ALLAMA IQBAL OPEN UNIVERSITY

Department of Business Administration

INTERNSHIP REPORT

ASKARI COMMERCIAL BANK LIMITED

Specialization: MBA Banking & Finance

Submitted to: Chairman Department of Business Administration

Submitted by:

Name: Abdul Razzaq Roll #. W581438 Registration #. Addres. .. Contact #. 0321-4033614

Date of submission:

Acknowledgment

In the Name of

ALLAH
The Most Gracious, The Most Merciful
But His command, when He intendeth a thing, is only that he saith unto it: Be! and it is. (Ya-seen Verse 086)
All praise to ALMIGHTY ALLAH alone, the Omnipresent and the most Merciful and compassionate. The words are bound, knowledge is limited and time is short to express His dignity. I am varying thankful to ALLAH who created me and gave countless blessing. He is the only Master of the universe and the Day of Judgment. First I thank my parents for their continuous support in MBA Programme. I also would like to thank all my teachers who guide me in the right direction, they taught me how to ask questions and express my ideas. I am also thankful to Sir Muhammad Azeem. I am very thankful to the branch Manager of Askari Bank (Qurtaba Chowk Branch) Mr. Shahid Mehmood Alvi who provided me the opportunity to learn.

Table of Contents
1. 2. 3. 4. 5. Objective of studying the organization .6 Over view of the Bank...8 Brief history of the Bank ..10 Nature of the organization 12 Business volume ...14 (i) Investment.15 (ii) Deposits 15 (iii) Advances...16 (iv) Revenue 16 6. Organizational Structure17 7. Number of employees ...18 8. Products & Services ..19 ( I ).Corporate & Investment banking19 (a) Corporate Banking Division 20 (b) Investment Banking Division20 (II) Agriculture Finance .21 Services .22 (a) Consumer Banking Services 22 (b) Islamic Banking Services .....22 (c) Investment Products Services...23 9. Structure of the Organization in term of reporting line..24 (I) Management (a) Board of Director .24 (b) Audit Committee..24 (c) Country Head & Inspection Division ..25 (d) Risk management .25 (II) Credit Administration Division & Information Security Division ..26 (a) Special Assets management. ....26 (b) Credit Division..26 (III) Human Resource Division .26 (IV) Commercial Banking Group ..27 (V) Information & Technology Department. .27 (VI) Islamic Banking Division........ 28 (VII) Finance Department..28 (VIII) Operation Division ..28 (IX) Legal Affairs Division .29 (X) Market & Strategic planning ...29 (XI) Compliance & Data Division ..30 (XII) Consumer Banking Services 30 (XIII) Corporate & Investment Banking ...30 10. Branch Structure 31 11. Review Of the various Department33 (I) General Banking 33 (a) Account Opening Department.34 (b) Function of Account Opening Department..34 (c) Importance of Introduction for Account Opening ...35 (d) Inquiry about customer 35 (e) Account Opening Procedure ...36 3

(II) Types of Accounts ...37 (III) Remittances Department..38 (IV) Cash Department..41 (V) Clearing Department....................................................44 (VI) Account Department ...48 (VII) Credit Department...49 12. How Information generated, Recorded and Used50 13. The Role of a Manager 52 14. Software used by the Bank...54 15. Different Types of Reports Being produced55 (a) Statement of Condition Report. .55 (b) Daily Non Financial Report ...56 16. Generations and Sources of Funds...58 17. Allocation of funds...61 18. Five Years of Balance Sheets ..62 19. Five Years of Income Statements ..63 20. Ratio Analysis..64 (a) Profitability Ratio ..64 (b) Loan Deposits Ratio...68 (c) Activity Ratio 69 (d) Market Ratio ..71 (e) Leverage Ratio ..74 (f) Interest Coverage Ratio . ...76 21. Horizontal Analysis of Five Year Balance Sheet...78 22. Horizontal Analysis of Five Year of Profit And Loss Account ..82 23. Vertical Analysis of Five Year Balance Sheet.....85 24. Vertical Analysis of Five Year Income Statement .88 25. Organizational Analysis..92 26. Future Prospects of the Organization 94 27. Short Falls/ Weakness ...95 28. Conclusion..96 29. References..97 30. Annexure ...98

OBJECTIVES OF STUDYING THE ORGANIZATION

Being a student of banking & Finance (MBA) need to know how a bank works and how theoretical knowledge relates the practical in the banking sector. As theoretical knowledge is not enough to run a bank or business therefore practical has its important not for only experience it also disclose the answers of the questions remain in the theoretical study.

Understanding of Financial Operation is another objective to study the organization. How working take place in the bank to handle financial matters. Without understanding the real picture of financial matter could not find the solution of the problems related to finance.

In order to understand the correct position of the bank financial analysis is also my objective. Financial analysis can be done by using various tools like Ratio analysis, Horizontal and vertical analysis of the financial statements.

There is importance of Finance Management in the banking sector because bank is a financial Institution how to manage the finance to know is my objective.

What kinds of software are being used in the bank for accounting and operational activities?

How Information generated and recoded and its use for decision making purpose. What kind of reports are producing in the bank for various purposes.

To understand the organizational structure in term of reporting line: who is report to whom and know how develop what are responsibilities & authorities of different designations.

To identify how banks working divide in to various departments to monitor all activities in the bank.

What are products lines of the bank offers to the customers.

OVERVIEW OF THE BANK

Askari Bank Limited Formerly known as Askari Commercial Bank Limited. Askari Bank LTD was incorporated in Pakistan on October 9, 1999 as a Public Limited Company and listed on the Karachi, Lahore, and Islamabad stocks exchanges. The registered office of the Bank is located at AWT Plaza, The Mall Rawalpindi. The Bank has 200 branches (2007: 150 branches); 199 in Pakistan and Azad Jammu and Kashmir, including 18 Islamic Banking Branches, 11 sub-branches and a wholesale bank branch in the Kingdom of Bahrain.

Banks, s principal activities are to provide lending, depository and related financial services. Financial services include credit risk

management, foreign trade, treasury, corporate and merchant banking, retail banking, electronic banking, credit cards, marketing and customer services.

Bank is playing a leading role in the Banking sector with broad product lines & customer need based services. Bank is operating with 200 branches in conventional banking as well as Islamic banking moods of financing. Bank is leading the way to the most modern and dynamic banking in the country.

The Vision To be the bank of first choice in the region

The mission To be the leading private sector Bank in Pakistan with an international presence, delivering quality services through innovative technology and effective human source management, in a modern and progressive organizational culture of meritocracy, maintaining high ethical and professional standards, while providing enhance value to all our stakeholders and contributing to society.

BRIEF HISTORY OF THE BANK

Askari Bank incorporated in October 1991, Bank commenced its operations in April 1992, and has since expanded into nation wide with modern technology in the banking sector. Bank connected online customers supported with network of ATMs. Over the years, Askari Bank has proven its strength as leading banking sector entity with ever-increasing commitments to its customers, through strategic investment in electronic technology. Askari Bank achieved the following firsts in Pakistani Banking.

The first Pakistani Bank to offer online real-time banking on country wide basis The first Pakistani bank with nation-wide network of ATMs The first bank in Pakistan, foreign or local, to introduce internet banking in the country The first bank in Pakistan, together with ABN-Amro bank, to develop inter-bank switch for the ATMs

Askari Bank is an important in Pakistans financial service industries, Bank is now leading the way to the most modern and

dynamic banking in the Pakistan. Bank is continues success in competition. Best Retail Bank in Pakistan award is given by the Asian banker. Bank has also received the Corporate Excellence Award for the financial sector from the Management Association of Pakistan (MAP) for the years 2002 and 2003. Bank has been given The Best Bank in Pakistan award by Global Finance Magazine

twice i.e. for the years 2001 and 2002. Best consumer Internet Bank award by Global Finance Magazine for the 2002 and 2003. Bank has A1+, the highest possible credit rating, for short-term obligations, and log-term rating stand at AA+. Bank won the prestigious Best Presented Annual Accounts awards from the Institute of Charter Accountant in Pakistan (ICAP), and the institute of Cost and management Account in Pakistan.

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NATURE OF THE ORGNIZATION

Banks, s principal activities are to provide lending, depository and related financial services. Financial services include credit risk

management, foreign trade, treasury, corporate and merchant banking, retail banking, electronic banking, credit cards, marketing and customer services. Askari bank offers the following retail products to serve the needs of the consumer market.

Askari Banks personal Finance-Loans schemes ASKAR Auto loans Askari i-Net Banking- internet banking solutions Askari MasterCard-credit card facility Askari Banks value plus-rupee Deposit Accounts Askari Travelers Cheques-Rupees Travelers Cheques ASKCARD-Debt Card ASKPOWER-Prepaid Card Askari Banks Mortgage Finance-Home Loans Askari Banks Business Finance-Business Loans Smart Cash-Running Finance Facility for consumer Askari Kissan-Agri Finance Programme

Askari Bank Limited provides corporate, retail, and commercial banking products and services primarily in Pakistan. The companys
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corporate financing solutions include corporate and investment banking activities, such as services in the areas of mergers and acquisition, underwriting, privatization, securitization, IPOs and related activities, and secondary private placements. Its retail banking solutions include services to small borrowers, including loans, deposits, and other transactions with retail customers, as well as credit card business. The companys commercial banking activities comprise services related to project finance, export finance, trade finance, leasing, lending, guarantees, bills of exchange, and deposits from corporate customers. It also offers treasury and money market services; payment and settlement services, such as payments and collections, funds transfer, clearing, and settlement; and locker service. The company also offers agricultural banking products and services, including various finance products that comprise tractor finance, live stock development finance, mechanization finance, and farm transport finance; and a range of Islamic banking products and services. As of December 31, 2008, it operated 200 branches, including 18 Islamic Banking branches, 11 sub-branches, and 1 wholesale bank branch in the Kingdom of Bahrain. The company was incorporated in 1991 and is headquartered in Rawalpindi, Pakistan. A shared network of 2,991 online ATMs covering all major cities in Pakistan supports the delivery channels for customer service. As at December 31, 2008, the Bank had equity of Rs. 12.97 billion and total assets of Rs. 206.19 billion, with 816,629 banking customers, serviced by our 6,496 employees. Askari Investment Management Limited and Askari Securities Limited are subsidiaries of Askari Bank engaged in managing Mutual funds and shares brokerage, respectively

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BUSINESS VOLUME
Business volume in terms of revenue, deposits, advances, and investments depict the Bank performance. Banks activities can be evaluated with the help of business volume. Introduction of Investment Banks according to State Banks circulars (10, 20, and 14) can be investing in various securities for profit motives. Askari Banks investment securities classified as follow: (a) Securities Held for Trading (b) Securities Held for Maturities (c) Securities Available for Sails. Askari Bank Securities acquire to hold for trading with the intention to trade by taking advantages of short-term market/interest rate movements i.e. Securities Held for trading. Securities acquired and hold up to maturities and third are present securities which dont fall under Held for trading and held for maturities falling in available for sail categories.

