Allied bank limited

Bahria Institute of
Management
Sciences
INTERNSHIP REPORT
NABIHA BASHIR

01-111062-101

BBA 8-C

2010
Table of Contents
Table of Contents....................................................................................................... 2
EXEECUTIVE SUMMARY...............................................................................................5
INTRODUCTION...........................................................................................................6
Central background information..............................................................................6
Vision....................................................................................................................... 6
Mission.................................................................................................................... 6
Values...................................................................................................................... 6
Company background.................................................................................................7
The Pre Independence History (1942 to 1947)........................................................7
Independence History (1947 to 1974).....................................................................7
Allied Bank (1974 to 1991)......................................................................................8
Allied Bank (1991 to 2004)......................................................................................8
(2005 to date).........................................................................................................8
CREDIT RATING...........................................................................................................9
Board of directors.....................................................................................................10
Management......................................................................................................... 10
MANAGEMENT SYSTEM OF ABL.................................................................................12
Allied Bank Management.......................................................................................12
Bank’s Information.............................................................................................12
MANAGEMENT HIERARCHY.......................................................................................14
2.11 FUNCTIONAL HIERARCHY...............................................................................15
STRUCTURE OF ABL LIMITED.................................................................................15
BRANCH NETWORK................................................................................................16
COMPANY’S ANALYSIS..............................................................................................18
OPERATION ANANLYSIS.........................................................................................18
SERVICES OF ALLIED BANK Ltd..............................................................................19
All-Time Banking................................................................................................ 19
Allied Umrah Aasan............................................................................................19
Master Cards.....................................................................................................20
Allied Tahafuz Deposit Scheme..........................................................................21

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 Allied Karzas Scheme (No Interest/Markup).......................................................21
Other Products:.................................................................................................. 22
Role of ABL in Banking Sector...............................................................................24
Financial Analysis..................................................................................................... 28
BALANCE SHEET STATEMENT................................................................................28
ANALYSIS OF BALANCE SHEET ..............................................................................32
CASH FLOW ANALYSIS...........................................................................................34
Analysis of Profit and Loss Account.......................................................................35
Vertical Analysis For year 2008.............................................................................36
RATIO ANALYSIS....................................................................................................... 38
INTERPRETATION OF RATIOS FOR 2008.................................................................39
OVERVIEW OF FINANCIAL ANALYSIS:.....................................................................43
CURRENT FINANCIAL OVERVIEW 2009..................................................................45
Human resource assessment....................................................................................46
Employee relationships.........................................................................................46
Recruitment Phases:..............................................................................................46
Marketing analysis....................................................................................................49
Marketing Policies..................................................................................................49
Promotional Policies.............................................................................................. 49
Public Relations:.................................................................................................... 50
Publicity:................................................................................................................50
ENVIRONMENTAL ANALYSIS......................................................................................52
INDUSTRY AND MARKET ANANLSYSIS....................................................................52
Major product lines market segments:...............................................................52
Growth rate for the entire industry....................................................................53
Competitor Analysis..................................................................................................55
Major competitors:................................................................................................ 55
Their market shares:.............................................................................................55
There Goals and Strategies:..................................................................................56
Technology analysis.................................................................................................59
TECHNICAL METHODS THAT AFFECT THE INDUSTRY.............................................59
INNOVATION..........................................................................................................60
DEPARTMENT WORKED IN AND MY CONTRIBUTIONS...............................................61

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 Duties and accomplishment:.................................................................................61
NEW KNOWLEDGE ACQUIRED:..............................................................................62
HOW EXPERIENCE IMPACTS MY CAREER:..............................................................67
IDENTIFICATION OF PROBLEM...................................................................................68
FINDINGS..................................................................................................................70
SWOT ANALYSIS: ..................................................................................................70
STRENGTHS: ......................................................................................................70
WEAKNESSES: ...................................................................................................71
OPPORTUNITIES: ................................................................................................71
THREATS: .......................................................................................................... 72
RECOMMENDATIONS................................................................................................ 73
CONCLUSION............................................................................................................75
APPENDIX ................................................................................................................ 77

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EXEECUTIVE SUMMARY

Allied Bank is amongst the leading commercial banks in the country and has always played a
pioneering role in introducing innovative technology-bused banking services. The role played by
its human resources is highly valued, both in terms of their skills and dedication in implementing
uniq1o banking services. The Bank Allied Bank Limited was the first bank to be established in
Pakistan. It started out in Lahore by the same Australasia Dank before independence in 1942;
was renamed Allied Bank of Pakistan Limited in 1974 and then Allied Bank Limited in 2005.

In August 2008, because of capital reconstruction, the Bank’s ownership was transferred
to a consortium comprising Abraham Leasing Limited and Abraham Group. Today . with its
existence of over 60 years, the Rank has built itself a foundation with a strong equity, assets and
deposit base. It offers universe banking services, while placing major emphasis on retail banking
The Bank also has the largest and work of over 700 online branches in Pakistan and offers
various technology-bused products and services to its diverse clientele.

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INTRODUCTION
Central background information
Allied Bank Limited was the first bank to be established in Pakistan. It started out in Lahore by
the name Australasia Bank before independence in 1942; was renamed Allied Bank of Pakistan
Limited in 1974 and then Allied Bank Limited in 2005.

In August 2004, because of capital reconstruction, the Bank’s ownership was transferred to a
consortium comprising Ibrahim Leasing Limited and Ibrahim Group. Today, with
its existence of over 60 years, the Bank has built itself a foundation with a strong equity, assets
and deposit base. It offers universal banking services, while placing major emphasis on retail
banking. The Bank also has the largest network of over 700 online branches in Pakistan and
offers various technology-based products and services to its diverse clientele.

Vision
To become a dynamic and efficient bank providing integrated solutions and the first choice of
bank for all customers.

Mission
• To provide value-added services to our customers
• To provide high-tech innovative solutions to meet customer requirements
• To create sustainable value through growth, efficiency and diversity for all stakeholders
• To provide a challenging work environment, and reward dedicated team members
• To play a proactive role in contributing towards the society

Values
• Integrity
• Excellence in Service
• High Performance
• Innovation and Growth

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Company background
Allied Bank was the first Muslim bank to have been established in Pakistan. Established in
December 1942 as the Australasia Bank in Lahore with a paid-up share capital of Rs. 0.12
million under the Chairmanship of Khawaja Bashir Bux, the Bank attracted deposits equivalent
to Rs. 0.431 million in its first eighteen months of business.
At the time, the Bank’s total assets amounted to Rs. 0.572 million. Today, Allied Bank's paid up
Capital & Reserves amount to Rs. 10.5 billion, deposits exceed Rs. 143 billion and total assets
equal Rs. 170 billion.
The Bank’s journey has been about dedication, commitment, professionalism and adapting to
environmental changes, leading to its immense growth and stability. It is these factors that have
made it a Bank the rest look up to.

The Pre Independence History (1942 to 1947)

In the early 1940s, the Muslim community was beginning to realize the need for its active
participation in the fields of trade and industry. Since the late 1880s, Hindus had established a
commanding presence in the areas of industry, trade and commerce and were especially
dominating in the Sub-continent area. Banking, in particular, was the exclusive forte of Hindus
and it was popularly and wrongly believed that Muslims were temperamentally unsuited for this
profession.

It was particularly upsetting for Khawaja Bashir Bux to hear that “Muslims could not be
successful bankers”. He decided to step-up to that challenge and takes the lead in establishing
this first Muslim bank by the name Australasia Bank Limited in Punjab, which was to become
Pakistan in December 1942.

The initial equity of the Bank amounted to Rs 0.12 million, which was raised to Rs. 0.5 million
by the end of the first year of operation, and by the end of 30th June 1947 capital increased to Rs.
0.673 million and deposits raised to Rs 7.728 million.

Independence History (1947 to 1974)

Australasia Bank was the only fully operational Muslim bank in Pakistan on August 14th, 1947.

However, it was severely hit by the riots in East Punjab. The Bank was identified with the
Pakistan Movement. At the time of independence all the branches in India, (Amritsar, Batala,
Jalandhar, Ludhiana, Delhi and Angra (Agra)) were closed down. New branches were opened in
Karachi, Rawalpindi, Peshawar, Sialkot, Sargodha, Jhang, Gujranwala and Kasur. Later, the
network spread to Multan and Quetta as well. The Bank financed trade in cloth and food grains
thus, played an important role in maintaining consumer supplies during the early months of 1948
affected by riots. Despite the difficult conditions prevailing and the substantial set back in the
Bank’s business in India, Australasia Bank made a profit of Rs. 50,000 during 1947-48.

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By the end of 1970 it had 101 branches. Unfortunately, it lost 51 branches in the separation of
East Pakistan. But the Bank did well despite losing a lot of its assets and by the end of 1973 had
186 branches in West Pakistan.

Allied Bank (1974 to 1991)

In 1974, the Board of Directors of Australasia Bank was dissolved and was renamed Allied
Bank. The first year was highly successful; profit exceeded Rs. 10 million, deposits rose by over
50 percent and approached Rs. 1460 million. Investments rose by 72 percent and advances
exceeded Rs. 1080 million for the first time in the banking history. 116 new branches were
opened during 1974 and the Bank started participating in the Government’s spot procurement
agriculture program. Those seventeen years saw a rapid growth for the Bank. Branches increased
from 353 in 1974 to 748 in 1991. Deposits rose from Rs. 1.46 billion and Advances &
Investments from Rs. 1.34 billion to Rs. 22 billion during this period. It also opened three
branches in the U.K.

Allied Bank (1991 to 2004)

As a result of privatization in September 1991, Allied Bank entered a new phase, and became the
world’s first bank to be owned and managed by its employees. In 1993 the “First Allied Bank
Modaraba” (FABM) was floated. After privatization, Allied Bank became one of the premier
financial institutions of Pakistan.

Allied Bank’s capital and reserves were Rs. 1.525 billion; its assets amounted to Rs. 87.536
billion and deposits to Rs. 76.038 billion. Allied Bank enjoyed an enviable position in Pakistan’s
financial sector and was recognized as one of the best amongst the major banks of the country.

In August 2004, as a result of capital reconstruction, the Bank’s ownership was transferred to a
consortium comprising Ibrahim Leasing Limited and Ibrahim Group.

Today, the Bank stands on a solid foundation built over 63 years of hard work and dedication,
giving it a strong equity, an asset and deposit base and the ability to offer customers universal
banking services with more focus on retail banking. The Bank has the largest network of online
branches in Pakistan and offers various technology-based products and services to its diverse
clientele through its network of more than 700 branches.

(2005 to date)
In May 2005, Ibrahim Leasing Limited dissolved and the company was vested into Allied Bank
Limited. ALL the shareholders were issued ABL shares instead of the all shares held by them.
An application for the listing of ABL shares in all the Stock Exchange Companies of Pakistan
was made; ABL was formally listed and the Bank’s share trading began on the following dates:

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 • Islamabad Stock Exchange 8th August 2005
• Lahore Stock Exchange 10th August 2005
• Karachi Stock Exchange 17th August 2005
Today, all Allied Bank Limited shareholders can trade in the Bank’s shares at their will.

