Bank Alfalah

Internship Report

Internship Report

Bank Alfalah LimitedSubmitted by: Sadia Abad

Program: M.Com Session:

2012 2014

Registration No: 32131080

Department of Commerce

National College of Business Administration & Economics

Lahore, Pakistan

Dedication:I dedicate my whole work to my almighty Allah who gave me the abilities to complete my internship report and HIS beloved Prophet Hazrat Muhammad (P.B.U.H) then to the True Followers His Prophet Hazrat Muhammad (P.B.U.H). I specially dedicate this report internship to my parents who inspire me in every field of life, to my teachers, friends, and staff of the bank. Everyone I mentioned above has helped me a lot in preparation the internship report and learning the knowledge about banking. Acknowledgement:First of all thanks to Allah for his countless blessings, this is made possible to attain knowledge. Im really grateful to my parents who helped and support me to get best practical knowledge in every phase of life. I acknowledge that I have completed internship with the help of my instructor and staff at bank. I acknowledge that I will complete internship report with the guidance of Mr. Kashif Mehmood. They helped and guided me a lot in preparation the internship report. I also acknowledge that the branch manager and other staff at the bank also helped me in learning and preparing the internship report. All the staff members are much cooperative.Executive summary:Pakistan after partition, banking sector does not have a strong economic position. The number of events likes the nationalization of banks in the 1970s. However today, the banking industry of Pakistan has been growing over the past few years, mainly consistent policies implemented by the Government of Pakistan, including the privatization of the banks as will as the State Bank of Pakistans monetary policy has been very friendly toward the banking industry..

The financial statistics of Bank Alfalah are as impressive as their human resource. The profit after taxation for Bank Alfalah in 2013 amounted to Rs 4,675,950 (000) and its total assets amounted to Rs.610,614, 291 (000). The earning per share moves up from Rs.3.38 to Rs.3.47 in 2013. Bank Alfalah promotes its products and services through print and electronic media. Bank Alfalah also promotes itself by sponsoring different events. (As per Bank-Alfalah Annual Report-2013)The major 5 competitors of Bank Alfalah that are want to become the leading banks of Pakistan and they are placed in large banks categories. To create this edge, technology has played an important role in the industry as banks are continuously trying to improve its products and services by introducing innovative products.

I have six weeks internship at Bank Alfalah Main Branch Toba Tek Singh and worked in account opening and customer services department, operations department, and accounts department. Some of the work that I can do in these departments included collecting cheques, filling account opening forms, and activity checking. There were no such big problems found in the working of Bank Alfalah.

Lastly Bank Alfalah has seen a rapid growth in its activities by introducing a range of products and services and showing its existence in the country by opening new branches and in future should keep this energy and always struggle to become the best.Table of contents2Dedication:

Acknowledgement:3Executive summary:41. Brief introduction of the organizations business sector:62. Overview of Bank Alfalah Limited:72.1Brief history72.2 Organizational Hierarchy chart82.3Business volume92.4Product lines92.5Competitors102.6Brief Introduction of all the departments103. Plan of internship program133.1 Brief introduction of the branch where you did your internship133.2 Starting and ending dates of your internship134. Training program144.1 Reason for selecting the organization:144.2 Duties performed144.3 Learning Experiences145. Ratio analysis166. Future Prospects of the Organization327. Conclusion338. Recommendations for Improvement34

1. Brief introduction of the organizations business sector:Banks play a vital role in the economy of any country. The State Bank of Pakistan is responsible for making monetary policy and over seeing all the activities being carried out in the banks. They are also responsible to print the currency note and function of lender of last resort of other banks as well as make policy to control the regulations of banking sector in Pakistan.

In addition to that the functions of the earlier banks were quite simple but in this modern world we see that the banks perform a wide variety of functions. They perform not only depositing money or issuing loans to different people or organizations but also they are involved in buying and selling of shares, debentures and various stocks. They sell different types of securities, bonds and deal with foreign exchange. Every bank issues debit and credit cards and provide online banking to its customers. The most important function of the state bank is to making the monetary policy to stabilize the economic conditions. The commercial banks are interested in making profit. They give loans on interest bases and earn profit in shape of interest. Mostly business communities are the customers of that bank. To support the SME and agricultural sectors, banks provide loan at reasonable interest rate to fulfill their needs. Commercial banks also accept the deposits of customers on saving scheme bases. They provide the interest on saving amount of the depositors. Various saving schemes are use to provide the interest benefits to their customers.