In Billion Rs. Business Volume Deposits Advances Investment Revenues 2004 83.3 70 17.2 4.7 2005 118.8 86 25.7 5.5 2006 131.8 99.2 28.6 6.6 2007 143 100.8 39.4 7.1 2008 167.7 128.8 35.7 6.4

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Investments:
Investment from year 2004 to 2007 showing increase trend and in 2008 investment decrease. Because of 28 billions advances increases from 07 to 08. While growing trend from 04 to 07 is healthy singe for organization.

45 40 35 30 25 20 15 10 5 0 2004 2005 2006 2 007 2008

Deposits:
Current, Savings and Other Deposits
Deposits increased by 17 percent to Rs. 167.68 billion as at December 31, 2008 as against Rs. 143.04 billion last year. Analysis of deposits show a healthy growth of 52 percent in current accounts over last Year and 32 percent in fixed deposits, while saving deposits remained
180 160 140 120 100 80 60 40 20 0 2004 2005 2006 2007 2008

almost unchanged. The aggregate number of deposit accounts Reached 611,323 at end 2008. By the end of

2008, deposits reached Rs. 167.68 billion from Rs. 143.04 billion at end 2007, an increase of 17 percent during the year. The increase in local currency deposits was 15 percent to Rs. 141.89 billion as of December 31, 2008 from Rs. 123.51 billion as of December 31, 2007, while the foreign currency deposits surged to Rs. 25.79 billion, increased by 32 percent over last year.

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Advances:
Advances are also showing increasing trend by 2004 to 2008 adding up 16 billions by 2005, 13 billions by 2006, 11.2 billions by 2007 and 24.7 billions by 2008. It is show the business growth of the bank.

140 120 100 80 60 40 20 0 2004 2005 2006 20 07 2008

Revenues:
Mark up / Interest on advances and return on investments are recognized on accrual basis the pattern of growth revenues from year 2004 to 2007 is showing good pictures. While in year 2008 revenue decrease as compared to last four year having reason of banking sector turmoil and fee commission & earning from in dealing foreign currencies decreases. Mark-up income on

8 7 6 5 4 3 2 1 0 2004 2005 20 06 2007 2008

investments, however, recorded an increase of 25 percent over last year the aggregate increase of 21 percent in total mark up income reduced marginally to 20 percent in terms of net interest income, as the aggregate increases in mark-up income and cost of deposits and borrowings were almost in reciprocity.

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ORGANIZATIONAL STRUCTURE

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NUMBER OF EMPLOYEES

Staff strength Permanent Temporary /on contractual basis Daily wagers Commission base

2005 _____ ____ ____ ____

2006 2754 519 _____ 679 3952

2007 3241 687 _____ 657 4585

2008

2009

3,834 4,252 1,273 1,703 ____ 789 ____ 541

Banks own staff strength at the en1950d of ____ year Out sourced Total staff strength at end of year Sr.No Designation 1 2 3 4 5 6 7 8 9 10 11 12 Area Manager Branch Manager Operational Manager Operational In charge CD In charge Account In charge It In charge Credit In charge BDO Accounts Opening officers Cashier & remittances officers Supporting staff ____ 2118

5,896 6,496

581 4533

641 5226 Numbers 10 200 200 200 200 200 200 250 200 1950 2800 398

1,064 912 7,560 6,808

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PRODUCT AND SERVICES

CORPORATE AND INVESTMENT BANKING
Corporate and investment banking comprises of two divisions as follows:

Corporate Banking Division Investment Banking Division

Askari Bank offers Corporate and investment banking to full fill business requirements through one window problems solution. Continuous business need analysis for new products augmentation is taking place under corporate and investment banking. Mr. Tahir Aziz, Group Head, Corporate and investment banking. Corporate and investment banking products are as follows:

Corporate Banking Division CBD is long-term business partner that is geared to help in meeting business growth objectives. The business is managed by a team of professional who understand requirements and can firmly stand by side. Dedicated relationship managers for each of corporate clients ensure satisfaction, which is our top priority. Relationship oriented outlook

focuses upon providing a complete array of tailored financing solutions, that are practical and cost effective, some of which include:

Working Capital Facilities Term Loans Structured Trade Finance Facilities

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 Letters of Guarantee Letters of Credit Fund Transfers / Remittances Bill Discounting Export Financing Receivable Discounting

Investment Banking Division

IBD provides value-added, specialist services and products through a dedicated team of professionals, with world-class skills, to provide customized solutions to help clients meet their strategic objectives. IBD is responsible for seamlessly originating, executing and distributing all forms of investment banking transactions ranging from syndicated loans to complex structured and project financing transactions. Some examples of products offered by IBD include: Strategic Advisory Privatization Advisory M & A Advisory Balance Sheet Restructuring Syndications Project Finance Structured Finance Islamic Finance Private Placements of Debt and Equity Issuance and distribution of Term Finance Certificates, Sukuk Bonds, and Commercial Paper Underwritings Capital Market Hybrid Products
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Agriculture Finance Solutions

The role of agriculture in Pakistan economy is of pivotal nature. Due to diverse geographical and climatic conditions the country has tremendous potential for growth and development in agriculture. However, adequate and timely financial assistance to the farmers will improve production potential of agriculture sector in the country. The modern concept of agricultural credit envisages establishment of an efficient institutional credit system to serve as a package of credit, supplies and knowledge for the overall strength of the farmers who at present suffer from low productivity and financial insecurity. A successful credit evaluation system, therefore, should have the basic ingredients to provide adequate amount at the right time and in the right form to help farmers in making a productive use of loan funds Kissan Ever Green Finance Kissan Tractor Finance Kissan Abpashi Finance Kissan Livestock Development Finance Kissan Farm Mechanization Finance Kissan Farm Transport Finance Agriculture Banking network

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SERVICES
Bank provides services as follows: A) Consumer Banking Services B) Islamic Banking services Consumer Banking Services: Under consumer banking services following are products. Askari Finance Smart Cash Personal Finance Mortgage Finance Business Finance Travelers Cheques Askari Card Value plus Deposit Islamic Banking services Islamic Banking was launched under the brand 'Askari Islamic Banking', by opening 6 dedicated Islamic Banking branches in major cities of the country. Further expansion is planned with improved capabilities for offering products conforming to the Shariah principles. Askari Islamic Banking opens the doors for Halal banking solutions. Objective is to put in place an efficient banking system supportive to economic justice and welfare of society in line with Shariah standards.

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A comprehensive range of Islamic Banking products and services is being offered, in order to meet customer's demand of Shariah Compliant Banking, in the following areas: Islamic corporate Banking Islamic Investment Banking Islamic Trade Finance Islamic General Banking Islamic Consumer Banking

Investment Products
Roshan Mustaqbil Deposit Deposit Multiplier Account Value Plus Deposits Rupee Traveler Cheques ASKCARD (Askari Debit Card) Internet Banking Service Electronic Bill Payment Services Cash Management Services Investment Certificates

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STRUCTURE OF THE ORGANIZATION IN TERM OF REPORTING LINE

In a Bank management play a vital role to achieve the predefine goals in a systematic manner. Reporting can be horizontal or vertical in organization depend on culture or nature of organization. In Askari Bank Board of Director comprises Chairman and directors which lead the Executive Committees and presidential authorities. Secretary assists the Board of Director

BORD
Board of director comprises of chairman and board members as follows: Executive Committee Audit Committee President and Chief executive

AUDIT COMMITTEE
Audit Committee is responsible for internal control, produce annual reports and report to the Executive committee. During audit finding of

any concern Committee will put reference to board and suggest compliance rules & regulations.

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Country Head & Inspection Division

Country Head & Inspection division responsible for internal control from inspection division internal auditor visit branch and make sure that rules & regulations follow. eg. For account opening what documents are essential if any document

miss then directed to the concern person. In similar fashion other departments can be check.

Country head and inspection division report to audit committee which report to executive committee and finally report to board of director.

RISK MANAGEMENT Risk management comprise of Chief Risk officer which monitor all activities of three departments as follows:

Risk Management Division Credit Administration division Information Security Division Risk Management Division is leading by Country Head and he responsible for risk management before loan approve risk measure and bestow to the chief Risk officer.

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Compliance & Data Division

Country Head of this Department is responsible to lead and Report to the President and Chief Executive

Consumer Banking Services

Country Head of Consumer Banking Services is responsible to monitor and mentoring to the consumer Services department and report to the President and Chief Executive regarding the performance of the department.

