Bank Alfalah Limited Final Internship Report PDF

BANK ALFALAH LIMITED
INTERNSHIP REPORT
FATIMA
MBA-12-05 (MORNING)
Preface
A practical training is an integral part of MBA study. Every student has to pass his/her
minimum six weeks in any organization of Pakistan. For internship I was selected through the
strict recruitment process of BAL HR department Lahore and appointed to work in BAL,
Sarwer Shaheed Road, Sahiwal. It was a six weeks training period in which I tried my best to
get complete knowledge and training in different sections of the Branch. Banking sector itself
playing an importance role in the economy of any country through its vibrant functions. This
is the basic motivation that stressed me to join a corporate bank for internship training.
Moreover, the experiences and practices learned during this period also prove very helpful
and facilitating in the forthcoming professional life. This report contains the necessary
information about the sections and function of branch. This report is prepared in simple and
understandable format so, that ordinary person can also take benefit from this report. I am
really very thankful to the Mr. Imran (Manager) and the entire staff members of this branch
for their friendly and cooperative behavior during internship.
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DEPARTMENT OF BUSINESS ADMINISTRATION,BAHAUDDIN ZAKARIYA UNIVERSITY,SUB-CAMPUS,SAHIWAL
Acknowledgement
No one can say that I am perfect, everyone should admit that without the help of ALLAH and
His people a man cant get anything so I bow my head before almighty Allah with gratitude. I
am also very much thankful and presents. I salute to many individuals who have helped me in
shaping this report .I am also very much thankful to lot of former fellows and contemporary
colleagues who took the time and trouble during the last few days to speak to me about the
way this text could be further improved. I have no wards to express my gratitude to my
coordinator Mr. Riaz Insari for his intellectual guidance without which it could have been
rather difficult for me to complete this report. I am eternally thankful to the whole staff of
RHQ BAL Sahiwal, BAL HR department Lahore, BAL head office Karachi and BAL Sarwer
Shaheed Road, Sahiwal who made to complete my manual work of report and enhancing my
practical knowledge and experience.
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Contents
Executive Summary................................................................................................................................. 4
Evolution of Banking ............................................................................................................................... 5
Introduction to Bank Alfalah Limited ...................................................................................................... 7
About Bank Alfalah Limited .................................................................................................................... 7
Bank Alfalah Limited Managerial Hierarchy............................................................................................ 9
Product and Services Portfolio.............................................................................................................. 10
Conventional Banking by Bank Alfalah Limited .................................................................................... 16
SWOT Analysis Bank Alfalah Limited .................................................................................................... 28
Competitors Analysis ............................................................................................................................ 29
Financial Analysis .................................................................................................................................. 31
Horizontal Analysis................................................................................................................................ 31
Ratio Analysis ........................................................................................................................................ 38
Future prospect of the Bank Alfalah Limited ........................................................................................ 43
Conclusion ............................................................................................................................................. 43
Recommendation and Suggestions: ..................................................................................................... 45
Application of Classroom Learning in BAL ............................................................................................ 46
If I was the manager of Bank Alfalah Limited ....................................................................................... 47
Annexure ............................................................................................................................................... 48
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Executive Summary
In Masters of Business Administration, Internship Program is an important part to give
students an opportunity to have experience of practical field. The purpose of this program is
to acquaint the students with practical applications of theoretical concepts taught to them
during conduct of their MBA program. This internship report is on my six weeks practical
training at Bank Alfalah Limited, Sarwer Shaheed Road,Sahiwal. All the efforts on the way are
summarized in shape of this Internship Report. In the introductory part of the report I have
discuss the general banking history and the banking history in Pakistan in different periods.
Then I have discussed general functions of banking sector that are performed by all the
banks.
In the body of the report I have discuss all the departments and learning that I have get from
them along with the Complete Products and Services Portfolio of Bank Alfalah Limited. During
this internship I got a chance to get an idea about the practical working of all the
departments. In account opening department learn about the different types of accounts
such as Current accounts, saving accounts, term accounts and foreign currency accounts and
account opening procedure. In credit department I learned types of loan that BAL offered
contains Commercial Financing and Consumer Financing and modes of securing loan such as
pledge mortgage and guarantee. In clearing department I get the knowledge about three
types of clearing that is inward clearing, outward clearing and online clearing. In remittance
department I learned about three types of remittance: Local funds transfer (LFT) intercity,
local foreign funds transfer intercity and foreign funds transfer and modes of remittance
including bankers check and foreign demand draft. In cash department I learned different
types of function that cash department performing including Cash receipt, Cash payment,
Online funds transfer, dealing with foreign currency (FC). . Remaining part of the report
consists of financial analysis for five years from 2008-2012. In ratios analysis I have calculated
liquidity ratios, leverage ratios, profitability ratios and activity ratio and shows BAL financial
position in graphical presentation. After that I discuss the SWOT analysis of HBL.
In the last part of the report I apply the class room learning in bank which shows the
application of bookish concept in particle work. I have also identified the problems that are
faced by the high street branch. Then I have given some new ideas and suggestions as a
manager to overcome those problems. In the last I have given some suggestion and
recommendations to improve the overall working of the bank.
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Evolution of Banking
The word bank was derived from the word BANCUS or BANQUE, which simply means a
bench. The Jews in LOMBARDI transacted the business of money exchange on benches in the
market places and when their business failed or they failed to honor the customers, the
BANCUS was destroyed by the people. Some argue that the bank is derived from the Germen
word BACK, which means joint stock fund. Later on when Germen occupied major part of
Italy, the word was Italianized into bank.
Some people says that Goldsmith were the early bankers who used to keep strong safe for
storing money and valuables so they were the first stage of evolution of Banking system.
Banking Sector in Pakistan

A brief look at the history of banking in Pakistan reveals that the banking sector has made
impressive achievements but still has a long way to go.
Humble Beginnings (1947 1970): Our financial sector evolved very differently from banks in
the developed world. For nearly a year after partition, Pakistan had no central bank. Habib
Bank established in 1941 filled this gap initially, until the State Bank of Pakistan (SBP) was
set up in 1948 under quasi-government ownership. The role of domestic banks was
particularly limited at the time, accounting for only 25 of the total 195 bank branches in the
country. Therefore, the SBP was initially mandated to develop commercial banking channels,
and maintain monetary stability so trade and commerce could flourish in the newly-created
state. Subsequently, Habib Bank, Allied Bank and National Bank were amongst the first to
start operations with strong support from the central bank.
A Legacy of Public Control (1970 1980): Commercial banking grew favorably in Pakistan until
1974. Under the nationalization policy implemented by Zulfikar Ali Bhuttos government,
thirteen banks were brought under full government control, and consolidated into six
nationalized banks. The Pakistan Banking Council was set up to monitor nationalized banks,
marginalizing the SBPs role as a regulator. These measures were meant to improve lending
to prioritized industries. However, while directed lending was viewed favorably at the time,
little can be said of the long-term gains that have been achieved.
Business as Usual (1980-1990): Over time, the financial sector grew to serve primarily large
corporate business, politicians and the government. Board of Directors and CEOs were not
independently appointed. Lending decisions were not always commercially motivated, and
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many billions of rupees were unsurprisingly funneled out of the financial system as bad
loans. Banks were essentially not in control of their destinies during this period.
Privatization (1990 1997): By 1991, the Bank Nationalization Act was amended, and 23
banks were established of which ten were domestically licensed. Muslim Commercial Bank
was privatized in 1991 and the majority ownership of Allied Bank was transferred to its
management by 1993. By 1997, there were still four major state-owned banks, but they now
faced competition from 21 domestic banks and 27 foreign banks. More importantly,
administered interest rates were streamlined, bank-wise credit ceilings removed and a
system of auctioning government securities was established, forcing the government to
borrow at market determined rates.
Ushering In the Reforms (1997 2006): After privatization, transformational reforms were
pushed through. The central banks regulatory powers were restored via amendments to the
Banking Companies Ordinance (1962) and the State Bank of Pakistan Act (1956).
Subsequently, corporate governance, internal controls and bank supervision was
strengthened substantially. Legal impediments and delays in recovery of bad loans were
streamlined in 2001. Furthermore, the scope of prudential framework set up in 1989 was
enhanced, allowing banks to venture into hitherto untapped business segments. Lending to
small and medium enterprise had previously been neglected, whereas consumer and
mortgage finance had not developed prior to reforms.
The Post-Reform Era 2006 Present Buoyed by the spirit of liberalization, the sectors
landscape has changed significantly. By 2010, there were five public commercial banks,
twenty five domestic private banks, six foreign banks and four specialized banks. There are
now 9,348 bank branches spread throughout the country, catering to the needs of some 28
million deposit account-holders.
Banking In Pakistan The Long Journey Ahead: Much still remains to be accomplished. In the
absence of sustainable economic growth, banks will remain vulnerable to business cycle
fluctuations. As recently as 2008, non-performing loans increased sharply in response to the
preceding years of easy credit and risky consumer lending practices. Moreover, strong
regulation will continue to be required so as to maintain the delicate balance between
industry concentration and competition. Presently, the top five banks account for about 50%
of the sector, measured in terms of total advances.
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Introduction to Bank Alfalah Limited

