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CHAPTER - 1
INTRODUCTION OF STUDY
Background of study
As part of the academic requirement for completing BBA (Hons) (Finance)
Bachelor of Business Administration. The students are required to under go two
months of internship with an organization. The internship is to serve the purpose
of acquainting the students with the practice of knowledge of the discipline of
banking administration.
This report is about National Bank of Pakistan. NBP was established in 1949 and
since then, it has expanded its network, becoming the largest commercial Bank of
the country. It offers different products of services to its customers.
Purpose of the study
The main purpose of the study in hand is together relevant information to compile
internship report on National Bank of Pakistan.
To observe, analyze and interpret data completely and in a useful manner.
1. To work practically in an organization.
2. To develop interpersonal communication.
Scope of Study
As an internee in National Bank of Pakistan the main focus of my study research
was on general banking procedure in one of the branches of NBP. These
operations include remittances, deposits, advances, foreign exchange, account
opening, ATM, dispatch and clearing departments.
Similarly different aspects of the overall of NBP are also covered in this report.
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Methodology of Study
The report is based on my two months internship program in National Bank of
Pakistan. The methodology reported for collection of data is primary as well as
secondary data. The biggest source of information is my personal observation
while working with staff and having discussion with them. Formally arrange
interviews and discussion also helped me in this regards.
1. Primary Data:
Personal observation
Interviews of staff
2. Secondary Data :
Manuals
Annual reports
Internet
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CHAPTER - 2
INTRODUCTION OF NATIONAL BANK OF PAKISTAN
Golden History of National Bank Pakistan
In 1949 (September) U.K (United Kingdom). Devalued its currency, India
followed suit but Pakistan did not. India said we had contravened the agreement of
keeping both currencies at par. We said we had not done that, India had done it
arbitrarily without consulting us. On October 3, 1949 the two central banks were
to announce the new par value of both currencies but India denied a day earlier.
India also froze our trade - balance surplus that is still an unsettled dispute.
India also withdraws the Marwari merchants who were employed annually for
movement of jute crop by financing it. There being no jute industry, prices fell
sharply, foreign banks and foreign merchants stood aside and an agrarian unrest
was threatening.
Two Ordinances were, therefore, issued
1. Jute Board Establishment Ordinance &
2. NBP Ordinance dated 08.11.1949
National Bank of Pakistan was established on November 9, 1949 under the
National Bank of Pakistan Ordinance 1949 in order to cope with the crisis
conditions which were developed after trade deadlock with India and devaluation
of Indian Rupee in 1949. Initially the Bank was established with the objective to
extend credit to the agriculture sector. The normal procedure of establishing a
banking company under the Companies
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Law was set aside and the Bank was established through the promulgation of an
Ordinance due to the crisis situation that had developed with regard to financing of
JUTE TRADE.
The Bank commenced its operations from November 20, 1949 at six important
jute centers in the East Pakistan and directed its resources in financing of jute
crop. The Banks Karachi and Lahore offices were subsequently opened in
December 1949. The nature of responsibilities of the Bank is different and unique
from other banks/financial institutions. The Bank act as an agent of the State Bank
of Pakistan for handling Provincial / Federal and Government Receipts and
Payments on its behalf. Mr. Ghulam Farooq was chairman Jute Board and Mr.
Mumtaz Hassan was chairman NBP. Until June 1950, NBP remained exclusively
in jute operations, thereafter-other commodities were also taken-up. After that Mr.
Zahid Hussain, Governor SBP assumed additional charge also as chairman NBP's
Board of Directors, and Mr. M.A. Muhajir became its first M.D.
In 1952 NBP replaced Imperial Bank of India. Mr. Mumtaz Hassan as Acting
Governor of SBP negotiated this arrangement. In 1962 when Mr. Mumtaz Hassan
became MD (He had already served NBP for 10 years as its Chairman of government Director), the number of branches had increased from 6 to 239 and
deposits from Rs.5 crore (50 million) to 106 crore (one bn & 60 mln), profit from
3 million (3 Lac) to 21 million (2.1. crore) and the staff increased from 380 to
7091, as compared to 1949-50. In Dec. 1966 its 600th branch was opened raising
the deposits to 2.31 bn. and staff to 14, 963. Up to 1965, the shareholders had
received 225% of their original investment.
The Bank has also played an important role in financing the countrys growing
trade, which has expended through the years as diversification took place. Today
the Bank finances import/export business to the tune of more than Rs.70 Billion,
whereas in 1960 financing under this head was only Rs. 2 Billion.
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The field is being de-layered to improve customer services and enable faster
decision-making. As a result of this de-layering zones have been eliminated and
the numbers of
Regions have been increased. Organizational hierarchy at the regional level has
been restructured and operational and business activities have been completely
separated. This separation will improve communication, decision-making and
promote teamwork.
