Fini 619 Allied Bank Internship Report

Come & Join Us at VUSTUDENTS.
net
For Assignment Solution, GDB, Online Quizzes, Helping Study material, Past Solved Papers, Solved MCQs, Current Papers, E-Books & more.
Go to http://www.vustudents.net and click Sing up to register.
VUSTUENTS.NET is a community formed to overcome the disadvantages of distant learning and virtual environment, where pupils dont have any formal contact with their mentors, This community provides its members with the solution to current as well as the past Assignments, Quizzes, GDBs, and Papers. This community also facilitates its members in resolving the issues regarding subject and university matters, by providing text e-books, notes, and helpful conversations in chat room as well as study groups. Only members are privileged with the right to access all the material, so if you are not a member yet, kindly SIGN UP to get access to the resources of VUSTUDENTS.NET Regards VUSTUDENTS.NET TEAM. Virtual University of Pakistan
Come and Join Us at www.vustudents.ning.com
INTERNSHIP REPORT
Allied Bank Limited (ABL)
ISLAMABAD, PAKISTAN
Submitted By
Syed Ahsan Ali Zaidi Mcxxxxxxxxx Session 2009 2011
Submission Date 12th Jan 2012 Virtual University Of Pakistan
1
All vu39 members especially my cute little sweet fellows who told me that report is nothing but a
sir dard
:D .
I did nothing as I did my efforts, & Special Thanks Goes To Mr. Lonely :p red alert The people who helped me out
Hibba, Sohnie, Seph, ayisha, sweety cuteey, fizza pervaiz
THANK YOU SO MUCH!
2
First of all, I want to express all my humble thanks to ALLAH who is very sensitive about each and every activity of all his men and without whose help, I am unable to accomplish any objective in my life. All respect to his Holy Prophet HAZART MUHAMMAD (Peace Be Upon Him) who brought the light of knowledge when the humanity was wandering in the desert of ignorance. Secondly, I am grateful to my prestigious institute that made his learning opportunity a part of our education, especially. Internship coordinator MR. Imran who not only guided me well but also helped me in finding such an excellent place for internship. I am also thankful to all other teachers as the knowledge imparted by them enables me to gain knowledge of the organization in best way. I would also thank to all the staff of Allied Bank, particularly Mr. Rana Riaz Ahmad who gives me an opportunity to work in the bank and gave me a chance to explore my knowledge. I submit my earnest thanks to my affectionate parents, who always remains at my back to support me, I can never give the return of their un tired struggle for me, but I can only prove myself as they expect from me. And I am also grateful to all other family members and all my friends for their moral boosting and spiritual support during my study and especially in this internship program. I went to pay gratitude to all persons, who had helped me in completing this support. Muhammad Chatta
3
MBA (Finance)
EXECUTIVE SUMMARY
This report is about my internship program with Allied Bank Limited. In this comprehensive report, I have discussed about every major aspect of the bank, which I observed and perceived during my internship program. In this report you will find the detail about the bank right from its incorporation to the current position. Along with it, the processes, policies and procedures of the bank are also discussed in detail.
During my internship program, I mainly worked in General Banking & Finance. All the departments have been discussed in detail and all the policies and procedures have been described thoroughly.
As the main purpose of internship is to learn by working in practical environment and to apply the knowledge acquired during the studies in a real world scenario in order to tackle the problems using the knowledge and skill learned during the academic process, In this report the detailed analysis of the organization has been done and all the financial, technical, managerial and strategic aspects have been evaluated to analyze the current position of the organization. Along with it, the background analysis, the prevailing competition analysis, the business process analysis, and the internal environment and external environment of the organization have been discussed and the recommendations for the improvement have been made wherever required.
In the end the learning and experiences section consists of all the policies, processes, practices and procedures which I have undergone through and learned during my internship program. This report also contains my perceptions about the employees satisfaction, motivation level and the working environment of the organization.
4
Index
Description
Page
OVERVIEW OF ORGANIZATION
BREIF HISTORY OF ORGANIZAITON
HIERACHY CHART OF THE ORGANIZATION
13
BUSINESS VOLUME
14
PRODUCT LINES
15
COMPETITORS
16
INTRODUCTION OF ALL THE DEPARTMENTS
17
COMMENTS ON THE ORGANIZATIONAL STRUCTURE
33
PLAN FOR THE INTERNSHIP
34
TRAINING PROGRAM
35
DETAIL DESCRIPTION OF TASKS ASSIGNED
36
RATIO ANALYSIS
38
Bank Ratios DFIs
1) Net Profit Margin 2) Gross Spread Ratio 3) Non Interest Income to Total Income Ratio 4) Spread Ratio 5) Return on Assets (ROA) 6) Du Pont Return on Assets Ratio 7) Return on Total Equity (ROE) 8) Debt Ratio 9) Debt / Equity Ratio 10) Times Interest Earned Ratio 11) Advances / Deposits Ratio 12) Operating Cash Flow Ratio 13) Dividend per Share
5
14) Earning per Share 15) Price/Earning Ratio
FUTURE PROSPECTUS
55
CONCLUSION
56
RECOMMENDATION FOR IMPROVEMENTS
57
REFRENCES & SOURCES USED
58
ANNEXES
6
OVERVIEW OF THE ORGANIZATION

