INTERNSHIP REPORT

ON

ALLIED BANK (LTD)

MBA(Finance)

SESSION(2012-2016)

Submitted by:Name: Muhammad Farhan

Roll no: 1337

UNIVERSITY OF EDUCATION LAHORE

(MULTAN CAMPUS)

Dedicate it speciallyMY parents,

Respected teachersAnd

Friends

Dedication

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IN THE NAME OF

Most Merciful and Compassionate the Most Gracious and Beneficent

whose help and guidance I always

Solicit at every step, at every moment.

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PREFACE

This Report is specially made for the student of commerce.. It is concerned to a brief study of the

operation, Function, tasks and services of Allied Bank Limited.

Banking play very important role in the commerce and economic development of a country.

Now-a-days mostly banks are using different high modern technologies, which change the

managerial activities that are why I decided to do my internship Training in the bank.

In preparation of this Report I have tried my best to provide all Possible information about the

operation, function and tasks of ABL in brief and comprehensive form. It also includes a brief

department worked during internship. I have also tried my best to use simple and easy words and

language.

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ACKNOWLEDGEMENT

All praise to Almighty Allah, the most merciful and compassionate, who give me skills and

abilities to complete this report successfully

I am grateful to my parents who are always been a source of encouragement for me throughout

my life and from start to the end of this report

I am thankful to all my staff members so Allied Bank Limited Khanewal Road branch MULTAN.

I found every one very co-operative and helpful for providing me the Theoretical as well as

practical knowledge about the function and operation of the bank.

I express my greatest gratitude to my kindhearted operation manager SIR IMRAN (BSM) who

was the Person who made me able to write this report, His enthusiasm shows the way forward to

me to achieve this success and who kept me in high spirit through his appreciation. He helped

me a lot each time I went up to him.

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EXECUTIVE SUMMARY

This report is about my internship program with Allied Bank Limited. In this comprehensive

report, I have discussed about every major aspect of the bank, which I observed and perceived

during my internship program. In this report you will find the detail about the bank right from its

incorporation to the current position. Along with it, the processes, policies and procedures of the

bank are also discussed in detail.

During my internship program, I mainly worked in General Banking & Finance. All the

departments have been discussed in detail and all the policies and procedures have been

described thoroughly.

As the principle reason for temporary position is to learn by working in viable environment and

to apply the information obtained amid the studies in a true situation in order to tackle the

problems using the knowledge and skill learned during the academic process, In this report the

detailed analysis of the organization has been done and all the money related specialized

administrative and key angles have been assessed to examine the present position of the

association. Along with it, the background analysis, the prevailing competition analysis, the

business process analysis, and the internal environment and external environment of the

organization have been discussed and the recommendations for the improvement have been

made wherever required.

In the end the learning and experiences section consists of all the policies, processes, practices

and procedures which I have undergone through and learned during my internship program.

Table of Content

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sChapter No 1:.................................................................................................................................10

1.1 Background of the Organization..........................................................................................101.2 Vision, Mission, Values and Objective...............................................................................121.3 Organization Culture...........................................................................................................13

1.4 Departments of Organization...................................................................................................141.4.1 Current Saving Department..............................................................................................141.4.2 Account Department.........................................................................................................14Types of accounts......................................................................................................................15Allied Basic Banking Account..................................................................................................15Current Account.........................................................................................................................15Allied Express Account.............................................................................................................15Savings & Term Deposits..........................................................................................................16Allied Islamic Current Accounts...............................................................................................16Procedure for Account Opening................................................................................................17

1. Application from for Opening of Accounting.............................................................172. Introduction.................................................................................................................17

Signature card............................................................................................................................18Cheque Book.............................................................................................................................181.4.3 Advances Department.......................................................................................................18 Function of Credit Department...........................................................................................20 Types of finance.................................................................................................................221.4.4 Remittances Department...................................................................................................23 1.4.5 Cash Department.......................................................................................................241.4.6 Clearing Department.........................................................................................................25

1.5 Scope of Organization.............................................................................................................261.6 Organization Structure.............................................................................................................271.7 Products & services provided by the organization..................................................................28

Personal Banking...................................................................................................................28Business Banking...................................................................................................................28Islamic Banking.....................................................................................................................28Other Services........................................................................................................................28

Chapter No 2:.................................................................................................................................29

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2.1 Department of organization as Internee I worked...............................................................29Types of Account:......................................................................................................................302.1.1 Current Account................................................................................................................302.1.2 Allied Basic Banking Account.........................................................................................302.1.3 Joint Account....................................................................................................................302.1.4 Illiterate Account..............................................................................................................302.1.5 Minor Account..................................................................................................................312.1.6 Staff Account....................................................................................................................312.1.7 Public or Private Limited Company Account...................................................................31

This account may be opened in the name of a public or a private limited company. For opening a public or private limited company account two documents are essential.............31 Articles of Association of the Company.....................................................................31 Permutation of the Board of Directors........................................................................31

Procedure of opening account:..................................................................................................31Account opening Form........................................................................................................31An account opening form contains the following:................................................................31 S.S card........................................................................................................................31 Know your customer Page..........................................................................................31 Term and condition page.............................................................................................31 Cheque Book request...................................................................................................31 ATM card request Form..............................................................................................31

Clearing:....................................................................................................................................32Types of Clearing:.....................................................................................................................32Remittances................................................................................................................................33Features & Benefits of Allied Express......................................................................................33 2.2 My projects and responsibilities as Internee:................................................................352.3 Personal learning objectives:...............................................................................................362.4 What I learnt in organization as Intern:...............................................................................37

1. Patience.......................................................................................................................372. Morality......................................................................................................................373. Resilience....................................................................................................................374. Empathy.....................................................................................................................375. Collaboration.............................................................................................................38

2.5 Application of class room learning in organization:............................................................38

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2.6 Comparison of practical experience of internship and teaching methods....................392.7 Improvement in knowledge and skills.................................................................................40 Gain Confidence................................................................................................................40 Experience of teamwork and development of interpersonal skills..............................403.1 Ratio Analysis...................................................................................................................41Net Profit Margin Ratio.............................................................................................................41Gross Spread Ratio....................................................................................................................42Non-Interest Income to Total Income Ratio..............................................................................43Return on Assets (ROA)............................................................................................................44Du Pont Return on Assets Ratio................................................................................................45Return on Total Equity (ROE)...................................................................................................46Debt Ratio..................................................................................................................................47Debt / Equity Ratio....................................................................................................................48Times Interest Earned Ratio......................................................................................................49Advances / Deposits Ratio.........................................................................................................50Horizontal Analysis...................................................................................................................51Vertical Analysis.......................................................................................................................52

3.2 SWOT analysis........................................................................................................................533.4 Suggestions for Concern Department......................................................................................553.5 Innovations:.............................................................................................................................563.6 Recommendations as manager:...............................................................................................573.7 Final Conclusion:.....................................................................................................................573.8 References………………………………………………………………………………...…58

3.9 Annexure…………………………………………………………………………………….59

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Chapter No 1:

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1.1 Background of the Organization

The Bank started out in Lahore by the name Australasia Bank before independence in 1942; and

became Allied Bank of Pakistan in 1974.

