Internship Report on

Askari Bank Limited

Submitted by: Hiba Saleem

Registration # SP08-MBA-089

Supervised by: Mr.Yasir Bin Tariq

Department of Management Sciences

COMSATS Institute of Information Technology
Abbottabad

January 2010

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 Internship Report on
Askari Bank Limited

Submitted by: Hiba Saleem

Registration # SP08-MBA-089

Supervised by: Mr.Yasir Bin Tariq

This internship report is submitted in partial fulfillment of the requirements

for degree of Master of Business Administration awarded by the
COMSATS Institute of Information Technology, Abbottabad.

Department of Management Sciences

COMSATS Institute of Information Technology
Abbottabad
January 2010

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 Department of Management Sciences
COMSATS Institute of Information Technology
Abbottabad

Approval Sheet
.

Approval Committee

1. External Examiner

Mr/ Ms_____________________________________________ Signature_______________

2. Supervisor

Mr ____________________________________________ Signature_______________

3. Head of Department

Mr ___________________________________________ Signature ________________

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 DEDICATIONS

All the efforts in compiling this report are dedicated

To

My Beloved Parents, Brothers, Friends

&

My Honourable Faculty Members of CIIT,

As they helped me in this Achievement

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 Abstract
This report comprehends basic information about ASKARI BANK LIMITED general and its
branches in particular. Then it includes ABL’s history, structure, hierarchy structure, its role in
economy and product and services that it provide to its valued customers. Data in the
compilation of report is collected through primary sources (interviews and observations) and
secondary sources ( annual reports, websites, brochures and manuals)

The main focus of the report is over the analysis of ABL’s organizational, business, and
financial structure, the common size analysis and ratio analysis reflects a slide downturn in
financial performance over the last three years but SWOT analysis still reveal ABL as having
strength in providing innovative financial solutions to the customers. Recommendations at the
end mainly covering ABL’s product and services strategies, managerial and financial
performance to let the management know about immediate problems and forged them to take
remedial measures to prove the bank as one of the leading private sector bank.

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Table of Contents
Acknowledgements XIV
Abbreviations XV
Executive Summary XVI

CHAPTER 01 Page No.

Introduction to the Report
1.1 Background of Study 01
1.2 Purpose of internship 02
1.3 Merits of the Report 02
1.4 Scope of the report 03
1.5 Methodology of the report 03
1.5.1 Primary Sources 03
1.5.2 Secondary Sources 03
1.6 Limitation of the report 04
1.7 Scheme of Report 04

CHAPTER 02
Introduction to Askari Bank Limited

2.1 Early growth of Banking 05

2.2 Formal Definition of Bank 05
2.3 History of Banking in Pakistan 05
2.4 Historical Background of Askari Bank Ltd 06
2.5 Vision Statement of ABL 06
2.6 Mission Statement of ABL 06
2.7 Corporate objectives of ABL 06
2.8 ABL as Leading banking sector entity 07
2.9 Credit rating 07
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2.10 Awards and achievements 07
2.11 Corporate Profile 08
2.11.1 Audit Committee 09

2.11.2 Company Secretary 09

2.11.3 Auditors 09

2.11.4 Legal Advisors 09

2.11.5 Registered / Head Office 09

2.12 Ethical Values 09

2.13 Role of ABL in Banking Sector 09
2.14 Number of branches 10

2.15 Structure of ABL 10

CHAPTER 03
Askari Bank Services and Products
3.1 Introduction to ABL Abbott bad Branch 12
3.2 Departmentalization 14
3.2.1 Account Opening Department 15
3.2.1.1 Types of Accounts 15
3.2.1.1.1 Current account 15
3.2.1.1.2 Saving account (PLs) 15
3.2.1.1.3 Term deposit 16

3.2.1.1.4 Askari deposit Account(ASD) 16

3.2.1.1.5 Askari Bachat certificate 16

3.2.1.1.6 Notice Deposits 16

3.2.1.1.7 Foreign Currency Saving Account 17
3.2.1.2 Account Opening Procedure 17
3.2.1.3 Letter of thanks 17
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 3.2.1.4 Stamping “Posted” 17