Corporate & Investment Banking

Corporate & Investment Banking is divided in to two divisions as follows: Corporate Banking Division Investment Banking Division Country Heads of both division are responsible their respective division and report to the Group Head of Corporate & Investment Banking which report to the President and Chief executive.

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BRANCH STRUCTURE IN TERM OF REPORTING LINE

The Branch commence on 2008 is situated at: Qurtaba chowk Lahore (Askari Commercial Bank) Branch having staffed as follows:

Branch Manager (Mr. Shahid Mehmood Alvi) Operational Manager (Rizwan Jameel )

Operation Department
Incharge (Furrkh Hussain Bajwa) CD inchareg (Rizwan Khan) Account opening (Saima Aslam) Clearing officer (Kh.Qaiser Usman)

Credit Department
O.G.I (Taufique Ahmad )

Foreign Trade Department

AMG (Faiza Qamar)

Cash Department
C.S.G.III. (Aslam) C.S.G.III. ( Sulman Shazad)

Account Department
O.G.II. (Asjad Humayun Butt)

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Computer Department
O.G.I. (Mr. Shamsi)

Marketing Department
B.D.O. (Muhammad Waqar)

General
Secretary (Muhammad Riaz)

Operation In charge
Operation in charge responsible for general banking which includes Remittance, Clearing, Cash, Account opening, and general information.

Supervision
Operation in charge supervise a certain limit (25 thousand) all kind of Chaques. Cash in hand and in accounts various currency i.e. US $, Euro, Yen PKR etc maintenance daily record. Operation in charge is also responsible for all kind of matter concerning to the general Banking.

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REVIEW OF THE VARIOUS DEPARTMENTS

Working of the Bank divided between various departments. Different

departments do their jobs in occurrence with the bank policies. In AKBL each branch is divided into various departments. Head of department manages each department & officials of the branch follow procedures.

The working of the Department within branch is as:

GENERAL BANKING DEPARTMENT

Account opening department Remittances department Cash department Clearing department

PRIVILEGE BANKING DEPARTMENT

Online banking Lockers

CREDIT DEPARTMENT FOREIGN TRADE DEPARTMENT

Import department Export department Foreign currency department ACCOUNTS DEPARTMENT IT- DEPARTMENT

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ACCOUNT OPENING DEPARTMENT

Functions of Account Opening Department

Providing account opening form according to the customer's requirements, Guide the customer about the requirements of the account opening and form filling, Check the forms whether they are correctly completed or not, Preparing checklist, Stamping on the form, Maintaining account opening register, Pasting of forms in register after release from general banking in charge, Issuance of cheque books, Issuance of accounts maintenance certificate, Closure of account Verification of signature in case of cheque presented before releasing of account opening from SS card is not yet scanned

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IMPORTANCE OF INTRODUCTION FOR A\C OPENING

Introductory references As soon as a person opens an account with the bank, the banker customer relationship is established. In such situation this is advisable the banker should not open new accounts of unknown persons unless references regarding the integrity and responsibility of the purposed persons are obtained from respectable parties. Failure to exercise this care may result in serious consequences not only for the banker concerned but also for the other bankers and general public. It is not sufficient to obtain the reference but its genuineness must also be verified. Omission of this may have serious consequences. In practice we see that there is tough competition among bankers for procurement of deposits, so to press a prospective new customer to find the desired reference may offend him, yet he is to be welcomed by the banker as a source of fresh deposits. But these practical difficulties have to be handled tactfully because the risk involved carrying out this requirement partially or wholly may lead to undesirable results.

INQURIES ABOUT CUSTOMERS Have all necessary information with him regarding his generally a banker is asked by another banker to give his opinion about his customers financial position. Therefore, it is beneficial for the both that the banker should customers. Now a practice that Bank officer visit to customer and inquire about his business nature then writes a report.

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ACCOUNT OPENING PROCEDURE &PRECAUTIONS:KNOW YOUR CUSTOMERS (KYC Form I & II) The objective of knowing a customer is to have a fair idea about the identity, financial resources, and general information about the customer at the time when the relationship is established. A banker must have following information about the customer: Customer name: Enter complete name as mentioned in original ID card /other business documents. Nature of business /profession: if customer is of salaried class enter his employer name. If the customer is a businessman, traders, sole proprietor, enter the business name, for example Zahid autos Traders etc.also enters the customers title/position and address of the business/employer. Private Service, business are not acceptable, rather specify what type of company/business the customer is associated with for example Manager Philips Electrical Company.

Address: Enter the complete business/residential address. With in the brackets you may also provide prominent address identification marks for ease of physically locating the address.

Contact Numbers: Enter home, official, mobile, fax number and e-mail address (if available). Banker can verify the number by giving the customer a courtesy call or by sending him an e-mail. Change Contact Numbers

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After Opening A/C contact can be change by receiving an application from customer with specify new contact.

Other/ secondary/ mailing address: Some customer may volunteer their parents or siblings addressor second home address or a mailing address other than a permanent address.

Special instructions: Clear-cut special instructions must be obtained from customers. If the customer has not given any special instruction specified column must be cancelled by drawing a line, as this column must not be left blank in any circumstance.

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TYPES OF ACCOUNTS
1) ACCOUNTS OF GENERAL CUSTOMERS

Minor account Illiterate person account/Photo Account Joint account ASK Mahana Bchat Account Value Plus Saving Accounts Current accounts PLS Income Accounts ASDA Accounts Value Plus Current Accounts Dollar Accounts Euro Accounts Sterling Pond Accounts

2) ACCOUNT OF SPECIAL PERSONS

Proprietorship account Partnership account Limited companys account Accounts of club societies and associations Agents accounts Trust account/NGO Liquidators account executers and administrators account

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REMITTANCE DEPARTMENT
Functions of remittances department The functions of remittance departments are to handle with the following instruments:

Pay Order Demand Draft Foreign Demand Draft Pay slip Telegraphic Transfer Foreign Telegraphic Transfer Payment of Remittances Cancellation of pay order & demand draft The remittance department deals with the transfer of money from one place to another.

Remittance can be made through:

Instrument transfer Electronic transfer Mail transfer

Instruments of the Remittances Departments

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PAY ORDER Pay order issued from one branch only be payable from the same branch. It is normally issued for payment in the same city. It is normally referred as banker's cheque Get the application form. Issue pay order after recovering Chaques/ Cash Do necessary vouchering. Make entry in PO issue register. All pay order shall be crossed" payees account only".

Duplicate Pay Order: Check the record to insure that payment has not been effected. Get application for issuing of duplicate PO. Recover charges. Issue duplicate pay order.

DEMAND DRAFT It is an instrument on demand for which value has been received, issued by the branch of the bank drawn i.e. payable at some other place (branch) of the same bank. Demand draft can also be issued by one branch of the bank payable to other branch of the other bank e.g. DD issued by AKBL payable by MCB.

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TELEGRAPHIC TRANSFER OR TELEX TRANSFER Telegraphic Transfer OR Telex Transfer is swift way for remittances from place or to place. Simply a request received from a customer to make TT either account debit or Cash received. TT sends to the beneficiary Bank. Incase of branch is not present then other Bank or financial institution make payment to the beneficiary.

F.D.D AND F.T.T (Online Transfer) DD and TT exercise within country incase of overseas remittances FDD and FTT use (Foreign Demand Draft & Foreign Telegraphic Transfer).The foreign remittances department at Askari Bank is fully equipped to meet the growing needs of the customers for a safe and fast funds transfer system. Bank offer the customers several ways to conduct foreign remittances through a network of thousands of correspondent banks around the world.

CASH DEPARTMENT
All physical movement of cash in the bank is made through the cash department. Normally cash department performs following functions

Receipt Payments Act according to any standing instructions Transfer of funds from one account to another Handling of ATM

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Verification of signatures Posting Handling of prize bond

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Cash receipt section

In this section the cashier in following manner receives cash:

Process of deposits
Fill- up deposit slips Deposited on Receipt Customer

Handover the deposit slip to the customer with receiving Stamp

Cashier counts the amounts and fulfills other requirement

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Cash payment section

In this section honoring the cheque through following process makes payment.

Process of Payment
Chaque is presented at Token counter two signatures on the back of Chaque get from customer

Cashier count the amount & payment is made

Chaque is recorded & token is allowed

Posting is made

competent officer cancel the Chaque after Supervision

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CLEARING DEPARTMENT
MEANING OF CLEARING The word clearing has been derived from the word Clear and is defined as a system by which banks exchange cheques and other negotiable instruments drawn on each other within a specific area and thereby secure payment for their clients through the Clearing At specified time in an efficient way.

1. Since clearing does not involve any cash etc. and the entire transaction take place through book entries, the number of transaction can be unlimited. 2. No cash is needed as such the risk of robbery, embezzlements and pilferages are totally eliminated. 3. As major payments are made through clearing, the banks came manage cash payments at the counters with a minimum amount of cash in vaults. 4. A lot of time, cost and labor are saved. 5. Since it provides an extra service to the customer of banks without any service charges or costs, more and more people are inclined and attracted towards banking.

Through NIFT clearing is made either Intercity or within city clearing lets understand what NIFT is and how it is working:

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NIFT - National Institutional Facilitation Technologies

NIFT - National Institutional Facilitation Technologies (Pvt.). Ltd. was incorporated in September 1995 as joint venture between a consortium of six banks and entrepreneurs from the private sector. All commercial banks and all of their branches in major cities avail NIFTs services. As of May 2009, 40 commercial banks and their 5571 branches in 185 major cities, 20 data centers utilize NIFTs services. NIFT has setup elaborate data centers geared to provide automated services for document processing particularly in the payment arena. Modern image based facilities have been established at Karachi, Lahore, Islamabad, Peshawar, Rawalpindi, Hyderabad, Multan, Faisalabad, Quetta, D.I.Khan, Sialkot, Gujranwala, Sukkur, Bahawalpur, Muzaffarabad, Jhelum, Abottabad, Mirpur, Sahiwal and Sargodha. The services include cheques clearing, reconciliation, return (unpaid) cheques processing, same day clearing (express 2 hrs. clearing service), intercity clearing and inter branch & inter bank settlement. Services are provided at individual branch level to over 5571 branches in 184 major cities and smaller cities.