A. The Brief History Organization
Allied Bank is the first Muslim bank, to have been established on the territory that became Pakistan.established in December 1942 as the Australasia Bank at Lahore with a paid-up share capital of Rs. 0.12 million under the Chairmanship of Khawaja Bashir Bux, the Bank had attracted deposits, equivalent to Rs. 0.431 Million in its first eighteen months of business. Total assets then amounted to Rs. 0.572 million. Today Allied Bank's paid up Capital & Reserves amount to Rs. 10.5 billion, deposit exceeded Rs. 143 billion and total assets equal Rs. 170 billion. The Allied Bank's story is one of dedication, commitment to professionalism, adaptation to changing environmental challenges resulting into all round growth and stability, envied and aspired by many.
The Pre Independence History (1942 to 1947)
In the early 1940s the Muslim community was beginning to realize the need for the active participation in the field of trade and industry. The Hindus had since the late 1880s established a commanding presence in these areas and industry, trade and commerce in the undivided Subcontinent was completely dominated by them. Banking, in particular, was an exclusive enclave of the Hindus and it was widely believed, and wrongly so, that Muslims were temperamentally unsuited for this profession. It was particularly galling for Khawaja Bashir Bux to hear the gibe that Muslims could not be successful bankers. He decided to respond to the challenge and took lead in establishing this first Muslim bank on the soil of Punjab that was to become
Australasia Bank (1947 to 1974)
Australasia Bank was the only fully functional Muslim Bank on Pakistan territory on August the 14th, 1947. It had been severely hit by the riots in East Punjab. The bank was identified with the Pakistan Movement. At the time of independence all the branches in India, (Amritsar, Batala,
7
Jalandhar, Ludhaina, Delhi and Angra (Agra)) were closed down. New Branches were opened in Karachi, Rawalpindi, Peshawar, Sialkot, Sargodha, Jhang, Gujranwala and Kasur. Later it network spread to Multan & Quetta. The Bank financed trade in cloth and food grains and thus played an important role in maintaining consumer supplies during riot affected early months of 1948. Despite the difficult conditions prevailing and the substantial set back in the Banks business in India, Australasia Bank made a profit of Rs 50,000 during 1947-48. By the end of 1970 it had 101 branches. Unfortunately it lost 51 branches in the separation of East Pakistan. The bank did well in despite losing lot of its assets. By the end of 1973 the bank had 186 branches in West Pakistan. Allied Bank (1991 to 2004)
As a result of privatization in September 1991, Allied Bank entered in a new phase of its history, as the worlds first bank to be owned and managed by its employees. In 1993 the First Allied Bank Modaraba (FABM) was floated. Allied Bank (2005 to date)
In May 2005 Ibrahim Leasing Limited was amalgamated by transfer to and vested in with and into Allied Bank Limited. ILL shareholders were issued ABL shares in lieu of the ILL shares held by them. Application for the listing of ABL shares in all the Stock Exchange Companies of Pakistan was made. ABL was formally listed and trading of the shares of the Bank commenced w.e.f. the following dates.
8
Vision
To become a dynamic and efficient bank providing integrated solutions in order to be the first choice bank for the customers
Mission
To provide value added services to our customers To provide high tech innovative solutions to meet customers requirements To create sustainable value through growth, efficiency and diversity for all stakeholders To provide a challenging work environment and reward dedicated team members according to their abilities and performance To play a proactive role in contributing towards the society
9
Board of Directors
Company Information
Board of Directors Mohammad Naeem Mukhtar Non-Executive Director Chairman Sheikh Mukhtar Ahmad Non-Executive Director Mohammad Waseem Mukhtar Non-Executive Director Abdul Aziz Khan Non-Executive Director Farrakh Qayyum Non-Executive Director Government Nominee Nazrat Bashir Non-Executive Director Government Nominee Tasneem M. Noorani Independent Director Mubashir A. Akhtar Independent Director Pervaiz Iqbal Butt Independent Director Sheikh Jalees Ahmed Executive Director Mohammad Aftab Manzoor Executive Director Chief Executive Officer
10
B. Organizational Hierarchy Chart