Nationalization of banks in 1970, in Pakistan was a major upset the domestic banking industry affected by political leadership and bureaucracy. The era of nineties after privatization the banking sector improve their business rapidly. The Muslim Commercial Bank was the first bank to privatize.

Now Pakistan has well developed banking system, which provides wide variety of functions which is the backbone of the economy. There is more then 43 banks works in Pakistan.

2. Overview of Bank Alfalah Limited:2.1 Brief history

Bank Alfalah was incorporated as public limited company on june21, 1992 under the companiesordinance1984 and deals in commercial banking and other services associated with it as defined in the Banking companies ordinance 1962. Bank Alfalah is registered at both Karachi and Lahore Stock Exchange. After privatization its banking operations commenced from November1, 1997.The bank is owned and operate by Abu Dhabi Group and is the sixth largest bank in Pakistan. They bought the majority shares of the bank and so got the rights to control the banks operations. Bank Alfalah conducts a business through a network of 574 branches across 196 cities in Pakistan and also international presence in Afghanistan, Bangladesh, Bahrain and representative office in UAE. The bank provides the financial solutions to consumers, corporation, institutions and governments through a broad spectrum of products and services.

2.2 Organizational Hierarchy chart

2.3 Business volumeAs per audited financial statements,

December 31, 2013.201420132012

Total AssetsRs. 610,614,291 Rs. 536,567,969 Rs. 468,294,146

Total LiabilitiesRs. 578,712,547 Rs. 506,508,650 Rs. 442,740,604

EquityRs. 31,901,744 Rs. 30,059,319 Rs. 2,553,542

Share capitalRs. 13,491,563 Rs. 13,491,563 Rs. 13,491,563

ReserveRs. 7,274,222 Rs. 5,636,549 Rs. 4,100,264

Inappropriate profitRs. 7,499,831 Rs. 6,373,545 Rs. 5,024,563

2.4 Product linesBank Alfalah major products services are discussed below.List of Bank Alfalah Products1. Current Account

2. PLS Account

3. Alfalah Kifayat Account

4. Basic Banking Account (BBA)

5. Royal Profit Account (RP)

6. Alfalah Mahana Amdan Account

7. Alfalah Kamyab Karobar

List of Bank Alfalah Services1. Alfalah Karobar finance2. Alfalah Milkiat finance 3. Alfalah Quick finance4. Alfalah Agri-finance 5. Lockers

6. Remittance7. Alfalah Car Finance8. Alfalah Cards

9. Money Gram10. On Line Banking2.5 CompetitorsAccording to banking survey report prepared by KPMG Taseer Hadi & Co. in 2013, the banks are categorized into large, medium and small by its total assets. Bank Alfalah are placed 6th largest bank in Pakistan. The competitors of bank Alfalah have strong market position and huge efforts are desired to lead the competitive market. The financial summery (in millions) of competitors of Bank Alfalah and credit rating are given below. Serial#BankTotal AssetsEquityDepositsInvestmentsProfit after TaxRating AgencyShort TermLong Term

1HBL1,715,271142,4341,401,230826,06223,027JCR-VISA-1+AAA

2NBP1,371,718160,6641,101,845396,4125,307JCR-VISA-1+AAA

3UBL1,083,633111,273889,526458,84619,731JCR-VISA-1+AA+

4MCB821,278115,463632,309453,80821,950PACRAA1+AAA

5ABL734,76266686608,407363,81114,783PACRAA1+AA+

6BAF610,61431,902525,526219,6904,676PACRAA-1+AA

2.6 Brief Introduction of all the departmentsBank Alfalah has a number of departments in a branch however it is possible that a specific department may not be present/ offering its servicing in a branch. For example credit card department may not be present in a branch. Following is the brief introduction of the departments of Bank Alfalah Toba Tek Singh.Account Opening Department

This Department is responsible for the opening and closing of all sorts of bank accounts. This department mainly comes under the general banking facilities being provided by the bank. The process of opening an account starts by filling out a form and submitting your CNIC. The form demands to input information like the person's name, DOB, address etc. A person can fill the form according to the type of account he wishes to open at the bank. Alfalah generally offers accounts for following types which are:

1- Accounts for Individuals & sole proprietorship business

2- Account for Joint persons

3- Account for Minors4- Accounts for Partnerships

5- Accounts for Companies6- Accounts for minors

Remittances Department

Remittance means the transfer of funds from one account to another or from one city to another city. All banks charge a fee on such transfers and so it is a source of income for the banks. Following instruments are used for transferring money.1- Pay Order