In August 2004, because of capital reconstruction, the Bank’s ownership was transferred to a

consortium comprising Ibrahim Group; therefore, it was renamed as Allied Bank Limited in

2005.

Today, with its existence of over 70 years, the Bank has built itself a foundation with a strong

equity, assets and deposit base. It offers universal banking services, while placing major

emphasis on retail banking. The Bank has a large network of 1000 online branches and over 850

ATMs in Pakistan and offers various technology-based products and services to its diverse

clientele.

The Pre Independence History (1942 to 1947)

In the early 1940s the Muslim community was beginning to realize the need for the active

participation in the field of trade and industry. The Hindus had since the late 1880s established a

commanding presence in these areas and industry, trade and commerce in the undivided

Subcontinent was completely dominated by them. Banking, in particular, was an exclusive

enclave of the Hindus and it was widely believed, and wrongly so, that Muslims were

temperamentally unsuited for this profession. It was particularly galling for Khawaja Bashir Bux

to hear the gibe that “Muslims could not be successful bankers”. He decided to respond to the

challenge and took lead in establishing this first Muslim bank on the soil of Punjab that was to

become Australasia Bank (1947 to 1974)

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Introduction to the Organization

Australasia Bank was the only fully functional Muslim Bank on Pakistan territory on August the

14th, 1947. It had been severely hit by the riots in East Punjab. The bank was identified with the

Pakistan Movement. At the time of independence all the branches in India, (Amritsar, Batala,

Jalandhar, Ludhaina, Delhi and Angra (Agra) were closed down. New Branches were opened in

Karachi, Rawalpindi, Peshawar, Sialkot, Sargodha, Jhang, Gujranwala and Kasur. Later it

network spread to Multan & Quetta. The Bank financed trade in cloth and food grains and thus

played an important role in maintaining consumer supplies during riot affected early months of

1948.

Despite the difficult conditions prevailing and the substantial set back in the Bank’s business in

India, Australasia Bank made a profit of Rs 50,000 during 1947-48. By the end of 1970 it had

101 branches. Unfortunately it lost 51 branches in the separation of East Pakistan.

The bank did well in despite losing lot of its assets. By the end of 1973 the bank had 186

branches in West Pakistan.

Allied Bank (1991 to 2004)

As a result of privatization in September 1991, Allied Bank entered in a new phase of its history,

as the world’s first bank to be owned and managed by its employees. In 1993 the “First Allied

Bank Modaraba (FABM) was floated.

Allied Bank (2005 to date)

In May 2005 Ibrahim Leasing Limited was amalgamated by transfer to and vested in with and

into Allied Bank Limited. ILL shareholders were issued ABL shares in lieu of the ILL shares

held by them. Application for the listing of ABL shares in all the Stock Exchange Companies of

Pakistan was made. ABL was formally listed and trading of the shares of the Bank.

1.2 Vision, Mission, Values and Objective

Allied Bank Limited operates by the following Vision, Mission & Values:

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VisionTo become a dynamic and efficient bank providing integrated solutions in order to be the first

choice bank for the customers.

Mission

To provide value-added services to our customers.

To provide high-tech innovative solutions to meet customers’ requirements.

To create sustainable value through growth, efficiency and diversity for all stakeholders.

To provide a challenging work environment and reward dedicated team members

according to their abilities and performance.

To play a proactive role in contributing towards the society.

Core Values

Integrity

Excellence in Service

High Performance

Innovation and Growth

Main Objective

The main objective of the bank is to accept deposits and provide loans to its customers

and also to be more efficient in providing services. The bank maintained its commitment to most

efficient and personalized services to its customers. 12

Allied Bank of Pakistan introduces many remunerative schemes for its depositors and introduces

computer services for the first time in the banking history of Pakistan. Allied bank gives

advances to small, medium and Big industries, commercial establishment, agriculture,

construction companies and other needy persons.

Allied bank collects electricity gas and telephone bills from public and over hundred branches of

Allied Bank Ltd. deal in foreign exchange were facilities are given to financial and commercial

so its ultimate objective is to receive funds from the depositors and provides loans\credit

facilities to different sector including trade, industry and agriculture in its most branches.

1.3 Organization Culture

The Allied Bank Limited department’s structure is well managed and capable of enhanced

services. They provide their shareholders the very best performance. The ABL is capable of

while building further limits of the organization potential. The Finance department plays vital

role in arranging its superior contagious financial statements in conformity with generally

accepted accounting principles.

All the departments are required to make certain estimates, judgments and assumptions that

affect the reported amounts of assets and liabilities at the date of the financial statements and the

reported amounts of revenues and expenses during the periods presented.

Most of them based estimates on historical experience, available information and various other

assumptions they believe to be sensible under the circumstances and they evaluate estimates;

however, actual results may differ from these estimates under different assumptions or

conditions.

1.4 Departments of OrganizationThere are different departments of Allied bank. It includes:

1.4.1 Current Saving Department

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In ABL Khanewal road Branch current saving department mainly deals with cheques, vouchers

and advices. First of all a cheque holder have to present his/her cheque to the person responsible

for issuing the tokens. . Then cheque is passed on to the computer operator to entry it in

computer. Afterward it will go for signature verification after which it will be given to cashier

for payment.

1.4.2 Account Department

Deposits the Life Blood of a Bank

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 it. 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 borrowing is

mostly in the form of deposits. These deposits are lend-out to different parties. Larger the

difference between the rate at which these deposits are borrowed and the rate at which they lend-

out the greater will be the profit margin of the bank.

Types of accounts

Allied Basic Banking Account

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This account is suitable for customers looking to avoid minimum balance requirements and

operate a simple bank account for limited set of transactions.

Other Features:

1. Account can be opened with an initial deposit of Rs 1,000/ only

2. No joining fee. Annual fee for the issuance of Allied Cash+Shop Visa Debit Card is to be

recovered in advance

3. Access to Allied Direct Internet Banking on Personal Computer and Mobile

Current AccountThis account is suitable for customers looking for a simple bank account for day to day

transactions. With Allied Bank’s Current Account, you get all the usual advantages and features

of a regular current account for all your daily transactions, frequent payments and flow of funds.

Allied Bank’s Pakistani Rupee-based non-remunerative Current Account perfectly suits your

banking.

More Than 0.5 Million Customers Have Their Current Accounts in Allied Bank

Allied Express Account

Get your loved ones to open an Allied Express account you can now receive foreign remittances,

with complete peace of mind.

You can now receive foreign remittances, with complete peace of mind. Just intimate your

account number to your overseas relatives and friends, enabling them to remit directly into your

current account. Allied Express Account is an easy and hassle free account for the Home

Remittance Benefices This account provides you relief in receiving your money without having

to go to the bank’s branch.

Savings & Term Deposits

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Your Savings stuffed into a mattress will never grow. But money deposited in a Savings Account

or in a fixed term, works for you by earning interest and is also a lot safer. The longer that saving

stays in your account, the more you’ll make out of it.