Today, with its existence of over 60 years, the Bank has built itself a foundation with a strong
equity, assets and deposit base. It offers universal banking services, while placing major
emphasis on retail banking. The Bank also has the largest network of over 700 online branches in
Pakistan and offers various technology-based products and services to its diverse clientele.
Today ABL has:

Total customers 4,605,000

Employees 6,747
Total branches 735
Utility booths 34
Airport booths 1

CREDIT RATING

In today’s world:
ABL is now one of the largest banks in Pakistan with a network of 757 in over 300 cities and
towns offering real time online banking. The bank leads the way by having the largest network
of 450 ATM’s in more than 145 cities and towns across Pakistan. Currently ABL
possesses 932 and position in the world. The management has a vision to move forward and to
be one of the world’s leading banks.

PACRA:
Based on its impressive financial performance and significant improvement in areas of risk
management and corporate governance, the Pakistan Credit Rating Agency assigned the long
term credit rating of Allied Bank to AA (double A) and short term rating to A1+ (A one plus).

• AA:
Very high credit quality. AA ratings 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.

• A1+:
Obligations supported by the highest capacity for timely repayment. The rating reflects
ABL’s good performance prospects emanating from its extensive outreach, sound
capital structure and an improving asset quality. While seeking to strengthen its
infrastructure and control environment, the Management intends to withstand in an
increasingly competitive environment through achieving diversification in loan book
and leveraging the extensive outreach to expand its retail universe both for credit
expansion and low cost deposit mobilization.

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Board of directors

• Mohammad Naeem Mukhtar(Chairman)

• Mohammad Aftab Manzoor(CEO)

• Pervaiz Iqbal Butt (Director)

• Mohammad Waseem Mukhtar (Director)

• Farrakh Qayyum (Director)

• Sheikh Mukhtar Ahmed (Director)

• Abdul Aziz Khan (Director)

• Tasneem M. Noorani (Director)

• Sheikh Jalees Ahmed (Director)

• Nazrat Bashir(Director)

• Mubashir A. Akhtar (Director)

Management

• Asim Tufail(Group Chief, Consumer & Personal Banking)

• Fareed Vardag(Chief Risk Officer)

• Iqbal Zaidi(Group Chief, Compliance)

• Mohammad Abbas Sheikh(Group Chief, Special Assets Management)

• Mohammad Aftab Manzoor(Chief Executive Officer)

• Muhammad Jawaid Iqbal(Group Chief, Corporate & Investment Banking)

• Muhammad Shahzad Sadiq (Group Chief, Audit & CRR)

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• Muhammad Yaseen(Group Chief, Treasury)

• Mujahid Ali(Group Chief, Information Technology)

• Shafique Ahmed Uqaili(Group Chief, Human Resources)

• Khawaja Mohammad Almas(Head, Core Banking Projects)

• Tahir Hassan Qureshi(Chief Financial Officer)

• Tariq Mehmood(Group Chief, Operations)

• Waheed ur Rehman(Company Secretary)

• Zia Ijaz(Group Chief, Commercial & Retail Banking)

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MANAGEMENT SYSTEM OF ABL

Successful and profitable banking management depends on two principal factors.

a) The manner in which the functions of banking, that is the acquiring of deposits, the
investing or converting such deposits into earning assets, and the servicing of such deposits, are
performed.
b) The degree to which officers and employees contribute their talents to the progress and
welfare of the bank in discharging duties and responsibilities.

Allied Bank Management

Banks are managed by board of director or similar group of men who are responsible to the
owners, creditors, and the government for the well being of their institutions. The government
selects all or some of directors of ABL. Management of ABL are given as follows:

Bank’s Information

1. Directors:
Mr. Khalid A. Sherwani is the chairman and Mohammadi Yaqoob is secretary of ABL, are also
the board of directors. ABL’s other directors are M. Saleem Shaikh, S. Jauhar Husain, I.A.
Usmaini, Raja Raza Arshad, Mohammad Saleem Sethi, Athar Mahmood Khan. Stockholders
elect the directors for a term of one year and they are eligible for re-election. Voting is
cumulative, that is, each shareholder has the right to vote the member of shares owned by him.
The boards may format major policies and select officers to execute them. They may supervise
these officers, review their act.

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2. Executive Committee
Executive Committee consists of Mr. Khalid A. Sherwani (president), M. Salim Shaikh, S.
Jauhar Husain, I. A. Usmain, Naveed Masud, Bilal Mustafa, M. Saleem Khan Durrani, Ashfaq
Hassan Qureshi, Shariqe Umar Farooqi (secretary).

3. Officers:
Officers are selected by the directors to manage their banks. An officer’s relationship to the
board is that of an employee to an employer. Chief Officer (Rashid M. Chaudary) of ABL is
known as Chairman, Senior Executive Vice President (M. Saleem Sheikh, S. Jauhar,). They are
also members of the board of director and are large shareholders. They are in a position, to
dominate the bank's policies as well as its administration.
The Chief duty of the chairman is to lend the bank's funds. This work is often subject to little
supervision by the board of directors.

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MANAGEMENT HIERARCHY
The management hierarchy represents the different positions and designations in the hierarchy of
the ABL. However, this is not the reporting hierarchy but merely represents the positions and
grades on the basis of seniority and grades.

President

Senior Vice President

Vice President

Executive Vice
President

Senior Executive Vice

President
[rosodmemtPresident
Regional General
Manager
Managerxecutive Vice
President

Branch Manager

Figure 2.1 Management hierarchy

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 2.11 FUNCTIONAL HIERARCHY
The functional hierarchy represents the reporting order in the hierarchy of ABL. The hierarchy
has president and directors at top management level and officers Grade I, II and Grade III at the lower
level management of ABL. The middle level management consists of regional general Manager and
Regional Controller of Operations. These positions are not fixed. Any person in the hierarchy above the
branch manager can be appointed as RGM and controller operations.

President and CEO

Board of
Director

Head of
Departments

Regional General Controllers of

Manager Operation

Branch Manager

Office G-I, II and other

lower Staff

Figure 2.2 Functional hierarch

STRUCTURE OF ABL LIMITED

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No bank can be expected to operate efficiently unless all employees within a department,
division or section know:
A) From whom they are to receive the work they are to do.
B) What they are supposed to do with the work after they receive it.
C) How they are supposed to handle the operation of item.
D) When they are supposed to do work, perform the operation.
E) To whom they give the item or function after finishing it.
To perform the functions efficiently the bank has its Head Office in Karachi, which is controlled
by the president of the Bank. The bank has regional office under head office in major areas of the
country. Regional Chief heads this office. The region Consist of many zonal offices with a zonal
chief. There are many branches in a zone to carry the functions effectively and performing
customer services locally.

ABL Ltd. is functionally organized into divisions and divisions are further divided into
department and sections. Every province has its own regional office and zonal offices. Executive
vice president heads the divisions and departments are further headed by OGI (Officer of Grade
I). Manager heads branches.

BRANCH NETWORK
There are Four Provincial Headquarters of Allied Bank Limited situated at Lahore (Punjab), Karachi
(Sind), Peshawar (NWFP & Azad Kashmir) and Quetta (Baluchistan).

• 800 domestic branches.

• Arrangements with large number of Correspondent Banks/Exchange Companies.

• Over 200 branches for Foreign Currency Accounts.

• Over 70 branches for trade finance.

• Large number of branches for Inland Remittances.

• Large number of branches for Rupee Travelers Cheques

16

Branch Setup
 MANAGER

General Banking Advance

Department

General Banking

Token Current Remittanc Account Clearing

e

NON-CLERICAL
STAFF

17
COMPANY’S ANALYSIS
OPERATION ANANLYSIS

PRODUCT LINE
The following is list of Product line of Allied Bank Limited
• Internet Banking (Online Banking)
• ATM Network
• Deposit Account
• SME
• Agriculture
• Corporate Leasing

Corporate Banking
• Project Finance
• Long Term Financing
• Short Term Financing
• Trade Finance

Investment Banking
• Project Finance
• Syndication
• Advisory

Financial Institution
• Cash Management
• Home Remittances

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SERVICES OF ALLIED BANK Ltd

All-Time Banking
Allied Bank has introduced the Allied Cash last year also referred to as ATM card. The customer
will now have the convenience of withdrawing cash from any of ABL’s ATMs (Auto Taller
Machine) conveniently located in major cities at any time of the day or night even on closed
days/holidays. Other services include customer being able to inquire about the balance of his/her
account or printing an abbreviated (mini) statement showing the most recent eight transactions
up to the previous working day.

In order to obtain Allied Cash+ Card, the customers simply have to fill out prescribed
Application form available at selected Allied Bank Branches in Karachi and Lahore. The dully-
filled form should be handed over the Manager of the Branch where the customer is maintaining
his account. Non-account holders would first have to open an account with Allied Bank to have
access to this facility. The Customer can feel absolutely safe his Allied Cash + Card because it
can only be used with the Personal identification Number (PIN), which is given to him by the
bank. Graphical representations have been employed, where appropriate, for ease of
understanding.

This topic is further explained in chapter 4.

Allied Umrah Aasan

This unique scheme facilities those persons, who cannot afford to incur the lump sum expenses
for Umrah. It allows the intending pilgrims (Aazmeen) to make payment of Umrah charges in
monthly installments. Its salient features are:

• It is free of interest and markup.

• Using this scheme family, relatives and household servants can be sent for Umrah.

• Around 2500 Aazmeen are to be sent for Umrah every month.

• Lucky winners of the draw are duly informed by their respective branches.

• Total package for Aazmeen from Karachi is being Rs. 45,000. Aazmeen from Lahore and
Islamabad will have to pay an extra Rs. 3,000/- for Airline fare.

• Umrah packages are of 10 days duration. The charges include Airline return ticket.

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 • Fee Visa, family accommodation and traveling within Saudi Arabia (Jeddah to Makka,
Makka to Madina and Median to Jeddah).

• Application for whole Family/Group can be filed through a single Application Form. All
applicants of a family/group are sent for Umrah even if only one member of that
family/group is declared successful in the draw.

• Due to any reason if Umrah Applicant needs to withdraw his/her application, he/she will
given a refund of all money deposited through installments till that time.

• At the time of submitting the application Aazmeen has to deposit Rs. 2,000 per person as
first installment. Rest of the money is to be deposited through monthly installments of Rs.
2,000/- person on every 5th day of the month.

• If an Applicant wins in the draw he/she is required to pay the balance amount through
monthly installments on returning from Umrah.

• Aazmeen have to submit a copy of their NI Cards and Passports with the application.

• Applicants have to deposit the monthly installment using deposit slips still 5th of every
month. Defaulters will not be included in the draw.