2- Demand Draft

3- Travelers Cheques

4- Call Deposit Receipt5- Telegraphic Transfer (TT)Clearing DepartmentIn the clearing department the transferring of funds is done. The transfer of funds may take between the same banks or between different banks. Clearing is done for cross Cheques in the following two ways inward clearing and Outward ClearingSame day clearing takes place for local Cheques. The Cheques presented belonging to the banks located in the same city are cleared on daily basis. Inter city clearing takes place between two branches of banks located in different cities. At bank Alfalah the customer is charged the courier fee when he presents Cheques that fall in the inter city clearing category.Cash Department Cash department is very sensitive department of every bank. No body is allowed freely like other departments. Cash security is also important to safe from theft and also sensitive department. Some times customer pays frauds are made in this department so extra care needed.Credit Department

The core activity in commercial banking is providing loans to people who have a legitimate running business. The reason that this activity is considered to be vital is its potential to generate revenue for the bank. Once all the investigation and back ground checks are done at the branch level then the loans is sanctioned from the head office of Bank Alfalah in Karachi. The two types of credit facilities offered at bank Alfalah are:Accounts Department

This particular department is at the back end of the organization but it performs a list of vital functions. These functions include:a. Budgeting

b. Reporting

c. Maintenance & depreciation of fixed assets

d. Miscellaneous functionsComments on the organizational structure

The organizational structure of all the private institutes is good. The organizational structure of Bank Alfalah Limited is very good. The Bank Alfalah is working efficiently under this structure build a customers relation with a strong team work. According to my branch manager, the organizational structure of the Bank Alfalah is very good structure and whole the organization is working under this structure efficiently and effectively.3. Plan of internship program

3.1 Brief introduction of the branch where you did your internship

I have completed my internship at Bank Alfalah Limited Toba Tek Singh branch. It is situated at P-105 Farooq Road Toba Tek Singh. This is business market area, situated at almost near the main bazaar Toba Tek Singh. It has many customers of this market as well as outside the market and outside of city. This main branch has good value in the market.3.2 Starting and ending dates of your internship

I have started internship from December 18, 2014 and will be ended on January 29, 2015 at Bank Alfalah Limited Toba Tek Singh Main Branch. My internship duration is 6 weeks.

3.3 Names of the departments in which you got training and the duration of your training

Detail of Department(s) Attended by the Internee during the Internship Program

Sr. #Name of the DepartmentDuration

From (Dates)To (Dates)

1Account Opening Department18-12-201431-12-2014

2Clearing Department01-01-201507-01-2015

3Remittances Department08-01-201514-01-2015

4Accounts Department15-01-201529-01-2015

4. Training program4.1 Reason for selecting the organization:

The bank Alfalah is one of the fast growing banks in Pakistan. It started their banking operations at Toba Tek Singh since 2004. It is a conventional banking branch. The staff of bank Alfalah Toba Tek Singh is very friendly and cooperative. They have well interpersonal and on the job skills. So I select this organization for internship.

4.2 Duties performed

I have performs duty in a bank is customer relations and receptions job and filling cash a Cheques slip for local and online transactions. With this duty I also work in account opening department and personally fill the account opening forms. Then I work in remittance fill remittance applications to make pay order and demand draft etc. There are two types of transfers Internal Transfers and Online Transfers After remittance I receive Cheques and clearing the inter city as will as outward request of Cheques.

Lastly I work in account department and inspect the day to day transactions, I also deal with inter office expanses and monthly performance reports.

4.3 Learning Experiences

Knowledge Gained

I learn how to work in an office like Banks, how to deal with customers and build up long terms relations. I also learn how to work with in a team. Cooperative culture of an organization helps to build long term customers relationship.

Skills Learned

First of all I learn communication skills, build up friendly relations with staff at bank and how to improve professional experience and gain ability to work with in an organization and take a good start of professional career. As a student of business administration I learn behavior of organizational culture is very important and greatly effect on customers. Personality is also important tip learn and how to lead the staff and build cooperative culture with in an organization. I read financial reports of branch bank transactions process learning.

Attitudes Observed/Values Gained

The bank staff is very integrated, responsible and hardworking. They work with in a team and managers operations and branch managers are supervises the staff.

Most Challenging Task Performed

All works are done with in a process the staff members guides me at every task. With the help of proper guide I have not face any problem at any stage o my training program.

