Imran MehmoodImran Mehmood

mc070200390mc070200390

MBA (Finance)MBA (Finance)

Askari Bank Ltd.Askari Bank Ltd.

Khanewal BranchKhanewal Branch

Brief Introduction of the Askari Bank

Date of Existence Date of Existence October 9October 9, , 19911991 by AWT (Army welfare Trust) by AWT (Army welfare Trust) Started operations during Started operations during April 1April 1, , 19921992 Listed on KSE, LSE, ISEListed on KSE, LSE, ISE

Business volumeBusiness volume

Assets over Rs. 206 BillionAssets over Rs. 206 Billion Over 8 Lacs CustomersOver 8 Lacs Customers

Competitors of the Askari BankCompetitors of the Askari Bank

National Bank of PakistanNational Bank of Pakistan Meezan Bank LimitedMeezan Bank Limited Allied Bank LimitedAllied Bank Limited MCB Bank LimitedMCB Bank Limited NIB Bank LimitedNIB Bank Limited United Bank LimitedUnited Bank Limited Habib Bank LimitedHabib Bank Limited House Building Finance CorporationHouse Building Finance Corporation Khushhali Bank LimitedKhushhali Bank Limited

Organizational Hierarchy ChartOrganizational Hierarchy Chart

Training ProgramTraining Program

Weekly Training ScheduleWeekly Training Schedule

Agriculture - Finance DepartmentAgriculture - Finance Department

Maintaining Database Completing files of Clients those request for Loans Providing necessary information about the loan Checking accounts of the customer in the

computer data base to giving current information. Computer Database Work

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Account Opening department How to fill the deposit SlipHow to fill the deposit Slip How to fill the different accounts FormHow to fill the different accounts Form How to fill the voucher for issuing of the How to fill the voucher for issuing of the

Cheque Book for the first time Cheque Book for the first time How to fill the requisition slip for the second How to fill the requisition slip for the second

time issuancetime issuance

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Account Opening department

Formalities for opening an account Formalities for opening an account How to issue the Cheque BookHow to issue the Cheque Book How to enter it in the register How to enter it in the register What are the procedures for the What are the procedures for the

issuing ATM cardissuing ATM card

Clearing DepartmentClearing Department

Responsibilities

1. Inward clearing

2. Outward clearing

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Clearing Department

Inward ClearingInward Clearing

Entering the cheques lodged for inward clearingEntering the cheques lodged for inward clearinge.g., cheque number, account holder name, cheque e.g., cheque number, account holder name, cheque

number, bank name and amount to be paidnumber, bank name and amount to be paid

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Clearing Department

Outward ClearingOutward Clearing

Same as entering cheque number account holder Same as entering cheque number account holder name amount and Bank namename amount and Bank name

REMITTANCE DEPARTMENT

Demand Draft.Demand Draft. Pay order.Pay order. Traveler's ChequeTraveler's Cheque

Structure of Finance DepartmentStructure of Finance Department

Departmental hierarchyDepartmental hierarchy

First LevelFirst LevelSenior Agricultural Credit Officer (SACO)Senior Agricultural Credit Officer (SACO)

OG1OG1Second LevelSecond Level

Agricultural Credit Officers (ACO’s)Agricultural Credit Officers (ACO’s)OG2OG2

Third LevelThird LevelField Credit OfficersField Credit Officers

(Commission based staff) (Commission based staff)

Functions of Finance Department

Accounting system of the organizationAccounting system of the organization

1.1. Fully Computer Based Accounting systemFully Computer Based Accounting system2.2. Reliable Electronic data is used in decision making.Reliable Electronic data is used in decision making.3.3. Generation of funds from Sales of Shares and Fixed Deposits from Generation of funds from Sales of Shares and Fixed Deposits from

Customers.Customers.4.4. High rate of Interest on Loan and Different Services good Sources High rate of Interest on Loan and Different Services good Sources

of fundsof funds5.5. Allocation of funds by providing Financial Services.Allocation of funds by providing Financial Services.6.6. Double Entry Book keeping SystemDouble Entry Book keeping System7.7. FoolproofFoolproof

Finance system of the Askari Bank

Based upon borrowing and lendingBased upon borrowing and lending

Use of electronic data in decision making

1.1. Fully Computer Based Accounting Fully Computer Based Accounting systemsystem

2.2. Reliable Electronic data is used in Reliable Electronic data is used in decision making.decision making.

Mobilization of funds

1.1. AdvertisementsAdvertisements

2.2. Sales Promotions ActivitiesSales Promotions Activities

Generation of funds

1.1.Sales of Shares Sales of Shares

2.2.Fixed Deposits from CustomersFixed Deposits from Customers

Sources of funds

1.1.Fixed Deposits from CustomerFixed Deposits from Customer

2.2.Sales of SharesSales of Shares

3.3.General Banking IncomeGeneral Banking Income

Allocation of funds

1.1.Lending to Financial InstitutionsLending to Financial Institutions

2.2.Lending people on interestLending people on interest

E.g. Loans, Car Finance, House E.g. Loans, Car Finance, House FinanceFinance

Critical Analysis

You are required to present all the financial You are required to present all the financial statements (balance sheet, profit and loss statements (balance sheet, profit and loss account, cash flow statement, etc).account, cash flow statement, etc).

a)a) Financial analysis Financial analysis• Ratio analysisRatio analysis• Horizontal analysisHorizontal analysis• Vertical analysisVertical analysis

b) b) Organization analysis in comparison with Organization analysis in comparison with its industry (or with its competitors)its industry (or with its competitors)

c)c) Future prospectus of the organization Future prospectus of the organizationYou are required to show complete You are required to show complete

calculations.calculations.