For the fourth consecutive year, the Bank is recognized as the best Bank in
Pakistan for the year 2004 by the prestigious periodical. The Banker UK (a
subsidiary of Financial Times Group). Were expanding horizons, reaching out, being there and bringing something for everyone. After all, we are The Nations
Bank
PRESIDENT MESSAGE
It gives me great pleasure to announce that National Bank of Pakistan is gearing
up to the challenges faced by the domestic banking industry due to innovations
and advances in the international banking world, which is the consequence of
globalization.
The bank wishes to effectively utilize the financial assistance being extended by
the Government of Pakistan for banking sector reforms aimed at reducing
operating costs and improving profitability.
National Bank of Pakistan is distinct from other banks in that it has a non profit
and service oriented motive, which has manifested itself in the area of salary
deposits of government employees and payment of utility bills. The bank renders
both of these services across the country reaching as far as the remotest regions;
from our northern borders to the Arabian Sea. These services do not contribute
towards the earnings of the bank; rather they put pressure on our resources.
Nevertheless, we are committed to serving small savers and the general public of
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the country. National Bank is everyones and does not only serve corporate
customers. By extending and targeting our research to improve bank earnings,
through customer focus of our commercial and corporate branches, and by
enhanced efforts towards the development of human capital, we shall very soontransform the bank from a bureaucratic organization to a fast paced, modern, and
competitive bank.
In conclusion, I firmly believe that we have the vision, which will enable us to
achieve even better results, safeguard the interest of our customers and to assist us
in our march towards progress and prosperity in future.
QAMAR HUSSAIN
Chairman & President.VISION STATEMENT: To be recognized as a leader and a brand synonymous
with trust, highest standards of service quality, international best practices and
social responsibility.
MISSION STATEMENT: NBP will aspire to the values that make NBP truly
the Nations Bank, by:
Institutionalizing a merit & performance culture.
Creating a distinctive brand identity by providing
the highest standard of services.
Adopting the best International Management
practices.
Making Shareholders values.
Discharging our responsibility as a good
corporate citizen of Pakistan & in countries where we operate.
CORE VALUES:
Highest standard of integrity.
Institutionalizing teamwork & performance
culture.
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Excellence in service.
Advancement of skills for tomorrow challenges.
Awareness of social & community response.
Value creation for all shareholders.
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GOALS:
To enhance profitability & maximization of NBP share through increasing
leverage of existing customer base & diversified range of products.
Board Of Directors
The board of directors is the supreme governing body of National Bank of
Pakistan. It comprises of a government representative, Pakistan Banking Council
Nominee, Nominee of corporate sector and three directors from National Bank of
Pakistan.
QAMAR HUSSAIN(CHAIR PERSON AND PRESIDENT)
TARIQ KARAMI Mrs HANIYA SHAHID NASEEM Ms NAZRATBASHIR
(DIRECTOR) (DIRECTOR) (DIRECTOR)
EKHLAQUE AHMED IBRAR A. MUMTAZ KOUSER HAMEED(DIRECTOR) (DIRECTOR) (DIRECTOR)
M..AYUB KHAN SIKANDAR HAYAT M.ARSHAD(DIRECTOR) (DIRECTOR) (DIRECTOR)
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Senior Management:
Masood Karim Sheikh SEVP & Group Chief, Corporate & Investment BankingGroupShahid Anwar Khan SEVP & Group Chief, Credit Management Group
Dr. Asif A. Brohi SEVP & Group Chief, Operations GroupImam Bakhsh Baloch SEVP & Group Chief, Audit & Inspection GroupZiaullah Khan SEVP & Group Chief, Compliance Group
Dr. Mirza Abrar Baig SEVP & Group Chief, Human Resources Management &Administration GroupAmer Siddiqui SEVP & Group Chief, Commercial & Retail Banking GroupMuhammad NusratVohra SEVP & Group Chief, Treasury Management Group
Amim Akhtar EVP & PSO to the President
Ekhlaq Ahmed EVP & Secretary Board of DirectorsTajammal HussainBokharee EVP/Divisional Head, Special Assets Management Group
Mrs. Khurshid MaqsoodAli
EVP & Divisional Head Employee Benefits, Disbursements& Trustee Division
Tahir Yaqoob EVP & Group Chief, Overseas Coordination & ManagementGroupAnwar Ahmed Meenai EVP & Divisional Head, Islamic Banking
Naeem Syed EVP & Head, Core Banking Application, PMO
Aamir Sattar Financial Controller & Divisional Head, Financial ControlDivisionAtif Hassan Khan Group Chief (A), Information Technology Group
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ORGANIZATIONAL HIERARCHY
PRESIDENT
SENIOR VICE EXECUTIVE PRESIDENT (SVEP)
EXECUTIVE VICE PRESIDENT (EVP)
SENIOR VICE PRESIDENT (SVP)
VICE PRESIDENT (VP)
ASSISTANT VICE PRESIDENT (AVP)
OFFICER GRADE III
OFFICER GRADE II
OFFICER GRADE I
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Objectives of NBP
Objectives are ends towards which an enterprise activity is aimed. The purpose of
business is production and marketing of economic goods and services but to
accomplish these objectives to a number of enterprise objectives may benecessary.