Bank Alfalah Limited was incorporated as a public limited company on June 21, 1992 under
the Companies Ordinance 1984.Its banking operations commenced from November1, 1997.
The bank is owned and operated by the Abu Dhabi Group and is the sixth largest bank in
Pakistan.
Bank Alfalah conducts business through a network of 574 branches across 196 cities in
Pakistan with international presence in Afghanistan, Bangladesh and Bahrain and the
representative offices in UAE. The provides Financial Solutions to customers, corporations,
institutions and government through broad spectrum of product and services ,including
corporate and investment banking, consumer banking and credit, securities brokerage
,commercial ,SME ,agri-finances ,Islamic and asset financing.
About Bank Alfalah Limited

Vision:
To be a premier financial services organization, operating both locally and globally, offering a
complete range of financial products and services to diverse segments under one umbrella.
Mission:
To develop & deliver the most innovative products and deliver exceptional service quality
which contribute to strengthening brand equity strength and maximize value for the
stakeholders of the Bank.
Slogan:
Taking Service Excellence to new heights, helping you realize your dreams The Caring Bank
Objectives:
To please customers by fulfilling the financial needs as best as possible, Bank Alfalah
Limited believes in placing the client at the center of business and all of the products and
services. For this the management has adopted the strategy of Caring for you Our
Customers
To get maximum share of the market
To price the products optimally
To expand more the network of branches in several other cities of Pakistan as well as in
the other countries of the world.
To reinforce a corporate culture that fosters learning, creativity and flexibility.
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Associated Companies of the Group

Alfalah Securities
www.alfalahsec.com
Alfalah GHP Investment Management Limited
www.alfalahghp.com
Alfalah Insurance Company Limited
www.alfalahinsurance.com
Warid Telecom (Pvt) Limited
www.waridtel.com
Wateen Telecom Limited
www.wateen.com
Credit Rating
PACRA, a premier rating agency of the country, has rated the bank AA (double A), Entity
Rating for long term and A1+ (A one plus) for the short term. These ratings denote a very low
expectation of credit risk, strong capacity for timely payment of financial commitments in the
long term and by highest capacity for timely repayment in the short term, respectively. The
ratings of first and second and third unsecured listed and subordinated TFC issues of PKR 650
million, PKR 1,250 million and Rs.1,325 million have been maintained at AA- (Double A
minus).
Corporate Citizenship
Responsible Finance and Sustainability through a Beyond Philanthropy approach are key agenda
priorities for Bank Alfalah as well as for the Abu Dhabi Group. The Bank is committed to growing in
alignment with the principle of responsible finance. We aim to work with community partners and
improve peoples lives by going beyond philanthropy and converting simple ideas into opportunities
the eventual aim is to serve our role as responsible corporate citizens and give back to the
communities where we live and operate.
The Banks two-pronged social governance approach incorporates financial investment towards
meaningful community causes coupled with employee volunteer programs in order to create
measurable, sustainable impact in our communities. We support both infrastructural development as
well as capacity building endeavours in alignment with the motto of giving back to our communities
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Bank Alfalah Limited Managerial Hierarchy
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Product and Services Portfolio

Product and Services portfolio of Bank Alfalah Limited is spread over:
1)
2)
3)
4)
5)
6)
7)
Personal Banking
Corporate and Investment Banking
Treasury and Institutional Banking
Business Banking
Branchless Banking
Self Service Banking
Islamic Banking
Personal Banking
o Deposits
Bank Alfalah Limited deposit suite has been designed keeping the diverse needs of its
customers. From basic banking accounts, term deposits, foreign currency to structured
savings products, choose the option that best suits customers needs and start enjoying
daily banking services through BAL vast branch network and self-service banking
solutions.
Current Account is an interest free instrument. It has following types of accounts,
Basic Banking Account (BBA account)
Simple Current Account
Alfalah Kamyab Karobar Account
Saving account is an interest-bearing account. It has following types of accounts,
Simple saving account

Royal Profit Account
Kifayat Account.
Alfalah Mahan Amdan Account
Alfalah Mahan Amdan Plus(Term Deposit)
To manage foreign currency transactions with security, ease and convenience, BAL
facilitates its customers with
Foreign Currency Current Account
Foreign Currency Savings Account
o Loans
Bank Alafalah Limited has designed loan products keeping its customers individual
needs in mind. With affordable tailor-made financing options that offer the flexibility to
choose repayment plans, BAL helps customer to stay in control of his finances and
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make the most of lifes opportunities today.
o Credit Cards
Bank Alfalah chip based credit cards open up a world of lifestyle privileges and financial
freedom that allow you to enjoy living life today just the way you want to! The newly
designed chip based credit card offers customers enhanced security features to protect
their information from fraudulent acts. The chip generates dynamic values for each
transaction, providing greater security every time client swipes.
o Bancassurance
Bank Alfalah Limited Bancassurance solutions are specially designed to help customers
to protect and secure a stable future with their loved ones. Partnering with leading
insurance companies in the country, BAL offers a diverse range of insurance plans,
customized to meet savings, education, marriage and retirement needs at every stage
in life.
o Home Remittances:
Bank Alfalah Limited offers unmatched services for overseas Pakistanis to send money
home fast and free across BAL large network of over 470 branches in more than 160
cities across Pakistan. Enjoy the convenience of sending home remittances to your
loved one through our International Send Agents in any of the following modes:
Cash over Counter: Remittance can be collected in cash of up to Rs. 500,000 from any
of BAL branches across Pakistan.
Cash over Account: Money can be sent to Pakistan through hassle free account credit
in a Bank Alfalah maintained account or in an account in any RTGS (real time gross
settlement) member bank.
Pay Order/ Demand Draft: If an account is maintained with a non-RTGS member bank,
money can be sent conveniently through Pay Order or Demand Draft facility.
Corporate and investment Banking:

o Working Capital Finance
Successful businesses often experience considerable pressure on the available finances
due to timing difference of cash inflows and outflows, up-gradation of existing facilities
and business expansion.
Bank Alfalahs dedicated team of relationship managers can structure tailor-made
credit solutions to meet your specific short-term or long-term funding requirements.
The loans are provided at competitive rates and are structured to enhance customers
profitability by scheduling the repayment to match the cash flow available to repay the
debt.
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Bank Alfalah offers working capital finance by way of overdraft or working capital loans
suitably structured to customers needs and risk profile. These products are designed
to ease the liquidity position of our clients.
o Trade Finance
Bank Alfalah Limited offers a wide range of trade services designed to meet a range of
its corporate clients needs. It has Industry specialists who are professional and
seasoned to make sure that all corporate clients trade finance requirements are taken
care of with precision and skill. The team is strongly supported by a wide and effective
correspondents network spread worldwide.
BAL team of specialists goes the extra mile to ensure that customers` experience with
the below mentioned services is nothing but exceptional.
Letter of Credit
Import Finance
Export Finance
Bank Guarantee
o Capital Market Operations

Bank Alfalah Limited provides capital market services to various companies including its
existing customers.
The following services are part of Capital Market Operations;
Bankers to the Issue for Initial Public Offerings (IPOS)
Offer for Sale of Shares (OFS)
Right Share Issues
Dividend Redemption
The Bank also provides the requisite MIS of all the banker to the issue/dividend
transactions on the prescribed format as and when required by the customer.
o Investment Banking
Our seasoned Investment Banking team is fully equipped to help you in the following
areas:
Leveraged and Structured Finance
Project and Infrastructure Financing (Recourse & Non-recourse based)
Debt Syndication (Conventional and Islamic both)
Capital Market Issues (Listing and private placement of corporate bonds, sukuks,
commercial papers, preference shares, right shares in addition to initial and
secondary public offering of ordinary shares)
Secondary Market Trading of tradable instruments
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Treasury and Institutional Banking

o Global treasury
Bank Alfalah has a state-of-the-art treasury set up and is one of the most active
participants in the foreign exchange and fixed income markets. This enables us to offer
our customers the most competitive rates in all market conditions.
In addition to Pakistan, BAL also have offices in Afghanistan, Bahrain, and Bangladesh.
o Foreign Exchange
BAL FX desk is one of the most active participants in the interbank market dealing in
ready, spot, forward and swap transactions for all major currencies. Its sizable FX Book
allows us to be a market maker in the interbank markets of Pakistan, Afghanistan and
Bangladesh. This enables BAL to offer its corporate and individual customers the most
competitive rates in all market conditions.
o Fixed Income
BAL dedicated fixed income trading desk is one of the most active participants in all
segments of the domestic money and bond markets.
Primary Dealer of Government Securities
BAL has been appointed by State Bank of Pakistan (SBP) as a Primary Dealer of
government securities which allows us to purchase Treasury bills and Pakistan
Investment Bonds from the government directly through auction.Having a large Islamic
banking setup also allows us to participate in auctions of Shariah-compliant
government bonds called GOP Ijarah Sukuk.
o Derivatives and Structured Products
BAL offer advisory support to our customers on foreign exchange and interest rate
hedging solutions.
Financial institutions
BAL offers the following services to various financial institutions.
a. Fund Based Relationships
b. Trade Relationships
c. Operational support
Via
i.
Corporate banking
ii.
Home remittances
Business banking
o
Alfalah SME toolkit