5. Ratio analysis

1. Net Profit Margin

2. Gross Spread Ratio 3. Spread Ratio

4. Non Interest Income to Total Income Ratio

5. Return on Assets (ROA)

6. Du Pont Return on Assets Ratio

7. Return on Total Equity (ROE)

8. Debt Ratio

9. Debt / Equity Ratio

10. Times Interest Earned Ratio

11. Advances / Deposits Ratio

12. Operating Cash Flow Ratio

13. Dividend per Share

14. Earnings per Share

15. Price/Earning Ratio Net Profit Margin

201220132014

24.53%30.33%29.52%

Interpretation:NBP has its net profit margin of 29.52% at 2013 that is good, want to meet the 2012s ratio trend. These results show the increasing trends in the coming years by bank Alfalah. More earning capacity makes a great goodwill of the business in the competitive market. With the increasing margin the market value of shares also improve.Gross spread ratio

201120122013

0.32 Times0.33 Times0.36 Times

Interpretation:

As compare to previous two years the ratio indicator go up which is positive and favorable sign for bank Alfalah. The ratio trends of bank Alfalah are expected to improve in the coming years. The more gross spread ratio means more share are offered to public to extend their business volume.

Spread Ratio

201120122013


Interpretation:The spread ratio is decreasing constantly as compare to previous years but have a favorable trend for current coming years. The banks have good control on interest expense and more interest earn as compare to the previous years.Non-interest income to total income Ratio

201120122013

1.53 Times 1.60 Times1.77 Times

Interpretation:As compare to the previous years the bank Alfalah gain more non interest income. This is a favorable sign for Bank Alfalah and trend to improve non-interest income in coming years. A great proportion of non-interest income mean save more expenses. Return on Assets (ROA)

*100201320122011


Interpretation:Return on Assets of Bank Alfalah show the favorable sign and want to meet the trend of 2012. The graph of ROA shows that to improve in coming financial years. The bank wants to improve that ratio to meet the liabilities against assets in future. Du Pont Return on Assets Ratio

201120122013

0.75%0.85%0.77%

Interpretation:The difference between the two profitability measures, ROA and ROE, is the use of debt financing. Du Pont Return on Assets of Bank Alfalah show the improving and favorable sign. The trend of that ratio is increasing in the upcoming years.Return on Total Equity (ROE)

201320122011


Interpretation:Return on Equity of Bank Alfalah show the improving sign but not meet 2012 results. The value of ROE aspect to improves in coming financial years. This is a good sign for share holders.Debt Ratio

201120122013


Interpretation:Debt ratio expresses total obligations or liabilities against total value of assets. The results show that the Bank Alfalah debt values more than previous years which means business volume expand.

Debt / Equity Ratio

201120122013


Interpretation:Obligations or liabilities against total value of equity represent the debt burden face by the share holders. The results show that the Bank Alfalah debt values more than previous years which means business affect on share holders equity.

Times Interest Earned Ratio

201120122013


Interpretation:The ratio indicates how many times a company could pay the interest with its before tax income. The results of Bank Alfalah indicate the positive sign but not meet the 2012s results.

Advances / Deposits Ratio

201120122013


Interpretations:Banks liquidity measures by dividing the banks total loans by its total deposits. The advance deposit value show positive sign but not meet 2012s value.Operating Cash Flow Ratio

201120122013


Working:

Current Liabilities = Bills payable + Other Liabilities2013: 9543480 + 10537195 = 200806752012: 8430910 + 13567083 = 219979932011: 5403453 + 10427754 = 15831207

Interpretations:

Banks operating liquidity measures by dividing the banks total operating cash flow by its current liabilities. The operating cash flow value show positive sign but not meet previous year performance.

Dividend per Share

201120122013

0.14 Per Share0.26 Per Share0.36 Per Share

2013: Shares Face Value @20%

= 10*0.20=2 per Share2012: Shares Face Value @20%

= 10*0.20=2 per Share2013: Shares Face Value @17.50%

= 10*0.175=1.75 per Share

Note: These values based on % are approved by directors and value in column is actually distributed to shareholders. The graphical representation is based on column.

Interpretations:

Dividend distributed to the share holders as value improves as compare to the previous years this is a positive sign and beneficiary for the share holders as well as for Bank Alfalah.

Earnings per Share

201120122013


Interpretations:

Earnings per share value show more earning as compare the previous years. The value of EPS improves constantly. EPS is a positive sign for the bank and aspect to improve in coming years.

