CHAPTER 1

INTRODUCTION

1.1-HISTORY AND BACKGROUND

1.2-BUSINESS PHILOSOPHY

1.3-VISION AND MISSION STATEMENT

1.4-MARKET STANDING

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Introduction

A bank is a financial institution licensed to receive deposits and make loans. Banks may also
provide financial services, such as wealth management, currency exchange, and safe deposit
boxes. Banking in Pakistan first formally started in Pakistan during the period of British
colonialism in the South Asia. After independence from British in 1947, Muhammad Ali Jinnah
took actions to establish a central bank in Pakistan which resulted in the new founding of the
State Bank of Pakistan, with its headquarters to be based in Karachi.As per State Bank of
Pakistan data, there are 50.565 million bank accounts in Pakistan, giving a penetration rate of
24.34%. In addition, there are 15,053 bank branches, 14,148 ATMs, and 53,269 POS machines
active in the country.

1.1 History and Background

Askari bank Pakistan was incorporated in October 9th, 1991 as a Public Limited Company. It
commenced operations on April 1st, 1992 and is principally engaged in the business of banking
as defined in the Banking Companies Ordinance 1962. The bank is listed on Karachi Lahoreand
Islamabad Stock Exchanges. Askari Bank has expanded into a network of 501 Branches/ sub-
branches, including 94 devoted Islamic banking branches and a wholesale bank branch in
Bahrain. A shared network of 587 onsite/ offsite ATMs covering all major cities in Pakistan
supports the delivery channel for customer service. An important player in Pakistan's financial
services industry. Askari Bank is now leading the way to the most modern and dynamic banking
in the country.

Under the aegis of the Fauji Group since June 2013, the Bank has almost doubled the number of
branches across Pakistan. Askari Bank commenced its operations in April 1992, and has
expanded into a nationwide presence of 150 branches, including 14 dedicated Islamic Banking
branches connected online and supported by a shared network of over 2,670 online ATMs
covering all major cities in Pakistan supports the delivery channels for customer service. Askari
Bank also has an Offshore Banking Unit in Bahrain.

Askari Bank is the leading private sector bank in Pakistan, delivering quality service through
innovative technology. In the success story of Askari Bank, one of the most important factors,
apart from its dynamic management and prudent approach, is the Quality of its Services, which

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gives it a great edge over its competitors. Askari Bank has always strived to facilitate its
customers by introducing various high quality hi-tech services for the first time in Pakistan.

We are proud of our pioneering role in providing the most modern and technologically advanced
services to our customers. Knowing our customers and their needs is the key to our business
success. Our products and services are as diverse as our market segments. Technology has played
a pivotal role in meeting customer expectations, particularly with respect to the speed and quality
of services.

We have fully automated transaction-processing systems for back-office support. Our branch
network is connected on-line real-time and our customers have access to off-site as well as on
site ATMs, all over Pakistan. This includes not just establishing and maintaining technology
infrastructure for providing operational support to all units of the Bank, but also encompasses
introducing latest state-of-the-art technology-driven products and service delivery systems, such
as ATM networking, Internet Banking, Mobile ATM, Credit Cards, Debit Card, Prepaid Card,
utility bills payment through ATMs & Internet which have brought about cost effectiveness,
timesaving and safety.

Askari bank has also achieved another milestone with the launch of Askari Bank Zari Credit
Card. This is the first ever credit card offered to the farmers in Pakistan with complete product
features and service benefits. It aims to meet farmer's production and development needs and to
supplement cash flows, whenever required.

It is also a matter of satisfaction that Askari Bank has been the first bank to introduce PTCL and
WAPDA utility bills payment electronically through ATM and Internet on an Online-Real-Time
Basis. For the first time in Pakistan, we have introduced Mobile ATMs to provide banking
facilities at the doorsteps of our customers. Askari bank's mobile ATMs first in the banking
history of Pakistan, now four in number, continue to serve customer needs.

1.2 Business Philosophy

The Bank selects and appoints staff with appropriate academic qualifications, talent, skills and
experience through a methodical selection process, free from discriminatory biased and based
soundly on the principle of Equal Opportunity Employment.

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Career development programs are designed to prepare employees to meet the challenges of the
workplace. All employees have an opportunity to take benefit from such programs which are
offered at all levels to meet the specific needs of the staff & organization.A business philosophy
might also list the company values that are important to the founders, executives, and employees.
Askari code of business principle is:

 To achieve sustained growth and profitability in all areas of banking business.

 To build and sustain a high-performance culture, with a continuous improvement focus.
 To develop a customer–service-oriented culture with special emphasis on customer care
and convenience.
 To build an enabling environment, where employees are motivated to contribute to their
full potential.
 To effectively manage and mitigate all kinds of risks inherent in the banking business.
 To optimize use of technology to ensure cost–effective operations strengthened controls,
efficient management information system, enhanced delivery capability, and high service
standards.
 To manage the Bank’s portfolio of businesses to achieve strong and sustainable
shareholder returns and to continuously build shareholder value.
 To deliver timely solutions that best meets the customer’s financial needs.
 To explore new avenues for growth and profitability.
 To provide strategic initiatives and solutions for projects, products, policies and
procedures.
 To provide strategic solutions to strengthen weak areas and to counter threats to profits.
 To identify strategic initiatives and opportunities for profit.
 To create and leverage strategic assets and capabilities for competitive advantage the
economy will continue to move along with macroeconomic adjustment path for some
time.

1.3 Vision and Mission Statement

1.3.1 Vision

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"To be the Bank of first Choice in the Region

&

"To be a customer focused bank with service excellence"

1.3.2 Mission

"To be the leading private sector bank in Pakistan with an international presence, delivering
quality service through innovative technology and effective human resource management, in a
modern and progressive organizational culture of meritocracy, maintaining high ethical and
professional standards, while providing enhanced value to all our stakeholders, and contributing
to society."

1.3.3 Core Values of Askari Bank

The intrinsic values, which are corner stones of Askari corporate behaviour, are:

 Commitment

Passionate about our customers success and delighting them with the quality of our service.

 Integrity

A distinctive investment, delivering outstanding performance return and value.

 Fairness

Exemplary compliance governess and business ethics.

 Team Work

Caring for our people and helping them to grow.

 Service

Dedication towards social development and improvement in quality of life.

1.4 Market Standing:

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Market standing is about the total shares, total sales of the product and about profit in present
days and their achievements.Market standing is the term used in relation to business; it refers to
the ranking of a company in an industry in comparison to its competitors. Market standing also
includes awards and achievements of an organization.

Askari Bank continues its success in competition. Recently they have been given the "Best Retail
Bank in Pakistan" by The Asian Banker for the 2nd consecutive year. Askari Bank has been
given the 1st Consumer Choice Award 2004 for the Commercial Banking Category by the
Consumer Association of Pakistan. They have also received the Corporate Excellence Award for
the financial sector from the Management Association of Pakistan (MAP) for the years 2002,
2003 and 2004.They have been given "The Best Bank in Pakistan" award by Global Finance
magazine twice for the years 2001 and 2002. They have been given the "Best Consumer Internet
Bank" award by Global Finance magazine for the years 2002 and 2003. They won the Euro
money and Asia money awards as early as 1994, 1996 and 1997.

They have A1+, the highest possible credit rating, for short-term obligations, and our long-term
rating stands at AA. They won the prestigious "Best Presented Annual Accounts" award from the
Institute of Chartered Accountants in Pakistan (ICAP), and The Institute of Cost and
Management Accountants in Pakistan (ICAMP), for the Services Sector, for the years 2000,
2001and 2002.They have also received ranking prizes during the last six years from the South
Asian Federation of Accountants (SAFA) for "The Best Presented Annual Accounts" for the
financial sector, in the SAARC region. In 2007 Askari bank won "The Best Consumer Banking
Award 2006" for the third consecutive year from the consumer Association of Pakistan. In 2008,
Askari Bank has been given "The Best Retail Banking Award 2008" by Pakistan Guarantee
Export Corporation Ltd.

Total number of shares held in 2018

=1,260.26 mn
Current status of share
Authorized capital 20,000.00 mn
Total No. Shares: 1,260.26 mn
Free Float: 378.08 mn
Beta: 0.98

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Face value: 10
Earnings
Latest EPS Upto 2019 3Q RS. 3.48
EPS Last Quarter 2019 3Q Rs. 1.00
Last Annual EPS Upto 2018 4Q Rs. 3.52
Price to Earning P/E Upto 2018 4Q 5.07 x
Exp Price to Earning P/E Upto 2019 3Q 3.84 x
Exp Earning Growth Upto 2019 3Q 31.82 %
Price Earning Growth Upto 2019 3Q 0.12 x
Competitors:

 Habib Bank Limited

 Allied Bank Limited
 Meezan Bank Limited
 National Bank Limited
 United Bank Limited
 Muslim Commercial Bank
 Bank Alfalah Limited
 Faysal Bank Limited
 Standard Chartered Bank
 Bank AL-Habib Limited
 MCB Bank
 Soneri Bank
Askari Bank Limited profit increased 13 percent to Rs1.293 billion for the quarter ended June
30, 2019 translating into earnings per share (EPS) of Rs1.03, a bourse filing said on Thursday.
The bank earned Rs1.140 with EPS of Rs0.90 in the corresponding quarter ended earlier, the
notice to the Pakistan Stock Exchange said. The company did not announce any interim cash
dividend for the quarter ended June 30, 2019.
Net interest income of the bank settled at Rs10.9 billion, improving 22 percent YoY whilst
declining 10 percent QoQ which was on account of the 150bps rate hike in May (immediate
impact on liabilities and lagged impact on asset side).
Non-funded income (NFI) accelerated 19 percent YoY/45 percent QoQ with stellar growth in fee
income (23 percent YoY/15 percent QoQ), compensating for lackluster capital gains (down 72
percent YoY/91 percent QoQ). FX income of the bank also showed a remarkable uptick of 32
percent YoY/113 percent QoQ. The bank booked a net provisioning of Rs239 million during

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1HCY19 compared to net reversals of Rs402 million SPLY. The bank booked a provisioning
expense of Rs587 million during the second quarter which was most likely owing to an
impairment charge on the equity portfolio.

Chapter #2

MANAGEMENT SYSTEM

2.1- Organizational Chart

2.2- Corporate Profile

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2.3- Management Hierarchy

2.4- Policy Formulation

2.5- Managerial Policies

2.6- Credit Rating

Management System

A management system is the framework of policies, processes and procedures used by an

organization to ensure that it can fulfil all the tasks required to achieve its objectives.
Centralization Management tends to concentrate decision making at the top organization.
Decentralization Management disperse decision making and authority throughout and further
down the organization hierarchy. ACBL is a centralization organization. One of the concept in
the organizational design in the team base structure which is made up of works-groups or teams

9
that performs the organization’s work. ABL has high departmentalization and more
formalization.

2.1 Organizational Chart

The organization design of Askari Bank Limited is horizontal ( which has low hierarchical level).
There are different groups containing 10 to 12 people which are assigned different tasks to work
on each group has its own supervisor who supervise all employees in its groups.

