Finance

shahaanzulfi@gmail.
com
Virtual University of Pakistan

Evaluation Sheet for Internship Report
Spring 2010
FINI619: Internship Report (Finance) Credit Hours: 3
Name of Student: Shahaan Zulfiqar

Evaluation Criteria Result
Written Work Status
Pass
(Internship Report)
Student’s ID: MC080404704
Presentation & Viva Voce
Final Result
Supervisor:
SHAHAAN ZULFIQAR
shahaanzulfi@gmail.com
Mistakes have been highlighted Formatted: Left
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IN THE NAME OF
ALLAH
THE MOST GRACIOUS & THE MOST MERCIFUL
VIRTUAL UNIVERSITY OF PAKISTAN

Masters of Business Administration (Finance)
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Title page
National Bank of Pakistan
Shahaan Zulfiqar
Student ID: MC080404704
Session 2008
Virtual University of Pakistan
Letter of Undertaking
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Original Internship Completion certificate
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Dedication
I dedicate my work to my mother (Late) and my

most important friend SHABANA SHAFIQUE.
Acknowledgement
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Nobody has complete knowledge in this world. Every body needs support.
I have prepared my internship report under following NBP personnel. These people
helped me a lot for gathering data and resources for this report.
I mention their names below:
Person name Post name

Zahid Hussain OGІ
Saleem Javaid Chishti AVP
Khalid Mehmood OGІІ
Shabana Shafique Class Mate
Adeel Friend
Imran Zulfiqar Brother
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Executive Summary:
This report is based on internship in National Bank of Pakistan Nawan Shaher Branch
Multan. It is a famous and reputed bank of Pakistan. National Bank of Pakistan maintains
first position in banking sector in Pakistan. This report is based on the activities which are
performed in this bank. This report contains Introduction, company background, goals,
Organizational Structure, Products and Services Offered and bank tariffs of National
Bank of Pakistan. There are also stated the activities which I performed during my
internship in the branch. There are also mentioned the way of investment, rates of
investment, all types of financing and loans facilities the National Bank of Pakistan
provides. The problems in this branch are also discussed. This report also intimates about
the daily reserves which are required by the branch to meet the need of its daily
transactions.
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Table of contents
Title Page#
Evaluation Sheet 1
In the name of ALLAH 2
Title page 3
Letter of undertaking 4
Original Internship completion certificate 5
Dedication 6
Acknowledgment 7
Executive summary 8
Table of contents 9
Brief introduction of the organization’s business 10
sector
Overview of the organization 12
Organizational structure 20
Plan of internship program 27
Training program 29
Structure of the Finance Department 41
Functions of the Finance Department 42
Critical analysis(Financial Analysis) 46
Ratio Analysis 58
Horizontal Analysis 77
Vertical Analysis 81
Industry Analysis 84
Trend Analysis 88
Future prospects of the organization 110
SWOT analysis 111
Conclusion 114
Recommendations 115
Reference & Sources 116
Annexes 117
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Introduction of the organization’s business sector

National Bank of Pakistan was established on November 9, 1949 under the National
Bank of Pakistan Ordinance, 1949 in order to cope with the crisis conditions which were
developed after trade deadlock with India and devaluation of Indian Rupee in 1949.
Initially the Bank was established with the objective to extend credit to the agriculture
sector. The normal procedure of establishing a banking company under the Companies
Law was set aside and the Bank was established through the promulgation of an
Ordinance due to the crisis situation that had developed with regard to financing of jute
trade.
The Bank commenced its operations from November 20, 1949 at six important jute
centers in the East Pakistan and directed its resources in financing of jute crop. The
Bank's Karachi and Lahore offices were subsequently opened in December 1949. The
nature of responsibilities of the Bank was different and unique from other
banks/financial institutions. The Bank acts as the agent to the State Bank of Pakistan for
handling Provincial/Federal Government Receipts and Payments on their behalf. The
Bank has also played an important role in financing the country's growing trade, which
has expanded through the years as diversification took place. The various phases through
which the bank went have been discussed in a sequence below:
When NBP was first formed it had authorized capital equivalent to the amount of Rs. 60
million. In 1950 shares of the bank were also floated and taken up and by 1951 NBP had
started foreign exchange business. The ordinance that was passed at the time of inception
of NBP was amended to include ordinary commercial banking business as well and by
1952 it was felt that the development of NBP was so immense that it should be
considered as the agent of State Bank of Pakistan. Thus by May of 1952 NBP had taken
over the Government treasury work from the former agent, Imperial Bank. The
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expansion of NBP was quite apparent by 1959 when it had 129 fully functioning
branches as compared to the meager 17 in 1950.
After the quick growth in the 50’s, NBP worked to establish itself as a sound and stable
bank in the 60’s. The expansion efforts were put into force during these years and
marketing efforts were made to target specific market segments. For example NBP
directed its attention towards popularizing schemes among school and college students,
industrial workers, and ladies. Under the School and College Banking scheme,
introduced in 1962 all branches of NBP performed School Banking in the premises of
selected schools.
By December 1969 NBP had 720 branches, 713 at home and 7 in foreign countries.
The 1970’s witnessed the nationalization of Pakistani commercial banks operating in the
country. On January 1, 1974 National Bank of Pakistan along with 13 other scheduled
Pakistani banks was nationalized by the promulgation of the Banks Nationalization
Ordinance 1974. Shares not formerly held by the Government were acquired from the
private holders after compensating them.
The decade of the 70’s saw major changes at NBP. In 1972 there was reorganization in
the top management structure of the bank. This structure had remained unchanged since
the inception of the bank and had originally been inherited from the old Imperial Bank of
India.
On February 10th 1980, the Government of Pakistan announced a three year plan for the
implementation of an Islamic Economic System. The Institutionalization of Zakat and
introduction of interest free banking were the two most important measures directed to
Islamize the economy. The system was introduced by the nationalized commercial banks
with effect from January 1st 1981. National Bank of Pakistan evolved and introduced a
wholly separate and comprehensive procedure for banking under this system from branch
level to Head office.
In 1995 NBP become the first bank in Pakistan with a deposit base which crossed the Rs.
200 billion mark to become the largest financial institute in the country. Total deposits of
the bank have since risen to Rs. 362 billion by end December 2002.
NBP continue to render active help in provision of services like Hajj services, collection
of utility bills, paying of pension to central/provincial government pensioners, as well as
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to civilian military pensioners and retired army personnel. Its performed is continued as
by the end of Dec. 2009.
Overview of the organization

INTRODUCTION
National Bank of Pakistan was established on November 9, 1949 as a commercial bank

under the NBP Ordinance 1949 in Pakistan. The head office of the bank is in Karachi.
NBP is 100% owned by the Government of Pakistan.
National Bank of Pakistan is one of the strongest banks, maintains its position as
Pakistan's premier bank establish to set higher standards of achievements. NBP is among
the five major commercial banks which have adopted the new mechanism, and now
transfer of remittances to the beneficiary’s account takes place the same day. NBP has
correspondent arrangements with banks in nearly a thousand cities worldwide.
It is the major business partner for the Government of Pakistan with special emphasis on
development of Pakistan's economic growth through aggressive and balanced policies,
technologically oriented products and services offered through its large network of
branches locally, internationally and representative offices. NBP occupies a unique
position in the financial sector of Pakistan. The National Bank of Pakistan is a
Commercial Bank and transacts all types of Banking Business. In Pakistan, the bank
provides complete bank facilities to the people at over 1287 branches operating.
VISION
“To be recognized as a leader and a brand synonymous with trust, highest standards of
service quality, international best practices and social responsibility.”
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MISSION STATEMENT
NBP will aspire to the values that make NBP truly the Nation’s Bank, by:
• Institutionalizing a merit and performance culture

• Creating a distinctive brand identity by providing the
highest standards of services
• Adopting the best international management practices
• Maximizing stakeholders value
• Discharging our responsibility as a good corporate
citizen of Pakistan and in countries where we operate
NBP's CORE VALUES
• Highest standards of Integrity

• Institutionalizing team work and performance culture
• Excellence in service
• Advancement of skills for tomorrow’s challenges
• Awareness of social and community responsibility
• Value creation for all stakeholders
GOALS
To enhance profitability and maximization of NBP share through increasing leverage of

existing customer base and diversified range of products.
BOARD OF DIRECTORS
Syed Ali Raza - Chairman & President

Mian Kausar Hameed - Director
Mr. Ibrar A. Mumtaz - Director
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Sikandar Hayat Jamali - Director
Azam Faruque - Director
Mr. Tariq Kirmani - Director
Mrs. Haniya Shahid Naseem Director
Ms. Nazrat Bashir Director
Mr. Ekhlaq Ahmed- Secretary Board of Directors
AUDIT COMMITTEE
Tariq Kirmani
Ibrar A Mumtaz
Mian Kausar Hameed
Nature of the organization
It is functioning as an agent of State Bank of Pakistan. It implements the policies of SBP.

Varied banking and investment products are offered to the corporate clients from working
capital financing to infrastructure project, structured and syndicated financing,
divestitures, financial restructuring, mergers and acquisitions assignments and associated
financing solutions.
It deals all Govt Revenue, collection and payments of salaries, pensions and Govt
Treasury. It is a complete commercial, retail and corporate bank as well.
The bank also focused on increasing trade finance income by leveraging the bank’s
relationship with clients. The bank’s retail strategy focuses on its extensive branch
network and leveraging the customer base. NBP has the largest retail client base in the
country with one of the highest retail portfolios. National Bank of Pakistan is present in
all major financial centers of the world; in Europe, USA, Hong Kong, Japan as well as in
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the emerging markets of Central Asia, South Asia and Far East to capture trade related
business.
The bank aims to cater to the entire farming and non-farming agriculture business and
provides finances ranging from short to long term for the production and development of
crops and non-crop items for agriculture business related to packing, grading, processing,
storage, marketing and exports. NBP has the largest treasury in terms of size. Its function
includes liquidity, exchange and interest rate management. The Bank is a major player in
the foreign exchange and money market and is a primary dealer of government securities.
NBP is continuously transforming its image and customer perception as a modern bank
through branch renovation and relocation to more convenient and accessible sites. With
opening of customer facilitation centers for the collection of utility bills and making
payments to pensioners, the bank expects to reduce its counter traffic at branches thereby
focusing more on its customer’s business needs. Customer care is a key area of the bank
and various training programs have been conducted for employees to improve customer
handling and interaction. Five new capacity building projects were initiated i.e. Online
Connectivity, Bandwidth Enhancement for core WAN links, Call Centre, ATMs
Expansion, E-Channel Manager/CMS projects. The purpose of these initiatives is
business integration and transition towards modern banking with a focus on customer
facilitation.
Business Volume
National Bank of Pakistan’s business volume is expanding day by day and now it
becomes largest bank of the country.
(Rs. In Millions)
2007 2008 2009

Total 817,758 944,233
762,194
Assets
Deposits 591,907 624,939 726,465
Advances 340,677 412,987 475,243
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Investment 211,146 170,822 217,643
Share 81,367 94,792
Holder’s 69,271
Equity
Pre-Tax 23,001 22,300
28,061
Profit
After-Tax 15,459 18,212
19,034
Profit
Earning 14.36 16.92
Per Share 17.68
(Rs.)
National Bank of Pakistan’s product details are given below:
NATIONAL BANK OF PAKISTAN’S PRODUCTS
Unprecedented Safety - Unprecedented Return
Unprecedented Safety - Unprecedented Return
President's Rozgar Scheme - Easy financing for self

employment
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Affordable, Flexible & Convenient home financing for all
Take up to 20 Advance Salaries - Affordable Installations from 1

- 60 months
One Card does it all - ATM plus Debit Card in one
Invest with Confidence - Marginal Finance Facility
Meet your need for ready cash against your idle gold jewelry
with no
NBP KISAN Taqat
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NBP's affordable agricultural program offers you a wide

range of financing
Knitting Links - AASAN Banking
NBP's Internet Based Home Remittance Service
Life is precious
OTHER SERVICES
In addition to Shariah acceptable standard general banking services, following services
are also being offered at the Islamic Banking Branch:
•Letter of Credit Facility
• Handling of Remittances
• Issuance of Bank Drafts and Pay Orders.
• Collection of Export Bills.
• Collection of Local Bills.
• Government Collections
• Utility Bills Collection
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Competitors
NBP is facing lot of competition from different organizations. All Private Banks are the
Competitors of the NBP which are mentioned below.
 Standard Chartered Bank (Pakistan) Limited

 United Bank Limited
 MCB Bank Limited
 Bank Alfalah Limited
 Bank Al Habib Limited
 Allied Bank Limited
 Habib Bank Limited
 Habib Metropolitan Bank Limited
 Soneri Bank Limited
 PRIVATE BANKS
 Atlas Bank Limited
 Arif Habib Bank Limited
 Askari Bank Limited
 Faysal Bank Limited
 JS Bank Limited
 KASB Bank Limited
 SILKBANK Limited
 HSBC Bank Middle East Limited
 Citibank N.A.
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ORGANIZATIONAL STRUCTURE
PRESIDENT
HEAD OFFICE
REGIONAL BRANCH
OFFICE General Chief
Commercial & retail
Banking group
Regional Business Manager
Chief Business (Dep & loan)
General Chief
Regional Operation Operations Group Operational Manager
Chief
General Chief
Regional Credit Compliance Credit Officer
Management Chief
General Chief
Regional Compliance Human Resource Compliance Officer
Chief
General Chief
Regional HR Chief Credit HR Officer
General Chief
Audit & Inspection
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Structure of Branch
Manager
Operational Manager
Credit Officer Clearing Officer