The management hierarchy represents the different positions and designations in the hierarchy of the ABL. However, this is not the reporting hierarchy but merely represents the positions and grades on the basis of seniority and grades.
11
C. Business Volume
The business volume of bank comprises on deposits and advances of any bank so ABL Business Volume Figures are as under for the year 2008 to 2010: During 2010, the Group successfully embarked upon its strategy of increasing the proportion of low cost deposits. Deposits grew by 13% to reach Rs. 371 billion as at December 31, 2010 over the previous year with share of CASA improving on average volume basis from 53% during 2009 to 55% in 2010, thereby managing. The cost of funds in contributing to improved profitability.
12
D. Product Lines
ABL facilitates its customers by providing different types of services of deposits, advances, foreign exchange and other general services. Here is the list of services provided by bank:
Current Account Allied Business Account PLS Saving Deposits Allied Basic Banking Account Foreign Currency Deposits PLS Term Deposit Account Allied Munafa Account Behtar Munafa account (BMA) Behtar Munafa Term Deposit (BMTD) Mahana Aamdani Package Allied Bachat Scheme (ABS) Allied e-Savers Accounts (ESA) Home remittances Remittance Hajj services Utility bills Lockers Agriculture finance Import Export business/Trade finance Allied bank rupee traveller cheques Seasonal finance Running finance Cash finance Demand finance Corporate leasing All time banking On line banking Internet banking Visa credit card ATM Net Work Helpline
13
E. Competitors
The following are the competitors of Allied Bank Limited which stands in cause of competing with its diametrically opposed products National Bank Of Pakistan Bank Al Falah United Bank Limited Muslim commercial bank Citibank Habib Bank Limited Faysal Bank Prime Commercial Bank Abn Amro Bank Saudi Pak Commercial Bank Indus Bank Soneri Bank The Bank Of Khyber Metropolian Bank Standard Chartered Bank Askari Bank
14
F. Brief Introduction Of All Departments
1. General Banking Department
The general banking department performs functions of account opening, deposits of cheque, demand draft, telegraphic transfer, clearing, collection of utility bills etc. it consists of following departments to perform its functions. Cash department Accounts department Remittance department Clearing department
2. Cash Department
It provides its users with following facilities: a) Accept deposits:
When a customer wants to deposit any amount in its account it goes to the relevant officer who accept deposit and give a receipt to the customer. The cashier in cashier long book enters the amount deposited by the customer on its credit side. b) Collection of utility bills:
The branch also provides the facility of utility bills collection of electricity, gas and telephones. The branches collect utility Bills during banking hours. Bills can be paid through cash or cheques. 3. Accounts department
One of the important functions of bank is to accept deposits from general public. Following are the types of accounts provided by the bank: 1. Current accounts. 2. Pls saving accounts.
15
3. Pls term deposit. 4. Special notice deposit.
The classification is based on the duration and purpose for which the deposits are kept at the bank. Following are the features of these accounts.
4. Remittance Department
One of the major functions of bank is remittance. This department provides this facility through following instruments. 1. Demand draft 2. Telegraphic Transfer 3. Payment order 4. Deposit at call
5. Clearing Department:
When the branch receives cheques of other banks than one process of getting payment against these cheques is that you sent a person who will take money on your behalf but in these cities where State bank exist this function is performed by clearing. In State bank of Pakistan there is a clearinghouse. It involves two clearing procedures,
Outward Clearing Register: Inward Clearing Register:
16
G. Comments on Organizational Structure