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 BOARD OF DIRECTORS

Head of HR

President & CEO

Company section Head of

compliance &
internal control

Board audit Board Risk CEO secretariat

committee management Head of risk & credit policy
committee

Business
manager Chief financial
officer

Head of Audit &

RAR Head of operations & IT

DCEO

Head of
Head of treasury Head of retail Head of Agri-Head Head of Special Assets Head of
corporate &
& Equity capital Banking commercial strategic Management Islamic
investment
market banking development Banking &
banking
Modarba

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2.2- Corporate Profile:

Name of Bank ASKARI BANK LIMITED

Year of Foundation 09-OCTOBER-1991
Authorized Capital Rs. 20,000.00 mn
National Tax Number 0709045-5
Business Nature Subsidiary Company/Any other
Organization/Company Type Company Limited by Shares
Principal Activity Services
Major Products/Services Commercial & Retail Banking
Bi Products/Services Credit Card, Debit Card, ATM Facility etc
Mailing Address Third Floor, Plot No.18, NPT Building, F-8
Markaz, Islamabad
Phone No. 111-000-787

Fax 051-2857448
E-Mail ir@askaribank.com.pk

Website www.akbl.com.pk

2.2.1 Board of Directors

Lt Gen Syed Tariq Nadeem Gilani, HI (M) Chairman- Board of Directors

(Retd)
Lt Gen Tariq Khan, HI(M) (Retd) Director

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Lt Gen Javed Khan, HI(M) (Read) Director
Dr. Nadeem Inayat Director
Mr. Rehan Laiq Director
Mr. Manzoor Ahmed Director
Mr. Kamal A. Chinoy Director
Syed Ahmad Iqbal Ashraf Director
Mr. Mushtaq Malik Director
Brig Saleem Ahmed Moeen SI (Retd) Director
Mr. Abid Sattar President & Chief Executive

2.2.2 Audit Committee

Mr. Syed Ahmed Iqbal Ashraf Chairman

Dr. Nadeem Inayat Member
Mr. Rehan Laiq Member
Mr. Manzoor Ahmed Member

2.2.3 Human Resource & Compensation Committee

Mr. Lt Gen Javed Iqbal HI (M) Retd Chairman

Mr. Syed Ahmed Iqbal Ashraf Member
Dr. Nadeem Inayat Member
Mr. Mushtaq Malik Member
Mr. Kamal A. Chinoy Member

2.2.4 Risk & Compliance Committee

Mr. Manzoor Ahmed Chairman

Dr. Nadeem Inayat Member
Mr.Brig Salem Ahmed Member
Moeen, SI (Retd)
Mr. Abid Sattar Member

2.2.5 IT Committee

Mr.Brig Saleem Ahmed Moeen, SI (Retd) Chairman

Dr. Nadeem Inayat Member

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Mr. Abid Sattar Member

2.2.6 Chief Financial Officer

Mr. Saleem Anwar
2.2.7 Company Secretary & Chief Legal Counsel
Mr. M. A. Ghazali Marghoob

2.2.8 Registered Office

AWT Plaza. P.O. Box 1084, The Mall, Rawalpindi.

2.2.9 Registered NTN Number

0709045-5

2.2.10 Head Office

AWT Plaza. P.O. Box 1084, The Mall, Rawalpindi.

2.2.11 Share Registrar

Central Depository Company of Pakistan Limited2nd Floor, 307 – Upper Mall Opposite Lahore
Gymkhana (Near Mian Mir Bridge), Lahore-54000Tel: (92-42) 35789378-87, 35789367 (Dir.)
Fax: (92-42) 35789340 Email: info@cdcpak.com

2.2.12 Auditors
M/s. KPMG Taseer Hadi & Co., Chartered Accountants
M/s. A.F. Ferguson & Co Chartered Accountants

.
2.2.13 Legal Advisor
Mr. Mehmood Abdul Ghani & Co Advocates

 As Askari Bank looks ahead to the future by moving through the decade of the 1990’s its
efforts are guided by a broad framework of corporate objectives, such are as follows:
 Askari is committed to it identify of ‘security & Trust’ and will endure to upload this
image at all the time.

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 It will endure to provide its customers with as many creative financial services and
products, as is required. As today customer demand a package of services suited to his
particular business, Askari plan to develop different and new product to cater to the
customer’s demand. Askari bank has the strength to be a market leader.
 Bank will keep standing and by and develop, its human capital base. It is planning to
provide all the required training to its staff towards achieving a higher level of
professionalism. Askari will continue striving to build a strong, motivated and dedicated
work force where total commitment will be towards customer’s satisfaction and wealthy
growth of organization.
 Askari bank will endure to provide a competitive return to its shareholders and will strive
to maximize its share value. The most enhancement in its capital and returns will be a
continuous process.
 The Board is responsible to ensure active oversight over implementation of policies and
framework so as to prevent any significant financial loss or reductions in shareholder
value that may be suffered by the bank. Therefore, is the responsible of the board to
ensure that policies and frameworks are in place to recognize all significant/ material
risks to which the Bank is / may be exposed and that the required human resources,
culture, practices and system are adequate to address such risks.
 It has constituted the following committees to help in discharging its regulatory
responsibilities in an effective manner.
 The Board Audit and Compliance Committee ensures that an independent internal audit
function exists in the Bank with adequate resources and staffing. BACC reviewed the
effectiveness of internal controls of the Bank and recommended various steps for
strengthening of the internal controls and Compliance culture within the Bank.
 Board Risk Committee (BRC) is a Board sub-committee that facilitates the BOD in
ensuring that the bank follows risk managements guideline & regulations. (BRC) is
primarily focusing on the creation of sound risk culture across the Bank.
 Board Human Resource and Remuneration Committee (BHR and RC) is primarily
responsible to review, monitor and make recommendations to the Board of Directors on
Askari human resource strategy and policies pertaining to staffing, training &
development, remuneration/ compensation, benefits and related issues.

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2.3- Management Hierarchy:
Total number of employees in Karim Block are 7. The branch was handled by Branch Manager
“Sir Nauman Gulzar. The flow chart of responsibilities and designation are shown in the
management hierarchy.

Branch Manager

Operations Manager

Credit Department General Banking Manager Foreign Trade Department

Manager Manager

Assistant General Manager

Officers Grade I

Officers Grade II

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 Officers Grade III

2.4- Policy Formulation:

The Bank has developed a diversified and customer-focused delivery system to provide financial
services to individuals, small & medium enterprises as well as large corporate and public sector
clients. It has organized a dedicated business function for each type of clientele. Its various
centralized functions as Head Office level provide support to the business groups in smooth
execution of their business activities. Its Head Office control functions provide a supervisory and
governance role through policy making and monitoring.
The Bank has developed a diversified and customer-focused delivery system to provide financial
services to individuals, small & medium enterprises as well as large corporate and public sector
clients. It has organized a dedicated business function for each type of clientele. Its various
centralized functions as Head Office level provide support to the business groups in smooth
execution of their business activities. Its Head Office control functions provide a supervisory and
governance role through policy making and monitoring.
The business function are primarily responsible for making business plans & Strategies for their
respective business domain and ensuring that it is coherent with the overall business strategy of
the bank. Each business group defines and delivers the customer preposition and is accountable
for end-to-end customer processes and products.
Support and control functions define strategy to support the business function in achieving their
business goals. The control functions extend their expertise in developing & implementing policy
framework that set the route for the business groups.

 The Board shall be responsible for the following risk management activities- (For details,
refer approved TORS of the Board of Directors)

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  Approving the risk management policies and strategies developed/ updated by the senior
management and monitoring appropriate translation of such strategies into business plan
and budget.
 Defining the overall risk appetite of the Bank, monitoring the actual capital against such
appetite to address any exceptions/ limit branches etc. and instructing remedial actions.
 Monitoring implementation of the Risk Management Policy and maintenance of adequate
and capable organizational structure (such as human resource, skills/ experience) and
architecture (such as systems, tools, methodologies, MIS etc) to support the framework.
 Reviewing exceptions reported by the relevant Board and senior management committees
involving deviations of activities and operations from established standards that are
significant on a Bank wide level.
2.5- Managerial Policies:

POLICIES OVERVIEW AT BANK:

Since the inception of Askari Bank by the grace of almighty, the bank has moved rapidly in
expanding its branch network and deposit base, along with making profitable advances and
increasing its range of products and services. It has made a break-through in providing premier
services at an affordable cost to our customers. Managerial policies followed by the bank have a
direct contribution in its success. The Board and Management of the Bank have implemented
strategies and policies to carve a distinct position for the Bank in the market place.

In a bid to satisfy Askari Bank shareholders and valued clients the management initiated the
process of realization of the banks vision by consolidating its financial position and creating a
large and diversified business base. Askari Bank has made notable progress in business volume,
efficiency and profitability following its increased involvement in trade finance, commercial
lending and foreign exchange and money market operation.

Major policies have been made and implemented at Askari Bank are:

 Financial Policies
 Procurement Policies
 Marketing Policies
 Promotional Policies
 Lending Policies
 Public Relations Policies

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  Leading Policies
 Accounting Policies

1. Financial Policies:

The financial policies of any bank are the most important policies through which the whole
banking activity is conducted. These Policies are primarily conducted on

 Source of Funds
 Use of Funds

Source of Funds

The bank finance policy is acquiring funds from the following sources:

 Deposit of Account Holders.

 Interest on Advances and loans granted to the borrowers.
 Income and Commission from the services provided by the bank.
 Bank Open various type of Accounts for its customer services are provided for earning.
 Interest Income and Commission bank providing the services to its customer.

Uses of Funds

After the acquisition of the funds their acquisition become necessary. The bank seeks the best
way for making investment to got more profit with the maximum security. The bank has an
investment portfolio in which it allocates its funds for crediting to borrowers, investment in the
stock market, investment in the real estate property etc. For allocation of funds a bank has to
follow some banking policies and the prudential regulations of SBP these are:

A bank has to maintain a liquidity with central bank i.e., 25% of its total deposits.

The bank cannot invest all of its funds otherwise it will be difficult to meet urgent needs.A
substantial part of funds is received from interest on loan and advances. Before granting a loan
the bank analyze and observe the borrower and conduct a complete ratio analysis. Bank prepare
credit line for this purpose the major thing is granting an advance is the security offered by the
borrower and its actual market value.

2.Accounting Policy

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Askari Bank has adopted almost the same accounting procedures that other financial institutions are
adopting at this time. These accounting procedures or Accounting policies are made according to
Generally Accepted Accounting Principles, the GAAP. The process flow and the usage of the policies in
the day wise routine are mandatory for all the employees working in the specified departments at the
branch.

3.Leading Policy

Askari Bank pursues a conservative yet dynamic credit policy. This strategy has enabled the bank to have
a high-quality risk portfolio. Bank prefers to finance exporters because of less risk involved. ACBL
managers the credit risk, liquidity risk, market risk and other operational risks very efficiently. For this
very purpose ACBL has got an effective credit line proposals system to be sanctioned to the clients on
demand.

4.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 invests the acquire funds. One alternative is to lend its money and earned interest
mark-up 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 on mark-up charges received from various services offered by the bank to its
clients.

A bank tries to attract maximum no of accounts so that it can increase it's deposit and these
lending ability. In order to get maximum no of accounts the staff of the bank must be efficient as
compared to the other banks and the manager of the branch must take personal interest in
attracting deposits. Good quality of the service is the key of success.