(OG 1) (AVP)
ATM & Cash Book Operations Officer Operations Officers Operations Officer
Officer (OG 1) (OG 2) (OG 2) (OG 3)
A
Cashier Cashier
(OG 3) (OG 3)
Supporting Staff
The Bank currently has over 16,248 employees worldwide.
BRANCHES IN PAKISTAN
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There are 1287 branches in Worldwide of NBP.
Here is a list of the banks locations in Pakistan accordance to each province or territory;
Sindh: Dadu, Sanghar, Hyderabad, Jacobabad, Shikarpur, Karachi, Larkana,

Mirpurkhas, Badin, Nawabshah, Sukkur, Khairpur, Tharparkar.
Punjab: Bahawalpur, D.G. Khan, RYKhan, Faisalabad, Gujranwala, Sialkot,
Narowal, Jhang, Jhelum, Gujrat, Chakwal, Darya Khan , Bhakkar, Lahore,
Multan, Murree, Attock, Gilgit, Rawalpindi, Sahiwal, Sargodha, Sheikhupura.
NWFP: Abbottabad, Mansehra, Bannu, D.I. Khan, Kohat, Mingora, Mardan,
Peshawar.
Baluchistan: Quetta,
Azad Kashmir: Muzaffarabad, Mirpur.
Introduction of all the departments
There are many different departments in National Bank of Pakistan:
DEPARTMENTS of NBP
WORKING OF DEPOSIT DEPARTMENT
A person who wants to open an account it is compulsory to fill an account opening form
(AOF). Customers are direct to fill all column of AOF. All rules and regulations and
necessities are completed and verified. If a person is illiterate and cannot sign then his /
her hand thumb impression is affixed marked. Right hand thumb impression for females
and left hand thumb impression for males. Account number is allotted to the customer
and all particular such as nature of account, opening date, initial deposit, title of accounts
are written in register. Specimen Signature cards are handed over to incharge of
operations department for record and verification. The letter of thanks is sent to customer
for confirmation of address and other particulars of customers and one copy is attached to
AOF. After complete procedures finally the manager of bank signs the AOF and these
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forms are filed in “Accounts Opening File” with a proper sequence. Cheque book request
forward to the head office and cheque book receive after two or three days and handed
over to the customer by taking their signature on the cheque book issue form. The bank
does not make payment of cheques a six month or older date.
 Types of account
Following are the main types of accounts
 Individual Account
 Joint Accounts
 Sole proprietors Account
 Partnership Account
 Company’s Accounts
Deposits
Banks are largely depending on the funds deposited by its customers. Deposits are of
several types:
 Current deposits
Current deposits are also called demand obligation. NBP pays no interest on current
deposits. Businessmen usually open current accounts. Minimum amount of Rs.5000/-
should be to open an account. No profit is paid on the current account holders.
No limitation to the number of withdrawal.
 ADVANCES
Advances are the main source of bank income, the bank collect the fund through general
public and lend them in the various sector for the purpose of some profit.
So NBP also provided the advances on the following sectors which are given below:
1- Commercial Finance
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NBP's provides commercial finance to professionals, agriculturists, large and small
business and other segments of the nation. They are the customer’s best resource in
making NBP’s products and services work for.
Two types of Finance:
1- Agricultural Finance
2- Corporate Finance
Government section
i) Government Receipts
In this department all types of Government receipts i.e. Revenues, Taxes, Abyana,
Agriculture Tax, Government Fees, EOBI Funds and Utility Bills are deposited. From
this way NBP is serving great job revenue collection
ii) Government Payments
All types of Government Payment i.e. Pension, Salaries, Grants, Zakat, Benevolent
Fund, Treasury Refund and Taxes Refund carry on through the bank.
.
v) Remittances
Another important department in the bank is remittances. People send their money to the
other persons and organizations through various way i.e. Bank draft, Telegraphic
Transfer, Mail Transfer, Coupons, Govt. Draft and Western Union Money Transfer etc. It
works both inward and outward.
WORKING OF REMITTANCE DEPARTMENT
Four main modes of remittance are:
 Demand Draft
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 Pay Order
 Mail Transfer/Online Funds Transfer
 Telegraphic Transfer
WORKING OF PENSION DEPARTMENT
Pension is defined as the payment of retired govt. servants, who die during service but
fulfill the age of pensioner, Employees Old Age Benefits (EOBI), etc.
Types of pension
 Govt. servant retired benefits

 Benevolent funds
 Employees Old Age Benefits
WORKING OF CLEARING AND CHEQUES
COLLECTION DEPARTMENT
1) Clearing
Clearing is a system by which banks exchange cheques and other negotiable instruments
drawn on each other within a specified area and thereby secure payment for their clients
through the clearinghouse at a specified time in an efficient way.
vi) Bills
Customers collect their money/amount through bills. They present their cheques,
drafts and other bills for collection within the city and out of the city through mail.
vii) Cash Department
National bank deals Government treasury on behalf of State Bank of Pakistan. There
are Chest, Sub-chest and Non-chest branches in the bank. SBP supplies currency notes
to the bank and monitors its cash flow. Cash In charge and other cashiers deal with
cash receipt and payment in the bank.
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COMMENTS ON THE ORGANIZATIONAL STRUCTURE:
 There is too much working on NBP and staff are too less.
 In cash and credit department, controls are handed over at low levels. If any
person goes to leave then there is no urgent backup for his/her position.
 Management should organized and take necessary actions to complete their work
properly.
 Most of the staff does not work and most of them are not understand the technical
problems.
 It is necessary for every staff member of the bank to attend at least one training
program.
Nawan Shaher Branch Multan is an old branch of national bank of Pakistan. It follows
the instructions and is under control of regional head quarter (East region). It has
following accounts with regional office
 General account
 Suspense Account
 Commission Account
In public they deal in two accounts i-e.
 Current Account
 PLS Account
They provide lot of services like
 Deposits
 Advances
 Pension
 ATM
 Utility, bill, traffic challan
 Western Union
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Plan of Internship Program
National Bank of Pakistan Nawan Shaher Branch Multan.
There are 14 employees who working in the branch. All the persons are helping persons.
I mention below the names of the branch employee with his/her designation
1. Saeed Ahmed Manager

2. M.Saleem Manager
3. Syed Meraj Rasul AVP
4. Saleem javaid chishti AVP
5. Khalid Mehmood AVP
6. Farooq Awan AVP
7. Zahid Hussain OG1
8. Mian Mureed Abbas OG1
9. Mobeen Qureshi OG2
10. Khalid Mehmood OG2
11. Bushra Riaz OG3
12. Shahid Iqbal OG3
13. Sobia Iram Assistant
14. Asif Hussain Assistant
Starting date of Internship 1-5-2010

Ending Date of Internship 30-6-2010
During the session of eight weeks I worked in different departments on weekly basis. I
worked in different departments during working as an internee which is very beneficial
and I am able to get basic concepts of banking operations.
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Names of the departments in which i got training and the duration of my training program
are listed below.
.
Names Duration
1) Deposits 1 Week
2) Bills collection 10 days
3) Cash counter 14 days
4) Remittances 1 Week
5) Govt. Section 15 days
6) Advances 1 Week
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Deleted: Program mention in detail
Training the activities performed by you during
internship
Deposits Department & Service of Western Union
The key function of this department are maintain records of saving, current, call deposit,
and TDR account holders, their signatures, their balances, issuance of cheque book,
inspection of cheques issued.The account opening or deposit department is one of the
most important departments of any bank. This department is considered as back bone of
any bank, because it is essential for today's organizations to make use of fund to meet its
financing needs. Banking borrowed capital is always more than its equity capital.
Functions of The department
Key function of this department is:
Opening of an Account
Opening of account is like a contract between banker and customer, which is Guided by
people of deposit section.
Types of Account
To open an account it is the mainly function to select the suitable type of account.
Following are the main types of accounts find in the bank:
Demand Deposits
Demand deposit is one which is payable on the demand of the customer. This includes
 Current account
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 Saving deposit account.
Current Account
These are running accounts. These deposits represent the current liability of the bank.
This account is opened for meeting day to day needs of the customer. Customer can
withdraw any amount of money within banking hours from branch and from ATM at any
time. A cheque account, also known as a current account, is a bank account in which
client's income can be deposited and from which he or she can manage his or her finances
during the month.
Current account can be opened by the following persons:
 Individual/sole proprietor
 Public limited companies
 Private limited companies
 NGO’s
 Partnership Firms
Features:
 Minimum requirement to open the account is Rs. 1000.

 The accountholder should maintain a minimum balance of Rs.5000 per month
otherwise a deduction of Rs.50 per month is made for balance less than given
limit. It is bank commission.
 There is no limit for maximum deposit.
 No limit for deposit and withdrawals is definite.
 These accounts are completely exempted from zakat and with holding taxes.
 Current account does not pay any kind of profit to account holder.
 In case of no response from customer side after 1 year of non operation account is
transferred to dormant account register and after 3 years to inoperative account
register. To re-operate such account an application is written in the name of
general manger.
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 Account statements are provided to the depositors whenever required by him.
FOREIGN CURRENCY ACCOUNT / DEPOSIT
Rates of return on Foreign Currency Deposits are subject to fluctuation as determined in

accordance with State Bank of Pakistan. The bank shall not be responsible to depositors
of foreign currency in the event of any limitations imposed by the Government of
Pakistan.
It will be paid on six monthly bases whereas the return on Term Deposit will be paid on
maturity or as agreed by SBP.
PLS Saving Account
This basic account is opened with a minimum balance set by each individual bank.
Savings accounts are the easiest way to save money. Saving accounts are mostly opened
by those types of customers whose baking transactions are not common. Normally lower
and middle income groups, small traders, professionals, farmers and other salaried classes
typically make such deposits to save small amounts to meet up their needs.
Funds can be deposited normally through cash, cheques, demand drafts, pay orders,
telegraphic transfers and other such instruments.
Features:
 The minimum amount requirement for opening the account is Rs.1000.

 The account statement is provided to depositor as per their instructions.
 There is no maximum limit for deposit.
 Zakat and profit is deducted on the amount at Shirah rates but Zakat is not
deducted if declaration is given by the customer.
 Profit is paid half yearly at rate which fluctuates after every six months.
Term Deposit or Fixed Deposit Account
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Term deposit account is an account opened for a specified period of time. You may
choose any deposit period from 3 months up to 60 months, and the Bank will pay you
the best interest rate possible. .
People deposit large amount of money in such accounts. Banks give advances to
businessmen out of such deposits for particular period. Rates are revised after every
six month. Interest is given on a half yearly basis and Calculated as a simple interest
for the period. The deposit amount and interest earned will be paid on fixed principle
basis
Features:
 The minimum limit of deposit is Rs.1000.

 The maximum deposit has got no limit.
 On maturity the depositor has option to withdraw the money or renew the deposit
for fixed period.
 In case of no response from depositor side on maturity date bank is eligible to
renew the deposit and transfer the interest to the account of depositor.
 Current rate of profit is 3% which is paid to the depositor after every six months.
 Maximum period of deposit is 5 years.
 As the period of deposit increases rate of profit also increases.
 Depositor can open PLS and current account in addition to fixed deposit account.
Notice Deposit Accounts
Notice deposits are kind of fixed deposits. The minimum balance for notice deposit
required is Rs. 5000. Client can withdraw money from this account depending on the
maturity of specific period. Notice deposits are of two types:
 7- Days Notice Deposit Account
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 30- Days Notice Deposit Account
7- Days Notice Deposit Account
For withdrawing money from this account, 7-days advance notice is given to bank.
The return is given according to the rates announced by bank from year to year. Rate
of return in this type of account is less as compared to 30-days notice deposit account.
30- Days Notice Deposit Account
For withdrawing money from this account 30-days notice is given to bank. These types of
accounts are used by the banks for making long term investments because banks know
that depositors will not demand their money before certain fixed long maturity.
Documents Required for Opening an Account:
Opening an account in NBP requires following documents:
 Application for opening an account

