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Acknowledgement
In the name of ALMIGHTY ALLAH, the most Gracious, Merciful and Compassionate, the creator of the universe, who enabled us to complete this internship, report work successfully I would also like to thank Branch Manager GHAZANFER HAYAT, and branch staff and helping and guiding me through out my learning period. I am thank full specially my parents who help me in every step. Last but not least I would love to thank all my friends for their undying support, help and for being there when ever I need them.
Executive Summary
This document provided details of my achievements in term of practical implementation and understanding of working environment in banks. I had started my internship from Allied Bank Limited PAF Branch. From 15th may to 30th June. During the internship I have learnt basic banking work and a lot of practical work which I had not acknowledged before. I worked in different departments and learnt basic operations of the departments that departments are. Account opening department, Clearing department, Remittance department Calling and sorting department etc. I have spent most of my time in Account opening department and hence I learnt what professional attitude to adopt while dealing with external as well as internal customers. I have filled out the different vouchers and slips such as Current Account slip, PLS Saving Account deposit slip, clearing vouchers; online inter branch transaction slip etc. And this document provided aspect of Allied bank limited and one of its branch PAF Base. 1 VIRTUAL UNIVERSITY OF PAKISTAN www.vustudents.ning.com
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This report is composed of the ABL History, ABL introduction, organizational structure, finance structure, its different Analysis such as critical analysis and swot analysis and recommendation etc. e.g. ABL is the one of the leading bank that is first Muslim bank incorporated in the soil of Pakistan in 1942.in Lahore as Australasia bank. ABL organizational and financial structure is very trustworthy. ABL has some weakness but by using its strength ABL can over come the weakness as ABL is the strong and leading bank, But It also has faces many threats but it has many opportunity to overcome the threats.
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Chapter -2
Organization Structure --------------------------------------------------------- Organization Hierarchy Chart Number of Employees Main Offices Comments on the Organization Structure 23
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Chapter - 3
Plan of your Internship Program -------------------------------------------- Introduction of the Bank Starting & Ending date of Internship Department in which you got Training Training Program ------------------------------------------------------------- Introduction of all Department Description of the Department I am work in 2 VIRTUAL UNIVERSITY OF PAKISTAN www.vustudents.ning.com
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Chapter - 4
Structure of the Finance Department ------------------------------------- Department Hierarchy Number of employees working in Finance Department Finance & Accounting Operations
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Functions of the Finance Department----------------------------------------- Accounting system of the Organization Finance system of the Organization Use of electronic data in decision making Mobilizations of funds Generation of funds Sources of funds Allocation of funds
Chapter - 5
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Critical Analysis ------------------------------------------------------------------Financial Analysis (i) (ii) (iii) Ratio Analysis Horizontal Vertical Analysis for the last three years
Chapter 6
SWOT Analysis of the ABL Bank ----------------------------------------------Conclusion & Recommendation -------------------------------------------------References & Sources Used ------------------------------------------------------Annexes -----------------------------------------------------------------------------VIRTUAL UNIVERSITY OF PAKISTAN www.vustudents.ning.com
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1. INTRODUCTION:
What is Bank?
A system of trading in money which involved safeguarding deposit and making funds available for borrowers
Or simply,
A bank is an institution which Accept deposits and give advances.
Definition of Bank:
An organization usually a corporation Chartered by a state or federal government, which does most or all of the following: Receives demands and deposits, Honor instruments drawn on them, And pays interest on them; Discounts notes makes loans, and invest in securities; collects checks, drafts, and notes; certifies depositors checks; and issue draft, and chasier.
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Allied Bank Limited is the first bank incorporated on the soil of Pakistan. It was incorporated in Lahore before independence in 1942 as Australasia Bank and was renamed as Allied Bank of Pakistan Limited in 1974 and Allied Bank Limited in 2005. In August 2004 as a result of capital reconstruction, the Banks ownership was transferred to a consortium comprising of Ibrahim Leasing Limited and Ibrahim Group. Allied Bank Limited is the one of the top and renowned bank it has excellent reputation. In the wake of its success one of the most important factors, apart from its energetic management and prudent approach, is the QUALITY of its SERVICES, which gives it a great periphery over its competitors ABL is providing the most modern and technologically advanced services to its customers according to the customers need and demands, and hence the ABL is meeting the customers expectation very finely. BANK has always strived to facilitate its customers by introducing various high quality hi-tech services. Today the Bank stands on a solid foundation of over 66 years of its existence having a strong equity, assets and deposits base offering universal banking services with higher focus on retail banking. The Bank has the largest network of on-line branches in Pakistan and offers various technology based products and services to its diversified clients through its network of 779 branches in over 300 cities and towns. The bank has in place the largest ATM network in the country with more than 502 ATMs in more than 145 cities and towns across Pakistan
Credit Department:
The main function of the credit department is to lend money to the borrowers on the interest and hence bank earns a lot .ABL is serving the customers by giving the short term, medium term, long term, farm and non firm credits. The bank lends money against some guarantee or pledges or some property. ABL the is giving the clean advances against promissory notes, giving secured advances against tangibles and marketable securities and now also lending money against life policies and immoveable property.
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Euro (EUR) Japanese yen (JPY) Sterling Pond Foreign currency account can be opened in many accounts such as: Current account Saving account Term deposit account
VISION
To become a dynamic and efficient bank providing integrated solutions and the first choice of bank for all customers.
MISSOIN
To provide value-added services to our customers To provide high-tech innovative solutions to meet customer requirements To create sustainable value through growth, efficiency and diversity for all stakeholders To provide a challenging work environment, and reward dedicated team members To play a proactive role in contributing towards the society
VALUES
Integrity Excellence in Service High Performance Innovation and Growth
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The bank is listed on all stock exchanges in Pakistan ABL is a Private Bank.