5.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:

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  Creation of new product and services.
 The bank marketing must be consumer oriented.
 Following are the marketing policies of Askari Bank Ltd.
 Keeping the track of latest development in the world and incorporating the latest and the
most equipment to make the banking procedures simple and easy for the customer.
 Development of products for the customer.
 Giving good services and maintaining good relationships with the customer.

6. Consumer Banking Policies

Bank of Punjab policy regarding consumer-banking policies includes the development through
the electronic consumer banking operations. Likewise, Bank of Punjab has created a niche for
itself in the marketplace. It is planning to introduce new consumer products like credit cards, e-
banking etc.

7.Public Relation Policies

Public relation and advertising have assumed a great importance in the modern banking business.
As for as promotional activities are concerned the main objective of the bank is to inform the
existing the clients and other people about its new products or change in the existing services.
ABL establishes its purpose through:

Direct contact with Customer.

Relation with business Organization.
Community Relating

8.Lending Policies

Every bank has its own lending policies expect for those, which are common for all the banks,
i.e. the policies, which are imposed on all the commercial banks by the SBP are known as
prudential regulations. The lending policies of ABL are as follow as:

The bank only invests in those sound and viable projects, which have good rate of return.
Bank prefers to advance loan to their account holder
Loan is given to reliable person only.
No political loan is sanctioned by bank.

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Any account holder can apply for running finance or demand finance. The manager apprises the
past record of account holder and his credit worthiness. If he finds anything wrong, he can refuse
to sanction the amount.
The bank while taking security prefers govt. Securities to shares.
It also advances working capital loans.

2.6 Credit Rating

While acknowledging the improved risk profile of the bank, M/s Pakistan Credit Rating Agency
(PACRA) has maintained the long-term entity rating of “AA”, while the short term rating has
been maintained at “A1+”.

Entity ratings by PACRA:

Long Term: AA+

Short Term: A-1+

Long Term Rating:

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 for foreseeable events.

Short Term Rating:

A-1+ Obligations supported by the highest capacity for timely repayment.

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Chapter # 3

MARKETING MIX

3.1- Product

3.2- Price

3.3- Place

3.4- Promotions

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MARKETING MIX OF ASKARI BANK

Marketing mix is a combination of a number of marketing elements according to a market

situation. If a business enterprise rationally blends the elements of marketing into a program of
mix, then it competes, stays and earns profit in the market. In case, the integration of the various
elements of marketing is defective, the firm cannot fight out its rivals in the market and
ultimately suffers losses.

The various elements of marketing mix are as follows;

 Products
 Promotion
 Price
 Place

Marketers use numerous tools to elicit desired responses from their target market. These tools
constitute a market mix.

3.1-PRODUCT

A product line is defined as “A group of products that are closely related because they function
in a similar manner, are sold to the same customer groups, are marketed through same type of
outlets, or fall within the given price ranges”Askari Bank aims to provide its customers with a
wide array of financial solutions catering to diverse banking needs. We offer conventional,
corporate, consumer, Islamic, and agricultural banking services through a network of 423
branches/sub-branches in major cities, towns and cantonments.

Askari bank use the following strategies

1. Askari Bachat Account:

Askari Mahana Bachat Account is a term deposit designed for individual and corporate
customers with a medium-term investment appetite. It offers individual customers the option of
investing for one- and two-year tenures, while corporate customers can invest for two years. It is
designed to cater to the saving needs of customers who want profit on a monthly basis. With the

24
option of availing financing facility of up to 90%, Askari Bachat Account caters to customers
saving needs without blocking their funds for a long duration.

2.Value Plus Current Deposit:

Askari Value Plus Current Account offers financial freedom and security with unmatched
flexibility. Now customers (individuals) can open a Value Plus Current Account to avail the
benefits of free life insurance coverage of upto Rs. 2 million, debit card with two supplementary
cards, I-Net facility, SMS alerts, issuance of cheque books, pay orders and demand drafts – all
with no minimum balance requirements.

3.Current Account:

Current accounts cater to a variety of financial needs of our diverse customer base with added
benefits of free cheque book, issuance of demand drafts/pay orders and much more.

4. Savings Account:

Savings accounts offered by the Bank to both individual and institutional customers include
Askari Special Deposit and normal savings account based on profit and loss sharing. Askari
savings deposits offer attractive features and competitive returns.

5. Askari Asaan Account:

Askari Bank offers Asaan Account to un banked/under-banked individuals. The facility is

available in current and savings account categories. As per the name of this product, its hassle
free account opening and operating procedure helps the lower income groups to fulfil their
banking requirements with ease and comfort.

6. Rupee Traveller Cheques:

Askari Bank offers its customers the widely accepted Rupee Traveller Cheque, which eliminates
all financial risks while traveling. It is a safe and secure way to make payments.

7. ASK Sona Card:

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Ask Sona Card is a joint venture of Askari Bank Limited & Fauji Fertilizer Company Limited
(FFC), especially designed to create convenience and cater to the business needs of FFC and its
dealers. It is an innovative, electronic cash management solution that replaces the existing
conventional collections system. It is a transaction-specific debit card with plastic money
features which will replace the conventional transfer of funds.

8. International Banking

We have correspondent banking relationships with over 450 banks in 83 countries around the
world. The business in the South Asian region in particular continues to grow and delivers
excellent results in terms of balance sheet growth and bottom line contribution. We carry out
regular due diligence exercises to ensure that we deal with only those financial institutions which
are able to meet the prescribed standards and criteria.

9. Askari Aasaan Money:

Transfer Askari Aasaan Money Transfer is a service which provides quick and free home
remittances by overseas Pakistanis to beneficiaries in Pakistan. The remittances are received
through our arrangements with correspondent banks and exchange companies. This service is
completely free-of-cost and is available for all citizens across the country. We have a dedicated
team of customer service officers who are available to respond to the queries of remitted and
beneficiaries.

10. Commercial & SME Banking

We offer a divers range of financial solutions designed to suit the unique needs of our
commercial and SME customer base.

11. Commercial Banking:

Commercial Banking serves the middle tier segment by providing both general and tailored
solutions encompassing all financial needs of the borrower ranging from project financing to
working capital requirements/ payroll management. Dedicated relationship managers at our
credit hubs provide personalized solutions to our customers.

26
12. Small and Medium Enterprises (SME):

Banking Askari Bank has been playing a significant role in the development of the SME sector
by providing customers with the opportunity to access credit through strategically located
Regional Credit Hubs as well as our branches across the country. The Bank also offers trade
expertise and awareness on trade related activity through these access points, where specialized
credit resources pleasures, along with reward points and transactional alerts through SMS as an
enhanced security feature.

13. Consumer Banking

Consumer banking provides financing facilities to individuals through prudent, customercentric

policies and quality services that aim to make our customers’ experiences more interactive and
intuitive. We are focused on broadening our outreach and expanding our presence in accordance
with the needs of our customers across the country through direct sales as well as through our
branch network. Special attention is given to business opportunities involving strategic alliances,
with greater emphasis on a secured form of consumer lending so as to increase product offerings
and improve the quality of our asset portfolio. We are committed to providing solutions and
services that meet our customers’ needs at every stage of life.

14. Askari World Master Card:

Askari Bank pioneered Pakistan’s first ever “World MasterCard” in collaboration with
MasterCard international. Askari World Master Card is specifically developed for customers
seeking high-class service worldwide.

15. Ask4Car:

It is an auto financing product for new, used, and imported vehicles at a competitive mark-up and
easy and quick processing without any hidden costs.

16. Personal Finance:

With unmatched financing features in terms of loan amount, payback period and affordable
monthly installments, Askari Bank’s personal finance makes sure that our customer gets the most

27
out of their loan. The product tenure ranges from one to five years and is designed primarily for
salaried individuals.

17. Mortgage Finance:

Whether our customers plan to construct a house, buy a constructed house, or renovate a house,
Askari. Mortgage Finance enables them to pursue their goal without any hassle. Askari Mortgage
Finance is a premium house financing product for customers belonging to the upper, upper
middle- and middle-income groups.

18. Askari Branch less Banking

Askari Bank launched branch less banking jointly with China Mobile Pakistan under the brand
name of “Timepey” in 2012. With this initiative, banking has become even more convenient and
efficient as customers can safely send and receive funds anytime, anywhere across the country. A
wide network of Timepey shops across Pakistan are fully equipped to handle the day-today needs
of the customers. The following transactions are currently being handled under this program.

19. Time Pay Money Transfer:

Customers can send and receive money from any Time pay outlet in the most efficient, secure
and convenient manner. The facilities include person-to-person, government-to-person, person-
to-account, account-to-person and account-to-account funds transfers.

20. Time pay Utility Bill Payment:

Time pay account and non-account holders can pay all their utility bills through Timepey
instantly and without any charges. Simply dial *888# from your mobile phone or visit any Time
pay agent for cash payment.

21. Time pay mobile top-up:

Customers can purchase prepaid airtime and pay post paid bills anytime, anywhere from their
own mobile phone. This service is available to Zong customers who have a Time pay account.

22. Agricultural Banking

28
Agricultural banking products and services are specifically designed for Pakistan’s farming and
rural business segment. This function of the Bank aims to extend credits on softer terms to
farmers, both on revolving as well as term basis. Recently the markup rate was brought down to
make this facility available at grass-root levels so as to enhance not only the agricultural output,
but to also become a source of better living standards for farmers who do not have access to low
cost funding.Agricultural banking products and services are offered across the country through
efficient delivery channels under a control mechanism with minimum turnaround time for loan
application approvals. The Bank has set up a vibrant program for fresh lendings under revised
parameters, enabling farmers to avail financing in an easy, accessible and affordable manner

• Kissan Ever Green Finance

• Kissan Tractor Finance

• Kissan Livestock Development Finance

• Kissan Farm Mechanization Finance

• Kissan Aabpashi Finance

Islamic Banking

Under the guidance of its Shariah Board and professional bankers, Askari Islamic banking offers
a diversified range of Shariah compliant products and services to its valued customers to fulfill
their banking needs through its 78 dedicated Islamic banking branches (including 3 sub-
branches) in 28 cities spread across the country.

Alternate Delivery Channels

23. Internet (I.NET) Banking:

Askari’s i.net banking assures convenient banking from the comfort of your home as customers
are no longer required to wait in long and worrisome queues for a financial transaction, balance
inquiry, statement of accounts, funds transfer, utility bill payment etc. In addition to these
services, our i.net banking also added the following services in 2015:

 Online Investment in Mutual Funds managed by Askari Investment Management Limited

29
  Online Insurance premium payment of EFU & JL.
 Online payment for the purchase of Shaheen Airline Tickets
 Online LUMS fee payment Mobile Banking Askari mobile banking solution provides
customers with convenient access to their accounts from their mobile phones, anytime,
anywhere. We offer three types of mobile banking solutions to our customers
 Askari Lite Mobile Banking – browser-based solution.
 Askari USSD Mobile Banking – available to all mutual customers of Askari Bank and
Ufone
 Askari Mobile Application – for Android, IOS, & Windows.

24. Automated Teller Machine (ATM):

Askari Bank is a member of two electronic ATM inter-bank connectivity platforms i.e., MNET
and 1-link. Through this shared network of more than 9,000 online ATMs, including more than
467 Askari Bank ATMs, we provide services in all major cities of Pakistan.