 Prescribed Account opening form
 Specimen signature card
 Nadra verification letter
 Copy of NIC of account holder
 Copy of NIC of kin
 Salary certificate
 Student certificate (in case if a student is opening an account)
 I worked in this department for 1 week. I opened many accounts such as
Individual Account, Joint Accounts. For account opening I collected all the
documents which are necessary for account opening from customer. when
customer came into the bank and want to opening an account. Then I tell them
that there are many types of account in NBP like child A/c, company A/c,
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personal A/c, student A/c, basic banking A/c, current A/c, saving A/c and etc,
then customer told me that he/she want to open this type of account. Then I
collect them some documents.
 Application for opening an account
 Nadra verification letter
 Copy of NIC of account holder
 Copy of NIC of kin
After filling these requirements from customer I filled the account opening form
in which title of the account, account number, personal information, next of kin,
address of the customer, corporate account, type of entity, nature of account,
currency of account, details of the term, notice and call deposit, zakat deduction
instruction, instruction for operation of account, introducer’s details, declaration,
terms and conditions governing the account are given. After filling that form I
take signatures of the customer in the form at various places then I forward this
form to the officer and officer entered this information into computer.
SERVICE OF WESTRN UNION
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National Bank of Pakistan and Western Union - A Partnership for Pakistan's
Economic Growth:
NBP teams up with Western Union Financial Services Inc. a worldwide money
transfer service, to facilitate the remittance of money through legal channels.
This mode of transfer will ensure that the remittances reach the mainstream of
national economy and are able to contribute to its growth. This will also assist in
reaching the Government's goal in revitalizing the economic sector, attaining self
reliance and achieving transparency.
NBP introduced this service on 24th January 2003.
CASH DEPARTMENT
The following books are maintained in the cash department:-
1) Receiving Cashier Books
2) Token Book
3) Paying Cashier Book
4) Scroll Books
5) Cash Balance Book
When the cheque is presented at the counter for payment then it is entered in the
Token Book and Token is issued to the customer. Then employee entered the cheque
amount into computer and passes the cheque to cashier and cashier make entry in the
Payment Book and the payment is made to customer.
I worked in this department for 14 days. When customers came then I collect the cheque
from them. 1st thing I check that the date do not cross over 6 months. For example, date
written on a cheque 11.1.2001 means that it cannot be applicable to pay. Then I checked
that it is cross cheque or open cheque. Cross cheque means that it can only be paid into a
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bank account and cannot be paid in cash over the counter. The amount of this cheque is
transferred to the person’s account whose name is specified on the cheque. Open cheques
are those cheques, which are paid over the counter. Open cheques may be Bearer cheques
or Order cheques. A bearer cheque is payable to the person who presents it to the bank
for encashment. Order cheque is payable to the person whose name is written on the
cheque. The amount is paid at counter after identification of that person.
Then I verify the signature from Specimen Signature card and then check amount.
Amount must be matched in the words and digits then I wrote the token number on the
cheque and then pass the check to officer for computer entry. Officer enters the cheque
amount and cheque number in computer then I scroll this cheque in the scroll book. In the
scroll book I wrote serial # and cheque amount and passed cheque to the cashier for
payment.
ADVANCES AND CREDIT DEPARTMENT
Bank gives the secured advances against tangible and marketable securities.
Advances and Credit Department give somebody the loan of money against the
promissory note.
Types of Advance
1 ... ... Demand Finance(Ordinary Loans)
2 ... ... Running Finance(Overdraft)
3 ... ... Cash Finance
4 ... ... Small Finance
5 ... ... Finance against Bills
6 ... ... Agriculture Loans
In this department I worked for 1 week. Operation manager give me the task of scrolling
the amount of each loan in a register. Small finance is called personal loan which gives to
the small industries. My work is that scrolling the amount of personal installment loan in
a register at the right side of customer’s account number. Personal installment loan
considered unsecured loan. I entered the amount of equally monthly installment. Tenure
range of this loan is from 12 to 60 months.
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Minimum loan amount is 50000 and maximum loan amount is 5, 00000. For open an
account of personal loan a customer should have keep the following things:
Customer’s salary slip, bank statement and CNIC copy. Customer can submit following
bank’s bank statements:
NIB, MCB, ASKARI BANK, HSBC, BANK ALFALAH
It was boring for me to only scroll the loan amount for 1 week in a register. Operation
manager did not give me any task of that department.
REMITTANCE DEPARTMENT
Four main modes of remittance are:
 Demand Draft
 Pay Order
 Mail Transfer/Online Funds Transfer
 Telegraphic Transfer
DEMAND DRAFTS (DD)

Demand draft is secure, fast and reliable way to transfer money. Any person can purchase
a Demand Draft from a bank branch. The holder of DD has to deposit it in his account
with the bank he is dealing and that bank collects the payment on behalf that customer.
MAIL TRANSFER (MT)

Mail transfer is also used for transfer of money in case the responding branch is of the
same bank, which is Issuing the MT. In MT funds are transfer through system within
seconds if 2nd branch is online.
Funds transfer only same branch of the banks.
It is necessary that the customer must have the Branch Code of the host branch, account
number of a drawer, name of place, etc.
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I worked for 1 week in this department. Miss Bushra Riaz is the head of department. In
this department I learnt about issuance of PO, DD, MT, and T.T. when customer comes
for pay order then I wrote the following things in pay order voucher:
Branch code, Name of beneficiary, his address, telephone number and amount of pay
order. Then I take the CNIC copy from that customer and verify the CNIC copy with the
original and finally take signature of the applicant and passed to the officer.
When customer comes for Demand draft then I wrote the following things:
Branch code, Name of beneficiary, his address, city where is to be drawn, telephone
number, amount of DD and obtain a copy of CNIC and compare it with original and now
takes signature of the applicant and passed to the officer. Officers make the entries and
credit his branch’s sundry A/c and debit the sundry A/c where DD pay.
Head of department helped me a lot to achieve this target. I only made entries of PO and
DD. MT is an online system it was not permissible to internee to do it. The Manager only
does TT; it is a secret way of transfer funds.
Govt. Department
Pension Department
Mr. Malik Muhammad Farooq is the head of pension department. During my internship, I
learnt how to handle with new pensioner’s cases, entries made into the “pension register”,
recommend payments of pension on monthly basis, transfer of payments into the
accounts of the customers, entries made into the system. I learnt that how to fill pension
farm and how to enter in ledgers and balance account.
The person who wants to get his/her pension from NBP be capable of open an account
with any branch of National Bank of Pakistan. When an retired employer comes for
pension then I check the pensioner’s pension book in which photo of the pensioner, No
and date of CNIC, Two specimen signature, thumb and finger impression are given. I
served more than 250 people daily. If customer receives benevolent funds opportunity
then entries are made into Benevolent Fund Register. Entries of pension holder are made
into the Pension Register.
The most obligatory thing for payment of pension is to check pension slip in form of cash
payment P.P.No., name of the pensioner, signature, and payment period.
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Bills Collection
MR. Shahid Iqbal is operating this department. Public dealing is not very effective in
NBP. Employees are not taking care of the customers, especially in pension and bills
department. Collection of Export Bills, Collection of Local Bills, Utility Bills Collection,
Sui Northern Gas bills, telephone bills, electricity bills etc are working of this
department. My working is that I collect the bill and then scroll the 30 bills amount and
serial # on each page of bills collection register. I work in 4 types of bills, Sui Northern
Gas bills, telephone bills, electricity bills and Wasa bills (Water and Sanitation Agency).
1st I check that in the bills that it is within due date or after date. Normally it is within due
date of any bill then I checked the amount of cash, after than I post the bank stamp and
wrote on the both sides of the bill that it is receipt and it is bank copy. The receipt given
to the customer and then I enter the serial number and amount of bill in the bill register
when I scroll 30 bills then I passed these 30 bills to the officer. For rest of 3 types of bills
I work in the same way.
Accounts Department
In accounts department, Miss. Sobia Assistant is performed all activities. She sorted
vouchers and checked advices by tallying the account number, instrument number,
document, and amount appearing on the instrument in words and figures with the
information register and on the system. I sorted vouchers, and checked advices by
tallying the account number and amount appearing on the instrument in words and
figures with the information register and on the system. In daily activity checking I
collect all vouchers, cheques, DD’s, pay order, pay slips etc from all departments of the
bank and then sorted all vouchers.
I worked in this department after completing my internship period because due to fewer
staff operation manager said me that I should work in this department for one week.
The accounts department deals with various routine activities:
Daily advance and deposit position
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• Daily exchange position
• Daily fund management
Budgeting
• Reporting
• Maintenance & depreciation of fixed assets
Daily checking activity
• Reconciliation statements
• Closing entries
• Foreign exchange forward transaction
Miscellaneous function
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Structure of the Finance Department

Departmental hierarchy
Mubeen Qureshi
OG-2
Only one employee working in the finance department.

Finance & accounting operations
The finance function supports planning, monitoring and decision making processes.
Financing decision first confirms from accounting tricks then provides finance to the
customers. Finance and Accounting operations are operated with the help of subordinate
staff. Finance ensures that it is capable of meeting all financial reporting requirements.
Continuously Updated status of the customer, customer’s accounts maintenance, payment
and collection on behalf of customers, collection of bills of exchange by bank and the
collections of bills including Sui gas bills, telephone bills and electricity bills falls in
accounting and finance operations.
Finance and accounting departments are interlink with each other. Accounting Operations
verifying an invoice for payment, providing special handling on a check, approving a
Special Request for Check, or issuing a stop payment.
Accounting Operations departments include Cashier, Payroll, Accounts Receivable, and
Tax Compliance. Finance and Accounting Operations evaluate and processes budget
activity. Finance and Accounting Operations playing a dynamic role in planning,
assembling, managing and defense resources efficiently.
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Functions of the Finance Department
Accounting system of the organization
Accounting system of the bank is very bad due to non-availability of Information

Technology. Accounting system is based on cash and accrual basis they make daily
reports for the record keeping. They check the daily activity which is generating
automatically from the system the daily dealings report. From this system we easily
calculate the assets and liabilities of bank, cash inflow and outflow.
The accounting system of the NBP deals with various routine activities for the bank. The
accounting system of the bank is well manage they have accounting software in their
branch. No manual work required all accounting ledger generals are computerized. A
ledger has both a Debit left side and a Credit right side. If the values on the debit side are
greater than the value of the credit side of the ledger then that ledger is said to have a
debit balance. Oversee the development and implementation of an effective accounting
system to facilitate the preparation of financial statements in accordance with
internationally accepted accounting standards
Accounting operations provides sufficient relevant information to make sensible and
smart decisions regarding bank’s business.
.
Finance system of the organization
Finance Department performs following functions:
 Borrowing from State Bank of Pakistan.
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 Lending to Commercial Banks
 Lending to Investors.
The financing system of the NBP regarding financing is taken by Manager and Operation
Manager. In this branch they inform the customers about the procedure and policy
regarding financing activities and give them loans. Financing by NBP include Home
loans, agri-finace, leasing, bank guarantees etc. They Monitor deposits and arrange /
oversee procurement action. They Provide directions initiate the development/design and
coordinate the implementation of financial control system of the organization
USE OF ELECTRONIC DATA IN DECISION MAKING
Modern organization uses electronic data for decision making for example in NBP; four
types of software’s are used in consumer sector
1. Phoenix
2. Debt Manager
3. CRM (customer relationship management)
4. CDL
For example in granting and approving loan for a customer that has already being a
customer of NBP Phoenix software is used .i.e customers N.I.C # is entered in the field
and all the loans taken by the customer are displayed.
Every loan that is being taken by the customer is displayed with full information showing
Account title
Account number
Address
Contact Numbers
Credit history (Satisfactory or not)
Delinquent amounts
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Nature of Loan
Maturity
Last installment
Repayment Behavior
% of markup
Terms and conditions of loan (maturity and markup)
Principal amount
Current Balance
These all information helps in marinating the account of the customer and to complete
check on the customer about repayment behavior of the customer. If the customer is
defaulter then the system will show the delinquency and the delinquent amount of which
customer is defaulter and no loan will be granted to the customer.
This system is linked with the all commercial banks of the same organization and most
importantly to the CIB that Credit Information Bureau that is software where all
commercial banks of the Pakistan connect with the State Bank of Pakistan
Sources of funds
Sources of funds are the main elements to carrying out the operations of business.
Sources of funds
 Deposits
 Guarantees
 Markup on different funding
 From financial institutions
 Leasing
It involves the capital uses by the Bank i.e. Reserves, Deposits, Borrowing from other
institutions, Debt and Equity financing.
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Allocation of funds
Allocate funds and make a collection of funds to productivity is the most important
functions of banks. NBP allocate resources on different ways i.e. advances, investments,
and in fixed assets. Lending is the most important functions of banks. They collect funds
from the public in the form of various types of deposits and lend and invest them for
productive and profitable purpose. The most important activity of the bank is the granting
of credit to the customers. It is the loan function which produces the major portion of
banks income. NBP provides short term long terms financing for domestic and
international trade. Manager can grant the credit limit to each customer with in the
declared limits approved by the controlling offices i.e., co, GHQ, circle and zonal.
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Critical analysis
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Ratio Analysis
Ratio analysis is the calculation and comparison of ratios which are derived from
the information in a company's financial statements. Financial ratios are usually
expressed as a percent or as times per period.
a) Liquidity Ratios
Liquidity ratios measure a firm’s ability to meet its current obligations.
These include:
• Current Ratio
• Acid Test Ratio
• Sales to Working Capital
• Working capital
Current ratio =(Current assets/Current liabilities)

Years 2007 2008 2009
Current assets 30994965 44550347 59316438
Current liabilities 30869154 39656831 42269623 Comment [a1]: Working required
Current Ratio 1.004076 1.123396547 1.403288
Interpretation of the ratio :

Current ratio shows a firm’s ability to cover its current
liabilities with its current assets. Here the current ratio in 2007 is 1.004 and it show that
the company has not such resources to paying its bills but in 2008 is 1.12 and then 1.40 in
2009. Current assets should be twice the current liabilities. It should however be noted
that too high ratio may indicate that capital is not being used productively and efficiently.
Acid test ratio=(Cash+Marketable securities)/Current liabilities
2007 2008 2009

Cash 132346081 144848364 144233432
Marketable securities(Treasury bills,
Federal Investment Bonds,Pakistan
Investment Bonds, Term Finance
Certificates, money market funds ) 129934534 88259054 137602255
Current liabilities 30869154 39656831 42269623
Acid test ratio=(Cash+Marketable
securities)/Current liabilities 8.496527472 5.878115122 6.6675704
Interpretation of the ratio:
this ratio provides a more penetrating measure of liquidity than does the current ratio.
also known as the acid-test ratio, it examines the business’s liquidity position by comparing
current assets and liabilities but it omits stock from the total of current assets. The reason for this
is stock is the most illiquid current asset,. In 2007 it is very high and indicates that less portion of
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current assets is in the form of large portion of liquid assets. In 2008 Acid Test Ratio is Low and
2009 it becomes low from the 2008.
Working Capital=(Current assets-Current liabilities)
2007 2008 2009