The Allied Bank Limited departments structure is well managed and capable of enhanced services. They provide their shareholders the very best performance. The ABL is capable of while building further limits of the organization potential. The Finance department plays vital role in arranging its superior contagious financial statements in conformity with generally accepted accounting principles. All the departments are required to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Most of them based estimates on historical experience, available information and various other assumptions they believe to be sensible under the circumstances and they evaluate estimates; however, actual results may differ from these estimates under different assumptions or conditions. The accounting policies they believe require managements most difficult tasks to accomplish and complex judgments are most critical to their reporting of results of operations and financial positions.
17
1. Plan of Internship Program:
The ABL Bank Limited deliberated as an immense part to get know-how in field of Finance specialization to polish or to groom my skills. The whole banking staff is so well managed and forthcoming for the internees. I observed that the workforce contains all those qualities to be a financial independent, successful, self-assure, and respected from fellow staff.
2. Internship starting & Ending Dates:
The Internship is considered to be a compulsory practical training. My internship program arranged from 1st Nov, 2011 to 30th Dec, 2011.
3. Name of Departments & time duration where I got training:
No
Departments
Duration
Accounts
6 Weeks
Remittance
1 Week
Cash
1 Day
Clearing
4 Day
18
I got training in the General Banking & Finance department compliance to there tremendous work under T24 accounting software at 0722-kashmir road branch. The employees there had bright chances to get promotion as they provide many attractive opportunities to employees and internees. Focusing the dimension of Finance, therefore this reputable banking environment suited me up to the best of my satisfaction. In the period of one month, I was assigned the task to work in the General Banking department of ABL Bank Limited. I was assigned the task to maintain the accounts under single entry and double entry system and also be familiar with account opening, deposits of cheque, demand draft, telegraphic transfer, clearing. During my training program I get familiar with all finance department activities. It is beneficial for me to understand the account controlling and cash flow procedures. They guide me how to deal customer when he deposit money in account, the deposit slip is needed to put account number and further details to get authorized by the MTOs to accomplish the prerequisite. My duty was under the Accounts department for six weeks, under Remittance department to maintain pay-orders; demand drafts (DD) for one week also to be familiar with term Pak account, one day at Cash department and the remaining four days at Clearing department.
19
In addition, the amount both in words and figures should be mentioned with signature authority. The sorting of cheques maintaining debit and credit vouchers. They told me how to respect our customers values, beliefs, culture and history. We value the equality of gender and diversity of experience and education that our employees bring with them because we create an environment where each individual is enabled to succeed. I learnt about mutilated, crossed cheques, inward and outward clearing accomplishing the whole task related to finance department general banking system. I also noticed the types of accounts and closing of an account for which the form of undertaking is filled by the customer to close his account acquiring the further intimation to acknowledge the customer for closing of his account having approval to close account on a certain cause.
THE TASKS ASSIGNED BY THE FINANCE DEPARTMENT
They assigned me informative task according to my qualification to manage the accounting data in the finance department. I was assigned to sort all kinds of expense vouchers, cheques of the finance department and recording of the transaction in journal and tax deduction charges prior to the recent bank circular.
1. Cash Department:
In cash department I learnt how to make payments on cheques, accepts deposits and collection of utility bills. The parties to cheque must be considered while
20