25. ASKARI Visa Debit Card :

You can manage your account, withdraw cash, make purchases and transfer your funds through
Askari Visa Debit Card, which offers the conveniences of a credit card without the hassle of
monthly bills and interest charges. There are no minimum balance requirements for the issuance
or retention of the VISA Debit Card, which is available in Classic and Gold categories.

26. Corporate Banking

Corporate banking works on a long-term relationship-based business model to provide a single

point within the Bank which meets all business requirements of its corporate and institutional
customers, including public sector enterprises. Its primary objective is to enhance customer
service, which remains our top priority. Dedicated relationship managers ensure customer
satisfaction for all our corporate clients. Our relationship-oriented outlook focuses on providing a
complete array of tailored financing solutions that are practical and cost effective, some of which
include

 Working Capital Facilities

 Term Loans
 Structured Trade Finance Facilities
 Letters of Guarantee

30
  Fund Transfers/Remittances
 Bill Discounting
 Export Financial

3.2-PRICE

Pricing is one of the four Ps of the marketing mix. The other three aspects are product,
promotion, and place. Price is the only revenue generating element amongst the 4ps, the rest
being cost centers.

Askari commercial bank use different price strategy for different products and service to Achieve
the organization Financial goals for each product it use different strategy when any new product
is lunched by the Askari commercial bank the top management of the organization must the see
the marketing objective Before selecting a suitable price for a product, the marketer is needed to
review the company's objectives. The more clearer the company's objectives the more easily to
set a price.

Following are the possible pricing objectives

 Survival
 Maximum current profit,
 Maximum market share,
 Maximum market skimming,
 Product quality leadership.
ACBL see the nature of product and charge price according to product if the product is innovative it
charge higher margin before launching the new product the top management must see and analyze the
demand of product and estimate its costs analyzing competition cost price and offer and then choose a
pricing strategy according to company objective Askari commercial bank has different product and
services each is based on its own target market and exception toward the customer price is only key
which generate the revenue for the organization to achieve its financial objective and the success and
failure of product and service is depend on the price strategy the detail of some product and service and
their marketing strategy is given below

Product & Service Strategy Detail

Kissan Tractor Cost-plus pricing Price = Cost of Production + Margin of Profit.
Finance

31
Electronic Bill Market-oriented Setting a price based upon analysis and research
Payment Services pricing compiled from the targeted market. Also, with the cost
price
Personnel finance Price discrimination Charge different price for civilian customer and army
customer
Agriculture Finance Product line Askari commercial bank offer a range of product line
pricing for former such like
Kissan Ever Green Finance
Kissan Tractor Finance
Kissan Aab pashi Finance
Deposit Premium pricing Premium pricing is the practice of keeping the price of
Multiplier Account a product or service artificially high in order to
encourage favourable perceptions among buyers
Askari Rupee Target pricing Pricing method whereby the selling price of a product
traveler cheque is calculated to produce a particular rate of return on
investment for a specific volume of production.
Askers car Finance Competition based Charge the price according to competitor
pricing Price strategy
Islamic Banking Competition based Charge the price according to competitor
pricing Price strategy
The detail of product and service and their pricing strategy is given below which is
based on company financial objective.

1.Safe Deposit Lockers

Fee for safe deposit lockers (to be recovered in advance or at the commencement of the period
yearly/half yearly/quarterly as the case may be)

Rs. 1,200 p.a.

Small

Medium Rs. 1,700 p.a.

Rs. 3,000 p.a

Large

Extra Large XL (16”x 16”) Rs. 3,750 p.a

32
 Rs. 6,000 p.a
Extra Large XXL (16”x31”)

charge price according to usage or service

2. Utility Bills (Pick, Wapda, Sngpl)

Service Charges RS 8 Rupees payable by utilities companies

Charge a fix fee for every customer

3. Agriculture Banking

Processing Fee for following Finances 1% of the sanctioned facility amount

i) Askari Kissan Evergreen Finance.

ii) Askari Kissan Tractor Finance.
iii) Askari Kissan Farm Mechanization.
iv) Askari Kissan Livestock Development Finance
v) Askari Kissan Aab pashi Finance
vi) Askari Kissan Transport Finance
vii) Askari Kissan Green House & Tunnel Finance
viii) Askari Kissan Farm Storage Finance
ix) Askari Kissan Model Dairy Finance
x) Askari Kissan Gold Fish Finance.
xi) Askari Kissan White Pearl Finance
xii) Askari Kissan Murghban Finance
xiii) Askari Kissan Gulban Finance
xiv) Askari Kissan Samar Bahisht Finance
xv) Asan Mali Sahulat.

2. Service charges on delayed payment of markup/Installment

of TF/rollover of revolving credit facilities.

33
i) overdue by 31 days to 60 day Rs.500/- (flat)

ii) overdue by 61 days to 90 days Rs.1,000/- (flat)

iii) overdue (past) 90 days Rs.1,500/- or Rs.0.46/1000 on daily

product ( whichever is higher)

3. Transfer of Facility (on request within the bank) Rs. 1,000/- (flat)
4. Amendments in terms of approval Rs. 500/- (flat)
Provide a rage of product and service to former and provide different loans for agriculture.
4. Retail Banking
Personal Finance
a. Processing fee for civilians

1. Clean 1.20% of loan amount min. Rs.2, 750/-

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

b. Processing fee for Armed Forces personnel

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

5. Smart Cash
a. Processing Fee
1. Clean 1.20% of loan amount min. Rs.3, 500/-
(Including legal & documentation charges)
2. Secured 1.20% of loan amount max. Up to Rs.5, 500/-

34
 (Legal & documentation charges at actual)

6. Business Finance

Processing Fee Rs.5, 500/- (Flat)

Legal/documentation/valuation/income
Estimation charges at actual
Renewal Fee Rs.5, 500/- (Flat)
Enhancement Charges Rs.5, 500/- (Flat)
Cheque Return Charges Rs. 600/- (per cheque)
Late Payment Charges 21% of the overdue amount
Premature Termination Charges Upto 6% of the limit.

7. Auto Finance
Processing Fee Rs.5, 000/- (Rs.2, 200/- non-refundable

.Legal/documentation/valuation/income at actual

Estimation charges

Premature Termination Charges Up to 6.5% of the outstanding loan amount

Balloon Payment 15% of the outstanding balance in a year

subject to 3.25% Charges on the amount
being paid (balloon payment amount)

Cheque Return Charges Rs.600/-

. Late Payment Charges Rs.600/-

The price is based on competitor price and price include margin + cost .

3.3 Promotion

Promotion is a form of corporate communication that uses various methods to reach a targeted
audience with a certain message in order to achieve specific organizational objectives. Nearly all

35
organizations, whether for-profit or not-for-profit, in all types of industries, must engage in some
form of promotion.

Under the concept of Integrated Marketing Communication ACBL attempt to develop a unified
promotional strategy involving the coordination of many different types of promotional
techniques. The objective of promotion strategy is to getting customers to buy an organization’s
product and, in most cases, to remain a loyal long-term customer.

The purpose and objectives for marketing promotions of ACBL may include the following:

 Build Awareness
 Create Interest.
 Provide information
 Stimulate Demand.
 Reinforce the Brand

Promotional Strategies use by ACBL

1. Advertising

The main source is used by ACBL is advertisement it involves non-personal, mostly paid
promotions often using mass media outlets to deliver the marketer’s message. While historically
advertising has involved one-way communication with little feedback opportunity for the
customer experiencing the advertisement, the advent of computer technology and, in particular,
the Internet has increased the options that allow customers to provide quick feedback.

Advertising in News Papers and Television is used as a marketing tool by ACBL However it is
often used when a new product is introduced

2. Bill Board

Another source used by ACBL to convey message is billboard the main areas of urban era near
the school/college airport and high traffic areas the bill board are placed to convey message

3. Broachers

36
The Bank publishes various brochures for the general guidance of the customers. These include
the Schedule of Bank Charges, VISA Card Information, and Savings & Term Deposit
Information etc.

4. Personal Selling

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

5. Internet

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

6. Social marketing

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

7. Public Relations

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

8. Public

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

3.4-PLACE

37
Place is one of the four elements of marketing mix. An organization or set of organizations (go-
betweens) involved in the process of making a product or service available for use or
consumption by a consumer or business user.

The manner by which a product is sold or distributed can have a profound impact on the
resulting equity and ultimate sales success of a brand. So, the marketing channels are defined as
“sets of independent organizations involved in the process of making a product or service
available for use or consumption”.

Channel Strategy involved the how many channels are used for the distribution of the product.
These branches are located at convenient locations. It also has very large ATM network. By
viewing twenty first century’s challenges, Askari Bank also uses

• Online banking

• Web banking

• 9-5 non-stop banking

• 24-hours ATM Network

Askari commercial bank use selective distribution strategy it has only a few outlet in
geographical area to provide is only one branch of Askari commercial bank in district Rahim
Yar-khan selective distribution means selective distribution, it means that there are fewer
locations where the customer can buy our product. Several advantages may be gained by the use
of selective distribution. Askari commercial bank has its own outlet or branches to promote their
product the main advantage and disadvantage of selective distribution strategy.

Conventional Branches 422

North Region 144

Central Region 139

South Region 139

38
 Islamic Branches 94

North Region 35

Central Region 35

South Region 24

ATM(onsite/offsite) 613

North Region 234

Central Region 219

South Region 157

Chapter # 4
FINANCIAL ANALYSIS

4.1-Horizontal/Trends Analysis

4.2-Vertical Analysis

4.3-Financial Ratio Analysis

39
Financial Analysis

Financial analysis of the Askari Bank from 2014 to 2018

 Vertical Analysis
 Horizontal Analysis
 Ratio Analysis
Financial statements analysis are the principal means of reporting the financial condition and
results of operations of a business entity. These statements are meant to assist various parties in
decision making who are interested in the activities of the business. These statements are means
to an end of helping stakeholders in decision-making. To improve the quality of decision making
proper analysis of these statements helps a lot. Financial statements analysis helps in determining
the financial conditions at any particular points in time and effectiveness of operations of a firm
during a specific period.

40
The various stakeholders of business are interested in the analysis of financial statements. But
the focus of interest of all is not the same. For example, creditors and credit reporting agencies
are interested in finding out the credit worthiness of the firm to which they have extended credit
or intend to extend credit. Short term creditors are interested in short term liquidity of the
business and long term creditors are interested in the long term cash flow which the firm can
generate over the long period of time. Investors are interested in the firm’s ability to sustain
profitability over a period of time. Government agencies analyze financial data for tax purposes.
The internal users of financial statements like management also analyze financial data for
planning and control.
Balance Sheet
The accounting balance sheet is one of the major financial statements used by accountants and
business owners. (The other major financial statements are the income statement, statement of
cash flow, and statement of stockholder’s equity) The balance sheet so also referred to as the
statement of financial position.

Because the balance sheet informs the reader of a company’s financial positions as of one
moment in time, it allows someone---like creditor----to see what a company owns as well as
what is owes to other parties as of the date indicated in the heading. This is valuable information
credit or loans. Others who would be interested in the balance sheet included current investors,
company management, suppliers, some customers, competitor’s, government, agencies, and
labor unions.

Income Statement

An income statement (also referred to as a profit and loss statement) is one of the financial
statement that shows the company’s revenues and expenses during a particular period. The
purpose of the income statement is to show managers and investors whether the company made
money (profit) or lost money (loss) during the period being reported.