Master Cards
The customer can now become the holder of a true Credit Card here in Pakistan. Allied Bank
under license from Master Card International, U.S.A. issues its Master Card to anyone meeting
the eligibility criteria. With the Allied Bank Master Card the customer is assured of a service
meeting the highest international standards maintained by Master Card.

The Allied Bank Master Card helps the customer pay without the complications of cash or
checks. It doesn’t cost the customer anything if he pays in full within the due date, but if he
decides to spread the payments over several months a service charge @ 2.50% per month is
charged. Allied Bank – Master Card is safer than cash and simpler than checks.

The customer has been an account holder with the Allied Bank to apply for the Allied Bank –
Master Card that is available to the customer for an initial fee of Rs. 2,000/- (Rs. 500/-
membership fee + Rs. 1,500/- annual fee). Once the customer obtains his card, he simply
presents it at Shops, Supermarkets, Hotels, Pharmacies, Nursing Homes, restaurants, Petrol
Pumps and hundreds of other establishments which display the familiar Master Card sign
throughout Pakistan and abroad.

Once purchases are made, the customer signs a voucher and that’s it he is not required to take
extra troubles. Every month the customer receives a statement showing details of transactions,

20
outstanding and the minimum amount due. The statements also give the last date for payment so
the customer can avoid paying service charges.

In order to avoid disruption in use of the card, it is essential that a least minimum payable
amount of the bill be paid regularly. In case the required payment is not received the operation of
the Master Card is automatically, suspended by the system. In such case, the card is activated
after receipt of overdue payment only.

Allied Tahafuz Deposit Scheme

Brings the customer unparalleled life insurance covers along with attractive monthly profit.
Minimum Deposit amount – Rs. 50,000/- or multiples thereof. Insurance cover up to - Rs.
5,000,000/. As Competitive rate profit. The features of this scheme are:

• Prospective client who will maintain a return free deposit for at least 3 months shall
eligible to avail interest free/mark-up free finance.

• Payment of profit on monthly basis, automatic renewal on face value.

• Life insurance up to 5 times of the customer’s deposit amount with no extra cost.

• Premium shall be paid by the bank.

• Full payment of claim in case of – Death – Permanent total Disability.

• Eligibility Age – 18 to 64 years.

• No medical examination for:

o Deposit up to Rs. 500,000/- and age up to 60.

Allied Karzas Scheme (No Interest/Markup)

Allied Bank moves a step forwards by introducing interest free banking through Allied Karzas
Scheme. The aim of this scheme is to provide an opportunity to the depositors to take advantage
of a real Riba Free economic environment and avail

• Prospective client will maintain a return free deposit for at least 3 months shall be eligible
to avail interest free/mark-up free finance.

• Deposit amount Rs. 100,000/- and multiples thereof.

• Minimum deposit period, 3 months with automatic rollover facility.

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 • Premature encashment allowed, without any penalty/charge.

• Minimum deposit period for eligibility of finance, 3 months.

• Maximum period of finance, 6 months.

• Maximum period to avail finance, 12 months from the maturity of deposit.

• Every month (30 days) completed by the deposit shall be taken into account for
calculation of entitlement of finance.

• Finance proposal processing fee Rs. 100/- (non-refundable) plus documentation cost on
actual basis.

• In case of default/delay in repayment @ 0.055% per day (20.075% p.a._ to be placed in

charity A/C.

• Formula for calculation of entitlement of finance.

o Same amount of finance for half the period of deposit or

o Same period of finance for half the amount of deposit.

Other Products:

• Home Remittances

The Bank having a network of 755 branches all over Pakistan, undertakes to provide safe and
instant payment of remittance from expatriates, routed through designated foreign exchange
companies and correspondent banks with whom special arrangements have been made in this
regard. Through the Allied Express Services, ABL ensures that beneficiaries’ Accounts in ABL
branches are credited with in 48 hours of receiving home remittance information from overseas.

• Hajj Services

The Bank serves the intending pilgrims by helping them in performing this religious obligation.
The Hajj forms and other related services are provided by the bank. However, the terms and
conditions for accepting the Hajj forms from intending pilgrims are in accordance with the Hajj
Policy announced by the government, each year. Hajj applications are available with all branches
during Hajj season, immediately after the Hajj policy is announced by the Government of
Pakistan.
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• Utility Bills

All branches of the Bank collect utility bills of electricity, gas and telephones. For convenience
of the customers, Utility Bills are collected by the branches during banking hours and also in he
evening banking on all working days. Bills can be paid through cash or checks. Consumers may
drop bills with crossed checks into a drop box available at the branches under “Checks Drop-in”
system.

• Agricultural Finances

Bank under Agricultural Financing Schemes envisaged by he State Bank of Pakistan extend
short, medium and long term, farm and non-farm credits. The farm credits are extended for
production (inputs) and development purposes. Non-farm credits are allowed for livestock
(goats, sheep and cattle), poultry, factory including social forestry and fisheries (inland and
marine excluding deep sea fishing).

• Lockers

Allied Bank Lockers are available in three different sizes Small, Medium and Large on a yearly
fee. Locker holders need not have an account in the Bank.

• Import Export Business/Trade Finance

ABL Provides highly efficient trade finance services for import/export business for our
clients/customers through large number of authorized branches where trained and motivated staff
is available to handle the business on behalf of customer.

• Allied Bank Rupee Travelers Checks

Carrying cash to strange alien location can prove to be risky as a single incident can render one
without monetary backup of any sort. Hence banks introduce traveler’s checks in order to protect
against any contingency.

• Seasonal Finance

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 o Running Finance is a short-term loan allowed by the bank for a period of one year. The
running finance account can be operated and daily sale proceeds can be deposited into the
account. The markup is recovered on the products of daily outstanding balance. The
running finance is suitable for meeting day-to-day financial needs of the business.

o Cash Finance is allowed against pledge of goods. The delivery of goods is made against
payment.

o Demand Finance is disbursed in lump sum or in accordance with the agreed

disbursements schedule and it is repayable as per the agreed installments, which could be
monthly, quarterly, biannual or annual.

Role of ABL in Banking Sector

ABL is one of the most dynamic and progressive bank in the banking industry of Pakistan. This
is due to its impressive growth and development, which it achieved during sixty years of its
existence. It did not take long for Allied to grow into one of the leading bank in the country
overtaking the several other banks which were its competitors were established earlier.

• Contribution Before/At the Time of Independence

ABL was established as a response to the cal of Muhammad Ali Jinnah for having a Muslim
representative bank in him Sub Continent. At the time of independence when Pakistan was in
intense need of banking services and expertise, ABL rose to the occasion and rendered all its
expertise at best for the development of the newly born state.

• Commitment to Serve the Customers

ABL used novel methods of customers service instead of conventional ways of the day, which
was market oriented and appealed to if customers. ABL’s dynamic, radical and personalized
style of banking differed significantly for the conventional business patterns of the period. In fact
every feature and aspect ABL’s behavior reflected highlighted those differences most
significantly, the commitment to serve the customers.

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• Better Working Environment

ABL has provided its employees a better working environment and salary structure and facilities.
Incentives and awards were given to promote efficiency and better service to customers. A
competitive environment was instrumental in introducing a thorough going professionalism,
which in the ultimate analysis transformed the entire outlook of the industry.

• Modern Banking Policy

The expansion and growth of he banking sector in Pakistan has been remarkable. Until 1942, the
growth of banking comprised the phases of laying the foundation of the banking structure. The
establishment of ABL has started a new era in the banking system. This was the phase
competition with the already established giants. Banking underwent a complete metamorphosis;
clients were naturally attracted to the bank, which provided better and quicker banking services.
When Allied Bank challenged the major banks of the time they began evaluate their policies and
were surprised to find that they had a lot to change before long. They began to change and adopt
a more modern and relevant strategy.

• Deposit Mobilization

The banking sector as a whole and ABL in particular has played an important role in helping to
mobilized savings. The continuously rising importance of deposit money in total money supply
underscores the contribution of commercial banks in this direction.

From its inception, ABL has launched a number of successive drives for improving the deposit
base of the Bank. An essential part of each drive was to popularize the banking habit among the
people both rural and urban, and to bring a large number of customers into its orbit.

• Branch Expenses

Soon after commencing business by the end of June 1942, only few branches had been opened.
The management decided to broaden the geographical coverage so besides the cities, the bank
branched out into small towns & the far-flung, less development and unbaked areas of fulfill its
social responsibility. The branches in small town and villages have been vital help to the small
industrialists and business, industrial workers, farmer’s craftsmen and other persons of limited
means. The bank had extended its network to more than 650 by the end of Dec. 1973. At present
the number exceeds 819 branches.

25
• Home Remittances Handled

The Bank contributions in handling home remittances by over seas Pakistanis have also been
commendable.

• Foreign Trade

The bank has always played key role in the promotion of foreign trade especially in financing of
exports. The bank’ achievement in the area is really commendable, as it has not only to compete
with the domestic banks but with the large international financial agencies as well.

• Interest Free Banking

The Islamization of economic system in Pakistan began from July 1979. In Jan 1981 the PLS
banking was launched. Interest free modes of financing had been introduced, and in the first half
of 1985 a number of measures over taken for complete charge over of the whole system of
domestic banking to non interest basis. And finally the process of transaction from interest base
to non-interest banking was completed. Since the banking companies are not allowed to accept
deposits (excluding foreign currency deposits) except on the basis of Profit & Loss sharing.

A separate department at the head office was set up which was later on upgraded into a full-
fledged Islamic banking division apart from supervising the Islamic banking operations. The
division has conducted research and has been able to add to the literature on Islamic banking,
both of theoretical and practical significance.

• Computerization

While mechanization in ABL, began as early as in 1950’s the bank also took the lead in
introducing computers in banking operation in Pakistan and now ABL is connected to its
branches through online banking.

• Utility Booths

The bank has 34 utility booths throughout of country to accept payments, both in the morning
and in the evening against utility bills, such as gas, electricity and telephone bills. The bank also
issues television licenses.

26
• Prize for Success in Banking Diploma Examination

The bank instituted prizes for those securing highest position in bank diploma examinations. In
1993, three bonuses were awarded in a single year to recognize and reward to services and
achievements of its employees.

• Obligation to Serve Society

ABL also plays it part in the development of society. It has established public libraries in many
cities and towns.