Business volume:
Different schemes: Allied Umrah Aasan Allied Tahafuz Deposit Scheme Allied Karzas Scheme Allied Bachat scheme 2009 418,374,331 94,789,492 237,344,038 41,121,503 7,110,008 10.02 196,211 2008 366,695,669 82,646,595 212,972,008 30,570,540 6,463,644 5.85 194,186 8,325 766 2007 320,109,723 83,958,463 168,407,280 21,201,422 5,386,370 5.73 150,698 8,181 757 Finance Facility: Cash Finance Deman d Finance Runnin g Finance etc
Total Assets investments Advances Interest earned Share capital EPS Imports Exports Other information: No. of Employees 8,713 No. of branches 779 Agricultural Finances etc
Accounts facility:
Current Account Saving account Other Accounts Banking provides: Internet Banking 7 VIRTUAL UNIVERSITY OF PAKISTAN www.vustudents.ning.com
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Allied basic Banking Foreign currency banking Deposits: Allied profit plus term deposit Allied profit deposit Allied monthly income scheme etc
Large
ATM Network: 24/7 availability
Competitors:
These are the some competitors. Habib bank limited Soneri bank Alfalah bank United Bank Limited The bank of Punjab Soneri Bank Limited Bank Al-Habib Limited Bank Al-Falah Limited
Hierarchy chart
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PRESIDENT cc
SENIOR EXECUTIVE VICE PRESIDENT PRESIDENT EXECUTIVE VICE PRESIDENT PRESIDENT SENIOR VICE PRESIDENT
VICE PRESIDENT
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CASHER
PEONS
Comments:
The organizational hierarchy represents the different designations in organization. And every lower level position officer/employee is responsible for the upper level designation person. And Assistants play a very vital role in the organizational structure. Assistants assist their officer and make the work/job easy and quick. And every one is responsible for his work for their officer. Hence it creates a good control in overall structure and thus the overall ABL structure full filling the overall requirement of the organization.
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Operation Manager
Department Incharge
Officers Teller
Cashier
Comments:
The successful management depends on these factors: Fully and hearted contribution of all the members/employees. Successful organizational/management structure usually depends upon the fully and active contribution of the each member of the organization: Such as contribution of: 11 VIRTUAL UNIVERSITY OF PAKISTAN www.vustudents.ning.com
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President Board of directors Supervisors All employees etc. And the organization/management structure also depend upon the The manner of doing the work at each level is also very important PAF branch have above both factors, every employee is responsible for senior officer in the branch and work with fully attention and devotion, And the overall branch is under the control of board of directors and president etc. and hence overall working of the branch is best. As the branch is under the control of: Presidents and board of directors, Every junior employee of the branch is under the control of his senior officer/employee and it creates the dual control on the branch and hence branch is working with full awareness and with intimation and hence the PAF branch structure is fully fulfilling the requirement of the organization.
Head Quarters:
There are Four Provincial Headquarters of Allied Bank Limited situated at Lahore (Punjab), Karachi (Sindh), Peshawar (NWFP & Azad Kashmir) and Quetta (Baluchistan)
Number of employees:
Total number of employees in PAF branch is 14. In over all Allied Bank numbers of employees are: 2009 2008 Number of 8713 8325 employees 2007 8181
Departments:
Customer service Department Cash department Advances Department Foreign currency Department Clearing Department Foreign currency Department Remittance Department OBC Intercity 12 VIRTUAL UNIVERSITY OF PAKISTAN www.vustudents.ning.com
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Introduction of all departments:
Customer Service Department:
This is the main department of the PAF branch. And this department is dealing with customer and provides them services of giving the information about the Banks products and Services. And also help the customer in different ways, also response to the complaint.
Cash Department:
This is also the very important and main Department of PAF ABL branch as this department is dealing in cash which come in the bank or goes from the bank. Cash is in different form of currency. Its basic function is dealing with Receipts and Payments. For example, Accept deposits in terms of cash Give advances in terms of cash Collect utility bills etc Other sources
Advances Department:
This Department is also play a vital role in banking this department give advances to the customers etc To accept deposits and lend or give advances is the basic and primary Function of this bank. The bank lends money in the form of: Advances, against promissory notes Secured advances against tangible and marketable securities. Etc.
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Clearing Department:
This department is used for clearing for example clearance of cheque and the work of this department is very sensitive and time taking. The clearance is dealing with those activates when bank receive or pay the amounts or cheque of the other banks for instance the receiving or sending amount to Mezan bank Habib Bank Limited, National Bank of Pakistan, Soneri bank. Intercity and OBC actually the part of the clearing department with little bit difference functioning.
Remittance Department:
The main task of the Remittance department is: Transfer funds from one bank to another on demand And the collection takes place in this department.
Remittances include:
Demand draft (DD) Cash order or credit order Online inter branch transaction
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STARTINNG ENDING DATE OF INTERSHIP:
Starting date: 15 May Ending date: 30th June
NAME OF DEPARTMENT AND DURATION: Account opening : 15 May to 21st May Remittance : 24 May to 28 May Clearing : 1st June to 8 June Calling and sorting: 9 June to 15 June OBC : 16 June to 23 June Intercity : 24 June to 30th June
Training program:
Detailed description of the Activities performed by the departments:
I have done my internship from ABL PAF branch. The job performed by these departments is different and this division is useful for accurate performance and well managed functioning of each departments. I have work in these departments: Account opening Remittance Clearing Calling and sorting OBC Intercity
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The account opening section deals in the opening of following types of accounts. 1. Individual/ Joint Account 2. Sole Proprietorship/ Partnership/ Joint Stock 3. BBA(Basic Banking Account)
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Resolution of Board of Directors for opening of account specifying the person(s) authorized to operate the company account. Memorandum and Article of Association Certificate of Incorporation. Certificate of Commencement of Business. Copy of NIC (see original NIC)
Activities are: Account opening. Issuing of Cheque book Issuing of ATM card. The process of the account opening is as follows:
The first set of steps in the process of account opening is the verification of the applicant/account opener who wants to open the account: The steps that are used in verification are:
FIRST STEP:
To Obtain Attested Copy of Valid CNIC: The first and for most step is to obtain the identification card from the applicant and check it carefully and then obtain the attested copy of the identification card and carefully see expiry date of the date of the identification card. If the date of the identification card is expired then the account cannot be opened mean this national identification card is not valid. This is the basic requirement for opening the account. If identification date is not expired mean valid CNIC, then proceed further. And the account holder must know the identity card number of his Next of kin. 17 VIRTUAL UNIVERSITY OF PAKISTAN www.vustudents.ning.com
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Next of kin may be his mother/father, wife/husband; sister/brother etc blood relation is must with next of kin.
