGE FOR WOMEN UNIVERSITY Receipt Payments Act according to any standing instructions Transfer of funds from one account to another Handling of ATM Verification of signatures Posting Handling of prize bonds

INTERNSHIP REPORT

INTERNSHIP REPORT

CLEARING DEPARTMENT
Bank collects payment of cheques on behalf of its customer within city.

FUNCTIONS
Accepting transfer delivery and clearing cheques. Arranging receipt of cheques payment. Posting of clearing cheques in the system Maintaining register for inward and outward clearing cheques Prepare the return summary Charges for returns Amount collections on drawn checks for members and sub-members of local clearing house

Inward Clearing
Cheques and other negotiable instruments (PO, CDR, dividend warrants etc.) drawn on Askari Bank township branch, lhr, sent by other banks, constitute the inward clearing of ACBL. Other points to remember in inward clearing: We are paying amount of cheque Customers Account will be debited In case of return charges will be Rs. 250

After having all the stamps and dates of Cheques confirmed, the following entries will be passed in the system: Customer account.Dr Suspense clearing a/c ..Cr At day end when returns are received: Suspense clearing a/c.. ..Dr M.O. Cr

OUTWARD CLEARING
When Cheques are drawn upon other banks of the same city (as Lahore) are presented in Askari Bank to deposit them in the respective payees accounts, these instruments are lodged in outward clearing of Askari Bank. 129 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

Other points to remember in outward clearing: Askari bank receives payment of cheque Customer account will be credited In case of return charges will be Rs. 50. Return memo will be attached with cheque.

The following entries will be passed in the system for outward clearing: Suspense clearing A/c Dr Customer A/c.. Cr At day end: M.O A/c. Dr Suspense clearing A/c Cr

PREVILDGE BANKING DEPARTMENT ONLINE BANKING


Online banking means that if a person is sitting in one city like Lahore can easily transfer/deposit and withdraw his fund from any other branch of Askari Bank in any city or location. For this purpose the person needs to complete the online funds transfer slip, which includes the information of that person and the account to which the transaction is made. If the funds are transfer with in a city no extra charges are made but in case of out of city some charges are applied like: Case Cash deposit Cash withdraw Funds transfer Charges (Rs) 320 120 185

LOCKERS
Askari bank offers locker facility to its customers. The application form was filled by the customer as well as specimen signature card (S.S) need to be filled. While fulfilling the form, there are three options regarding the operating of locker, these are 130 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

Anyone can operate Jointly Either or survivor

In order to get a locker the bank gives two options Rent If the person wants to get an account on rent the security fees which need to be deposited is Rs.1175 which is refundable. The monthly charges for different lockers have already been mentioned in the product section. On rent the entry which is passed by the bank is: Customers A/c for rentDr. Customer account key depositDr. Key depositCr. RentCr. On purchase the entry passed by the bank is: Customers A/c..........Dr. Key deposit..Cr. On Rent Purchase

FOREIGN EXCHANGE/FOREIGN TRADE DEPARTMENT


Foreign Exchange Department works like the general bank departments with the difference that it deals in foreign currency.

FUNCTIONS
Foreign remittances. Foreign currency accounts Non-resident accounts maintenance Foreign bills for collection(FBC) Foreign telegraphic transfer(FDD)

131 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

FOREIGN CURRENCY ACCOUNT


A depositor can open account in US dollar, pond, Japanese Yen and Euro with nominated branches. For opening of account a form is provided to the person/party, introduction of the new account holder or by the officer of the bank. Procedure of opening foreign currency accounts is same as other accounts. No zakat is deducted on these accounts, no income tax deductions; no wealth tax deduction will be there.

FOREIGN REMITTANCE
The procedure of foreign remittance is same as in local remittance. The only difference is that it deals in foreign currency. Most of the times, following modes are used in foreign remittance. Foreign Demand Draft (FDD) Foreign Telegraph Transfer (FTT)

FOREIGN DEMAND DRAFT


When bank receive foreign demand draft then bank will debit to unsupervised account of the customer and credit to treasury bank because all the foreign currency accounts are maintained in treasury, the bank will send debit advice to treasury. In return, treasury will send the credit advice and branch officer will debit the treasury and credit to customer account.