National bank of Pakistan has certain objectives. These objectives are
(1) Advancing loans:
One of the main objectives of NBP is advancing loans to industrialists and traders
against security of stock, debentures or other securities
(2) Accept deposits:
Bank provides deposit facility to its customers. The types of deposits areProfit and loss saving accounts
Fixed account
Current account
Basic banking account (bba account)
PLS Term deposit account
(3) Remitting of funds:
The bank provides the facility to its customers remitting large amounts of
money in the form of bank Drafts, Telegraphic Transfer, Mail Transfer to where
ever the customers want.
(4) Sale of promissory notes:
To sell and realize the proceeds of sale of any promissory notes, debentures, stock
receipts, bonds, shares etc.
(5) Selling and realizing property of bank claims:To manage sell and realize all property whether moveable or immoveable which
may come in any way of the bank in satisfaction of its claim.
(6) Investment or underwriting of stocks:
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To invest the funds of the bank in or the underwriting of any of stocks, funds,
shares securities, debentures, bonds or scripts or other securities for money issued
by any public limited companies and to convert them into money when required.
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Branches & Centers
Branches:
Currently more than 1500 branches are working in over all Pakistan in different
cities and regions including all major and minor cities of Pakistan.Online Branches:
Following are the online branches that are currently working in Pakistan.
Karachi
Islamabad
Rawalpindi
Gujar Khan
Sialkot
Gujranwala
Sheikhupura
Hyderabad
Quetta
LahoreBurewala
Multan
Muzaffarabad
Faisalabad
Peshawar
Kohat
Mirpur
Gujrat
Abootabad
Bhawalpur
DG Khan
DI Khan
Jhang
Ladkana
Mardan
Sahiwal
Sargodha
Sucker
Jhelum
Wah Cantt
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Swift Centers
SWIFT is a main center that is interconnecting all branches with each other.
SWIFT channels mainly do the international transactions of NBP. These
transactions include Foreign Exchange Dealings, Foreign Telegraphic Transfer and Letter of Credit.
NBP SWIFT Local CentersCity
FAISALABAD
GUJRANWALA
HYDERABAD
ISLAMABAD
LAHORE
MULTAN
PESHAWAR
QUETTA
RAWALPINDI
SIALKOTMIRPUR
MUZAFFARABAD
KARACHI
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NBP SWIFT International Centers
City Branch name
K.S.ARABIA Regional Office Saudi Arabia
KYRGYZ Rep National Bank Of Pakistan, Bishkek
ASHKHABAD National Bank Of Pakistan
CHAINA Regional Office, Beijing
SOUTH KOREA National bank of Pakistan ,Seoul Branch
BANGLA DESH National Bank of Pakistan, Chitta gong Branch
BISHKEK National Bank Of Pakistan, Bishkek Branch
FRANKFURT National Bank Of Pakistan, Frankfurt
HONG KONG National Bank Of Pakistan, Hong Kong
KABUL National Bank Of Pakistan, Kabul
MANAMA National Bank Of Pakistan, Bahrain
NEW YORK National Bank Of Pakistan, USA
PARIS National Bank Of Pakistan, France
SEOUL National Bank Of Pakistan, Seoul Branch Korea
TOKYO National Bank Of Pakistan, Tokyo Japan
KAZAKHASTAN Regional Office KHAZAKHSTAN
Through these channels NBP Super Market is sending messages for Letter of
Credit, foreign trade etc. because in every branch SWIFT system is not available
because of IT problems.
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Hajj Mubarak Scheme
For the convenience of a person with a limited income who desires to perform
Hajj, Hajj Mubarak Scheme is introduced. Moreover, National Bank of Pakistan
processes the Hajj applications of thousands of people successfully more than any
other bank in Pakistan.
