Askari bank limited_internship_report_by_abdul_razzaq

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Transcript of Askari bank limited_internship_report_by_abdul_razzaq

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ALLAMA IQBAL OPEN UNIVERSITY

Department of Business Administration

INTERNSHIP REPORT

ASKARI COMMERCIAL BANK LIMITED

Specialization: MBA Banking & Finance

Submitted to: Chairman

Department of Business Administration

Submitted by:

Name: Abdul Razzaq Roll #. W581438 Registration #. Addres. ………………….. Contact #. 0321-4033614

Date of submission:

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Acknowledgment

In the Name of

ALLAH The Most Gracious, The Most Merciful

But His command, when He intendeth a thing, is only that he saith unto it: Be! and it is. (Ya­seen Verse 086)

All praise to ALMIGHTY ALLAH alone, the Omnipresent and the most

Merciful and compassionate. The words are bound, knowledge is limited

and time is short to express His dignity.

am varying thankful to ALLAH who created me and gave countless

blessing. He is the only Master of the universe and the Day of Judgment.

First I thank my parents for their continuous support in MBA Programme. I

also would like to thank all my teachers who guide me in the right

direction, they taught me how to ask questions and express my ideas. I am

also thankful to Sir Muhammad Azeem.

I am very thankful to the branch Manager of Askari Bank (Qurtaba Chowk

Branch) Mr. Shahid Mehmood Alvi who provided me the opportunity to

learn.

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Table of Contents

1. Objective of studying the organization ……………………………………….6 2. Over view of the Bank………………………………………………………...8 3. Brief history of the Bank ……………………………………………………..10 4. Nature of the organization ……………………………………………………12 5. Business volume ……………………………………………………………...14

(i) Investment…………………………………………………………….15 (ii) Deposits ………………………………………………………………15 (iii) Advances……………………………………………………………...16 (iv) Revenue ………………………………………………………………16

6. Organizational Structure………………………………………………………17 7. Number of employees ………………………………………………………...18 8. Products & Services …………………………………………………………..19

( I ).Corporate & Investment banking…………………………………………19 (a) Corporate Banking Division ………………………………………………20 (b) Investment Banking Division………………………………………………20 (II) Agriculture Finance ……………………………………………………….21 Services ……………………………………………………………………….22 (a) Consumer Banking Services ………………………………………………22 (b) Islamic Banking Services ……………………………………………….....22 (c) Investment Products Services……………………………………………...23

9. Structure of the Organization in term of reporting line………………………..24 (I) Management (a) Board of Director ………………………………………………………….24 (b) Audit Committee…………………………………………………………..24 (c) Country Head & Inspection Division ……………………………………..25 (d) Risk management ………………………………………………………….25 (II) Credit Administration Division & Information Security Division ………..26 (a) Special Assets management…………………………………………. …....26 (b) Credit Division……………………………………………………………..26 (III) Human Resource Division ……………………………………………….26 (IV) Commercial Banking Group ……………………………………………..27 (V) Information & Technology Department…………………………………. .27 (VI) Islamic Banking Division…………………………………………........ 28 (VII) Finance Department……………………………………………………..28 (VIII) Operation Division ……………………………………………………..28 (IX) Legal Affairs Division ………………………………………………….29 (X) Market & Strategic planning …………………………………………...29 (XI) Compliance & Data Division …………………………………………..30 (XII) Consumer Banking Services ……………………………………………30 (XIII) Corporate & Investment Banking ……………………………………...30

10. Branch Structure ………………………………………………………………31 11. Review Of the various Department……………………………………………33

(I) General Banking ………………………………………………………33 (a) Account Opening Department…………………………………………….34 (b) Function of Account Opening Department………………………………..34 (c) Importance of Introduction for Account Opening ………………………...35 (d) Inquiry about customer ……………………………………………………35 (e) Account Opening Procedure ……………………………………………...36

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(II) Types of Accounts …………………………………………………...37 (III) Remittances Department……………………………………………..38 (IV) Cash Department……………………………………………………..41 (V) Clearing Department………………....................................................44 (VI) Account Department ………………………………………………...48 (VII) Credit Department…………………………………………………...49

12. How Information generated, Recorded and Used……………………………50 13. The Role of a Manager ………………………………………………………52 14. Software used by the Bank…………………………………………………...54 15. Different Types of Reports Being produced…………………………………55

(a) Statement of Condition Report……………………………………. …….55 (b) Daily Non Financial Report ……………………………………………...56

16. Generations and Sources of Funds…………………………………………...58 17. Allocation of funds…………………………………………………………...61 18. Five Years of Balance Sheets ………………………………………………..62 19. Five Years of Income Statements …………………………………………..63 20. Ratio Analysis………………………………………………………………..64

(a) Profitability Ratio ………………………………………………………..64 (b) Loan Deposits Ratio……………………………………………………...68 (c) Activity Ratio ……………………………………………………………69 (d) Market Ratio ……………………………………………………………..71 (e) Leverage Ratio …………………………………………………………..74 (f) Interest Coverage Ratio …………………………………………. ……...76

21. Horizontal Analysis of Five Year Balance Sheet…………………………...78 22. Horizontal Analysis of Five Year of Profit And Loss Account ……………..82 23. Vertical Analysis of Five Year Balance Sheet…………………………….....85 24. Vertical Analysis of Five Year Income Statement ………………………….88 25. Organizational Analysis……………………………………………………..92 26. Future Prospects of the Organization ………………………………………94 27. Short Falls/ Weakness ……………………………………………………...95 28. Conclusion…………………………………………………………………..96 29. References…………………………………………………………………..97 30. Annexure……………………………………………………………… …...98

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OBJECTIVES OF STUDYING THE ORGANIZATION

Being a student of banking & Finance (MBA) need to know how a

bank works and how theoretical knowledge relates the practical in

the banking sector. As theoretical knowledge is not enough to run a

bank or business therefore practical has its important not for only

experience it also disclose the answers of the questions remain in the

theoretical study.

Understanding of Financial Operation is another objective to study

the organization. How working take place in the bank to handle

financial matters. Without understanding the real picture of financial

matter could not find the solution of the problems related to finance.

In order to understand the correct position of the bank financial

analysis is also my objective. Financial analysis can be done by

using various tools like Ratio analysis, Horizontal and vertical

analysis of the financial statements.

There is importance of Finance Management in the banking sector

because bank is a financial Institution how to manage the finance to

know is my objective.

What kinds of software are being used in the bank for accounting

and operational activities?

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How Information generated and recoded and its use for decision

making purpose. What kind of reports are producing in the bank for

various purposes.

To understand the organizational structure in term of reporting line:

who is report to whom and know how develop what are

responsibilities & authorities of different designations.

To identify how bank’s working divide in to various departments to

monitor all activities in the bank.

What are products lines of the bank offers to the customers…….

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OVERVIEW OF THE BANK

Askari Bank Limited Formerly known as Askari Commercial Bank

Limited. Askari Bank LTD was incorporated in Pakistan on October 9,

1999 as a Public Limited Company and listed on the Karachi, Lahore, and

Islamabad stocks exchanges. The registered office of the Bank is located at

AWT Plaza, The Mall Rawalpindi. The Bank has 200 branches (2007: 150

branches); 199 in Pakistan and Azad Jammu and Kashmir, including 18

Islamic Banking Branches, 11 sub-branches and a wholesale bank branch

in the Kingdom of Bahrain.

Banks, s principal activities are to provide lending, depository and

related financial services. Financial services include credit risk

management, foreign trade, treasury, corporate and merchant banking,

retail banking, electronic banking, credit cards, marketing and customer

services.

Bank is playing leading role in the Banking sector with broad

product lines & customer need based services. Bank is operating with 200

branches in conventional banking as well as Islamic banking moods of

financing. Bank is leading the way to the most modern and dynamic

banking in the country.

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To

,

,

.

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The Vision

To be the bank of first choice in the region

The mission

be the leading private sector Bank in Pakistan with an

international presence delivering quality services through innovative

technology and effective human  source management, in a modern and

progressive organizational culture of meritocracy maintaining high

ethical and professional standards, while providing enhance value to all

our stakeholders and contributing to society

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BRIEF HISTORY OF THE BANK

Askari Bank incorporated in October 1991, Bank commenced its

operations in April 1992, and has since expanded into nation wide with

modern technology in the banking sector. Bank connected online customers

supported with network of ATMs. Over the years, Askari Bank has proven

its strength as leading banking sector entity with ever-increasing

commitments to its customers, through strategic investment in electronic

technology. Askari Bank achieved the following firsts in Pakistani

Banking.

The first Pakistani Bank to offer online real-time banking on

country wide basis

The first Pakistani bank with nation-wide network of ATMs

The first bank in Pakistan, foreign or local, to introduce internet

banking in the country

The first bank in Pakistan, together with ABN-Amro bank, to develop

inter-bank switch for the ATMs

Askari Bank is an important in Pakistan’s financial service

industries, Bank is now leading the way to the most modern and

dynamic banking in the Pakistan.

Bank is continues success in competition. Best Retail Bank in Pakistan

award is given by the Asian banker. Bank has also received the Corporate

Excellence Award for the financial sector from the Management

Association of Pakistan (MAP) for the years 2002 and 2003. Bank has been

given “The Best Bank in Pakistan” award by Global Finance Magazine

,

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twice i.e. for the years 2001 and 2002. Best consumer Internet Bank

award by Global Finance Magazine for the 2002 and 2003.

Bank has A1+ the highest possible credit rating, for short-term

obligations, and log-term rating stand at AA+. Bank won the prestigious

“Best Presented Annual Accounts” awards from the Institute of Charter

Accountant in Pakistan (ICAP), and the institute of Cost and management

Account in Pakistan.

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NATURE OF THE ORGNIZATION

Banks, s principal activities are to provide lending, depository and

related financial services. Financial services include credit risk

management, foreign trade, treasury, corporate and merchant banking,

retail banking, electronic banking, credit cards, marketing and customer

services. Askari bank offers the following retail products to serve the

needs of the consumer market.