Saving Accounts give you the ability to earn profit along with the flexibility to withdraw funds

whenever you require offsetting a financial emergency or need. The profit is earned as per the

mechanics of Saving Accounts which are mostly on the basis of Minimum Deposit maintained in

the account.

Term Deposit Mechanics

Term deposits are investment options offered by banks where you deposit your savings for a

certain ‘term’ or period of time – upon which it would earn a particular percentage as profit.

Let’s say you decide to place your deposit for a term of 1 year at Allied Bank. Your deposit will

be kept secured till the maturity date.

Allied Islamic Current Accounts

It’s a current account based on the Shariah compliant mode of ‘Qard’.

Allied Islamic Current Account is a banking account for day to day transactions without any

risks or rewards.

Salient Features:

The Bank will utilize all such deposits as the Bank may deem appropriate in Shariah

compliant modes of financing / investments

No charges will be recovered at the time of closing the account

Initial deposit amount: Rupees 1,000 for Pak Rupees Accounts and 100 units in

respective foreign currency

No initial deposit will be required for the followings categories:

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Mustahkeen of Zakat

Students

Employees of Government or Semi Government institutions for salary and pension

purposes (including widows / children of deceased employees eligible for family

pension / benevolent fund grant etc.), other autonomous bodies and similar types of

accounts.

Procedure for Account Opening

As discuss earlier there is a prescribed procedure for opening different types of account.

Following steps re followed while opening a new account.

1. Application from for Opening of Accounting

A person who wishes to open a bank account is required to complete this from the personal

information is to be furnished. The application signs the declaration to effect that he has

understood the rules and regulation of the bank.

2. Introduction

As required by the banking law the new customer needs to be introduced by the account holder

of the same branch where the account is being opened. The manager or any other bank officer

may introduce the new customer if they know them personally.

Signature card

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At the time of opening an account a specimen signature card containing two

signature of the customer is required which the manager of the branch attaches with application

form. During the operation of account the signature is verified when the cheque is presented for

payment.

Cheque Book

After completing formalities for opening saving and current a cheque book is issued to the

customer for withdrawing cash from his or her account at the time of need. The cheque contains

minimum 25 pages & maximum 100 pages.

1.4.3 Advances Department

Lending Principles

The basis 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. While lending the money to the borrowers the bank should observe the following lending

principals:

Safety Principle

It means that the lended money will come back along with interest or service charges

etc. The borrower should not invest the money borrowed in unproductive or speculative

business.

Liquidity Principle

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The money which has been lended to the borrower should be returned to the bank on

demand or as per repayment schedule provided by the client. The sources of repayment

should be clear and definite

Purpose Principle

The purpose of the advances should be legitimate and productive. It should be ensured

that the banks, funds are not being utilized for speculative business. The credit

restrictions by the central bank should not be violated & it should also be ensured. It is

always beneficial for the bank to finance for short-term requirements.

Profitability Principle

The end result of every business activity should be to earn some profit. Similarly

the bank must get some profit out of the activity of lending so that the depositors could

get their shares as well as the shareholders could earn something for their investments..

Security Principle

The proposal should be dealt on its merit not on security. The security should be

considered a safety for the bank only in case of unexpected emergencies. All the

relevant documents of securities must be obtained & got valuation of the property or

any other security should be assessed correctly.

Spreading of Risk Principle

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It is always safe for the bank to spread the risk in large number of borrowers instead of loaning

huge amount to few big shots, it is better to obtain different types of securities instead of

concentrating on one security.

National Interest and Suitability Principle

It is our moral as well as legal obligation to ensure that no loaning is running counter

to national interest. It is also our duty to ensure that our lending policies are not

against the social conditions or bindings

Function of Credit Department

The main function of the credit department is to lend money to the customer. Allied

Bank Ltd. Lends money in the form of clean advances against promissory notes as well

as secured advances against tangible and marketable securities.

LIENLien is the bank right to withhold property until the claim on the property is paid. The

bank looks at their lien as a protection against loss or overdraft or any other credit

facility. In ordinary lien the borrower remains the owner of the property, but the actual

or constructive possession remains with the creditor or bank though the borrower has

no right to sell it.

BY CASH CREDIT

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In this the bank lends money to the borrower against tangible security. The total amount of the

loan is not paid in one installment. The borrower has to pay markup on the amount borrowed.

Cash credit is favorite loan for large commercial & industrial concern.

BY OVERDRAFT

This the most common type of bank lending. When a borrower requires temporary

accommodation, ABL allows its customer to withdraw an excess of the balance form

their account which the borrowing customers have in credit and thus called overdraft.

This facility is given to regular reliable & well established customer. When it is against

collateral securities, it is called “Secured Overdraft” & when borrowing customer cannot

offer any collateral security except his personal security then the accommodation is

called “Clean Overdraft”.

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Types of finance

Short Term Finance

Allied Bank Ltd. receives the saving of the people and lends it for short term to its

customers. Short-term finance is generally given for a period of one year or less in

duration.

Medium Term Finance

o The duration range of the intermediate term finance is from one year to three years. It

is also called term loan. Intermediate term finance is usually given for the expansion of

an existing business or for the purchase of new equipment’s.

Long Term Finance

This type of finance is required for the period of more than five years. Long term finance

is generally given for the compilation of big projects, for the construction of building and for the

purchase of machineries.

Producer of Applying for Loan

Any customer who applies for loan should have an account (usually current account) with

ABL branch concerned. That account must be in running position. When approval from head

office is given, branch gives tern & condition to the party. Bank does not advance 100% loan

against a security, rather the profit margin is different in different type of loan.

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1.4.4 Remittances Department

Another important department in ABL Khanewal road Branch is Remittances

Department. The remittances department transfers the funds from one bank to other bank and

from one place to another place.

In remittances department the collection take place. The ABL made payment of only open

cheques on the counter and prohibits the payment of crossed cheques. ABL transfers money

from one place to another by the following means:

Pay Order

Pay order is the most convenient simple and secure way of transfer of money. It is

issued by, drawn upon and payable by the same branch of the bank. It is neither

transferable nor negotiable and as such it is payable to the payee named there in. The

following are the parties to a pay order.

Purchaser is a person, firm, company or local authority.

Issuing/paying branch is one which issues/pays on presentation.

Payee is a person named there in.

Demand Draft

Demand Draft is another way of transfer of money from one bank to another bank.

Unlike pay order, a form is required to be filled for the issuance of the demand draft in

which necessary particulars about the beneficiary and sender are given.

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The following are the main essential of draft:

It is a Negotiable Instrument.

Filling a form and depositing the amount written on it prepare 2} Draft.

It is a written order to

Its branches or to another bank to pay the stated amount on draft.

1.4.5 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

An individual who has account in the Bank can deposit money in his account. For deposit

of the money the individual has to fill the deposit slip in which the account holder writes

his name, Account number, amount of the money both in figures and in words.