SECOND STEP:
To Obtain Attested Copy of Service Card, Salary Certificate of Employee Certificate: The second step is to obtain the Service certification letter. Where the applicant is doing the job. This is the necessary document. In case of unemployed (having no job) the
THIRD STEP:
The third step is to obtaining of different documents for verification of the person. These include the document according to the Types of Accounts. Every type of account contain different document. But attested copy of Valid CNIC and attested copy of service card are the basic documents are that is necessary for opening every type (such as personal, business, sole proprietor) of account. After receiving the necessary required documents the next step is the Filling of the Account Opening Form. The Account Opening Form of Allied bank includes this form/ sheets as follows with attachment arrangement: Specimen Signature Card: it is being filled at the last but it is attach at the front of the Account opening form. Checklist of detail document Account Opening From Account Detail Customer profile: CDD/ KYC form Allied cash + shop visa Debit/ATM Card Application Form
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It contains the different items of the document that is obtain form the customer under Prudential Regulation. And it is attached with the customer profile in account opening form. It should be checked carefully. Check those items of document that is obtaining from the customer/account holder. Fro example: These items are usually checked: Attested copy of valid CNIC Photograph/ CNIC of the account holder(s) by Gazetted officer/City Nazim Attested copy of Service Card, Salary certificate or employee certificate Etc
Additional information (in case of Personal Account) Additional information (in case of Business Account) Other instructions Declaration (it contains signature of applicant) For bank use only (it contains Account number, Marketing etc) Terms and Conditions Acknowledgement
Customer profile:
It contains the personal information about the customer. The applicant can be fill the applicant himself. It usually includes: Currency (in which want to operate). Particular of deposits. (Period for operation). Complete address. Telephone number Name. Date of birth. Nationality etc. 19 VIRTUAL UNIVERSITY OF PAKISTAN www.vustudents.ning.com
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Then signatures of the account holders and the bankers and manager. Signature of the introducer, his account number and address etc.
After the completion of filling of Account opening form the check book is issued and ATM cards if applicant want ATM card (issuance of ATM card taking more time than check book issuance).The issuance of check book and issuance of ATM card is in account opening department. The cheque book is issued after 2 or 3 days from opening process of the account. The Account No. is stamped by the rubber stamp on each Cheque. Then it is given to the applicant/account holder. When all Cheque books are issued to the customers then these are recorded in the CD Book or PLS saving book. All Cheque books are recorded with their a/c number and name of the account holder. These all work or activities is done in the Account opening Department.
REMITTANCE:
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Transferring of funds from one place to another place through instruments A central Account named as Pak account is used by all branches of ABL for dealing with each other. All remittances made by the different branches is controlled by the Pak Account. Pak Account: Pak account is minted all the accounts of the branches thats dealing with each other. And every branch that is listed in the Pak account is given a specific code through which every branch entered in Pak account and dealing with other branches. Usually two types of remittance are used: Outward remittance Inward Remittance
Remittance outward:
Suppose, Mr. A comes to the PAF ABL branch and ask to make Demand draft of the amount of Rs. 75,000/- on the name of beneficiary whose Bank is the ABL Islamabad branch. Now PAF branch (my branch) receives the amount from Mr. A, and prepare the Demand draft of RS. 75,000/- and then send it to the ABL Islamabad branch. And PAF branch will inform to the Central Office that it has sent a Demand Draft of amount Rs. 75,000/- to the ABL Islamabad branch. PAF ABL branch (sender of DD) will be debited with the amount of Rs. 75,000 And Islamabad branch (receiver of DD) will be credited with the amount of Rs.75, 000 in Pak account This is the procedure of Remittances Outward in Pak account
Inward Remittance:
When the PAF branch receives the Demand draft from the ABL Islamabad Branch then this is called the inward Remittance. Then the sender branch that is ABL Islamabad branch will be debited in the Pak account. And the receiver branch will be credited in pak account... The remittance can be made through the following mode of transference. The remittance can be made through the following mode of transference. Demand Draft Pay order Inter branch transaction or online banking transaction
Parties Involved in DD
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o o o o Purchaser Issuing Branch Drawee Branch Payee
Pay order:
Pay order is used to transfer money within city Pay order and DD are the same instrument but the difference is that the DD is used for transferring the fund to out of the city while the pay order is used to transferring of fund within the city, The PAF branch also issue the Pay order that is written authorization for payment. Pay Order involves the following parties: Purchaser May be a person, firm, company or local authority. Issuing/paying branch is one which issues/pays on presentation. Payee is a person named there in.
Procedure:
First of all the Application form is given to the customer to fill. And then two signatures are taken on the form one for request and other for receiving the instrument. All the particulars of 22 VIRTUAL UNIVERSITY OF PAKISTAN www.vustudents.ning.com
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application form are checked and bank commission charges and withholding tax is written on the top of the application form. PO can be made through Check and Cash Payment received through Cheque: The customer can give cheque for total amount of instrument plus bank charges if the he is maintained his account with the branch. Cheque and application form is then given to the officer of Cash Department for the payment of cheque. After proper inspection, Officer of Cash Department posts the cheque and signs the application form in token of payment received. Payment received in the form of Cash: If the customer wants to pay cash, then cash is deposited by the customer along with the bank charges and withholding tax. Application form is then given to the Remittances Incharge for issuance of instrument. He writes all the particulars of the application form in the system and allots a number to the instrument. Two authorized officers of the branch sign it. Instrument is then given to the customer. When instrument is presented for payment, canceled by the Remittances Incharge after proper inquiry. In case of PO, remitter account is credited and PO A/C of branch is debited. At presentation, Beneficiary is debited and PO A/C of branch is credited Charges for issuance of pay order: Rs.75/- is charged for account holder through his account Rs 500/- through cash ( A/c holder and walk-in-customer) Cancellation charges: Rs 150/- charged for account holder through his account Rs 500/- through cash (A/c holder and walk-in-customer) Issuance of Duplicate DD charges: Rs 200/- charged for account holder through his account Rs 500/- through cash (A/c holder and walk-in-customer)
After completion the issuance of DD/PO these are recorded in the registers:
Demand Draft/PO Issue Register: After filling and making of DD/PO , for keeping manual record these are recorded in the DD/PO issue register and this register contains the following details: Date Draft Number Name of purchaser Favoring Amount Amount of Exchange Demand Draft/PO Payable Register: When a DD/PO is paid and received then an entry is made in the Demand draft payable register. This register has the following particulars. 23 VIRTUAL UNIVERSITY OF PAKISTAN www.vustudents.ning.com
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Date on which it is received Draft number and its date Favoring Amount Paid on
Clearing House:
An Office where different banks exchanges cheque and settle accounts. There are two banks involved in clearing process, one is the collector bank and other one is the payee bank. And a body called NIFT is also involved. Collector Bank: Collects or receives the cheque of the other bank given to their customer Payee Bank: Receives the cheques and pays it after having all necessary requirements NIFT: National institute of Facilitation Technologies (Pvt.).Ltd An institution called NIFT is the bridge between both the bank and all transactions between two banks are done through the help of NIFT. It modernize the payment system and its process in Pakistan started with the implementation of first Automed Clearing house (ACH) in Karachi in 1996. Stamps Required: Clearing stamp of next date on front of bill Crossing stamps( bank name stamp) Clearing stamp on front of deposit slip
Types of Clearing:
There are two types of clearing which are: Out word Clearing Inward Clearing 24 VIRTUAL UNIVERSITY OF PAKISTAN www.vustudents.ning.com
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INWARD CLEARING:
When through clearing payment is given to the other bank than this entry will be recorded in outward clearing register. This is out ward clearing register. Inward Clearing Register: When payment is received from the other bank than entry is recorded in inward clearing register. The register contain following information: Serial number Date Amount Remarks
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to being cleared. And at the Top the Today date and Our Branch name (PAFABL) is written by clearance officer. And then three stamps are affixed on the cheque these stamps are: Today Date stamp front of the cheque Crossing stamp (bank name stamp of clearing) on the front of the Cheque Payee account credit stamp on the back Pass these cheques along with vouchers/advices, all the cheques are entered into the clearing system of the bank. Then Print out of the clearing is taken and details are attached with the cheques of each bank. Details of these banks are then entered into the clearing schedule containing number of cheques presented and their total amount against the name of each bank. Then total number of cheques presented to all banks and their total amount is written on the foot of that schedule, which is tallied with the clearing register. First clearing sent: Next morning, these cheques along with voucher are delivered to the respective banks in clearing house of NIFT between 9:00 to 9:30AM. In the same manner, other banks present their clearing drawn on ABL. Total number of cheques and their amount delivered to other banks and received from them are written on the Clearing House schedule branch for their payment. After proper scrutiny of cheques, verification of signatures and confirmation of balance in the account, the Officer Cash Department pays these cheques by canceling and posting them in the system. Some important concepts should keep in mind while doing the job of clearing of cheque: Date: Cheques should not be post dated or out of date. Figures: Amount in words and figures should match. Signature: Drawers signature must be clear. Payees Name: Payees name should be written, and endorsement should be as per the beneficiary of the cheques Intercity: Cheques must not be of other cities. Intercity clearing cheques for consumer departments are not entertained There should be no over writing, every thing is written clearly. Cheque Return: Cheque can be returned and it cannot be passed due to these reasons: Fund insufficient/Insufficient balance Mismatching figures Signature differ Filling incomplete Similar many other reasons may be. If any cheque is not passed due to insufficient balance, mismatching figures, filling incomplete or any other reason, Officer Cash Department returns the same cheques by attaching cheques return memo containing reason for return. This cheque is entered into the cheques returned register and bank charges are deducted according to the schedule of charges. Second Clearing: 26 VIRTUAL UNIVERSITY OF PAKISTAN www.vustudents.ning.com
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Second clearing in ABL is at 2:30PM to check the destiny of the cheques presented to other banks in the morning. If any cheque is to return, that is delivered to the same bank in second clearing. In the same manner, if any cheques presented by ABL Bank in first clearing are returned, they receive it and once again give schedule of clearing figure to the Officer Clearing House NIFT containing number of cheques and their amount delivered and received unpaid.
Intercity:
It is the same as clearing but the difference is that the branch transfer or receives the cheque etc to or by the other city branch or banks. And this includes that branches that are of local station for that bank (sender and receiver bank). For ABL these are the local cities thats used in intercity. Islamabad Karachi Pindi Peshawar Multan
Almost the intercity Process is the same as clearing with little bit difference. E.g. for Intercity Clearing a stamp of intercity instead of clearing posted on face of bill, then amount, account number and city name is entered in a separate register and deposit slip is attached in a specific file. And a stamp is posted on back of bill. A separate slip is filled for every city given by NIFT. In the specified envelope is used for every city given by NIFT with printed name of city. One advice is made for him. Three copies are prepared for each advice. One advice goes to CSO for record. One goes for cashier and one goes to the clearing department for entry in the computer. When we release the intercity/clearing then we will Debited the advice and cheque will credited. And when we lodge the intercity/clearing then advice will be credited and cheque will be debited.
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It is mention on the cheque that the person To Whom It May Concern can cash it from the certain branch of the bank in favor of which its drawn. The customer presents the cheque to his branch, which sends a document called OBC to the bank that has to make the payment. The clearing department of the receiving bank follows a prescribed Procedure and credits the amount to sending bank through a central account maintained by each bank with SBP. ABL sends the cheque to its own branch if available for collection from the payers banks otherwise the OBC is directly sent to other bank.
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Calling and sorting is basically related to the matching or teling of whole day work at the end of the working day Process: Sorting is the process of arrangements of account slips/cheque etc are arrange in the increasing order. All vouchers are collected first, and then sort them according to the accounts for example the current account voucher, PLS saving Account vouchers, staff members vouchers etc they all are separate first and then all vouchers of each category are arrange according to the increasing order of their account numbers. Calling and Sorting also includes the checking of Bank history, Customers Credit History, study of loan and financing that are given to the creditors. It can be say that calling and sorting is the revision process and complete observation process.