Current assets 30994965 44550347 59316438
Current liabilities 30869154 39656831 42269623
Working Capital=(Current assets-Current
liabilities) 125811 4893516 17046815
Interpretation of the ratio
It depends upon the size and nature of business.. From the above analysis it is observe
bed that the current assets of National bank are increase as compare
to its liabilities as compare to
previous years.
b) Leverage Ratios
Leverage ratios measure the degree of protection of suppliers of long term funds.
These include:
• Time Interest Earned
• Fixed Charge Coverage
• Debt Ratio
• Debt / Equity Ratio
• Debt to Tangible Net worth Ratio
• Current Worth / Net worth Ratio
• Total Capitalization Ratio
• Fixed Asset Ratio / Equity Ratio
• Long term Assets versus Long term Debt
Sales/Working Capital ratio=(Sales/Working Capital)
2007 2008 2009

Sales 50569481 60942798 77947697
Working Capital 125811 4893516 17046815
Sales/Working Capital
ratio=(Sales/Working Capital) 401.9480093 12.45378538 4.57256661
From the above analysis it is observed that Sale of working Capital decrease year to year
because current assets of National bank are increase as compare
to its liabilities.
Time interest earned=(net income+interest expensed/interest expensed)
2007 2008 2009

Net income 51147457 60933234 70791984
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Interest Expensed 14391079 19502080 23513897 Comment [a2]: Wrong figure
Time interest earned=(net income+interest
expensed/interest expensed) 4.55411 4.12445 4.011
measure the firm's ability to meet interest payments out of its operating profit. In
2007 the position of company to pay the interest payment is not satisfactory & in 2008 it
goes more dangerous for the company because the total structure build on debt & the
company has not in position to pay the interest payment which goes more complex and
critical in 2009.
Fixed Charge coverage =(EBIT+fixed charge before tax/fixed charge befor tax+
interest expensed)
2007 2008 2009

EBIT(Earning before interest and tax) 51993691 64019452 75280524 Formatted: Highlight
Fixed Charge(before tax) 6781683 7925370 8930391 Formatted: Highlight
Interest Expensed 14391079 19502080 23513897 Formatted: Highlight
Fixed Charge coverage =(EBIT+fixed charge before
tax/fixed charge befor tax+ interest expensed) 2.776 2.6231 2.5955
This ratio serves as one measure of the firm’s ability to meet its Fixed Charge Coverage
and thus avoid bankruptcy. From calculation of ratios show that bank are in struggling to
achieve its previous a image for the prospective investors to invest their money in the
bank. It also shows that the bank has ability to pay its debt easily which is due. Coverage
ratios are designed to relate the financial charges of a firm to its ability to service, or
cover, them.
Debt ratio=(Total debt/total assets)
2007 2008 2009

Total debt 645855936 715299108 824676384
Total assets 762193593 817758326 944232762
Debt ratio=(Total debt/total
assets) 0.847364688 0.874707215 0.87338251
measures the percentage of assets that have been financed by debt (borrowings). .
As the percentage of debt financing increases, the firm becomes highly leveraged. The
amount of financial leverage implies risk to creditors and owners. In 2007 this ratio was
0.84 and it is serious position for the company but it goes better in 2008,which is 0.874.
and in 2009 is 0.873
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Debt to Equity Ratio=(total debt/Shareholders equity
2007 2008 2009

Total debt 645855936 715299108 824676384
Shareholders equity 69270631 81367002 94791919
Debt to Equity Ratio=(total
debt/Shareholders equity 9.323661798 8.791022041 8.69985957
it shows how much value there would be in a liquidation of the company. In 2007
this ratio was 9.32 and was very serious and indicates that company has not good equity
resources to compete its short term and long term debt and in 2008 it become 8.79 and it
is also show the company weak equity position but in 2009 it decreased to 8.69, which
indicates that company accept loan from the financial institution.
Debt to Tangible Net worth Ratio = Total Debts

Tangible net worth *100
2007 2008 2009

Total debt(X) 645855936 715299108 824676384
Tangible Net worth (Y) 69262053 81361077 94774389
Debt to Tangible Net worth Ratio :
(X/Y) 9.32481652 8.791662234 8.701468748
Working:
Tangible Net worth = Equity - All intangible Assets
2007 2008 2009
intangible assets 8578 5925 17530
Total 69262053 81361077 94774389
It is observed that the solvency of the business is towards the owner. The increase in
equity is also due to the increase in reserves and net earnings of the bank when the
solvency of the company is favorable toward the owner so it means that the equity of the
company is contributing more than other items.
Current worth to Net worth ratio=(Net profit/Shareholders equity*100) Formatted: Highlight
2007 2008 2009

Net profit 51147457 60933234 70791984
Current worth to Net worth ratio=(Net 0.74886910 0.7468145
profit/Shareholders equity*100) 0.738371461 5 5
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This ratio is a debt management ratio and is calculated by dividing the net income
available for common stockholders by the common stockholders equity Current Worth /
Net worth Ratio measures the overall effectiveness of management in generating profits
with its available equity.. low Current Worth / Net worth Ratio may also suggest that the
firm is more conservatively financed (lower leverage), Current Worth / Net worth Ratio
may also suggest that a firm is more risky due to higher,
Total capitalization ratio=( long term debt/ long term debt+Owners Equity)
Deleted: Correct this ratio¶
2007 2008 2009
Long term Debt (X)
424979997 411088344 513668300
Long term Debt + Owner's Equity
(Y) 494250628 492455346 608460219
Total Capitalization Ratio: (X/Y) 0.859847156 0.834772832 0.844210162
2007 2008 2009

long term debt 424979997 411088344 513668300
Owners Equity 69270631 81367002 94791919
Long term Debt + Owner's Equity 494250628 492455346 608460219
Working
long term Debt
2007 2008 2009
Fixed Deposits 128403278 141949041 194731591
Savings Deposits 188687111 179807400 196373780
Remunerative
Deposits 76708879 50893400 74133946
financial institution 31180729 38438503 48428983
Sub-Ordinated loans 0 0 0
424979997 411088344 513668300

Where total capitalization represents all long-term debt and shareholder’s equity. This
tells us the relative importance of long term debt to the capital structure (long-term
financing) of the firm.in 2007 is 0.85 , decrease in 2008 is 0.83 and then increase in
2009 is 0.84
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Fixed asset ratio/Equity ratio=(Net Fixed Assets/Long term Funds/Owners
Equity/Total assets)
2007 2008 2009

Net Fixed Assets 25905823 24205805 25112132 Deleted: show detailed calculation of
fixed assets
Long term Funds(long term liabilities and net
worth) 255914060 332388997 381705171
Owners Equity 69270631 81367002 94791919
Total assets 762193593 817758326 944232762
Fixed asset ratio/Equity ratio=(Net Fixed
Assets/Long term Funds/Owners Equity/Total
assets) 1.114 0.7319 0.655335
Working:
fixed assets
2007 2008 2009

Capital work in
progress 459487 1016513 1472451
Property & equipment 25454914 23195217 23657211
Operating Assets/
total fixed assets/net
fixed assets 25905823 24205805 25112132
I have taken these from Instructor's Reply:
Banks usually consider intangible assets as fixed assets whereas these are long term
assets. So subtract intangible assets amount from this figure. Then operating
assets, total fixed assets and net fixed assets will be same.
Dear student,
Yes, these are same in a bank report but you should not include intangible assets
in fixed and operating assets.
. This ratio indicates the utilisation of fixed assets and increases in this ratio means that
bank have utilized its fixed assets more efficiently then the previous year.
.in 2007 that was a golden financial year of the bank the ratio is 1.114 then decrease in
2008 and 2009. The bank does not maintain its position in further and lose its position in
next year. However during financial year bank significantly improve their productivity
and as a result its turnover is much better than previous level
c) Profitability Ratios
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Profitability ratios measure the earning ability of a firm.
These include:
Net Profit Margin
Return on Assets
DuPont Return on Assets
Operating Income Margin
Operating Assets Turnover
Return on Operating Assets
Sales to Fixed Assets
Return on Investment
Return on Total Equity
Gross Margin
Operating Margin
Net profit Margin= Net income/Net Sales

2007 2008 2009
Net income 51147457 60933234 70791984
Net Sales 50569481 60942798 77947697
Net profit Margin=
Net income/Net Sales 1.011429344 0.999843066 0.90819853
This ratio shows profitability of the organization against it sales. The Management of
National Bank need to improve sale and control cost to earn better margin At the year
ended 2007, net profit against sales was 1.011.It says in short. in 2008 the profit margin is
0.99 start to decreases and in year 2009 the profit margin of National Bank decreasing
rapidly and reached at 0.908
Long term Assets to total long term debt= long term Assets/total long term debts Deleted: how detailed calculation of
long term debt and long term assets
2007 2008 2009

Total long term debt 424979997 411088344 513668300
Total long term Assets 188080408 180798053 211852405
long term Assets/total long term debt 1.164354258 1.575647815 1.42202535
Working
long term
Debt
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2007 2008 2009
Fixed Deposits 128403278 141949041 194731591
Savings Deposits 188687111 179807400 196373780
Remunerative
Deposits 76708879 50893400 74133946
financial institution 31180729 38438503 48428983
Sub-Ordinated loans 0 0 0
424979997 411088344 513668300
Long term Assets 2007 2008 2009

Investment-Held to Maturity
securities 35707859 33323193 22021518
Advance(Long Term) 126466726 123269055 164718755
Fixed Assets 25905823 24205805 25112132
Long term Assets 188080408 180798053 211852405
. Long term Assets versus Long term Debt ratio gives an investor a better idea of how
much safety a company has in paying its long term liabilities regardless of the size of the
company, whereas net working capital must be
Return on Assets= Net income/ Total assets
2007 2008 2009

Net income 51147457 60933234 70791984
Total assets 762193593 817758326 944232762
Return on Assets 0.067105598 0.07451252 0.07497302
The ratio analysis explains that Return On Assets is growing with from year ended 2007-
2009. This ratio was 0.067 in year 2007, but after this it is slightly increases from
previous level and then it reached at 0.074 in financial year 2009, it increase from 0.0749
from the previous year and is mainly due to the fact there was a small increase in profits
as compared to the total assets
Dupont return on assets= (Net income / Sales) x (Sales / Total Assets)
2007 2008 2009

Net income/Sales (X) 1.011429344 0.999843066 0.908198532
Sales/Total Assets
(Y) 0.066347292 0.074524216 0.082551358
DuPont Return on
Assets = (X * Y) 0.067105598 0.07451252 0.074973022
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This ratio indicate how effectively a firm's management generates profits on sales, total
assets and equity. To increase this ratio company must give the proper attention to its all
operating and investing activities A high ratio is favorable. It implies that net income as a
percentage of total sales is good or the firm is able to generate a high level of sales given
its investment in assets (Total assets turnover) or a combination of both and A low ratio is
unfavorable.
Operating income margin= EBIT/ Net Sales

Ebit = profit before tax + interest expensed
2007 2008 2009
EBIT(Earning before interest
and tax) 51993691 64019452 75280524
Net Sales 50569481 60942798 77947697
Operating income margin 1.028163429 1.050484292 0.96578253
Working
EBIT(Earning before interest and tax)
Profit available for appropriation- non markup interest income+ non
interest/markup expensed
2007 2008 2009
Profit available for appropriation 51147457 60933234 70791984
Non markup interest income 13544845 16415862 19025357 Formatted: Highlight
non interest/markup expensed 14391079 19502080 23513897 Formatted: Highlight

EBIT(Earning before interest and tax) 51993691 64019452 75280524
Instructor’s Reply
Dear Student,
For the calculation of EBIT, take the total amount resulting from subtracting the Formatted: Highlight
non markup interest income and then add non interest/markup expensed in this
figure. The resulting amount will be EBIT.

Operating Income Margin provide information about a firm’s profitability from the
operation of its core business. Here the operating margin of Bank in 2007 is 1.028
Operating margin ratio in 2008 to 2009 at a very poor condition, In 2009 it is .966 which
indicate that the company is performing improper functions for its expenses. which
indicates position, it shows that the company expenses are very high and to increase
company should reduce its cost and also expense of the company.
Operating Asset turnover= Sales/ Operating Asset
2007 2008 2009
SHAHAAN ZULFIQAR
Sales 50569481 60942798 77947697
Operating Asset 25905823 24205805 25112132
Operating Asset
turnover 1.952050742 2.5176935 3.1039856
This ratio indicates the utilisation of Total assets and increases in this ratio means that
bank have utilized its totalassets more efficiently then the previous year
Analysis on table shows upward trend during three consecutive years from 2007-09.
However bank significantly improve their productivity and as a result its turnover is
much better than previous level.
Return on operating assets= EBIT/Operating Asset Deleted: show detailed calculation of

operating assets
2007 2008 2009

EBIT(Earning before interest
and tax) 51993691 64019452 75280524
Operating Asset 25905823 24205805 25112132
2.99777509
Return on operating assets 2.007027185 2.644797477 9
Working
Capital work in progress+ Property & equipment-intangible assets=Operating Assets
Operating Assets 2007 2008 2009

Capital work in
progress 459487 1016513 1472451
Property &
equipment 25454914 23195217 23657211
Operating Assets 25905823 24205805 25112132

The ratio expresses how effectively the management is using the assets of the business.
This ratio was 2.007 in year 2007, but after this it is slightly increases from previous level
and then it reached at 2.645 in financial year 2009, it also increase at 2.998 from the
previous year
Sales to fixed asset=Sales/ Net Fixed Assets
2007 2008 2009

Sales 50569481 60942798 77947697
Net Fixed Assets 25905823 24205805 25112132
SHAHAAN ZULFIQAR
Sales to fixed asset 1.952050742 2.517693504 3.10398564