After filling the deposit slip the Cash amount along with the deposit slip is submitted with the

cashier. The cashier collects the cash and counts it and after verification the cashier stamps the

deposit slip. One part of the deposit slip is given back to the customer and the other part of the

deposit slip remains with the bank for the record purposes

The cashier also record the deposits made by the customers in credit sheets daily. The deposits

of all customers of the bank are controlled by mean of ledger account. Every customer has its

own ledger account and has separate ledger cards in which his / her total record is kept.

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Payments

The procedure of clearance of a cheque or payments is as following. First of all the

customer presents his cheque to the cashier. The cashier records the account number

and the amount, which is to be drawn. Then the cashier check the cheque number in

the computer for the verification whether the account holder has such amount in his

account which he is demanding or not. If the computer passes the cheque, the Passing

officer signs the cheque and sent it to the cash counter then cashier pays the written

amount to the customer and then in the end cashier records the amount paid in

computer.

1.4.6 Clearing Department

In clearing process, if the account holder of ABL receives the cheque of other bank like

City Bank, Habib Bank Limited etc, and he submits it in ABL branch to be cashed. At the same

time the clearing process starts. First the bank name. Cheque number and the amount are written

in the register. After this three kind 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.

Some cheques are local and some are outstation. 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 cities, like Karachi, Lahore, Rawalpindi, Multan, and Faisalabad. The cheque of inter city

is send through N.I.F.T. And where, the N.I.F.T service is not available so the cheque is sent

through T.C.S.

The clearance of cheque is informed through advice. Some cheque is not passed so they should

return so Rs. 100 is deducted and if the cheque is intercity then the postage charges is deducted.

For this purpose the Debit & Credit voucher is used.

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OUT WARD BILL FOR COLLECTION

OBC means the cheque of other banks. When they sent OBC the OBC is credit & OBR is

debited and the advice is made on that time, one copy is remain in the bank and the other copy is

sent to the related branch. When they realized the opposite entry is made. It is entered in the

OBC register. The income A\c commission is credited, and postage

1.5 Scope of Organization

To get acquaintance to the banking operations.

To know what sort of changes IT brings in managerial activities.

To see the application of our Professional studies especially.

Specific purpose of the organization includes.

A partial fulfillment as a requirement for the completion of MBA degree in Banking and Finance

Sector.

To objectively observe the operations of Allied Bank of Ltd in general

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1.6 Organization Structure

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President

Senior Vice President

Vice President

Executive Vice president

Regional General Manager

Branch Manager

Senior Executive

1.7 Products & services provided by the organization

The bank provides its customer various products & services, to cater there need of investments

and other social or business requirements. These Product & Services offered by the bank are as

follows:

Personal Banking

Under Personal Banking, ABL offers: Everyday Accounts, Lifestyle Banking, Savings & Term

Deposits, Credit & Debit Cards, Domestic Remittance, , and e-Banking Services.

Business Banking

Under Business Banking, ABL offers: Corporate & Investment Banking, Transaction & Business

Accounts, and Home Remittances to Pakistan, Cash Management Solutions, Trade Services,

SME Financing, and Agriculture Financing.

Islamic Banking

Allied Bank has established its Islamic banking group to offer a diverse range of Deposit and

Investment related accounts ensuring Shariah compliance.

Other Services

Allied Bank's other services include: Extended Hours Banking, Online Banking, Safe Deposit

Lockers, Utility Bills Payments, Allied Phone Banking, and Customer Support.

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Chapter No 2:

2.1 Department of organization as Internee I worked.

As I am working in ALLIED Bank it gave me some practical knowledge about the operations of

a bank. In the following I have narrated my experience and some working activities which

I observed during internship.

i. NO OF EMPLOYEES 2012 5,400

2013 9,600

2014 10,000

Starting and ending dates of my internship:I have done my internship from 09th November 2015 and the end date is 28 th December 2015.

The time spam of my Internship was eight weeks.

Accounts Opening Department:

A/C Opening Officer: Mrs Mehwish Ahmad khan helps me to learn about this department in my

internship.

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Grooming in Organization

Types of Account:2.1.1 Current Account

This account is suitable for customers looking for a simple bank account for day to day

transactions. With Allied Bank’s Current Account, you get all the usual advantages and features

of a regular current account for all your daily transactions, frequent payments and flow of funds.

2.1.2 Allied Basic Banking Account

This account is suitable for customers looking to avoid minimum balance requirements and

operate a simple bank account for limited set of transactions.

A non-remunerative PKR checking account that gives you the support you need to manage your

bank account in a simple and hassle-free way

2.1.3 Joint Account

It may be current deposit or profit and loss sharing account. It can be opened by 2 to 4 persons. If

more than 4 people want to open joint account then they can open only current account.

2.1.4 Illiterate Account

For the illiterate customer, an illiterate account is maintained. For this purpose a thumb

impression and a recent photograph of the customer is required.

2.1.5 Minor Account

A guardian operates it on behalf of a minor. When the minor attain maturity then he can operate

it by himself.

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2.1.6 Staff Account

Staff account is maintained for the employees of the ALLIED BANK (non-clerical, clerical,

officer, executives) salaried of the staff are credited to their account.

2.1.7 Public or Private Limited Company Account

This account may be opened in the name of a public or a private limited company. For opening a

public or private limited company account two documents are essential.

Articles of Association of the Company

Permutation of the Board of Directors

Procedure of opening account:

Account opening Form

An account opening form contains the following:

S.S card

Know your customer Page

Term and condition page

Cheque Book request

ATM card request Form

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Clearing:

The process by which cheques exchanged between the collecting and paying bank and the

relating financial settlements is called clearing. This facility is provided by the State Bank of

Pakistan for offsetting of cross obligations between different banks.

The clearing process majority involves receiving the cheques and making payments. This

process can be inward or outward.

Inward Clearing:

When cheques, drafts etc. of our branch presented to us for clearing by the SBP. Cheque

to be honored by bank.

Outward Clearing:

The cheques of other banks, which the account holder deposit in their accounts is sends

for collection

Types of Clearing:

i. Local Clearing:

It is within city.

It has no charges

ii. Someday clearing:

Cheque must be more than 1 lac.

It has 500 rupees charges.

iii. Intercity clearing

3 days duration is maintained.

It has 400 rupees charges.

iv. OBC clearing (Outward Bills for Collection)

In it no NIFT is involved.

It also has 3 days duration.

32

Remittances

Allied Express

The Allied Express service is a state-of-the-art remittance processing service that ensures the

instant and secure transfer of your funds to nearly every corner of Pakistan.

No charges applied to Remitters or Beneficiaries

No hidden charges

No deductions from your remitted amounts

Extremely competitive exchange rates

The remittance amount can be collected in cash from any Allied Bank branch or it can be sent to

a bank account, with any bank in Pakistan.

Features & Benefits of Allied Express

Allied Express Account is an easy and hassle free account for the Home Remittance Benefices.

Customers may enjoy a plethora of benefits, with a complete peace of mind.