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KYC form: After filling the form of account opening I had filled the KYC form (known your customer). . Taking sign on Specimen Signature Card: When this form is filled then signature of the person who want to open the account are to be taken on the Specimen Signature Card. And I had checked the signature carefully; this signature must be matched with the identity card signature. Then it is recorded in the computer. Specimen Signature Card is available in Annexes. Allot the Account number : After filling of all required documents I had allot the Account number to the new opened account which is being processed till now. Enter the Account number into the relevant Account Opening Register: After allotting the account #, I put it in all the spaces of account opening form, SSC card etc and then enter this account # in the relevant Account opening register, for example the account # of joint account will be enter in the joint Account Opening Register. Calling the clients/customers if any omission or mistake found in the Account: I did all the work of opening account very carefully, but if there found any mistake or signature differ problem or any type of mistake or omission then I had called those customers and rectify the errors. Issuance of Cheque book: After the completion of all the formalities of Account opening form the customer receives the letter of thanks. Then. He will get the cheque book within a week and my job was to receiving the cheque book and I had to verify the customer signature and I had to issue the cheque book manually. There is a requisition slip with every cheque book for the purpose of re issuance of cheque book when all the leaves of first cheque book are being used. The following information is printed on the front of cheque book. Title of Account Account number of customer The stamp of ABL And it also contains the signature of the authorized person and this all information is printed on every page of cheque book. Calling them after receiving the ATM card of the customers/ issuance of ATM: After some days of opening account the ATMs are issued by the bank. My job was to receive the ATMs card of applicants and then calling them. I had called all the ATMs clients and told them to bring their ATMs card it is issued. I had issued the ATMs card and received the sign on the ATM record register and sign of those customers who had received their ATMs card by me. Telling them the remaining balance and other account information of the account: 31 VIRTUAL UNIVERSITY OF PAKISTAN www.vustudents.ning.com
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Here I was assigned the work of telling the remaining balance, payments etc I used to tell to the customer about their receipts, payments, charges and remaining balance etc and I told these Account information only those persons who are the real account holder of that account I never told these information to any other persons who asking these even to his relative one. I had asked the account number and then after opening the account on pc I used to ask the title of the account and after proper verification I used to tell the Account information to the real account holder. After telling I also record it on the book that I opened and told this account information to its account holder. Filling of different Slips: Here I had assigned the work of filling of different slips of the customers who didnt know how to fill the slip. I had filled different slips but I mostly I had filled these slips thats are Current Account Slip PLS Saving Account deposit Slip How to fill the Current Account Slip: This slip is used for current account only for withdrawing the money from current account. It is very easy to fill; I had filled the following information in this slip Title of Account (name of Account holder) in two spaces Phone # of the Account holder Account # in two places Amount in figures as well as in digits in two places which the Account holder wanted to take out. And word Cash in the particulars. And then getting the sign of the Account holder. PLS Saving Account deposit Slip: I also had used to fill these slips and PLS saving account slips are used incase of saving Account and it is used for depositing the cash or cheque etc. this slip is just like a current account slip with the same filling only with the difference in the particulars filling and it include the stamp when I had received the cheque for depositing then I had entered the cheque # of the bank that and name of those bank from which the amount is being transferring/ adding into the ABL account of the account holder.. (Available in annexes)
Remittance:
Transfer of fund from one place to the other within the city or out of the city It is the one of the major function of banking sector. I worked in this department four days i.e. form 24th May to 28th May.
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Demand Draft Issue Payable Register: Filling/ issuance of Pay order Online inter branch transaction Keep record of all issued and paid pay order Process: Demand draft (DD): The first and the most popular way of remittance is Demand Draft. The DD has the following information which I had filled during issuing the DD: A bank Demand draft has following particulars: Payees name Date of issue Amount in words and figures Drawee Branchs name and code Address Serial number (Note: Complete procedure is given above.) Demand Draft Issue Register: After filling and making of DD I had to record this on the DD issue register and this register have the following details: Date Draft Number Name of purchaser Favoring Amount Amount of Exchange Demand Draft Issue Payable Register: When a DD is paid and received then an entry is made in the Demand draft payable register. This register has the following particulars. Date on which it is received Draft number and its date Favoring Amount Paid on Filling/ issuance of Pay order: Pay order is used to transfer money within city. It is very safe and convenient method to sending money from one place to another place. Pay Order involves the following parties: Purchaser May be a person, firm, company or local authority. Issuing/paying branch is one which issues/pays on presentation. Payee is a person named there in. 33 VIRTUAL UNIVERSITY OF PAKISTAN www.vustudents.ning.com
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Process:
I issue the pay order by making the pay order on the receipt and this receipt is Issue and payable by other bank. Here I had to make the record of all issued and paid pay orders. As pay order is in the written form thus certain document filled by the client/customer and by me.. Detail of the procedure is already described above (In departments activities/operation)
Clearing Department:
Clearance means to clear the cheque of other branches:
Process:
Firstly I had to sort out all the cheques branch wise and then I used to scrutinize the each cheque the cheque should be free of error thats are going into clearing, all particulars should filled properly, the sign should be matched the amounts in figures and words should be matched, and stamp of clearing of other bank should be put on all cheques if there is any mistake exist in the 34 VIRTUAL UNIVERSITY OF PAKISTAN www.vustudents.ning.com
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cheques then those cheque will be returned. And I had filled the returning reason slip and then attached this slip with the Cheque and then I had to record this in the clearing returned register. And those cheque thats free from errors I had selected them and then made their vouchers and advices and stamped them and then recorded all the vouchers and advices in their respective register. i.e. inward clearing in inward clearing register and out ward clearing cheques in out ward clearing register. (Note: This is the Short process its detail Process is given above)
Intercity:
Intercity is the same as of Clearing but the difference is that clearing is dealing those cheques of other branches thats are come from with in the city and intercity is used for out side city cheques but local cheques (NIFT having)
Process of intercity:
The detail process is given above.
OBC Department:
I had also worked in this department and the detail is given above.
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Finance director
Account officer
Accounting Process:
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ABL uses the Appropriate Accounting policies to performing the Accounting Operations. And these accounting policies have been consistently applied in preparation of financial statements. Accounting estimates are based on reasonable and prudent judgment and International Accounting Standards have been followed in preparation of financial statements and any departure therefrom ahs been adequately disclosed in the Annual Accounts.