Bank Alfalah is proud to be the first bank in Pakistan to introduce an SME toolkit in
partnership with International Finance Corporation (IFC). It is an online business
management tool dedicated to help small and medium enterprises to develop
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sustained growth through implementation of business practices based on information,

communication and technology.
Alfalah SME Toolkit is a free of charge online portal which provides value
added resources including business advice, local and global best practices and various
interactive tools to help both existing and potential SMEs grow and develop.
o Business accounts
BAL Business Banking team is committed to working in conjunction with our SME
clients as trusted partners in their progress and success. Whether your operations
include sole trading, manufacturing or exporter, we aim to understand your evolving
business requirements needs and offer you a broad range of customized financial
solutions and services to help you achieve your goals.
Offering a complete product menu including Business Accounts, Loans, Working Capital
Finance, Trade Finance, Transaction Banking and Financial Advisory Services, we work
to enhance your business growth, access and convenience
o Business Loans
At times, businesses can experience challenges with an unavailability of finances as a
result of the difference in timings of cash inflows and outflows, up-gradation of existing
facilities and business expansion.
Our dedicated team of relationship managers can provide you with a range of business
loans and solutions to meet your specific short-term or long-term funding and business
expansion requirements.
o Personal Saving and Bancassurance products
In order to not simply grow clients savings and protect future, BAL offers a diverse
range of Savings and Bancassurance solutions:
Alfalah Savings Account
Alfalah Kifayat Monthly Savings Account
Alfalah Mahana Amdan Term Deposit
Alfalah Bancassurance Solutions
o Agri Loans
Bank Alfalah Limited realizes the strong contribution of agriculture in our countrys
economy and the growing financial needs of our farmers. BAL Rural Finance Program
Alfalah Zarie Sahulat offers finance facilities covering an entire spectrum of farming
and non-farming needs with a wide range of products on flexible short, medium and
long term repayment tenures at affordable mark-up rates.
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Branchless Banking
o Mobile Paisa
Bank Alfalah has joined hands with Warid Telecom to launch Mobile Paisa; a
branchless banking service which aims to provide innovative, technology based
financial solutions to customers. Mobile Paisa currently offers customers with Over the
Counter (OTC) facilities for making utility bill payments as well as Person to Person
(P2P) funds transfer services via 2000 plus agent locations across Pakistan.
With the launch of Mobile Paisa, the Bank aims to support the creation of a branchless
banking and alternate payments ecosystem which is likely to augment financial
inclusion in the country, thereby reducing the gap between the banked and the yet-tobe-banked. In addition, Mobile Paisa will also provide bespoke products and services
to Pakistans existing banking population, including solutions for SME, agri & payroll
segments. The ultimate objective is multipronged; firstly, to enable individuals to
conduct transactions through a wider array of products and distribution channels and
secondly, to eventually enhance access to financial services by broadening the banking
population ambit a critical gap which needs to be addressed in Pakistan.
Self Service Banking

o Alfalah VISA Debit/ATM Card
The Bank Alfalah VISA Debit/ATM Card saves customers from the hassle of carrying
cash or writing checks along with the freedom of making electronic payments
anywhere in the world. It carries the Visa logo ensuring worldwide acceptability at
more than 30 million establishments and 1.5 million ATMs.
o SMS alert service
With BAL SMS Alerts Service, customers can keep track of their transactions 24/7. By
subscribing to the service, they can receive real-time SMS updates for transactions
conducted on their Debit Card. It also helps customer keep track of all their POS, ATM,
in-branch and supplementary Card transactions as and when they are conducted.
o E-Statements
With Bank Alfalahs e-statement service, customer can receive monthly, quarterly or
half-yearly account statements directly via email. This facility is offered to you at no
extra cost, all you need is a personal e-mail address to which your e-statements will be
sent.
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Conventional Banking by Bank Alfalah Limited

Conventional banking Bank Alfalah Limited has been divided in two main sections
o
Branch Banking:
Operations
Account opening
Accounts
Clearing
Remittance
Sales
Credits
Imports /Exports
o Consumer Banking:
Credit cards
Car Finance
Home Financing
During my Six-weeks of internship, I was gives access to Operations and Credits only
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Account Opening Department:

Contractual Relationship:
There is a contractual relationship between a Bank and a Client and opening of an
account with the bank is the first step of this contract. BAL chooses its clients very
carefully as it believes that good clientele is at the heart of good business.
Functions of Account Opening Department
Following are the functions of the department:
Account Opening
Department
Filling of Account
Opening Form
Verification And
Stamping
Providing Account
Numbers
Issuance of Cheque
Book
Recording Of
Alteration
Closing Of
Account
Customer Service
Procedure of Account Opening
For opening all types of account the procedure:
One customer relationship form (CRC).
Two signature specimen card (SSC).
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One cheque book requisition form.

There is one undertaking form that is signed by the customer that his or her
account will be blocked at the time until cheque book is not received.
One form signed by the customer for all online facilities. (This form is not for photo
account).
One form signed by the customer that his or her sign are shaky and the customer is
responsible if any other person copy his or her sign.
One form signed by the customer that his or her sign is other than English.
If customer is different from CNIC then one form is signed for undertaking that his
or her sign is different from CNIC.
One ssc is send to the head office. And one is scanned by the branch when
customer sign on any document then first of all it is verified by the branch.
Complete form is send to the head office if there is any mistake the head office show
discrepancy in through mail. The bank Alfalah has centralized system. Thats why it is
also show to the area manager and also to the branch manager. If all the documents
are correctly then firstly the letter of thanks is send at customers address and then
after the six days the cheque book is received by the branch and the customer come
with the letter of thanks and take his or her check book. The bank takes sign at the first
page of check for record.
Requirements for Opening Partnership Account:
Following are the requirements of Partnership Deed.
Identity cards photocopies of all partners.
Partnership mandate for operation of Account signed by all the partners.
Requirements For Opening Of Corporate Account:
Following are the requirements of opening corporate account
Copy of Certificate of Incorporation

Memorandum and Articles of Association
List of Directors
Certificate of commencement of business (if required). It is required only in the
case of public companies and not for private companies.
Copies of N.I.C of Directors
Latest copy of Form-29
Requirements for Opening an Account For A Club/Society/Association:
Copy of rules/by-Laws
Copy of registration (if applicable)
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List of executive member Management committee/Management board etc.

(whichever is applicable)
Certified copy of resolution
N.I.C of all members of the Management body
Verification of Documents and Issuance of Account Number
The documents provided by the account opener are verified by the department head. In Bank
Alfalah this verification is done by the cash and deposit department head. The signatures are
also verified and a signature card is maintained for the purpose of future verification if
required. The account is then entered into the bank's system and processed for getting the
account number and the customer number. This system number comprises of following
components
Issuance of Cheque Book
After opening of account a letter of thanks is sent by head office at customers address. This
letter of thanks customer brings at bank and hand over to account opening in charge and
cheque book issued to customer.
Recording of Alterations and Additions
In case of any alteration the account opening officer is required to update the customers
account. The updating is required in the following cases
Change of address
Addition of signatories and attorneys
Change in signatures
Changes in any required documents
Account Closing
It is the second function of this department. For closing an account the customer is required
to
Submit a signed account closure request
Surrender the cheque book with the bank
Pay a statutory fee of Rs. 100 to the bank
The account opening officer gets an annexure (given on next page) approved by all the
departments and then closes the account. This is a sort of clearance from all the
departments. The cheque book is then destroyed.Account closed log file is printed in order to
complete the process of closing an account. In the end the account opening form is filed in
the closed accounts file.
Customer Service
It is the third very important function performed by Account Opening Department. It is the
customer service provided by the bank which ensures loyalty of customers and new accounts
and deposits. Any service that a customer requires should be provided in order not only to
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satisfy him but also delight him. The following services are provided by the Account Opening
Department
Balance confirmation
The account opening officer is responsible to provide answer to inquiries about
Balance on telephone as well as personal visits of the customers.
Check clearing inquiries
Account number confirmation
Issuance of statements
The bank provides statements of accounts on the requirement and instruction of the
customers. Normally the bank sends the statement of account after every six months but if
desired by the customer the statement can be sent on quarterly basis monthly basis or even
weekly basis.
Cash Department
Cash department of Bank Alfalah works under the operation department. This department is
given the complete responsibility of cash, as result of transaction in touch local and foreign
currencies. It is also responsible for the book keeping of these transactions and the safe
custody of cash. Out of three counters of cash department one counter is fix for senior
citizens and females. All counters are dealing at the same time in deposits, withdraw and
online transaction processes.
This department performs the main function.
Cash receipts
Cash payments
Cash Receipts
In cash department depositors use deposit slip for depositing the amount into their accounts.
The officer checks if the deposit slip is properly filled up containing title of account, A/C
number date and amount in words and figures. Detail on both counter file and cash receipt
voucher should be the same. Cash is received by cash receiving officer, twice counted and
matched with the deposit slip. The cash details are written on the deposit slip and are also
entered in computer software called Temenos. Cash received stamp is affixed on the face
of the deposit slip along with the signature of the cash receiving officer.
Deposit slip is forward to the officer in the cash department. Again proper scrutiny is made by
the officer cash department both on cash receipt and Temenos software. Officer cash
department sign the deposit slip and finally approved the transaction on Temenos. Deposit
slip is credited and posted in the concerned accounted in the system. Counter folio is given
the deposition as receipt. One consolidated cash debit voucher is posted in the system to
balance the cash.
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Cash Payments of Cheque