NIFT Rider NIFT riders come in a bank (Branch) twice in a day for inward and out ward clearing Chaques & instruments for collection and delivery at specified time.

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OUTWARD CLEARING AT THE BRANCH:

The following points are to be taken into consideration while an instrument is accepted at the counter to be presented in outward clearing:

The name of the branch appears on its face where it is drawn. It should be stale or post dated or without date. Amount in words and figures does not differ. Signature of the drawer appears on the face of the instrument. Instrument is not mutilated. There should be no material alteration, if so, it should be properly authenticated. If order instrument suitably indorsed and the last endorsees account being credited. Endorsement is in accordance with the crossing if any. The amount of the instrument is same as mentioned on the paying-in-slip and counterfoil. The title of the account on the paying-in-slip is that of payee or endorsee (with the exception of bearer cheque).

If an instrument is in order than our bank special crossing stamp is affixed across the face of the instrument. Clearing stamp is affixed on the face of the instruments, paying-in-slip and counterfoil (The stamp is affixed in such a manner that half appears on counterfoil and paying-in-slip). The instrument is suitably discharged, where a bearer cheque does not require any discharge and also an instrument in favor a bank not need be discharged. The instrument along with pay-in-slip is retained while the counterfoil is given to the customer duly signed. Then the following steps are to be taken:

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1. The particulars of the instrument and the pay-in-slip entered in the outward clearing register. 2. Serial no. Is given to each instrument. 3. The register is balanced; a regular report is generated after entering clearing instruments in the software (Inward outward clearing system. Balance of report compare with manual register balance to avoid omission. 4. Then a particular voucher is filled with total amount of Clearing. 5. All instruments with grand sum voucher put into a bag. 6. NIFT rider come and takes bag for out ward clearing. 7. For inward clearing bag reached at morning in the branch.

However the amount is kept in float till final status of various instruments is known from respective paying banks in second dealing.

The entry of the instrument returned unpaid is made in Cheques returned Register. If the instrument is not to be presented again in clearing then a covering memo is prepared. The covering memo along with returned instrument and objection memo is sent to the customer who sent the same to his account.

INWARD CLEARING OF THE BRANCH:

1. The particulars of the instruments are compared with the list.

2. The instruments are detached and check the corresponding account if balance is available then Debit the account. 3. Floating status is now realized at corresponding branch which send instrument for clearing.

43

INWARD CHEQUES RETURNED UNPAID:

These are the cheque returned unpaid by us in inward clearing due to some objections.

OUT WARD CHEQUES RETAINED UNPAID:

These are the cheques retained unpaid to us which were lodged by other Bank because of some objection eg. Insufficient balance.

ONLINE BANKING
Online banking means that the customer of AKBL can deposit / withdraw funds in / from other branches of AKBL. Askari bank provides online facility to all its branches. Just fill the online slip and submit at counter along with Check or Cash for online transfer. AKBL provide the facility to customer to transfer funds to any account through ATM.

44

ACCOUNT DEPARTMENT
Account department is known as backbone of an organization all financial matters deals and monitors in the account department. I worked three days in accounts department but as it has confidential information so they did not give me enough information regarding their working. First day I sorted out the cheques of AKBL with the help of the serial number and

the nature of the account and arrange them in sequence. After that i checked the activity which contains the title of the cheque, amount, date etc. Accounts department maintains the record of expenses of all the departments, it also maintain the record of all the employees regarding their basic salary, increment, benefits etc. It is the backbone of AKBL

CREDIT DEPARTMENT
Credit department provides credit to the customer according to theirs needs therefore credit divided into various categories majors are given as follows

SME Credit Corporate Credit Commercial Credit Consumer Credit

45

ADVANCES & LOANS

Credit can be divided into two main categories advances and loans which further categories as follows:

FUNDED Credits in which funds provides called as funded credit.

NON FUNDED Credits in which funds are not providing to the customer called non funded credits e.g. LC (Letter of Credits) LG (Letter of Guarantee) etc.

46

HOW INFORMATION GENERATED RECORED AND USED

For every transaction information is generated in the form of Voucher and then in the computer systems. PRACTICAL ILLUSTRATION A customer presented a Chaque for cash after all process completion (Verification & cancellation) Chaque became a Debit Voucher and then in charge officer make customer account Debit ( The same amount on chaque ) in the computer system. Automatically a report will be generated at the day end which use as recoded and for any inquiry. In a similarly fashion a customer deposited Cash with deposit receipt officer in charge make credit entry in the customer account and deposit receipt became a credit voucher. Information of various departments are recorded in the main server (IT Department) then recoded on the Tap and also preserve at head office on daily basis.

47

ATM

Remittanc es

Account Opening

Main Server

Accounts

Credit

Head office server

48

THE ROLE OF MANAGER

The Branch Manager is responsible for the administration and efficient daily operation of a full service branch office, including operations, lending, product sales, customer service, and security and safety in accordance with the Bank's objectives. Develops new deposit and loan business; provides a superior level of customer relations and promotes the sales and service culture through coaching, guidance and staff motivation; achieves individual and branch sales goals through new business sales, referrals and retention of account relationships. Provides leadership, training and supervision; delegates day to day operations to the Operations Officer or other branch personnel. Responsible for attaining established Bank and branch goals through active participation in sales management and officer call programs. Participates in community affairs to increase the Bank's visibility and to enhance new and existing business opportunities.

RESPONSIBLITIES
Branch Manager having following responsibilities: To ensure the punctuality and regular attendance of the staff. To appraise the performance of the Branch staff in a timely and fair manner and ensure safekeeping of the filled Appraisal forms To ensure that the branch assets are in a proper condition including vehicles ensuring control over movement of same through log books and it being used for official purposes only.

49

To correspond with the Head Office, Government and other networking agencies, as per the guidance of the SBP. To ensure that the Branch programmes are planned as per the Banks Strategic Plan. To ensure that the Accounts Officer is maintaining proper books of accounts including basic accounting controls like daily verification of cash in hand, daily entry of cash & bank vouchers, Bank Reconciliation statements, accounting of Receipts / Payments correctly.

50

SOFTWARE USED BY THE BANK

Bank used different types of software for various purposes some of which are given bellow: UNI-Bank PDF I Fax MS Word, Excel MS Window

CORE BANKING
For core banking UNI-bank software is being used for operational activities in general banking. This software having all features which are mostly used in the bank. UNI-Bank having various applications for each department having various modules.

51

DIFFERENT TYPES OF REPORTS BEING PRODUCED

Various reports are being produced at the day end automatically some of which are given bellow: Daily Non Financial Transcation Reports General Ladger Reports Subsidary Ladger Reports Statement of Secured Over Drafts Allowed Reports Reports of Pricing Calculation Daily Securety Transction Reports Transfer Register Reports Statement of Condition Above mention reports having different information for management use some of which are mention as follows:

STATEMENT OF CONDITION REPORT

This report having information of liabilities & Assets along with G/L Head and update. e.g. Liabilities items:

Current deposits Unique Deposits Value Plus Current Deposit Call Deposits PLS Term Deposit Value Plus Saving Deposit etc

52

At the end total of liabilities figures. Assets items: Foreign Currency on Hand Cash on Hand (PKR) Cash In ATM MO Account Head Office Expenditure Account PLS Profit Paid Account This report is important for management in the decision making which dipict the actual picture of the branch. Deposits are important to increase the branch profit.

DAILY NON FINANCIAL TRANSCTION REPORT

Both financial & non financial transctions are important therefor reports are being produced. In the non financial report following information are recoreded.

Account Open / Name & Open date Adress Fixed Date Interst information Loan Interst information Loan disbursmnet / Repayment Cash Account Status Chaque Book issue Cancel Chaque Stop Chaque

53

Block Amount Release Amount Claim Limit etc

Such inforation included in the non financial reports which are important for the recored and customer inquary . Every report has its important for management.

54

GENERATION AND SOURCES OF FUND

Funds are important for a bank survival more funds more business the rule is apply. Askari Bank having follwing kind of sources of funds.

A) . B) . C) .

Owner Equity Deposits Bowrrowing

Owner Equity
Owner Equity is the main source of fund for a bank without personal investment a bank can not establish. SBP has set the rules regarding owner equity.

55

Deposits
Key source of funds for a Bank are deposits Askari Bank having different types of deposits. Current Deposits Unique Deposits Value Plus Currents Deposits Call Deposits CD New Scheme Foreign Currency Deposits PLS Term Deposits ASK Mahan Bachat Deposits Value plus Saving Deposits etc.

2005 83,318,795

2006 118,794,690

2007 131,839,283

2008 143,036,707

2009 167,676,572

2005

2006

2007

2008

2009

Graph of Deposit

56

Comments: Deposits increases from 2004 to 2008 which show the growth of bank in term of network and customer increase. Currents saving and other deposits is the major portion of the deposits. Rs.167.68 billions at December 31, 2008 as against Rs. 143.04billion last year. Analysis of deposits show a healthy growth of 52 percent in current accounts over last year and 32 percent in fixed deposits, while saving deposits remained almost unchanged. The aggregate number of deposits accounts reached 611,323 at the end 2008.