RATIO ANALYSIS Function of Finance Department: LIQUIDITY RATIOS: Accounting System of the organization:
Fully computer base accounting system Current Ratio system is used which is very reliable Double entry Acid Test Ratio Generation of funds: Sales to Working Capital Lending the loans to the customer Working capital LEVERAGEfinancial institution. Lending to RATIOS:
The Equity or proprietary ratio finance system of the organization is based on two main factors that are: Debt / Equity Ratio Debt to Tangible Net worth Ratio Borrowing Total Capitalization Ratio Lending Fixed Asset Ratio / Equity Ratio Use Long term Assets versus Long term Debt of Electronic data: PROFITIBILITY RATIOS: The bank is using the Uni bank software for entering data; Net Profit Margin That is very reliable. Return on Assets DuPont funds: Sources of Return on Assets Operating the branch where The sources of Income Margin I have done the internship are mainly through: Operating Assets Turnover Depositing Return on Operating Assets Receiving interest on lending money Sales to Fixed Assets Borrowing from state bank of Pakistan Return on Investment (ROI) Advances from other financial institutions Return on Total Equity ReturnGeneral Banking income. on equity Capital Gross Profit Margin Allocation of funds: MARKET RATIOS: Banks allocates the fund usually to these parties: Earning per Share Dividend yield Lending to financial institution Book valueto people such as loan, Lending per share Dividend Yield Book Value per Share ACTIVITY RATIOS: Total Asset turn Advances to deposit ratio 37 VIRTUAL UNIVERSITY OF PAKISTAN www.vustudents.ning.com
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LIQUIDITY RATIOS
2008
2007
319968482 221043121
292264845 210262478
C.A/C.L
1.41
1.45
1.39
1.46 1.44 RATE 1.42 1.4 1.38 1.36 2009 2008 YEARS 2007 C.A/C.L
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Interpretation and Trend:
This ratios is indicates the Liquidity (ability of a bank to meet short tern obligation) of the business by comparing the current assets to current liabilities. The higher current ratio indicates the better liquid position. As, the current ratio of 2008 and 2009 is become higher as compare to 2007 its a good sign of liquidity its mean the bank become the more liquid, and more able to meet the short term obligations yet the ratio of 2009 is little bit less as compare to 2008 but the difference is not so larger its a small difference so, its not an alarming situation because yet the ratio is greater than 1, which is a good sign and standard current ration is 2:1.
Rupee in 000
2009 LIQUID ASSETS 56222856 CURRENT LIABILITIES 239473764 L.A/C.L 0.23 221043121 0.19 210262478 0.16 42957569 33641996 2008 2007
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0.25 0.2 RATE 0.15 0.1 0.05 0 2009 2008 YEARS 2007 L.A/C.L
Rupee in 000
2009 SALES 41121503 WORKING CAPITAL 30570540 21,201,422 2008 2007
98297185
98925361
82002367
SALES/W.C
0.42
0.30
0.26
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RATE
0.45 0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 2009 2008 2007
sales/W.c
YEARS
WORKING CAPITAL:
=CURRENT ASSETS CURRENT LIABILITIES
Rupee in 000
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2008
2007
319968482 221043121
292264845 210262478
CA-CL
98297185
98925361
82002367
100000000 80000000 RATE 60000000 40000000 20000000 0 2009 2008 YEARS 2007 CA-CL
INTERPRETATION: WORKING CAPITAL compares the current assets with the current liabilities it indicates that either the firm/bank is in a condition that it can pay its liabilities when due. Higher and appropriate working capital is used to face and get over the contingencies and uncertainties. As, the working capital is increasing it is a good for bank. 43 VIRTUAL UNIVERSITY OF PAKISTAN www.vustudents.ning.com
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LEVERAGE RATIOS:
2009
2008
2007
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INTERPRETATION: This ratio serves as one measure of the firms ability to meet its interest payments and thus avoid bankruptcy. In general, higher the ratio, the greater the likelihood that the company could cover its interest payments without difficulty. In 2007 the bank Time interest earned Ratio is 0.59 times in 2008 the ratios decreases and reaches it 0.35 times and 2009 ratios increases
2009
2008
2007
Total Debt
388,414,353
344,340,055
299,726,393
Total Assets
418,374,331 0.93
366,695,669 0.94
319,606,554 0.93 45
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Debt Ratio
0.94 0.938 0.936 0.934 RATE 0.932 0.93 0.928 0.926 0.924 2009 2008 YEARS 2007
debt ratio
PROPRIETORY OR EQUITY RATIO: =SHARE HOLDER FUND / TOTAL ASSET Rupee in 000
2009 2008 2007
29,959,978
22,355,614
19,880,161
418,374,331
366,695,669
319,606,554 46
VIRTUAL UNIVERSITY OF PAKISTAN or 7.2% SHARE HOLDER 0.072 www.vustudents.ning.com FUND / T.ASSET
0.061 or 6.09%
0.063 or 6.3%
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propriet equity
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388,414,353 25,891,278 15
48
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Interpretation and Trend:
Creditors would generally like this ratio to be low. The lower the ratio, the higher the level of firms that is being provided by shareholders. This ratio also tells as about capital structure, what portion of debt in the bank overall capital. In 2007 this ratio is 16.3 and in 2008 the ratio is 16.6 and in 2009 this ratios decreases which is 15 it is good for bank.
388,414,353 29,804,437
344,340,055 22,248,708
300,231,481 19,840,234
13
15.4
15.1
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DEBT/T.TANGIBLE NETWORTH
TOTAL CAPITALIZATION RATIO: =LONG TERM DEBT/ (LONG TERM DEBT+SHARE HOLDERS EQUITY)
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2009 2008 2007
0.85
0.86
0.87
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Interpretation and Trend:
This ratio represents the proportional importance of long term debt to long tern financing. Where, the total capitalization represents all long term debt and shareholders equity. The above ratio shows that the ratio is suitable for financing
11,134,436 22,355,614 .5
fixed assets/equity
0.5 0.4 RATE 0.3 0.2 0.1 fixed asset/equity
52
2008 YEARS
2007
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LONG TERM ASSETS VERSUS LONG TERM DEBT =LONG TERM ASSETS/LONG TERM DEBT
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2009 2008 2007
0.82
2008 YEARS
2007
PROFITIBILITY RATIOS:
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=NET PROFIT /NETSALES*100 Rupee in 000
2009 2008 2007
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This ratios shows the efficiency of the bank, how bank efficiently uses its assets and generating profits, the percentage of net profit based on sales, the bank net profit ratio in 2007 is 19.3% it decreases in 2008 which is 13.60% and in 2009 bank net profit ration increases which good which is 17.32%.