Financial AnalysisRatio AnalysisRatio Analysis

Uses of Ratio Analysis

•Make comparison between investments

•Analyze working capital

•Adjusting the component of working capital if needed

Users of Financial Ratios

•Managers•Stock Analyst•Credit Analyst

Balance Sheet 2008

Profit and Loss Account

Cash Flow Statement

Statement of Changes in Equity

Essential Financial Ratios for Essential Financial Ratios for 20082008

Current Ratio = Current Assets / Current LiabilitiesCurrent Ratio = Current Assets / Current Liabilities

= 19,984,449 / 17,774,976 = 19,984,449 / 17,774,976

= 1.12= 1.12

Current RatioCurrent Ratio

Working CapitalWorking Capital

Working Capital = Current Assets – Current Working Capital = Current Assets – Current Liabilities Liabilities

=19,984,449 - 17,774,976=19,984,449 - 17,774,976

=2,209,473=2,209,473

Times Interest EarnedTimes Interest Earned

Times Interest EarnedTimes Interest Earned = Earning Before Tax / = Earning Before Tax / Interest ExpInterest Exp

= 461,382 / 5,915,615= 461,382 / 5,915,615

= 0.077993919= 0.077993919

Debt RatioDebt Ratio

Debt RatioDebt Ratio = = Total Debt /Total AssetTotal Debt /Total Asset

= 18,186,248 / 206,191,138= 18,186,248 / 206,191,138

= 0.08820092= 0.08820092

Debt Equity RatioDebt Equity Ratio

Debt Equity Ratio = Total Debt / Total EquityDebt Equity Ratio = Total Debt / Total Equity

= 18,186,248 / 12,034,895= 18,186,248 / 12,034,895

= 1.51 = 1.51

Return on AssetsReturn on Assets

Return on Assets = Operating Income / Average Return on Assets = Operating Income / Average Total AssetsTotal Assets

= 2,531,035/ 206,191,138= 2,531,035/ 206,191,138

= 0.012275188= 0.012275188

Return on InvestmentReturn on Investment

Return on InvestmentReturn on Investment = Net Income / Total = Net Income / Total AssetsAssets

= 2,531,035/206,191,138= 2,531,035/206,191,138

= 0.012275188= 0.012275188

Horizontal and Vertical AnalysisHorizontal and Vertical Analysis

SWOT Analysis of the Askari SWOT Analysis of the Askari BankBank

Means

To analyze Strengths and weaknesses of the organization, which are part of the internal the environment

To analyze the threats and opportunities that are part of external environment.

StrengthsStrengths

Largest Financial Institution of PakistanLargest Financial Institution of Pakistan Strong Customer relationship managementStrong Customer relationship management Vast & Integrated Network High Market Share Share Highest share price Rs. 418 in month of January , Highest share price Rs. 418 in month of January ,

2009 2009 Military Sponsored EnterpriseMilitary Sponsored Enterprise

Weakness

Lack of Marketing PromotionsLack of Marketing Promotions Furniture and FixtureFurniture and Fixture White Elephant BranchesWhite Elephant Branches Low number of branchesLow number of branches Idle HR DepartmentIdle HR Department

Opportunities

Technological AdvancementTechnological Advancement Facility for Illiterate peopleFacility for Illiterate people Emphasize on Agriculture Sector of PakistanEmphasize on Agriculture Sector of Pakistan Closing White elephant branchesClosing White elephant branches

Threats

Economic EnvironmentEconomic Environment Political and Legal environmentPolitical and Legal environment Threats from Competitors e.g. MCBThreats from Competitors e.g. MCB

Conclusion

Financialy Strong BankFinancialy Strong Bank

Rational Decision making from top management Rational Decision making from top management at corporate levelat corporate level

Attraction for DepositorsAttraction for Depositors

Presentation of ethics from staff of bankPresentation of ethics from staff of bank

Creativity, Innovative and reliableCreativity, Innovative and reliable

Recommendations

High trained employeesHigh trained employees

Must create friendly environment with customersMust create friendly environment with customers

Marketing promotions are necessaryMarketing promotions are necessary

Should deal in foreign currencyShould deal in foreign currency

Should analytically analyze while issuing loanShould analytically analyze while issuing loan

Should increase the financing activitesShould increase the financing activites

Security system must be updatedSecurity system must be updated

Increase number of employees Increase number of employees

Thank YouThank You