All three counters deal with cash payments the process for payment of cheques local and
foreign currency is same. First the cheque is presented by the customer or holder to cash
payment officer. He confirms that it is drawn on the same branch and the particulars of
cheque are properly filled in. Two signatures of the holder are taken on the back of the
cheque. Officer checks the date, amount in words and amount in figures, payees name,
crossing if any, account number, cheque serial number, any material alterations /
endorsements and signature of the customer. Account is debited in Temenos and then
cheque is cancelled by the officer. It is posted in the system and posting stamp and number is
affixed on it. At the end officer hands over cash to client.
Cash Carrying Companies:
Cash is transferred through cash carrying/security companies when cash is transferred in
inter bank accounts or inter branch accounts. Alfalah deals with
PHEONIX
WACKENHUT
Accounts Department
It is the most important department of a bank. One can have a complete view of the
functions and performance of bank from the accounts. The department is responsible for:
Keeping record of each and every transaction.
Maintenance accounts.
Preparation of several daily, weekly, monthly, half yearly, and yearly reports.
Analysis of the reports.
Efficient management of funds.
Giving recommendations for improvement in the functions and methods.
Remittance Department
Remittance means transfer of money from one place to other place.
Remittances Department deals with:
DD (demand draft)
Pay order
CDR (call deposit receipt)
RTC (rupee traveler check)
TT (telegraphic transfer)
Money gram
21
DD (Demand Draft)
A Demand Draft (DD) is an instrument, which is drawn by one bank upon another bank for a
specific sum of money payable on demand. The bank, given DD to the purchaser against cash
or cheque, makes it. Parties involved In DD are:
Purchaser
Issuing branch
Drawee branch
Payee
DD (Demand Draft) open on customer demand, when someone wants to pay another person
in the city or out of city but there must be Bank Alfalah Branch where DD can be drawn.
Branch is liable to pay where it is drawn. It is transferable to other persons. Bank charges
service charges. Generally concept about DD is that if we want to pay out of city, but it is not
true there may be within the city payment through DD but there must be more than one
branch in a city.
Pay Order
Pay Order is non-transferable. Pay order is used to pay someone as DD but it clears from
same branch that is mention on pay order. General concept about Pay order is that it is used
when pay within the city, but may be out of city but in a specific branch.
CDR (Call Deposit Receipt)
Call Deposit Receipt is instrument made by the Bank, that is guarantee of customer specific
amount that customer has in his account.
When Government or firm ask to participate in Bids of different tenders or contracts and
submit the CDR of some part or percentage of total amount of tender or contract. Usually 2%
or 3% is required for CDR. Customer asks Bank Alfalah to make CDR on a company that
requires CDR for bid. If customer fails in the bid the Bank cancel the Call Deposit Receipt. It is
non-transferable instrument.
RTC (Rupee Traveller Cheque)
Bank Alfalah finished the Rupee traveller Cheque facility in many Branches. It is like rupee
and can easily converted into money. Customer uses this facility usually due to the threat of
theft of money during traveling.
TT (Telegraphic Transfer)
When the Bank debit or credit the customers account in response of customer fax or email
for transaction it is called Telegraphic Transfer. If customer has sufficient balance in the
account and ask bank to pay someone then Bank debited Head office account and credited
the Customers account.
Money Gram
Money gram is an international organization of transfer of money. It opens its franchises in
different banks and places. Bank Alfalah Limited has taken the franchise of money gram.
22
Money gram facility is available in 156 countries and at more than 40000 locations
worldwide. The feature of money gram is transfer amount individually from one country to
another within second. Money gram generates the code which provides money to customer.
Online Transfer
When we talk about the Online Transfer of money by the Bank Alfalah, only Bank Alfalah
branches involve in this kind of transfer. No any other Bank branch involves, for example if
we want to transfer money online from Sahiwal to Okara then Alfalah Sahiwal branch involve
and Alfalah Okara branch should be and not any other branch of any Bank of Okara.
Through the Online transfer funds can be transfer within seconds from branch to branch of
Bank Alfalah. Bankers credit the amount to branch where we have to transfer the funds, but
in response the head office perform this transfer of funds through software.
Clearing and Collection Department

o Clearing
Clearing were my third rotation under the supervision of Ms. Tuba Hussain Anwar. She taught
me about clearing. She tells me that it is the procedure for payment and collection of
instruments through State Bank of Pakistan. It is transfer of funds from one branch of bank
to the other branch of the same bank or the other bank on which instrument is drawn
without involving cash through State bank clearing house. The procedure of clearing is
facilitated by NIFT (national institution of facilitation technologies). Clearing procedure
require 2 days for completion.
NIFT
It is an institute which performs activities for clearing and collections. This is institute is
created by the government. The branch of NIFT is situating at high street Sahiwal.
Types of Clearing
There are two types of clearing which are following
Inward clearing
Outward clearing
Inward Clearing
All the instruments which are originated by Bank Alfalah Limited, Sahiwal and are presented
in other banks these are collected to NIFT by other banks and then NIFT send these
instruments to Bank Alfalah Limited, Sahiwal.
Types of Inward Clearing
There are three types of inward clearing which are following:
Regular Inward Clearing: Inward clearing that is within the city is called regular inward
clearing
Intercity Inward Clearing: Inward clearing that is outside the city is called intercity
inward clearing.
23
Same Day Inward Clearing: The instruments that are cleared in the same day on which
they are presented and funds transfer to the customer account on the same day.
Outward Clearing
All the instruments which are originated by some other banks and are presented to the Bank
Alfalah Limited, Sahiwal, these are sent to other banks by Bank Alfalah Limited, Sahiwal
through NIFT.
Types of Outward Clearing
There are three types of outward clearing which are following:
Regular Outward Clearing: Outward clearing that is within the city is called regular
outward clearing
Intercity Outward Clearing: Outward clearing that is outside the city is called intercity
outward clearing.
Same Day Outward Clearing: The instruments that are cleared in the same day on
which they are presented and send to other banks and funds transfer to the customer
account on the same day.
o Collection
There are two types of collection which are following:
Outward bills for collection-OBC
Inward bills for collection-IBC
Outward Bills for Collection-OBC
It is a facility given to customers for collection of their outstation checks. The cheque
undergoes a process of clearing. Collection involves
All of the outstation cheques become a part of outward bill for collection
These cheques are given OBC numbers from OBC Register
Information related to the checks is entered in the register such as date, cheque no.
bank on which check is drawn and amount of cheque etc.
These cheques along with OBC Forward Schedule are sent to the cities where the
banks are located on which these cheques are drawn.
After it the cheque is realized and a credit advice is mailed to the concerned branch,
which serves it as debit voucher.
Inward Bills for Collection-IBC
All of the cheques that are received from other cities become a part of inward bills for
collection
Each cheque is given IBC Number from IBC Register
Information of a cheque received is entered in the register
24
Credit Department
Credit means belief or trust. The quality of being credible or trustworthy. Another words
we can define credit as trust in ones integrity in money matters and ones ability to meet
payment when due.
The earnings of BAL are chiefly derived from interest charge and discounts. This department
is the revenue generating department. Credit and advance department deals with extending
loans (credit facility) to customers. State Bank of Pakistan (SBP) has prescribed regulations
which are called PRUDENTIAL REGULATIONS. Every bank has to follow these regulations. If
any bank violates the regulations it should be liable for penalties under the core spirit of SBP
PR(S).The Bank Alfalah limited credit is extended on the basis of these rules and regulations.
These regulations tells the term and conditions under which you can extend loans to the
borrower and to what extent.
Credit Facilities
At BAL there are two types of credit facilities
Funded facilities
Non funded facilities
o Funded Facilities
These are the facilities in which there is direct involvement of cash fund. Following are the
funded facilities.
Current finance CF
Term finance TF
Finance against foreign bills FAFB
Finance against packing and credit FAPC
Finance against imported merchandise FIM
Finance against trust receipt FATR
Payment against document PAD
Current Finance CF
The extensively used financing mode at BAL is current finance (CF) current finance is used to
finance both individuals and industries. Individual take current finance for their personal use
while in industries. It is taken for fulfilling the requirement of working capital.
Term Finance TF
Term finance is for specified time period. Term finance is given for fixed asset financing.
Finance against Foreign Bills FAFB
In FAFB facility exporter take loan from bank on the behalf of their foreign export bills. Like
exporter sends shipment but at that time he needs fund for the operation of the business. He
25
may go to the bank and surrenders all the documents including L/C, Bill of lading etc. bank
checks all the documents to be in accordance with terms and conditions. If they find no
discrepancy, they give money to exporter but take some margin on it.
Finance against Packing and Credit FAPC
FAPC is taken for the preparation of consignment. It has two forms.
Pre-shipment loans are export related working capital financing
Post shipment financing is essentially the receivable financing to the exporters till the
period he is out of cash after the shipment.
Finance against Imported Merchandise FIM
This facility is allowed against the commodities imported from other countries usually
through letter of credit. Sometimes importer does not have enough amounts for paying the
imported merchandise therefore. He request to the bank to pay all dues to the exporter
against the security of imported merchandise. Bank pays the amount and releases the goods,
when the importer pays off its liability partially / fully.
Finance against Trust Receipt FATR
Finance is extended upon the trust receipt signed by borrower. Importer have to import the
product. There are three conditions.
Pay money and get thing
Get fine facility
If that client is trust worthy for bank believing on him based upon his past record. He
releases the goods against the trust receipt. Trust receipt is given to the bank by the
customer. The customer in turn commits that I will pay on such and such date. Bank
pay all taxes and get merchandise and then give it to client. Bank do charges mark-up
against such financing. FATR is for specific period of time. If client do not pay with in
specified time then bank charges higher per day mark-up.
Payment against Document PAD
Payment against document is made by the banks as payment against L/C comes due payment
is made for imported documents. For example when exporter sends all the document to
importing bank as document reached, importing bank has to make payment within 24 hrs if
the importer does not pays then bank charges mark-up per day.
o Non Funded Facilities
The facilities where there is no direct involvement of banks fund. Following are the nonfunded facilities.
Letter of credit L/C
Letter of Guarantee L/G
26
Letter Of Credit
Importer bank issues a document on request stating that it will pay the exporter when
exporter fulfil the terms of letter of credit L/C is off two types:
Sight L/C requires the importer / importing bank to pay as soon as it receives the
clean documents from exporter.
Usance L/C extends time period (typically 60, 90, 120 days) to importing bank for
payment. After specified time period importer have to pay. Letter of guarantee L/G.
Bank give guarantee in the behalf of person that I will pay in case of default.
27
SWOT Analysis Bank Alfalah Limited