RETURN ON ASSET Ratio: =NET INCOME / TOTAL ASSET * 100 Rupee in 000
2009
2008
2007
RETURN ON ASSETS
1.80% 1.60% 1.40% 1.20% 1.00% RATE 0.80% 0.60% 0.40% 0.20% 0.00% 2009 2008 YEARS 2007
RETURN ON ASSETS
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Return on Assets is the most comprehensive measure of the banks earning capacity. In other words, the calculations show the efficiency of management to improve its earning capacity. This is why ROA is of significant importance among all other ratios. In 2007 the bank ROA is 1.27%, in 2008 it is 1.14% and in 2009 it is an increase which is 1.70%.
RETURN ON ASSETS (AVERAGE) Ratio: = [NET INCOME / (OPENING ASSETS+CLOSING ASSETS)/2] * 100
e.g. opening assets for 2009 is the closing assets/ inventory of 2008 and closing balance is ending balance of year 2009.
2009
2008
2007
7,122,167
4,156,686
4,076,158
(366,695,669+418,374,331)/ 2
(320,109,723+366,695,669)/ 2 1.21%
(4.48*1010+320,109,723)/2
1..42%
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2009
2008
2007
17.32 %
13.60 %
19.3 %
0.10
0.09
0.07
173.2
151.12
275.71
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components from the return on assets ratio in order to determine the impact of each on the profitability of the company. This ratio helps to highlight the impact of changes in asset turnover and profit margin.
OPRATING INCOME MARGIN Ratio: =OPERTATING INCOME / NET SALES Rupee in 000
2009
2008
2007
10,536,120
6,120,940
5,956,029
41,121,503
30,570,540
21,201,422
0.26 or 26 %
0.20 or 20%
0.28 or 28%
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operating income margin ratio
30.00% 25.00% 20.00% RATE 15.00% 10.00% 5.00% 0.00% 2009 2008 YEARS 2007 operating incom e/netsales
This ratio basically tell us percentage operating profit based on sales, so the bank operating income margin ratio in 2007 is 28% of sales and in 2008 it decreases which is 20% and in 2009 operating ratios increases which is 26%.
2009
2008
2007
41,121,503 12,446,748
30,570,540 11,134,436
21,201,422 7,548,628
3.3
2.8
2.8 60
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41,121,503 12,446,748
3.30
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340.00% 320.00% RATE 300.00% 280.00% 260.00% 240.00% 2009 2008 YEARS 2007 Total Sales/foxed Assets
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2009
2008
2007
7,122,167 94,789,492
4,156,686 82,646,595
4,076,158 83,958,463
0.075
0.05
0.05
8.00% 7.00% 6.00% 5.00% RATE 4.00% 3.00% 2.00% 1.00% 0.00% 2009 2008 YEARS 2007
return on investment
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Rupee in 000
2009 2008 2007
7,122,167 25,891,278
RETURN ON EQUITY
30.00% 25.00% 20.00% RATE 15.00% 10.00% 5.00% RETURN ON EQUITY
0.00%
64
2008 YEARS 2007
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Rupee in 000
2009 2008 2007
7,122,167 29,959,978
65
2008 YEARS
2007
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This ratios shows the percentage of gross profit based on sales, the bank gross profit ratio in 2007 is 3.4% it increases in 2008 which is 3.6% and in 2009 bank gross profit ration increases which good which is 4.5%
MARKETING RATIOS:
EARNING PER SHARE (EPS): =NET PROFIT /NO. OF SHARE RUPEE IN 000
2009 2008 2007 3,122,145
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DIVIDEND YIELD: =DIVIDEND PER SHARE / MARKET PRICE PER SHARE *100 Rupee in 000
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2009
2008
2007
DIVIDEND PER SHARE MARKET PRICE PER SHARE DIV.PER SHARE / MARKET PRICE PER SHARE *100
2.50
58.7 6.8 %
31.1 8%
130.2 2.3 %
dividend yield
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BOOK VALUE PER SHARE: =SHARE HOLDERS EQUITY /NO. OF SHARES Rupee in 000 2009 2008 2007
22,355,614
19,880,161
6,463,644 34.6
5,386,370 36.9
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ACTIVITY RATIOS:
2009
2008
2007
41,121,503 418,374,331
30,570,540 366,695,669
21,201,422 319,606,554
.10
0.09
0.07
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Total Assets Turn over
0.10% 0.08% RATE 0.06% 0.04% 0.02% 0.00% 2009 2008 YEARS 2007 Sales/Total Asset
2009
2008
2007
237,344,038 328,875,037 72 %
212,972,008 297,475,321 72 %
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Advances To Deposit Ratio
72.00% 70.00% 68.00% RATE 66.00% 64.00% 62.00% 60.00% 2009 2008 YEARS 2007 advances to de posit
Vertical Analysis:
In vertical Analysis each item in a financial Statement is the %age of total. This approach is also called Component percentage, Product Common -size financial statement. Vertical analysis helps in scrutinizing the actual increase or decreases in various items with regard to a specific total. Formula: The formula for Vertical Analysis is: Individual item of financial statement/total *100
Horizontal Analysis:
Horizontal Analysis Also Called Trend Analysis, The horizontal analysis of any organization shows the general trend of different items placed in the financial statements. For the purpose of Horizontal analysis of financial statement use Base Year Method. It means that for the purpose of comparison year here the base is 2007 for horizontal Analysis of years 2008 and 2009. Formula:73 VIRTUAL UNIVERSITY OF PAKISTAN www.vustudents.ning.com
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The formula, which is used in computing the percentages of various items on the basis of the figures of year 2007, is given below: = Current year x 100 Base year
RUPEE IN Million
%age 6.6 % 2008 Rs. 23,653 %age 7 2007 Rs. 29,739 %age 9.5
288,414
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Share capital Reserves Un-appropriated profit Surplus on revaluation of assets Total Equity Total liabilities + Total Equities 7,110 6,582 12,198 4,068 29,960 418,374 1.7% 1.6 2.9 1 7.2 100% 6,463 5,804 8,537 1,550 1.8 1.6 2.3 0.4 6.1 100% 5,386% 6,050 6,971 1,469 1.7% 1.9 2.2 0.5 6.3 100%
366,696
320,110
2007
%age 100%
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LIABILITIES:
Customer deposits Inter bank borrowings Bills payable Other liabilities Sub-ordinated loans 328,875 39,819 3,162 11,059 5,497
Total Liabilities Share capital
124% 173.6 90.5 150.8 220.0 129.4% 132.% 108 175 276.9 150.7% 130.6%
297,475 27,778 2,952 13,636 2,498 344,340 6,463 5,804 8,536 1,550 22,356 366,696
112% 121.1 84.5 186.3 100.0 114.7% 1.8% 95.9 122.5 105.5 112.5% 114.5%
263,972 22,933 3,494 7,332 2,499 300,231 5,386 6,050 6,971 1,469 19,878 320,110
100%
100% 100 100 100 100% 100%
Reserves Un-appropriated profit Surplus on revaluation of assets Total Equity Total liabilities + Total Equities
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Markup/Return/Interest earned Fee, commission 3,470 and brokerage income Capital gain and 2,452 Dividend income Other income 36
Total
47,080
Markup/Return/Interest Expense Operating 9,609 expense 4,416 Provisions Taxation Total Expense%of total income Profit/Los after taxation 3,414
39,861
7,122
15.2%
4,157
11.8%
4,076
16.2% 77
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Total
46,983 100% 35,391 100% 25,094 100%
Markup/Return/Interest earned Fee, commission and brokerage income Capital gain and Dividend income Other income
3,470
153.7%
3,266
144.6%
2,258
100%
2,452 36 47,080
1,571 59 35,467
1,585 77 25,121
Total
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income
7,122 46,983
174.7% 187.2%
4,157 35,391
102% 141%
4,076 25,094
100% 100%
Total
CHAPTER- 6
SWOT ANALYSIS. ,,..ANNEXES
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Swot analysis:
SWOT Analysis is the abbreviation of S: Strength W: Weakness O: Opportunity T: Threats And Strength and weakness represent the internal environment of the organization And weakness and Opportunity represent the external environment of the organization Hence, SWOT analysis is the critical and complete but comprehensive study of the organization.