For the Cash Pickup service, no bank account is required. Beneficiaries can collect their

amounts, from any ABL branch in Pakistan, by simply bringing along their Original

CNIC and the unique Remittance Reference Number

Send up to a maximum of Pak Rupees 5 lacs per transaction

Bank will send a free SMS to the Beneficiary informing them that a Remittance has

arrived and ready for collection. To avail this service, simply provide the beneficiary’s

mobile number when sending the remittance

Allied Bank offers Extended Banking Hours, at select locations, allowing beneficiaries

to collect cash till late in the evening and on Saturdays.

33

Extended hours banking

Monday to Friday

9.00 am to 8.00 p.m.

Saturday

11.00am to 8.00pm

One can send funds directly to an ABL bank account through Allied Express Account Service

Credit to Beneficiary Account within an hour

SMS Notification of Remittance Credit to Account (if service is activated by the account

holder)

Funds can be transferred to any account maintained with any bank in Pakistan

The funds are credited to the Beneficiary Account within 24 hours of receipt

Accounts Department:

Accounts Department is an important department of a bank as it is concerned with:

Revenue

Expenses

Assets

Liabilities

These are the pillars of banking business. IBS is the In charge of this department, and Sir Sabtain

helps him, all the vouchers (cheques) including cash received, cash paid, cash online transferred

34

to other branches or other banks and vice versa that are posted during one day before are sent to

the Account Department the next day.

Summary of activities performed by Accounts Department:

To check the daily activity

To sort and arrange the daily vouchers

To arrange the binding of daily vouchers on weekly basis

To keep the vouchers in safe custody

To prepare the daily branch expense vouchers and maintain the expense register

Proper record maintenance

Preparation of daily, weekly, monthly, and annual statement

Timely and accurate checking of activity

Monthly account closing

I also performed sorting of daily vouchers in the bank.

2.2 My projects and responsibilities as Internee: My responsibilities as intern were:

Entries of debit and credit transactions

Sorting and rechecking of vouchers

Handling remittances

Account opening

Manual form filling of call deposit receipts

Entry of ATM cards dispatched and new issued.

Informing customers about their account status.

Clearing of intercity and local cheques.

35

2.3 Personal learning objectives:

Setting objectives is a technique for helping to build a framework for internship learning

experience. It can provide a sense of direction and purpose; serve as a standard against which to

measure progress.

Classroom Theory

The concepts I have read about in textbooks applied in practice? That was my first

objective.

Skill Development

Some skills I may have the chance to develop include: operating office or computer

equipment; handling a variety of situations simultaneously; organizing or analyzing data,

records, writing, and speaking abilities.

Creativity

Doing things a new way and finding new things to do.

Problem Solving

Taking apart some existing problem and finding a solution

Personal Improvement

Developing personal habits or a social skill to deal better with work situations

36

2.4 What I learnt in organization as Intern:

Some of the things that I observed in Bank and I learnt that these key things are very

important to be successful.

1. Patience

A successful career in finance is no longer all about making the most amount of money in the

shortest amount of time. It requires patience. The onset of tough regulation and long vesting

periods requires patience, strategic adroitness and most of all a calm, disciplined disposition.

2. Morality 

Today’s senior bankers are more moral than senior staff in other industries. 

3. Resilience 

Banking is still a hard industry to work in. If one wants to progress through the ranks, one will

still need more resilience than the next person.

4. Empathy 

Getting to the top in banking is also all about empathy. Banks are spending a lot more time

educating potential leaders about the impacts of their actions on those around them. Leading in a

bank is no longer about being bossy and aggressive; it’s about empowering other people,

bringing them on, coaching own team.

5. Collaboration

37

Now a days Banking industry wants people who are able to give their own ideas, to back them

up with reasoned opinions and to listen and accept other people’s views in a considered way.

Collaboration is important in banking

2.5 Application of class room learning in organization:

“To know, is to know that you know nothing, that is the meaning of true knowledge” rightly said

by Socrates. Learning itself has a very vast meaning and is directly related to different ways of

acquiring knowledge. Practical knowledge and theoretical knowledge both are important phases

of learning. Perfect combination of both practical and theoretical methods is necessary for

holistic learning.

 Theoretical knowledge is the base of doing anything practically. Anything done practically

without the theoretical knowledge will be dangerous sometime.

Good communication skills were taught. It proves so helpful during internship because

effective communication causes productivity to increase, errors to decrease and operations

to run smoother.

Time management was taught to each student of class from very first day. The actual

benefits of it are solely realized when entered in practical experience during internship.

Time management is about more than just making schedules. It's also about eliminating

or even pre-empting distractions. This can lead to better communication between co-

workers.

Great time management is the lynchpin of reputation at work. Co-workers see how I

manage my time well as consistent and dependable. Few co-workers question whether I

am going to show up on time and managers may see me as someone who takes her job

seriously.

38

2.6 Comparison of practical experience of internship and teaching

methods

“He tried to read an elementary economics text; it bored him past endurance, it was like

listening to somebody interminably recounting a long and stupid dream. He could not

force himself to understand how banks functioned and so forth, because all the operations

of capitalism were as meaningless to him as the rites of a primitive religion, as barbaric,

as elaborate, and as unnecessary.

Class Room Teachings Practical Experience

One fined a teacher as mentor. No is concerned about Intern.

Things are discussed are précised. Banking is very advance than in

books.

Old manual Banking system is

explained.

Most of the Banks are now advanced

with I.T technology.

Every department is controlled and

checked by Branch Manager.

Every department has its own head

answerable to them.

39

2.7 Improvement in knowledge and skills

Internship is truly on-the-job training. In the job market, an internship is almost mandatory. .For MBA

students, a summer banking internship is extremely important when it comes time for full-time

recruiting.  

Gain Valuable Work Experience

An internship provides the opportunity to gain hands on work experience that just can’t get in

the classroom.

Gain Confidence

Getting experience is a great way to build confidence. Internship provides opportunity to gain

more experience.

Experience of teamwork and development of interpersonal skills

Ability to work in a team and colleagues around is essential in every type of job.

An internship allow to gain experience of this first hand and develop one’s own teamwork and

interpersonal skills which will make a more rounded and attractive candidate for any employer.

40

Chapter No. 3

3.1 Ratio Analysis

Net Profit Margin Ratio

Ratio Formula:

Net Profit after taxation x 100

Net Sales

Calculation:

2014 2013 2012=15015 × 100

79737

=14643 × 100

63825

=11641× 100

64672

=19% = 23% =18%*Amount in Millions

Interpretation of Ratio:

This ratio indicates the percentage of net profit margin the bank in year 2013 shows us the profit

margin the efficiency of the bank is in safety as compared to year 2012 and 2014

The risk extending as actual profit of the bank getting low predicts the decline of

sales or low margin of safety but the overall the profit is growing up from 18% to

23 in 2012 to 2013

The bank performance as calculated in year 2013is better than 2012 because of its

turnover.41

Analysis

Gross Spread Ratio

Ratio Formula:

Net Markup Income x 100

Gross Markup Income

Calculation:

2014 2013 2012=28186 × 100

40922

=21670× 100

31273

=18361× 100

32155

=68.9% =69.2% =57.1%

Interpretation of Ratio:

This ratio indicates the percentage of net mark-up / interest income over gross mark-up income

the bank in year 2014 shows us the net mark-up of the bank is in standard position.