Analysis on table shows upward trend during three consecutive years from 2007-09.
However during financial year bank significantly improve their productivity and as a
result its turnover is much better than previous level. This ratio indicates the utilisation
of fixed assets and increases in this ratio means that bank have utilized its fixed assets
more efficiently then the previous year
Return on Investment= Net income/ Total long term liability+ Owners Equity
2007 2008 2009

Net income 51147457 60933234 70791984
Total long term
liability 424979997 411088344 513668300
Owners Equity 69270631 81367002 94791919
Return on Investment 0.10348486 0.123733521 0.116346117
A performance measure used to evaluate the efficiency of an investment or to compare

the efficiency of a number of different investments. In 2007 it was .1035 and increase in
2008 at .124. In 2009 it little bit decrease at.11634.
Return on total equity= Net income/ Total Equity
2007 2008 2009

Net income 51147457 60933234 70791984
Total Equity 69270631 81367002 94791919
Return on total equity 0.738371461 0.748869105 0.74681455
Measures overall effectiveness in generating profits with available assets . Decision
makers will also look for ways to improve ROI by reducing costs, increasing gains, or
accelerating gains. Ratio is going high. Which means the efficiency on National Bank is
good they use their investment efficiently to borrowers
Gross Profit Margin= Gross Profit/ Net Sales Deleted: from where u have taken
value of GP?
In first report my figure of GP was wrong now it is correct
Net markup/interest income is gross profit from P&L account
I have taken these from Instructor's Reply

In banking sector, Interest markup earned is considered as sales and interest
markup expensed is considered as cost of goods sold now Net markup/interest
2007 2008 2009
Gross Profit 33629470 37058030 38458048
SHAHAAN ZULFIQAR
Net Sales 50569481 60942798 77947697
Gross Profit Margin 0.66501513 0.608078907 0.493382736

Gross Profit Margin measures the ability of the firm to control costs of inventories
and/or manufacturing cost and to pass along price increases through sales to
customers. Here in 2007 the gross margin is 0.665 and it indicate that company giving
the proper attention to its manufacturing cost and controlling it expense of
manufacturing which is very beneficial for the company in future but in 2008 and
2009 it decrease and become at .61 in 2009 which is very low & not good from the
previous year but here a reason is that company sale has decrease and due to this it
cost also increasing but company management not control its cost to get the
maximum profit
Activity Ratios
Activity ratios measure a firm's ability to convert different accounts within their
balance sheets into cash or sales.
These include:
Total Assets Turnover

Fixed Assets Turnover
Total Asset Turnover= Net Sales/ Average total assets
2007 2008 2009

Net Sales 50569481 60942798 77947697
Average total assets 698663152 789975959.5 880995544
Total Asset Turnover 0.072380346 0.07714513 0.08847683

The ratio explains how much in a prominent way the bank using total assets to increase
sales. Measures relative efficiency of total assets to generate sales. Asset turnover measures how
effectively a business is using assets to generate sales.
But now in last year 2009 National bank management increases its output by using total
assets to increase sale and revenue. In 2009 total asset turnover increases from previous
level It shows relative effectiveness of assets utilization .
Market Ratios
Market ratios are commonly used by the investors to assess the performance of a
SHAHAAN ZULFIQAR
business as an investment and also the cost of issuing stock.
These include:
Dividend per share
Earning per Share
Price/Earning Ratio
Percentage of Earnings Retained
Dividend Payout
Dividend Yield
Book Value per Share
Dividend Per Share=Total Dividend amount/ No. of outstanding shares
2007 2008 2009

Total Dividend
amount 2831895 6104894 5820338
No. of outstanding
shares 1000000000 1000000000 2500000000
Dividend Per Share 0.002831895 0.006104894 0.00232814
Dividend per share (DPS) is the total dividends paid out over an entire year (including
interim dividends but not including special dividends) divided by the number of
outstanding ordinary shares issued. in 2007 it was .0028 and it increase in 2008 at .006. in
2009 it decrease at .0023.
Earning Per Share= Net income/ No. of outstanding shares
2007 2008 2009

Net income 51147457 60933234 70791984
No. of outstanding
shares 1000000000 1000000000 2500000000
Earning Per Share 0.051147457 0.060933234 0.02831679
Earnings per share serve as an indicator of a company's profitability. in 2007 it was .05
and increase in 2008 at .061. in 2009 it decrease at .028
Price Earning Ratio= Market Value per share/ Earning Per Share Deleted: earning per share is not the
same which you have calculated above .
I have taken these values from kse website but now I change these values now these which EPS is correct?
are same.
2007 2008 2009
Market Value per
share 232.15 50.32 74.37
SHAHAAN ZULFIQAR
Price Earning Ratio 4538.837581 825.8219152 2626.357013
Investors are much interested to know whether a company’s performance is increasing or
decreasing. From an investor’s point of view, the organization earning per share is more
important and investors can easily understand the firm’s profitability. in financial year
2007 it 4538.837, and in financial year 2008 it decreases rapidly.in 2009 it increases at
2626.357
Percentage of retained Earning= Beginning Retained Earning+ Net income-

Dividend Comment [a3]: Net income – all
dividends / net income
http://www.investopedia.com/terms/r/retainedearnings.asp
This formula is also in Fin621
2007 2008 2009

Beginning Retained
Earning 8154319 8969751 10763702
Net income 51147457 60933234 70791984
Dividend paid 2831895 6104894 5820338
Percentage of retained
Earning 56469881 63798091 75735348
The increase in the percentage of retained earnings could give a negative influence to the
investors. But still the investor will be waiting to see the further results. It is due to the
reason that the investor would be interested to invest in the business in order to get more
dividends.
Dividend Payout Ratio= Dividend Per Share/ Earning Per Share

I have taken these values from kse website but now I change these values now these
are same.
2007 2008 2009

Dividend Per Share 0.002831895 0.006104894 0.00232814 Deleted: this is not the same which you
have calculated above
Dividend Payout
Ratio 0.055367269 0.10018989 0.082217652
The ratio indicates the percentage of a company’s earnings that is paid out to
shareholders in cash. The Dividend Payout Ratio is one of those numbers. It almost
seems like a measurement invented because it looked like it was important
Dividend Yield= Annual Dividend Per Share/ Market Value per share
SHAHAAN ZULFIQAR
2007 2008 2009
Annual Dividend Per
Share 3.47 6.8 7.5
Market Value per
share 232.15 50.32 74.37
Dividend Yield 0.014947232 0.135135135 0.10084712
. In year 2007 -2009 increase in outstanding shares increased dividend yield, it is clear
that the dividend is 0.0149 in 2007 but in 2008 it is increase. It is because of high market
price and dividend.
Book Value Per Share= Total assets- Total Liabilities/ Common Shares Comment [a4]: Preferred equity
should also be deducted
2007 2008 2009

Total assets 762193593 817758326 944232762
Total Liabilities 645855936 715299108 824676384
Common Shares 1000000000 1000000000 2500000000
Book Value Per
Share 0.11634 0.10246 0.047822
It is the amount below which stockholders’ equity cannot be reduced. This also shows a
negative picture of the bank. In the subsequent years, the value of asset could be higher or
lower than its present book value due to inflationary condition of the economy.
Statements of Cash Flow

Cash flow ratios indicate liquidity, borrowing capacity and profitability.
These include:
Operating Cash Flow/Current Maturities of Long Term Debt and Current
Notes Payable
Operating Cash Flow/Total Debt
Operating Cash Flow per Share
Other ratios
Operating Cash Flow/Current Matuirity of long term debt+current notes payable=

Operating Cash Flow/Current Matuirity of long term debt+current notes payable
2007 2008 2009

Operating Cash Flow 78804419 2532681 45451673
SHAHAAN ZULFIQAR
Current Matuirity of long term debt and current
notes payable(Depreciation and amortization) 556523 751575 871814
Operating Cash Flow/Current Matuirity of long term
debt+current notes payable 141.6013696 3.369831354 52.1345987
This ratio indicates that how much operating cash flow company has with respect to
Current Matuirity of long term debt and current notes payable
It was 141.601 in 2007 and huge decrease occurs in 2008. in 2009 it becomes at 52.13
Operating Cash Flow to Total debt= Operating Cash Flow/Total debt
2007 2008 2009

Total debt 645855936 715299108 824676384
Operating Cash Flow/Total
debt 0.122015475 0.00354073 0.05511456
This ratio indicates that how much operating cash flow company has with respect to total
debt. In 2007 it was .122 and in 2008 it decreases at .003. in 2009 it increase at .055.
Operating cash flow per share= Operating Cash Flow- referred dividends /
Common Shares
2007 2008 2009

referred dividends 0 0 0
Common Shares 1000000000 1000000000 2500000000
Operating cash flow per
share 0.078804419 0.002532681 0.01818067
It shows that how much operating cash flow company use with respect to its common
shares. In 2007 it was .07 and in 2008 it decreased at .002. in 2009 it increased at .01818.
Banks Equity Multiplier= Total assets/ Shareholders equity
2007 2008 2009

Total assets 762193593 817758326 944232762
Banks Equity
Multiplier (EM)
(Total
Assets/Shareholders
Equity) 11.00312762 10.05024526 9.96111031
SHAHAAN ZULFIQAR
It shows that how much assets company have with respect to its shareholders equity.
In 2007 it was 11.003 and in 2008 it was 10.05. I 2009 it decreased at 9.96.
Net Non interest margin =Non Interest Income –Non Interest Expense/Total
Assets*100
2007 2008 2009

Non .Interest income 13544845 16415862 19025357
Non .Interest Expense 14391079 19502080 23513897
Net Non interest margin (Non Interest Income –
Non Interest Expense/Total Assets*100) 0.941197321 0.84174929 0.80911118
Net Non interest margin shows that how much company has on interest margin with
respect to its non interest expense. In 2007 it was .9411 and in 2008 it decrease at .842. In
2009 it slightly decreases at .80911.
Advances to Deposits Ratio= Advances/Deposits
2007 2008 2009

Advances 340677100 412986865 475243431
Deposits 591907435 624939016 726464825
Advances to Deposits
Ratio 0.575558068 0.660843465 0.65418643
Advances to Deposits Ratio shows that how much advances a bank has with respect to its
deposits. In 2007 it was .5755and in 2008 it increase .661. in 2009 it decrease at .654.
Short term Deposits to advances= Short term Deposits/advances
2007 2008 2009

Short term Deposits 216576895 194109621 243177793
Advances 340677100 412986865 475243431
Short term Deposits
to advances 0.63572484 0.470014031 0.51169101
Short term Deposits to advances shows that how much short term deposits company has
with respect to advances. in 2007 it was .635 and in 2008 it decreased at .47. in 2009 it
increase at .51
SHAHAAN ZULFIQAR
Net Working Capital to total assets= Net Working Capital/total assets
2007 2008 2009

Net Working Capital 125811 4893516 17046815
Total assets 762193593 817758326 944232762
Net Working Capital
to total assets 0.000165064 0.005984061 0.01805362
Net working capital to total assets shows that how much net Working Capital Company
has with respect to its total asset. In 2007 it was .00016 and in 2008 it increase at
.00598.in 2009 it again increase at .01805.
Cash flow from operating activities to Total assets= Cash flow from operating
activities/Total assets
2007 2008 2009

Cash flow from operating
activities 78804419 2532681 45451673
Total assets 762193593 817758326 944232762
Cash flow from operating
activities to Total assets
0.103391605 0.003097102 0.04813609
This ratio indicates that how much cash flow operating with respect to its total assets. in
2007it was 1.56 and in 2008 it decrease at .0415. in 2009 it increase at .583
Cash Flow Margin ratio=Cash flow from operating cash flows/Net Sales
2007 2008 2009

Cash flow from operating activities 78804419 2532681 45451673
Net Sales 50569481 60942798 77947697
Cash Flow Margin ratio(Cash flow from
operating cash flows/Net Sales) 1.558339485 0.041558331 0.58310476
This ratio shows that how much cash flow operating with respect to its net sales. in 2007
it was .1034 and in 2008 it decrease at .0031. in 2009 it increase at .048.
Current Assets to Shareholders Equity= Current Assets/Shareholders Equity
2007 2008 2009
SHAHAAN ZULFIQAR
Current assets 30994965 44550347 59316438
Current Assets to
Shareholders Equity 0.447447418 0.547523516 0.62575416

In consideration to the ability of the bank to use the cash that includes not only cash
itself but also other short term highly liquid instruments has negative impact on the
business. All the measurements taken are unfavorable to the bank. The operating cash of
the bank has decreased in the current year which is the major reason for
the unfavorable results of cash flow analysis. It shows that the operating cash is
insignificant in relation to total debts, which show the National Bank is not able to cover
its total debts against the yearly cash flow. The negative results show the inability of the
management to cover the total debts with the available cash of the bank. Operating cash
per share has the negative indication for short term which indicates that the bank cannot
make capital expenditure decisions properly and will pay lesser dividends in the
concerned year. The Bank is, thus, not in a better position to pay its one year cash
dividend. Overall cash flow analysis shows that the net cash flow of the National Bank
from its operating activities would not attract the prospective investors to make their
investments in the concerned business.
Horizontal Analysis
NATIONAL BANK OF PAKISTAN