Capital, knowledge, skill, or other advantage that a firm has or can acquire over
its competitors in meeting the needs of its customers is called strength.
Core strength is providing Hilal banking services. Hilal is Arabic term for permissible.
Hilal banking follows traditional Muslim laws with strong market in Middle Eastern
company.
Public confidence
Sound financial strength
Highest profitability
There is professional and committed workforce.
Low cost then other banks
Free Online Banking
Weaknesses:
Flaw that increases the risk of a failure is called weakness or a company's weaknesses are the
things it does not do well or that others do better.
Bank Alfalah adherence to Hilal standers may be strength in some market but
weakness in the west that make it out of the home.
This bank has no advanced technology as compared to its competitors. That is a
strong weakness of bank Alfalah limited.
Less advertisement
Slow in introducing a new product.
Opportunities:
Ongoing opportunity to generate income as an independent representative of a network
marketing company is called opportunity.
Growth of Islam is the main opportunity of bank Alfalah limited Bank Alfalah has the
main opportunity to expand its business beyond the Middle East. And into markets in
the USA and Europe in order to offer hilal banking.
The market growth is very low as compared to the bank growth.
This bank can fully avail the facilities of E- banking
Extension of international network of branches
28
Threats:
Negative event that can cause a risk to become a loss, expressed as an aggregate of risk,
consequences of risk, and the likelihood of the occurrence of the event is called threats
BAL has main threat from western bank that are able to engage in less restrictive
source of revenue generating they admit that they do not offer full product of
continental western bank.
Establishment of new private financial institutions & expansion
Govt. sponsored schemes
Political pressure
Reducing branch network
Uncertain economic conditions
Action taken by competitors
Competitors Analysis
All the private banks are the competitor of bank Alfalah limited. But the main competitor of
this bank is united bank limited because it is also sister company of the Alfalah.
Strength of UBL:
But both of the banks are lie in the same category of its profitability.
Strength of united bank limited:
United bank is a largest bank of Pakistan in term of deposits.
2ndlargest Privatized Bank of Pakistan.
UBL offering Customized Products and services aggressively better than its
competitors.
Improved operational efficiency as to its past.
Courteous Customer service and fast delivery of online and offline services.
Marvelous Image and Reputation of the bank in the eyes of its customers.
Extensive Branch network.
UBL Product positioning is very effective.
UBL target the segment like salaried person, business people and self-employed
person.
Weakness of UBL:
No standardization in terms of branches some of the branches are very attractive and
most of the branches are not very good like other branches.
In some regions, urban areas of Pakistan service of UBL is not good as compared to
other privatized banks
29
The application time is also quite lengthy.

UBL is a step behind in using new technology as compared to other banks
All branches need orientation for customer dealing
Threat of UBL:
Large and increasing competition.
High operating costs
Opportunities of UBL:
Proper orientation of employees in all branches can help them to cope up with
foreign banks
By bringing new technology and modern business processes will bring the change and
increase their profitability
Call centre services should be improved to enhance their network
Objective of UBL:
Its objective to satisfy the customer needs and also become the premier organization in the
world.
30
Financial Analysis
Financial analysis (also referred to as financial statement analysis or accounting
analysis or Analysis of finance) refers to an assessment of the viability, stability and
profitability of a business, sub-business or project.
Financial analysts often assess the following elements of a firm:
Profitability - its ability to earn income and sustain growth in both the short- and longterm. A company's degree of profitability is usually based on the income statement,
which reports on the company's results of operations;
Solvency - its ability to pay its obligation to creditors and other third parties in the
long-term;
Liquidity - its ability to maintain positive cash flow, while satisfying immediate
obligations;
Both 2 and 3 are based on the company's balance sheet, which indicates the financial
condition of a business as of a given point in time.
Stability - the firm's ability to remain in business in the long run, without having to
sustain significant losses in the conduct of its business. Assessing a company's stability
requires the use of both the income statement and the balance sheet, as well as
other financial and non-financial indicators. Etc.
I have used different tools of financial analysis in this section. Financial statements of Bank
Alfalah are analyzed in following ways:
Horizontal Analysis.
Vertical Analysis.
Ratio Analysis.
Horizontal Analysis
A procedure of fundamental analysis in which an analyst compares ratios or line items in a
company's financial statements over a certain period of time. The analyst will use his or her
discretion when choosing a particular timeline; however, the decision is often based on the
investing time horizon under consideration.
31
Bank Alfalah Limited

Horizontal Analysis of Summarized Balance Sheet
From The Year 2008-2012
Year
2012
2011
2010
2009
2008
Balance with treasury banks
77.5735%
55.6648%
26.0361%
7.2465% 100%
Balance with other banks
23.8170%
-19.2602%
-25.0302%
5.2898% 100%
Lending to financial institution
-73.5524% 134.2153%
95.9751%
350.8350% 100%
Investment
149.4125% 119.1979%
49.2971%
30.5196% 100%
Assets
Advances
21.4159%
3.0089%
7.5161%
-2.4024% 100%
Fixed assets
-0.1871%
-2.7924%
3.1311%
5.2195% 100%
other assets
47.6500%
47.8494%
42.6851%
62.9667% 100%
Total assets
53.7195%
34.1508%
17.9068%
11.4843% 100%
Bills payable
144.2304%
56.5297%
30.9818%
9.0994% 100%
Borrowings
55.0584%
32.7150%
0.0723%
50.8662% 100%
Deposits and other accounts
52.0016%
33.4234%
17.7175%
7.9894% 100%
128.4853% 178.0328% 194.3094%
194.4256% 100%
-44.3940%
-13.7260% 100%
Deferred tax assets
Liabilities
Subordinated loans
Defferd tax liabilities
other liabilities
20.1554%
-7.6477%
-18.0056%
-11.3760% 100%
Total liabilities
52.5005%
33.2737%
17.2414%
10.5411% 100%
Net Assets
77.4589%
51.2316%
30.8647%
29.8548% 100%
Share capital
68.7500%
68.7500%
68.7500%
68.7500% 100%
Reserves
78.0306%
29.5070%
20.6275%
13.3261% 100%
Equity
32
Un appropriate profit
Surplus on revaluation of assets net of

tax
depreciation expense
90.3319%
52.2294%
-29.9236%
-21.9506% 100%
75.8545%
56.3463%
35.0346%
35.3337% 100%
87.0796%
20.5621%
5.8604%
-2.9987% 100%
77.4589%
51.2316%
30.8647% 1197.3705% 100%
-0.3945%
40.2333%
34.3787%
21.7245% 100%
Bank Alfalah Ltd.