3.2.2 Remittance Department 18

3.2.2.1 Instruments of bills and Remittance Department
3.2.2.1.1 Demand draft (D.D) 18
3.2.2.1.2 Telegraphic Transfer 18
3.2.2.1.3 Mail Transfer 18
3.2.2.1.4 Pay order 19
3.2.2.1.5 Pay slip 19
3.2.2.1.6 Outward bills for collection 19
3.2.2.1.7 Inward bills for collection 20
3.2.3 Credit Department 20
3.2.3.1 Types of Advances Offered by ABL 20
3.2.3.1.1 Demand Finance 20
3.2.3.1.2 Running Finance 20
3.2.3.1.3 Cash Finance 21
3.2.3.2 Level of Lending 21
3.2.3.2.1 Structure of Lending 21
3.2.3.3 Financial Products of ABL 21
3.2.3.3.1 Personal Finance 21
3.2.3.3.2 Askari “Mortgage” Finance 21
3.2.3.3.3 Business Finance 22
3.2.3.3.4 Ask Car 22
3.2.3.3.5 Ask Card 22
3.2.3.3.6 Travelers Cheque 22
3.2.4 Cash Department 22
3.2.4.1 Calculation of Ending Balance 23
3.2.4.2 Liquidity Maintenance 23
3.2.5 Clearing Department 23
3.2.6 Accounts Department 23

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3.2.7 Credit Card Department 24
3.2.7.1 ABL Offering 24
3.2.7.1.1 Local Card 24
3.2.7.1.2 Silver Card 25
3.2.7.1.3 Gold Card 25
3.2.8 Foreign Trade Department 25

CHAPTER 04

Financial Analysis of ABL

4.1 Introduction 26
4.2 Purpose of Financial Analysis 27
4.2.1 Analysis
4.2.2 Common Size Analysis 28
4.2.2.1 Trend analysis of Balance Sheet 30
4.2.2.1.1 Percentage Growth in Assets and Liabilities 30

4.2.2.1.2 Share Capital reserve and total Owner equity 30

4.2.2.2 Trend analysis of Income Statement 32

4.2.2.2.1 Mark up Expenses 32

4.2.2.2.2 Net Mark-Up Income/Gross Profit 32

4.2.2.2.3 Non Markup/Non Interest Income 32

4.2.2.2.4 Net income 32

4.2.2.3 Vertical Analysis of Balance Sheet 34

4.2.2.3.1 Percentage Growth in Assets and Liabilities 34

4.2.2.3.2 Share Capital reserve and total Owner equity 34

4.2.2.4 Vertical Analysis Income Statement 36

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 4.2.2.4.1 Markup Expenses 36

4.2.2.4.2 Net Mark-Up Income/Gross Profit 36

4.2.2.4.3 Non Markup/Non Interest Income 36

4.2.2.4.4 Net Income 36

4.3 Financial Ratios Analysis 37

4.3.1 Profitability Ratios of ABL 38

4.3.1.1 Net Interest Margin 39

4.3.1.2Operating Profit Margin Ratio 39

4.3.1.3 Credit to Deposit ratio 40

4.3.1.4 Cost to Income Ratio 40
4.3.1.5 Return on Assets (ROA) 41
4.3.1.6 Return on Earning Assets 41
4.3.1.7 Equity to Total Assets 42
4.3.1.8 Earning Assets to Total Assets 42
4.3.1.9 NIM to Average Earning Assets 43

4.3 SWOT Analysis 44

4.3.1 Strengths 44
4.3.2 Weakness 46
4.3.3 Opportunities 47
4.3.4 Threats 48

CHAPTER 05

Findings Recommendations and Conclusion

5.1 Findings
5.1.1 Employee Empowerment 53
5.1.2 Better Compensation Packages 53

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 5.1.3 Involvement of Higher Management 53

5.2 Recommendations 53
5.2.1 Generalization of Procedures 53
5.2.2 Human Resource Department 54
5.2.3 Basis for Promotion 54
5.2.4 Management Chances On Merit 54
5.2.5 Needs of Change in Recruitment Policy 54
5.2.6 Delegation of Powers 55
5.2.7 Development of Managerial Leadership 55
5.2.8 Computer Trainings 55
5.2.9 Incorporated Marketing Strategy 55
5.2.10 Change in Appraisal System 55
5.2.11 Credits and Advances Department 56
5.2.12 Guidance for Risk Management 56
5.2.13 Fake Financial Presentation by client 56
5.2.14 Poor Management 56
5.2.15 Proper Documentation 57
5.2.16 Administrative Reforms 57
5.3 Conclusion 57