Borrowing
Borrowing is an other source of fund when bank need funds borrowing are quick option to generate funds. Last five years borrowing figures are given as follows:

(Rupees in 000) 2005 13,781,555 2006 10,562,338 2007 14,964,087 2008 17,553,525 2009 15,190,148

2005

2006

2007

2008

2009

Graph of Borrowing

57

Comments: Analysis show that borrowing decrease in 2005 as contrast to 2004 , while in 2007 borrowing 17.55 billion against 15.19 billions in 2008. Borrowing rate increase is the reason for borrowing fluctuation.

58

ALLOCATION OF FUNDS
Bank allocates funds in to different sector which are given as follow: Corporate Sector SMEs Sector Consumer sector Agriculture Sector Commodity Finance Staff loans Funds are allocated in Corporate Sector 67%, SMEs 11.15%, Consumer 10.2%, agriculture 4.4%, and Commodity Finance 4.4%, and Staff loans 2.3%. Major portion of funds distributed in the corporate sector and agriculture, commodity finance have same portion that is 4.4%.

59

FIVE LAST YEAR BALANCE SHEET

Assets
Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating fixed assets Deferred tax assets Other assets

2009
16029635 3954814 4,479,754 35677755 128818242 8,266,458 8964480 206191138

2008
13,356,055 3,497,054 14,444,143 39,431,005 100780162 5,128,428 5,535,038 182171885

2007
14879230 7333002 8392950 28625915 99179372 3810331 3812788 166033588

2006
11766925 5550148 10172242 25708194 85976895 3192862 2732641 145099905

2005
8762866 4847899 2324839 17239156 69838392 2,595,023 1,559,365 107167540

Liabilities
Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance lease Deferred tax liabilities Other liabilities 2584828 15,190,148 167676572 2,996,100 12,987 4,759,140 193219775 12,971,363 2,627,051 17,553,525 143036707 2,997,300 471,519 3,219,796 169905898 12,265,987 1839077 14964087 131839283 2998500 736298 2603113 154980358 11053230 1315580 10562338 118794690 2999700 1459 567217 2045340 8813483 1,227,093 13,781,555 83,318,795 1,000,000 14,159 526,866 1,282,980 101,151,448 6,016,092

Net assets Presented By

Share Capital Reserve Unappropriated Profit Surplus on revaluation of assets -net of tax

4058774 7,667,141 308,980 12,034,895 936,468 12,971,363

3,006,499 6,948,336 2,144,810 12,099,645 166,342 12,265,987

2004333 5,814,754 1,799,979 9,619,066 1,434,164 11,053,230

1,507,018 4,470,530 1,617,597 7,595,145 1,218,338 8,813,483

1,255,848 4,317,301 5,573,149 442,943 6,016,092

Data Collected from Annual Report

60

FIVE LAST YEARS INCOME STATEMENT

2009
Mark-up / return / interest earned Mark-up / return / interest expensed Net mark-up / interest income
Provision against non-performing loans and advances Provision for impairment in the value of investments Bad debts written off directly Net mark-up / interest income after provisions 18393313 10650719 7,742,594 3,824,778 508 247,311 4,072,597 3,669,997 1,257,584 173,621 873,512 36,743 22,384 343,156 2,707,000 6,376,997

2008
15143241 8,685,624 6,457,617 3,920,240 1,501 3,921,741 2,535,876 1,072,868 137,079 655,761 2,361,251 1,728 336,809 4,565,496 7,101,372

2007
12596921 6977313 5619608 1128137 376 1128531 4491095 1013660 109326 584344 112474 2308 321758 2139254 6630349

2006
8780698 4278374 4502324 638547 36555 601992 3900332 838561 51143 356218 100407 582 206819 1552566 5452898

2005
4,487,206 1,117,206 3,370,000 277,398 38,066 7 315,471 3,054,529 708,377 26,318 180,992 540,193

Non mark-up / interest income

Fee, commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of securities - net Unrealised gain on revaluation of investments classified as held for trading - net Other income Total non-markup / interest income

177,648 1,633,528 4,688,057

Non mark-up / interest expenses

Administrative expenses Other provisions / write-offs Other charges Total non-markup / interest expenses Extra ordinary / unusual items 5,904,169 459 10,987 5,915,615 461,382 461,382 17,363 50,000 107,794 75,157 386,225 2,144,810 2,531,035 0.95 4,789,536 12,051 4,801,587 2,299,785 2,299,785 98,535 233950 245,812 381,227 2,681,012 1,799,979 4,480,991 7 3277353 6141 3283494 3346855 3346855 983875 113006 1096881 2249974 1617597 3867571 11.23 2591985 1832 2593817 2859081 2859081 828774 188247 196558 837085 2021996 1538432 3560428 10.09 1,845,179 138 1,845,317 2,842,740 2,842,740 876,089 43,611 919,700 1,923,040 1,923,040 12.76

Profit before taxation

Taxation current year prior years deferred

Profit after taxation

Unappropriated profit brought forward Profit available for appropriation Basic / diluted earnings per share - Rupees

Data Collected from Annual Report

61

RATIO ANALYSIS
Why we need ratio analysis ansewer of this quastion is simple as doctor check the patient to know correct condition of the patient in simillar fassion a financial analysit need ration anlaysis to know the correct

financial condition of an organization. Ratio can be obtaine by dividing one data by othre.

Profitability Ratio
Net Profit After Tax Ratio = Earning after tax /Interest earned

Formula
EAT/IE

2005
2842740 1,923,040

2006
2859081 2021996 141.39

2007
3346855 2249974 148.7

2008
2299785 2,681,012 85.78

2009
461382 386,225 119.4

147.82

160 140 120 100 80 60 40 20 0 2005 2006 2007 2008 2009

Net Profit After Tax Ratio Graph

62

Interpretation :
These ratios use margin analysis and show the return on sales and capital employed. Net profit after tax measure profit remaining after deducting all expenses including tax. When we compare ratio of 2005 and 2004 it vary because Interest earn increase by 5.14 % as a result ratio decrease in 2005. Earning after tax by 31 % decrease in 2007 which result net profit after tax decrease.

Gross Spread Ratio = Net Mark-up Income / Gross Mark-up Income

Formula
NMI/GMI

2005
3,370,000 4,487,206

2006
4502324 8780698 51.27

2007
5619608 12596921 44.61

2008
6,457,617 15143241 42.64

2009
7,742,594 18393313 42.09

75.1

80 70 60 50 40 30 20 10 0 2005 2006 2007 2008 2009

GS. Ratio Graph

63

Interpretation :
Gross Spread ratio measure profit after deducting cost of goods sold. We analyzed the data of 2004 and 2005 come to know that net mark-up income 33 % increase in 2005 but more than 80 % increase of gross mark-up income in 2005 which decreases the gross spread ratio in 2005 so we can say that profit after deduction cost of goods sold decrease in 2005. Gross mark-up income increase by 43% in 2005 result is gross spread ratio decrease in 2005 while remaining two years having same trend.

Return on Equity Ratio (ROE) =Earning After Tax /Total Share Holder Equity

Formula
EAT/TSE

2005
1923040 5573149

2006
2021996 7595145 26.62

2007
2249974 9619066 23.39

2008
2681012 12099645 22.15

2009
386225 12034895 3.2

34.5

35 30 25 20 15 10 5 0 2005 2006 2007 2008 2009

Graph of ROE

64

Interpretation:
ROE measure the return on owners total investment into the business. Data showed ROE decrease in 2005 contrast to 2004 due to increase in Total Share holder equity. In 2008 showed out standing decrease of ROE because of negative growth in earning after tax.

Return on Assets Ratio (ROA) = Earning After Tax / Total Assets

Formula
EAT/TA

2005
1923040 107167540

2006
2021996 145099905 1.39

2007
2249974 166033588 1.35

2008
2681012 182,171,885 1.47

2009
386225 206,191,138 0.187

1.79

Interpretation:
ROA measure the return of total investment of business. It should be maximum as owners have wish. Growth trend present in EAT by 2004 to 2008. But Total assets also increases which became the factor to decrease ROA value of total assets increase 35 % in 2005 contrast to 2004 while next two years dont have great variation in 2008 ROA ratio decrease because of 13 % increase of Total assets as compare to 2007.

65

1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2005 2006 2007 2008 2009

Graph of ROA

Loan Deposit Ratio:

Formula
Loans/Deposits

2005
69838392 83,318,795

2006
85976895 118794690 72.37

2007
99179372 131839283 75.22

2008
100780162 143036707 70.45

2009
128818242 167676572 76.82

83.82

Interpretation:
The amount of a banks loans divided by the amount of its deposits at any given time. The higher the ratio the more the bank is relying on borrowed finds which are generally more costly than types of deposits. Increase of 42 % deposits in 2005 contrast to 2004 is the factor to decline loan deposit ratio of 2005. Loans increase in 2008 as compare to 2007 which result the loan deposit ratio increases as compare to previous year.

66

85 80 75 70 65 60 2005 2006 2007 2008 2009

Loan Deposit Ratio Graph

67

Activity Ratio
Total Assets Turn over = Net Sale / Total Assets
Formula
N.S/T.A

2005
4,487,206 107167540

2006
8780698 145099905 6.05

2007
12596921 166033588 7.58

2008
15143241 182171885 8.31

2009
18393313 206191138 8.92

4.18

Interpretation:
These ratios (Activity ratio) also known as efficiency or turnover ratios, measure how effectively the organization is using its assets. Total asset turnover shows that by investment of Rupee One in average total assets, of the entity how much sale is generated. There is increase trend in total assets turn over ratio from 2004 to 2008 due to growth in mark-up/ return / interest earn.