Horizontal Analysis of Summarized Income Statement
Year
2012
2011
2010
2009
2008
Mark up earned
48.81%
43.05%
21.20%
14.84%
100%
Mark up expensed
34.18%
25.34%
16.40%
20.30%
100%
Net mark up income
77.42%
77.71%
30.58%
4.15%
100%
Provisions against loans & advances
-9.21%
-8.42%
10.20%
81.46%
100%
Provision diminution in investment

value
Bad debts written off directly
15.53%
66.27%
34.63%
-78.56%
100%
-95.89%
-79.87%
-9.87%
111.38%
100%
0.43%
22.19%
20.24%
14.91%
100%
116.79%
106.11%
35.87%
-1.35%
100%
Fee, commission and brokerage income
19.84%
1.48%
-6.16%
-9.63%
100%
Dividend income
15.99%
-36.30%
-32.07%
-17.52%
100%
Income from dealing in foreign

currencies
Gain on sale of securities
43.16%
21.92%
23.91%
11.47%
100%
213.01%
-66.98%
-81.71%
62.38%
100%
100%
100%
Net mark up income after provisions

Non mark up interest income
Gain/loss on revaluation of investment
Other income
100.83%
-93.91%
-101.82%
101.57%
40.77%
42.94%
4.42%
4.96%
33
Total non mark-up interest income
50.97%
11.30%
-2.38%
7.45%
100%
89.78%
67.20%
20.17%
2.26%
100%
55.05%
41.06%
28.27%
11.49%
100%
-99.94%
176.99%
-78.81%
104.96%
100%
other charges
68.57%
62.87%
-37.55%
-35.28%
100%
Total non mark-up interest expense
55.86%
42.76%
28.09%
10.49%
100%
277.95%
202.76%
-23.73%
-43.37%
100%
Current
81.61%
88.62%
-51.32%
-38.37%
100%
Deferred
-34.42%
19.69%
-67.78%
-33.33%
100%
86.89%
152.56%
1034.24%
109.87%
100%
351.36%
291.27%
-18.87%
-75.83%
100%
250.12%
169.20%
-25.58%
-31.07%
100%
8.17%
-50.21%
-44.54%
-28.95%
100%
Surplus on revaluation of fixed assets
20.78%
20.78%
20.78%
0.45%
100%
Profit available for appropriation
59.18%
-3.71%
-40.29%
-29.27%
100%
Non mark-up interest expense

Administrative expense
Provisions against balance sheet
obligation
Provisions against other assets
Profit before taxation

Taxation
Prior year
Profit after taxation

Un appropriated profit brought forward
34
Vertical Analysis
A method of financial statement analysis in which each entry for each of the three major
categories of accounts (assets, liabilities and equities) in a balance sheet is represented as a
proportion of the total account. The main advantages of vertical analysis are that the balance
sheets of businesses of all sizes can easily be compared. It also makes it easy to see relative
annual changes within one business.
Bank Alfalah Ltd.
Vertical Analysis of Summarized Balance Sheet
Years
2012
2011
2010
2009
2008
10.8197% 10.8683% 10.0120%
9.0102%
9.3662%
Assets
Balance with treasury banks
4.9809%
3.7218%
3.9319%
5.8402%
6.1838%
0.1635%
1.6587%
1.5791%
3.8418%
0.9500%
Investment
35.3213% 35.5705% 27.5651% 25.4864% 21.7694%
Advances
43.6063% 42.3921% 50.3428% 48.3313% 55.2081%
Fixed assets
2.5626%
2.8598%
3.4520%
3.7248%
3.9466%
Defferd tax assets
0.0717%
0.0901%
other assets
2.4741%
2.8388%
3.1171%
3.7652%
2.5758%
Total assets
100%
100%
100%
100%
100%
Bills payable
1.6655%
1.2214%
1.1618%
1.0264%
1.0399%
Borrowings
4.1934%
4.1069%
3.5203%
5.6287%
4.1242%
Liabilities

Subordinated loans
90.3005% 90.6986% 90.9648% 88.5057% 90.5969%

1.1605%
1.6159%

other liabilities
2.6801%
2.3571%
1.9444%
2.0631%
0.7746%
0.0298%
0.0490%
0.0628%
2.3789%
2.7271%
3.4015%
35
Total liabilities
100%
100%
100%
100%
100%
Net Assets
Equity
Share capital
44.6040% 52.3395% 60.4852%
6.1011% 46.9060%
Reserves
18.6348% 15.9067% 17.1219%
1.6225% 18.5750%
21.6932% 20.3594% 10.8308%
1.2168% 20.2260%
Surplus on revaluation of assets net of tax
15.0679% 11.3945% 11.5621%
1.0687% 14.2931%
100%
100%
100%
100%
100%
Bank Alfalah Ltd.

Vertical Analysis of Summarized Income Statement
Mark up earned
2012
2011
2010
2009
2008
100.00%
100.00%
100.00%
100.00%
100.00%
Mark up expensed
59.6790% 57.9877% 63.5632% 69.3287% 66.1820%
Net mark up income
40.3210% 42.0123% 36.4368% 30.6713% 33.8180%
Provisions against loans&advances
4.0116%
4.2090%
5.9783% 10.3892%
6.5748%
Provision diminution in investment value
3.7084%
5.5517%
5.3056%
0.8919%
4.7763%
Bad debts written off directly
0.0025%
0.0129%
0.0680%
0.1682%
0.0914%
7.7225%
9.7735% 11.3519% 11.4493% 11.4425%
Net mark up income after provisions
32.5984% 32.2388% 25.0849% 19.2220% 22.3755%
Non mark up interest income

Fee, commission and brokerage income
5.5050%
4.8495%
5.2930%
5.3795%
6.8358%
Dividend income
0.7575%
0.4328%
0.5447%
0.6980%
0.9718%
Income from dealing in foreign currencies
2.8422%
2.5180%
3.0203%
2.8675%
2.9543%
36
Gain on sale of securities
2.8819%
0.3163%
0.2068%
1.9373%
1.3701%
Gain/loss on revaluation of investment
0.0033%
-0.0250%
0.0088%
0.0080%
-0.5863%
Other income
3.8115%
4.0257%
3.4714%
3.6824%
4.0289%
Total non mark-up interest income
15.8015% 12.1172% 12.5450% 14.5727% 15.5746%

48.4000% 44.3560% 37.6299% 33.7948% 37.9500%
Non mark-up interest expense

Administrative expense
32.9954% 31.2250% 33.5145% 30.7427% 31.6657%
Provisions against balance sheet obligation
0.0000%
-0.0497%
0.0161%
Provisions against other assets
0.2832%
0.4135%
0.2479%
other charges
0.4491%
0.4513%
0.2043%
-0.0040%
0.0923%
0.2234%
0.3964%
Total non mark-up interest expense
33.6795% 32.0898% 33.9828% 30.9368% 32.1544%
14.7205% 12.2662%
3.6470%
2.8579%
5.7957%
Taxation
Current
6.8184%
7.3666%
2.2441%
2.9985%
5.5868%
Deferred
-1.6381%
-3.1100%
-0.9882%
-2.1578%
-3.7170%
Prior year
-0.3472%
0.1016%
-2.5874%
-0.5053%
-0.2765%
4.8331%
4.3582%
1.0666%
0.3354%
1.5934%
9.8874%
7.9081%
2.5805%
2.5225%
4.2023%
11.3890%
5.4536%
7.1695%
9.6944% 15.6680%
0.0644%
0.0670%
0.0791%
0.0694%

Un appropriated profit brought forward
Surplus on revaluation of fixed assets
Profit available for appropriation
21.3409% 13.4287%
0.0794%
9.8291% 12.2864% 19.9496%
37
Ratio Analysis
It can be defined as a tool used by individuals to conduct a quantitative analysis of
information in a company's financial statements. Ratios are calculated from current year
numbers and are then compared to previous years, other companies, the industry, or even the
economy to judge the performance of the company. Ratio analysis is predominately used by
proponents of fundamental analysis. I have calculated and analyze different ratios for the
purpose of financial analysis.
Profitability/ Efficiency Ratio:
A class of financial metrics that are used to assess a business's ability to generate earnings as
compared to its expenses and other relevant costs incurred during a specific period of time.
For most of these ratios, having a higher value relative to a competitor's ratio or the same ratio
from a previous period is indicative that the company is doing well. I have calculated
profitability ratios for Bank Alfalah which are explained below.
Year
Profitability/ Efficiency Ratio
Spread Ratio
Net interest Margin Ratio
Return on Assets
Return on Equity
2008
2009
2010
0.34
0.31
0.03
0.03
0.00273 0.00371
0.08
0
0.36
0.03
0.0023
0.04
2011
0.42
0.04
0.01
0.14
2012
0.4
0.03
0.01
0.15
Graphical Explanation:
Profitability Ratio
0.5
Spread Ratio
0.4
0.3
Net interest
Margin Ratio
0.2
0.1
Return on
Assets
Return on
Equity
2008
2009
2010
2011
2012
38
Interpretation:
As it is clear from above explanation that profitability ratios are increasing with the passage of
time. This factor shows that margin of profitability increases and profit of the bank is
increasing which is a good sign for bank.
Some other profitability/efficiency ratios measured and interpret here.
Year
Profitability/ Efficiency Ratio
Non-interest income to Total Assets
Interest Ratio
Admin. Exp. To Profit before tax
Admin Exp. To non Interest income
Return on Revenue (ROR)
2008
0.01
0.66
5.46
2.03
0.04
2009
0.01
0.69
10.76
2.11
0.03
2010
0.01
0.64
9.19
2.67
0.03
2011
0.01
0.58
2.55
2.58
0.08
2012
0.01
0.6
2.24
2.09
0.1
Efficiency ratio
12
10
Non-interest
income to Total
Assets
Interest Ratio
Admin. exp. to
Profit before tax
6
4
Admini Exp. to non