Price/Earnings Ratio

201120122013


Interpretations:

Average market value of the shares indicates growing sign for bank Alfalah. With increase the market value the EPS increase with increasing rate. Mostly the price fluctuation is based on market ups and down.6. Future Prospects of the OrganizationBank Alfalah intends to increase their network of branches with in Pakistan in the future. Bank Alfalah track reliable record of strong performance in Pakistans competitive banking sector. The management of Bank Alfalah has made a clear statement that they will get aggregate progress in the fields of microfinance and SME lending.

In addition Islamic banking in Pakistan a lot of peoples is taking interests in the products currently offered by the Islamic banking system of Bank Alfalah. Thus more Islamic Branches of Bank Alfalah being established inside Pakistan. Their strategy looks to be aggressive here too as the intent is to grab most of the market share by offering new products to its customer and take an early lead in the competition.

7. ConclusionBased on my experience and ratio analysis, the Bank Alfalah is one of the fast growing banks in Pakistan. His main competitors have a strong position in the competitive market. So to lead the market the Bank Alfalah wants to improve their marketing strategy, introduce new innovative product and technological improvement. Their focus would be to continually seek out development opportunities through increased quality in a wider range of products and services to their customers. It is providing top quality of customer services.

Overall, Alfalah Bank has a very dynamic position, technologically updated. Keeping in view the growing trend of Islamic banking is Pakistan, Bank Alfalah also establish Islamic Banking branches for customer and deal according Islamic mode of financing.

Lastly I can say the bank Alfalah is gain more value of EPS attracts the share holders to buy more shares.

8. Recommendations for ImprovementDuring my internship program, I see the internal atmosphere, banking policies, products and services. Some of the recommendation assigns for bank Alfalfas staff.

Equal employment opportunities should be provided at merit bases.

Customer survey should be obtained on banking operation by personally visiting the market.

Frequent training sessions are conducted to improve the working performance of employees.

Cash rewards for employee an also provided promotional opportunities.

Revision of HR policy are desire to improve the hiring the staff.

Performance evaluation techniques should be adopted

Keep the work done by the staff as a team work so improve the overall organizational performance.

There is need to establish new branches with professional employees so that its market position improved.Delegation of authority to lower levels is necessary for reduce decision making time.Employees job rotation is need so that their experience is increased.

There is need to increase equity part and reduce reliance on long term debt.

Modern commercial advertisement on cable is effective.

There is need to increase earning of the bank so that its net profit margin goes up.

Chairman

Board of Directors

President (CEO)

Chief Operating Officer

Group Head

Regional Manager

Area Manager

Branch Manager

Operation Manager

Non-Clerical Staff

Officers

17

_1485686921.xls

_1485689083.unknown

_1485691215.unknown

_1485692288.xls

_1485695906.xls

_1503301255.xls

_1485692652.xls

_1485692843.xls

_1485692467.xls

_1485691423.xls

_1485691622.xls

_1485691274.unknown

_1485689164.unknown

_1485689684.xls

_1485690105.xls

_1485691197.unknown

_1485689450.xls

_1485689125.unknown

_1485689145.unknown

_1485689094.unknown

_1485688147.unknown

_1485688714.xls

_1485689023.unknown

_1485689073.unknown

_1485688991.xls

_1485688380.unknown

_1485687908.unknown

_1485687941.unknown

_1485687270.xls

_1485687894.unknown

_1420824430.unknown

_1420828239.unknown

_1482726266.unknown

_1484049782.unknown

_1485685906.unknown

_1485685920.unknown

_1485685880.unknown

_1484048439.unknown

_1484049522.unknown

_1484049619.unknown

_1484049449.unknown

_1484048392.unknown

_1484048427.unknown

_1482985730.unknown

_1420914084.unknown

_1420921731.unknown

_1482726168.unknown

_1420921624.unknown

_1420832004.unknown

_1420914062.unknown

_1420914032.unknown

_1420831878.unknown

_1420831922.unknown

_1420828920.unknown

_1420824636.unknown

_1420827036.unknown

_1420828127.unknown

_1420828134.unknown

_1420825911.unknown

_1420824448.unknown

_1420824526.unknown

_1420824601.unknown

_1420824439.unknown

_1420656157.unknown

_1420818339.unknown

_1420820124.unknown

_1420824280.unknown

_1420817923.unknown

_1420818163.unknown

_1420817492.unknown

_1420656154.unknown

_1420656155.unknown

_1420653641.unknown

_1420653726.unknown

_1420653497.unknown

Bank Alfalah

Documents

Transcript of Bank Alfalah