Askari Bank’s personal Finance-Loans schemes

ASKAR –Auto loans

Askari i-Net Banking- internet banking solutions

Askari MasterCard-credit card facility

Askari Bank’s value plus-rupee Deposit Accounts

Askari Travelers Cheques-Rupees Travelers Cheques

ASKCARD-Debt Card

ASKPOWER-Prepaid Card

Askari Bank’s Mortgage Finance-Home Loans

Askari Bank’s Business Finance-Business Loans

Smart Cash-Running Finance Facility for consumer

Askari Kissan-Agri Finance Programme

Askari Bank Limited provides corporate, retail, and commercial

banking products and services primarily in Pakistan. The company’s

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corporate financing solutions include corporate and investment banking

activities, such as services in the areas of mergers and acquisition,

underwriting, privatization, securitization, IPOs and related activities, and

secondary private placements. Its retail banking solutions include services

to small borrowers, including loans, deposits, and other transactions with

retail customers, as well as credit card business. The company’s

commercial banking activities comprise services related to project finance,

export finance, trade finance, leasing, lending, guarantees, bills of

exchange, and deposits from corporate customers. It also offers treasury

and money market services; payment and settlement services, such as

payments and collections, funds transfer, clearing, and settlement; and

locker service. The company also offers agricultural banking products and

services, including various finance products that comprise tractor finance,

live stock development finance, mechanization finance, and farm transport

finance; and range of Islamic banking products and services. As of

December 31, 2008, it operated 200 branches, including 18 Islamic

Banking branches, 11 sub-branches, and 1 wholesale bank branch in the

Kingdom of Bahrain. The company was incorporated in 1991 and is

headquartered in Rawalpindi, Pakistan.

A shared network of 2,991 online ATMs covering all major cities in

Pakistan supports the delivery channels for customer service. As at

December 31, 2008, the Bank had equity of Rs. 12.97 billion and total

assets of Rs. 206.19 billion, with 816,629 banking customers, serviced by

our 6,496 employees. Askari Investment Management Limited and Askari

Securities Limited are subsidiaries of Askari Bank engaged in managing

Mutual funds and shares brokerage, respectively

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BUSINESS VOLUME

Business volume in terms of revenue, deposits, advances, and

investments depict the Bank performance. Bank’s activities can be

evaluated with the help of business volume.

Introduction of Investment

Banks according to State Bank’s circulars (10, 20, and 14) can be

investing in various securities for profit motives. Askari Bank’s investment

securities classified as follow:

(a) Securities Held for Trading

(b) Securities Held for Maturities

(c) Securities Available for Sails.

Askari Bank Securities acquire to hold for trading with the intention

to trade by taking advantages of short-term market/interest rate

movements’ i.e. Securities Held for trading. Securities acquired and hold

up to maturities and third are present securities which don’t fall under

“Held for trading and held for maturities” falling in available for sail

categories.

In Billion Rs.

Business Volume 2004 2005 2006 2007 2008 Deposits 83.3 118.8 131.8 143 167.7 Advances 70 86 99.2 100.8 128.8 Investment 17.2 25.7 28.6 39.4 35.7 Revenues 4.7 5.5 6.6 7.1 6.4

0

5

10

15

20

25

30

35

40

45

2004 2005 2006 2007 2008

0

20

40

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80

100

120

140

160

180

2004 2005 2006 2007 2008

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Investments:

Investment from year 2004 to 2007 showing

increase trend and in 2008 investment decrease.

Because of 28 billions advances increases from

07 to 08. While growing trend from 04 to 07 is

healthy singe for organization.

Deposits:

Current, Savings and Other Deposits

Deposits increased by 17 percent to Rs. 167.68

billion as at December 31, 2008 as against Rs.

143.04 billion last year. Analysis of deposits

show a healthy growth of 52 percent in current

accounts over last Year and 32 percent in fixed

deposits, while saving deposits remained

almost unchanged. The aggregate number of

deposit accounts

Reached 611,323 at end 2008. By the end of

2008, deposits reached Rs. 167.68 billion from Rs. 143.04 billion at end

2007, an increase of 17 percent during the year. The increase in local

currency deposits was 15 percent to Rs. 141.89 billion as of December 31,

2008 from Rs. 123.51

billion as of December 31, 2007, while the foreign currency deposits

surged to Rs. 25.79 billion, increased by 32 percent over last year.

0

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2004 2005 2006 2007 2008

0

20

40

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100

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140

2004 2005 2006 2007 2008

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Advances:

Advances are also showing increasing

trend by 2004 to 2008 adding up 16 billions by

2005, 13 billions by 2006, 11.2 billions by 2007

and 24.7 billions by 2008. It is show the business

growth of the bank.

Revenues:

Mark up / Interest on advances and return

on investments are recognized on accrual basis the

pattern of growth revenues from year 2004 to 2007

is showing good pictures. While in year 2008

revenue decrease as compared to last four year

having reason of banking sector turmoil and fee

commission earning from in dealing foreign

currencies decreases. Mark-up income on

investments, however, recorded an increase of 25 percent over last year

the aggregate increase of 21 percent in total mark up income reduced

marginally to 20 percent in terms of net interest income, as the aggregate

increases in mark-up income and cost of deposits and borrowings were

almost in reciprocity.

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ORGANIZATIONAL STRUCTURE

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3

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6

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NUMBER OF EMPLOYEES

Staff strength 2005 2006 2007 2008 2009

Permanent _____ 2754 3241 3,834 4,252

Temporary /on contractual basis ____ 519 687 1,273 1,703

Daily wagers ____ _____ _____ ____ ____

Commission base ____ 679 657 789 541

Bank’s own staff strength at the en1950d of

year

____ 3952 4585 5,896 6,496

Out sourced ____ 581 641 1,064 912

Total staff strength at end of year 2118 4533 5226 7,560 6,808

Sr.No Designation Numbers

Area Manager 10

Branch Manager 200

Operational Manager 200

Operational In charge 200

CD In charge 200

Account In charge 200

It In charge 200

Credit In charge 250

BDO 200

10 Accounts Opening officers 1950

11 Cashier & remittances officers 2800

12 Supporting staff 398

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PRODUCT AND SERVICES

CORPORATE AND INVESTMENT BANKING

Corporate and investment banking comprises of two divisions as

follows:

Corporate Banking Division

Investment Banking Division

Askari Bank offers Corporate and investment banking to full fill

business requirements through one window problems solution. Continuous

business need analysis for new products augmentation is taking place under

corporate and investment banking. Mr. Tahir Aziz, Group Head, Corporate

and investment banking. Corporate and investment banking products are as

follows:

Corporate Banking Division 

CBD is long-term business partner that is geared to help in meeting

business growth objectives. The business is managed by team of

professional who understand requirements and can firmly stand by side.

Dedicated relationship managers for each of corporate clients ensure

satisfaction, which is our top priority. Relationship oriented outlook

focuses upon providing a complete array of tailored financing solutions,

that are practical and cost effective, some of which include:

Working Capital Facilities

Term Loans

Structured Trade Finance Facilities

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Letters of Guarantee

Letters of Credit

Fund Transfers / Remittances

Bill Discounting

Export Financing

Receivable Discounting

Investment Banking Division

IBD provides value-added, specialist services and products through a

dedicated team of professionals, with world-class skills, to provide

customized solutions to help clients meet their strategic objectives. IBD is

responsible for seamlessly originating, executing and distributing all forms

of investment banking transactions ranging from syndicated loans to

complex structured and project financing transactions. Some examples of

products offered by IBD include:

Strategic Advisory

Privatization Advisory

M & A Advisory

Balance Sheet Restructuring

Syndications

Project Finance

Structured Finance

Islamic Finance

Private Placements of Debt and Equity

Issuance and distribution of Term Finance Certificates, Sukuk

Bonds, and Commercial Paper

Underwritings

Capital Market Hybrid Products

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Agriculture Finance Solutions

The role of agriculture in Pakistan economy is of pivotal nature. Due to

diverse geographical and climatic conditions the country has tremendous

potential for growth and development in agriculture. However, adequate

and timely financial assistance to the farmers will improve production

potential of agriculture sector in the country. The modern concept of

agricultural credit envisages establishment of an efficient institutional

credit system to serve as a package of credit, supplies and knowledge for

the overall strength of the farmers who at present suffer from low

productivity and financial insecurity. A successful credit evaluation system,

therefore, should have the basic ingredients to provide adequate amount at

the right time and in the right form to help farmers in making a productive

use of loan funds

Kissan Ever Green Finance

Kissan Tractor Finance

Kissan Abpashi Finance

Kissan Livestock Development Finance

Kissan Farm Mechanization Finance

Kissan Farm Transport Finance

Agriculture Banking network

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SERVICES

Bank provides services as follows:

A) Consumer Banking Services

B) Islamic Banking services

Consumer Banking Services: Under consumer banking services

following are products.

Askari Finance

Smart Cash

Personal Finance

Mortgage Finance

Business Finance

Travelers Cheques

Askari Card

Value plus Deposit

Islamic Banking services

Islamic Banking was launched under the brand 'Askari Islamic

Banking', by opening 6 dedicated Islamic Banking branches in major cities

of the country. Further expansion is planned with improved capabilities for

offering products conforming to the Shariah principles.

Askari Islamic Banking opens the doors for Halal banking solutions.

Objective is to put in place an efficient banking system supportive to

economic justice and welfare of society in line with Shariah standards.

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A comprehensive range of Islamic Banking products and services is

being offered, in order to meet customer's demand of Shariah Compliant

Banking, in the following areas:

Islamic corporate Banking

Islamic Investment Banking

Islamic Trade Finance

Islamic General Banking

Islamic Consumer Banking

Investment Products

Roshan Mustaqbil Deposit

Deposit Multiplier Account

Value Plus Deposits

Rupee Traveler Cheques

ASKCARD (Askari Debit Card)

Internet Banking Service

Electronic Bill Payment Services

Cash Management Services

Investment Certificates

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STRUCTURE OF THE ORGANIZATION IN TERM OF

REPORTING LINE

In Bank management play a vital role to achieve the predefine

goals in a systematic manner. Reporting can be horizontal or vertical in

organization depend on culture or nature of organization. In Askari Bank

Board of Director comprises Chairman and directors which lead the

Executive Committees and presidential authorities. Secretary assists the

Board of Director

BORD

Board of director comprises of chairman and board members as follows:

Executive Committee

Audit Committee

President and Chief executive

AUDIT COMMITTEE

Audit Committee is responsible for internal control, produce annual

reports and report to the Executive committee. During audit finding of

any concern Committee will put reference to board and suggest compliance

rules & regulations.