OR

The income statement is one of the major financial statement used by accountants and business
owners. (The other major financial statements are the balance sheet, statement of cash flows and

41
the statement of shareholder’s equity). The income statements are sometimes referred to as the
profit and loss statement throughout the explanation.

The income statement is important because it show the profitability of a company during the
time interval specified in its heading. The period of time that the statement covers is chosen the
business and will vary.

ASKARI BANK LIMITED

BALANCE SHEET

FOR THE ENDED FIVE YEARS (2018-14)

42
Particular 2018 2017 2016 2015 2014
Assets
Cash & 49,187,645 44,239,325 42,568,141 29,685,228 19,130,113
balances with
treasury banks
Balances with 4,093,402 3,193,835 5,845,748 8,358,930 7,121,128
other banks
Lendings to - 2,250,000 6,836,584 812,898 3,427,753
financial
institution
Investments 260,233,987 314,956,74 8 295,846,254 268,048,928 217,213,560
Advances 343,107,147 258,693,08 6 235,163,922 199,936,549 170,682,163
Operating fixed 12,791,827 9,885,958 10,132,940 9,278,150 8,350,849
assets
Assets held for 741,361 842,869 - - 201,582
sale
Deferred tax 3,773,779 100,755 - - 897,746
assets
Other assets 32,522,174 28,448,099 25,325,830 20,068,057 20,586,807
706,451,322 662,610,675 622,606,034 536,188,740 447,611,701
Assets 214,757 327,949 796,570 - -
attributable to
discounted
operation
706,666,079 662,938,624 623,402,604 536,188,740 447,611,701
Liabilities
Bills payable 15,512,880 10,769,262 8,579,809 6,094,885 6,855,020
Borrowings 52,702,323 71,587,311 89,261,788 57,323,250 13,742,030
Deposits & 573,596,926 525,808,308 472,803,094 433,130,465 387,534,873
other Accounts
Sub-ordinated 9,993,600 4,992,800 4,992,800 4,996,800 7,992,800
loans
Liabilites - - - - -
against assets
subject to
finance lease
Deferred tax - - 526,430 71,590 -
liabilities
Other liabilities 21,178,476 17,098,223 14,115,858 7,497,960 7,461,001
672,984,205 630,252,647 590,281,779 509,114,950 423,585,734
Liabilities 81,513 140,741 267,254 - -
associated with
discounted
43
operations
673,065,718 630,393,388 590,549,033 509,114,950 423,585,734
Net Assets 33,600,361 32,545,236 32,853,571 27,073,790 24,025,967
 ASKARI BANK LIMITED

INCOME STATEMENT

FOR THE ENDED FIVE YEARS (2018-14)

Particular 2018 2017 2016 2015 2014

Mark- 43,669,883 36,267,220 35,408,195 36,592,093 34,621,111
up/return/interest
earned
Mark- 25,059,925 20,071,965 20,496,757 21,688,045 22,712,353
up/return/interest
expensed

44
Net Mark-up/interest 18,609,958 16,195,255 14,911,438 14,904,048 11,908,758
income
Reversal of provision - (1,189,533) (729,441) 315,840 (83,198)
against non-
performing loans and
advances-net
Impairment loss on - 30,047 22,565 271,243 207,669
available for sale
investments
Provision for - 108,351 48,052 345,969 197,507
diminution in the
value of investments-
net
Reversal provision - - - - -
against assets for sale
Bad debts written off - - - - -
directly
- (1,051,135) (658,824) 879,052 321,978
Net Mark-up/interest 15,891,521 17,246,397 15,570,703 14,024,996 11,586,780
income after
provisions
Non mark-up/
interest income
Fee, commission and 3,116,070 2,706,794 2,438,914 1,732,140 1,611,279
brokerage income
Dividend income 231,312 302,894 304,850 302,721 350,810
Income from dealing 1,596,027 843,032 639,827 834,956 1,102,565
in foreign currencies
Gain on sale of 260,103 2,063,043 3,526,687 3,098,415 1,812,02
securitiesnet
Unrealised gain / - - - - 900
(loss) on revaluation
of investments
classified as held for
trading-net

45
Other income 418,081 347,470 300,195 573,477 748,345

Total non-markup / 5,621,593 6,263,233 7,210,436 6,541,709 5,644,145

interest income
24,231,551 23,509,630 22,781,139 20,566,705 17,230,925
Non mark-up/
interest expenses

Administrative 16,240,514 14,948,796 14,073,084 12,014,237 11,234,277

expenses
Workers welfare fund (540,060) - - - -
Other provisions/ 1,460,575 21,832 3,260 49,671 46,956
write offs
Other charges 191,067 193,401 221,535 216,639 125,696
Total non-markup/ 15,891,521 15,164,029 14,297,879 12,275,767 11,406,926
interest expenses
Profit before 8,340,030 8,345,601 8,483,260 8,290,938 5,823,996
provisions
Extra ordinary / - - - - -
unusual items
Profit before 6,879,455 8,345,601 8,483,260 8,290,938 5,823,996
taxation
Taxation (2,448,177) (2,265,570) (2,129,263) (2,329,796) (1,022,549 )
- Prior years (243,344) (266,425) (416,000) -
- deferred (715,001) (860,625) (642,481) (752,818)
(2,448,177) (3,223,915) (3,256,313) (3,388,277) (1,775,367)

Profit after taxation 4,431,278 5,121,686 5,226,947 4,902,661 4,093,724

46
Financial Statement Analysis:

Financial statement analysis is the process of identifying financial strengths and weaknesses of
the firm by properly establishing relationship between the items of the balance sheet and income
statement.

The purpose of analysis of financial statements is to examine past and current financial data so
that a company’s performance and financial position can be evaluated and future risk and
potentials can be estimated. The analysis can yield valuable information about trends and
relationship, the quality of a company’s earning, and it financial strengths and weaknesses.

Three techniques may be used in evaluating financial statements data:

• Horizontal analysis

• Vertical analysis

• Ratio analysis

Horizontal Analysis

Horizontal analysis (also known as trend analysis) is a financial statement analysis technique that
shows changes in the amounts of corresponding financial statement items over a period of time.
It is a useful tool to evaluate the trend situations.

Formula

47
 =Current year amount-base year amount/base year
amount*100

HORIZONTAL ANALYSIS

ASKARI BANK LIMITED

BALANCE SHEET

FOR THE ENDED FIVE YEARS (2018-14)

Particular 2018 2017 2016 2015

Assets

Cash & balances with 11.1% 3.3% 43.3% 55.2%

treasury banks

Balances with other banks 28.2% -45.4% -30.1% 17.4%

Lendings to financial - 67.08% 741.01% -76.28%

institution

Investments -17.4% 6.4% 10.4% 23.4%

Advances 32.6% 10.0% 17.6% 17.1%

Operating fixed assets 19.4% -2.4% 9.2% 11.1%

Assets held for sale -12.4% - - -

Deferred tax assets 3645.5% - - -

Other assets 14.3% 12.3% 26.2% -2.5%

3697.2% -141.0% 817.8% 45.4%

48
Liabilities

Bills payable 44.0% 25.5% 40.8% -11.1%

Borrowings -26.4% -19.8% 55.7% 317.1%

Deposits & other Accounts 9.0% 11.2% 9.2% 11.8%

Sub-ordinated loans 100.1% 0 -0.8% -37.5%

Liabilites against assets - - - -

subject to finance lease

Deferred tax liabilities - - 635.3% -

Other liabilities 23.8% 21.2% 88.6% 0.5%

Liabilities associated with -42.1% -47.3% - -

discounted operations

108.6% -9.2% 828.4% 280.7%

Net Assets 3.2% -0.9% 21.3% 12.7%

Owner’s Equity

Share capital 0 0 0 0

Reserves 29.5% 35.8% 37.3% 33.6%

Unappropriated Profit 37.2% -32.11% 35.07% 37.1%

Non controlling interest -2.4% 17.0% 6.5% 11.1%

Surplus on revalution of -67.9% -29.8% 45.3% 14.1%

assets-net of tax

Discontinued operations -71.2% -57.8% - -

-74.8% -66.9% 124.3% 95.9%

49
 HORIZONTAL ANALYSIS

ASKARI BANK LIMITED

INCOME STATEMENT

FOR THE ENDED FIVE YEARS(2018-14)

50
Particular 2018 2017 2016 2015
Mark-up/return/interest 20.4% 2.4% -3.2% 5.7%
earned
Mark-up/return/interest 24.9% -2.1% -5.5% -4.5%
expensed
Net Mark-up/interest 14.9% 8.6% 0 25.1%
income
Reversal of provision - 63.0% -330.9% -479.6%
against non-performing
loans and advances-net
Impairment loss on - 33.2% -91.7% 30.6%
available for sale
investments
Provision for - 125.5% -86.1% 75.1%
diminution in the
value of investments-
net
Reversal provision - - - -
against assets for sale
Bad debts written off - - - -
directly
- 59.5% -174.9% 173.0%
Net Mark-up/interest -7.9% 10.8% 11.0% 21.0%
income after provisions
Non mark-up/ interest
income
Fee, commission and 15.1% 10.9% 40.8% 7.5%
brokerage income
Dividend income -23.6% -0.6% 0.7% -13.7%

Income from dealing in 89.3% 31.8% -92.3% -24.3%

foreign currencies
Gain on sale of -87.4% -41.5% 13.8% 1609.9%
securitiesnet
Unrealised gain /(loss) - - - -
on revaluation of
investments classified
as held for trading-net
Other income 20.3% 15.7% -47.6% -23.4%

Total non-markup / -10.2% -13.1% 10.2% 19.4%

interest income 51

Non mark-up/ interest

Interpretation

Net income of Askari Bank has been increased in 2018 as compared to 2017 and 2016, the main
reason for this increase is, the net mark up interest income is increased in 2018 by 14% because
of loans and advances taken by the bank in 2018 decreases by a large amount. Another reason for
this increase is increase in net mark up interest earned by the bank. Total non mark up interest
income has been decreased in 2018 as compared to 2017 which is not a favorable.

Vertical Analysis

Vertical analysis is the propositional Analysis of a financial statement, each line item on a
financial statement is listed as a percentage of another item. Vertical analysis is also useful for
timeline analysis, to see relative changes in accounts over time, such as on a comparative basis
over a five year period.