27
Financial Analysis
BALANCE SHEET STATEMENT

28
PROFIT AND LOSS STATEMENT

29
PERFORMANCE COMPARISON OF ABL in Rs. Million

30
CASH FLOW SUMMARY

31
ANALYSIS OF BALANCE SHEET
Vertical Analysis

32
33
CASH FLOW ANALYSIS
HORIZONTAL & VERTICAL ANALYSIS
Allied Bank Limited Sheet of Dec 31, 2008 Horizontal Analysis

ASSETS Increase (decrease)

2007 2008

Cash and balances with treasury bank (0.79) 115

Balances with bank 2.40 2.50
Investments 147.22 (20.31)
Advances 0.175 (3.89)
Other Assets ( 14.67) (29.72)
Operating fixed assets 22. M (0.83)
Deferred tax net (50.55) -
Total Assets 20.75 40.00

Liabilities 14.35 19.36

Bills payable 7.67 7.87
Burrowing from financial institutions 62.29 (2.0)
Deposit I5.75 16.35

34
Shareholder equity 45.55 48.35

Share Capital 16.32 16.39

Capital reserves (40.20 ) (84.75)
Accumulated loss (23.41) (34.76)
Surplus on revaluation of fixed assets 132 (17.38)

Analysis of Profit and Loss Account

As on Dec 31, 2008

ITEMS Increase (decrease)

2006-2007 % age 2007-2008 % age

Murk up Interest return earned (10.40) 10.16

Mark up 24.97 (11.22)
Provisions (4.72) 93.20
Non mark upMnlerest Int:omd 12.34 (28.77)
Non mark up Interest expensed (0.52) (2.77)
Profit before Taxation 83,79 107
Taxation S4.74 139
Profit after Taxation 82.85 82.49
Earning per share 82,61 84

Allied Bank Limited Profit and Loss Account

Vertical Analysis

35
 2008 Rs. %
Income 2006 Rs.(000) %age 2007 Rs.(000) % age
(000) age
Markup
23,956714 79.47 26,738,446 82.98 24,271,792 75.92
earned
Fee
Commission 2,096.871 6.96 27,685 5.17 1,855,324 5.80
& Brokerage
Gain on
1.795,185, 5.98 1,099,947 3.41 385,912 1.21
Investment
Income from
1,144,350 3.80 1,453,522 4.51 1.135,343 3.55
Dealing
Other In tome 1.151.751 3.52 1,102.845 3.42 2,813,892 8.80
Dividend
Income - 0.00 0.00 1,509,213 4.72
Venture
Total 30.144,471 100 32,222.445 100 31,971,476 100

Vertical Analysis For year 2008

2006 Rs. 2007 Rs. % 2008 Rs.

Expenses % age % age
(000) (000) age (000)
Mark up Interest 11, 580, 15, 434,
41.20 49.61 17,385,761 55.44
Expenses 43 544
Provisions 2,512,207 S.94 2,636,707 8.4-8 1,364,722 4.35
Admin Expenses 1 42.00 11,724,44 37.69 12,071,531 38.49
1,807,126 3
Other Charges 4,061 0.01 12,381 0.04 68.924 0.22
Other Provisions Writes
(62,542) 0.22 72,896 0.23 6,013 0.02
off
Staff Welfare Fund 215,159 0.77 117,244 038 - 0.00
Taxation 2,054,066 7.31 1,112,342 3.58 465,000 1.48
Total 28,110,51 100 31,310,55 100 31,361,955 100
1 7

36
37
RATIO ANALYSIS
2003 2004 2005 2006 2007
2008

38
INTERPRETATION OF RATIOS FOR 2008

CURRENT RATIO:

39
It is used to check the ability of a bank to meet its short term obligations.

Current ratio= current assets

current liabilities

Current ratio for 2008= 3.16

Current ratio for 2007=1.88

Interpretation

As the current ratio is increasing, so it is good for the bank to meet its liabilities and the Bank is
more liquid in 2008 as compared to 2007.

DEBT RATIO:

It shows the proportion of total assets financed banks/firm’s creditors. Higher this ratio, greater
the amount of other people’s money is being used to generate profit.

Debt Ratio= Total Liabilities

Total Assets

Debt ratio for 2008=0.951

Debt Ratio for 2007=0.95

Interpretation

The debt ratio for both the years is approximately same. The ratio shows that the bank has
financed almost 95% of its assets with debts.

EARNING PER SHARE:

This ratio shows the amount earned on behalf of each share. It does not show the amount
actually distributed among the share holders.

Earnings per share= Earnings available for common stock holders

Number of outstanding shares

40
EPS for 2008=1.63

EPS for 2007=3.16

Interpretation

EPS is subjected to downfall in 2008 as compared with 2007. It shows that less profit is
distributed to the shareholders in 2008.

RETURN ON EQUITY:

This ratio shows the returned earned on the stockholders investment in the bank/firm.

ROE = Net Income

Shareholder equity

ROE for 2008=41%

ROE for 2007=36%

Intrepretation

Returns are higher in 2008 and is well for the customers and owners.

DEBT TO EQUITY RATIO:

This ratio shows loans of a firm as compared to its equity.

Debt to equity ratio = Total Debt

Total Equity

Debt to equity ratio for 2008= 22.35

Debt to equity ratio for 2007= 19.27

Interpretation

This shows that the bank has taken more loans from creditors in 2008 than 2007. This situation is
not good for the bank as this situation may lead to insolvency.

41
RETURN ON ASSETS:

It is also called return on investment. It measures the overall effectiveness of the management in
generating profits with its available assets.

ROA = Net Income

Total Assets

ROA for 2008=1.7%

ROA for 2007=1.8%

Interpretation

Greater the return on assets, the better is the situation. ROA has fallen in 2008 showing the
mismanagement of total assets.

NETWORKING CAPITAL RATIO:

Net working capital is basically difference between currents assets and current liabilities.

Networking capital ratio = current assets – current liabilities

Total assets

Networking capital ratio for 2008=0.106

Networking capital ratio for 2009=0.068

Intrepretation

The ratio has shown an increasing trend from 2007 to 08, indicating the increase in current assets
of the bank. Hence it’s a favorable situation.

OPERATION CASH FLOW RATIO:

A measure of how well current liabilities are covered by the cash flow generated from a
company's operations.

42
OCF ratio for 2008=00075

OCF ratio for 2007=0.083

Intrepretation

The operating cash flow ratio can gauge a company's liquidity in the short term. Using cash flow
as opposed to income is sometimes a better indication of liquidity simply because, as we know,
cash is how bills are normally paid off. The ratio is less in 2008 than 2007, indicating less
liquidity.

PRICE EARNING RATIO:

It is a valuation ratio of a company's current share price compared to its per- share earnings.

PRICE EARNING RATIO 2008= 6.74

PRICE EARNING RATIO 2007= 3.33

Interpretation

A high P/E suggests that investors are expecting higher earnings growth in the future compared
to companies with a lower P/E. 2008 P/E is higher suggests that higher growth in future.

OVERVIEW OF FINANCIAL ANALYSIS:

As the current ratio is increasing, so it is good for the bank to meet its liabilities and the Bank is
more liquid in 2008 as compared to 2007.

43
The debt ratio for both the years is approximately same. The ratio shows that the bank has
financed almost 95% of its assets with debts.

EPS is subjected to downfall in 2008 as compared with 2007. It shows that less profit is
distributed to the shareholders in 2008.

Returns are higher in 2008 and are well for the customers and owners.

This shows that the bank has taken more loans from creditors in 2008 than 2007. This situation
is not good for the bank as this situation may lead to insolvency.

Greater the return on assets, the better is the situation. ROA has fallen in 2008 showing the
mismanagement of total assets.

The operating cash flow ratio can gauge a company's liquidity in the short term. Using cash flow
as opposed to income is sometimes a better indication of liquidity simply because, as we know,
cash is how bills are normally paid off. The ratio is less in 2008 than 2007, indicating less
liquidity.

A high P/E suggests that investors are expecting higher earnings growth in the future compared
to companies with a lower P/E. 2008 P/E is higher suggests that higher growth in future.

The above mentioned sentences depict the overall analysis of bank fiscal years. Now these
clearly show bank assets are more liquid so bank must invest cash and cash equivalents into the
business. Debt ratio is same but bank must use less risky debts. EPS is subjected to a downfall
showing loss in share prices too. Bank must grab the market in order to ensure rising EPS and so
will increase its shareholders. Returns are higher so better for customers. Bank has taken more
loans which it must avoid in future in order to save itself from markups. ROA has fallen, which
means that bank is not utilizing its assets properly. OCF ratio is less in 2008 which indicates less
liquidity. Higher P/E ratio shows higher investments will be taken up by the company in the near
future. It attracts the attention of the investors.

44
CURRENT FINANCIAL OVERVIEW 2009

Under the current challenging circumstances, Allied Bank is effectively pursuing its strategy of
consolidation for the year 2009 and remained focused on the improvement in the quality of
assets and achievement of a more favorable deposit mix in terms of cost. In line with this
strategy, Allied Bank continued to align its risk management framework to improve asset quality
and remained prudent in lending . The share of Current and Savings Deposits in the total deposits
has increased from 50.5% at December 31, 2008 to 55.2% at June 30, 2009, thereby reducing
reliance on costly deposits. Deposits of Allied Bank increased to Rs. 312,777 million at June 30,
2009 compared to Rs. 297,475 million at December 31, 2008. The loan book maintained the
same level attained in December 2008, with average balance increasing by around 14.4 % during
1H09. The Balance Sheet size of Allied Bank stands at Rs. 385,636 million as at June 30, 2009,
while the equity of Allied Bank registered a growth of 18.2% to reach at Rs. 26,419 million.

Allied Bank has been able to increase its pre-tax profit by 21% to Rs.4,627 million and after tax
profitof Rs. 3,061 million during half year ended June 30, 2009 as compared to Rs. 2,508 million
in the corresponding period last year, reflecting a growth of 22%. Resultantly, the EPS for six
months period ended June 30, 2009 stands at Rs. 4.30 compared to Rs. 3.53 in the comparative
period last year.
The net mark-up income increased by 45% led primarily by improved deposit mix, as Allied
Bank focused on its strategy to consolidate. The interest rate spread rose to 6.2% during 1H09
from 5.1% registered during corresponding period of last year. Mark-up income grew by 53%
during 1H09 over the corresponding period last year, with mark-up expense rising by 59%.
While, the mark-up income during 2009 increased by 46%, Allied Bank was able to restrict
increase in its cost of funds, which rose by 50% over the corresponding period last year.
Resultantly, net mark-up income for 2009 was able to grow by 41%.

Allied Bank was able to achieve this growth despite State Bank of Pakistan’s (SBP) regulation of
paying profit at a minimum of 5%, effective June 1, 2008, on all PLS deposits coupled with the
staggered increases of 500 basis points in the SBP’s Discount Rate during year 2008, though the
Discount Rate was cut by 100 basis points by the SBP in April 2009.

Non mark-up income grew to Rs. 3, 363 million or 82% over the corresponding period of last
year. This growth was led by improved capital market results, increased foreign currency gains
and investment banking fee income. Non mark-up expenses increased by 28% during 1H09,
however, these have been contained during 2009 to 11% over the corresponding period of last
year.