9 8 7 6 5 4 3 2 1 0 2005 2006 2007 2008 2009

Assets turn over ratio graph

68

Fixed Assets Turn over = Net Sale / Fixed Assets

Formula
N.S/F.A

2005
4,487,206 2,595,023 1.7

2006
8780698 3192862 2.75

2007
12596921 3810331 3.30

2008
15143241 5,128,428 2.95

2009
18393313 8,266,458 2.22

Interpretation:
Fixed assets turnover shows that by investment of fixed assets how much (revenue) sale is generated in other way we can say that how effectively used fixed assets. Data analysis showed that growth of net sale (revenue) is taking place from 2004 to 2006 and as result fixed assets turnover ratio are increases. Ratio decline in 2007 and 2008 due to fixed assets increase even net sale increases (increase in fixed assets is more than N.S.)

3.5 3 2.5 2 1.5 1 0.5 0 2005 2006 2007 2008 2009

Fixed Assets Turnover Ratio Graph

69

Market Ratio
Earning per share = Earning after Tax / Total Outstanding Share

Formula
EAT/TOS

2005
1,923,040 1,255,848 1.53

2006
2021996 1,507,018 1.34

2007
2249974 2004333 1.12

2008
2,681,012 3,006,499 0.89

2009
386,225 4058774 0.09

Interpretation:
Market ratio showed the position of an organization in the market with respect to earning. Ratio increase showed that profit of the company is increasing. When we analyze the data come to know that EPS is decreasing from 2004 to 2008. The reason behind is increase of numbers out standing share even earning after taxis also increase. Total outstanding share increase more than 200 % in 2008 as compare to 2004 therefore negative growth trend is found in the five years data.

1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2005 2006 2007
Graph of EPS

2008

2009

70

Book Value per Share = Total Share Holder Equity / Total Outstanding Share

Formula
TSE/TOS

2005
5,573,149 1,255,848 4.4

2006
7,595,145 1,507,018 5.03

2007
9,619,066 2004333 4.79

2008
12,099,645 3,006,499 4.02

2009
12,034,895 4058774 2.96

Interpretation:
Book value per share somewhat similar to earning per share but it relates to share holder equity. Book value per share increase in 2005 as compare to 2004 because of 36% increase of Total share holder equity even 20 % increase happened of total outstanding share but it is less than TSE. Decline observed in book value per share from 2006 to 2008 due to increase of total outstanding share about 35 to 45 % from 2006 to 2008.

6 5 4 3 2 1 0 2005 2006 2007

Graph of BV

2008

2009

Revaluation per Share = Surplus on Revaluation / Total Outstanding Share

71

Formula
SOR/TOS

2005
442,943 1,255,848 35.27

2006
1,218,338 1,507,018 80.84

2007
1,434,164 2004333 71.55

2008
166,342 3,006,499 5.53

2009
936,468 4058774 23.07

Interpretation:
Revaluation per Share fluctuates from 2004 to 2008 because of increase / decrease in the total outstanding shares. Unusual change of revaluation per share in 2007 due to 88 % negative growth in surplus on revaluation and 49 % growth in total outstanding share. In 2008 ratio 17 % growth as compared to previous years.

90 80 70 60 50 40 30 20 10 0 2005 2006 2007

RVPS Graph

2008

2009

72

Leverage Ratio
Debt-To-Equity Ratio = Total Debt / Total Equity
Formula
T.D/T.E

2005
13,781,555 5,573,149 2.47

2006
10,562,338 7,595,145 1.39

2007
14,964,087 9,619,066 1.55

2008
17,553,525 12,099,645 1.45

2009
15,190,148 12,034,895 1.26

Interpretation:
Any ratio used to calculate the financial leverage of a company to get an idea of the company's methods of financing or to measure its ability to meet financial obligations. There are several different ratios, but the main factors looked at include debt, equity, assets and interest expenses. Debit to equity ratio shows how much portion of long term funds was financed through long term debt, maximum ratio 60:40 Debts to equity. When we analyze the data come to know that debt-to-equity ratio drop in 2005 as compare to previous year. Reason behind is negative growth 23 % of Debt taking place and growth factor of equity is also included. Next two year has same condition but in 2008 drop happened because of debt decrease.
2.5 2 1.5 1 0.5 0 2005 2006 2007 2008 2009

Graph of Debt to Equity Ratio

73

Debt to Assets Ratio = Total Debt / Total Assets

Formula
T.D/T.A

2005
13,781,555 107167540 12.85

2006
10562338 145099905 7.27

2007
14964087 166033588 9.01

2008
17,553,525 182171885 9.63

2009
15,190,148 206191138 7.36

Interpretation:
Debt to total assets or debt ratio serves a similar purpose to the debt to equity ratio. It highlights the relative importance of debt financing to the firm by showing the percentage of the organizations assets that is supported by debt financing. Ratio decrease in 2005 contrast to 2004 because of debt decrease and assets increase. Next two year has same ratio and in 2008 ratio again drop due to Debt decrease and assets increase.

14 12 10 8 6 4 2 0 2005 2006 2007 2008 2009

Graph of Debt to Assets Ratio

74

Interest Coverage Ratio

Interest Coverage Ratio = Earning Before Interest Tax / Interest Expense

Formula EBIT/IE

2005 4,688,057 1,845,317 2.54

2006 5452898 2593817 2.1

2007 6630349 3283494 2.01

2008 7,101,372 4,801,587 1.47

2009 6,376,997 5,915,615 1.077

Interpretation:
A ratio used to determine how easily a company can pay interest on outstanding debt. The interest coverage ratio is calculated by dividing a company's earnings before interest and taxes (EBIT) of one period by the company's interest expenses of the same period: Ratio show decrease from 2004 to 2008 which reflect earning before interest tax growth is slow down and interest expense increasing more that is why interest coverage ratio decreases.

3 2.5 2 1.5 1 0.5 0 2005 2006 2007 2008 2009

Graph of Interest Coverage Ratio

75

Assets

HORIZONTAL ANALYSIS OF FIVE YEAR BALACE SHEET 2005 2006 2007 2008 2009
100% 100% 100% 100% 100% 100% 100% 100% 100% 134.2817 114.48564 437.54608 149.12676 123.10835 123.03791 100% 175.24063 135.39539 169.7986709 151.2614434 361.0120959 166.0517197 142.0126798 146.8322631 100% 244.5090149 154.9289906 152.4165 72.13545 621.2965 228.7293 144.3048 197.6255 100% 354.9546 169.9879 182.9269 81.5779 192.6909 206.9577 184.4519 318.5505 100% 574.8802 192.4007

Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating fixed assets Deferred tax assets Other assets Total Assets

Liabilities
Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance lease Deferred tax liabilities Other liabilities Total Liabilities 100% 100% 100% 100% 100% 100% 100% 100% 100% 107.21926 76.641119 142.5785 299.97 10.3044 44.210865 388.2095 134.73502 146.49847 149.8726665 108.5805412 158.2347452 299.85 100% 57.38962619 494.0759018 153.2161537 183.7277422 214.0874 127.3697 171.674 299.73 100% 0.003675 611.1235 167.9718 203.8863 210.6465 110.2209 201.247 299.61 100% 1.012252 903.294 191.0203 215.6111

Presented By
Share Capital Reserve Unappropriated Profit Surplus on revaluation of assets -net of tax total liabilities+total share holder equity 100% 100% 100% 100% 100% 120.00003 103.54919 100% 136.28103 275.05526 159.5999675 134.6849339 100% 172.5966056 323.7807122 239.3999 160.9417 100% 217.1061 37.55382 323.1899 177.5911 100% 215.9443 211.4195

76

COMMENTS:
Now we will discuss the assets side of the bank. The liquidity position is fundamentally important for the bank, as it must have all the time sufficient funds to meet the demands for the money that may be made on it. It is the protection against the risk that losses may develop if banks are forced to sell or liquidate creditworthy assets in an adverse market. The current liquidity position of the bank has improved as indicated by the percentages shown. The property plant and equipment is the kind of asset, which is required by the service business only to increase its network therefore the ratio of the banks plant and equipments as compared with the other important particulars of the assets is high. But here one thing should be mentioned that it is the policy of the bank not to start the business on the rented premises. The bank has mostly started business on its own premises. The other assets of the bank are also showing a good amount that means that bank is in position to earn money from every available source.

Total assets of Askari Bank growing from 2005 to 2008 as we compared with 2004. Technically we can say that Cash and balances with treasury banks increase from 2005 to 2008. A balance with others banks is increasing & landing to the financial institutions is also growing outstandingly so it is another reason to increase the assets and become major contributors in the assets.

Investment also increases in the last five years large input

by the

investment in 2007 & 2008. Advances in 2005 increases as compared to 2004 and 19% increase in 06 found contrast to 05 in 07 just 2% & in 08 about 40% increase compared to previous year.

77

Total assets increase trend observed from 04 to 08. Assets 14% increase in 06 & 9% in 07 compared to previous years and 13 % in 08 as compared to 07.

Liabilities & Share Holder Equity:

New if we analyze the liability side of the bank we see that the banks deposits are going on increasing since 2004 which is a very healthy sign for the bank as the banks basic business is to deal in money. The increase in deposits shows that the people have interest in the bank and deposit their fund in the bank without any hesitation. However it has not been

mentioned here that how many of the deposit are current and how many of them have fixed nature but we can say that it is a very important source of the bank to earn profit. As the banks usually earn through interest or mark ups imposed on the deposits they keep with themselves.