Balance Sheet
Horizontal Analysis of Balance Sheet
Taking 2007 as base year
SHAHAAN ZULFIQAR
ASSETS
2007 2008 2009
Cash and balances with treasury banks 100 112.2589952 122.087
Balances with other banks 100 102.3264214 75.80309
Lending’s to financial institutions 100 79.79665123 91.25339
Investments 100 81.04000132 103.2521
Advances 100 121.2253084 139.4997
Other assets 100 143.734142 81.13315
Operating fixed assets 100 93.42157396 11.81296
Deferred tax assets 100 0 0
Total assets 100 107.2901076 123.8836
LIABILITIES
Bills payable 100 144.7069217 150.401
Borrowings from financial institutions 100 371.6580181 415.9276
Deposits and other accounts 100 105.5805315 122.7328
Sub-ordinated loans 0 0 0
Liabilities against assets subject to
finance lease 100 75.32335936 127.046
Other liabilities 100 128.4675019 136.9316
Deferred tax liabilities 100 0 0
Total liabilities 100 110.7521143 127.6874
NET ASSETS 100 88.07055539 102.7667
Share capital 100 110.0000012 132
Reserves 100 126.4322231 143.8088
Un appropriated profit 100 115.6845151 135.2908
Equity 100 117.4624813 136.8429
Surplus on revaluation of assets 100 44.81315081 52.61531
Total Equity 100 88.07055539 102.7667
HORIZONTAL ANALYSIS OF BALANCE SHEET
SHAHAAN ZULFIQAR
Interpretation:
Over all the assets has increased from the previous year the major increase has been seen in
cash and bank balance. Similarly the liabilities has also been increased in liabilities major
increase has been seen in bills payable and deposits in other bank while share capital has
also increased by significant margin.
1) Total assets
Financial year 2007 is a base year. It is equal to 100% value. Total assets due to analysis
show an upward trend by 107.29%, 123.88% respectively as compare to base year 2007.
The increase in total assets in 2005 only 7.29%, which is very low figure then form years
2004-08. Other assets are decreased and vary during a period of time from year 2007-
2009. Cash and balances with treasury banks increases as 112.25%, 122.087%
respectively from year 2007-2009. Similarly advances and other assets shows upward
trend that support the overall increase in total assets. The balance with other banks and
lending to financial institutions shows upward trend in year 2008, similarly in financial
year 2009 the advances and investments of NBP at peak point by 139.4997% and
103.2521% respectively. But over all total assets of bank is increase from previous level.
- Total liabilities and capital
Total liabilities shows an upward trend by 110.75%, and 127.6874% respectively as

compare to base year 2007. The total liability is increase in 2009 as compare to base year
which is very high figure then from year 2008. Other liabilities are increased and
decreased during a time period of 2007-2009. Deposits and other accounts are increases
as 122.7328%, 127.046%, 136.9316% .respectively. Other liabilities are increase
108.98%, 116.06, 134.70, and 173.05% during the time period of 2004 -2008. Liability
side, financial year 2005 shows downward trend in bills payable, deposits, and borrowing
form financial institutions but increase in share capital and reserves. NBP focus to
increase capital through equity in the long run from year 2007-08.
SHAHAAN ZULFIQAR
Horizontal Analysis
Profit and Loss Account
Interpretation:
Profit and loss statement or income and expenditure determine the summary of an
Description
2007 2008 2009
Mark-up/Return/Interest earned 100 120.5129987 154.1398
Mark-up/Return/Interest expensed 100 140.9961776 233.1147
Net-mark-up/Interest income 100 110.1951057 114.3582
Provision against non-performing advances 100 224.2933854 233.819
-
Provisions for diminution in the value of investments 100 923.2437914 -1498.04
Provisions against off balance sheet obligations 100 0 0
Bad debts written of directly 100 0 0
Total interest income 100 232.2978952 247.0885
Net mark up /interest income after provisions 100 90.24615198 92.67291
Non mark up /interest income
Fee commission and brokerage income 100 116.8643536 131.684
Dividend income 100 88.22295346 58.84742
Income from dealing in foreign currencies 100 380.6055079 290.3804
Gain on sale of securities 100 16.88639401 196.0932
un realized gain/ loss on revaluation of investments
classified as -
held for trading 100 5.340382931 -7.36766
Other income 100 845.1029091 374.7318
Total non mark up /interest income 100 121.1963814 140.462
Total income before expense 100 100.12131 107.9208
Non mark up /interest expenses
Administrative expenses 100 127.9129371 158.8879
Other provisions /write offs 100 444.8814774 369.4525
Total non mark up /interest expenses 100 135.5150646 163.3922
Total non interest expenses 100 81.96930625 79.47176
Extra ordinary items
Profit before tax 100 81.96930625 79.47176
Taxation – current 100 141.5225892 110.9488
- prior years 100 -1055.76
-
- Deferred 100 1303.626159 -308.869
Total tax 100 83.55638942 45.29135
Profit after tax 100 81.21663529 95.68174
SHAHAAN ZULFIQAR
organizations revenues and expenses over a specified period ending with net income or
loss.
The above table shows that interest earned vary during the 3 years in analysis, the interest
expenses also vary with the same point. Both figures effects on net-mark-up, so we can
see that net-mark-up in 2008 are 110.19%, 114.358% in 2009. Net markup in 2009 shows
the NBP’s performance goes higher and higher. Markup interest income after provisions
shows increasing trends since 2007-2009. Total non markup/ interest income show
increasing trend which is because of greater increase in income from dealing in foreign
currency and fee, commission and brokerage, income. However there is some variation in
non markup/interest income, in 2009 dividend income decreased at 58.847% from year
2008, similarly other income also decrease from 2008-2009. Profit before taxation show
declining trend this is because of increase in the portion of interest expenses as well as
non interest expenses in current year. Non interest expenses increase because of increase
in admin expenses, other provision/ write off also increasing. Profit after taxation show
greater declining as compare to previous year 2008.
SHAHAAN ZULFIQAR
Vertical Analysis
Balance Sheet
Vertical Analysis
Taking Total assets amount as base value
ASSETS
2007 2008 2009
Cash and balances with treasury
banks 12.4473952 13.0238669 12.26688
Balances with other banks 4.91644542 4.68899023 3.008322
Lending’s to financial institutions 2.81616117 2.09451026 2.074401
Investments 27.6554238 20.8891167 23.0497
Advances 44.6969252 50.5023125 50.33117
Other assets 4.06654757 5.44786223 2.663241
Operating fixed assets 3.40110167 2.96146847 0.324313
Deferred tax assets 0 0.39187275 6.281972
Total assets 100 100 100
0 0
LIABILITIES
Bills payable 0.9265234 1.24964316 1.124846
Borrowings from financial
institutions 1.42825433 4.9475407 4.795231
Deposits and other accounts 77.6584113 76.4209909 76.93705
Sub-ordinated loans 0 0 0
Liabilities against assets subject to
finance lease 0.00440229 0.00309064 0.004515
Other liabilities 4.05004113 4.8494561 4.476611
Deferred tax liabilities 0.66883677 0 0
Total liabilities 84.7364692 87.4707215 87.33825
NET ASSETS 15.2635308 12.5292785 12.66175
Share capital 1.0698488 1.09687064 1.139942
Reserves 2.06930682 2.43850125 2.402131
Un appropriated profit 5.9491694 6.41463405 6.496969
Equity 9.08832502 9.95000594 10.03904
Surplus on revaluation of assets 6.1752058 2.57927255 2.622707
Total Equity 15.2635308 12.5292785 12.66175
SHAHAAN ZULFIQAR
Interpretation:
Analysis of balance sheet 2007 shows 100% on both sides and further as well. The cash
and balances with treasury banks is 12.447% and cash with other banks is 4.9%, which
are impressive figures to meet the liquidity position. Lending to financial institutions is
2.8%. Investments and advances are major components in balance sheet 27.65% and
44.6969% respectively. These two elements are lifeblood of any banking business.
Operating fixed assets and other assets are not up to the mark showing 3.4% and 4.06%
only. A deferred tax asset is 0 %. Deposits are the one of the main sources of the bank
and shows 77.65%, which is impressive figure. Total equity is 15.26% in which the
higher figure is surplus on revaluation of assets. It gives view that the bank is strong and
need to further expansion because bills payable and borrowings are .9265% and 1.43%
respectively.
Analysis of year 2008 shows cash and balance with treasury banks, balances with other
banks are increase at (12.44% to 13.02%) and decrease (4.91% to 4.68%) respectively. In
this year, NBP follows a downward trend in its position but it got overall profitability.
Lending to financial institutions, investments, and other assets are increases from
previous year 2.81%, 27.65%, and 4.06% respectively. While operating fixed assets are
slightly decreases as (3.40% to 2.96%) and deferred tax assets is zero. On liability side,
Bills payable increase, borrowing from financial institutions increase, deposit and other
accounts are decreases at 1.249%, 4.947% and 76.42% respectively, while other
liabilities and deferred tax liabilities also increases. In this financial year total liability is
increases from 84.73% to 87..33%. Total equity is 12.66% in which the higher figure is
surplus on revaluation of assets. It gives view that the bank is strong and need to further
expansion because bills payable and borrowings are 0.92% and 1.12% respectively.
Analysis of December 31, 2009, appears both increase and decrease in balance sheet
throughout the year. Cash and balance with treasury banks, advances, and other assets
shows downward trend as compare to last financial year, and decreases at 12.26%,
50.33%, and assets 2.66% respectively. In this financial year total liabilities are also
increases at 87.33%. Bills payable, borrowing from financial institutions, are also
SHAHAAN ZULFIQAR
decrease at 1.124% and 4.795% respectively. The total equity is increases from 12.52%
to 12.66%.

Profit and Loss Account
Vertical Analysis
SHAHAAN ZULFIQAR
Taking Mark up income and non Mark up income as base value
Description
2007 2008 2009
Mark-up/Return/Interest earned 78.8739181 78.7795419 80.38078
Mark-up/Return/Interest expensed 26.4215692 30.8753642 40.72229
Net-mark-up/Interest income 52.4523489 47.9041778 39.65849
Provision against non-performing advances 7.36665936 13.6940906 11.38818
-
Provisions for diminution in the value of investments 0.06305611 0.48249155 0.624533
Provisions against off balance sheet obligations 0 0.00517072 0.020869
Bad debts written of directly 0.06223102 0 0
Total interest income 7.36611502 14.1817529 12.03359
Net mark up /interest income after provisions 45.0862339 33.7224249 27.6249
Non mark up /interest income 0 0 0
Fee commission and brokerage income 10.5774847 10.244968 9.209147
Dividend income 5.08972987 3.72153809 1.980278
Income from dealing in foreign currencies 1.62651168 5.13072098 3.122687
Gain on sale of securities 3.65236624 0.51116061 4.735227
un realized gain/ loss on revaluation of investments classified as -
held for trading 0.04985469
0.0022066 0.002429
Other income 0.22984411
1.60986372 0.569453
Total non mark up /interest income 21.1260819
21.2204581 19.61922
Total income before expense 66.2123158
54.9428829 47.24412
Non mark up /interest expenses 0 0 0
Administrative expenses 22.1571556
23.489546 23.27602
Other provisions /write offs 0.26207403
0.96630552 0.640157
Other charges 0.02673505
0.75409915 0.331687
Total non mark up /interest expenses 22.4459647
25.2099506 24.24787
Total non interest expenses 43.7663511
29.7329323 22.99626
Extra ordinary items 0 0 0
Profit before tax 43.7663511
29.7329323 22.99626
Taxation - current 12.9635614
15.2053435 9.509356
- prior years 0.61062328
0 -4.2623
-
- Deferred 0.50492771 5.45542283 -1.03112
Total tax 14.0791124 9.74992069 4.215941
Profit after tax 29.6872387 19.9830116 18.78032
Industry Analysis
National Bank of Pakistan
SHAHAAN ZULFIQAR
Years 2007 2008 2009
Debt ratio=(Total
debt/total assets) 0.847364688 0.874707215 0.87338251
2007 2008 2009
Debt to Equity
Ratio=(total
2007 2008 2009
Current worth to Net
worth ratio=(Net
profit/Shareholders
equity*100) 0.738371461 0.748869105 0.74681455
2007 2008 2009
Net profit Margin= Net
income/Net Sales 1.011429344 0.999843066 0.90819853
2007 2008 2009
Dupont return on assets 0.738371461 0.748869105 0.74681455
2007 2008 2009
2007 2008 2009
Total Asset Turnover 0.072380346 0.07714513 0.08847683
2007 2008 2009
Operating Cash
Flow/Total debt 0.122015475 0.00354073 0.05511456
Alfalah Bank
Years 2007 2008 2009

Debt Ratio: (X/Y) 0.950684 0.95116 0.943112
Debt / Equity Ratio: (X/Y) 22.71248 22.72276 18.56003
Current Worth / Net worth Ratio = 43.42288 42.28851 22.09985
SHAHAAN ZULFIQAR
(X/Y)
Net Profit Margin = 0.231846 0.198983 0.122864
DuPont Return on Assets = (X * Y) 0.018176 0.017702 0.01123
Total Assets Turnover 8.529505 9.159825 9.636418
Operating Cash Flow/Total Debt 0.126794 0.00753 0.054358
Meezan Bank
Years 2007 2008 2009

Debt ratio=(Total debt/total assets) 0.93266806 0.9370906 0.941221161
Current worth to Net worth ratio=(Net
profit/Shareholders equity*100) 0.3703407 0.210308 0.107799333
Net profit Margin 0.295907 0.1376063 0.062518241
Total asset turnover 0.08697876 0.0947223 0.098418413
Operating Cash Flow/Total debt 0.04926481 0.0134384 0.15209866
MCB BANK
Years 2007 2008 2009

Debt ratio=(Total debt/total assets) 0.86572078 0.86827331 0.863046419
SHAHAAN ZULFIQAR
Current worth to Net worth
ratio=(Net profit/Shareholders
equity*100) 0.45819171 0.39289352 0.404593957
Net profit Margin 0.65462784 0.51260511 0.478745925
Total asset turnover 0.08447212 0.09376831 0.108341436
Operating Cash Flow/Total debt 0.17418472 0.00527426 0.177817925
SHAHAAN ZULFIQAR
Trend Analysis
Current Ratio
70000000
60000000 Current assets
Current Ratio
50000000
40000000 Current liabilities
30000000
20000000 Current ratio =(Current
10000000 assets/Current liabilities)
0
2007 2008 2009
Years
Current ratio measures the firm's short-term debt-paying ability & the ability to
meet its current liabilities out of its current assets. The current ratio gives an investor a
better idea of how much safety a company has in paying its current liabilities regardless
of the size of the company. Here the current ratio in 2007 is 1.004 but in 2008 a minor
increase in this ratio is 1.12 and then 1.13 and in 2009 a great difference show in this
ratio. it indicates that firm has so much capital to compete its liabilities for the year.
Cash+Marketable
Acid Test Ratio securities(Treasury bills,
Federal Investment
160000000 Bonds,Pakistan
140000000 Investment Bonds, Term
Acid Test Ratio
120000000 Finance Certificates,

100000000 Current liabilities
80000000
60000000
40000000
20000000
0
2007 2008 2009 Acid test
Years ratio=(Cash+Marketable
securities)/Current
liabilities
SHAHAAN ZULFIQAR
Quick ratio also known as the acid-test ratio, it examines the business’s liquidity
position by comparing current assets and liabilities but it omits stock from the total of
current assets. In 2007 it is very high and indicates that a large portion of current assets
is in the form of less liquid assets. In 2008 quick ratio come at low value 5.8 but in 2009
it becomes 6.7 little bit increase from the 2008.
Woking Capital
70000000 Current assets

60000000
Woking Capital
50000000
40000000
Current liabilities
30000000
20000000
10000000
0 Working
2007 2008 2009 Capital=(Current
assets-Current
Years
liabilities)
Working capital must be compared to the amount of liabilities.