45
Human resource assessment
Employee relationships

"Unusual effort on part of the employees who are apparently ordinary workers is one of the key
indications of a superior enterprise"
Askari bank’s staff is its most valuable asset. The human resource philosophy at askari bank
focuses on multi-talent hiring, professional grooming, requisite training and merit based reward
system. Bank lays great emphasis on the development and nurturing of "Askari Culture", a
cohesive teamwork, where each relies on the strength of the other and together they achieve
common objectives. Staff welfare has always been a priority. New initiatives like hospitalization
plan, car buy-back facility and home loan insurance have added new dimensions to the staff-care
policy and motivated them to out-perform askari competitors.
Employee productivity enhancement is organized through extensive in-house and external
training programs. Askari continue to offer opportunities for people to develop their knowledge,
skills and personalities, thus ensuring greater self-fulfillment and progression in the organization.

Recruitment Phases:

Recruitment strategy and method:

ABL recruits the most deserving and talented people for the service. It recruits those
candidates who really have passion and talent, those who can serve the banking sector the
most. So that it can select the best one from them. The candidates scoring above 3 Gpa in
business administration or commerce or any related field are proposed to apply and come
forward.ABL announces its selection tests by giving advertisements in newspaper. The
basis requirements are mentioned in that, means the requirements for capable candidates
are mentioned in the add. Like the minimum requirement of years of education, percentage of
,marks , skills etc.Then the interested candidates apply through email or mail and send their Cvs
to the address given.Then the recruitment staff shortlist the candidates and sends the letter of
being short listed to the most deserving and capable candidates. The date of entry test is
mentioned in that letter along with the roll number slips.

Selection strategies and methods:

46
ABL’s selection committee checks the papers very care fully and honestly, and selects the
most brilliant candidates who really deserve to be selected. This procedure of selection
takes almost a month. And after a month when result is prepared the short listed candidates are
given the date for interview. Interviewsare taken by the senior staff of ABL. The selected
candidates are sent appointment letter within 5 to 8 days. Those candidates who reply Yes in
reply of this letter are selected and given training.

Training:
All the candidates are given training of basic banking for about three months. The most
interesting point in this training are that all the candidates are given salary which is almost
20,000 rupees%, so this training is almost equivalent to job. In this training program all the
students or employees who have come from different institutions and backgrounds are
taught banking courses and all those subjects whose basic awareness is important in the
field of banking like finance , accounting, computer science , English , the routine work
done in banks and many more. The most efficient bankers and teachers are appointed to train
all of them. At the end of the training all the candidates have to go through an exam , and all
those who score above 90% get the promotion to MG 10 after 3 months of working in
bank where as the remaining ones are all appointed on MG11 at the time of end of training.

Increment and performance evaluation:

All the employees of ABL are given an increment of 10% after every 6 months of period.
Bonuses are also given on every Eid that is equivalent to the basic salary of every employee. The
process of performance evaluation keeps on going in banks, special exams and test are arranged
to evaluate employees. And the daily performance evaluation is also done by seniors, so that
those employees who really perform well are given promotions every year.

Incentives, motivating and demotivating factors:

All the increments given after every 6 months, and all the bonuses on Eids, bonuses
according to daily performance of employees, house building loans, car leasing loans, insurance
policies together become the factors of motivation for the employees. Whereas all the non
achievements of these factors become the demotivating factors for the employees, as well as
the long hours of working, the sensitivity of work, and to work by sitting on a seat all the
time really de-motivate the employees.

Service quality training:

Allied bank is focusing on quality customer services to deliver the best customer experience. The
aim of the Service Quality Group is to create Service Awareness across the bank where every
individual has the willingness to help both internal and external customers and provide prompt
services while adopting a personalized approach. To put this in effect, the role of the service

47
quality group is to conduct service oriented training programs, which would be conducted
across the customer touch points. In this regard, the service quality group conducted in-
house training in March 2008 on Customer Services for branch staff where Customer
Support Officers (CSO’s) were placed.

The participants were the CSO’s, Branch Managers, CSM and Tellers. This training was
conducted in all three regions (Karachi, Islamabad, and Lahore) at their Management
Development Centers and the facilitator was their Training Manager of Service Quality
Group. The Group Head of Service Quality along with the respective Group Heads of CRBG
were also present at each session. The aim of this training was to develop the skills and
knowledge of our frontline staff on delivering consistent courteous behavior, which would
consequently build trust and confidence in ABL’s customers. The involvement of individuals
within the dimensions of service culture was emphasized through various team building games
and role plays.

TOPICS COVERED IN THE TRAINING:

• ABL vision

• How to create the best customer experience

• How to communicate with your customer

• Service Quality dimensions and objectives

• Business dressing and grooming

This initiative was the first step taken by the Service Quality Group towards
strengthening customer relationship and building upon customer loyalty.

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

48
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 analysis

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:

• Creation of new product and services.

• The bank marketing must be consumer oriented.

Following are the marketing policies of the Allied bank:

• Keeping the track of latest developments 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.

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.
The main objective of bank is to inform the existing clients and other people about its new
products or change in the existing services. Allied bank establishes its purpose through:

• Direct contact with customers.

49
 • Relation with business organizations.

• Community relations.

Public Relations:
As part of its corporate social responsibility (CSR) program, ABL strives to contribute
and bring about positive changes in the communities it operates in. On March 12, 2008, over
4000 special and underprivileged children from over 65 local schools and institutes
gathered to enjoy the 9th annual Children’s Benefit Concert, organized by the Family
Education Services Foundation (FESF) and partly sponsored by Allied bank. Seating 4000
children was not so easy but more than 100 volunteers did an excellent job of making the
children feel like they were the special VVIP guests for the day. The program, presented by
Pakistan’s very famous compares and also featured FESF’s own show team, who made
audience really enjoy a lot, many other items were presented by volunteers of FESF’s. A
Musical evening was also arranged for those children, most of those students never had an
opportunity to participate in any such lively event. This musical event, so called concert for
them, was an unforgettable day they will remember for many months to come.

This event was a team effort in which the role of ABL was also very prominent and it was
really great to see that what is possible when people join hands together and reach out
to those who are less privileged. The love and encouragement given to those children
will live on in many hearts that were touched in a special way that day. In this way ABL
performed its social responsibility.

Publicity:

ABL Co-sponsored India Pakistan cricket series 2006:

ABL is proud to co-sponsor the India-Pakistan cricket series 2006, comprising the 3 test Allianz
Cup and the 5 one day International Hutch Cup. By signing the sponsorship deal, ABL
outdid a number of Indian banks that were in the line to sponsor the India Pakistan series_ one
of 2006’s most important events in the cricket calendar. With this deal ABL has entered the
sponsorship of global sporting events. The successful initiative by the bank showcases its
desire to be an active partner in the passion for cricket shared by the people of both India and
Pakistan. ABL is also presenting Catch of the match award throughout the test and ODI
series.ABL is one of the largest commercial banks in Pakistan. With its new vision and new
look, the bank has taken upon the task of nourishing the sports talent of the country by
sponsoring the sports events, in order to bring out the best talent on the sporting frontiers of

50
Pakistan, ABL is phenomenal and the one to be followed and admired by each and every sports
lover of the country. The management allocates an extensive budget in term of sponsorship
of the sports events, tournaments and life achievement awards for the players.

MEN’S MINI MARATHON:

On the occasion of Pakistan Independence Day celebrations, ABL organized a men’s mini
marathon held on 19th august 2005, in Lahore.

The bank focuses on the national and international sports promotional activities, and provides
principal and partial sponsorship. In this connection, the splendid history of the bank shows that
ABL is the pioneer bank to prop up the sports financially and morally. The greatest legends of
sports have always been un-precedently motivated by the bank.ABL looks forward to the bright
future of the sports wholeheartedly and ready to set an example to facilitate the sports activities
in all good manners.ABL believes that the sports promotional activities are not only a
source for a healthy environment in the country but they also build a healthy generation.

STEWARD OF THE DAY: (UPLIFTING THE SERVICE AT BRANCH LEVEL)

In order to further improve the customer experience at branches, ABL has introduced a
unique concept called STEWARD OF THE DAY, which has been put into practice from 17th of
March, 2008.The brief of this concept is that the Branch Managers assign each member of its
branch a particular day of the week (in case of smaller branches) or a particular date (in case of
bigger branches), when that individual would be the STEWARD in the branch. He or She
would be responsible to go through a checklist of various functions and activities of the
branch and remark accordingly in the morning before banking hours. These remarks would
pertain to various aspects of the branch operations such as front entrance, customer service area,
waiting area, tellers area, ATM’s and over all staff presentation, behavior and punctuality. It will
be his responsibility to upgrade the quality of services, i.e., to convert poor into good by taking
appropriate measures and to maintain the same throughout the business day. The checklist or
form will be submitted to the Branch Manager at the end of the day, who will keep a record of
the same in a separate file. Since every individual has an opportunity to play the STEWARD
and make the branch appearance checks, all the members of each branch are collectively
involved in monitoring and ensuring the branch is presentable.

51
ENVIRONMENTAL ANALYSIS
INDUSTRY AND MARKET ANANLSYSIS

Major product lines market segments:

Commercial and Retail Banking

This segment is catering to the needs of individuals; middle sized customers, Small and Medium
Enterprises (SMEs) and agriculture sector. It provides to its customers with integrated financing
and investment options and offers various deposits solutions including speedy funds transfer
through its extensive online network. This segment is overseen by four geographical groups and
is further divided into 27 regions in order to effectively service its customers’ needs.

Corporate and Investment Banking

Corporate book is a major component of our loan portfolio. Corporate and Investment Banking
Group offers a wide range of financial services to medium and large sized private and public
sector entities. These services include providing and arranging term financing, corporate
advisory, underwriting, cash management, trade products, corporate finance products and
customer services on all bank related matters through the concept of relationship management.
Now, your bank is one of the leading corporate lending Institutions in the country. The bank
played a key role in the economic growth of Pakistan by financing all the major sectors of the
economy. Allied Bank is one of the Leading investment banks in the country because of its role
in the major investment and corporate banking transactions. The Corporate and Investment
Banking has been awarded “Corporate Finance House of the Year (Banks)” for the second
consecutive year by CFA Association of Pakistan and received international recognition when
“The Banker” magazine UK, conferred the “Deal of the Year 2008 – Pakistan”.

Consumer & Personal Banking

In line with the bank’s policy to provide complete suite of products and services to its customers,
substantial ground work was done to establish our consumer banking business. In 2008, the
Consumer Banking re-branded Visa Debit Card. Other consumer products will be launched in a
phased manner. Although, Allied Bank will be faced with increased competition from several
other banks offering the same products, we are confident to benefit from leveraging our largest
network of online branches, superior technology platform and a huge customer base.
52
Treasury

Treasury Group is actively involved in managing funds through interbank market, investments in
securities and capital markets with the objective to provide support to other businesses of the
bank as well as to the customers. At the same time, the Group also ensures that all regulatory
requirements are being complied with. The Group has dynamic and experienced professionals
who have specialized expertise in treasury functions. The Group is divided into desks of Money
Market, Foreign Exchange, Treasury Marketing and Capital Market.