The net mark-up income depicts that in year 2013 the higher percentage of mark-

up established as the 69.2% that of 57.1% in the year 2012 financial analysis from

unconsolidated statement.

The net mark-up income is maximized at 2013 while minimized in 2012.

The bank gross spread ratio as calculated in year 2013 is better than 2012 because

of its gross income.

42

Non-Interest Income to Total Income Ratio

Ratio Formula:

Non-Interest Income x 100

Total Income

Calculation

2014 2013 2012= 12736x 100

22202

=9603 x 100

14761

=13794x 100

15836

=57.3% =65.0% =87.1%

Interpretation of Ratio:

This ratio indicates the percentage of non-interest income to total income the bank in year 2012

shows us the net mark-up of the bank is in standard position.

The net mark-up income depicts that in year 2014 the higher percentage of mark-

up established as the 87.1% that of 57.3% in the year 2012 financial analysis from

unconsolidated statement.

The income is maximized at 2012 while minimized in 2013 and 2014.

43

Return on Assets (ROA)

Ratio Formula:

EBIT x 100

Total Assets

Calculation:

2014 2013 2012

= 61017x 100

842269

= 47313x 100

734196

= 46978x 100

633705

=7.2% =6.4% =7.3%

Interpretation of Ratio:

This ratio indicates the percentage of non ROA of bank in year 2014 shows.

The return on assets depicts that in year 2014 the higher percentage of assets

established as the 7.2% that of 16.4 in the year 2013 financial analysis from un-

consolidated statement.

The income is maximized at 2014 while minimized in 2013.

The Return on assets ratio as calculated in year 2012 is better than 20114because

of its total assets.

44

Du Pont Return on Assets Ratio

Ratio Formula:

Net Markup / Interest Income x 100

Total Assets

Calculation:

2014 2013 2012=28186

842269

=21670

734196

=18361

633705

=3.35% =2.95% =2.89%

Interpretation of Ratio:

This ratio indicates the percentage of non ROA of bank in year 2014 shows.

The Du Pont on assets depicts that in year 2014 the higher percentage of assets

established as the 3.35% that of 2.89% in the year 2012 financial analysis from

un-consolidated statement.

The Du Pont on assets is maximized at 2014while minimized in 2013 and 2012.

The Du Pont on assets ratio as calculated in year 2014 is better than 2012 because

of its total assets.

45

Return on Total Equity (ROE)

Ratio Formula:

Net Markup / Interest Income x 100

Total Equity

Calculation:

2014 2013 2012=28186 × 100

80890

=21670 × 100

66198

=18361 × 100

52038

=34.84% =32.73% =35.28%

Interpretation of Ratio:

This ratio indicates the percentage of ROE of bank in year 2010 shows.

The ROE depicts that in year 2012 the higher percentage of equity including share

capital, reserves and un-appropriated profit established as the 35.28% that of

34.84% in the year 2014 financial analysis from un-consolidated statement.

The ROE is maximized at 2012 slightly difference in 2014.

The ROE ratio as calculated in year 2012 is better than 2014 because of its total

equity.

46

Debt Ratio

Ratio Formula:

Total Liabilities

Total Assets

Calculation:

2014 2013 2012

=761379

842269

=667998

734196

= 581667

633705

=0.90 times =0.90 times =0.91 times

Interpretation of Ratio:

This ratio indicates the percentage of debt ratio of bank in year 2014 shows.

The debt ratio depicts that in year 2012 the higher established as the 0.91 times

rather than in year 2013 and 2014 based on un-consolidated financial statements.

The debt ratio is maximized at 2012 while same in 2013 and 2014.

The Debt ratio as calculated in year 2012 is better than 2014 because of its total

assets effect.

47

Debt / Equity Ratio

Ratio Formula:

Total Liabilities

Equity

Calculation:

2014 2013 2012

=761379

80890

=667998

66198

=581667

52038

=9.41 times =10.0 times =11.17 times

Interpretation of Ratio:

This ratio indicates the percentage of debt to equity ratio of bank shows.

The Debt to equity ratio depicts that in year 2012 the higher established as the 11.17

times rather than in year 2013 and 2014 based on un-consolidated financial statements.

The Debt to equity ratio is maximized at 2012 somewhat variation in 2013 and 2014.

The Debt to equity ratio as calculated in year 2012 is better than 2014 because of its total

equity effect.

48

Times Interest Earned Ratio

Ratio Formula:

Earnings before interest and taxes (EBIT)

Interest Expense

Calculation:

2014 2013 2012

=61017

38815

=47313

32552

=46978

31142

1.57 times 1.45 times 1.50 times

Interpretation of Ratio:

This ratio indicates the percentage of times interest earned ratio of bank shows.

The times interest earned ratio depicts that in year 2014 the higher established as

the 1.57 times rather than in year 2013 and 2012 based on un-consolidated

financial statements.

The times interest earned ratio is maximized at 2014 somewhat variation in 2013

and 2012.

The Debt to equity ratio as calculated in year 2014 is better than 2012 because of

its interest expense.

49

Advances / Deposits Ratio

Ratio Formula:

Advances x 100

Deposits

Calculation:

2014 2013 2012

=325825 x 100

667878

=285376 x 100

608412

=288889 x 100

514707

=48.78% =46.90 % =56.12%

Interpretation of Ratio

As ratio is going higher and higher as compare to previous years which explains that. The

advances to deposits ratio in its operation in Year 2013 was slow; however it is increases in

2014.

50

Horizontal Analysis

This technique is also known as comparative analysis. It is conducted by setting consecutive

balance sheet, income statement or statement of cash flow side-by-side and reviewing changes in

individual categories on a year-to-year or multiyear basis. The most important item revealed by

comparative financial statement analysis is trend. A comparison of statements over several years

reveals direction, speed and extent of a trend(s). The horizontal financial statements analysis is

done by restating amount of each item or group of items as a percentage. Such percentages are

calculated by selecting a base year and assign a weight of 100 to the amount of each item in the

base year statement. Thereafter, the amounts of similar items or groups of items in prior or

subsequent financial statements are expressed as a percentage of the base year amount. The

resulting figures are called index numbers or trend ratios.

Formula = Current Year amount / Base Year amount * 100

Horizontal analysis, whilst simple to execute and useful to a certain extent, has its limitations.

These limitations include:

Being highly dependent on the selection of base year and the period under examination in

the financial model.

Horizontal analysis provides little insight into why the trend occurred in a financial

model.

Horizontal analysis does not provide insight into whether the trend in the financial model

results was superior/inferior to some benchmark.

Horizontal analysis does not address the challenge of negative numbers.

51

Vertical Analysis

When using vertical analysis, the analyst calculates each item on a single financial statement as a

percentage of a total. The term vertical analysis applies because each year's figures are listed

vertically on a financial statement. The total used by the analyst on the income statement is net

sales revenue, while on the balance sheet it is total assets. This approach to financial statement

analysis, also known as component percentages, produces common-size financial statements.