FOREIGN TELEGRAPH TRANSFER


When a customer wants to transfer funds to foreign country through telegraph transfer then he will deposit the amount.

LETTER OF CREDIT (L/C)


Letter of credit is a commitment by the buyer bank to make the payment to the exporter bank that it assumes the responsibility of payment if the goods are according to terms & conditions.

PARTIES INVOLVED
132 LAHORE COLLEGE FOR WOMEN UNIVERSITY Importer/buyer/opener Exporter/seller/beneficiary Importer bank/ issuing banks

INTERNSHIP REPORT

INTERNSHIP REPORT

Exporter bank/advising bank/negotiating bank

TYPES OF L/C
1) IRREVOCABLE L/C Under this L/C, amendments or cancellation of L/C can be done with the mutual consent of all the parties involved. 2) CONFIRMED L/C A letter which is confirmed by the exporter bank, where it takes the liability of making the payment without consulting the importer bank. 3) SIGHT L/C In this type of L/C, on spot payment is made as the importer bank receives the bill of lading from the exporter. 4) USANCE L/C In this L/C, time period is involved. The importer bank will make payment at defined days after the shipment. The shipment period may be 60, 90 or 120 days.

PROCEDURE FOR OPENING OF L/C


CUSTOMER REQUESTS FOR OPENING L/C

REQUEST LETTER + INSURANCE + PERFORMA INVOICE+IB8+CERTIFICATE OF IMPORT OF GOODS

BANK-RISK ANALYSIS & CREDIT HISTORY OF IMPORTER

APPROVAL BY THE BANK/AREA/REGION/H.O (WITHIN THEIR LIMITS)

RCAD + CFTU 133 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

RCAD (Regional credit administration department) It feeds the limit. CFTU (centralized foreign trade unit) It controls the transmission of L/C. Calculate margin, commission and mark up on L/C.

L/C LODGEMENT
L/C is registered in the PAD. Customers liabilityDr. To banks liability.Cr

PERFORMA INVOICE
It is the document which is sent by the exporter to the importer about the description of the goods like quality, quantity and price of goods.

INDENT FORM
The agent (for e.g., USA parent company and its agent in PAKISTAN) authorizes on behalf of its parent company that the goods have been received.

IB8
Its the application of irrevocable L/C. its the legal document which contains terms & conditions of the opening of L/C. It contains the details of country of origin. Amount, date of initiation, date of expiry and the name of the insurance company. Bath parties signed on it.

COUTRY OF ORIGIN
It contains the information about who has manufactured the goods, country of manufacture. It tells about in which country goods are ready for sale.

I-FORM/IMPORT FORM
Its the statistical form which will be submitted to SBP by the bank about the imported goods.

CREDIT REPORT
The report required by the importer from the exporter for 1.5m or above transaction.

SWIFT (society for worldwide interbank financial telecommunication)


134 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

Its software that generates messages which is send to the exporter. Its a network that exchanges messages in a more secure way and not hold accounts for its customers nor facilitate fund transfer but sends payment orders between banks and other financial institution.

HS CODE (Harmonized system code)


Different codes for every requirement of L/C which is worldwide used and accepted.

CREDIT LIMIT
The limit which is set by the banks policy Restriction by the SBP on foreign currency.