Woking Capital represents operating liquidity available to a business.
In 2007 W.C was very low which is 125811 Million Rs but in 2008 there is great increase
in its W.C which is 4893516 Million Rs and in 2009 a huge difference occur 17046815
Million Rs.
Sales to Working Capital Ratio
100000000 Sales
Sales to Working Capital
80000000
60000000
Ratio
Working Capital
40000000
20000000
0 Sales/Working
2007 2008 2009 Capital
ratio=(Sales/Working
Years
Capital)
SHAHAAN ZULFIQAR
A high ratio may indicate insufficient working capital, which reflects negatively on
liquidity. In 2007 ratio of the sales to W.C was 402 and in 2008 a huge difference occur
which was 12.45 and then in 2009 it becomes 4.57 which indicate sufficient W.C.
Time Interest Earned
2007
28%
2009
2007
39%
2008
2009
2008
33%
The times interest earned ratio indicates the extent of which earnings are available to
meet interest payments. In 2007 it was 28% and then in 2008 it was increase only 5%.
Now in 2009 there is 6% increasing which shows that 6% earnings are available to meet
interest payments.
Fixed Charge coverage
35000000
Fixed Charge coverage
30000000 EBIT(Earning before

25000000 interest and tax)
20000000 Fixed Charge(before tax)
15000000
10000000 Interest Expensed
5000000
0
2007 2008 2009
Years
SHAHAAN ZULFIQAR
The fixed charge coverage ratio is a broader measure of how well a firm covers their
fixed costs than the times interest earned ratio.
The fixed charge coverage ratio includes lease payments as well as interest payments. in
2007 it was 1.685 which shows greater covers their fixed cost and in 2008 it was
decreasing at 1.24 and in 2009 it becomes at 1.1 which means bad debt position of the
bank.
Debt Ratio
1000000000
800000000 Total debt
Debt Ratio
600000000 Total assets

400000000
Debt ratio=(Total
200000000 debt/total assets)
0
2007 2008 2009
Years
debt Ratio is a financial ratio that indicates the percentage of a company's assets that are
provided via debt. In 2007 it was .847 which shows company relies on debt to finance
assets. in 2008 it was slightly increasing at .8747 and in 2009 it was approximately
constant which shows company relies on debt to finance assets.
Debt to Equity Ratio

Total debt
900000000
800000000
Debt to Equity Ratio
700000000
600000000 Shareholders
500000000 equity
400000000
300000000
200000000 Debt to Equity
100000000 Ratio=(total
0 debt/Shareholders
2007 2008 2009 equity
Years
SHAHAAN ZULFIQAR
The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of
shareholders' equity and debt used to finance a company's assets. In 2007 it was 9.324
and then it decreasing at 8.79 and in 2009 it slightly decreasing which measures a
company's ability to borrow and repay money.
Debt to Tangible Net Worth ratio
350000000
300000000
Debt to Tangible Net
250000000
Worth ratio
Total long term debt

200000000
Shareholders equity
150000000
intangible assets
100000000
50000000
0
2007 2008 2009
Years
Debt to Tangible Net Worth ratio shows the health (or illness) of a company. In 2007 it
was 2.768 and in 2008 it increased at 3.0853 and in 2009 it slightly decreases.
Current Worth to Net Worth Ratio
100000000 Net profit

Current Worth to Net
80000000
Worth Ratio
60000000
Shareholders equity
40000000
20000000
0 Current worth to Net
2007 2008 2009 worth ratio=(Net
profit/Shareholders
Years
equity*100)
SHAHAAN ZULFIQAR
Current worth to Net worth ratio shows that how much net profit available versus
Shareholders equity. In 2007 net profit was .74 and in 2008 it was little bit increase at .75
and in 2009 it was
Approximately constant at .75
Total Capitalization Ratio
350000000 Total long term debt

Total Capitalization
300000000
250000000
200000000
Ratio
Owners Equity
150000000
100000000
50000000
0 total capitalization
2007 2008 2009 ratio=(Total long term
debt/Total long term
Years
debt+Owners Equity)
The capitalization ratio measures the debt component of a company's capital structure, or
capitalization (i.e., the sum of long-term debt liabilities and shareholders' equity) to
support a company's operations and growth. in 2007 it was .735 and then increase in 2008
at .755. in 2009 it was approximately constant at .75.
Net Fixed Assets

Fixed Asset Ratio/Equity Ratio
1.114, 0%
25905823, 2% Long term Funds(long
term liabilities and net
255914060,
worth)
23%
69270631, 6% Owners Equity

762193593,
69%
Total assets
Fixed asset ratio/Equity

ratio=(Net Fixed
Assets/Long term
Funds/Owners
Equity/Total assets)
SHAHAAN ZULFIQAR
Fixed asset ratio/Equity ratio shows that how much a company has fixed asset with
respect to owners equity. In 2007 it was 1.114 and then decrease at .732 in 2008. in 2009
it decrease at .655.
Net Profit Margin
100000000
Net Profit Margin
80000000
Net income
60000000
Net Sales
40000000
Net profit Margin
20000000
0
2007 2008 2009
Years
Profit margin measure the percentage of each sales dollar remaining after deducting all
expenses. A high ratio suggests that expenses as a percentage of sales are under control
indicating operational efficiency. in 2007 it was at 1.011 and then a decrease occur in
2008 and finally a little decrease in 2009 was .91.
long term Assets/total long term debt
350000000 Total long term debt

long term Assets/total
300000000
long term debt
250000000
200000000
Total long term
150000000 Assets(Held to Maturity
100000000 securities,long term
50000000 Advances other assets)
0 long term Assets/total
2007 2008 2009 long term debt
Years
SHAHAAN ZULFIQAR
long term Assets/total long term debt shows that how much a company has long term
asset with respect to long term debt. In 2007 it was 1.16 and in 2008 it decrease at 1.57
and in 2009 it decrease at 1.422 which shows that company has sufficient long term
assets with respect to long termReturn
debt On assets
1000000000
Return On assets
800000000
Net income
600000000
Total assets
400000000
Return on Assets
200000000
0
2007 2008 2009
Years
Return on Assets measures the overall effectiveness of management in generating

profits from its total investment. A high ratio is favorable. It implies that net income as a
percentage of total sales is good (Profit margin ratio) or the firm is able to generate a high
level of sales given its investment in assets (Total assets turnover) or a combination of
both and A low ratio is unfavorable. In 2007 it was .07 and then increase in 2008 and in
2009 it reached at .075.
Dupont Return On Assets

Dupont Return On Assets
100000000
80000000 Net income
60000000 Owners Equity

40000000
Dupont return on
20000000 assets
0
2007 2008 2009
Years
SHAHAAN ZULFIQAR
DuPont return on assets shows how the return on assets depends on both asset turnover
and profit margin. In 2007 it was .74 and then increase at .75 in 2008 and finally in 2009
it increase at .757.
Operating income margin
100000000
EBIT(Earning before
Operating income
80000000
interest and tax)
60000000
margin
Net Sales
40000000
Operating income
20000000 margin
0
2007 2008 2009
Years
It is a measurement of what proportion of a company's revenue is left over, before taxes

and other indirect costs (such as rent, bonus, interest, etc.), after paying for variable costs
of production as wages, raw materials, etc. in 2007 it was .57 and decrease in 2008 at
.42. In 2009 it decreased.
Operating Asset turnover
100000000
80000000
Sales
60000000
Operating Asset
40000000
20000000
0
2007 2008 2009
Years
SHAHAAN ZULFIQAR
Operating Asset turnover shows that how much sales are greater with respect to operating
assets. In 2007 it was 1.95 and then increase in 2008 at 2.52. in 2009 it increase at 3.1
Return on operating Assets
35000000
Return on operating
30000000 EBIT(Earning before

25000000 interest and tax)
Assets
20000000 Operating Asset

15000000
10000000 Return on operating
5000000 assets
0
2007 2008 2009
Years
Return on operating assets shows that how much company cover its earning before
interest and taxes with respect to its operating assets. In 2007 its return was 1.115 and
decrease in 2008 at 1.077. in 2009 it decrease at 1.065.
Sales to fixed asset
100000000
80000000
Sales
60000000
Net Fixed Assets
40000000
20000000
0
2007 2008 2009
Years
SHAHAAN ZULFIQAR
Sales to fixed asset show that how much sales company have with respect to its fixed
assets.
In 2007 it was 1.95 and in 2008 it decrease at 2.518. in 2009 it again increase at 3.104.
Return on total equity
100000000
80000000
Net income
60000000
Total Equity
40000000
20000000
0
2007 2008 2009
Years
ROE, tells investors how much profit a company earned in comparison to the total
amount of shareholder equity on the balance sheet. in 2007 it was .74 and increase in
2008 at .75.in 2009 it decrease at .74
350000000
300000000
250000000
Net income
200000000
Total long term liability
150000000
Owners Equity
100000000
50000000
0
2007 2008 2009
Years
SHAHAAN ZULFIQAR
A performance measure used to evaluate the efficiency of an investment or to compare

the efficiency of a number of different investments. In 2007 it was .196 and decrease in
2008 at .18. In 2009 it little bit increase at.1855.
Gross Profit Margin
100000000
Gross Profit Margin
80000000
Gross Profit
60000000
Net Sales
40000000
Gross Profit Margin
20000000
0
2007 2008 2009
Years
What remains from sales after a company pays out the cost of goods sold. To obtain gross
profit margin, divide gross profit by sales. in 2007 it was .665 and decrease at .60 in
2008. in 2009 it again decrease at .49.
Total Asset Turnover
1200000000
Total Asset Turnover
1000000000
800000000 Total Asset Turnover
600000000 Average total assets
400000000 Net Sales
200000000
0
2007 2008 2009
Years
SHAHAAN ZULFIQAR
The total asset turnover represents the amount of revenue generated by a company as a
result of its assets on hand. In 2007 it was .072 and increase in 2008 at .077. in 2009 it
increase at .088.
Dividend Per Share
3000000000
2500000000
Dividend Per Share
Total Dividend amount

2000000000
No. of outstanding
1500000000
shares
1000000000 Dividend Per Share
500000000
0
2007 2008 2009
Years
Dividend per share (DPS) is the total dividends paid out over an entire year (including
interim dividends but not including special dividends) divided by the number of
outstanding ordinary shares issued. in 2007 it was .0028 and it increase in 2008 at .006. in
2009 it decrease at .0023.
Earning Per Share
3000000000
2500000000 Net income
Earning Per Share
2000000000
No. of outstanding
1500000000
shares
1000000000 Earning Per Share
500000000
0
2007 2008 2009
Years
SHAHAAN ZULFIQAR
Earnings per share serve as an indicator of a company's profitability. in 2007 it was .05
and increase in 2008 at .061. in 2009 it decrease at .028
Price Earning Ratio
250
Price Earning Ratio
200 Market Value per

share
100
Price Earning Ratio
50
0
2007 2008 2009
Years
A valuation ratio of a company's current share price compared to its per-share earnings.
Price Earning Ratio shows that how much market value of per share with respect to
earning per. in 2007 it was 9.95 and in 2008 it decrease at 2.92. in 2009 it increase at4.4.
SHAHAAN ZULFIQAR
Dividend Yield
250
200 Annual Dividend Per

Dividend Yield
Share
150
Market Value per
share
100
Dividend Yield
50
0
2007 2008 2009
Years
The percentage of earnings paid to shareholders in dividends.