Formula:

= Individual item of financial statement/total of item head*100

52
 VERTICAL ANALYSIS

ASKARI BANK LIMITED

BALANCE SHEET

FOR THE ENDED FIVE YEARS(2018-14)

53
Particular 2018 2017 2016 2015 2014
Assets
Cash & balances 6.9% 6.6% 6.8% 5.5% 4.3%
with treasury
banks
Balances with 0.6% 0.5% 0.9% 1.6% 1.6%
other banks
Lendings to - 0.3% 1.0% 0.1% 0.8%
financial
institution
Investments 36.8% 47.5% 47.4% 50.0% 48.5%

Advances 48.5% 39.0% 37.7% 37.3% 38.1%

Operating fixed 1.8% 1.5% 1.6% 1.7% 1.9%

assets
Assets held for 0.1% 0.1% - - 0.04%
sale
Deferred tax 0.5% 0.2% - - 0.2%
assets
Other assets 4.6% 4.3% 4.0% 3.8% 4.6%

100% 100% 100% 100% 100%

Assets 0 0 0 0 0
attributable to
discounted
operation

Liabilities
Bills payable 2.3% 1.7% 1.5% 1.2% 1.6%
Borrowings 7.8% 11.3% 15.1% 11.3% 3.2%
Deposits & 85.2% 83.0% 80.0%% 85.1% 91.5%
other Accounts
Sub-ordinated 1.5% 0.8% 0.8% 0.9% 1.9%
loans
Liabilities - - - - -
against assets
subject to
finance lease
Deferred tax - - 0.1% 0.01% -
liabilities
Other liabilities 3.1% 2.7% 2.4% 1.5% 1.8%
100% 100% 100% 100% 100%
54
Liabilities 3.1% 0 0 - -
associated with
 VERTICAL ANALYSIS

ASKARI BANK LIMITED

INCOME STATEMENT

FOR THE ENDED FIVE YEARS (2018-2014)

Particular 2018 2017 2016 2015 2014

Mark- 100% 100% 100% 100% 100%
up/return/interest
earned
Mark- 57.4% 55.3% 57.9% 59.2% 65.6%
up/return/interest
expensed

55
Net Mark-up/interest 42.6% 44.7% 42.1% 40.7% 34.4%
income
Reversal of provision - -3.3% -2.1% 0.9% 0.2%
against non-
performing loans and
advances-net
Impairment loss on - -0.1% -0.1% 0.9% 0.6%
available for sale
investments
Provision for - 0.2% 0.1% 0.9% 0.5%
diminution in the
value of investments-
net
Reversal provision - - - - -
against assets for sale
Bad debts written off - - - - -
directly
- 2.9% 1.9% 2.4% 0.9%
Net Mark-up/interest 36.4% 47.6% 43.9% 38.3% 33.5%
income after
provisions
Non mark-up/
interest income
Fee, commission and 7.1% 7.5% 6.9% 4.7% 4.6%
brokerage income
Dividend income 0.5% 0.8% 0.9% 0.8% 1.0%
Income from dealing 3.7% 2.3% 1.8% 2.3% 3.2%
in foreign currencies
Gain on sale of 0.6% 5.7% 9.9% 8.5% 0.5%
securitiesnet
Unrealised gain / - - - - 0
(loss) on revaluation
of investments
classified as held for
trading-net

56
Other income 0.9% 1.0% 0.8% 1.6% 2.2%

Total non-markup / 12.9% 17.3% 20.4% 17.9% 16.3%

interest income
55.5% 64.8% 64.3% 56.2% 49.8%
Non mark-up/
interest expenses

Administrative 37.2% 41.2% 39.7% 32.8% 32.4%

expenses
Workers welfare fund 1.2% - - - -
Other provisions/ 3.3% 0.1% 0 0.1% 0.1%
write offs
Other charges 0.4% 0.5% 0.6% 0.6% 0.4%
Total non-markup/ 36.4% 41.8% 40.4% 33.5% 32.9%
interest expenses
Profit before 15.8% 23.0% 23.9% 22.6% 16.8%
provisions
Extra ordinary / - - - - -
unusual items
Profit before 15.8% 23.0% 23.9% 22.6% 16.8%
taxation
Taxation 5.6% 6.2% 6.0% 6.3% 2.9%
- Prior years - 0.6% 7.8% 1.1% -
- deferred - 1.9% 2.4% 1.8% 2.2%
5.6% 8.9% 9.2% 9.2% 5.1%

Profit after taxation 10.1% 14.1% 14.8% 13.4% 11.8%

Ratio Analysis:

A ratio analysis is a quantitative analysis of information continued in a company’s financial

statements. Ratio analysis is the comparison of line items in the financial statements of a
business. Ratio analysis is used to evaluate a number of issues with an entity, such as its liquidity,
efficiency of operations, and profitability. Following are the types of ratio analysis:

Liquidity Ratios

57
In measure the ability of a company to meet its financial obligations as they come due. It is used
to measure a company’s ability to pay its short-term debts.
Liquidity of a firm is measured by its ability to satisfy its short-term obligations as they come
due. Liquidity refers to the solvency of firm’s overall financial position-the ease with which it
can pay off its bills.

Because a common precursor to financial distress and bankruptcy is low or declining liquidity,
these ratios can provide early signs of cash flow problems and business failure. The firm’s
creditors are particularly interested in short term liquidity of firm. The basic measure of liquidity
ratios

 Current Ratio
 Acid Test Ratio
 Working Capital
Current Ratio

The current ratio is a liquidity ratio that measures a company's ability to pay short-term
obligations or those due within one year. It tells investors and analysts how a company can
maximize the current assets on its balance sheet to satisfy its current debt and other payables

Formula:

=Current assets/ Current liabilities

Current Assets: Cash and balances with treasury and other banks+ Lending to financial
institutions+ Investment+ Advances
Current Liabilities: Deposit and other accounts+ Borrowing from financial institutions+ sub-
ordinated loans+ Bill Payable
Calculations:
2018 313,515,034/651,805,729 0.48

2017 623,332,994/613,157,681 0.01

2016 586,260,649/575,637,491 0.1

58
2015 506,842,533/501,545,400 0.01

2014 417,574,717/416,124,723 0.10

Interpretation:

As the current ratio in the year 2017 to 2015 remains 10.01%, and in the year 2014 it is 0.10%.
There is a slightly change but in the year 2018 it shows declining trend. It shows a decrease in
the current assets and liability of the Askari Bank. The current ratio of 48% is not considered
acceptable for a public utility.
Working Capital:
Working capital Identify whether the company’s net working capital is positive or negative. A
positive result means the company has enough current assets and money left over after paying its
current liabilities
Formula:

= Net working capital = Current assets – Current liabilities

Calculations:
2018 313,515,034 - 651,805,729 (338,290,695)

2017 623,332,994 - 613,157,681 10,175,313

59
2016 586,260,649 - 575,637,491 10,625,858

2015 506,842,533 - 501,545,400 5,297,133

2014 417,574,717 - 416,124,723 1,449,994

Interpretation:
In year 2014 working capital is 1449994 and in year 2018 it is (338290695), which shows
decreasing trend in the working capital of the Askari Bank Limited. It shows that the currents
assets in not enough to meet its current debts. So as a result is shows the bank has not enough
current assets to pay the current debts.
Leverage Ratios

 Debt Ratio
 Debt/ Equity Ratio
Debt Ratio

Debt Ratio is a financial ratio that indicates the percentage of a company’s assets that are
provided via debt. It is the ratio of total debt (the sum of current liabilities and long-term
liabilities) and total assets.

Formula:

=Total Debt/ Total assets

Calculations:
2018 673,065,718/706,666,079 0.95

2017 630,393,388/662,938,624 0.95

2016 590,549,033/623,402,604 0.94

2015 509,114,950/536,188,740 0.97

2014 423,585,734/447,611,701 0.96

60
Interpretation:
The debt ratio is 0.95% in 2018 and in 2017 it is 0.952% it is also same due to slightly changes
in total liabilities and total assets. There is only 1 percent and some points differences in the
ratios of 2016-2014. Higher the ratio, higher the firm’s degree of in debt ness.
Debt To Equity Ratio

Debt/ Equity Ratio is a debt ratio used to measure a company’s financial leverage, calculated by
dividing a company’s total liabilities by its stockholder’s equity. The D/E ratio indicates how
much debt a company is using to finance its assets relative to the amount of value represented in
shareholder’s equity.

Formula:

=Total Liabilities/Total Equity

Calculations:
2018 673,065,718/33,600,361 20.0%

2017 630,393,388/32,545,236 19.4%

2016 590,549,033/32,853,571 17.9%

2015 509,114,950/27,073,790 18.8%

2014 423,585,734/24,025,967 17.6%

61
Interpretation:
Askari Bank Limited in all the five years 2014-18 debt ratio is 20% , 19%, 18% ,17% and 16%
respectively during years mentioned above. It indicates that a company is using to finance its
assets relative to the amount of value. There is an increase of one percent in the ratio from 2014-
18.
Profitability Ratio:
Profitability analysis of a firm indicates the overall efficiency of the management. Without profit
a company cannot attract the outside capital. Profitability analysis includes:

 Net Profit Margin

 Return in Assets
 DuPont Return on Asset
 Return on Total Equity
 Operating income margin
 Gross Profit Margin
Net Profit Margin
The net profit margin, also known as net margin, indicates how much net income a
company makes with total sales achieved.
Formula:

62
 = Net Profit/Total Revenue

Calculations:
2018 4,431,278/43,669,883 10.1%

2017 5,121,686/36,267,220 14.1%

2016 5,226,947/35,408,195 14.8%

2015 4,902,661/36,592,093 13.4%

2014 4,093,724/34,621,111 11.8%

Net Profit=Profit after taxation

Total Revenue=Mark-up/Return/Interest Earned
Interpretation:
Net profit margin of Askari has decreased in 2018 as compared to last years. This is happened
due to increase in the interest expense. This indicates a negative trend. A higher net profit margin
indicates that a company has ability to converting sales into actual profit.
Return On Total Assets:
Return on assets is a profitability ratio that provides how much profit a company is able to
generate from its assets. Return on assets measures how efficient a company's management is in
generating earnings from their economic resources or assets on their balance sheet.

Formula:

= Earnings available for common stockholders/ Total assets*100

Calculations:

63
2018 4,431,278/706,666,079*100 0.6%

2017 5,121,686/662,938,624*100 0.8%

2016 5,226,947/623,402,604*100 0.8%

2015 4,902,661/536,188,740*100 0.9%

2014 4,093,724/447,611,701*100 0.9%

Earnings available for common stockholders=Profit after taxation

Return On Equity:

The Return on equity ratio or ROE is a profitability ratio that measures the ability of a firm to
generate profits from its shareholder’s investments in the company.
Formula:

Return on Total Equity= Net Income/Total Equity*100

Calculations:
2018 4,431,278/33,600,361*100 13.1

2017 5,121,686/32,545,236*100 15.7

2016 5,226,947/32,853,571*100 15.9

2015 4,902,661/27,073,790*100 18.1

2014 4,093,724/24,025,967*100 17.0

64
Interpretation:
In year 2017 it is 15.7% and in 2018 it decreases to 13.1%. The ratio is favorable in 2015 as
compared to 2017 and 2018.This also shows that the return on equity is not inconsistent that
makes it unattractive.
Operating Income Margin:
The operating income margin ratio indicates how much profit a company makes after paying for
various costs of production such as wages, raw material etc.

Formula:

Operating Income Margin = EBIT/Total Revenue

2018 8,340,030/43,669,883 1.9

2017 8,345,601/36,267,220 0.2

2016 8,483,260/35,408,195 0.2

2015 8,290,938/36,592,093 0.2

2014 5,823,996/34,621,111 0.2

65
Interpretation:
Operating income means income from operations i.e. earnings before tax (EBT). Income from
operation shows increasing trend from 0.2 to 1.9% during years 2014 to 2018 which indicates
that operating income of the bank is remain constant from 2014 to 2017 and then increase in
2018 from 1.7.