TRANSPORTATION DOCUMENT
There are four types of documents. Bill of lading Airway bill Truck receipt Rail receipt

FORMAT OF L/C
Instruction Mode of transmission Name & address of applicant and beneficiary Total amount with destination Advising bank Partial shipment allowed/ not allowed Transshipment allowed/ not allowed LATEST SHIPMENT DATE AND EXPIRY DATE 135 LAHORE COLLEGE FOR WOMEN UNIVERSITY Place of shipment Destination Tenor Description of goods (ref. Performa invoice/ indent form) Documents required Commercial invoice Certifying country of origin

INTERNSHIP REPORT

INTERNSHIP REPORT

MODE OF TRANSMISSION BY SEA/AIR Marine insurance company COVER NOTE, DATE OF EXPIRY Packing list required Any additional condition HS code TIME ALLOWED FOR PREPARATION OF DOCUMENTS Instructions regarding bank charges by opener/beneficiary Signature of customer % margin Approval of manager Account no. of customer/ phone no. Signature of witnesses Reimbursing bank/ negotiating bank/advising bank Details of charges Signature at the start and at the end

ENTERIES IN LODGEMENT
After the completion of L/C, The following entries will be passed. Banks liability..Dr. To customer liability..Cr.

CREDIT DEPARTMENT
Credit department performs two basic functions: Credit Administration Credit Appraisal

CREDIT ADMINISTRATION
The credit department takes the decision about credit sanction after the risk analysis and collects the extended loans at the maturity of loan.

136 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

CREDIT APPRAISAL
The credit department reviews their credit policies and all credit proposals. Also credit officer report all the data of his activities to credit division Karachi. Credit division reviews their policies after every six month in the light of this data and also sends the data to State Bank of Pakistan (SBP) to review its policies. Askari Commercial Bank provides two types of loan that are: Funded Facility Non Funded Facility

A. FUNDED FACILITY In this type of finance, bank actually deploys its funds and mark up is charged on it. ACBL provide the following types of fund-based loan. I. Running finance Cash finance Term finance Staff finance Trade finance Finance against packing credit Post Shipment Finances Running Finance

It is used to meet the running requirement of the capital. Its the short term finance normally used for a period 1 year in which payment is made at the end of the period. In running finance, Bank transfers a particular amount of loan in customers account from where he withdraws the amount as needed. Markup is charged only on the amount withdrawn not on the whole amount of loan. R.F is used for the purpose of A/R, purchase of raw material, Salaries payable, utility bills payable, Administration expenses, Maintenance, Packaging etc. II. Cash Finance

Cash finance is like a running finance but it is extended against the pledged security like inventory or stock and 25% cash margin is also charged. The pledged stock is also insured from any insurance company and the customer also pays all the insurance and any other security expenses. Mark up is charged over the full loan amount and for whole time period of maturity. III. Term Finance 137 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

The finance in which Mark up is charged on the overall amount of loan whether utilized or not. Its a long term finance normally used for a period of 3-5yrs.Personal guarantee is required in it. Loan will be issued to the person having 25,000 or above salary. Installment basis pay back. CATEGORIES OF TERM FINANCE Financing Leasing

FINANCING Title/ownership with the customer Bank will pay the amount to customer and customer will purchase the machinery

LEASING IV. Ownership/ title with the bank. Bank will purchase the car 20% markup charged on the principle amount. Bank-customer account no. required. Tax benefit to customer

Staff Finance

This facility is provided for the staff of ACBL. The purpose is welfare of the employees. SBP specify the credit limit for the staff of bank. The mark up rate is less than commercial rate. Trade finance is provided for short time period so it is most suitable for bank. These generate more income for the bank due to greater revolution of money. V. Trade Finance

Trade finance is of money. Trade finances are of two types: Import related finance Export related finance IMPORT RELATED FINANCE There are three types of import related finance Payment against document Finance against imported merchandize Finance against trust receipt PAYMENT AGAINST DOCUMENT (PAD) 138 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