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Country Head & Inspection Division

Country Head & Inspection division responsible for internal control

from inspection division internal auditor visit branch and make sure that

rules & regulations follow.

eg. For account opening what documents are essential if any document

miss then directed to the concern person. In similar fashion other

departments can be check.

Country head and inspection division report to audit committee which

report to executive committee and finally report to board of director.

RISK MANAGEMENT

Risk management comprise of Chief Risk officer which monitor all

activities of three departments as follows:

Risk Management Division

Credit Administration division

Information Security Division

Risk Management Division is leading by Country Head and he

responsible for risk management before loan approve risk measure and

bestow to the chief Risk officer.

&

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Compliance & Data Division

Country Head of this Department is responsible to lead and Report to

the President and Chief Executive

Consumer Banking Services

Country Head of Consumer Banking Services is responsible to

monitor and mentoring to the consumer Services department and report to

the President and Chief Executive regarding the performance of the

department.

Corporate & Investment Banking

Corporate Investment Banking is divided in to two divisions as

follows:

Corporate Banking Division

Investment Banking Division

Country Heads of both division are responsible their respective

division and report to the Group Head of Corporate & Investment Banking

which report to the President and Chief executive.

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BRANCH STRUCTURE IN TERM OF

REPORTING LINE

The Branch commence on 2008 is situated at:

Qurtaba chowk Lahore (Askari Commercial Bank) Branch having staffed

as follows:

Branch Manager (Mr. Shahid Mehmood Alvi)

Operational Manager (Rizwan Jameel )

Operation Department

Incharge (Furrkh Hussain Bajwa)

CD inchareg (Rizwan Khan)

Account opening (Saima Aslam)

Clearing officer (Kh.Qaiser Usman)

Credit Department

O.G.I (Taufique Ahmad )

Foreign Trade Department

AMG (Faiza Qamar)

Cash Department

C.S.G.III. (Aslam)

C.S.G.III. ( Sulman Shazad)

Account Department

O.G.II. (Asjad Humayun Butt)

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Computer Department

O.G.I. (Mr. Shamsi)

Marketing Department

B.D.O. (Muhammad Waqar)

General

Secretary (Muhammad Riaz)

Operation In charge

Operation in charge responsible for general banking which includes

Remittance, Clearing, Cash, Account opening, and general information.

Supervision

Operation in charge supervise certain limit (25 thousand) all kind of

Chaques. Cash in hand and in accounts various currency i.e. US $, Euro,

Yen PKR etc maintenance daily record. Operation in charge is also

responsible for all kind of matter concerning to the general Banking.

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28

REVIEW OF THE VARIOUS DEPARTMENTS

Working of the Bank divided between various departments. Different

departments do their jobs in occurrence with the bank policies. In AKBL

each branch is divided into various departments. Head of department

manages each department & officials of the branch follow procedures.

The working of the Department within branch is as:

GENERAL BANKING DEPARTMENT

Account opening department

Remittances department

Cash department

Clearing department

PRIVILEGE BANKING DEPARTMENT

Online banking

Lockers

CREDIT DEPARTMENT

FOREIGN TRADE DEPARTMENT

Import department

Export department

Foreign currency department

ACCOUNTS DEPARTMENT

IT­ DEPARTMENT

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ACCOUNT OPENING DEPARTMENT

Functions of Account Opening Department

Providing account opening form according to the customer's

requirements,

Guide the customer about the requirements of the account opening

and form filling,

Check the forms whether they are correctly completed or not,

Preparing checklist,

Stamping on the form,

Maintaining account opening register,

Pasting of forms in register after release from general banking in

charge,

Issuance of cheque books,

Issuance of accounts maintenance certificate,

Closure of account

Verification of signature in case of cheque presented before releasing

of account opening from SS card is not yet scanned

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IMPORTANCE OF INTRODUCTION

FOR A\C OPENING

Introductory references As soon as person opens an account with the

bank, the banker customer relationship is established. In such situation this

is advisable the banker should not open new accounts of unknown persons

unless references regarding the integrity and responsibility of the purposed

persons are obtained from respectable parties.

Failure to exercise this care may result in serious consequences not only for

the banker concerned but also for the other bankers and general public. It is

not sufficient to obtain the reference but its genuineness must also be

verified. Omission of this may have serious consequences.

In practice we see that there is tough competition among bankers for

procurement of deposits, so to press a prospective new customer to find the

desired reference may offend him, yet he is to be welcomed by the banker

as source of fresh deposits. But these practical difficulties have to be

handled tactfully because the risk involved carrying out this requirement

partially or wholly may lead to undesirable results.

INQURIES ABOUT CUSTOMERS

Have all necessary information with him regarding his generally a banker is

asked by another banker to give his opinion about his customer’s financial

position. Therefore, it is beneficial for the both that the banker should

customers. Now a practice that Bank officer visit to customer and inquire

about his business nature then writes a report.

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ACCOUNT OPENING PROCEDURE &PRECAUTIONS:­

KNOW YOUR CUSTOMERS (KYC Form I & II)

The objective of knowing customer is to have fair idea about the

identity, financial resources, and general information about the customer at

the time when the relationship is established. A banker must have following

information about the customer:

Customer name

Enter complete name as mentioned in original ID card /other

business documents.

Nature of business /profession: if customer is of salaried class enter his

employer name. If the customer is a businessman, traders, sole proprietor,

enter the business name, for example “Zahid autos Traders” etc.also enters

the customer’s title/position and address of the business/employer. “Private

Service”, “business” are not acceptable, rather specify what type of

company/business the customer is associated with for example Manager

Philips Electrical Company.

Address:

Enter the complete business/residential address. With in the brackets you

may also provide prominent address identification marks for ease of

physically locating the address.

Contact Numbers:

Enter home, official, mobile, fax number and e-mail address (if available).

Banker can verify the number by giving the customer a courtesy call or by

sending him an e-mail.

Change Contact Numbers

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After Opening A/C contact can be change by receiving an application from

customer with specify new contact.

Other/ secondary/ mailing address:

Some customer may volunteer their parents or siblings’ addressor second

home address or a mailing address other than a permanent address.

Special instructions

Clear-cut special instructions must be obtained from customers. If the

customer has not given any special instruction specified column must be

cancelled by drawing a line, as this column must not be left blank in any

circumstance.

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TYPES OF ACCOUNTS

1) ACCOUNTS OF GENERAL CUSTOMERS

Minor account

Illiterate person account/Photo Account

Joint account

ASK Mahana Bchat Account

Value Plus Saving Accounts

Current accounts

PLS Income Accounts

ASDA Accounts

Value Plus Current Accounts

Dollar Accounts

Euro Accounts

Sterling Pond Accounts

2) ACCOUNT OF SPECIAL PERSONS

Proprietorship account

Partnership account

Limited company’s account

Accounts of club societies and associations

Agent’s accounts

Trust account/NGO

Liquidator’s account executer’s and administrator’s account

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REMITTANCE DEPARTMENT

Functions of remittances department

The functions of remittance departments are to handle with the following

instruments:

Pay Order

Demand Draft

Foreign Demand Draft

Pay slip

Telegraphic Transfer

Foreign Telegraphic Transfer

Payment of Remittances

Cancellation of pay order & demand draft

The remittance department deals with the transfer of money from one place

to another.

Remittance can be made through:

Instrument transfer

Electronic transfer

Mail transfer

Instruments of the Remittances Departments

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PAY ORDER

Pay order issued from one branch only be payable from the same branch. It

is normally issued for payment in the same city. It is normally referred as

banker's cheque

Get the application form.

Issue pay order after recovering Chaques/ Cash

Do necessary vouchering.

Make entry in PO issue register.

All pay order shall be crossed" payees account only".

Duplicate Pay Order:

Check the record to insure that payment has not been effected.

Get application for issuing of duplicate PO.

Recover charges.

Issue duplicate pay order.

DEMAND DRAFT

It is an instrument on demand for which value has been received,

issued by the branch of the bank drawn i.e. payable at some other

place (branch) of the same bank. Demand draft can also be issued by

one branch of the bank payable to other branch of the other bank e.g.

DD issued by AKBL payable by MCB.

a

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TELEGRAPHIC TRANSFER OR TELEX TRANSFER

Telegraphic Transfer OR Telex Transfer is swift way for remittances

from place or to place. Simply a request received from a customer to make

TT either account debit or Cash received. TT sends to the beneficiary Bank.

Incase of branch is not present then other Bank or financial institution make

payment to the beneficiary.

F.D.D AND F.T.T (Online Transfer)

DD and TT  exercise within country incase of overseas remittances FDD

and FTT use (Foreign Demand Draft & Foreign Telegraphic Transfer).The

foreign remittances department at Askari Bank is fully equipped to meet

the growing needs of the customers for safe and fast funds transfer

system. Bank offer the customers several ways to conduct foreign

remittances through a network of thousands of correspondent banks around

the world.

CASH DEPARTMENT

All physical movement of cash in the bank is made through the cash

department. Normally cash department performs following functions

Receipt

Payments

Act according to any standing instructions

Transfer of funds from one account to another

Handling of ATM

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Verification of signatures

Posting

Handling of prize bond

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Cash receipt section

In this section the cashier in following manner receives cash:

Process of deposits

Fill- up deposit slips Deposited on Receipt Customer

Handover the deposit slip to Cashier counts the amounts the customer with receiving and fulfills other requirement

Stamp

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Cash payment section

In this section honoring the cheque through following process makes

payment.

Process of Payment

Chaque is presented at two signatures on the back

Token counter of Chaque get from customer

Cashier count the amount Chaque is recorded &

& payment is made token is allowed

Posting is made competent officer cancel

the Chaque after Supervision

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CLEARING DEPARTMENT

MEANING OF CLEARING

The word clearing has been derived from the word “Clear” and is defined

as system by which banks exchange cheques and other negotiable

instruments drawn on each other within a specific area and thereby secure

payment for their clients through the Clearing At specified time” in an

efficient way”.

1. Since clearing does not involve any cash etc. and the entire

transaction take place through book entries, the number of

transaction can be unlimited.

2. No cash is needed as such the risk of robbery, embezzlements and

pilferages are totally eliminated.

3. As major payments are made through clearing, the banks came

manage cash payments at the counters with a minimum amount of

cash in vaults.

4. A lot of time, cost and labor are saved.

5. Since it provides an extra service to the customer of banks without

any service charges or costs, more and more people are inclined and

attracted towards banking.

Through NIFT clearing is made either Intercity or within city clearing lets

understand what NIFT is and how it is working:

-

,

.