NBP Advance Salary Scheme
Do you need urgent funds? If yes then head to National Bank of Pakistan and avail
NBP Advance Salary Scheme, which allow you to draw twenty months salary in
one go. This facility is available to permanent employees of the:
Federal and Provincial governments
Semi-governments, autonomous, semi-
autonomous, local bodies, and government corporations
Other corporations approved by NBP
No guarantee, collaterals, or insurance is required to avail this scheme. NBP gives
the facility to repay the excessive amount within 1 to 60 months. The procedure isvery easy, just fill the application form and choice between 1 to 60 months and
take your NBP. NBP received 20% markup on this loan. It advances twenty
salaries at once.
Fund Management Scheme
This scheme is offered to corporate under customer and is aimed at providing
better rate of return up to 15% per annum. One of the objectives of the scheme isto develop the secondary market for government securities.
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Functions of NBP
The National Bank of Pakistan performs two types of function. It acts as an
ordinary commercial bank, and at places where there are no branches of State
Bank of Pakistan it represents Pakistan, that is why it cannot be privatized. As a
commercial bank it performs the following functions.
Accepting of deposits of money on current
account, saving, term deposit and other profit and loss sharing accounts.
Borrowing money and arranging finance from
other banks.
Advancing and lending money to its clients.Financing of projects including technical
assistance, project appraisal through long term/short term loans.
Buying, selling, dealing and discounting of bills
of exchange, promissory notes, drafts, bill of lading, other instruments of
securities etc.
Foreign exchange business.
Financing of seasonal crops like cotton, wheat,
rice.
Receiving of bonds, scripts, valuable etc. for safe
custody.
Carrying on agency business of any description
other than managing agent on behalf of clients, including government and
local authorities.Generating, undertaking, promoting etc. of issue
of shares, bonds.
Transacting guarantees and indemnity business.
Undertaking and executing trusts.
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Making investments in other banking companies.
Joint venturing with foreign dealers, agents and
companies for its representation abroad.
Participating World Bank and AsianDevelopment bank's lines of credit.
Utility services.
Providing Hajj services to intending Hajjis.
Agent to State Bank of Pakistan for collecting.
Payment of pension on behalf of provincial and
central governments.
Treasury business.
Gold finances.
Functions of NBP as A Representative of State Bank of Pakistan
Collection of cheques and bill of exchange for its
customers.
Paying insurance premium, rent or other
obligations of the customers.
Collecting interests due, dividend pensions and
other sums due to customers.
Transferring of money from place to place.
Acting as an executor, trustees for the customers.
Providing safe custody and jewelry documents or securities.
Issuing of travelers cheques and letter of credit
to give credit facilities for travel.
Purchasing shares for the customers.
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Accepting bills of exchange on behalf of
customers.
Undertaking foreign exchange business.
Furnishing trade information and tenderingadvice to customers.
Formulating operation policy guidelines for the
banks.
Laying down performance criteria for banks and
taking steps for ensuring their observance.
Evaluating the performance of the banks in the
context of operational guidelines issued to the banks.
Determining the areas of coordination of the
banks.
Formulating schemes under section of the act.
Making recommendations to the federal
government for the appointment of the president and members of the
executive board.
Analyzing and appraising financial statement
including balance sheets and profit and loss accounts of banks and
appointment of auditors of the bank.
Conducting such surveys, inquiries and appraisals
as may be necessary for the purpose of this act.
Exercising and performing such powers and
functions of the federal government under the act and such other functionsas the federal government may assign to it.
Establishing a research department or conduct
banking research and in particular study overseas banking operation and
problems of the agricultural financing.
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Establishing a central training institution for
improving bank services.
Coordinating the planning of the operations of
nationalized commercial banks, and exercising general overall checks onthe cost of their operations.
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CHAPTER - 3
SERVICES OF NATIONAL BANK OF PAKISTAN
Service is an identifiable, intangible activity that is the main object of a transactiondesigned to provide want satisfaction to customers.
International Banking
National Bank of Pakistan is at the forefront of international banking in Pakistan,
which is proven by the fact that NBP has its branches in all of the major financial
capitals of the world. Additionally, we have recently set up the Financial
Institution Wing, which is placed under the Risk Management Group. The role of the Financial Institution Wing is:
To effectively manage NBPs exposure to foreign
and domestic correspondence
Manage the monetary aspect of NBPs
relationship with the correspondents to support trade, treasury and other
key business areas, thereby contributing to the banks profitabilityGeneration of incremental trade-finance business
and revenues
NBP offers:
The lowest rates on exports and other
international banking productsAccess to different local commercial banks in
international banking
DEMAND DRAFTS
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If you are looking for a safe, speedy and reliable way to transfer money, you can
now purchase NBPs Demand Drafts at very reasonable rates. Any person whether
an account holder of the bank or not, can purchase a Demand Draft from a bank
branch
Mail Transfers
Move your money safely and quickly using NBP Mail Transfer service. And we
also offer the most competitive rates in the market.