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The branch is linked through an Online Network of Branches, it enables them to serve customer in better way ABL has the large network of ATM and they expend their branches.
Opportunity:
ABL is not yet giving the facilities of car financing and house financing to their customers. It is a big opportunity for ABL to expending its business at a more large scale by starting the business of car and house financing.
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PAF branch has the deficiency of honest and hard work employees PAF branch can increases its progress by availing the more technical, professional and hard work employees. ABL bank is giving the facility of collection of utility bills and also giving the facilities of giving the payments to the PAF servants which are very large number of servants, ABL PAF branch can attract those customers to open their accounts and to depositing activities etc. hence it is a big opportunity for the PAF branch for expending business. ATM and online facility is yet provided by branch but its functioning is not very appropriate. Often the ATM machine and online system is not working and hence many a times the customers get disappointed by the services of the branch and they go another bank for transferring fund by online transactions etc. If they overcome these weaknesses then they have and opportunity to attract and retain the large customers. As, there are coming large numbers of customers daily for ATM and online transaction. The branch is located in a commercial area hence its location is the big opportunity for the bank to attracting the customers at a large scale. The branch has the opportunity to availing the new schemes such as HAJJ SERVICES, HUNDI and WESTERN UNION etc. The bank has the facility of internet it is a big opportunity the bank can expand it self by increasing its use in more appropriate way. The bank has a large network all over the world it can cover the major market of the Pakistan if it will make it possible to fast delivery of funds.
THREATS:
The allied bank is one of the strong and leading banks so, it has many competitors. The HBL is located in front of PAF branch that is a big threat for ABL PAF branch. Pakistan is facing a very critical situation it is suffering from continuous downfall of the economy since last few years it is the biggest threat for all banks. If this situation will not be stopped than it is a big threat for Pakistans banks for achieving the banks objectives. Dissatisfied customers is the one of the biggest threat to the PAF branch, As discussed above (in opportunities) ATM and online services is yet provided by branch but its functioning is not very appropriate. Often the ATM machine and online system is not working and ATM machine some times is not filled by the funds from the main branch of ABL, and hence many a times the customers get disappointed by the services of the branch and they go another bank for getting the online transactions. If this draw back will not be sort out early, the customers will terminate towards other bank such as towards its neighbor bank HBL. Many private banks are providing the better competitive services than ABL that is the very sensitive threat for ABL.
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ABL as compare to other top banks is yet not providing many services such as car financing, house financing services and many other new services. Hence it can loose its reputation
Conclusion:
Although the country is suffering from the financial crises, slow economic growth, and lack of political stability, however, still the ABL continues to fulfill its commitment by contributing in a structured manner, by focusing on Agriculture sector and SME, strengthening cooperate and commercial relationships, product innovation, creativity , technological advancement, and continuous focus on service quality. Due to its strong foundation and well-built strategy. Customer is the focus of every thing for ABL and ABL is working tirelessly to enhance relationship with customers by understanding them and then offering relevant products and services all the times and ABL tirelessly continues to working very hard to strengthen the relationship with customers and number of initiatives has been taken by ABL to strengthen its overall function. During three years analysis of ABL such as form 2007 to 2009, I observed that ABL has impressive profit growth as form 2007 to 2009 its profit after tax rose by Rs. 4,076 million to Rs. 7,122 million. And it resulted in increase in increase in ROA and ROE by 1.42% to 1.81%, and ROE by 23.545 to 30.50% by average. Thus I have concluded that the ABL is a financially strong bank and having the long term rating of AA and short term rating of A1+ by pacra.and serving and continuously attracting the large number of customers by offering them the innovative, reliable and better competitive products and services and capture a great part of the market in the country by having a large number of depositors and customer. PAF base also a very progressive branch and it expanding its business very rapidly and serve the customers very efficiently from 36 years.
Recommendations:
During my internship training of 6 weeks in ABL PAF branch, I have analyzed some problem in the Bank. Keeping in view those problems followings are my recommendations:
Elimination of favoritism:
There is a great part of favoritism it should be eliminated immediately and enhance the performance by benevolent the opportunities to the fresh, well educated and able people.
Sitting Arrangement:
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There is no proper sitting arrangement; the branch should be focus on proper sitting arrangement and should furnish the branch hence the branch will be able to manage customers in a well manner.
Expansion in business:
The ABL should strongly focus on providing new services to meet its customers expectation and for expansion financing, etc.. e.g. the ABL should focus on the business of personal loaning such as House financing, car
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THANKS