Chapter # 5
SWOT ANALYSIS

5.1 Strength

66
5.2 Weakness
5.3 Threat
5.4 Opportunity

5. SWOT Analysis:

SWOT Analysis is one of the most expedient technique or tool used in the strategic Management
process for conducting the situation analysis of an organization. The proper analysis of the firm
is given in the form of Strengths, Weaknesses, Opportunities and Threats (SWOT) the company
presently facing or can be forecasted for the future. It is a common approach to make

67
assessments in terms of internal and external environment of the organization, and to formulate
strategies analyzing its internal strengths and weakness, external opportunities and threats,
coming up is the SWOT analysis for the ABL. Such an analysis is very important for the
management in relating the strength, overcoming the weaknesses, capitalizing over the emerging
market opportunities, and craving ways to successfully tackle with the threats and ultimately
converting them in the strengths for the organization.

For the Environmental scanning of the organization is done. It is the analysis of Strength,
Weakness, Opportunities and different Threats an organization may face from the external
environment. ACBL SWOT analysis is:

 Strength
 Weakness
 Opportunities
 Threats

5.1 Strength

Askari Bank has set its firm foot in Pakistan and has gained its strengths over the
period of time an effort of enlisting its strengths can be done as follow:

 The past decade has been the biggest strength because that was the time when
there was not much of the competition and it gave time for the company to
adjust and now it has grown better than the rest
 It has a good reward policy of giving bonuses and incentives for its customers.
 Askari Bank has a flawless Customer services
 The MIS they use in the company is always updated well ahead of time giving
the bank an upper edge
 Honesty, Equality and fairness prevail throughout the organization and that is
the utmost requirement.
 The card division has strong network facilities nationwide
 ACBL has got a well-developed on-line system in most of its branches.
Remittance Department is working very efficiently in transferring the funds of
people due to this system.
 The bank has also started ATM facility in most of its branches. 24-hour
banking is new trend in Pakistan and ACBL has also taken apart in this trend.

68
 One distinctive feature of the bank is that it is the only bank working for the
welfare of army officers, which was established by Army Welfare Trust.
 The productivity of the bank is very good. Bank is providing a high quality
service to its customers.
 ACBL have strength that most of the imports & exports which are done are
handled by ACBL
 The main strength of ACBL Limited is that all of its branches are fully computerized and
they have latest software’s available to keep the records of their customer account and
other important information up-to-date. It reduces manual work and provides good
provides services.
 ACBL has a well-knitted and adequately equipped branch networking system that.
efficiently covers both the domestic and international markets. ABCL has the largest
branch networking in Pakistan comprising of 245 branches/ sub bunches
 ACBL is one of the largest private banks with deposit base of Rs.167.68 billion/- showing
constant growth over the period 1999 till day and with many online branches in major
cities of Pakistan.
 Customers are allowed to give suggestion regarding banking services. If there is any
complaint by the customer the bank authorities investigate the reason for complaint.
Complaint monitoring system is excellent at ACBL that shows bank values more to its
customers
 ACBL has also invested heavily in information technology resources, which has not
allowed bank to develop one of the most comprehensive and advanced system available.
With the help of this system ACBL has now achieved an “online” status via real time
facilities and features available through nationwide network.
 I.T group of ACBL has been able to create the largest network for secure electronic
financial transaction in Pakistan.
 With over 5319 online ATMS network ACBL is again an undoubted industry leader with
connectivity extended to above than twenty five cities of Pakistan. ACBL ATMs not only
serve 24 hours cash convenience and also improve on the counter services and
turnaround time at cash counters.
 ACBL is subsidiary of ARMY WELFARE TRUST (AWT) so it has a strong army
background and it definitely adds to its prestige and provides it an edge over the
competitors.

69
  The ACBL Atm Master Card has become a global service furthering the convenience to
the customers. Traveling customers can access their accounts for a large number of
internationally deployed ATMs and point of sale unit.
 In order to save their customer's time ABCL provides the good phone banking service
that is very attractive especially for those customers who don't have time to personally
visit to the bank.
 The organization showing concern for the people, ethics and environment enjoy good
public reputation and are able to reap the benefits in the long run. ABCL management is
quite sensitive to this issue.
 ABCL is the first bank to introduce i-banking which provides convenience to our
customers by enabling them to gain access to their account and carry out any transaction
sitting at home.
 ABCL has launched its mobile atm bus service which is the Pakistan First Mobile ATM
Bus Service. No other bank has taken initiative of mobile ATM Bus yet.

5.2 WEAKNESSES

The weaknesses of ABCL are listed as

 A certain education level should be set for a particular task, it adds up to the
hard-work, the company has some undergraduates as well which can effect the
company
 Its good to have a friendly working environment but there should be a code of
conduct.
 Because of the increasing workload the employees a being over burdened
 The inventory management is not up to the mark
 Promotions and transfer from departments is a political issue.
 Bank is not introducing new products and new saying schemes. Bank should boost the

product development and increase the range of facilities offered for customers.
 Due to risk such as political economy and legal the bank has suffered losses the main
reason was piling up to of large number of irrevocable debts.
 The bank has still some of the traditional ways of operations in this advanced
technological environment. ABCL has use computerized accounting system but, still the
bankers use to make their entries in thr accounting register also.

70
  In Askari Bank the individual difference has strong impact on the organization's
performance due to wrong criteria of selection of employees. So with the passage of time
individual differences start increasing which undermine the goodwill of the organization.
 No availability of sophisticated equipment's in branches lengthy credit processing and
documentation procedures.
 Bank's marketing department is not very strong. Accumulated losses pushed the bank to
cut down its promotional activities in order to reduce expense for last few years. The
Advertising media used by Askari Bank for publicity include mostly newspaper and
journals.
 The employees of ABCL are constantly subjected to job rotation. It keeps back from
gaining complete know- how about a particular department.
 The Management system in ABCL is quite centralized leaving all the decision-making
activities to the upper management only. Employee empowerment is also over looked due
to such management policy. I personally observed that delay occured in the operations of
the employees only due to the fact that they had not got any instructions from the Head
Office.

5.3 OPPORTUNITIES

These are positive external enviromental factors affecting the ABCL:

 Better and convenient services to employees and business class.

 Expansion of their branch network can be very helpful.
 Engage qualified professionals for providing specialized banking products and
services to their customers, reorganization of existing systems as well as
Infrastructure with de-centralized work processes.
 Institutionalization of HRM (best person should be posted for best
assignment), depoliticizing the atmosphere.
 Bank can extend its network in other countries.
 It can enhance its profitability by making use of new technology.
 The plastic money business still has a lot of potential to grow so it gives the
company an opportunity to introduce new products and services.
 They should keep on looking for opportunities in the market because it’s a
first come first served situation.

71
  Askari Bank is now looking into new ways of providing banking services to its
customers. New concept of mobile banking has been introduced by the bank, which will
prove to be remarkable success in the field of consumer banking.
 It is opportunity for Askari Bank to steady increase customer deposit by adopting new
marketing and promotion scheme and launch new scheme for their customer.
 Foreign remittance are another area as present worldwide control system over transfer of
currencies through illegal channels has facilitated the area of the bank.
 Foreign Trade is the focus of quite alot bank. It has become an ideal bank for the
importers and exporters but still a lot of opportunities and yet to be discovered.
 ABCL should emphasize on E-banking in which bank can design a universal account like
their foreign bank, to enhance online facilities.

5.4 THREATS

 Very uncertain economic conditions.

 Actions taken by competitors.
 Political instability.
 Employees turnover rate is too high
 Politics involved in a working atmosphere has never done well for the
company it has always gone the other way round.
 Some other banks have competent taskforce, which is also a threat for ACBL,
because human resource is the most valuable resource.
 Pakistan India relations often create a war danger. This chance of war may
cause army officer and their families to increase the frequency of withdrawals,
which would decrease deposits.
 ACBL has many competitors, which are continuously increasing it products
and marketing aggressively. It may cause its customers to shift to
competitor .
 Political instability is also threat for the bank because instability leads to lower business.
The same situation is prevailing in Pakistan.
 Growing global technological advancements and adaptation of modern style of
management in banking sector.
 Askari Bank leading in the domestic commercial banking sector in Pakistan, as such there
are no close competitors of ABL but every commercial bank is the competitor for each
other. But mainly these are HBL, UBL ,Meezan Bank Limited etc they are threats for
ABCL.

72
Chapter # 6

TRAINING PROGRAMME

73
6.1- Divisional or Departmental Details

6.2-Activities of Internee

6.1 Departments
Different departments do their jobs in occurrence with the bank policies. In United Bank Limited
of Pakistan each branch is divided into various departments depending on their size and volume
of business. Head of department manages each department & official of the branch follow
procedures. The department working within United Bank Limited of Pakistan are as under:

74
  Account Opening Department
 Clearing Department
 Collection Department
 Remittance Department
 Insurance Department
Account Opening Department

Bank borrowing funds from outside parties is more important because the entire banking system
is based on it. Receiving of deposits is a basic function of all commercial banks. Commercial
banks do not receive these deposited for safekeeping purpose only. When the bank receives the
amount of deposited as a depositor, it become the owner of the bank may therefore use these
deposits, as it deems appropriate. But there is an implicit agreement that the amount owned by
the bank will be paid back to the depositors on demand or after a specified period of time. The
borrowed capital of the bank is than the bank own capital. Bank’s borrowings mostly in the form
of deposits.
Following are tasks which are held in account opening department.
 Account Opening
 Account Closing
 Cheque Book Issuing

Account Opening Procedure:

When a customer wants to open an a/c he comes in this department of the bank, and submits an
application for opening an a/c. The officer of this department gives him an application form. The
application form is useful for all types of opening an account. For Example: Saving A/C, Current
A/C etc. The requirements of application form are that information which bank wants to know.

Following are in the bank:

Types of accounts:

 Current Account
 Individual Account
 Basic Business Account (BBA)
 Joint Account
 Partnership Account
 Asaan Account
 Askari Special Deposit Account (ASDA)

75
Necessary information, which a bank requires

Name

Address

Telephone no

Zakat Deduction

Signature of the Applicant

Details of other banks account

Documents to be attached

Attested Photo Copy of NIC/Passport of account holder, Proprietor, Partner, Directors and Office
Bearers as the case may be.

The true copy of rent agreement (in case of business).

Certified true copy of the certificate of incorporation or registration (in case of companies and
registered bodied only).

Certified True Copy of the Certificate of Commencement of Business (in case of public limited
companies only)

Certified True Copy of the Memorandum and Articles of Associated (in case of limited
companies)

Certified True Copy of Rules and Regulations or By-Laws (in case of limited companies)

Certified True Copy of the Resolution of the Board of Director/Managing Committee/Governing

Body regarding conduct of the account

List containing names and signatures of the Direct/Office Bearer duly certified by Registration
Authority

Letter of partnership or certified Copy of Partnership dead (in case of partnership)

Trust deed and Board Resolutions, for Trust account

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Specimen Signature Card:

When an account is opened with account opening form a specimen signature card is given to the
customer, which contain;

Branch Code

Date

Account No.

Title of Account

Names

Signatures

Approved By

The customer fills this card and returns it to bank officer. For illiterate persons thumb
impressions are taken and two latest passport photographs shall be taken. This specimen
signature card is scanned in the computer system. So that whenever the account holder’s cheque
will come the bank officer will verify his signature to the computer.