ABL Asset Management

To provide a wide array of investment products, Allied Bank launched its asset management
company, ABL Asset Management Company Limited, with a paid up capital of Rs. 500 million.
The company was incorporated in October 2007 and also received its license for Asset
Management and Financial Advisory. The company launched its mutual fund in 2008. By the
year end, ABL – Income Fund became the best performing fund among all Income Funds in
Pakistan, posting an annualized return of over 15 percent since its inception. The Fund size grew
close to Rs. 2,000 million by December 31, 2008 at a time when the Asset Management Industry
posted a decline of over 50 percent in Funds Under Management and had the distinction of being
the only Income Fund in Pakistan to post increase in Assets during September-December 2008
period

Growth rate for the entire industry

Net Foreign Assets (NFA) of the banking system recorded a decline of over Rs 227.1 billion
during the first ten months of the current fiscal year to May 9th. Government borrowing from the
central bank has been dampened since December 2008 in line with the target set under the
macroeconomic stabilization programmed as part of the IMF Stand-By Arrangement.

Government's budgetary borrowing from the banking system decreased by Rs 339.9 billion
during July-May FY09 against an increase of Rs 360.4 billion in the corresponding period of
FY08. Credit to private sector grew by Rs 21.8 billion during July-May FY09 as compared to Rs
369.8 billion during the corresponding period last year. The weighted average lending rate has
risen by 210 bps during the same period accompanied by 180 bps addition in the deposit rates.

During July-December, 208 Khushali Bank, disbursed loans amounting Rs 1,9 billion (December
2008) as compared to Rs 2.6 billion in the same period last year. The share of all other
microfinance banks in loan disbursement increased to Rs 2.6 billion (December 2008) from Rs

53
2.3 billion in July-March FY08. Microfinance Institutions have also disbursed amounting to Rs
10.4 billion as compared to Rs 12.9 billion.

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Competitor Analysis

Major competitors:
Allied bank faces a lot of competition from other banks. But among its major competitors who it
has to cope up on major level are:

MCB
• Askari Bank Limited

• United Bank Limited

• Citi Bank Limited

• National Bank Of Pakistan

Their market shares:

Allied Bank has many competitors in Government sector as well as some of private banks
located in private sector. The comparisons of market share of Allied Bank with its some major
competitors are given as under.

MCB 25%
• Askari Bank Limited 20%

• United Bank Limited 15%

• Allied Bank Limited 10%

• National Bank of Pakistan 20%

• Other banks 10%

55
There Goals and Strategies:

United Bank Limited

UBL was established in 1959, to provide banking facilities to the nation, after its nationalization
in 1971, the bank became an inefficient enterprise, however after its privatization in 2000; the
whole face of UBL has been changed. Today UBL stands on a solid network of more than 1000
branches nationwide and 15 overseas branches and with an experience of 46 years its main goal
is to become the leading bank of Pakistan. To achieve its goal, UBL has introduced innovative
products in the banking sector to facilitate the general public. It was one of the very first banks to
introduce internet and SMS banking to its customers. It has divided its banking into three
divisions, each having customized products to satisfy the needs of that particular division:

• Consumer: for individual customers

• Commercial: for small and medium enterprises

• Corporate: for large national and multinational companies

These strategies have helped UBL to raise its image in the banking sector. Its long term credit
rating is ‘AA+9

MCB Bank

In 1974, MCB was nationalized along with all other private sector banks. This led to
deterioration in the quality of the Bank’s loan portfolio and service quality. Eventually, MCB
was privatized in 1991. The vision of MCB is’ Challenging and Changing the Way you Bank.’
The main strategies of the bank have concentrated on growth through improving service quality,
investment in technology and people, utilizing its extensive branch network, developing a large
and stable deposit base and managing its non-performing loans via improved risk management
processes. In 2006, MCB Bank was awarded the Euro money Award for the ‘best bank in
Pakistan’, which shows its commitment of changing the way you bank.

Askari Bank

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Askari Commercial Bank was established in 1992, with the vision of maintaining excellent
standards of banking quality and service, so as to serve its customers better. With time Askari
Bank has also changed its identity, changing its name to a shorter ‘Askari Bank’, a new logo and
a new slogan ‘Ask Us’. Askari Bank has a wide variety of product and services that cater to need
of all type of customers. It also developed a wide variety of products for the ‘Ksaans’ or farmers
of Pakistan, a segment of Pakistani’s neglected by the banking sector of Pakistan. Askari bank
was also the first bank in Pakistan to introduce ATM machines on a third party basis. Askari
Banks long term rating of ‘AA+’ by Pakistan Credit Rating Agency Limited (PACRA) also
shows its commitment of developing excellent standard of products and services for its
customers.

Citi Bank

Citi Bank was established in Pakistan in 1990 and since then has been using its international
roots and knowledge to make a name in the Pakistani banking sector. Its main vision is to
provide right financial solutions - every time, all the time and to fulfill their vision Citi Bank has
used its ability to identify market needs and develop products which are unique in concept and
fulfill customer requirements. Every customer is served by a versatile team of relationship
managers who ensure in-depth knowledge of trends and opportunities while synchronizing their
financial activities. Some of the innovative products introduced by Citi Bank or the very first
time in the Pakistani Banking sector are as follows:

• Citi Gold Priority Banking

• Photo Credit Card

• First to launch Personal Loans in Pakistan

• First foreign bank to launch MasterCard in Pakistan

• Complaint Tracking System (CTS) launched

National Bank of Pakistan

One of the largest nationalized Bank in Pakistan operating since 1949. It has a network of 1226
branches over all the country and has branches in 17 countries across the globe. Project
management of developing and commissioning of operations and management of Consumer
Assets products, including new asset management product launched under the micro finance
initiative taken by NBP, and also developed technical and operational manuals for each module
of the system.

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Development of complete product factory parameterized to the extent of defining lines with
variable business rules and functions performed and up gradation of the existing systems and
innovatively structured it to improve customer satisfaction and retention and massively enhanced
profitability. Business continuity solution for Consumer Assets Product, which would enable
NBP to undertake end to end business process in offline mode for avoiding business redundancy
and continuity in case of net working or any other unforeseen incidents.

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Technology analysis

TECHNICAL METHODS THAT AFFECT THE INDUSTRY

Your bank has always strived to adapt the latest technological advancements. In line with its
technological upgrade plans, a state of the art core banking solution has been acquired and is
presently under implementation and will be entering the roll out phase in 2009. The bank has
initiated the process of deploying a suite of Risk Management Solutions from one of the leading
global firms. The solution is a cutting edge analytical tool for risk management, customer
segmentation and behavioral scoring to meet the sophisticated data management and reporting
requirements under Basel II. Your bank has signed a contract to host its credit card issuing and
data management. This will enable the bank to use the latest technology to service its customers
all across the globe. The bank acquired a state of the art interactive voice response system for
convenient self banking system to the customers round the clock. An agreement has been signed
for Sales Tracking System which will be used at the outbound telesales call center for cross
selling purposes to all customers of the bank. These technological initiatives along with effective
implementation of core banking solution will enable the bank to improve customer centricity and
enhance efficiency.

Allied Bank of Pakistan plays an important role in the economic development of Pakistan. The
bank is bringing a rapid growth in various sectors of the Pakistani economy by their efficient,
effective and disciplined mechanism in banking systems. Few of its roles are:

1. Rising Financial Resources: The bank encourages its customers' saving habit by giving
various types of incentives on their savings. The bank is gaining more and more recourses by
spreading its network throughout Pakistan, and it has over 7,000 branches in the country's rural
and urban areas. The bank is also supporting the business community which makes use of
resources for productive purposes in Pakistan's economic development.

2. New Investment Opportunities: Businessmen usually hesitate to invest their money in new
enterprises. The Allied Bank of Pakistan provides the opportunities to the businessmen to invest
their money in new enterprise where the bank's financial analyst guides them about which sector
suite them. For adopting new technologies and production method, the bank also provides short-
term and medium-term loans on very low interest rate along with financial assistance. This
provision of timely credit increases the productive capacity of the Pakistan economy.

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3. Promotion Of Trade Of Industry: The bank always seeks to promote the country's trade and
industry by providing many facilities such as allied online, bank demand draft, claques over
drawn facility, bill of exchange, foreign currency account, allied bank master card, etc to
revolutionized both national and international trade.

4. Development of Different Regions: It plays a key role in development various regions in

Pakistan. The bank helps the government transfer the surplus capital from one region to another
by announcing different schemes. Then traders and industrialists of less developed region are
able to get adequate capital for meeting their business needs. This, in return, increases
investment, trade and production in the country.

5. Export Promotion Cell: The bank set up its export promotion cell to increase the country's
export. They provide information about general trade and economic condition of the country and
government policies about customers' interest both inside and outside.

The bank's management understands the demand of global customers. To rectify their
difficulties, they introduce online banking services along with latest information network into
international banking.

INNOVATION

With a view to strengthen the long term relationship with the customers, your bank is committed
to provide quality customer services and better facilities across the network. To achieve this
objective, most of the branches of the bank have already been renovated and re branded, and this
process will continue in the future. These newly remodeled branches will help us to provide
improved ambience, better facilities and personalized services to all our customers across the
country. The ATM network is also being expanded to provide round the clock service. During
the last year, your bank has launched Visa Debit Card, facilitating the customers to take their
bank account with them all around the globe. The bank has also changed its credit card
association from Master to Visa. This will further enrich the customer experience with new
features and improved service. In Corporate, Investment and Retail banking, the growth
momentum continues and it remains the core of the bank’s loan portfolio. Your bank is
strengthening the existing relationships and building new ones by diversifying focus more
towards SME and Agriculture sectors. Value added initiatives are translating into profitable
relationships. Introduction of innovative deposit products have contributed towards substantial
growth in deposits.

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DEPARTMENT WORKED IN AND MY CONTRIBUTIONS
Duties and accomplishment:
My duties at the bank were of different types. I was rotated in different departments in different
weeks, so that I could get the exposure of different tasks in a bank. But my duties were always
supervised by the employees of ABL so that I do not make any major mistake, as I was an
internee and didn’t go through the training of three months, as all the employees of ABL get
before joining the bank. But still I had to deal with all the matters of the bank under
their supervision. My duties are mentioned as follows.

ACCOUNT OPENING:

During my first two weeks in the bank I did work in account opening department. During my
training in that department I was taught that how to open the account of the customers in the
bank. That whenever a customer comes how he should be explained about the types of
accounts and the benefits provided in each account. My supervisor used to tell me that
how to fill the form of account opening, and which documents are required for opening
the account, the information’s and all. But I didn’t have the opportunity to enter the accounts
opened on daily bases in the software system because it’s a very sensitive issue and I was not so
much trained that’s why I used to only fill the forms and do stamping on them.

CLEARING DEPARTMENT:

I also spent two weeks in clearing department.