&

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NIFT ­ National Institutional Facilitation Technologies

NIFT National Institutional Facilitation Technologies (Pvt.). Ltd. was

incorporated in September 1995 as joint venture between a consortium of

six banks and entrepreneurs from the private sector. All commercial banks

and all of their branches in major cities avail NIFT’s services. As of May

2009, 40 commercial banks and their 5571 branches in 185 major cities

20 data centers utilize NIFT’s services.

NIFT has setup elaborate data centers geared to provide automated services

for document processing particularly in the payment arena. Modern image

based facilities have been established at Karachi, Lahore, Islamabad,

Peshawar, Rawalpindi, Hyderabad, Multan, Faisalabad, Quetta,

D.I.Khan, Sialkot, Gujranwala, Sukkur, Bahawalpur, Muzaffarabad,

Jhelum, Abottabad, Mirpur, Sahiwal and  Sargodha The services

include cheques clearing, reconciliation, ‘return’ (unpaid) cheques

processing, same day clearing (express 2 hrs. clearing service), intercity

clearing and inter branch & inter bank settlement. Services are provided at

individual branch level to over 5571 branches in 184 major cities and

smaller cities.

NIFT Rider

NIFT riders come in a bank (Branch) twice in a day for inward and out

ward clearing Chaques instruments for collection and delivery at

specified time.

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OUTWARD CLEARING AT THE BRANCH:

The following points are to be taken into consideration while an instrument

is accepted at the counter to be presented in outward clearing:

The name of the branch appears on its face where it is drawn.

It should be stale or post dated or without date.

Amount in words and figures does not differ.

Signature of the drawer appears on the face of the instrument.

Instrument is not mutilated.

There should be no material alteration, if so, it should be properly

authenticated.

If order instrument suitably indorsed and the last endorsee’s

account being credited.

Endorsement is in accordance with the crossing if any.

The amount of the instrument is same as mentioned on the

paying-in-slip and counterfoil.

The title of the account on the paying-in-slip is that of payee or

endorsee (with the exception of bearer cheque).

If an instrument is in order than our bank special crossing stamp is affixed

across the face of the instrument. Clearing stamp is affixed on the face of

the instruments, paying-in-slip and counterfoil (The stamp is affixed in

such manner that half appears on counterfoil and paying-in-slip). The

instrument is suitably discharged, where a bearer cheque does not require

any discharge and also an instrument in favor bank not need be

discharged.

The instrument along with pay-in-slip is retained while the counterfoil is

given to the customer duly signed. Then the following steps are to be taken:

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1. The particulars of the instrument and the pay-in-slip entered in the

outward clearing register.

2. Serial no. Is given to each instrument.

3. The register is balanced; a regular report is generated after entering

clearing instruments in the software (Inward outward clearing

system. Balance of report compare with manual register balance to

avoid omission.

4. Then a particular voucher is filled with total amount of Clearing.

5. All instruments with grand sum voucher put into a bag.

6. NIFT rider come and takes bag for out ward clearing.

7. For inward clearing bag reached at morning in the branch.

However the amount is kept in float till final status of various instruments

is known from respective paying banks in second dealing.

The entry of the instrument returned unpaid is made in Cheques returned

Register. If the instrument is not to be presented again in clearing then a

covering memo is prepared. The covering memo along with returned

instrument and objection memo is sent to the customer who sent the same

to his account.

INWARD CLEARING OF THE BRANCH:

1. The particulars of the instruments are compared with the list.

2. The instruments are detached and check the corresponding account if

balance is available then Debit the account.

3. Floating status is now realized at corresponding branch which send

instrument for clearing.

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INWARD CHEQUES RETURNED UNPAID:

These are the cheque returned unpaid by us in inward clearing due to some

objections.

OUT WARD CHEQUES RETAINED UNPAID:

These are the cheques retained unpaid to us which were lodged by other

Bank because of some objection eg. Insufficient balance.

ONLINE BANKING

Online banking means that the customer of AKBL can deposit / withdraw

funds in / from other branches of AKBL. Askari bank provides online

facility to all its branches.

Just fill the online slip and submit at counter along with Check or Cash for

online transfer. AKBL provide the facility to customer to transfer funds to

any account through ATM.

i

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ACCOUNT DEPARTMENT

Account department is known as backbone of an organization all

financial matters deals and monitors in the account department. I worked

three days in accounts department but as it has confidential information so

they did not give me enough information regarding their working. First day

I sorted out the cheques of AKBL  with the help of the serial number and

the nature of the account and arrange them in sequence. After that

checked the activity which contains the title of the cheque, amount, date

etc. Accounts department maintains the record of expenses of all the

departments, it also maintain the record of all the employees regarding their

basic salary, increment, benefits etc. It is the backbone of AKBL 

CREDIT DEPARTMENT

Credit department provides credit to the customer according to theirs needs

therefore credit divided into various categories majors are given as follows

SME Credit

Corporate Credit

Commercial Credit

Consumer Credit

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ADVANCES & LOANS

Credit can be divided into two main categories advances and loans which

further categories as follows:

FUNDED

Credits in which funds provides called as funded credit.

NON FUNDED

Credits in which funds are not providing to the customer called non funded

credits e.g. LC (Letter of Credits) LG (Letter of Guarantee) etc.

a a

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HOW INFORMATION GENERATED RECORED

AND USED

For every transaction information is generated in the form of Voucher and

then in the computer systems.

PRACTICAL ILLUSTRATION

A customer presented a Chaque for cash after all process completion

(Verification & cancellation) Chaque became a Debit Voucher and then in

charge officer make customer account Debit ( The same amount on chaque

) in the computer system. Automatically a report will be generated at the

day end which use as recoded and for any inquiry.

In similarly fashion customer deposited Cash with deposit receipt

officer in charge make credit entry in the customer account and deposit

receipt became a credit voucher.

Information of various departments are recorded in the main server (IT

Department) then recoded on the Tap and also preserve at head office on

daily basis.

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Main Server

Remittanc es

Account Opening

Accounts Credit

Head office server

ATM

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THE ROLE OF MANAGER

The Branch Manager is responsible for the administration and

efficient daily operation of full service branch office, including

operations, lending, product sales, customer service, and security and safety

in accordance with the Bank's objectives. Develops new deposit and loan

business; provides a superior level of customer relations and promotes the

sales and service culture through coaching, guidance and staff motivation;

achieves individual and branch sales goals through new business sales,

referrals and retention of account relationships.

Provides leadership, training and supervision; delegates day to day

operations to the Operations Officer or other branch personnel.

Responsible for attaining established Bank and branch goals through active

participation in sales management and officer call programs. Participates

in community affairs to increase the Bank's visibility and to enhance new

and existing business opportunities.

RESPONSIBLITIES

Branch Manager having following responsibilities:

To ensure the punctuality and regular attendance of the staff.

To appraise the performance of the Branch staff in a timely and fair

manner and ensure safekeeping of the filled Appraisal forms

To ensure that the branch assets are in a proper condition including

vehicles ensuring control over movement of same through log books

and it being used for official purposes only.

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correspond with the Head Office, Government and other

networking agencies, as per the guidance of the SBP.

To ensure that the Branch programmes are planned as per the Bank’s

Strategic Plan.

To ensure that the Accounts Officer is maintaining proper books of

accounts including basic accounting controls like daily verification

of cash in hand, daily entry of cash bank vouchers, Bank

Reconciliation statements, accounting of Receipts Payments

correctly.

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SOFTWARE USED BY THE BANK

Bank used different types of software for various purposes some of which

are given bellow:

UNI-Bank

PDF 

I Fax

MS Word, Excel

MS Window

CORE BANKING

For core banking UNI-bank software is being used for operational activities

in general banking. This software having all features which are mostly used

in the bank. UNI-Bank having various applications for each department

having various modules.

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DIFFERENT TYPES OF REPORTS BEING

PRODUCED

Various reports are being produced at the day end automatically some of

which are given bellow:

Daily Non Financial Transcation Reports

General Ladger Reports

Subsidary Ladger Reports

Statement of Secured Over Drafts Allowed Reports

Reports of Pricing Calculation

Daily Securety Transction Reports Transfer Register Reports Statement of Condition

Above mention reports having different information for management use

some of which are mention as follows:

STATEMENT OF CONDITION REPORT

This report having information of liabilities & Assets along with G/L Head

and update. e.g.

Liabilities items:

Current deposits

Unique Deposits

Value Plus Current Deposit

Call Deposits

PLS Term Deposit

Value Plus Saving Deposit etc

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At the end total of liabilities figures….

Assets items:

Foreign Currency on Hand

Cash on Hand (PKR)

Cash In ATM

MO Account Head Office

Expenditure Account

PLS Profit Paid Account

This report is important for management in the decision making which

dipict the actual picture of the branch. Deposits are important to increase

the branch profit.

DAILY NON FINANCIAL TRANSCTION REPORT

Both financial & non financial transctions are important therefor reports

are being produced. In the non financial report following information are

recoreded.

Account Open / Name & Open date

Adress

Fixed Date

Interst information

Loan Interst information

Loan disbursmnet / Repayment Cash

Account Status

Chaque Book issue

Cancel Chaque

Stop Chaque

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Block Amount

Release Amount

Claim Limit etc

Such inforation included in the non financial reports which are important

for the recored and customer inquary . Every report has its important for

management.

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GENERATION AND SOURCES OF FUND

Funds are important for a bank survival more funds more

business the rule is apply. Askari Bank having follwing kind

of sources of funds.

A) . Owner Equity

B) . Deposits

C) . Bowrrowing

Owner Equity

Owner Equity is the main source of fund for a bank without personal

investment a bank can not establish. SBP has set the rules regarding owner

equity.

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Deposits

Key source of funds for a Bank are deposits Askari Bank having different

types of deposits.

Current Deposits

Unique Deposits

Value Plus Currents Deposits

Call Deposits

CD New Scheme Foreign Currency Deposits

PLS Term Deposits

ASK Mahan Bachat Deposits

Value plus Saving Deposits etc.

2005 2006 2007 2008 2009

83,318,795 118,794,690 131,839,283 143,036,707 167,676,572

2005 2006 2007 2008 2009

Graph of Deposit

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Comments:

Deposits increases from 2004 to 2008 which show the growth of

bank in term of network and customer increase. Currents saving and other

deposits is the major portion of the deposits. Rs.167.68 billions at

December 31, 2008 as against Rs. 143.04billion last year. Analysis of

deposits show a healthy growth of 52 percent in current accounts over last

year and 32 percent in fixed deposits, while saving deposits remained

almost unchanged. The aggregate number of deposits accounts reached

611,323 at the end 2008.