acknowledging the person who is ordering for payment, the bank who has to pay the amount and finally the payee who is receiving the payment. The cheque is the most important, convenient and well established medium of modern banking used for withdrawal of funds and settlement of debts by an account holder i.e a drawer. While taking cheques from customers the verification of signatures must be kept in mind be checked according to the signature card. I observed that when cheque is posted it is supervised to know the effect of posting and if the cheque is ok it is forwarded to the cashier for payment. Further more, when a customer wants to deposit any amount in its account it goes to the relevant officer who accept deposit and give a receipt to the customer. I learn when a customer wants to deposit any amount in its account it goes to the relevant officer who accept deposit and give a receipt to the customer. The cashier in cashier long book enters the amount deposited by the customer on its credit side. Another facility provided to customers the utility bills collection of electricity, gas and telephones. The bank collects utility Bills during banking hours. Bills can be paid through cash or cheques.
2. Accounts Department:
Under accounts department they assigned me the task to accept deposits from general public which is the main task of accounts department. I identify with continued addition of new accounts is an important functional activity of a bank because it not only builds up its deposits base, but also increases its profitability, it is very necessary for its survival. All deposits are opened with a fixed minimum cash deposit. It is checked carefully that account opening form is complete in all respects and signed by the account holder and introducer. I checked carefully whether the account opening form is complete in all respects and signed by the account holder introducer. I recognized to get an additional precaution attested copy of national identity of
21
account holder and introducer will be obtained. In addition, the opening account relevant information is recorded in account opening register. I observed that the continued addition of new accounts is an important functional activity of a bank because it not only builds up its deposits base, but also increases its profitability, it is very necessary for its survival. All deposits are opened with a fixed minimum cash deposit.
3. Remittance Department:
In remittance department they assigned me the task to handle the instruments like Demand draft, Telegraphic Transfer, Payment order, Deposit at call etc. The Draft is an order cheque drawn by the one branch of the same bank to pay sum of money to drawer on demand. It is payable on demand. During my stay in the remittance department I resolute the bank demand draft must have the Payees name, Date of issue, Amount in words and figures, Drawee, Branchs name code, Address and Serial number. I filled out and made entry by recording in DD- demand draft registers. I observed when a Demand draft is received and paid than an entry is made in Demand draft payable register. Further more, I come to know about deposit at call are kept as security when a tender is submitted by a person to a company. If the tender is approved than these are payable to that company but if person fails to get approval of tender than these are cancelled and will be refunded by the person. There is no limit of the period of deposit at call.
4. Clearing Department:
22
In clearing department the branch receives cheques of other banks than one process of getting payment against these cheques is that you sent a person who will take money on your behalf but in these cities where State bank exist this function is performed by clearing. I recorded clearing payments in outward registers considering the receiver, drawer, drawee, cheque number, account number and the amount. In the same way when payment is received from the other bank than I entered in inward clearing register. The representatives of local banks meet there at 9:00oclock and exchange there cheques and other instruments with each other. Than they come to their bank and check these instruments that these are ok or not. The representative again meet at 12:00 oclock in the clearance house and the cheque which are ok get payment against these and the cheque that cannot be cashed these are again exchanged.
23
1. Net Profit Margin Ratio
i.
Ratio Formula: Net Profit after taxation x 100 Net Sales
ii.
Calculation:
Year 2010
Year 2009
Year 2008
8225332 / 44992696 = 18.28%
7122167 / 41121503 = 17.32%
4156686 / 30570540 = 13.60%
iii.
Graphical Representation:
24
iv.
Interpretation of Ratio: This ratio indicates the percentage of net profit margin the bank in year 2010 shows us the profit margin the efficiency of the bank is in safety as compared to year 2008 and 2009 i. The risk extending as actual profit of the bank getting low predicts the decline of sales or low margin of safety but the overall the profit is growing up from 13.60% to 18.28%. ii. As the turnover is increasing the profit of the ABL same as declining from 2010 to 2008 iii. The bank performance as calculated in year 2010 is better than 2008 because of its turnover.
2. Gross Spread Ratio
i.
Ratio Formula: Net Markup Income x 100 Gross Markup Income
ii.
Calculation:
Year 2010
Year 2009
Year 2008