Interest income
2
0
2008
2009
2010
2011
2012
Return on Revenue
(ROR)
Interpretation:
During two consecutive years 2009 and 2010 its ratio of administrative expenses to profit was
high which is not a positive sign but now it is decreased even below the ratio of 2008.This point
show the efficiency of organization to cater its financial problem. Its ROR is increasing it means
bank is going to earn more profit.
39
Liquidity Ratio:
A class of financial metrics that is used to determine a company's ability to pay off its shortterms debts obligations. Generally, the higher the value of the ratio, the larger the margin of
safety that the company possesses to cover short-term debts.
Year
Liquidity Ratio
Current ratio
Cash and balance with bank to total
assets
Investment to Total Assets
Advances to Total Assets
Total liabilities to Total assets
2008
2009
2010
2011
2012
3.4
3.0
3.5
3.2
2.9
0.16
0.22
0.55
0.95
0.15
0.25
0.48
0.94
0.14
0.28
0.5
0.95
0.15
0.36
0.42
0.94
0.16
0.35
0.44
0.94
Graphical Explanation
Liquidity Ratio
4.0
3.5
Current ratio
Cash and balance with
bank to total assets
3.0
2.5
Investment to Total Assets
2.0
1.5
Advances to Total Assets
1.0
0.5
0.0
2008
2009
2010
2011
2012
Total liabilities to Total

assets
Interpretation:
Current ratio of the bank is satisfactory. This ratio which is subject to seasonal fluctuations is
used to measure the ability of an enterprise to meet its current liability out of its current
asset. This ratio is decreased in 2009 and 2012 and highest in 2010. It shows that the bank
has high liquidity in 2010 and less power to meet its short term obligation in 2007.Other
financial ratios have shown a consistent manner. Bank is not trying to minimize its TL to TA
ratio which is almost same throughout the period. It should be minimizing so TL not exceed
TA.Which shows organizations excellent position of liquidity.
40
Leverage Ratio:
Leverage 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.
Year
Leverage Ratio
Capital Ratio
Deposit to Equity Ratio
EPS
2008
0.05
17.64
1.14
2009
0.57
14.7
0.71
2010
0.05
15.87
0.72
2011
0.06
15.57
2.6
2012
0.06
15.11
3.38
Leverage Ratio
20
18
16
14
12
10
8
6
4
2
0
Capital Ratio
Deposit to Equity
Ratio
EPS
2008
2009
2010
2011
2012
Interpretation:
Leverage ratios of bank Alfalah shows that its financial value is enhancing. As we see its EPS is
increasing and from 2008 to 2012 the change in EPS is noticeable.
41
Cash flow Ratio:

This section of the financial ratio looks at cash flow indicators, which focus on the cash being
generated in terms of how much is being generated and the safety net that it provides to the
company. These ratios can give users another look at the financial health and performance of
a company
Year
Cash Flow Ratio
Cash flow to Profit after Tax
Cash flow to Current Liabilities
2008
2009
2010
2011
2012
10.76
1.65
15.49
2.3
18.7
0.99
22.24
0.82
1.92
0.15
Cash Flow Ratio

25
20
15
Cash flow to Profit

after Tax
10
Cash flow to
Current Liabilities
5
0
2008
2009
2010
2011
2012
Interpretation:
Cash flows are basically the cash inflows and out flows from the business many factors involved
in cash inflows as well as cash out flows. Cash flow to profit after tax ratio tel us that whether
we have availed all the opportunities for making profit or not.Cash flow to current liabilities
ratio is decreasing with the passage of time.
42
Future prospect of the Bank Alfalah Limited

The Bank Alfalah and Abu Dhabi Group are not looking to exit Pakistan through divestment or
sell off and they will very much stay in Pakistan.
The CEO said, "The Bank is forcefully looking for growth opportunities in Pakistan, which is
evident from the growth of its branch network across the country." the detailed overview of
the Bank`s operations and future expansion plans, which started operations in 1997 with just
three branches and virtually no banking infrastructure is today the 6th largest bank in
Pakistan with 386 branches in 150 towns, over 400 billion rupees (48 billion US dollars) in
assets and is still growing rapidly.
The bank is planning to open 24 more branches and looking for opportunities to expand
foreign operations in Hong Kong & Beijing in addition to Bangladesh, Afghanistan, UAE, and
Bahrain.
The Bank also has the distinction of having the second largest Islamic Banking operations in
Pakistan. Commenting on the perception of higher interest rates being changed by the banks
in Pakistan, the CEO said that this issue requires more subjective analysis because while the
old and more established banks have low cost assets, new comers of young banks such as
Bank Alfalah have a much higher costs of deposits.
BALs reliable track record of strong performance in Pakistans competitive banking sector
has made it stand out as one of Pakistans most important banks and the flagship investment
of the Abu Dhabi Group in Pakistan. Bank Alfalah famous itself through the introduction of
inventive financial products including car financing which it introduced for the first time in
Pakistan.
Conclusion
Bank Alfalah (BAL) has made significant in building of strengthening both the corporate and
retail banking sectors in Pakistan.
Bank Alfalah views specialization and service excellence as the foundation of its strategy. The
people of bank innovation, reliability, creativity, customized services and their
implementation are the key ingredients for their future growth. Based on this approach, their
Treasury Division and the Structured Finance Unit have been geared to provide specialized
services to the business customers. Revenues from these activities have started yielding
43
dividends and they expect important growth in these areas in the coming years. While
building on their in depth awareness with their customers needs and expected
developments in the banking industry, the Retail and corporate areas of their processes will
carry on to provide a strong and stable base to the business of the Bank.
They are conscious that they have stepped into the 21st century and they must meet its
challenges by acquiring the highest levels of Technology. They will thus be accelerating their
enable them deal out their products and services through most competent and modern
resources. They say that they will invest in the modern tools and considerable allocation of
resources will be made to attain this objective during the current year.
Their program to commence real time on line Banking Services and introduction of ATMs at
strategic positions have been firmed up and it will be fully operational during the year
2001.Their focus would be to continually seek out development opportunities through
increased quality assets and by contribution a wider range of products and services to their
esteemed customers. There are significant growth opportunities for Bank Alfalah and they
are positive in their ability to grab them. They are committed to attract the shareholders
value and look forward with greater hopefulness to an affluent future for Bank Alfalah
Limited.
44
Recommendation and Suggestions:

After doing my summer internship at Bank Alfalah Limited, I would like to give some
recommendations to count over some problems.
Bank Alfalah should adopt appropriate strategies for promoting organization
citizenship behavior among its employees.
In Bank Alfalah, there is misdistribution of work; some people are over burdened with
the work. So I suggest that there should be fair distribution of work in all the
departments.
Bank Alfalah is only dealing in Money Gram; it should also starting providing the
service of other money transfer lines like Western Union.
In the presence of intense competition Bank Alfalah Limited has to realize the
importance of marketing.
The top management should immediately start thinking in terms of rotating the
employees in various departments, as this transforms work force into human capital,
if a particular individual keeps on employing his\her efforts in one sphere of banking it
would not only create a sense of monotony, but also not help improving the skills of
Bank Alfalah Limited employees.
Bank Alfalah has equipped its branches with all major IT tools being used in the
industry like ATM, fax machines, photocopiers, printers, latest computers and a good
connectivity architecture, however it has been observed that when its time to work,
there are many failures seen in the different devices used by Bank Alfalah, especially
its connectivity architecture and remains offline with the main server, that creates
problems for the customers.
As we all know concept of part time jobs offered to students is in practice in big cities
of Pakistan but it is experienced in Sahiwal. Bank Alfalah can give competitive edge by
promoting such practices.
New and innovative products should be brought in by Bank Alfalah, like other banks
develops for their customer. For this purpose, special teams should be developed that
include professional from all departments of the banks to come with ideas.
There should be increase in cash counter so that customers service can be enhanced.
Sahiwal branch has insufficient cash counters which are not enough to deal with
customers. There are lots of customers who wait and spend lot of their precious time.
45
Application of Classroom Learning in BAL