When the bank receives bill of lading and other commercial document from the exporter then bank will pay to reimbursing bank of exporter. If the customer will not receive the document within 7 days then bank issue a letter to the importer and now letter of credit (LC) is converted into absolute liability. The bank gives the credit period to the importer to make the payment which is 90 or 120 days. And now bank will charge the mark up and import service charges from the importer. The reimbursing bank will send all the documents to ACBL and not directly to the importer. FINANCE AGAINST IMPORTED MERCHANDIZE (FIM) When the importer has no funds to import merchandize then he request the bank letter of credit along with the finance. In PDA the bank is only responsible to make payment but in FIM bank makes payment from its own funds these types of finances have specified rate of mark up and time period. All the value-added expenses like excise duty, port charges etc are charged by the customer as cash security margin. FINANCE AGAINST PACKING CREDIT Finance against packing credit is extended for the preparation of goods when the exporter has confirmed letter of credit from the importer. To improve the economy of Pakistan and to improve the export, SBP introduce special export finance schemes to the exporter at cheaper mark up rate and also offer export rebates. It is of two types: 1) Pre Shipment Finance Part I Pre shipment finance part I is extended for one year. Funds of SBP are involved in this finance. When this finance is extended then bank will debit the SBP account and credit to customer account. Rate of mark up is 2% from which 1 are for SBP and the bank charges 1%. 2) Pre Shipment Finance Part 2 This facility is for existing exporter. In this way exporter can avail half of the limit of total export business transacted last year. If the credit history of exporter is satisfactory then this credit limit can be increased.

POST SHIPMENT FINANCES This loan facility is provided to exporter after the shipment. Post shipment finance is for different purposes like when the exporter does not have finance to the payment of credit raw material. B. NON-FUNDED FACILITY

139 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

In this finance, no cash is involved. It is only a commitment. It is an obligation of bank and if the customer declares default then bank is liable to make payment. The bank charges commission in these finances in respect of markup. This facility is provided against the cash margin and mortgage of property because bank has risk in this type of finances. Letter Of Guarantee (LG) Letter Of Credit (LC)

LETTER OF GUARANTEE (LG) Letter of guarantee is contingency liabilities of bank because the funds are not actually involved in it. So they are classified as off balance sheet items. Letter of guaranty is mostly given in case of contract. 25% cash margin is charged and also some collateral is taken. Three beneficiaries of this non-fund based finance are: Government Financial Institutions Others BID BOUND When the contractor has no funds for the bid of contract then he requests the bank to issue the guarantee letter. This type of guarantee is called bid bounds guarantee and now contractor will quote the rate in tender against this guarantee. ADVANCE PAYMENT GUARANTEE If the bid is accepted and beneficiary want to make the advance payment to the contractor because the contractor is away the contract and beneficiary requires guarantee of bank from the contractor. If bank gives the guarantee of contractor for advance payment then it is called advance payment guarantee. The contractor is adjusted this liability by the running bill.

PERFORMANCE BOUND When the bid is accepted then bank will give guarantee that contractor will perform the task assigned within the specific period of time. MAINTENANCE BOUND GUARANTEE This guarantee is issued for the maintenance of work performed by the contractor, so it is called maintenance bound guarantee.

140 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

SHIPPING GUARANTEE This type of guarantee is very rare and issued against 100% cash margin. When the shipment is at port but has not any document then bank issue guarantee in favor of Shipment Company only for 2 days. OTHER GUARANTEE If the bank issue any guarantee other than above likes to cove the credit sale, then it is classified as other guarantee.

ACCOUNTS DEPARTMENT
FUNCTIONS
Daily activity checking Physical checking of cheques and deposit slips Reconciliation of cheques with ledger Preparation of statement of affairs Weekly schedule program Budgeting

IT DEPARTMENT FUNCTIONS
Managing day to day cash transaction in computer Maintaining customers accounts in computer Receiving all mails from Head Office Fax Keeping ATM in working condition Printing daily reports Receiving IBCA

141 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

DETAIL DESCRIPTION OF THE SKILLS ACQUIRED DURING INTERNSHIP


Working as an internee in Askari Bank, I learned different aspects of banking which enhanced my knowledge base and confidence all the more. I did my internship at ASKARI BANK, TUFAIL ROAD BRANCH, which is considered to be one of the busiest branches of Askari Banks network. I worked in the branch for 6 weeks and each week I was shifted to a new department so that I had an insight of all the 6 departments.