22565044 / 24153445 = 93.42%
18699809 / 20160239 =92.76%
13297816 / 15038730 =88.42%
iii.
25
iv.
Interpretation of Ratio: This ratio indicates the percentage of net mark-up / interest income over gross mark-up income the bank in year 2010 shows us the net mark-up of the bank is in standard position. i. The net mark-up income depicts that in year 2010 the higher percentage of mark-up established as the 93.42% that of 88.42 in the year 2008 financial analysis from unconsolidated statement. ii. The net mark-up income is maximized at 2010 while minimized in 2009 and 2008. iii. The bank gross spread ratio as calculated in year 2010 is better than 2009 because of its gross income.
3. Non Interest Income to Total Income Ratio
i.
Ratio Formula: Non Interest Income x 100 Total Income
26
ii.
Calculation:
Year 2010
24,153,445 /42,635,104
Year 2009
20,160,239 /34,362,444
Year 2008
15,038,730 / 25,180,545
=
56.65%
=
58.67%
=
59.72%
iii.
iv.
Interpretation of Ratio: This ratio indicates the percentage of non interest income to total income the bank in year 2008 shows us the net mark-up of the bank is in standard position. i. The net mark-up income depicts that in year 2010 the higher percentage of mark-up established as the 59.72% that of 56.65% in the year 2010 financial analysis from unconsolidated statement. ii. The income is maximized at 2008 while minimized in 2009 and 2010.
27
iii.
The non interest to total income ratio as calculated in year 2008 is better than 2010 because of its total income.
4. Return on Assets (ROA)
i.
Ratio Formula: EBIT x 100 Total Assets
ii.
Calculation:
Year 2010
Year 2009
Year 2008
24,153,445/449,931,526 = 2.74%
20,160,239 /418,374,331 =2.52%
15,038,730 / 366,695,669 = 1.67%
iii.
Working:
EBIT = Profit before tax + interest expense In year 2010,
EBIT = 12,343,106 + 11,810,339 = 24,153,445 In year 2009,
EBIT =10,536,120 + 9,624,119 = 20,160,239 In year 2008,
EBIT = 6,120,940 + 8,917,790 = 15,038,730
iv.
28
v.
Interpretation of Ratio: This ratio indicates the percentage of non ROA of bank in year 2010 shows. i. The return on assets depicts that in year 2010 the higher percentage of assets established as the 2.74% that of 1.67% in the year 2008 financial analysis from un-consolidated statement. ii. The income is maximized at 2010 while minimized in 2008 and 2009. iii. The Return on assets ratio as calculated in year 2008 is better than 2010 because of its total assets. .
5. Du Pont Return on Assets Ratio
29
i.
Ratio Formula: Net Markup / Interest Income x 100 Total Assets
ii.
Calculation:
Year 2010
Year 2009
Year 2008
/ 449,931,526 = 5.02%
22,565,044
18,699,809
/ 418,374,331 =4.47%
13,297,816 /
366,695,669 = 3.63%
iii.
iv.
Interpretation of Ratio: This ratio indicates the percentage of non ROA of bank in year 2010 shows. i. The Du Pont on assets depicts that in year 2010 the higher percentage of assets established as the 5.02% that of 3.63% in the year 2008 financial analysis from un-consolidated statement.
30
ii.
The Du Pont on assets is maximized at 2010 while minimized in 2008 and 2009.
iii.
The Du Pont on assets ratio as calculated in year 2008 is better than 2010 because of its total assets.
6. Return on Total Equity (ROE)
i.
Ratio Formula: Net Markup / Interest Income x 100 Total Equity
ii.
Calculation:
Year 2010
Year 2009
Year 2008
22,565,044 /31,166,452 = 72.40%
18,699,809 / 25,891,278 =72.22%
13,297,816/ 20,805,117 = 63.92%
iii.
Working: Total Equity = Share capital + Reserves + un-appropriated profit In year 2010,
Total Equity = 7,821,009+ 7,516,910 + 15,828,533 = 31,166,452 In year 2009,
Total Equity = 7,110,008+ 6,582,845 + 12,198,425 = 25,891,278 In year 2008,
Total Equity = 6,463,644+ 5,804,776 + 8,536,697 = 20,805,117
31
iv.
v.
Interpretation of Ratio: This ratio indicates the percentage of ROE of bank in year 2010 shows. i. The ROE depicts that in year 2010 the higher percentage of equity including share capital, reserves and un-appropriated profit established as the 72.40% that of 63.90% in the year 2008 financial analysis from un-consolidated statement. ii. iii. The ROE is maximized at 2010 slightly difference in 2009. The ROE ratio as calculated in year 2010 is better than 2008 because of its total equity.
7. Debt Ratio
i. Ratio Formula: Total Liabilities x 100 Total Assets
ii.
Calculation:
32
Year 2010
Year 2009
Year 2008
413956669 / 449931526 = 0.92 times
388414353 / 418374331 =0.93 times
344340055 / 366695669 = 0.94 times
iii.
iv.
Interpretation of Ratio: This ratio indicates the percentage of debt ratio of bank in year 2008 shows. i. The debt ratio depicts that in year 2008 the higher established as the 0.94 times rather than in year 2009 and 2008 based on un-consolidated financial statements. ii. The debt ratio is maximized at 2008 somewhat variation in 2009 and 2010. iii. The Debt ratio as calculated in year 2008 is better than 2010 because of its total assets effect.
33
8. Debt / Equity Ratio