• I learned to fill the deposit slips of current and saving account in this department.

• I also learned to fill the cheques in this department, as most of the customers do
not know that how to fill the cheques and deposit slips ( mostly the labor class
and others who do baking by giving just thumb impressions).

• I also learned to do clearing of inward and outward cheques.

• I learned to make OBC’s

• I learned to make Demand drafts

• AND I also learned to enter the daily inward and outward proceedings in the record

ONLINE TRANSFER OF MONEY:

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In this department I learned to make transfer slips and see the online transfer of money from one
branch of ABL to another, I spent one week in this department. I couldn’t get a chance to
transfer money myself online because this is a very sensitive issue. That’s why I was
assigned the duty of filling the online slips of the customers, to tell them about this facility and
solve any of their quires. As online transfer facility is the point on which ABL really has
comparative advantage that’s why a lot many people used to come for online transfer of money
every day and as it’s a new service and people used to have many queries and I had to solve them
,that’s why it kept me very busy all the week.

ATM’S, CHEQUE BOOKS AND LOCKERS:

I also spent two weeks in this department. I learned to send ATM request, cheques book and
lockers request of the customers. And I also learned to issue them the ATM card, cheques
books and to operate lockers. Whenever any customer used to come to collect his or her
ATM, cheques book then I used to take his sign on the record register, do stamping, write date of
issuance, matches sign with sign card and then provide him his card and cheques book. It was
also my duty to explain him the working procedure, so that if any customer had any query in his
mind he could ask me the details. It was also my duty to issue lockers, that if any customer used
to come to take any locker , it was my duty to let him operate his locker and note the operating
time of his locker, I also used to tell them about the rents and security of the lockers.

DIVERSE DUTIES:

Apart from the duties mentioned above, in the last week of my internship, I had to perform some
other duties as well. Calling was one of those duties. It’s manual checking of the record
produced by the computer pertaining encashment, transfer and collection of cheques and
other instruments like deposit slips and online slips. I also had to do arrange the cheques in
the evening. One of my duties was also to do phone calls to customers to remind them about
their ATM cards and cheque books. I also had to do customer care service, means if any
customer had any query about any procedure or if he wanted information regarding any
account then I had to explain him all the procedure.

NEW KNOWLEDGE ACQUIRED:

ISSUENCE OF CHEQUE BOOK:

Whenever a person opens an account with ABL, then he is issued a cheque book which is free of
cost. But for his purpose he has to fill a requisition slip, and then after about four days of
opening of account he gets his cheque book, which comes from Karachi. There are two
types of cheque books:

• The first type of cheque book has 50 leaves.

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 • The second type of cheque book has 25 leaves. There is also another requisition slip
inside each cheque book, which is used for the purpose of reissuance of a new
cheque book if the leaves of first cheque book start finishing. There is written the
title of account holder, his account number, the stamp of Allied bank and the
signatures of the authorized person on every page of cheque book and also on the
requisition slip.

ACCOUNT OPENING:

Account opening is one of the most interesting things which I have learnt in ABL. To open the
account of any person an account opening form is made fill by him. This form contains:

• A signature card

• Requisition slip

• The main account opening form

• Acknowledgement

• Know your customer profile

• ATM application form These all forms will be filled by the customer and following
things will be required from the customer to attach with this form:

• A copy of NIC

• A copy of job evidence or contract or student ID card copy (house wives do not need to
submit this). If the customer wants to change his signature on the account opening form
then he has to fill another form.

• Undertaking for: This form contains the request of the customer to change his signature
and both signatures, the first one which he has done on his NIC and the other one which
he has done in his account opening form. One the person completes these forms then his
account is opened, the account opening officer gets this form signed by CSM officer
and the Manager of the bank. Then the account opening officer enters the account
opened in the software system. He also scans the Signature card, and gives the
Requisition slip and ATM request form to the officer responsible for issuance of Cheque
book and ATM. And attaches a Letter of thanks with the remaining forms and now the
person is an account holder of the bank. The minimum amount of money for opening
account is Rs: 100, which has to be deposited by the customer at the time of account
opening. Those people who are not literate do not need to do a sign; they can give their
Thumb impressions instead of Signatures.

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But those people who do signature in Urdu or give thumb impressions instead of sings are not
issued ATM cards and they also have to submit a photograph during account opening as
well, but those ladies which do Pardah need not to submit the photograph. After a few days
the Bank sends or mails another copy of Letter of thanks to the customer as well.

ZAKAAT:

The deductions of Zakaat from the account of Muslims are made on the 1st Ramadan
according to the Islamic rate. But the people who do not want the bank to deduct Zakaat and
want to disburse it at their own; they have to provide an affidavit on a prescribed format
provided by the bank.

CLEARING DEPARTMENT:

There are two types of clearing:

• Inward clearing

• Outward clearing

• OBCs

CLEARING CHEQUES

This department receives the cheques and other negotiable instruments drawn on local branches
of other banks. NIFT has a clearing house, in which cheques and other negotiable instruments
are brought by each local bank representative and the claims of each bank on other is offset and a
settlement is made by the payment of difference. Clearing system is helpful for both the
customers and bank in saving money, time and labor.

PROCEDURES

The cheques and drafts come to branch from different banks. They enter the particulars of the
cheques on a register. After this process the balance with total drafts and total amount are given
to the representative. ABL works under the rules and regulations prescribed beef State
Bank of Pakistan (SBP) and has an account with SBP. The clearinghouse of SBP (NIFT),
through whom branches forward/receive-clearing cheques along with a schedule conducts
clearing. The clerk of forwarding branch prepares the schedule and vouchers of all the clearing
cheques, which he receives by the clerk on that day and sends these cheques to the checking

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officer. Checking officer passes these cheques and vouchers by his initials, endorsement stamp
and branch special crossing stamp. Clerk posts the contra entries of these vouchers in the
clearing register. Representatives’ banks collect these cheques. Next day at 8:30 A.M.
representatives of all local banks and foreign banks exchange their cheques, which are drawn on
their banks. The clearinghouse debits/credits the payee/receipt branch with the total amount of
the cheques paid on their behalf. The settlement of book entries e.g., if ABL is to give Rs. 2
Million to ASKARI BANK and ASKARI BANK has to give Rs.1 million to ABL then
ABL will draw a cheque of 1 Million in favor of ASKARI BANK. SBP will debit this
amount from ABL account and credit of ASKARI BANK account. In this way mutual cross
debiting and crediting in the books of SBP settle obligation of banks.

PAK ACCOUNT

All the inter-bank adjustments will be affected through head office account called Pak account.
It will be essential for the branch to advise Pak account of each transaction so that they
may also pass the necessary entries in their books. The NIFT will send a consolidated
debit/credit advice to the branches in respect of clearing cheques delivered to or received
from the branches. The amount of the advice will agree with the total amount appearing in
the schedule of cheque delivered/received. The head office will similarly send advice to the
branches of the returns, if any. Copies of all advices will be sent to the head office.

INTER-BRANCH CLEARING AND COLLECTION

Branch receives the cheques and other negotiable instrument drawn on other branches of
the same bank. Main branch of ABL handles the transfer and delivery of cheques. The same
clearing cheque procedure will be adopted in the transfer deliveries except in case when the
facility of SBP is not availed. In case of cheques drawn on one branch and collected by another
branch for the credit of its constituents, the branch delivering the cheques will send a
consolidated debit advice. If any cheque is returned unpaid, a credit advice will be sent to the
branch returning the cheque.

COLLECTION CHEQUES OR OBCs

The collection cheques/OBCs are the cheques, which we have cleared for our customers
when some of our customers receive the cheque that is of some other city. These types of
cheques are known as collection cheques or the other name we gave them is OBC

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PROCEDURE OF COLLECTION

On the cheque there is written that the person To Whom It May Concern can cash it from the
certain branch of the bank in favor of which it’s drawn. The customer presents the cheque to his
branch, which sends a document called “OBC” to the bank that has to make the payment. The
clearing department of the receiving bank follows a prescribed procedure and credits the
amount to sending bank through a central account maintained by each bank with SBP.

ABL sends the cheque to its own branch if available for collection from the payer’s bank
otherwise the OBC is directly sent to other bank.

MAINTAINING REGISTER for OBCs

We have a register in which we have the serial no for OBCs with other details like amount, date,
sending and receiving branches’ codes. Every OBC is entered in that register on daily basis. If
OBC is not cleared due to whatever fault, we take it back as a return but after that we call the
concerned person and we also write name of the person.

ONLINE TRANSFER:

Online transfer is a very interesting department as well. Any person who wants to transfer some
amount from minimum 500/- to 500,000/- from one branch of ABL to another branch of ABL
can transfer the amount within minutes. The fee charged for this service for within city is Rs:
120/- and inter city is 315/-.The only thing which I had to do was to fill the slip of online
transfer in which the most important coloums were;

• Name and code of remote branch

• Title of the remote account

• Account number of remote account

• Applicant’s name

• Amount to be transferred in words

• Amount to be transferred in numbers

• If cheque is submitted then the number of cheque

• A copy of NIC (only if the person is not the account holder of the bank)

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Then the person submits the cash and slip on the counter and the cash is transferred to
the remote account within seconds by entering the data in the software system. This is
what I have learned in the online transfer department.

HOW EXPERIENCE IMPACTS MY CAREER:

By doing internship for eight weeks in Allied bank limited I have gained a lot of practical
experience of doing work, which was really different from the experience of student life. By
doing internship I really gained the knowledge of banking sector, which I didn’t found so
easy, I have learnt the meaning of responsibility, time management, and professionalism.
Because of this experience now I can decide well that should I opt to join banking field or should
go for another one. The real thing which I gained by doing this internship was the
confidence and knowledge, the confidence and knowledge which we gain from our student life
is far more different from this one, because whenever I used to talk or deal with those
bankers who are in banking sector from more than a decade they used to give me a lot of
knowledge to deal with daily routine matters of banking sector. Whenever I used to interact
with such highly professional bankers, I used to hesitate in the beginning but with the
passage of time I also gained that much confidence and a little knowledge that I could
interact with them more sense ably. In the beginning really it was very difficult for me to interact
and work with such formal people in such a formal environment but as I said that I really leant to
work with them and talk to them with the passage of time and now I think I will not find any
difficulty in at least understanding the environment of organizations and offices when I
will start my job in nearby future. I also feel that I have also understood the basic
culture and environment of professional life which is very important to understand for doing
any kind of job.

Now I really feel that the knowledge which I got by working n ABL for eight weeks will be
really helpful to me in future, as I have got the experience of General banking during
my student life in my vacations from university. This experience will also help me in getting a
good job in near future because now at least I have some experience of work.