Borrowing

Borrowing is an other source of fund when bank need funds borrowing are

quick option to generate funds. Last five years borrowing figures are given

as follows:

(Rupees in 000)

2005 2006 2007 2008 2009

Graph of Borrowing

2005 2006 2007 2008 2009

13,781,555 10,562,338 14,964,087 17,553,525 15,190,148

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Comments:

Analysis show that borrowing decrease in 2005 as contrast to 2004 , while

in 2007 borrowing 17.55 billion against 15.19 billions in 2008. Borrowing

rate increase is the reason for borrowing fluctuation.

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ALLOCATION OF FUNDS

Bank allocates funds in to different sector which are given as follow:

Corporate Sector

SMEs Sector

Consumer sector

Agriculture Sector

Commodity Finance

Staff loans

Funds are allocated in Corporate Sector 67%, SMEs 11.15%, Consumer

10.2%, agriculture 4.4%, and Commodity Finance 4.4%, and Staff loans

2.3%. Major portion of funds distributed in the corporate sector and

agriculture, commodity finance have same portion that is 4.4%.

- - - - -

- - - -

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FIVE LAST YEAR BALANCE SHEET

Assets 2009 2008 2007 2006 2005

Cash and balances with treasury banks 16029635 13,356,055 14879230 11766925 8762866

Balances with other banks 3954814 3,497,054 7333002 5550148 4847899

Lendings to financial institutions 4,479,754 14,444,143 8392950 10172242 2324839

Investments 35677755 39,431,005 28625915 25708194 17239156

Advances 128818242 100780162 99179372 85976895 69838392

Operating fixed assets 8,266,458 5,128,428 3810331 3192862 2,595,023

Deferred tax assets

Other assets 8964480 5,535,038 3812788 2732641 1,559,365

206191138 182171885 166033588 145099905 107167540

Liabilities Bills payable 2584828 2,627,051 1839077 1315580 1,227,093

Borrowings 15,190,148 17,553,525 14964087 10562338 13,781,555

Deposits and other accounts 167676572 143036707 131839283 118794690 83,318,795

Sub-ordinated loans 2,996,100 2,997,300 2998500 2999700 1,000,000 Liabilities against assets subject to finance lease 14,159

Deferred tax liabilities 12,987 471,519 736298 1459 526,866

Other liabilities 4,759,140 3,219,796 2603113 567217 1,282,980

193219775 169905898 154980358 2045340 101,151,448

Net assets 12,971,363 12,265,987 11053230 8813483 6,016,092

Presented By Share Capital 4058774 3,006,499 2004333 1,507,018 1,255,848

Reserve 7,667,141 6,948,336 5,814,754 4,470,530 4,317,301

Unappropriated Profit 308,980 2,144,810 1,799,979 1,617,597

12,034,895 12,099,645 9,619,066 7,595,145 5,573,149

Surplus on revaluation of assets -net of tax 936,468 166,342 1,434,164 1,218,338 442,943

12,971,363 12,265,987 11,053,230 8,813,483 6,016,092

Data Collected from Annual Report

- 7

-

- -

-

- 7

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FIVE LAST YEARS INCOME STATEMENT

Data Collected from Annual Report

2009 2008 2007 2006 2005 Mark­up / return / interest earned 18393313 15143241 12596921 8780698 4,487,206

Mark­up / return / interest expensed 10650719 8,685,624 6977313 4278374 1,117,206

Net mark­up / interest income 7,742,594 6,457,617 5619608 4502324 3,370,000 Provision against non-performing loans and advances 3,824,778 3,920,240 1128137 638547 277,398 Provision for impairment in the value of investments 508 1,501 376 36555 38,066

Bad debts written off directly 247,311

4,072,597 3,921,741 1128531 601992 315,471

Net mark up / interest income after provisions 3,669,997 2,535,876 4491095 3900332 3,054,529

Non mark­up / interest income Fee, commission and brokerage income 1,257,584 1,072,868 1013660 838561 708,377

Dividend income 173,621 137,079 109326 51143 26,318

Income from dealing in foreign currencies 873,512 655,761 584344 356218 180,992

Gain on sale of securities - net 36,743 2,361,251 112474 100407 540,193

Unrealised gain on revaluation of investments classified as held for trading - net  22,384 1,728 2308 582

Other income 343,156 336,809 321758 206819 177,648

Total non-markup / interest income 2,707,000 4,565,496 2139254 1552566 1,633,528

6,376,997 7,101,372 6630349 5452898 4,688,057

Non mark­up / interest expenses Administrative expenses 5,904,169 4,789,536 3277353 2591985 1,845,179

Other provisions / write offs 459

Other charges 10,987 12,051 6141 1832 138

Total non-markup / interest expenses 5,915,615 4,801,587 3283494 2593817 1,845,317

461,382 2,299,785 3346855 2859081 2,842,740

Extra ordinary / unusual items

Profit before taxation 461,382 2,299,785 3346855 2859081 2,842,740

Taxation – current year 17,363 98,535 983875 828774 876,089

prior years’ 50,000 233950 188247

– deferred 107,794 245,812 113006 196558 43,611

75,157 381,227 1096881 837085 919,700

Profit after taxation 386,225 2,681,012 2249974 2021996 1,923,040

Unappropriated profit brought forward 2,144,810 1,799,979 1617597 1538432

Profit available for appropriation 2,531,035 4,480,991 3867571 3560428 1,923,040

Basic / diluted earnings per share Rupees 0.95 11.23 10.09 12.76

a

%

0

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RATIO ANALYSIS

Why we need ratio analysis ansewer of this quastion is simple as

doctor check the patient to know correct condition of the patient in simillar

fassion financial analysit need ration anlaysis to know the correct

financial condition of an organization. Ratio can be obtaine by dividing one

data by othre.

Profitability Ratio

Net Profit After Tax Ratio = Earning after tax /Interest earned 

Formula 2005 2006 2007 2008 2009

EAT/IE 2842740 2859081 3346855 2299785 461382

1,923,040 2021996 2249974 2,681,012 386,225

147.82 141.39 148.7 85.78 119.4

20

40

60

80

100

120

140

160

2005 2006 2007 2008 2009

Net Profit After Tax Ratio Graph

%

.

%

0

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Interpretation :

These ratios use margin analysis and show the return on sales and capital

employed.

Net profit after tax measure profit remaining after deducting all expenses

including tax. When we compare ratio of 2005 and 2004 it vary because

Interest earn increase by 5.14 % as a result ratio decrease in 2005. Earning

after tax by 31 decrease in 2007 which result net profit after tax

decrease

Gross Spread Ratio = Net Mark­up Income / Gross Mark­up Income

Formula 2005 2006 2007 2008 2009

NMI/GMI 3,370,000 4502324 5619608 6,457,617 7,742,594

4,487,206 8780698 12596921 15143241 18393313

75.1 51.27 44.61 42.64 42.09

10

20

30

40

50

60

70

80

2005 2006 2007 2008 2009

GS. Ratio Graph

%

0

5

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Interpretation :

Gross Spread ratio measure profit after deducting cost of goods sold. We

analyzed the data of 2004 and 2005 come to know that net mark-up income

33 % increase in 2005 but more than 80 % increase of gross mark-up

income in 2005 which decreases the gross spread ratio in 2005 so we can

say that profit after deduction cost of goods sold decrease in 2005. Gross

mark-up income increase by 43% in 2005 result is gross spread ratio

decrease in 2005 while remaining two years having same trend.

Return on Equity Ratio (ROE) =Earning After Tax /Total Share Holder Equity

Formula 2005 2006 2007 2008 2009

EAT/TSE 1923040 2021996 2249974 2681012 386225

5573149 7595145 9619066 12099645 12034895

34.5 26.62 23.39 22.15 3.2

10

15

20

25

30

35

2005 2006 2007 2008 2009

Graph of ROE

%

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Interpretation:

ROE  measure the return on owner’s total investment into the

business. Data showed ROE  decrease in 2005 contrast to 2004 due to

increase in Total Share holder equity. In 2008 showed out standing

decrease of ROE because of negative growth in earning after tax.

Return on Assets Ratio (ROA) = Earning After Tax / Total Assets

Interpretation:

ROA measure the return of total investment of business. It should be

maximum as owners have wish. Growth trend present in EAT by 2004 to

2008. But Total assets also increases which became the factor to decrease

ROA value of total assets increase 35 % in 2005 contrast to 2004 while

next two years don’t have great variation in 2008 ROA ratio decrease

because of 13 % increase of Total assets as compare to 2007.

Formula 2005 2006 2007 2008 2009

EAT/TA 1923040 2021996 2249974 2681012 386225

107167540 145099905 166033588 182,171,885 206,191,138

1.79 1.39 1.35 1.47 0.187

0

1

%

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0.2

0.4 0.6

0.8

1.2

1.4

1.6 1.8

2005 2006 2007 2008 2009

Graph of ROA

Loan Deposit Ratio:

Formula 2005 2006 2007 2008 2009

Loans/Deposits 69838392 85976895 99179372 100780162 128818242

83,318,795 118794690 131839283 143036707 167676572

83.82 72.37 75.22 70.45 76.82

Interpretation:

The amount of a bank’s loans divided by the amount of its deposits at any

given time. The higher the ratio the more the bank is relying on borrowed

finds which are generally more costly than types of deposits. Increase of 42

% deposits in 2005 contrast to 2004 is the factor to decline loan deposit

ratio of 2005. Loans increase in 2008 as compare to 2007 which result the

loan deposit ratio increases as compare to previous year.

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60

65

70

75

80

85

2005 2006 2007 2008 2009

Loan Deposit Ratio Graph

%

0 1

2 3

4

5 6

7

8 9

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Activity Ratio

Total Assets Turn over = Net Sale / Total Assets

Formula 2005 2006 2007 2008 2009

N.S/T.A 4,487,206 8780698 12596921 15143241 18393313

107167540 145099905 166033588 182171885 206191138

4.18 6.05 7.58 8.31 8.92

Interpretation:

These ratios (Activity ratio) also known as efficiency or turnover

ratios, measure how effectively the organization is using its assets. Total

asset turnover shows that by investment of Rupee One in average total

assets, of the entity how much sale is generated. There is increase trend in

total assets turn over ratio from 2004 to 2008 due to growth in mark-up/

return / interest earn.