Pay Order
NBP provides another reason to transfer your money using our facilities. Our payorders are a secure and easy way to move your money from one place to another.
And, as usual, our charges for this service are extremely competitive.
Traveler's Cheques
Negotiability: Pak Rupees Travelers Cheques are a negotiable instrumentValidity: There is no restriction on the period of validityAvailability: At 700 branches of NBP all over the countryEncashment: At all 400 branches of NBPLimitation: No limit on purchaseSafety: NBP Travelers Cheques are the safest way to carry out money
Letter Of Credit
NBP is committed to offering its business customers the widest range of options in
the area of money transfer. If you are a commercial enterprise then our Letter of Credit service is just what you are looking for. With competitive rates, security,
and ease of transaction, NBP Letters of Credit are the best way to do your business
transactions.
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Commercial Finance
Us help make your dreams become a reality
Our dedicated team of professionals truly understands the needs of professionals,
agriculturists, large and small business and other segments of the economy. They
are the customers best resource in making NBPs products and services work for
them.
Foreign Remittances
To facilitate its customers in the area of Home Remittances, National Bank of
Pakistan has taken a number of measures to:
Increase home remittances through the banking
system.
Meet the SBP directives/instructions for timely and prompt delivery of remittances
to the beneficiaries.
New Features :
The existing system of home remittances has been revised/significantly improved
and well-trained field functionaries are posted to provide efficient and reliable
home remittance services to nonresident Pakistanis at 15 overseas branches of the
Bank besides United National Bank (the joint venture between NBP and UBL in
UK)., and Bank Al-Jazira, Saudi Arabia.
Zero Tariffs: NBP is providing home remittance
services without any charges.Strict monitoring of the system is done to ensure
the highest possible security.
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Special courier services are hired for expeditious delivery of home remittances to
the beneficiaries.
Swift System
The SWIFT system (Society for World-wide Inter- bank Financial
Telecommunications) has been introduced for speedy services in the area of home
remittances. The system has built-in features of computerized test keys, which
eliminates the manual application of tests that often cause delay in the payment of
home remittances.
The SWIFT Center is operational at National Bank of Pakistan with a universal
access number NBP-PKKA. All NBP overseas branches and overseas
correspondents (over 450) are drawing remittances through SWIFT.
Using the NBP network of branches, you can safely and speedily transfer money
for our business and personal needs.
Short Term Investments
NBP now offers excellent rates of profit on all its short-term investment accounts.Whether you are looking to invest for 3 months or 1 year, NBPs rates of profit are
extremely attractive, along with the security and service only NBP can provide.
Equity Investments
NBP has accelerated its activities in the stock market to improve its economic base
and restore investor confidence. The bank is now regarded as the most active and
dominant player in the development of the stock market. NBP is involved in thefollowing:
Investment into the capital market
Introduction of capital market accounts (under
process)
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Provide farmers an integrated package of credit
with supplies of essential inputs, technical knowledge, and supervision of
farming.
Agricultural Credit (Medium Term):
Production and development.
Watercourse improvement.
Wells.
Farm power.
Development loans for tea plantation.
Fencing.
Solar energy.
Equipment for sprinklers.
Farm Credit:
NBP also provides the following subsidized with ranges of 3 months to 1 year on a
renewal basis.
Operating loans.
Land improvement loans.
Equipment loans for purchase of tractors, farm
implements or any other equipment.
Livestock loans for the purchase, care, and
feeding of livestock.
Production Loans:
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Production loans are meant for basic inputs of the farm and are short term in
nature. Seeds, fertilizers, sprayers, etc are all covered under this scheme.
Corporate Finance:
Working Capital and Short Term Loans:
NBP specializes in providing Project Finance Export Refinance to exporters
Pre-shipment and Post-shipment financing to exporters Running finance Cash
Finance Small Finance Discounting & Bills Purchased Export Bills
Purchased / Pre-shipment / Post Shipment Agricultural Production Loans.
Medium term loans and Capital Expenditure Financing:
NBP provides financing for its clients capital expenditure and other long-term
investment needs. By sharing the risk associated with such long-term investments,
NBP expedites clients attempt to upgrade and expand their operation thereby
making possible the fulfillment of our clients vision. This type of long term
financing proves the banks belief in its client's capabilities, and its commitment to
the country.
Loan Structuring and Syndication:
National Banks leadership in loan syndicating stems from ability to forge strong
relationships not only with borrowers but also with bank investors. Because we
understand our syndicate partners asset criteria, we help borrowers meet
substantial financing needs by enabling them to reach the banks most interested in
lending to their particular industry, geographic location and structure through
syndicated debt offerings. Our syndication capabilities are complemented by our
own capital strength and by industry teams, who bring specialized knowledge to
the structure of a transaction.