Common-size balance sheets and income statements can be more easily compared, whether

across the years for a single company or across different companies.

Vertical analysis is a technique for identifying relationship between items in the same financial

statement by expressing all amounts as the percentage of the total amount taken as 100. In a

balance sheet, for example, cash and other assets are shown as a percentage of the total assets

and, in an income statement, each expense is shown as a percentage of the sales revenue.

In Vertical analysis, various components of the financial statements are standardized by

expressing them as a percentage of some bases.

Examples of common-sized statements include:

Components of the balance sheet expressed as a percentage of total assets.

Components of the income statement expressed as a percentage of sales or revenue.

52

3.2 SWOT analysis

SWOT analysis is an acronym that stands for Strengths, Weaknesses, Opportunity and Threats.

This is a careful evaluation of an organization’s strengths to avail an opportunity by overcoming

its weaknesses and phasing out all the threats to its survival in order to grow and survive.

Strengths

This branch have , more than 7 telephone connections, which makes communication

easier with different branches

The branch is linked through an online network of 1000 plus BRANCHES, thus enabling

them to serve customer in better way.

This branch is provided with latest computer with latest technology which increases the

speed of computer work.

The branch is situated in the commercial hub of MULTAN near the Dawoo Terminal.

This location provides a competitive edge to the Branch.

The branch is situated in commercial area were business activities perform greater as

compare to reside

The Branch has the most experienced and the least experienced staff, which is a good

combination of experienced heads and exuberance of youth.

.

Weaknesses

The Branch has a good staff combination on the basis of experience, but their training

capabilities are not up to the requirements of the fast changing banking environment.

The customer’s Long-term contacts are not maintained with customers.

The technical training of the staff is negligible e.g. in case of the absence of computer there is no

alternate trained personal who can record the daily transactions.

The organization is very much mechanistic and provides no flexibility to encourage creativity.53

The lower staff is non cooperative as compared the lower staff of other branches.

The control of manager is not effective.

The discretionary powers of manger are very low to offer more incentives and value added

services to its customers.

There is a lack of commitment and professionalism on part of the employees. The staff is always

in a hurry to leave the bank as soon as possible.

The organizational culture is not cooperative

Nepotism was observed on part of the manger as well as the top management towards some

staff members.

The branch lacks some physical facilities such as clean washrooms which can affect employee’s

performance

Foreign currency accounts are not entertained. The main reason for these negative responses

that the staff is not trained in dealing foreign currency accounts..

Some shortcomings on part of Allied Bank of Pakistan, which affects the operations of the bank:

Opportunities

A considerable portion of the labor force of the area is serving overseas. Their families

can be encouraged to use ABL as channel for remittances.

The Internet facility in the area provides an opportunity to ABL to get Online.

The Bank has the basic infrastructure, which can facilitate the online process

The location of the ABL, khanewal road branch itself provides an opportunity to ABL to

get more and less cost deposits.

The group from its survey and analysis of IT companies have found out that there are

many companies which are not satisfied with its current bank, so Khanewal road with its

superior service quality and long working hours can capture those customers

54

Threats

The biggest threat to the operational success of the branch is the better competitor’s

services. Many private sector banks are offering higher rates of return to customers than

Allied Bank of Pakistan.

Cannibalization of profits is yet another threat to the success of Bank KHANEWAL Road branch.

The branches of Allied Bank are located very close to the branch. All these branches are taking

away each other’s customers.

One of the biggest threat to the ABL, khanewal road branch is the increasing rate of dissatisfies

customers. Most of these customers were observed to be dissatisfied with the delays in their

servicing.

The greatest threats to the performance of ABL, Khanewal road branch are the decreasing

morale of employees. They feel that they are not provided with bonuses. They are not given

proper attention to have a say in the annual meetings.

High-pressure interest groups are developing which poses a constant threat to Allied Bank.

3.4 Suggestions for Concern Department

Allied Bank was first Muslim bank to be established on Pakistan soil, today being one of the

largest and prominent banks of Pakistan. Allied Bank is providing its customers with value,

quality and distinctive level of service and high ethical standards in all dealings with them. But

there is always need for improvement and need to identify any deficiencies if they are present.

Some of these identified by me are stated below: 

As compared to other competitions of Allied Bank its deposits and advances

percentage is less so there is a desperate need that to adopt such policies that will

help to increase these deposits and advances attract more and more customers by

winning their confidence. 

55

During some previous year such schemes and policies are launched by Allied

Bank which is not needed by customers or perhaps these are not marketed

properly and launched without any market research. That is why they got failure.

So measures should be taken by top management to organize the marketing

department. There should proper research before launching any product and

proper marketing should be done for it to get success. 

There is a desperate need for Human Resource Development by hiring

professionals and competent persons and training the existing force. It will

contribute a lot more in progress of bank. 

Bank has not yet consumer project and commercial banking it is advised that bank

should established 3 types of banking under specialized heads. These are 

Project financing.

Consumer financing.

Commercial financing.

All these three segments should be run separately by the competent persons to

enhance performance and quality of work.

3.5 Innovations:

Bank has successfully achieved the milestone and milestone and migrated its entire operations to

state of the art T-24 core banking solution. It is a Swiss based technology. The core banking

solution has enabled the bank to launch products best suited to customers’ needs strengthen

control environment and assisted in enha

nced market positioning with improved brand image.

It is now launching a new ATM machine in a new format that a customer can withdraw 5 lac in

single transaction and more can be withdrawn in a single day.

Bank has surpassed the milestone of opening the 1000th branch. In addition, internet banking,

890 ATMs and mobile banking played a pivotal role in establishing bank as a first choice bank

for its customers.

56

3.6 Recommendations as manager:

Performance Audit should be done.

Motivation of employees is very necessary. An efficient working employee

should be appreciated.

The accountability of employees should be increased if one is behind its

performance bench mark it should not be neglected as senior person of branch it

should be evaluate.

The attitude of the staff should be friendly of all the customers. The customers

should be taken to the concerned person or guided friendly if the concerned

person is not available. The attitude of “that’s not my Job” should not exist

anymore.

Personal contacts with the customers can hold in providing information to

customers.

3.7 Final Conclusion:

Allied bank was first Muslim bank to be established on Pakistan soil in December 1942 and

serving towards the financial and economic progress of the country. Allied Bank is the one of the

largest and prominent bank of Pakistan. Allied Bank is providing with its customers with value,

quality and distinctive level of service and high ethical standards in all dealings with them. Bank

performance is well despite solid growth across all business lines. Together with sustained focus

on serving customers through integrated banking solutions, evolving risk management

framework, consistent investment in technology and optimal management of operational

efficiencies to bring about cost rationalization has helped deliver consistent performance. It was

really an excellent experience for me as it polishes my analytical skills. I learn how to deal with

customers and your behavior must be cooperative towards customer.