v. Ratio Formula: Total Liabilities Equity
vi.
Calculation:
Year 2010
Year 2009
Year 2008
413956669/
31,166,452
388414353/
25,891,278
344340055/
20,805,117
= 13.28 times
=15 times
= 16.65 times
vii.
viii.
Interpretation of Ratio: This ratio indicates the percentage of debt to equity ratio of bank in year 2008 shows.
34
i.
The Debt to equity ratio depicts that in year 2008 the higher established as the 13.28 times rather than in year 2009 and 2008 based on un-consolidated financial statements.
ii.
The Debt to equity ratio is maximized at 2008 somewhat variation in 2009 and 2010.
iii.
The Debt to equity ratio as calculated in year 2008 is better than 2010 because of its total equity effect.
9. Times Interest Earned Ratio
i.
Ratio Formula: Earnings before interest and taxes(EBIT) Interest Expense
ii.
Calculation:
Year 2010
Year 2009
Year 2008
24,153,445 / 11810339 = 2.05 times
20,160,239 / 9624119 = 2.09 times
20,160,239 / 8917790 = 1.69 times
i.
Working:
EBIT = Profit before tax + interest expense In year 2010,
EBIT = 12,343,106 + 11,810,339 = 24,153,445 In year 2009,
EBIT =10,536,120 + 9,624,119 = 20,160,239
35
In year 2008,
EBIT = 6,120,940 + 8,917,790 = 15,038,730 iii. Graphical Representation:
iv.
Interpretation of Ratio: This ratio indicates the percentage of times interest earned ratio of bank in year 2009 shows. i. The times interest earned ratio depicts that in year 2009 the higher established as the 2.09 times rather than in year 2008 and 2010 based on un-consolidated financial statements. ii. The times interest earned ratio is maximized at 2009 somewhat variation in 2008 and 2010. iii. The Debt to equity ratio as calculated in year 2009 is better than 2008 because of its interest expense.
36
10.Advances / Deposits Ratio
i.
Ratio Formula: Advances x 100 Deposits
ii.
Calculation:
Year 2010
Year 2009
Year 2008
268530/ 371284 = 72.32%
249887/ 328875 = 75.98%
223640/ 297475 = 75.18%
iii.
iv.
Interpretation of Ratio:
37
As ratio is going higher and higher as compare to previous years which explains that. The advances to deposits ratio in its operation in Year 2008 and Year 2010 was slow; however it is double in Year 2009.
11.Operating Cash Flow Ratio
i.
Ratio Formula:
Operating Cash Flow (Current Maturities of Long term debts+ Notes Payable)
ii.
Calculation:
Year 2010
Year 2009
Year 2008
36199585/ 22565 = 54.70%
10811077/ 18700 = 56.34%
563633/ 13298 = 46.03%
iii.
38
iv.
This ratio indicates the percentage of net profit to the Mark-up earned and expensed and the Banks overall profitability. The above graph shows that in the year 2009 the net profit in relation to the Interest earned is highly increased due to an unusual increase in the other income. On the other hand, the net profit in the year 2010 and 2008 has been decreased as compare to the year 2009.
12.Dividend per Share
i.
Ratio Formula: Dividend Paid Number of bonus shares in issue
ii.
Calculation:
Year 2010
Year 2009
Year 2008
2979352/ 3577722 = 0.83 times
2073173/ 2866721 = 0.72 times
1753971/ 2220357 = 0.79 times
iii.
39
iv.
This ratio indicates the percentage of earning per share is much low in 2009 while on the other hand bit increased in 2008 and remained excellent in 2010.
13.Earning per Share
v.
Ratio Formula: Net Income - Dividends on Preferred Stock Average Outstanding Shares
vi.
Calculation:
Year 2010
Year 2009
Year 2008
2979352/ 3577722 = 0.83 times
2073173/ 2866721 = 0.72 times
1753971/ 2220357 = 0.79 times
40
vii.
viii.
This ratio indicates the percentage of earning per share is much low in 2009 while on the other hand bit increased in 2008 and remained excellent in 2010.
14.Price / Earnings per Share
ix.
Ratio Formula: Market value per Share EPS
x.
Calculation:
Year 2010
Year 2009
Year 2008
2 / 0.83 = 0.19 times
2 / 0.72 = 0.22 times
1 / 0.79 = 0.19 times
41
xi.
xii.
This ratio indicates the percentage of price to earning per share is much low in 2008 while on the other hand bit increased in 2010 and remained excellent in 2009.
42
The macroeconomic outlook remains vulnerable on account of inflationary pressures, difficult fiscal management and uncertainty attached with the global outlook. Meanwhile, severe energy shortage is expected to impact the overall industrial output and economic activity. The borrowers repayment capacity is likely to remain stressed under these challenging times, thereby leading to risk of further rise in NPLs. Your Bank being watchful of the given environment would continue with its strategy of cautious lending by deploying resources in selected avenues following stringent risk management policies. Meanwhile, focus would remain on improving the mix of cost effective core deposits and optimizing cost efficiencies. The cornerstone of Your Banks philosophy would remain on improving service quality standards and providing state of the art banking services through leveraging technology.
43
After doing this internship I acquired partially the skills of analyzing & observing the system & corporate culture, values, norms.
It was really an excellent experience for me as it polishes my analytical skills & enhances my visions. I become more confident, punctual, regular & responsible.
I learn how to deal with customers and your behaviour must be cooperative towards customer. How to behaves to your peers and help your peers if any one has some difficulty. How to behave to the upper and lower level of hierarchy of management.
Now I think that I can work more effectively & efficiently in a group/team with the ability to mange all levels.
During my internship training at ABL Dubai chowk branch, I have learned a lot. It was a geed experience for me. In Decembe3, 1942, the, ABL became the first Pakistans Muslim bank. After privatization, the profitability and performance of the bank has increased. Today ABL represents a bank that has grown with time.
44
Allied Bank was first Muslim bank to be established on Pakistan soil in December 1942 and serving towards the financial and economic progress of the country. Allied Bank is the one of the largest and prominent bank of Pakistan. Allied Bank is providing with its customers with value, quality and distinctive level of service and high ethical standards in all dealings with them. But there is always need for improvement and need to identify any lacking if they are present. Here some of these identified by me are stated.
As compared to other competitions of Allied Bank its deposits and advances percentage is less so there is a desperate need that to adopt such policies that will help to increase these deposits and advances attract more and more customers by winning their confidence.
There is a desperate need for Human Resource Development by hiring professionals and competent persons and training the existing force. It will contribute a lot more in progress of bank.
All these three segments should be run separately by the competent persons to enhance performance and quality of work.
Although ATM and online banking is started in accordance with banks branch network not even half of its branches are equipped with these facilities so need to modernize whole bank to attract more customers.
There is also need to provide facility of car financing. In housing and car finance the bank has edge over the newly established private banks having large network of branches all over the Pakistan and if they enter in to this segment of market they can earn a lot.
45
All of the references and sources from where the data gathered for this report are mentioned herewith for your kind concern
Web Links:
http://www.abl.com/thebank/financials.asp
http://www.abl.com/thebank/pdf/annual_report_2010/Annual_Report_2010.pdf
http://www.abl.com/thebank/pdf/annual_report08/abl-annual-report-2008.pdf
http://www.abl.com/thebank/pdf/annual_report_2009/complete_annual_report/annual
_report09.pdf
http://www.google.com
http://www.abl.com/commercial/
Handouts or Books Consulted:
Charles, H., & Gibson. (2008). Financial Reporting Analysis (10th ed.). : SouthWestern College. Lyn M. Frazer, & Aileen Ormiston. (2009). Understanding Financial Statements (7th ed.). : Prentice Hall.
46