Cash Management Services:
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With National Banks Cash Management Services (in process of being set up), the
customers sales collection will be channeled through vast network of NBP
branched spread across the country. This will enable the customer to manage their
companys total financial position right from your desktop computer. They willalso be able to take advantage of our outstanding range of payment, ejection,
liquidity and investment services. In fact, with NBP, youll be provided
everything, which takes to manage your cash flow more accurately.
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Lockers service:
National bank of Pakistan also provides lockers facility in the country. The lockers
issued only to the depositors. No lockers are issued to any unknown person.
The dual control system is used for lockers. The officer has master key to apply on
the locker but he cannot open the locker of any person. The locker holder provides
the bank has specimen signature. Whenever the locker holders come to open the
locker, his signatures are verified by the officer and then will be able to open his
locker. If the key of the locker is lost company providing these lockers breaks the
locker and new lock is fitted in its locker and lock is destroyed in the presence of
the locker holder and bank charges RS 1200 for that. In case the locker holder dies, the court opens his locker in the presence of his heir as mentioned in his will
or and his belongings are given to them and the locker is closed.
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CHAPTER - 4
ORGANIZATIONAL REVIEW
Work Done By Me:During my stay in National Bank of Pakistan, saddar road branch Peshawar. I
found it as among one of the best bank in Pakistan. As an internee, I enjoy
working their, .NBP has a very cooperative staff .I worked there in very congenial
and supportive environment. The staff over there is always being ready to guide
about bank and its systems.
According to its financial statements it is on a way to progress.
I joined National Bank of Pakistan, saddar road branch Peshawar on 17 th June,
2011.On my first day Mr. Waqar Ahmed Awan introduced me about the
functioning of the branch and the staff. He told me that all departments are very
important for banking functions. During the Two Months of my internship, I
worked in different sections of the branch and did the maximum practice of
banking system details of which is as under:
Departments In NBP
1. Foreign Exchange department2. Credit & Advance department
3. Bills section/department
4. Remittance section/ department
5. Deposit section/ department
6. Govt. section/ department
7. Cash section/ department
8. Establishment /administration section/ department
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ORGANOGRAM OF NBP
32
NATIONAL BANK OF PAKISTAN
Compliance Officer Manager Operations Manager
CREDITSECTION/DEPARTMEN
T
LOANOFFICER
Foreign Exchange Deptt
Credit (CAD Officer)
Bills Section/Deptt
Remittance Section/Deptt
Deposit Section/Deptt
Govt Section/Deptt
Cash Section/Deptt
Estab/Admn Section/Deptt
Each Department is headed by Departmental Head with a number of staff reporting to them as per volume of the work
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ORGANOGRAM OF FOREX DEPTT
33
INCHARGE
DEPOSIT SECTIONREMMITANCE
S IMPORT
1. Foreign CurrencySaving/Current A/C Punchingand Maintenance.
2. Deduction of Service Charges.
3. Opening/Closing of F.CAccounts and issuance of chequeBooks.
4. Foreign Exchange relevantReturns.
5. Western Union Payment.
6. up-date Record of ForeignExchange Rates.
7. FE inward remittance
8. FDDP
Overall Incharge of ForeignExchange Department andresponsible for all affairs of Foreign exchange.1. Checking and ensuringeffectiveness of controls.2. Ensure satisfactoryservices to Customers.3. Review of daily activityand daily transaction.4. Import L/C opening
lodgment and retirement.5. Opening of ForeignCurrency Account approval.6...Rectification of AuditIrregularities.7. Checking of all relevantdaybooks8. Daily activity report of FCDeposits.9. Sale purchase of F.C
Notes10. T.Cs Encashment/USD
bonds and their profit payment..11. Issuance /Authentication
of Form E.12.NOSTRO a/cReconciliation.13.Monthly mismatch of FE25 Deposit.14.Relevant returns.
1. Outward Remittances.
2. Daily FET Preparation andReporting to TMG H.O by Fax.
3. Foreign Bills Collection of Cheques/Instruments.
4. Local US$ Clearing &Settlement.
5. Maintenanace of AssignmentA/cs and their balancing with NBP New York andSBP.
6. Export and maintenance of relevant books/other records.
7. Processing /Payment of Freight subsidiary claims.
8. Reconciliation of Assignment A/cs.
9.SBP Summary Statement.