In 2007 it was .015 and in 2008 it was .135. it decrease in 2009
Percentage of retained Earning
7%
Beginning Retained
Earning
Net income
48%
43% Dividend paid
Percentage of retained
Earning
2%
The percentage of earnings paid to shareholders in dividends. In 2007it was 56469881

and it increasing in 2008. it again increase in 2009 and reaches 75735348.
Dividend Payout Ratio
25
Dividend Payout Ratio
20 Dividend Per Share

10
Dividend Payout
5 Ratio
0
2007 2008 2009
Years
SHAHAAN ZULFIQAR
The percentage of earnings paid to shareholders in dividends. in 2007 it was .15 and
increase in 2008 at .4.I 2. In 2009 it slightly increases at .443.
Book Value Per Share
0%
32%
Total assets
41%
Total Liabilities
Common Shares
Book Value Per Share
27%
it relates the stockholder's equity to the number of shares outstanding, giving the shares a
raw value. In 2007 it was .116adin 2008 it decreased at .102. in 2009 it slightly decreased
at .047.
SHAHAAN ZULFIQAR
Operating Cash Flow/Current MatuirityOperating
of long term
Cash Flow
debt+current notes payable
100000000
Flow/Current Matuirity
debt+current notes
80000000
Operating Cash
Current Matuirity of long
of long term term debt and current
60000000
payable
notes
40000000 payable(Depreciation
20000000 and amortization)
Operating Cash
0
Flow/Current Matuirity of
2007 2008 2009 long term debt+current
Years notes payable
It was 141.601 in 2007 and huge decrease occurs in 2008. in 2009 it becomes at 52.13.
Operating Cash Flow/Total debt
1000000000
800000000 Operating Cash Flow

Operating Cash
Flow/Total debt
600000000 Total debt

400000000
Operating Cash
200000000 Flow/Total debt
0
2007 2008 2009
Years
This ratio indicates that how much operating cash flow company has with respect to total
debt. In 2007 it was .122 and in 2008 it decreases at .003. in 2009 it increase at .055.
SHAHAAN ZULFIQAR
Operating cash flow per share
3000000000
Operating cash flow per 2500000000
2000000000 Operating Cash Flow
share
1500000000 prefered dividends

1000000000 Common Shares
500000000
0
2007 2008 2009
Years
It shows that how much operating cash flow company use with respect to its common
shares. In 2007 it was .07 and in 2008 it decreased at .002. in 2009 it increased at .01818.
Banks Equity Multiplier Total assets
1000000000
Banks Equity Multiplier
800000000
Shareholders equity
600000000
400000000
200000000
Banks Equity
0
Multiplier (EM) (Total
2007 2008 2009 Assets/Shareholders
Years Equity)
It shows that how much assets company have with respect to its shareholders equity.
In 2007 it was 11.003 and in 2008 it was 10.05. I 2009 it decreased at 9.69.
Net Non interest margin Non .Interest income
25000000
Net Non interest margin
20000000
Non .Interest Expense
15000000
10000000
5000000
Net Non interest margin
0
(Non Interest Income
2007 2008 2009 –Non Interest
Years Expense/Total
Assets*100)
SHAHAAN ZULFIQAR
Net Non interest margin shows that how much company has on interest margin with
respect to its non interest expense. In 2007 it was .9411 and in 2008 it decrease at .842. In
2009 it slightly decreases at .80911.
Advances to Deposits Ratio
800000000
700000000
Advances
600000000
500000000
Deposits
Ratio
400000000
300000000
200000000
Ratio
100000000
0
2007 2008 2009
Years
Advances to Deposits Ratio shows that how much advances a bank has with respect to its
deposits. In 2007 it was .5755and in 2008 it increase .661. in 2009 it decrease at .654.
SHAHAAN ZULFIQAR
Short term Deposits to Advances
Short term Deposits to 500000000

Advances
400000000 Short term Deposits
300000000 Advances
200000000
Short term Deposits to
100000000 Advances
0
2007 2008 2009
Years
Short term Deposits to advances shows that how much short term deposits company has
with respect to advances. in 2007 it was .635 and in 2008 it decreased at .47. in 2009 it
increase at .51.
Net Working Capital to Total assets
1000000000
Net Working Capital to
800000000 Net Working Capital

Total assets

400000000
Net Working Capital
200000000 to Total assets
0
2007 2008 2009
Years
Net working capital to total assets shows that how much net Working Capital Company
has with respect to its total asset. In 2007 it was .00016 and in 2008 it increase at
.00598.in 2009 it again increase at .01805.
SHAHAAN ZULFIQAR
Cash Flow Margin ratio
Cash Flow Margin ratio 100000000 Cash flow from

operating activities
80000000
60000000
Net Sales
40000000
20000000
0 Cash Flow Margin

ratio(Cash flow from
2007 2008 2009
operating cash
Years flows/Net Sales)
This ratio shows that how much cash flow operating with respect to its net sales. in 2007
it was .1034 and in 2008 it decrease at .0031. in 2009 it increase at .048.
Operating Cash Flow to total assets
1000000000
Operating Cash Flow to
800000000 Cash flow from operating

activities
total assets

400000000
Operating Cash Flow to
200000000 total assets
0
2007 2008 2009
Years
SHAHAAN ZULFIQAR
This ratio indicates that how much cash flow operating with respect to its total assets. in
2007it was 1.56 and in 2008 it decrease at .0415. in 2009 it increase at .583
Current Assets to Shareholders Equity
100000000
Shareholders Equity
Current assets
Current Assets to
80000000
60000000 Shareholders equity

40000000
Current Assets to
20000000 Shareholders Equity
0
2007 2008 2009
Years
It indicates that how much current assets company has with respect to its shareholders
equity. In 2007 it was .447 and in 2008it increase at .54752. in 2009 it again increase at
.626.
SHAHAAN ZULFIQAR
Future Prospects of the Organization:
Every organization‘s development is based on its future planning. Here in Pakistan,
people trust in Islamic banking rather than the commercial system of banking. Pakistan is
an Islamic state and mostly of its population is Muslim. Keeping in view the importance
of this culture, the bank executives has a plan to launch to more branches in the country
and partially Islamic Branches. NBP’s management is increasingly focusing on the
service quality aspect to increase retention rate through organized programs as the Gold
Standard Service.
In competition with other banks, national bank helps on concentrating better chances of
trade not only on country basis but also globally.
One more thing which has a key value in the disciplines of bank is its customer which is
like a backbone for the bank. For this purpose, bank is introducing a new service named
as consumer banking which is purely for the convince of its customers and besides this
for developing the local banking, ATM and Debit Card services are also benefit for the
customers.
SHAHAAN ZULFIQAR
SWOT ANALYSIS
Strength
 National Bank of Pakistan has got the pubic confidence due to its very secure
transactions. Business people and other do their transaction through this bank
because they feel that their money is dealt with safe and sound.
 National Bank of Pakistan has strong financial position in the country. The reason
is that it is government organization and it is earning huge profits due to efficient
working.
 National Bank of Pakistan is also authorized to act as an agent of the State Bank
of Pakistan.
 Nation Bank of Punjab has the highest profitable position that its competitors due
to vast operational network and public confidence
Weaknesses
 Mostly workload increase on the employees. They often remain in office till 9-
7P.M. To decrease this load appropriate number of employees should be there in
each department.
 HRM department of NBP is not working properly. It results lack of motivation,
creates confusion among employees because many employees are placed at seats
which are totally irrelevant to them
 The Bank has poor quality counter services in branches .It does not give equal
importance to all the customers.
 National Bank of Pakistan is not using latest system and technology. Mostly work
is being done through manually .It is the age of information technology but NBP
is using outdated system & procedures

SHAHAAN ZULFIQAR
Opportunities
 NBP can diversify its funding base and earn foreign exchange by investing into
capital markets of other countries.
 NBP should concentrate more industrial sector and agriculture sector. They
should provide finances to the farmers both on short term and long term basis.
 New schemes for deposits and finances should be introduced regularly to attract
different people from different demographics.
 The bank by establishing new branches in the foreign countries can expand its
business and earn more foreign exchange.
 Since the Govt. has offered Golden Hand Shake scheme only in NBP. So the NBP
can reduce its huge establishment expenses
Threats
 With the passage of time the other banks are introducing efficient information
technology sections & computer networks. But use of the modern technology is
very less in NBP as compared to the other banks. So there may be a time come
when those banks would snatch the market share of NBP.
 The establishment of new private financial institution is a biggest threat to the
National Bank of Pakistan .Because it adversely effect the performance and
profitability of the bank.
 Other threat for the National Bank of Punjab is that there is political pressure for
implementing the decisions. The people that are having higher authority are
forcing to the NBP to make their work easier. They can force the bank to sanction
the loan in huge amount for their benefit.
 NBP should change its old culture and old staff because these are the major
threats of the bank. Being the Govt. employees it is often seen that the employees
are not so much efficient and hard working. When employees of some
SHAHAAN ZULFIQAR
organization are not so much hard working ultimately that organization will
remain behind the competitors.
SHAHAAN ZULFIQAR
CONCLUSION
This report explains the different aspects of the NBP along with my experiences as an
internee over there. Before doing this internship I knew briefly about the common
operations of a bank from a student’s point of view. But ever since I started my internship
in NBP, I have developed concepts that have become clearer from a banker’s as well as a
customer’s point of view.
There are also some problems in the current system and business processes which are
mentioned in the report and I have also given some recommendations about how each
problem can be looked after.
Since competition in the banking industry is very intense and mergers and acquisitions
are also occurring which are expected to increase it more. NBP must continually evolve
its policies and should keep up its pace with the changing market conditions and the
customer expectations.
To understand how NBP fully operates is a huge task and I have only been able to
analyze a small part of it i.e. the NBP Branch. But this experience has been very good for
me, as I have learned so many things about the operations of the bank, its work
environment, the rules and regulations of Foreign Trade. I have worked in different
departments of the bank and have gained knowledge about products of bank and how the
customers view that product.
SHAHAAN ZULFIQAR
Deleted: give any finance related
Recommendations recommendation
During my internship in NBP I find out some areas that require improvements for long
term benefit of the organization.
 All branches of the bank must be online.

 Bank should take step to establish separate counters for the old age employees
and pensioners because the heavy traffic on early days of the month and old age
employees cannot stand on one counter.
 Training program should be establishing in order to increase the computer skills
of their employees.
 Communication skills should be must improved because due to poor
communication skill banking system is not in position to satisfied customer and
competes with others banks. The selection of candidates should be on merit based
and not on their strong family background.
 ATM machine problems should be solved
 Online system of bank should be faster
 Working condition of staff should be improved.
 Staff should be cooperative with each other.
 Personal dealing should be improved
 Bank should adopt new technologies and software
 New computers software should be introduce to handle the heavy load of work
and better control.
 National Bank should also have a trade interest like Army welfare trust. Bank
should seek such project in which they invest its money .So they set more Profit
by like these projects.
 Computerization of branches
 E-Commerce (online savings, investment banking, branchless banking, mobile
banking etc).
 Appearance (Physical appearance of location in and outside of the branch. It helps
to attract the customer).
 NBP can enhance the volume of advanced especially retail loans.
SHAHAAN ZULFIQAR
Reference & Sources used
Books:
James C.Van Horne “Financial Management”
Peter S. Rose “Commercial Bank Management”
NBP Annual Reports
Financial Statement Analysis Fin621
Financial Accounting MGT101
SHAHAAN ZULFIQAR
Annexes
Internet:
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www.mcb.com.pk
www.bankalfalah.com
www.meezanbank.com
SHAHAAN ZULFIQAR

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Virtual University of Pakistan

Name of Student: Shahaan Zulfiqar

Mistakes have been highlighted Formatted: Left

VIRTUAL UNIVERSITY OF PAKISTAN

National Bank of Pakistan

Student ID: MC080404704

Virtual University of Pakistan

Original Internship Completion certificate

I dedicate my work to my mother (Late) and my

Person name Post name

Imran Zulfiqar Brother

Introduction of the organization’s business sector

Overview of the organization

National Bank of Pakistan was established on November 9, 1949 as a commercial bank

• Institutionalizing a merit and performance culture

NBP's CORE VALUES

• Highest standards of Integrity

To enhance profitability and maximization of NBP share through increasing leverage of

Syed Ali Raza - Chairman & President

Nature of the organization

It is functioning as an agent of State Bank of Pakistan. It implements the policies of SBP.

2007 2008 2009

NATIONAL BANK OF PAKISTAN’S PRODUCTS

Unprecedented Safety - Unprecedented Return

Unprecedented Safety - Unprecedented Return

President's Rozgar Scheme - Easy financing for self

Take up to 20 Advance Salaries - Affordable Installations from 1

One Card does it all - ATM plus Debit Card in one

Invest with Confidence - Marginal Finance Facility

NBP KISAN Taqat

NBP's affordable agricultural program offers you a wide

Knitting Links - AASAN Banking

NBP's Internet Based Home Remittance Service

 Standard Chartered Bank (Pakistan) Limited

Credit Officer Clearing Officer

The Bank currently has over 16,248 employees worldwide.

Sindh: Dadu, Sanghar, Hyderabad, Jacobabad, Shikarpur, Karachi, Larkana,

Introduction of all the departments

There are many different departments in National Bank of Pakistan:

WORKING OF DEPOSIT DEPARTMENT

ii) Government Payments

WORKING OF REMITTANCE DEPARTMENT

Four main modes of remittance are:

WORKING OF PENSION DEPARTMENT

 Govt. servant retired benefits

vii) Cash Department

In public they deal in two accounts i-e.

They provide lot of services like

National Bank of Pakistan Nawan Shaher Branch Multan.

1. Saeed Ahmed Manager

Starting date of Internship 1-5-2010

Functions of The department

Key function of this department is:

Following are the main types of accounts find in the bank:

 Minimum requirement to open the account is Rs. 1000.

Rates of return on Foreign Currency Deposits are subject to fluctuation as determined in

PLS Saving Account

 The minimum amount requirement for opening the account is Rs.1000.

Term Deposit or Fixed Deposit Account

 The minimum limit of deposit is Rs.1000.

Notice Deposit Accounts

 7- Days Notice Deposit Account

7- Days Notice Deposit Account