References 59
List of Tables and Figures
Figure 2.1 ABL Organization Structure Chart 11
Figure 3.1: Organizational Chart of the Branch 13
Figure 3.2 Branch systems Hierarchy 14
Figure 4.1 Trend Analysis of Balance sheet of Year 2007 30

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Figure 4.2 Trend Analysis of Balance sheet of Year 2008 30
Figure 4.3 Trend Analysis of Income Statement of Year 2007 33
Figure 4.4 Trend Analysis of Income Statement of Year 2008 33
Figure 4.5 Vertical Analysis of Balance Sheet Year 2007 36
Figure 4.6 Vertical Analysis of Balance sheet Year 2008 36
Figure 4.7 Vertical Analysis of Income Statement Year2007 39
Figure 4.8 Vertical Analysis of Income Statement Year2008 39
Table 4.1 Trend Analysis of Balance Sheet 28
Table 4.2 Trend Analysis of Income Statement 31
Table 4.3 Vertical Analysis of Balance sheet 34
Table 4.4 Vertical Analysis of Income Statement 37
Table 4.5 Profitability Ratios of ABL 41

List of Annexure
Annexure A Askari Balance Sheet December 31, 2008 60
Annexure B Askari Profit and Loss Account December 31, 2008 61
Annexure C Askari Balance Sheet December 31, 2007 62
Annexure D Askari Profit and Loss Account December 31, 2007 63

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 Acknowledgements

God Al-Mighty is Worthy of all acknowledgements Whose Grace has no limits and Who gave
me the strength and will to complete this report.

I am thankful to my parents who supported me morally and financially for the last two years
despite of their limited resources and social pressures.

Special thanks to my internship supervisor Sir Yasir Bin Tariq for his kind co-operation,
guidance and support to compile this report.

I would like to pay special thanks to Mr.Sardar Arif (Manager of ABL Abbottabad Branch) for
his constant guidance and motivation, the entire staff at ABL, for being very cooperative and
courteous with me and providing me with the congenial environment at the bank during my six
weeks stay at ABL.

My gratitude to all my honorable teachers who taught me different courses during the last two
years with addict zeal and zest. My special gratitude to Ms Tabassam Rashid for her guidance.

Finally, keeping the tradition alive as well as fulfilling social and ethical responsibility, my
dedications will always go to my dear Parents & Family and Friends.

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 List of Abbreviations

ABL Askari Bank Ltd.

ATM Auto Teller Machine

ADBP Agricultural Development Bank of Pakistan

BTF Balance Transferred Facility

DD Demand Draft

EBIT Earnings Before Interest and Taxes

ETD Electronic Technology Department

FDD Foreign Demand Draft

FC Foreign Currency

HRM Human Resource Management

IDBP Industrial Development Bank of Pakistan

L/C Letter of Credit

MT Mail Transfer

MIS Management Information System

MT Mail Transfer

NIT National Investment Trust

NPL Non Performing Loans

PLS Profit & Loss Sharing

SBP State Bank of Pakistan

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 Executive Summary

Banks play a significant role in mobilizing savings thus taking great part in capital formation
process. Their role in development of a country has increased, with the advent of modern
technology. The intense competition, among banks, the privatization of the financial institution
and financial liberalization in general are gradually and continuously making the banking sector
efficient and effective.

Because of the reasons mentioned above banking has always been the main field of interest for
most of the students of business administration. It is also an academic requirement to undergo
internship therefore the main purpose behind this report is partial fulfillment of requirements, for
the degree of MBA. The report is categorized into the following chapters:

In the first chapter introduction to the report, background of study, scope of the study, merits,
limitations and scheme of the study are given.

The second chapter is about history of banking, banking in Pakistan, introduction to the
organization, its historical background, role and functions of organization, its core values, and
miscellanies topics related to banking.

The third chapter is the major portion of the report. It covers the organizational structure of ABL,
the different departments working at ABL and the different financial products of ABL.

The fourth chapter of the report covers the analysis of report and the findings, which have been
observed. It includes the financial analysis. Furthermore it analysis in detail strengths, weaknesses,
opportunities and threats of the organization. SWOT analysis no doubt acts as a mirror for the
management to know the strengths and weaknesses so that it can take appropriate corrective actions.
The management should develop elaborate plans for capitalizing on the available opportunities.

The end of the report is about recommendations based on the analysis in chapter four. It mainly
focuses on the recommendations pertaining to management/administration, to let ABL capitalize on
the opportunities and overcome the weaknesses by using its strengths.

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