Liabilities 191% increase in 08 as compared to 04 growing trend is found from 04 to 08 & 143% increase of liabilities in 05 contrasts to 04. Bills payable & borrowing increase 107%, 76% respectively in 05 compared to 04, Deposits and others accounts increase significantly 142% in 05 compared to 04, Subordinated loans & liabilities against assets also increase. 388% increases of others liabilities are found in 05 contrasts to 04 that is hwy liabilities side of the bank increase show in 05. And 19% increase noticed of liabilities in 06 compare to 05, due to bills payable, borrowing, deposits and others liabilities increase. In the year 2006 liabilities increase 14% as compared to year 2005 and 9 % increased in year 2007 compared to 2008 similarly in 2008 it increased 13 % contrast to 07. The increase in the total liabilities because of increase in the deposits

78

and borrowing from various sources so in the year 2006 13% borrowing increased compared to the 05 and 9% of borrowing increased in 07 compared to 06 similarly in the year 2008 borrowing 13 % increased as compared to last year hence total liabilities showing increasing trend. As compare to 2004: In year 05 share capital is increased by 120% as compared to 04 reserves are also increase by 103 % compared to 04. In year 06 share capital increased by 159 % and 143 % reserve contrast to 04.Similarly 239 % & 323 % increased found in 07 and 08 respectively compared to 04. Reserves 160 % & 177 % grow in 07 & 08 respectively compared to 04.

79

HORIZONTAL ANALYSIS FIVE YEAR OF PROFIT AND LOSS ACCOUNT

2005 2006 2007 2008

Mark-up / return / interest earned
Mark-up / return / interest expensed Net mark-up / interest income Provision against non-performing loans and advances Provision for impairment in the value of investments Bad debts written off directly 100% 100% 100% 100% 100% 100% 100% 100% 195.683 382.953 133.6001 230.1916 96.03058 100% 190.8232 127.6901 280.7297 624.5324 166.7539 406.6853 0.987758 100% 357.7289 147.0307 337.4759 777.4416 191.6207 1413.219 3.943151 100% 1243.138 83.0202

2009
409.9057 953.3353 229.7506 1378.805 1.334524 100% 1290.958 120.1494

Net mark-up / interest income after provisions

Non mark-up / interest income

Fee, commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of securities - net Unrealised gain on revaluation of investments classified as held for trading - net Other income

100% 100% 100% 100% 100% 100% 118.3778 143.0961 151.4544 177.5303 100% 194.3271 415.4039 520.8564 659.7044 100% 196.8142 322.8563 362.3149 482.6246 100% 18.58725 20.82108 437.1125 6.801828 100% 100% 100% 100% 100% 116.4207 95.04373 116.3147 100% 181.1211 130.9591 141.4306 100% 189.5935 279.4869 151.4779 100% 193.1663 165.7149 136.0264

Total non-markup / interest income Non mark-up / interest expenses

Administrative expenses Other provisions / write-offs Other charges Total non-markup / interest expenses Extra ordinary / unusual items Profit before taxation Taxation current year prior years deferred

Profit after taxation

Unappropriated profit brought forward Profit available for appropriation

100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

140.4734 100% 1327.536 140.5621 100.5748 100% 100.5748 94.59929 100% 450.7074 91.01718 105.1458 100 185.1458 79.07524

177.6171 100% 4450 177.9366 117.7334 100% 117.7334 112.3031 100% 259.1227 119.2651 117.0009 100 201.1176 88.0094

259.5703 100% 8732.609 260.2039 80.90029 100% 80.90029 11.24714 100% 563.6468 41.45123 139.4153 100 233.016 51.80251

319.9781 100% 7961.594 320.5745 16.23019 100% 16.23019 1.981876 100% 247.1716 8.171904 20.08409 100 131.6163 7.445141

Basic / diluted earnings per share

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COMMENTS:
The most important component of any profit and loss account of a banking concern is its mark up expenses it has to pay for servicing the depositors. Now we will analyze profit and loss account. Profit 185 % increase observed in 05 as compared to 04 this is due to: Mark-up / Interest earned On loans and advances to: I) Customer II) Financial Institution ON investments, on deposits with financial institution, on securities purchased under released agreement. Mark-up/Interest earned increase 195 % in 05 compared to 04. Non-mark-up / Interest income 95 % increased

as compared to 04 profits before tax is also increase 100 %.

In year 2006 profit increase 88% compared to 04 this is because of:

Mark-up / interest earned 280 % increase in 06 compared to 04 net mark-up interest income is also increase by 166 % in the same year. Fee,

Commission, and brokerage income 143% Dividend income 415 % income from dealing in foreign currencies 322 % other income 130 % show growth as compared to year 2004. In year 2007 profit 233 % increase as compared to 04 major contributors as follow: Mark-up / interest earned 337 % net mark up / Interest income 191 % , fee commission, brokerage income 155 % increased as compared to 04.Dealing in foreign currencies 362 % income earned and dividend income 520 % increased as compared to 04.profot before tax 80 % increased show.

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In year 2008 profit remain 131% compared to 04 but decrease found contrast to last three years it is because of: Interest expense 953 % in 08 as compared to 04, Provision against nonperforming loans and advances 1378 % as compared to 04.

Non mark-up/ interest expenses: Administrative expenses 320 % increased as compared to 04 as result profit after tax decreased and effect the earning per share from 79 to 7 Rs. per share decline observed. Country economic condition is also contributed in the decline of profit as well as banking sector facing term oil. Non Mark-up / Interest Income The non-mark-up / interest income, showed an increase of 11 percent, which was attributable mainly to income derived from dealing in foreign currencies that registered significant growth of 33 percent. The fee, commission and brokerage income also increased by 17 percent over last year. Gain on sale of investment declined considerably due to downturn of the bourses.

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VERTICAL ANALYSIS OF FIVE YEAR BALACE SHEET

Assets
Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating fixed assets Deferred tax assets Other assets Total Assets

2005
8.176791 4.523664 2.16935 16.08617 65.16749 2.421464

2006
8.1095332 3.8250528 7.0105091 17.717582 59.253585 2.2004577

2007 2008 2009

8.961578304 4.416577446 5.054971166 17.2410386 59.73452311 2.294915773 7.331568 1.919645 7.928854 21.64495 55.32147 2.815159 7.774163 1.918033 2.172622 17.30324 62.47516 4.009124

1.455072 100%

1.8832824 100%

2.296395594 100%

3.03836 100%

4.347655 100%

Liabilities
Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance lease Deferred tax liabilities Other liabilities Total Liabilities 1.145023 12.85982 77.7463 0.933118 0.013212 1.197173 0.491627 94.38627 0.9067408 7.2793555 81.870962 2.0673342 0.0010055 0.3909148 1.4096081 93.925921 0.443463283 1.567823132 93.34277472 0.258832 1.767449 91.62149 0.006299 2.308121 93.70906 1.107653591 9.012686638 79.40518818 1.805959888 1.442073 9.635694 78.51744 1.645314 1.253608 7.367023 81.32094 1.453069

Presented By
Share Capital Reserve Unappropriated Profit Surplus on revaluation of assets -net of tax total liabilities+total share holder equity 100% 100% 1.171855 4.028553 0 1.0386071 3.0810013 1.114816 1.207185259 3.502155239 1.084105344 0.863779442 100% 1.650364 3.814165 1.177355 0.09131 100% 1.968452 3.718463 0.149851 0.454175 100%

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COMMENTS:
An analysis of percentage financial statements where all balance sheet items are divided by total assets and all income statements items are divided by net sales or revenues. In addition to other financial ratios over time, it is often useful to express balance sheet items and income statement items as percentages. Common size Analysis, also called Vertical Analysis, or Component Percentage, or 100 percent Statements as each statement is reduced to the total of 100 and each individual item is stated as a percentage of the total of 100.

Cash and balances with treasury banks are 8.17 % and

balances

with

others banks are 4.5 % of the total assets. Investment is 16 % & major portion of assets in the form of advances which are 65 % on other hand operating fixed assets and other assets are 2.4 %, 1.45 % respectively. So we can say that current assets are in a large portion compare to fixed assets. In year 2005 cash and balances with treasury banks are remain same as previous year and balances with other banks are 3.8 %. Lending to the financial institution and investment increase in 05 compared to 04 is significant change. Year 2006 having same proportion of assets as in year 2005. Cash and balances with banks & balances with other banks remain same compared to previous year but lending to the financial institution decrease contrast to 07. Advances and others assets show increase as compared to previous year advances are 62 % and other asset are 4 % of the total assets.

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Liabilities:
Borrowings, deposits and others accounts make significant contributions in liabilities side year 2004 show that borrowing 12 % & deposits and other accounts are 77% of the total liabilities plus share holder equity. Borrowing acquired from Pakistan as well as out of Pakistan in the form of local currency and foreign currency, from State Bank of Pakistan borrowing in local currency. Deposits and others accounts generated funds Under categories of Fixed Deposits, Saving Deposit , Current accounts ,Special exporter Accounts and Margin Accounts etc. in year 2005 deposits 81% and others accounts stand to the total assets and share holder equity which is increase about 4% compared to last year . In 2006 79 % deposit and other counts of the total assets stand which is decline compared to last year but 2 % borrowing increase as compared to 05 and in year 2007 condition remain intact. In 2008 again increase founds in the form deposits and others accounts which stand 81 % of the total assets and other accounts.

Shareholders Funds
Shareholders funds increased to Rs. 12.97 billion at December 31, 2008 from Rs. 12.27 billion, registering an increase of 6 percent. During the year, Bank owned land was revalued and resulting surplus of Rs. 1.86 billion was recognized as part of equity. Also, revaluation deficit on Available for Sale investments was recognized as reduction from equity, due to adverse movement of bourses.