2005 2006 2007 2008 2009

Assets turn over ratio graph 

0

1

2

3

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Fixed Assets Turn over = Net Sale / Fixed Assets

Formula 2005 2006 2007 2008 2009

N.S/F.A 4,487,206 8780698 12596921 15143241 18393313

2,595,023 3192862 3810331 5,128,428 8,266,458

1.7 2.75 3.30 2.95 2.22

Interpretation:

Fixed assets turnover shows that by investment of fixed assets how much

(revenue) sale is generated in other way we can say that how effectively

used fixed assets. Data analysis showed that growth of net sale (revenue) is

taking place from 2004 to 2006 and as result fixed assets turnover ratio are

increases. Ratio decline in 2007 and 2008 due to fixed assets increase even

net sale increases (increase in fixed assets is more than N.S.)

0.5

1.5

2.5

3.5

2005 2006 2007 2008 2009

Fixed Assets Turnover Ratio Graph 

0

1

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Market Ratio

Earning per share = Earning after Tax / Total Outstanding Share

Formula 2005 2006 2007 2008 2009

EAT/TOS 1,923,040 2021996 2249974 2,681,012 386,225

1,255,848 1,507,018 2004333 3,006,499 4058774

1.53 1.34 1.12 0.89 0.09

Interpretation:

Market ratio showed the position of an organization in the market

with respect to earning. Ratio increase showed that profit of the company is

increasing. When we analyze the data come to know that EPS is decreasing

from 2004 to 2008. The reason behind is increase of numbers out standing

share even earning after taxis also increase. Total outstanding share

increase more than 200 % in 2008 as compare to 2004 therefore negative

growth trend is found in the five years data.

0.2

0.4

0.6

0.8

1.2

1.4

1.6

2005 2006 2007 2008 2009

Graph of EPS

0

1

2

3

4

5

6

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Book Value per Share = Total Share Holder Equity / Total Outstanding Share

Formula 2005 2006 2007 2008 2009

TSE/TOS 5,573,149 7,595,145 9,619,066 12,099,645 12,034,895

1,255,848 1,507,018 2004333 3,006,499 4058774

4.4 5.03 4.79 4.02 2.96

Interpretation:

Book value per share somewhat similar to earning per share

but it relates to share holder equity. Book value per share increase in 2005

as compare to 2004 because of 36% increase of Total share holder equity

even 20 % increase happened of total outstanding share but it is less than

TSE. Decline observed in book value per share from 2006 to 2008 due to

increase of total outstanding share about 35 to 45 % from 2006 to 2008.

2005 2006 2007 2008 2009

Graph of BV

Revaluation per Share = Surplus on Revaluation / Total Outstanding Share

% %

0

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Interpretation:

Revaluation per Share fluctuates from 2004 to 2008 because of increase /

decrease in the total outstanding shares. Unusual change of revaluation per

share in 2007 due to 88 % negative growth in surplus on revaluation and 49

growth in total outstanding share. In 2008 ratio 17 growth as

compared to previous years.

10

20 30

40

50 60

70

80 90

2005 2006 2007 2008 2009

RVPS Graph

Formula 2005 2006 2007 2008 2009

SOR/TOS 442,943 1,218,338 1,434,164 166,342 936,468

1,255,848 1,507,018 2004333 3,006,499 4058774

35.27 80.84 71.55 5.53 23.07

0

1

2

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Leverage Ratio

Debt­To­Equity Ratio = Total Debt / Total Equity

Formula 2005 2006 2007 2008 2009

T.D/T.E 13,781,555 10,562,338 14,964,087 17,553,525 15,190,148

5,573,149 7,595,145 9,619,066 12,099,645 12,034,895

2.47 1.39 1.55 1.45 1.26

Interpretation:

Any ratio used to calculate the financial leverage of a company to get an

idea of the company's methods of financing or to measure its ability to meet

financial obligations. There are several different ratios, but the main factors

looked at include debt, equity, assets and interest expenses. Debit to equity

ratio shows how much portion of long term funds was financed through

long term debt, maximum ratio 60:40 Debts to equity. When we analyze

the data come to know that debt-to-equity ratio drop in 2005 as compare to

previous year. Reason behind is negative growth 23 % of Debt taking place

and growth factor of equity is also included. Next two year has same

condition but in 2008 drop happened because of debt decrease.

0.5

1.5

2.5

2005 2006 2007 2008 2009

Graph of Debt to Equity Ratio

0

2

4

6

8

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Debt to Assets Ratio = Total Debt / Total Assets

Formula 2005 2006 2007 2008 2009

T.D/T.A 13,781,555 10562338 14964087 17,553,525 15,190,148

107167540 145099905 166033588 182171885 206191138

12.85 7.27 9.01 9.63 7.36

Interpretation:

Debt to total assets or debt ratio serves a similar purpose to the debt

to equity ratio. It highlights the relative importance of debt financing to the

firm by showing the percentage of the organization’s assets that is

supported by debt financing. Ratio decrease in 2005 contrast to 2004

because of debt decrease and assets increase. Next two year has same ratio

and in 2008 ratio again drop due to Debt decrease and assets increase.

10

12

14

2005 2006 2007 2008 2009

Graph of Debt to Assets Ratio

0

1

2

3

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Interest Coverage Ratio

Interest Coverage Ratio = Earning Before Interest Tax / Interest Expense

Formula 2005 2006 2007 2008 2009

EBIT/IE 4,688,057 5452898 6630349 7,101,372 6,376,997

1,845,317 2593817 3283494 4,801,587 5,915,615

2.54 2.1 2.01 1.47 1.077

Interpretation:

A ratio used to determine how easily a company can pay interest on

outstanding debt. The interest coverage ratio is calculated by dividing a

company's earnings before interest and taxes (EBIT) of one period by the

company's interest expenses of the same period:

Ratio show decrease from 2004 to 2008 which reflect earning before

interest tax growth is slow down and interest expense increasing more that

is why interest coverage ratio decreases.

0.5

1.5

2.5

2005 2006 2007 2008 2009

Graph of Interest Coverage Ratio

%

%

%

­ %

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HORIZONTAL ANALYSIS OF FIVE YEAR BALACE SHEET

Assets 2005 2006 2007 2008 2009 Cash and balances with treasury banks 100% 134.2817 169.7986709 152.4165 182.9269

Balances with other banks 100% 114.48564 151.2614434 72.13545 81.5779

Lendings to financial institutions 100 437.54608 361.0120959 621.2965 192.6909

Investments 100% 149.12676 166.0517197 228.7293 206.9577

Advances 100% 123.10835 142.0126798 144.3048 184.4519

Operating fixed assets 100% 123.03791 146.8322631 197.6255 318.5505

Deferred tax assets 100% 100% 100% 100% 100%

Other assets 100% 175.24063 244.5090149 354.9546 574.8802

Total Assets 100% 135.39539 154.9289906 169.9879 192.4007

Liabilities

Bills payable 100 107.21926 149.8726665 214.0874 210.6465

Borrowings 100% 76.641119 108.5805412 127.3697 110.2209

Deposits and other accounts 100% 142.5785 158.2347452 171.674 201.247

Sub­ordinated loans 100% 299.97 299.85 299.73 299.61

Liabilities against assets subject to finance lease 100% 10.3044 100% 100% 100%

Deferred tax liabilities 100% 44.210865 57.38962619 0.003675 1.012252

Other liabilities 100% 388.2095 494.0759018 611.1235 903.294

Total Liabilities 100% 134.73502 153.2161537 167.9718 191.0203

100% 146.49847 183.7277422 203.8863 215.6111

Presented By

Share Capital 100% 120.00003 159.5999675 239.3999 323.1899

Reserve 100% 103.54919 134.6849339 160.9417 177.5911

Unappropriated Profit 100 100% 100% 100% 100%

Surplus on revaluation  of assets net of tax 100 136.28103 172.5966056 217.1061 215.9443

total liabilities+total share holder equity 100% 275.05526 323.7807122 37.55382 211.4195

A

&

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COMMENTS:

Now we will discuss the assets side of the bank. The liquidity

position is fundamentally important for the bank, as it must have all the

time sufficient funds to meet the demands for the money that may be made

on it. It is the protection against the risk that losses may develop if banks

are forced to sell or liquidate creditworthy assets in an adverse market. The

current liquidity position of the bank has improved as indicated by the

percentages shown.

The property plant and equipment is the kind of asset, which is required by

the service business only to increase its network therefore the ratio of the

bank’s plant and equipments as compared with the other important

particulars of the assets is high. But here one thing should be mentioned

that it is the policy of the bank not to start the business on the rented

premises. The bank has mostly started business on its own premises. The

other assets of the bank are also showing a good amount that means that

bank is in position to earn money from every available source.

Total assets of Askari Bank growing from 2005 to 2008 as we compared

with 2004. Technically we can say that Cash and balances with treasury

banks increase from 2005 to 2008. balance with others banks is

increasing landing to the financial institutions is also growing

outstandingly so it is another reason to increase the assets and become

major contributors in the assets.

Investment also increases in the last five years large input by the

investment in 2007 & 2008. Advances in 2005 increases as compared to

2004 and 19% increase in 06 found contrast to 05 in 07 just 2% & in 08

about 40% increase compared to previous year.

&

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Total assets increase trend observed from 04 to 08. Assets 14% increase in

06 & 9% in 07 compared to previous years and 13 % in 08 as compared to

07.

Liabilities & Share Holder Equity:

New if we analyze the liability side of the bank we see that the bank’s

deposits are going on increasing since 2004 which is a very healthy sign for

the bank as the bank’s basic business is to deal in money. The increase in

deposits shows that the people have interest in the bank and deposit their

fund in the bank without any hesitation. However it has not been

mentioned here that how many of the deposit are current and how many of

them have fixed nature but we can say that it is a very important source of

the bank to earn profit. As the banks usually earn through interest or mark

ups imposed on the deposits they keep with themselves.