I have do the six weeks internship in BAL Sarwer Shaheed branch during these six weeks I have
learned many new things and also see the applicability of the bookish concept and terminology
in the bank. I have seen how the class room learning can be applied to the particle work.
In accounting department I see the applicability in the promotion of balance sheet
income statement and profit and loss account.
Business communication helps in dealing with the customers to satisfy them and
heading their complaints.
Psychology helps to understand the mentality and the behavior of the customers.
Sociology also helps to create the affliction with the customers.
Time value of money and amortization table in financial management helps in the
credit department to calculate the amount of the loans.
Fundamentals of marketing and marketing management help to understand how to
promote the banking activates and to create the good will in the mind of the customers.
Subject of management help me to learn about the culture of the bank management
style and decision making rules.
Subject of money and banking helps me to learn a lot of things about the bank such as
types of cheques, bouncing of cheques, types of customer and form of money.
Economics helps me to learn about the interest rate and government regulations about
the banks.
Subject of ethics helps to see the organizational ethics and how to behave with the
employees and customers in ethical manner.
46
If I was the manager of Bank Alfalah Limited

If I was the manager of the BAL, Sahiwal then I will take few steps to improve the overall
working of the branch. These steps help to increase the reputation of the branch in the eyes
of the customers and employees as well.
The steps are as follows:
The sitting area of the customers should be enhancing so that they can find the
proper place to sit when they enter in the bank.
I will arrange the proper common room for the employees.
Employees should be going for the on job training to match their abilities with the
new and innovative technology.
Work should be properly divided in all the employees and the employees are worked
in their specialized area.
Decision making should not be centralized but the low level employees should also
take part in the decisions so that they also feel the proper members of the branch.
Working of the bank requires too much mental work and the duration of the working
hours are also very long. so to refresh the employees mind there should be some
dinner party every six months or at least once in a year.
Schedule should be arranged for the internees in whom they know about their
working and the requirement.
Installation of good quality air conditioner.
47
Annexure
Bank Alfalah Ltd.
Summarized Income Statement
From the year 2008-2012
2012
46,079,918
2011
44,298,178
2010
37,530,256
2009
35,561,312
2008
30,966,638
27,500,056
25,687,485
23,855,448
24,654,180
20,494,355
18,579,862
18,610,693
13,674,808
10,907,132
10,472,283
1,848,535
18,64,510
2,243,687
3,694,546
2,035,997
1,708,833
24,59,294
1,991,192
317,164
1,479,062
1164
5696
25,504
59,817
28,298
3,558,532
4,329,500
4,260,383
4,071,527
3,543,357
Net mark-up /interest

income after
provisions
Non mark up interest
income
15,021,330
14,281,193
94,14,425
683,56,05
6,928,926
Fee, commission and

brokerage income
Dividend income
Income from dealing
in foreign currencies
Gain on sale of
securities
Unrealized gain(loss)
on revaluation of
investment
other income
2,536,717
2148239
1,986,470
1,913,004
2,116,818
349,061
1,309,703
191,708
111,541,7
204,425
1,133,544
248,217
1,019,732
300,943
914,845
1,328,000
140,093
77,609
688,924
424,261
1,511
-11,053
3,300
2,849
-181,571
1,756,348
1,783,309
1,302,813
1,309,527
1,247,628
Mark-up/
return/interest earned
Mark-up/
return/interest
expensed
Net mark-up/interest
income
Provisions against
loans and advances
Provisions for
diminution in value of
investment
Bad debts written off
directly
48
Total non mark-up

interest income
Non mark-up interest
expense
Administrative
expense
Provisions against if
balance sheet
obligation
Provisions against
other assets
other charges
Total non mark-up
interest expense
Taxation
current
Deffered
Prior year
Un appropriated profit
brought forward
Transferred from
surplus on revaluation
of fixed assets
Profit available for
appropriation
7,281,340
53,6771,3
47,08,161
5,182,253
4,822,924
22,302,670
19,648,906
14,122,586
12,017,858
11,751,850
15,204,236
13,832,096
12,578,080
10,932,507
9,805,790
(22005)
60,56
-1,419
28,582
18.3
130,504
183,161
93,040
__
_______
206,933
15,519,468
199,931
14,215,188
7,666,5
12,753,841
79,454
11,001,542
122,758
9,957,130
6,783,202
5433718
1,368,745
1,016,316
1,794,720
3,141,909
(754,828)
(160,000)
2,227,081
4,556,121
5,248,059
3,263,249
(1,377,661)
45,000
1,930,588
3,503,130
241,586,0
842,232
(370,883)
(971,056)
400,293
968,452
2,690,728
1,066,301
(767,346)
(179,674)
119,281
897,035
3,447,457
1,730,051
(1,151,019)
(85,613)
493,419
1,301,301
4,851,840
29,695
296,95
29,695
24,696
24,586
9,833,875
5,948,685
3,688,875
4,369,198
6,177,727
49
Bank Alfalah Ltd.

Summarized Balance Sheet
From the year 2008-2012
2012
2011
2010
2009
2008
cash and balance with treasury

banks
Investment
Advances
Fixed assets
Defferd tax assets
other assets
Total assets
Liabilities
58,044,054
50,882,662
41,197,841
35,056,012
32,687,335
26,720,993
876,870
189,486,762
233,933,358
13,747,520
384,601
13,272,536
536,466,694
17,424,487
7,765,407
166,531,768
198,468,512
13,388,683
421,825
13,290,458
468,173,802
16,179,255
6,497,556
113,425,861
207,152,546
14,204,555
_________
12,826,225
411,483,839
22,722,639
14,947,435
99,159,957
188,042,438
14,492,194
______
14,649,380
389,070,055
21,581,043
3,315,500
75,973,238
192,671,169
13,773,293
______
8,989,186
348,990,764
Bills payable
Borrowings
Subordinated loans
Liabilities against assets
subject to finance lease
other liabilities
Total liabilities
Net Assets
Equity
8,430,910
21,227,834
457,118,723
5,874,742
________
5,403,453
18,168,978
401,247,886
7,148,693
________
4,521,533
13,700,124
354,015,311
7,567,192
______
3,766,144
20,653,921
324,759,752
7,570,181
______
3,452,031
13,690,222
300,732,858
2,571,169
_______
________
13,567,087
506,219,292
30,247,402
________
10,427,754
442,396,764
25,777,038
115,919
9,258,216
389,178,295
22,305,544
179,851
10,006,786
366,936,635
22,133,420
208,465
11,291,280
331,946,025
17,044,739
Share capital
Reserves
13,491,563
5,636,549
6,561,628
25,689,740
4,557,662
13,491,563
4,100,264
5,248,059
22,839,886
29,371,52
13,491,563
3,819,133
2,415,860
19,726,556
2,578,988
13,491,563
3,587,969
2,690,728
19,770,260
2,363,160
7,995,000
3,166,056
3,447,467
14,608,523
2,436,216
30,247,402
1,201,068
25,777,038
1,690,968
22,305,544
1,620,372
221,133,420
1,467,784
17,044,739
1,205,825
Assets
Surplus on revaluation of
assets net of tax
depreciation expense
50
51
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BANK ALFALAH LIMITED

Banking Sector in Pakistan

Introduction to Bank Alfalah Limited

About Bank Alfalah Limited

Associated Companies of the Group

Bank Alfalah Limited Managerial Hierarchy

Product and Services Portfolio

Simple saving account

make the most of lifes opportunities today.

Corporate and investment Banking:

o Capital Market Operations

Treasury and Institutional Banking

Alfalah SME toolkit

DEPARTMENT OF BUSINESS ADMINISTRATION,BAHAUDDIN ZAKARIYA UNIVERSITY,SUB-CAMPUS,SAHIWAL

sustained growth through implementation of business practices based on information,

Self Service Banking

Conventional Banking by Bank Alfalah Limited

Account Opening Department:

One cheque book requisition form.

Copy of Certificate of Incorporation

List of executive member Management committee/Management board etc.

Cash Payments of Cheque

Clearing and Collection Department

SWOT Analysis Bank Alfalah Limited

The application time is also quite lengthy.

Bank Alfalah Limited

Balance with treasury banks

Balance with other banks

Lending to financial institution

Deposits and other accounts

128.4853% 178.0328% 194.3094%

Deferred tax assets

Surplus on revaluation of assets net of

30.8647% 1197.3705% 100%

Bank Alfalah Ltd.

Net mark up income

Provisions against loans & advances

Provision diminution in investment

Fee, commission and brokerage income

Income from dealing in foreign

Net mark up income after provisions

Gain/loss on revaluation of investment

Total non mark-up interest income

Total non mark-up interest expense

Surplus on revaluation of fixed assets

Profit available for appropriation

Non mark-up interest expense

Profit before taxation

Profit after taxation

10.8197% 10.8683% 10.0120%

Lending to financial institution

35.3213% 35.5705% 27.5651% 25.4864% 21.7694%

43.6063% 42.3921% 50.3428% 48.3313% 55.2081%

Defferd tax assets

Deposits and other accounts

90.3005% 90.6986% 90.9648% 88.5057% 90.5969%

Defferd tax liabilities

DEPARTMENT OF BUSINESS ADMINISTRATION,BAHAUDDIN ZAKARIYA UNIVERSITY,SUB-CAMPUS,SAHIWAL

44.6040% 52.3395% 60.4852%

18.6348% 15.9067% 17.1219%

21.6932% 20.3594% 10.8308%

Surplus on revaluation of assets net of tax