Now I think that I can work more effectively & efficiently in a group/ team with the ability to

manage all levels.

57

References Annual Reports of the Allied bank Ltd for the year 2010, 2011, 2012, 2013, 2014.

Previous reports on Allied bank Ltd.

Existing documents of Allied bank Ltd.

Annual report of the State Bank of Pakistan.

James c. Van Horne, John M. Wachowicz, Jr. “chapter # 6 Financial Statement

Analysis”, Financial Management 10th Edition, 121-157.

Richards, Verlyn D, and Eugene J. Laughlin. “A Cash Conversion Cycle Approach to

Liquidity Analysis” Financial Management 9, 32-38.

Lawrence J. Gitman “chapter # 3 Financial Statements, Taxes, Depriaciation and Cash

Flow” Principles of Managerial Finance 9th Edition, 78-84.

Employ handbook of Allied bank Ltd.

58

Annexure

Horizontal Analysis of Balance Sheet

Horizontal Analysis (%)

ASSETS     2010 2011 2012 2013 2014

Cash     100 75 83 100 113

Balances with other banks 100 62 82 75 77

Lending’s to fin. institutions 100 155 219 204 163

Investments   100 105 94 141 114

Advances   100 122 143 154 187

Operating fixed assets 100 103 105 282 263

Other assets   100 125 194 162 233

Total

Assets 100 104 117 138 148

LIABILITIES   2010 2011 2012 2013 2014

Share Capital   100 120 144 166 182

Reserves   100 125 128 146 184

Unappropriated profit 100 182 350 495 573

Surplus On Reval. of assets 100 179 135 221 99

59

Bills payable   100 24 147 98 142

Borrowings   100 79 106 98 365

Deposits and other accounts 100 100 108 127 134

Liabilities against assets 100 97 78 197 148

Deferred tax liabilities net 100 15291 8179 17467 Nil

Other liabilities   100 108 115 134 172

Total Liabilities   100 104 117 138 133

Horizontal Analysis of Income Statement

2010 2011 2012 2013 2014

Markup/return/interest earned 100 161 211 241 291

Markup/return/interest expensed 100 157 213 258 364

Net markup/interest income 100 162 210 234 258

Provisions against non-performing advances 100 161 203 312 699

provision for/(reversal of) diminution in the value    

of investments 100 -132 -382 -22 201

provision against off balance sheet obligations 100 Nil Nil Nil 28

bad debts written off directly 100 70 16 122 Nil

100 127 136 270 628

Net markup/interest income after provisions 100 167 220 229 206

NON MARKUP/ INTEREST

INCOME

60

Fee, Commission & brokerage income

100 97 121 133 155

Dividend income 100 135 227 256 226

Income form dealing in foreign currencies 100 119 132 103 393

Gain on sale & redemption of securities-net 100 2,872 2,459 4,924 831

Investments classified as held for trading Nil Nil Nil Nil Nil

Other income 100 20 72 17 142

Total non-markup/ Interest income 100 113 146 163 198

Total income ( Interest + non-Interest) 100 146 191 203 203

NON MARKUP/ INTERSET

EXPENSES

Administration expenses 100 126 151 160 205

Other provisions written off 100 615 -54 521 2,318

Other charges 100 763 2,515 207 7,042

Total non markup/ Interest expenses 100 129 153 161 219

PROFIT BEFORE

TAXATION 100 159 220 234 192

Taxation Current 100 145 176 168 238

Prior years 100 -130 63 46 Nil

Deferred 100 -1,852 -394 -2,058 26,831

100 110 161 156 130

PROFIT AFTER

TAXATION 100 205 275 307 250

Unappropriated Profit brought forward 100 155 329 544 769

Transfer from surplus on revaluation of fixed    

assets on account of incremental depreciation 100 95 90 86 287

Profit available for appropriation 100 181 300 422 502

61

Vertical Analysis of Balance Sheet

          Vertical Analysis (%)  

ASSETS     2010 2011 2012 2013 2014

Cash     17.07 12.32 12.19 12.45 13.02

Balances with other banks 9.00 5.37 6.30 4.92 4.69

Lending’s to fin. institutions 1.90 2.82 3.57 2.82 2.09

Investments   27.00 27.17 21.69 27.66 20.88

Advances   39.91 46.53 49.00 44.70 50.50

Operating fixed assets 1.66 1.64 1.50 3.40 2.96

Other assets   3.46 4.14 5.75 4.07 5.45

Total     100 100 100 100 100

LIABILITIES   2010 2011 2012 2013 2014

Share Capital   0.89 1.02 1.10 1.07 1.09

Reserves   1.95 2.34 2.15 2.07 2.43

Unappropriated profit 1.66 2.89 4.97 5.95 6.41

Surplus On Reval.of assets 3.86 6.61 4.48 6.18 2.57

62

Bills payable   1.30 0.30 1.64 0.93 1.25

Borrowings   2.00 1.52 1.81 1.43 4.94

Deposits and other accounts 84.15 80.22 77.79 77.66 76.42

Liabilities against assets 0.0031 0.0029 0.0021 0.0044 0.0030

subject to finance lease          

Deferred tax liabilities net 0.01 0.77 0.37 0.67 Nil

Other liabilities   4.17 4.32 4.12 4.05 4.85

Total     100 100 100 100 100

Vertical Analysis of Income Statement

2010 2011 2012 2013 2014

Markup/return/interest earned 100 110 110 119 143

Markup/return/interest expensed 31 34 35 40 56

Net markup/interest income 69 77 75 79 87

Provisions against non-performing advances 7 8 8 11 25

provision for/(reversal of) diminution in the value    

of investments 1 -1 -2 0 1

63

provision against off balance sheet obligations 0 Nil Nil Nil 0

bad debts written off directly 0 0 0 0 Nil

8 7 6 11 26

Net markup/interest income after provisions 60 69 70 68 61

NON MARKUP/ INTEREST

INCOME

Fee, Commission & brokerage income 24 16 15 16 19

Dividend income 6 6 7 8 7

Income form dealing in foreign currencies 5 4 3 2 9

Gain on sale & redemption of securities-net 0 4 3 6 1

Investments classified as held for trading Nil 0 0 0 0

Other income 4 1 2 0 3

Total non-markup/ Interest income 40 31 30 32 39

Total income ( Interest + non-Interest) 100 100 100 100 100

NON MARKUP/ INTERSET

EXPENSES

Administration expenses 42 37 34 33 43

Other provisions written off

0 2 0 1 5

Other charges 0 0 1 0 1

Total non markup/ Interest expenses 43 38 34 34 46

PROFIT BEFORE

TAXATION 57 62 66 66 54

Taxation Current 24 23 22 20 28

Prior years 4 -4 1 1 Nil

Deferred 0 1 0 1 -10

28 21 23 21 18

PROFIT AFTER

TAXATION 30 42 43 45 36

Unappropriated Profit brought forward 28 30 48 76 107

Transfer from surplus on revaluation of fixed    

64

assets on account of incremental depreciation 0 0 0 0 0

Profit available for appropriation 58 72 91 120 143

65