Liabilities 191% increase in 08 as compared to 04 growing trend is found

from 04 to 08 & 143% increase of liabilities in 05 contrasts to 04. Bills

payable & borrowing increase 107%, 76% respectively in 05 compared to

04, Deposits and others accounts increase significantly 142% in 05

compared to 04, Subordinated loans liabilities against assets also

increase. 388% increases of others liabilities are found in 05 contrasts to

04 that is hwy liabilities side of the bank increase show in 05. And 19%

increase noticed of liabilities in 06 compare to 05, due to bills payable,

borrowing, deposits and others liabilities increase. In the year 2006

liabilities increase 14% as compared to year 2005 and 9 % increased in

year 2007 compared to 2008 similarly in 2008 it increased 13 % contrast to

07. The increase in the total liabilities because of increase in the deposits

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and borrowing from various sources so in the year 2006 13% borrowing

increased compared to the 05 and 9% of borrowing increased in 07

compared to 06 similarly in the year 2008 borrowing 13 % increased as

compared to last year hence total liabilities showing increasing trend.

As compare to 2004:

In year 05 share capital is increased by 120% as compared to 04 reserves

are also increase by 103 % compared to 04. In year 06 share capital

increased by 159 % and 143 % reserve contrast to 04.Similarly 239 % &

323 % increased found in 07 and 08 respectively compared to 04. Reserves

160 % & 177 % grow in 07 & 08 respectively compared to 04.

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HORIZONTAL ANALYSIS FIVE YEAR OF

PROFIT AND LOSS ACCOUNT

2005 2006 2007 2008 2009 Mark­up / return / interest earned 100% 195.683 280.7297 337.4759 409.9057

Mark­up / return / interest expensed 100% 382.953 624.5324 777.4416 953.3353

Net mark­up / interest income 100% 133.6001 166.7539 191.6207 229.7506 Provision against non­performing loans and advances 100% 230.1916 406.6853 1413.219 1378.805 Provision for impairment in the value of investments 100% 96.03058 0.987758 3.943151 1.334524

Bad debts written off directly 100% 100% 100% 100% 100%

100% 190.8232 357.7289 1243.138 1290.958 Net mark­up / interest income after provisions 100% 127.6901 147.0307 83.0202 120.1494

Non mark­up / interest income 100% 100% 100% 100% 100%

Fee, commission and brokerage income 100% 118.3778 143.0961 151.4544 177.5303

Dividend income 100% 194.3271 415.4039 520.8564 659.7044

Income from dealing in foreign currencies 100% 196.8142 322.8563 362.3149 482.6246

Gain on sale of securities ­ net 100% 18.58725 20.82108 437.1125 6.801828

Unrealised gain on revaluation of investments

classified as held for trading ­ net 100% 100% 100% 100% 100%

Other income 100% 116.4207 181.1211 189.5935 193.1663

Total non­markup / interest income 100% 95.04373 130.9591 279.4869 165.7149

100% 116.3147 141.4306 151.4779 136.0264

Non mark­up / interest expenses Administrative expenses 100% 140.4734 177.6171 259.5703 319.9781

Other provisions / write­offs 100% 100% 100% 100% 100%

Other charges 100% 1327.536 4450 8732.609 7961.594

Total non­markup / interest expenses 100% 140.5621 177.9366 260.2039 320.5745

100% 100.5748 117.7334 80.90029 16.23019

Extra ordinary / unusual items 100% 100% 100% 100% 100%

Profit before taxation 100% 100.5748 117.7334 80.90029 16.23019

Taxation – current year 100% 94.59929 112.3031 11.24714 1.981876

prior years’ 100% 100% 100% 100% 100%

– deferred 100% 450.7074 259.1227 563.6468 247.1716

100% 91.01718 119.2651 41.45123 8.171904

Profit after taxation 100% 105.1458 117.0009 139.4153 20.08409

Unappropriated profit brought forward  100% 100 100 100 100

Profit available for appropriation 100% 185.1458 201.1176 233.016 131.6163

Basic / diluted earnings per share – 100% 79.07524 88.0094 51.80251 7.445141

%

%

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COMMENTS:

The most important component of any profit and loss account of a banking

concern is its mark up expenses it has to pay for servicing the depositors.

Now we will analyze profit and loss account. Profit 185 increase

observed in 05 as compared to 04 this is due to:

Mark­up / Interest earned

On loans and advances to:

I) Customer

II) Financial Institution

ON investments, on deposits with financial institution, on securities

purchased under released agreement. Mark-up/Interest earned increase 195

% in 05 compared to 04. Non-mark-up / Interest income 95 % increased

as compared to 04 profits before tax is also increase 100 %.

In year 2006 profit increase 88% compared to 04 this is because of:

Mark-up / interest earned 280 % increase in 06 compared to 04 net mark-up

interest income is also increase by 166 in the same year. Fee,

Commission, and brokerage income 143% Dividend income 415 % income

from dealing in foreign currencies 322 % other income 130 % show growth

as compared to year 2004.

In year 2007 profit 233 % increase as compared to 04 major contributors as

follow:

Mark-up / interest earned 337 % net mark –up / Interest income 191 % , fee

commission, brokerage income 155 % increased as compared to 04.Dealing

in foreign currencies 362 % income earned and dividend income 520 %

increased as compared to 04.profot before tax 80 % increased show.

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In year 2008 profit remain 131% compared to 04 but decrease found

contrast to last three years it is because of:

Interest expense 953 % in 08 as compared to 04, Provision against non-

performing loans and advances 1378 % as compared to 04.

Non mark­up/ interest expenses:

Administrative expenses 320 % increased as compared to 04 as result

profit after tax decreased and effect the earning per share from 79 to 7 Rs.

per share decline observed. Country economic condition is also contributed

in the decline of profit as well as banking sector facing term oil.

Non Mark­up / Interest Income

The non-mark-up / interest income, showed an increase of 11 percent,

which was attributable mainly to income derived from dealing in foreign

currencies that registered significant growth of 33 percent. The fee,

commission and brokerage income also increased by 17 percent over last

year. Gain on sale of investment declined considerably due to downturn of

the bourses.

0

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VERTICAL ANALYSIS OF FIVE YEAR BALACE SHEET

Assets 2005 2006 2007 2008 2009 Cash and balances with treasury banks 8.176791 8.1095332 8.961578304 7.331568 7.774163

Balances with other banks 4.523664 3.8250528 4.416577446 1.919645 1.918033

Lendings to financial institutions 2.16935 7.0105091 5.054971166 7.928854 2.172622

Investments 16.08617 17.717582 17.2410386 21.64495 17.30324

Advances 65.16749 59.253585 59.73452311 55.32147 62.47516

Operating fixed assets 2.421464 2.2004577 2.294915773 2.815159 4.009124

Deferred tax assets

Other assets 1.455072 1.8832824 2.296395594 3.03836 4.347655

Total Assets 100% 100% 100% 100% 100%

Liabilities Bills payable 1.145023 0.9067408 1.107653591 1.442073 1.253608

Borrowings 12.85982 7.2793555 9.012686638 9.635694 7.367023

Deposits and other accounts 77.7463 81.870962 79.40518818 78.51744 81.32094

Sub-ordinated loans 0.933118 2.0673342 1.805959888 1.645314 1.453069 Liabilities against assets subject to finance lease 0.013212 0.0010055

Deferred tax liabilities 1.197173 0.3909148 0.443463283 0.258832 0.006299

Other liabilities 0.491627 1.4096081 1.567823132 1.767449 2.308121

Total Liabilities 94.38627 93.925921 93.34277472 91.62149 93.70906

Presented By Share Capital 1.171855 1.0386071 1.207185259 1.650364 1.968452

Reserve 4.028553 3.0810013 3.502155239 3.814165 3.718463

Unappropriated Profit 1.114816 1.084105344 1.177355 0.149851

Surplus on revaluation of assets -net of tax 0.863779442 0.09131 0.454175

total liabilities+total share holder equity 100% 100% 100% 100% 100%

.

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COMMENTS:

An analysis of percentage financial statements where all balance sheet

items are divided by total assets and all income statements items are

divided by net sales or revenues

In addition to other financial ratios over time, it is often useful to express

balance sheet items and income statement items as percentages. Common –

size Analysis, also called Vertical Analysis, or Component Percentage, or

100 percent Statements as each statement is reduced to the total of 100 and

each individual item is stated as a percentage of the total of 100.

Cash and balances with treasury banks are 8.17 % and balances with

others banks are 4.5 % of the total assets. Investment is 16 % & major

portion of assets in the form of advances which are 65 % on other hand

operating fixed assets and other assets are 2.4 %, 1.45 % respectively. So

we can say that current assets are in a large portion compare to fixed assets.

In year 2005 cash and balances with treasury banks are remain same as

previous year and balances with other banks are 3.8 %. Lending to the

financial institution and investment increase in 05 compared to 04 is

significant change. Year 2006 having same proportion of assets as in year

2005. Cash and balances with banks & balances with other banks remain

same compared to previous year but lending to the financial institution

decrease contrast to 07. Advances and others assets show increase as

compared to previous year advances are 62 % and other asset are 4 % of

the total assets.

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Liabilities:

Borrowings, deposits and others accounts make significant contributions in

liabilities side year 2004 show that borrowing 12 % & deposits and other

accounts are 77% of the total liabilities plus share holder equity. Borrowing

acquired from Pakistan as well as out of Pakistan in the form of local

currency and foreign currency, from State Bank of Pakistan borrowing in

local currency. Deposits and others accounts generated funds Under

categories of Fixed Deposits, Saving Deposit , Current accounts ,Special

exporter Accounts and Margin Accounts etc. in year 2005 deposits 81%

and others accounts stand to the total assets and share holder equity which

is increase about 4% compared to last year . In 2006 79 % deposit and other

counts of the total assets stand which is decline compared to last year but 2

% borrowing increase as compared to 05 and in year 2007 condition remain

intact. In 2008 again increase founds in the form deposits and others

accounts which stand 81 % of the total assets and other accounts.

Shareholders’ Funds

Shareholders’ funds increased to Rs. 12.97 billion at December 31, 2008

from Rs. 12.27 billion, registering an increase of 6 percent. During the

year, Bank owned land was revalued and resulting surplus of Rs. 1.86

billion was recognized as part of equity. Also, revaluation deficit on

Available for Sale investments was recognized as reduction from equity,

due to adverse movement of bourses.