WEEK 1: ACCOUNTS DEPARTMENT


I started with the accounts department. Mr. Saleem was the in charge officer. He guided me about the functions performed in accounts. I learnt about how to differentiate among cheques. He assigned me the duty of sorting out of all types of cheques in descending order. I made separate head of current deposits (CDR), saving account (PLS), Askari Special account (ASDA), basic banking account (BBA), Value Plus and Foreign Currency (FCY) according to their account codes and then arranged them in descending order. He gave me an M.O (Main Office) sheet that includes all entries related to head office or inter branch transfer (IBT). All amounts in a specific ledger of specific account should be known to accounts in charge. Some amounts in transfer section relates to IBT so they are checked in M.O sheet. Account codes are as follows: Current A/c Saving A/c BBA A/c ASDA Value Plus FCY 01010 01100 01021 01165 01032 0213

EXAMPLE 142 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

ACCOUNT NUMBER: 0056-01-165-0001-3 0056 01 165 0001 = = = Branch Code = Currency Code

ASDA Account Account Number of the ASDA Account Holder

MODES OF POSTING There are 3 modes of posting in the ledger, namely: Cash
Cash includes ATM entries and cheques in cash payments.

Clearing

Clearing includes cheques that branch received from NIFT.

Transfer Transfer includes transfer of amount from one branch to another or inters branch transfer.

WEEK 2: ACCCOUNT OPENING DEPARTMENT


In the Account Opening Department, Ms Sadia Hassan was the in charge. Firstly, I had gone through different types of the accounts and the operation of different accounts. I had opened accounts of so many people myself and helped them fill in the required forms. There are different requirements for different account. I performed the following activities: Providing account opening form according to the customers requirements (single, joint, partnership etc) Guide the customer about the requirements of the account opening and form filling, Check the forms whether they are correctly completed or not, Preparing checklist and Stamping on the form, Maintaining account opening register, To get the Verification of signature in case of cheque presented before releasing of account opening from SS card is not yet scanned.

I also received requisition slips, got the signatures verified and issued a slip to be shown at the time of receiving the cheque book. The requesting date along with the account holders name was to be entered in the register. The cheque books are available to the customer after 5 working days. 143 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

Apart from that I was assigned the responsibility of writing account holders name and account number on the cheque books to be delivered to the customers. And then sort them by the date when they were applied for. When these cheque books were demanded, I checked for the date when the cheque cook was requested for through a database in the computer. Then I took the cheque book out of the drawer and made entries in the same register as used earlier to enter the date of receiving the cheque book and the signatures of the receiver. In case the receiver was not the account holder himself, an undertaking form had to be filled by the account holder himself along with his signatures. So I provided the form to such customers and then got the signatures verified as well before the cheque book could be issued.

WEEK 3: CLEARING DEPARTMENT


In Askari bank Mr. Fiaz Aslam was in charge of this section. I learnt following activities while working in that section. When cheque or other instrument is drawn on Askari Bank which is of the other bank, it comes in the clearing department. I was assigned the duty to receive cheques from the customers and while doing so, the following points had to be remembered while checking a cheque for clearing: Date Amount in words & Figure Clearing stamp with todays date Payees account credited stamp Within city cheque

There are two types of clearing. 1. I/W (Inward clearing) 2. O/W (Outward clearing) REASONS FOR REJECTING A CHEQUE Some cheques were rejected as they did not meet certain criteria. For such cheques I had to fill form on which I wrote the cheque number and certain other details mentioned on the cheque along with selecting the reason for rejected the clearance of cheque mentioned in the form. The following can be the reasons for returning a cheque: 1) Effects not yet clear: please present again. 2) Not arrange for. 3) Payees endorsement required. 144 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