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IDENTIFICATION OF PROBLEM

OVERLOAD OF WORK & SHORTAGE OF EMPLOYEES:

The bank management is well experienced and has lots of professional skills to deal with the
difficulties in banking and complaints of the customers. In the bank, employees have to control
more than one department at a time and in doing so it might disturb the performance and
intensity of work of the staff. In my bank, I also find myself in charge of the department that has
to deal with accounts and clearing department along with the remittance department. In my
opinion, this is not the only case that hampers the performance of the employees but the overload
of duties is also not a good sign for the smooth functioning of banking process. The new hiring
process takes a long time and in doing so the management may be entirely changed or their work
period is ended. The HR department carry’s out the new recruitment for the different branches of
the Allied bank. The bank in recent years takes initiative for hiring MBAs for different posts of
the bank.

UNAVAILABILTY OF ATM MACHINE & JAM SERVICE:

The other analysis is the management failure of Allied bank is the not proper running of ATM
machines. ATM machines are old and there are long queues seen outside the bank. The network
is also not properly divided around the city. The small branches are completely ignored by the
higher level management in providing ATM facility. Problems in ATM machines hamper
growth and do not leave a positive feeling about the banking service. I suggest that the branch,
whether it is small, provide the ATM facility to the customer so that it also a relief to the
customer and also to the bank itself because the cheque book or traditional way of making
payment is more time consuming, is only available in banking hours whereas the ATM facility is
a 24 hour automated service. Therefore, ATMs provide the latest services with modern
technology.

Due to a big fraud in ATM transactions made at the ABL ATMs in 2007-08, the one link system
of the ATM operations has been suspended for the last twelve months or so. One link suspension
means that no bank account holder other than the Allied bank can make a transaction with his
ATM card at the ATMs of ABL. This problem is a great concern for the customers of other
banks because they have to find another ATM to make a transaction. Many complaints are filed
each day regarding the same problem and the reputation of the bank is at great stake. The
problems are taking place on a regular basis resulting in closed operations of the ATMs
nowadays.
I was surprised to see the reactions and behavior of the management of the bank because no
attention whatsoever was paid in this regard and no serious efforts are being made to fix the
problem, especially with regards to the one link suspension. This is the only department of the
bank where I have seen the typical bureaucratic style of doing business which is so common in
Pakistan. No real attention is paid to critical matters and customers are very much disappointed.
We all know that ATM transactions have become very important these days and have almost

68
replaced the cheque withdrawals. But the one link suspension and out of order ATMs of Allied
bank are making it difficult for the customers to gain the services in true sense.

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FINDINGS

SWOT ANALYSIS:

SWOT analysis is done for a company, to find out its overall strengths, weaknesses,
opportunities in order to gauge the competitive potential of the company.

The SWOT Analysis enables a company to recognize its market standing and adopt strategies
accordingly. Here SWOT Analysis of Allied bank of Pakistan is made to understand the
positioning of the bank better.

STRENGTHS:

• ABL is working as the right arm of the government of Pakistan as it is responsible for all
the claims of the government for recovery as well as payment. All depositors of ABL are
in relief as their money security is guaranteed by government of Pakistan.
• ABL has a diversified portfolio as the bank provides a large number of products and
services which help it to extend the relationship with existing customers. ABL has an
umbrella of products to offer their customers as LC (letter of credit) of ABL is acceptable
all over the world. Some products and services, which ABL is offering are:

o Retail banking
o Business banking
o ABL online facility
o Personal loans, housing loans and other financial loans
o ABL help line centre
o Insurance
o Cash Card facility

• ABL is one of the largest financial institutions of Pakistan. It has the highest profit among
the largest banks of Asia.
• ABL has extensive branches located all over Pakistan. The bank also has presence in
international locations.
• It acts as an agent of central bank wherever the State Bank does not has its own branch.
• One very interesting thing that I have observed it that ABL is having an edge over other
banks in case of salary account. Many of the companies are having their salary account
with ABL even if their current account is with any other Bank. This is mainly because of
huge network of ATMs and branches of ABL.
• Bank charges low cost for its transactions. I have find out that most of the small
companies prefer nationalized bank like ABL only because of this low cost factor.

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 • The revolution in banking in the form of electronic banking operations has opened
avenues of excellent, efficient and quick services saving the time and cost of customers
and fortunately ABL is among those few banks which is already reaping the benefits of
electronic transactions.
• The management of the bank believes in customer focus banking rather than product
oriented banking. The products and the services designed by the bank are specifically
tailored to the individual needs of its customers.
• Each department in the bank is fully allowed to take adequate decisions of its own, saving
time and helping in achieving objectives. Well experienced and quality staff is present at
all times.

WEAKNESSES:

• ABL’s staff, especially the lower levels of management, considers their work as a burden.
They usually waste time in other tasks instead of performing their duty, using
government property for their own needs. They are reluctant to accept change brought by
the latest restructuring efforts.
• Customers have to follow long lengthy procedures for opening accounts as well as
applying for debt which discourages people from investing in ABL.
• In ABL, most of the time, merit has no importance in hiring of employees. Favoritism is
rampant. Such practices are a black spot on the face of the bank and results in big losses.
• The general outlook and interior lay-out of branches are not required according to
modern banking. ABL is bearing a large burden in running those branches, which are not
producing any income but keep on adding to the overall expenditure.
• With its aggressive marketing campaign, ABL is rapidly increasing its customer base.
They are not however, increasing the number of employees accordingly. This is leading
to deterioration of the standard of service and a decrease in the customer base.
• ATM transactions have become very important these days and have almost replaced the
cheque withdrawals. The out-of-order ATMs of ABL are making it difficult for the
customers to gain good service in a true sense.

OPPORTUNITIES:

• Management offer specialized services to major corporations including advisory and debt
syndication.
• Reorganizing efforts going on in ABL has opened many opportunities for ABL to grow.
ABL’s current management has a broader vision. They have taken steps to improve
current services, and streamlined internal procedures.
• Comprehensive training programs have been developed to upgrade the core banking
skills of the existing staff as well as integrating high quality hiring.
• To improve the motivation of staff a merit – based culture is being promoted.
• A large amount of foreign investment is attracted.
• Steady increase in customer deposits.

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 • Sharp increase in imports and exports.
• Expanding branches to remote areas.

These actions taken or in process of being taken by the current management provide a great
opportunity for ABL for making its future prosper.

THREATS:

Major threats that ABL is facing is from its competitors include:

• Retail banking and consumer banking results in products such as credit cards, automobile
finance lending to small individual consumers and purchases of automobiles, housing and
consumer goods are generally made on cash basis. They are causing another threat and if
not countered, will result in significance loss of customers.
• Changing consumer preferences.
• Action taken by competitors.
• Unstable political environment and uncertain economic conditions.

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RECOMMENDATIONS

After spending six weeks at different departments of the bank, interacting with the employees,
getting their views, observing the organizational structure and design, I have come up with
following suggestions that in my view, will definitely improve a few of the weaknesses observed
in the bank by me.

• To attract customers in the future, ABL has to make extensive efforts to give outstanding
services of retail and consumer banking. Focus should be on acquiring and using the
latest technology in banking.

• Obtaining services from the bank must be made easier and should not involve long and
difficult procedures for carrying out simple tasks.

• ABL is in the process of providing the services of Automated Teller Machine properly in
order to contend with other banks. ATM services must be provided all over the country as
this service is becoming very popular with bank customers.

• The bank is in process of computerizing its records which is a good sign.

Computerization must be done as soon as possible. This will help in increasing efficiency
of the work done, resulting in customer satisfaction, decreasing the stationary cost and
increase in profits.

• To remain in the market the bank needs to be vigilant in the eyes of customers. One way
is through extensive and eye catching promotion efforts, so that people are aware about
the services of the bank.

• The employees in the organization should be assured about their job security so that there
is no pressure on employees while performing their tasks.

• Mismanagement of resources must be avoided as much as possible as it decreases profit

but also discourages hard workers and honest employees.

• The current system used by the bank is very slow in processing so my view is that the
bank should try to adopt some other but more effective form of processing technology in
order to provide to the needs of customers as well as the staff.

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• The bank should place emphasis on the organization of effective training and
development programs for its new as well as existing employees.

• The bank should adopt flexible policies. Extra counters should be brought in order to
facilitate during the rush hours and avoid the difficulties faced by the customers as well
as staff.

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CONCLUSION

At present there is no such organization in the world that is free from problems and challenges.
Every organization has to strive and struggle a lot to be more profitable and to gain more
competitive edge. The management of ABL is taking strategic steps to enable the bank to
emerge as a strong and progressive institution. New deposit schemes have been introduced and
an action plan to maintain revenue growth in the future. As the business and economic conditions
remain uncertain, ABL continues to develop new products like it has been doing in the past.
ABL’s major fault is that it was not keeping pace with the ongoing changes in the banking
industry unlike other banks. Allied bank views specialization and service excellence as the
cornerstone of its strategy. For the people of bank innovation, creativity, reliability, customized
services and their execution are the key ingredients for their future growth. They are aware that
they have stepped into the 21st century and that they must meet its challenges by acquiring
superior technology. They will thus be able to accelerate their services, distribute their products
and services through the most efficient and high-tech means. ABL states that they will invest in
modern tools and substantial allocation of resources will be made to achieve this objective during
the current year. As competition is growing day by day, ABL is also applying new ways to raise
their value in the eyes of customer and also adopt new ways of innovation.

The focus would be to constantly seek out growth opportunities through increased quality assets
and by offering a wider range of products and services to their esteemed customers. There are
significant growth opportunities for Allied bank and they are confident in their ability to make
the most of them. They are committed to enhancing the shareholder’s value and look forward
with greater optimism towards a prosperous future.

An objective appraisal system should be introduced to motivate employees. New equipments

such as computers, lights, UPS and electric generators should be provided to the branch while
the existing equipments should be fully utilized. Latest reorganizing efforts are necessary to
make it cost effective and also updating its facilities according to modern banking needs. Bank
management has to put all its efforts to change the prevailing culture of the bank.

The bank should be adopting flexible policies, especially in the areas of the recruitment,
promotions, evaluation of the employees otherwise the high turnover observed in the bank will
continue to create problems for the bank now and in the future.The employees in the
organization should be insured job security so that there is no pressure on the employees while
performing their tasks.

The fresh hiring should be made permanent so that they are secured of their future. Further the
allowances and perquisites attached with the permanent jobs will also increase the motivation
level of the employees. The bank should place emphasis on the organization of effective training
and development programs for its new as well as existing employees so that these are gradually
updated regarding the recent developments in the field of banking.

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The number of allowances and perquisites for the employees should be increased to ensure that
they put their body and soul in the jobs assigned to them. The rates for the various charges
provided by the bank should be brought down a bit, as it would result in increase in the number
of customers of the bank. The current system used by the bank is very slow in processing so my
view is that the bank should try to adopt some other but more effective form of technology in
order to provide comfort to the customers as well as the staff.

The higher authorities should form team-based management rather than centralized management.
It would result in improvement in uplifting the morale of the employees. They will be more
motivated and involved in all their operations resulting in overall effectiveness of the
organization.

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APPENDIX

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