Fini 619 Allied Bank Internship Report

Diunggah oleh

Informasi Dokumen

Deskripsi Asli:

Hak Cipta

Format Tersedia

Bagikan dokumen Ini

Bagikan atau Tanam Dokumen

Opsi Berbagi

Apakah menurut Anda dokumen ini bermanfaat?

Apakah konten ini tidak pantas?

Hak Cipta:

Format Tersedia

Fini 619 Allied Bank Internship Report

Diunggah oleh

Hak Cipta:

Format Tersedia

Come & Join Us at VUSTUDENTS.

Go to http://www.vustudents.net and click Sing up to register.

Come and Join Us at www.vustudents.ning.com

Submission Date 12th Jan 2012 Virtual University Of Pakistan

Hibba, Sohnie, Seph, ayisha, sweety cuteey, fizza pervaiz

THANK YOU SO MUCH!

BREIF HISTORY OF ORGANIZAITON

HIERACHY CHART OF THE ORGANIZATION

INTRODUCTION OF ALL THE DEPARTMENTS

COMMENTS ON THE ORGANIZATIONAL STRUCTURE

PLAN FOR THE INTERNSHIP

DETAIL DESCRIPTION OF TASKS ASSIGNED

Bank Ratios DFIs

14) Earning per Share 15) Price/Earning Ratio

RECOMMENDATION FOR IMPROVEMENTS

REFRENCES & SOURCES USED

OVERVIEW OF THE ORGANIZATION

The Pre Independence History (1942 to 1947)

Australasia Bank (1947 to 1974)

B. Organizational Hierarchy Chart

F. Brief Introduction Of All Departments

1. General Banking Department

It provides its users with following facilities: a) Accept deposits:

3. Pls term deposit. 4. Special notice deposit.

Outward Clearing Register: Inward Clearing Register:

G. Comments on Organizational Structure

1. Plan of Internship Program:

2. Internship starting & Ending Dates:

3. Name of Departments & time duration where I got training:

THE TASKS ASSIGNED BY THE FINANCE DEPARTMENT

1. Net Profit Margin Ratio

Ratio Formula: Net Profit after taxation x 100 Net Sales

8225332 / 44992696 = 18.28%

7122167 / 41121503 = 17.32%

4156686 / 30570540 = 13.60%

2. Gross Spread Ratio

Ratio Formula: Net Markup Income x 100 Gross Markup Income

22565044 / 24153445 = 93.42%

18699809 / 20160239 =92.76%

13297816 / 15038730 =88.42%

3. Non Interest Income to Total Income Ratio

Ratio Formula: Non Interest Income x 100 Total Income

4. Return on Assets (ROA)

Ratio Formula: EBIT x 100 Total Assets

20,160,239 /418,374,331 =2.52%

15,038,730 / 366,695,669 = 1.67%

EBIT = Profit before tax + interest expense In year 2010,

EBIT = 12,343,106 + 11,810,339 = 24,153,445 In year 2009,

EBIT =10,536,120 + 9,624,119 = 20,160,239 In year 2008,

EBIT = 6,120,940 + 8,917,790 = 15,038,730

5. Du Pont Return on Assets Ratio

Ratio Formula: Net Markup / Interest Income x 100 Total Assets

6. Return on Total Equity (ROE)

Ratio Formula: Net Markup / Interest Income x 100 Total Equity

22,565,044 /31,166,452 = 72.40%

18,699,809 / 25,891,278 =72.22%

13,297,816/ 20,805,117 = 63.92%

Total Equity = 7,821,009+ 7,516,910 + 15,828,533 = 31,166,452 In year 2009,

Total Equity = 7,110,008+ 6,582,845 + 12,198,425 = 25,891,278 In year 2008,

Total Equity = 6,463,644+ 5,804,776 + 8,536,697 = 20,805,117

413956669 / 449931526 = 0.92 times

388414353 / 418374331 =0.93 times

344340055 / 366695669 = 0.94 times