4) Payees endorsement irregular. 5) Refer to drawer. 6) Drawers signature differs. 7) Payees endorsement requires banks guarantee. 8) Alternation requires full signature 9) Cheque is post-dated/stale/ mutilate.(wear and tear) 10) Amount in words and figure differs. 11) Cross cheque must be presented through a bank. 12) Payment stops by the drawer. 13) Payees separate discharge to the bank required. 14) Payees discharge on revenue stamps requires. 15) Not drawn on us. 16) Account close. 17) Insufficient balance I then had to get a photocopy of both the rejected cheque and the rejection form filled by me, enter the details in a rejection cheque. Paste the photocopy in the register while the original documents were maintained in a separate file which had to be returned to the customer later on. CLEARING STAMPS Clearing stamp

It has two parts one is crossing part and other is clearing part. Crossing part shows that cheque is the ownership of bank. Clearing part shows that everything is clear and bank has collected payment on behalf of customer. Payees A/c Credited

This stamp will be stamped on individuals and companies accounts only but if cheque is in the favor of some bank like Askari bank then stamp will be of cash received. I entered the amount, account no. and Drawers bank in outward return register and to get the signatures of the customer at the time he collects his cheque from the bank.

WEEK 4: CREDIT DEPARTMENT


Ms. ASMA was my supervisor in this department and she guided me through the procedure that Askari bank follows before extending loan to a requesting party. I helped receive her different signatures from the higher officials of the branch. I assisted her in preparing different statements for the credit department which then had to be forwarded to the main branch. 145 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

WEEK 5: FOREIGN EXCHANGE DEPARTMENT


In fifth week, I worked in Foreign Exchange Department. They told me brief introduction about import and Export. Necessary Requirement about the Letter of Credit .What Documents are required for Import and Export. I worked under the supervision of Ms. Nadia. She taught me the procedure that Askari Bank has to follow to TT payments (telegraphic transfer on money) to overseas bank as requested by a customer of Askari Bank. I helped her fill in the TT form and enter it in a register.

WEEK 6: IT DEPARTMENT AND REMITTANCES DEPARTMENT


I spent three days of my last week in IT department where Mr. Adnan Butt gave me an overview of how the intranet of Askari Bank works, how passwords for Askari banks employees are created, how the database of the branch is linked to main branch etc. I spent my last three days in the remittances department. Mr. Usman was my supervisor. Nearly six to ten draft issued daily from this department. Here I knew how the amount transfers and what the procedure is. I helped the supervisor in following activities: Collection of remittances forms Guiding the customers Filling the forms. I was not allowed to do the signatures for final clearance of the instruments.

146 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

CHAPTER # 7 PROBLEMS AND RECOMMENDATIONS

147 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

Recommendations
Doing internship at Askari Bank was an interesting ,gaining ,grooming and ever remembering experience .The highl y cooperative staff , variet y of tasks , dealing and communication with customers and documentation were some of tasks that made me to gain a lot. Though there every activit y was at its elegance, but I am here giving some suggestions that in my thinking will be beneficial for the bank.

GENERALIZATION OF PROCEDURES
The procedure for opening an account should be simplified. The account opening form should be self-explanatory and Urdu version of the form must also be made available since the fact cannot be ignored that many people do not have a good understanding of English.

DECENTRALIZATION
Delegating powers to the department in-charges up to the possible extent will most certainly reduce the workload on the managers and they would be able to perform well by taking quick remedial actions where necessary. Besides, the spare time will be spent dealing with matters of more important nature. There is a high degree of centralization in Askari Bank. It should be bit flexible as here in this branch, I have seen many simple cases where many matters get late or pending because the case is being sent to higher authorities for approval.

HUMAN RESOURCE DEPARTMENT


Askari Bank does not have a human resource department. The importance of manpower cannot be denied in any organization. In case of banks it is the most valuable asset, because the bank is most sensitive organization and to be in harmony with this sensitivity, need for proper human resource is felt badly.

BASIS FOR PROMOTION


A sizeable promotion of the officers of ABL, are promoted in without test and interviews of officers cadre. The promotion policy must be too tight and transparent that no one may have the chance to promote on criteria other than required qualification, experience and performance. As for present excess staff, those not found up to the required criteria may be given GHS etc.