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VERTICAL ANALYSIS OF FIVE YEAR OF PROFIT AND LOSS ACCOUNTS

2005
Mark-up / interest earned+ non-markup / interest income Mark-up / return / interest expensed Net mark-up / interest income Provision against non-performing loans and advances Provision for impairment in the value of investments Bad debts written off directly Net mark-up / interest income after provisions Non mark-up / interest income Fee, commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of securities - net Unrealised gain on revaluation of investments classified as held for trading - net Other income 100% 18.25 55.05 4.53 0.621 0.0001 5.15 49.90 11.57 0.42 2.95 8.82

2006
100% 41.40 43.57 6.17 0.35 5.82 37.74 8.11 0.49 3.44 0.97

2007
100% 47.34 38.13 7.65 0.0025 7.65 30.47 6.87 0.741 3.96 0.76

2008
100% 44.06 32.76 19.89 0.007 19.89 12.86 5.443 0.695 3.32 11.98

2009
100% 50.47 36.69 18.126 0.0024 19.30 17.39 5.96 0.82 4.13 0.17

2.90 76.59

2.001 52.77

2.183 44.99

1.708 36.03

1.62 30.22

Non mark-up / interest expenses Administrative expenses Other provisions / write-offs Other charges Total non-markup / interest expenses Extra ordinary / unusual items Profit before taxation Taxation current year prior years deferred Profit after taxation Unappropriated profit brought forward Profit available for appropriation Basic / diluted earnings per share - Rupees

30.1 0.0022 30.14 46.44 46.44 14.31 0 0.712 15.025 31.41 31.41 0.00020

25.083 0.0177 25.101 27.66 27.6687 8.020 1.821 1.90 8.10 19.56 34.45 9.76

22.24 0.041 22.281 22.71 22.71 6.67 0 0.76 7.44 15.26 26.24 7.620

24.30 0.061 24.36 11.66 11.66 0.499 1.187 1.24 1.93 13.60 22.73 22.73

27.98 0.052 28.035 2.18 2.18 0.082 0.236 0.510 0.356 1.83 10.16 11.99 4.50

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COMMENTS:
Comparing figures from 2004 to 2008

PROFIT AVAILABLE FOR APPROPRIATION Profit for appropriation having decreasing trend from 04 to 08 therefore we have to discuss yearly figures. We have taken interest income plus non interest income as 100 %. In 2004 profits for appropriation is 31 % of the sum of interest and non interest income having reasons as follow: Mark-up / return / interest expense 18 % and net mark-up interest income 55 % stand for 05. Non mark-up interest income is better as compared to year 05 that is because of brokerage income and fee commission is 11.5 %, gain on sale of securities is stand at about 9 % of the sum of interest and non interest income which is healthy singe for profit.

In year 2005 profit available for appropriation is 34 % which show slight increase as compared to 04 having following reasons:

Income from dealing in foreign currencies is 3.44 % which is increase as compared to previous year more over total non mar-up / interest expenses 25 % stand which is decrease as compared to last year these reasons creating combining effect on profit available for appropriation. In 2006 profit available for appropriation 26 % which is decrease from last two year (31%, 34% in 04 and 05 respectively) having reasons as follows: Mark-up /return /interest expenses in 06 increased from last two year which is 47. 34 % (18 %, 41 % in 04 and 05 respectively) and net mark-up interest income decrease which is 38 % as compared to two last year. Provision against non performing loans & advances increase that is 7.65 % (4 %, 6 %

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in 04 and 06 respectively). Fee commission and brokerage income decreases in 06 as compared to last two year that is 6.87 % (11.57 %, 8.11% in 04and 05 respectively).

In year 2007 profit available for appropriation is 22 % showing decreasing trend because of following reasons: Net mark-up interest income decrease in 07 compared to last years which is 32 % (55 % 43 %, 38 in 04, 05 and 06 respectively) because of provision against non performing loans an advances increased about 20 % of the sum of interest an non interest incomes. Fee commission brokerage income decrease in 07 stands at 5 % (11%, 8 %, 6 %, in 04, 05 and 06 respectively). In year 2008 profit for appropriation stand at 12 % which is the part of decreasing trend from 05 to 08.

Operating Expenses
Administrative expenses have increased by 23 percent over last year. This rise is mainly due to 33 percent increase in number of branches/ subbranches from 150 to 200 and general rise in inflation. Cost to income ratio (CIR) registered negative trend, as on the other hand revenues remain under pressure due to rising on performing loans.

Return on Average Assets:

Return on average assets at the close of 2008 was 0.20 percent as against 1.54 percent last year (0.32 percent excluding one-off gain), registering a decrease of 134 bps (12 bps on comparable basis) due to decrease in profit for the year as against increase in total assets.

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Earnings per Share:

Earning per share (EPS) decreased from Rs 6.61 per share to Rs. 0.95 per share restated for bonus shares issued during 2008. The decrease is mainly due to high provisions and writes off. The last years EPS excluding One-off gain works out to be Rs. 1.39 per share, thus on a comparable basis, the decline In EPS is 31 percent

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ORGANIZATIONAL ANALYSIS
For organizational analysis we have choose three banks which will use for comparative analysis. The information of the banks is given bellow:

In (000) Bank NBP MCB BAFL AKBL Assets Liability Profitability Branches 23,000,998 21,867,566 1,794,720 461,382 1276 1040 195 200

817,758,326 715,299,108 443,615,904 385,179,850 348,990,764 331,946,025

206,191,138 193,219,775

NBP (National Bank of Pakistan) MCB (Muslim Commercial Bank) BAFL (Bank Alflah Limited) AKBL (Askari Bank Limited)

When we compare AKBL with NBP come to know that NBP having assets greater than AKBL similarly liability is also greater & profitability is more of NBP than AKBL. Reason: As NBP is oldest bank in Pakistan having vast branch network with 1276 branches. It means that NBP having more access to the customer as compared to AKBL. Field of activity is also greater with accessibility. While AKBL is just of 14 year old as compared to NBP which is 60 years old. There is difference of assets is (611567188) because of large banking

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network in the country. And profit ability difference is (22539616) because of with 1276 branches all over the Pakistan of NBP as compared to AKBL. MCB having assets 817,758,326 while AKBL 206,191,138 showing large difference between two banks in the country. Reason is that MCB providing diversityfied products to the customer along with 1040 branches in the country. Profitability is about 46 % greater of MCB than AKBL which reflect the customer share captured in the market. While on other hand AKBL stands with only 200 branches in the country.

When we compared BAFL with AKBL having almost same branch network but there is difference in the assets and profitability this is because of BAFL having strong background with good market share in term of customer and product line. Diversified customer products provide by the BAFL as compared to AKBL. But AKBL stand in a competitive environment having huge potential to capture more market share by enhancing products with new options for customers.

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FUTURE PROSPECTS OF THE ORGANIZATION

Askari commercial bank is the leading private sector bank in the banking network in Pakistan with many of them online branches in major cities of the country The operations performed by the bank are highly automated that result in assurance for the customers that their transactions are completed reliably, efficiently and securely. The bank has the largest ATM Network cross the country. The customers of AKBL withdraw access their funds any time at all the ATM Sites with ASKCASH Logo. The management of the bank believes in customer focused banking rather than the product oriented banking. The products and services designed by the bank are specifically tailored to the individual needs of its customers. The priority banking centres of the bank offer an unmatched where the customer receives highly privileged services in a highly elegant environment. It gives the chance of experiencing new standards in banking. Designed specially for those who appreciate only the finest things in life, Priority Banking offers the very highest levels of personalized banking to match customers unique status. AKBL management is quite prepared to adopt the latest advancements in technology resulting in revolution in the banking operations such as check clearing process, computer based teller equipment, automatic teller machines, and electronic funds transfers among the others. The organizations showing concern for the people, ethics, and environment enjoy good public reputation and are able to reap the benefits in the long run. AKBL management is quite sensitive to this issue.

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SHORT FALLS/ WEAKNESSES

In my opinion there are some points might be short falls of the bank which are given bellow:

Understanding and the effective management of the human resources is the most difficult challenge faced not only by the bank but by all the organizations. Even though the people have been sacrificed in the new organizational developments, it is becoming clear that the true lasting competitive advantage comes through human resources and how they are managed. AKBL seems to not focusing on this highly critical issue as the job satisfaction level of the employees working at AKBL, was quite low.

This famous and useful concept given by Adam Smith in 1776 seems to be missing in the bank. The employees are constantly rotated from one job to another job of totally different characteristic in the view of giving them the know-how of the working in all the departments. But I think this is not a very good tactics used by the management. Otherwise the situation might be like this Jack of all and master of none. There is a high degree of centralization in the bank. Almost all the decision-making is in the hands of the upper management. But centralization is effective up to a certain level otherwise it becomes inefficient and at times costly too. I personally observed that delay occurred in the operations of the employees only due to the fact that they had not got any instructions from the head office.

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CONCLUSION
In the Askari Bank I have spend six week for internship programme and try to understand the working of different departments. I come up with some areas to improve like customer facilitation, recruitment, rotation of staff between the branches. To capture more market share bank has to be introducing new facilitation plan for the customer satisfaction. There are some flaws in the recruitment policy and need to be hire staff with banking related qualification which will give the better out come. Over all bank performance is good as we look its age because it has to cover long distance to become first choice for customer in the banking sector. During policy formation must keep in mind that how customer will involve with the policy and what kind of benefits and problems have to be faced by the customer through this policy. New products & Services will have to be introduce in the bank by analyzing the customer needs and market demands which will build the image and prestigious among the customers. Bank has lot of potential to become a leader in the banking sector.

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REFERENCES
For the preparation of this report I have used sources are given bellow:

Annual reports of the Askari Commercial Bank Limited http://www.askaribank.com.pk/financialstatement.php http://www.bankalfalah.com/about/financial_performance.asp http://www.nbp.com.pk/Publications/index.aspx http://www.mcb.com.pk/ir/fin_data_rep.asp

Books Fundamentals Of Financial Management Twelfth Edition by: James C. Van Horne & John M. Wachowicz, JR Principles Of Corporate Finance Eighth Edition by: Richard A. Brealey, Stewart C. Myers and Franklin Allen.

Teacher consultation (Mr. Muhammad Azeem)

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