Cheque Book Issuing:

A cheque book contains a number of cheques, which enables the customer to make withdrawal
from his account or make payment by issue of cheque. After account opening a cheque book
requisition, which is in fact, a request to acquire a cheque book. This requisition, form is given
just for first time getting cheque book or for new account holders. When the account holder is
old then a cheque book slip is already in his cheque book before 10 leaves of the cheque book.
So when the account holder reaches to this slip after issuing the first cheques, he fills this slip
and presents it to the bank. This slip contains:

Title of the Account

Date (in 2 places)

Account number

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Cheque Book from _____ to______

Signature of Account Holder

When the new or old customer presents the requisition form or cheque slip the bank officer fills a
bank cheque book slip. In the cheque book he fills the;

NIFT keeps the record of these issued cheque books. These cheques are send to the bank. NIFT
also sends a summary of these cheques books containing the account numbers and title of
accounts. The bank also keeps records of these cheque books. The bank officer receives these
cheque books with clearing.

Advances Department

The basic function of the bank is to accept deposit and lend money to the borrowers against a
spread so to be able to give some profit to the depositors as well as to earn profit for the bank.
Cash Department
This is the most important and critical department in a Bank. There are two basic functions
performed by the cash department. These are
 Receipts

The bank receipt process can be used for money you receive in that does not relate to a sale or
customer account. This type of receipt will only record the necessary accounting entries, it won't
generate any physical documents, so if a receipt is required you will need to enter the payment
against a customer.

Some examples for when to use a bank receipt are:

 Interest
 Investment income
 Bank deposits
 Miscellaneous income
 Donations
 Payments

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Payment is the transfer of one form of goods, services, or financial assets in exchange for another
form of goods, services, or financial assets in acceptable proportions that have been previously
agreed upon by all parties involved. Payment can be made in the form of funds, assets or
services.

Remittance Department
Another important department in Askari Bank is Remittances Department. The remittances
department transfers the funds from one bank to another bank and from one place to another
place. In remittances department the collection take place. The Askari Bank has made payment of
only open cheques on the counter and prohibits the payment of crossed cheques.
Types of Remittance:

The Askari Bank deals with the following type of remittances:

Banker’s Cheque (BC)

Demand Draft (DD)

Call Deposit Receipt (CDR)

Telegraphic/Swift Transfer

Pay Order

Clearing Department
In clearing process, if the account holder of Askari Bank receives the cheque of other bank like
Meezan Bank, Habib Bank Limited etc. They submits it in Askari’s branch to be cashed. At the
same time the clearing process starts. The clearing time starts in the morning and ends in the
afternoon .Firstly check the bank name, cheque number and the amount are written in the
cheque. After this three kinds of stamps are required. First bank name stamp, secondly clearing
stamp of next date and if the cheque is not local then the intercity clearing stamp is required.

Types of Clearing:

Normal Clearing

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Intercity Clearing

Same Day Clearing

Normal Clearing:

It is within the city. It needs only 24 hours.

Intercity Clearing:

This is from one city to another city. It requires 48 hours to be cleared. It required an intercity
clearing stamp on the bank of cheque. It requires some charges also. Bank receives the charges
from the customer.

Same Day Clearing:

Outward Bill for Collection (OBC) used within small cities like villages.

The institution N.I.F.T. provides the services in clearing the cheque. They send the different
cheque to different banks. The N.I.F.T service is only in few cities, like Karachi.

6.2 Activities of Internee

I completed my internship program of six weeks at Askari Bank Limited. I started my

internship program on 26th June 2018 at the Askari Bank Limited. On the very start of my
internship branch manager asked various questions about bank branches, various
account. I was briefed by the branch manager about different branches of the bank I also
told the major rules and regulations which were being observed by the management of
the bank.

First Week:

Maintained Maintained different documents in there levant files was also my duties like
the Files: Internees documents, locker rent report, dormant account report, attendance
sheet, account opening files, specimen signature card files and maintain the
register of TCS express voucher received which is the proof that the letters
and forms, are send to other branch

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Second Week:

Stamping I also stamped the documents are required by the permission of respected Sir
the or Mam. Mostly I stamped the clearing cheques or opening forms.
Documents

Checking the I have also checked the signatures of the customer that the signatures are
Signatures correct or not.

Fill the I started fill the deposits slips of customers with the permission of respected
Deposit Slip Sir

Third Week:

Account opening I worked on account opening desk. Account opening Sir Kashif Butt
department was friendly and cooperative. He was not too quite young and I think
this factor helped me a lot, due to more age difference. He behaved
like a good teacher than an officer.

Fourth Week:
Signature Difference Form If client signature differs from the CNIC, the signature of
the client is taken on a signature different form.

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 Computerized Checking The bank officer connected via internet to the NADRA
website checks the record of his customer’s social life. If
the record of the person is ok, then the officer of the bank
authenticates the record under his signature and stamp and
send it to the branch manager.

Account Number Account number is written on the chequebook requisition.

After completion of all procedures, the bank prepared.

Fifth Week:
Procedure of Dormant to if a customer account is become dormant (not used in 6
Active Account months) and the customer want to used after six month, the
customer fills an application form of active account. The form
requires account number and a copy of CINC card and the
thumb impression on the thumb scanner.

At check book desk Usually account opening officer collect check book,
requisition slip and pass entry for it. This task was assigned
to a separate officer Sir Kashif Butt.

Sixth Week:
Remittance
Word remittance mean“a sum of money sent in payment or as a gift”.In
Department
this department we make payment of salaries.Officer Mam Uzma deals
with Remittance department. I with remittance officer paid salaries and
pensions to employees of different organizations on their behalf. For
this purpose, we use easy pay cash management service. We enter
CNIC number of employee and our system show the particular of that
employee that all already saved in system

CHAPTER # 7

PROBLEMS & RECOMMENDATION

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7.1-Problem

7.2- Recommendation

7.3- Conclusion

7.1 Problems:

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 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 the following suggestions that in my view, will
definitely improve few weaknesses observed in the bank by me.
 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.
 The current SWIFT system used by the bank is very slow in processing so may
view is that the bank should try to adopt some other more effective form of
technology in order to provide comfort to the customers as well as the staff.
 The main weakness during the internship I found short number of employees.
There was inadequate availability of the employees for the departments. Less
availability of cashiers on the cash counter cause problem for customers while
withdrawing cash because only one or two cashiers working at a time and the
branch has a big number of customers daily. Like only one employee was
responsible for two main departments alone.
 Askari banks financial strength is declining year by year. That is not a good
sign in this rapidly growing world and when the world is a global market.
AKBL has to raise sufficient funds to be in the competition.
 The decision making is centralize the branch manager fully control whole the
branch and decision making is at top level that create the distance between
middle and higher level.
 Understanding the effective management of the human resources is the most
difficult challenge faced not only by the bank but by all the organizations.
Even though the people have been sacrificed in the new organizational
developments, it is becoming clear that the true lasting competitive advantage
comes through human resources and how they are managed. AKBL seems to
not focusing on this highly critical issue as the job satisfaction level of the
employees working at AKBL, was quite low.
 This is one of the biggest weaknesses of AKBL that there is low communication
of problems between different levels of management of Askari bank that is
causing de- motivation in employees because they don’t feel that management
is concerned about them. This results in low level of banking services.
 AKBL employees are not given sufficient amount of bonuses that cause low
job satisfaction and motivation.
 Besides taking care of the above mentioned problems there are some
recommendations which can be advised to the bank, which can be helpful for
the Bank:
 The bank should adopt 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.

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  The employees in the organization should be insured job security so that there
is no pressure on the employees while performing their tasks.
 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 results in increase in the number of customers of the
bank.
 The higher authorities should form team-based management rather than
centralized management. It would result in improvement in uplifting the
moral of the employees. They will be more motivated and involved in all their
operations resulting in overall effectiveness of the organization.
 It is the opportunity for Askari commercial bank to expand their business in
rural areas along with Islamic banking services and met unmet segment in
geographical areas and promote their business.
 It is opportunity for Askari commercial bank limited to make technical
improvement to cope up with the business world requirements and standards. It
is convince for both customer and organization to save their time and a positive
gesture of giving value to their customers. Also enhance their ATM machines
working.

RECOMMENDATION
The overall organization is very good and results oriented, but I feel there is a need of
improvement in some areas. The following are the suggestions that I have recommend
for the Askari Bank Limited.
1.Information technology should be introduced in all the branches to enhance the
efficiently Dominating influences of politicians and bureaucrats have been mainly
responsible for the deterioration that has crept in the banking industry.
2. Effective training and qualified, dutiful and vigilant inspection teams are inducted
per in all the banks.
3. A separate ladies counter should be there.
4. The ACBL branches should improve his position to attract more customers
5. The behavior with the customers should be improved.

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6. There is a great need of proper training of employees. Because whenever they were
asked about the latest banking the answer was sorry, we don’t know.
7. Like the other reputed commercial banks ACBL should recruited some officers
especially from the fresh MBAs and M. Com students. Doing so, the more talented
persons would enter in the management and they will try to make the National Bank
compatible with the other banks.
8. This branch is not doing many functions to open L/C and to deal in export and
import facilities. Therefore, bank should hire export staff for such type of activities and
star them in the branch.
9. Do marketing through internet

10. Try to establish effective communication between top-level management and

executives
11. In order to check efficiency and effectiveness of employee working, MYSTERY
SHOPPING concept must introduce by the management.
12. ACBL’ Stop management must adopt such strategies, that will help ful in
eradication of internet politics.
13. The bank should make some strategies to educate the employers and public about
the bank services and products.
14. ACBLS management must introduce some teams that should do investigation about
the creditors worthiness, so that the non-performing loans due to frauds canreduce
15. Create a marketing department in this branch and in other branches improve the
marketing department that will give a lot of profit.
16. Reduce the conflict between top management and branch staff.
17. Most of the branch staff is unaware of updates regarding ACBLs product & services
especially the online services.
18. Human Resource Department must work on providing a platform to the branch employees
from where they can get updated information of new products & services launched by ACBL.
19. Divide equal work to employees because in this branch, some employees have a lot
of work and some have few.

7.2 Conclusion:

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Askari Bank has been growing both in size and profits for past few years and is one of the
most reputed groups. It has gained a good repute in the banking sector of Pakistan.

Employees are the most important assets for any organization as the success of any organization lye in
their hands, therefore there is a need for the group to focus on the needs of their employees. The bank has
to overcome its weaknesses and should avail the opportunities available in the industry, because
competition is very intense particularly in the banking sector these days the organization which offers far
better services to its customers than its rivals will succeed ultimately. New products/services should be
introduced by the bank by analyzing the customer needs and market demands which will build the image
of AKBL among customers. Its profitability has shown improvement over years, but still it requires
improvement in infrastructure and technology. They are aware that they have stepped into the 21st
century and they must meet its challenges by acquiring the highest level of the technology. They will thus
be accelerating their technological advancements to enable them to distribute their products and services
through most efficient and high tech means. Nodoubt there are many threats faced by bank but there are a
lot of potential growth opportunities for ACBL.

Chapter 8

Annexure

8.1 Reference

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8.1 Refrences

www.askaribank.com
www.google.com
www.pkeconomist.com
www.sbp.orgnet.com
Askari bank annual report 2016
Askari bank annual report 2017
Askari bank annual report 2018

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