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Foreign Exchange Department
In this department I work for one week with Mr. Waqar ahmed Awan. I also deal
the Western Union Money Transfer activities in this department. It has specific
software which link with the Head office of NBP. For receiving money the ten
digits code number is require, the name of receiver & sender is also require, along
with this the NIC No of the receiver is necessary. The amount transfer is also
entering & it provides the complete information. The detail of the process is print
out. It has three parts on for the customer, other for the in charge of department &
the 3 rd is for the purpose of sending to the head office of NBP.
All the activities perform in this department are mention in the above chart of department.
Credit and Advances Department:
It may be defined as:
The sale of goods and services and money claims in the present in exchange for a
promise to pay in future .
The most important activity of the bank is the granting of credit to the customers.
NBP provides short term long terms financing for domestic and international
trade. The policies made by central office of the cash can be amended on the basis
of the rules and regulation, economic risk of each country board of directors and
committee of the NBP made this type of decisions and informed about these
decisions to the branch managers.
The in charge of this department is Mr. Naveed . They are working under the
control of manager only & free of the control of operational manager.
In this department I work two weeks I only perform the duty of President Rozgar
Scheme and Gold loan. The requirements & procedure of Gold loan is following.
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Gold Loan Service
First of all the person who need the money from bank as in the form of credit the
NBP provide this facility under the Gold loan for this he need to get the ECIB
(Electronic Customer Investigation Bureau) through it checked that the customer
may or may not borrow money from any other bank of Pakistan. It is software that
is providing to all banks by SBP. After this step the NADRA verification of the
borrower NIC is made. And it is also the necessary step of Gold loan requirements
that the current account will be open in the account opening department, for the
purpose of deposit of insurance and installments to the bank. When it is clear than
the approval is made. The borrower is send to the ANDARSHER for the purpose
of weighting of Gold. The bank made a contract with the Goldsmith that he
performed the duty on behalf of NBP. He weight and valued the Gold and write a
receipt for bank. The bank receives the documents and Gold. The payment is made
to he borrower and the gold is kept in the locker of bank. Under the authority of
Chief Cashier.
The Gold loan is the demand finance. The form is containing of the following
requirements.
Proposal of Rs-------------.Terms & conditions.
NameLimitPurposeSecurityDate of expiryDate of final adjustments
Date of markupMode of repaymentDocuments
President's Rozgar Scheme
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If you are aged between 18 and 45 years, you could be eligible for easy
financing for self employment in the categories below:
NBP Karobar Utility Store .
NBP Karobar Mobile Utility Store.
NBP Karobar Mobile General Store.
NBP Karobar Transport.
NBP Karobar PCO.
NBP Karobar Tele-Centre.
In this department only provide the transport facility as Rickshaw. The
requirements & procedures for the product is the following.
ECIB, NADRA verification of NIC, current account. Application form, legal
documents, Authority letter, Sanction letter, Delivery order, purchase order,
registration, insurance. Repayment schedule, To Whom It May Concern, credit
approval memo, internal verification of applicant& witnesses.
Other services of this department:
This department also provides the service of House Building Finance, Car finance,
computer finance to the employees of NBP only. And Advance salary
is providing to those departments employees which have account with
NBP.
Account Opening Department:
In this department, I gain the practical knowledge about opening account. This
department deals with opening current and saving account for its customers and all
matters regarding thereof. The customers opening current and saving accounts can
be categorized as following.
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Individual.
Firm.
Company.
Trust.Staff.
Others.
Opening Accounts
In order to open an account, first of all the customers have to a verified NIC from
NADRA. The requirements of the account opening form are type of account,nature of account, currency, Next of kin, personal information, signatures etc.
Types of accounts
Following types of accounts are open in NBP
Saving account
Current or demand account
Fixed account
Saving account (PLS)
This type of account is designed to encourage the saving habit of the customer and
lead to a long-term banking or investment relationship.
Bank saving accounts are in the nature of deposits accounts and are not normally
available for drawings. Rates of interest are typically ahead, by a small margin.
Saving accounts with the banking sector represent a very small proportion of total
deposits.
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Current or demand account
These are those deposits, which can be drawn by the depositor at anytime by
presenting a cheque to the bank. People deposit their money in this account they
gave a ready command on their account in developed and under developed
countries of the world, a very significant part of money is kept under current or
demand account.
Fixed account
Fixed accounts are those, which are deposited for a fixed period of time and arerepayable after the expiry of stipulated time to the customers. Those people who
have surplus funds and want to have save investments deposit the amount in the
fixed account. The rate of interest given to depositor varies with the length of
deposit, i.e. it is higher for longer period and lowers for shorter period.
Issuance of Cheque Book
After opening the account, a cheque book is given to the customer to sign uponwhich the number of cheque book issued and the name of the customer is written.