DEVELOPMENT OF MANAGERIAL LEADERSHIP


In services industries like banks the need of managerial skill is much more important. It makes positive contribution towards effective results. Without development of managerial leadership, the effective utilization of the human resource will be impossible. ABL should also focus on this 148 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

area and should avoid deficiencies in managerial leadership by applying modern style of management.

MANAGEMENT CHANCES ON MERIT


In ABL, though vary rare fresh recruitment are made, and the bank faces saturation in personnel, now clipping will be more helpful. The downsizing will leave the ABL with the staff, to be retained on the basis of ultimate meritocracy with zero tolerance of incompetence. Now in this remaining workforce, a cultural change right from the top management down to the frontline, that better suits to present day needs of banking environment could be included through proper discipline and training.

COMPUTER TRAINING PROGRAMS


The present conventional and orthodox training programs need to be made more comprehensive and reinforce with inclusion of computer training process. Training programs should rather be held on a periodic basis so to enhance the computer skills of their employees as all the banking system of the current era is computerized.

CHANGE IN CURRENT APPRAISAL SYSTEM


To present performance appraisal system is good. However, it needs to be implemented in true sense. The drawbacks that are obvious like nepotism and favoritism etc., needs to root out and the culture of ultimate meritocracy in appraising needs be inculcated. The current appraisal system does not add to the employee satisfaction level. So this demands a change to be introduced in the appraisal system of Askari bank.

ADMINISTRATIVE REFORMS
Fast resolving of loan default cases is must. The bank should plan to enhance its ATMs and Internet Banking Services with new features like inter-branch funds transfer, and the payment of utility bills. The future focus of the ABL should be to improve the automation of the accounting processes and enhance the quality and effectiveness of MIS. The ABL should increase press coverage and advertising to create effectively market its corporate as well as product/Brand image. The marketing policies and strategies must be clearly written and communicated to all the staff members. The Branch Managers must make the use of the staff in pursing the organizational objectives. The Bank must reshape its portfolio of business by investing in higher growth areas, extending and developing its core competencies and moving out of week and non-core segment.

149 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

OPENING BRANCHES IN REMOTE AREAS


Pakistan is an agricultural country and most of its population lives in villages and rural areas. However contrary to this fact, almost all of the branches of Askari bank are in urban areas. Banks management should pay serious attention to this .Though bank is offering special services in agriculture but clients has to travel far to urban areas to access its services. So there are many chances that such customers turn to some other bank.

DEVELOP A STRONG MARKETING STRATEGY


Today is the era of electronic media and advertising play a major role in the success and worth building of any organization. Askari banks management should pay some attention at this side as well .By giving consistent advertisements in electronic as well as print media to aware, retain, attract and appeal people. Askari Bank is lagging far behind in this area while its competitors have invested heavy amounts of their funds so as to increase their customer base.

JOB ROTAION AN EXPERIENCE HURDLE


Job rotation from one job to another is a big hurdle in the way of getting experience. Employees have known how about how to work but not master in one work.

INTRODUCING NEW OR MODIFYING EXISTING PRODUCTS


The bank may choose to make its existing products distinctive or to introduce new products. It is often easier to benefit from adverse changes made by other banks than to attract customers by innovations.

150 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

CHAPTER # 8 ANNEXTURE

151 LAHORE COLLEGE FOR WOMEN UNIVERSITY

INTERNSHIP REPORT

INTERNSHIP REPORT

Annual report ASKARI BANK 2010-2011, 2009-2010 Account opening forms Deposit slips OBC Bundle covers Brochures Vouchers www.askaribank.com.pk www.awt.com.pk www.brecorder.com http://www.onepakistan.com/finance/news/ http://www.pakistanbizbuzz.com/articles/business/ http://www.ibp.org.pk/

152 LAHORE COLLEGE FOR WOMEN UNIVERSITY