- -

-

0 0

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VERTICAL ANALYSIS OF FIVE YEAR OF PROFIT AND LOSS

ACCOUNTS

2005 2006 2007 2008 2009 Mark up / interest earned+ non markup / interest income 100% 100% 100% 100% 100% Mark-up / return / interest expensed 18.25 41.40 47.34 44.06 50.47 Net mark-up / interest income 55.05 43.57 38.13 32.76 36.69 Provision against non performing loans and advances 4.53 6.17 7.65 19.89 18.126 Provision for impairment in the value of investments 0.621 0.35 0.0025 0.007 0.0024 Bad debts written off directly 0.0001

5.15 5.82 7.65 19.89 19.30 Net mark-up / interest income after provisions 49.90 37.74 30.47 12.86 17.39 Non mark-up / interest income Fee, commission and brokerage income 11.57 8.11 6.87 5.443 5.96 Dividend income 0.42 0.49 0.741 0.695 0.82 Income from dealing in foreign currencies 2.95 3.44 3.96 3.32 4.13 Gain on sale of securities - net 8.82 0.97 0.76 11.98 0.17 Unrealised gain on revaluation of investments classified as held for trading - net Other income 2.90 2.001 2.183 1.708 1.62

76.59 52.77 44.99 36.03 30.22

Non mark-up / interest expenses Administrative expenses 30.1 25.083 22.24 24.30 27.98 Other provisions / write-offs Other charges 0.0022 0.0177 0.041 0.061 0.052 Total non-markup / interest expenses 30.14 25.101 22.281 24.36 28.035

46.44 27.66 22.71 11.66 2.18 Extra ordinary / unusual items Profit before taxation 46.44 27.6687 22.71 11.66 2.18 Taxation – current year 14.31 8.020 6.67 0.499 0.082 prior years’ 1.821 1.187 0.236 – deferred 0.712 1.90 0.76 1.24 0.510

15.025 8.10 7.44 1.93 0.356 Profit after taxation 31.41 19.56 15.26 13.60 1.83 Unappropriated profit brought forward 10.16 Profit available for appropriation 31.41 34.45 26.24 22.73 11.99

Basic / diluted earnings per share - Rupees 0.00020 9.76 7.620 22.73 4.50

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COMMENTS:

Comparing figures from 2004 to 2008

PROFIT AVAILABLE FOR APPROPRIATION

Profit for appropriation having decreasing trend from 04 to 08 therefore we

have to discuss yearly figures. We have taken interest income plus non

interest income as 100 %.

In 2004 profits for appropriation is 31 % of the sum of interest and non

interest income having reasons as follow:

Mark-up / return / interest expense 18 % and net mark-up interest income

55 % stand for 05. Non mark-up interest income is better as compared to

year 05 that is because of brokerage income and fee commission is 11.5 %,

gain on sale of securities is stand at about 9 % of the sum of interest and

non interest income which is healthy singe for profit.

In year 2005 profit available for appropriation is 34 % which show slight

increase as compared to 04 having following reasons:

Income from dealing in foreign currencies is 3.44 % which is increase as

compared to previous year more over total non mar-up / interest expenses

25 % stand which is decrease as compared to last year these reasons

creating combining effect on profit available for appropriation.

In 2006 profit available for appropriation 26 % which is decrease from last

two year (31%, 34% in 04 and 05 respectively) having reasons as follows:

Mark-up /return /interest expenses in 06 increased from last two year which

is 47. 34 % (18 %, 41 % in 04 and 05 respectively) and net mark-up interest

income decrease which is 38 % as compared to two last year. Provision

against non performing loans & advances increase that is 7.65 % (4 %, 6 %

5 % 8 6

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in 04 and 06 respectively). Fee commission and brokerage income

decreases in 06 as compared to last two year that is 6.87 % (11.57 %,

8.11% in 04and 05 respectively).

In year 2007 profit available for appropriation is 22 % showing decreasing

trend because of following reasons:

Net mark-up interest income decrease in 07 compared to last years which is

32 % (55 % 43 %, 38 in 04, 05 and 06 respectively) because of provision

against non performing loans an advances increased about 20 % of the sum

of interest an non interest incomes. Fee commission brokerage income

decrease in 07 stands at (11%, %, %, in 04, 05 and 06

respectively). In year 2008 profit for appropriation stand at 12 % which is

the part of decreasing trend from 05 to 08.

Operating Expenses

Administrative expenses have increased by 23 percent over last year. This

rise is mainly due to 33 percent increase in number of branches/ sub-

branches from 150 to 200 and general rise in inflation. Cost to income ratio

(CIR) registered negative trend, as on the other hand revenues remain under

pressure due to rising on performing loans.

Return on Average Assets:

Return on average assets at the close of 2008 was 0.20 percent as against

1.54 percent last year (0.32 percent excluding one-off gain), registering a

decrease of 134 bps (12 bps on comparable basis) due to decrease in profit

for the year as against increase in total assets.

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Earnings per Share:

Earning per share (EPS) decreased from Rs 6.61 per share to Rs. 0.95 per

share restated for bonus shares issued during 2008. The decrease is

mainly due to high provisions and writes off. The last year’s EPS excluding

One-off gain works out to be Rs. 1.39 per share, thus on a comparable

basis, the decline In EPS is 31 percent

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ORGANIZATIONAL ANALYSIS

For organizational analysis we have choose three banks which will use for

comparative analysis. The information of the banks is given bellow:

In (000)

NBP (National Bank of Pakistan)

MCB (Muslim Commercial Bank)

BAFL (Bank Alflah Limited)

AKBL (Askari Bank Limited)

When we compare AKBL with NBP come to know that NBP having assets

greater than AKBL similarly liability is also greater & profitability is more

of NBP than AKBL.

Reason:

As NBP is oldest bank in Pakistan having vast branch network with 1276

branches. It means that NBP  having more access to the customer as

compared to AKBL. Field of activity is also greater with accessibility.

While AKBL is just of 14 year old as compared to NBP which is 60 years

old. There is difference of assets is (611567188) because of large banking

Bank Assets Liability Profitability Branches

NBP  817,758,326 715,299,108 23,000,998 1276

MCB 443,615,904 385,179,850 21,867,566 1040

BAFL 348,990,764 331,946,025 1,794,720 195

AKBL 206,191,138 193,219,775 461,382 200

a

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network in the country. And profit ability difference is (22539616) because

of with 1276 branches all over the Pakistan of NBP as compared to AKBL.

MCB having assets 817,758,326 while AKBL 206,191,138 showing large

difference between two banks in the country. Reason is that MCB

providing diversityfied products to the customer along with 1040 branches

in the country. Profitability is about 46 % greater of MCB than AKBL

which reflect the customer share captured in the market. While on other

hand AKBL stands with only 200 branches in the country.

When we compared BAFL with AKBL  having almost same branch

network but there is difference in the assets and profitability this is because

of BAFL having strong background with good market share in term of

customer and product line. Diversified customer products provide by the

BAFL  as compared to AKBL. But AKBL  stand in competitive

environment having huge potential to capture more market share by

enhancing products with new options for customers.

a

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FUTURE PROSPECTS OF THE

ORGANIZATION

Askari commercial bank is the leading private sector bank in the banking

network in Pakistan with many of them online branches in major cities of

the country

The operations performed by the bank are highly automated that result in

assurance for the customers that their transactions are completed reliably,

efficiently and securely.

The bank has the largest ATM Network cross the country. The customers

of AKBL withdraw access their funds any time at all the ATM Sites with

ASKCASH Logo.

The management of the bank believes in customer focused banking rather

than the product oriented banking. The products and services designed by

the bank are specifically tailored to the individual needs of its customers.

The priority banking centre’s of the bank offer an unmatched where the

customer receives highly privileged services in highly elegant

environment. It gives the chance of experiencing new standards in banking.

Designed specially for those who appreciate only the finest things in life,

Priority Banking offers the very highest levels of personalized banking to

match customer’s unique status.

AKBL management is quite prepared to adopt the latest advancements in

technology resulting in revolution in the banking operations such as check

clearing process, computer based teller equipment, automatic teller

machines, and electronic funds transfers among the others.

The organizations showing concern for the people, ethics, and environment

enjoy good public reputation and are able to reap the benefits in the long

run. AKBL management is quite sensitive to this issue.

I a

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SHORT FALLS/ WEAKNESSES

In my opinion there are some points might be short falls of the bank which

are given bellow:

Understanding and the effective management of the human resources

is the most difficult challenge faced not only by the bank but by all

the organizations. Even though the people have been sacrificed in the

new organizational developments, it is becoming clear that the true

lasting competitive advantage comes through human resources and

how they are managed. 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 famous and useful concept given by Adam Smith in 1776 seems

to be missing in the bank. The employees are constantly rotated from

one job to another job of totally different characteristic in the view of

giving them the know-how of the working in all the departments. But

think this is not very good tactics used by the management.

Otherwise the situation might be like this ‘Jack of all and master of

none.’

There is a high degree of centralization in the bank. Almost all the

decision-making is in the hands of the upper management. But

centralization is effective up to a certain level otherwise it becomes

inefficient and at times costly too. I personally observed that delay

occurred in the operations of the employees only due to the fact that

they had not got any instructions from the head office.

To

&

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CONCLUSION

In the Askari Bank I have spend six week for internship programme and try

to understand the working of different departments. I come up with some

areas to improve like customer facilitation, recruitment, rotation of staff

between the branches. capture more market share bank has to be

introducing new facilitation plan for the customer satisfaction. There are

some flaws in the recruitment policy and need to be hire staff with banking

related qualification which will give the better out come.

Over all bank performance is good as we look its age because it has to

cover long distance to become first choice for customer in the banking

sector. During policy formation must keep in mind that how customer will

involve with the policy and what kind of benefits and problems have to be

faced by the customer through this policy.

New products Services will have to be introduce in the bank by

analyzing the customer needs and market demands which will build the

image and prestigious among the customers. Bank has lot of potential to

become a leader in the banking sector.

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REFERENCES

For the preparation of this report I have used sources are given bellow:

Annual reports of the Askari Commercial Bank Limited

http://www.askaribank.com.pk/financialstatement.php

http://www.bankalfalah.com/about/financial_performance.asp

http://www.nbp.com.pk/Publications/index.aspx

http://www.mcb.com.pk/ir/fin_data_rep.asp

Books

Fundamentals Of Financial Management

Twelfth Edition by: James C. Van Horne & John M. Wachowicz, JR

Principles Of Corporate Finance

Eighth Edition by: Richard A. Brealey, Stewart C. Myers and

Franklin Allen.

Teacher consultation (Mr. Muhammad Azeem)

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