Bank issues a cheque book against requisition. A cheque book may be of (PLS),
25 & 50 or 100 leave (current A/C).
A cheque book register is maintained by the office. In this register, the cheque
book inventory, cheque books issue is recorded.
Issuance of New Cheque Book to Old Customer
The accountholders request for the new chequebook by presenting the requisition
slips along with the authority letter to the concerned office. His signatures are
verified before giving him a new chequebook. The presence of the accountholders
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is compulsory to get a new chequebook. But if he sends a third person to get his
chequebook then the procedure is as follows;
An authority letter is given to the third party by
the accountholders.
The accountholders verify the signature of the
third person on that authority letter.
The bank officer gets the signature of that third
person to confirm whether he is the same to whom the accountholder has
sent.
The bank issues the new cheques book and authority letter is kept by the bank.
Clearing Department
In this department, I have worked for two weeks. Main branch receives the
cheques from all of its branches and makes the list of these cheques again. Main
branch sends these cheques to the state bank of Pakistan where a clearinghouse
exits. In this clearinghouse the representatives receive their cheques and go back to their bank's main branch. Then the main branch sends these cheques to their
relevant branches where the validity of these cheques is verified and the accounts
of the relevant clients are affected.
The major function of Clearing Department is to receive the cheques, which are
drawn on some other bank. The customer can get the money in his account
at NBP, from the cheques drawn on another bank. The bank accepts these
cheques and collects the amount from that bank on which cheque is drawn
through the Clearing House. Bank charges some commission for this
function.
Stamping
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Early in the morning the cheques are received and than arrange in different sets.
All cheques are stamped by a number of different stamps, which is use for specific
purpose. The original cheque will be marked with two stamps. Mostly used stamps
are:
National bank of Pakistan
Clearing Stamp
At the end of day, all cheques are counted and then scrutinized in bank-wise and
sent to the Clearing House.
Remittances Department
Remittance is the monitory transfer from one place to another place or from one
country to another country to fulfill the requirements of the customers by the order
of the customer.
I worked in this department for one week. In this department internees are advised
only to observe the working of transfer of money from one place to another place
of the country by the above modes of transferring money.
Issuing a bank draft it is necessary that the draft should be free from alternations.
All the details must be written clearly in ink. After issuance a demand draft it is
handed over to the applicant and its advice containing the particulars of the draft is
sent to drawer branch with its necessary information and payment of the draft is
making on its presentation.
I learn in this department also the basic of the following instruments:
Payment order (p/o)
Demand draft (DD)
Telegraphic transfer (TT)
Mail transfer (MT)
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Pay Order
It is an instrument, which is payable in demand .Pay order is also called the
bankers cheque drawn upon the issuing bank itself. It is not negotiable and
therefore, bankers tend to cross the instrument Payees account only to avoid the
possibility of dealing with instruments with forged endorsement. The pay order is
issued favoring individuals, commercial concerns, and government departments.
On the presentation of pay order, the bank is liable to pay the amount to the
customer.
Demand Draft
If you are looking for a safe, speedy and reliable way to transfer money, you can
now purchase NBPs Demand Drafts at very reasonable rates. Any person whether
an account holder of the bank or not, can purchase a Demand Draft from a bank
branch.
Telegraphic Transfer
It is the message, which is sent from one branch to another on the order of payer to
payee through wire. It is one of the quickest means to transfer fund through the
use of telex/fax/internet or cable. Payment to the beneficiary is affected directly
by the drawee office upon identification or through credit into beneficiarys bank
account. As such remitting office is not required to issue any instrument payment
to the remitter for delivery to the beneficiary.
Mail Transfer
It is the same like TT, but in this type, the message is sent through mail rather than
telex. The procedure is same as TT, but the advice is sent through mail rather than
wired.
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New Features:
The existing system of home remittances has been revised/significantly improved
and well-trained field functionaries are posted to provide efficient and reliable
home remittance services to nonresident Pakistanis at overseas branches of the
Bank besides Pakistan International Bank (UK) Ltd., and Bank Al-Jazira, Saudi
Arabia.
Zero Tariffs: NBP is providing home remittance
services without any charges.
Strict monitoring of the system is done to ensure
the highest possible security.Special courier services are hired for expeditious
delivery of home remittances to the beneficiaries.
Dispatch Department
I worked in this department for six days. Department deals in receiving of all the
posted documents. They receive the posted materials posted by other banks andinstitutions. Also mail their own documents to other organization. After receiving
the documents it is recorded in the registered.
ATM Department
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I work in this department for three days .on the first day I fill the forms for those
customers whose ATM card are expired and issue the reminders to those customers
through their home address. The ATM is the separate department in the main
branch Peshawar Cantt. It is operated by a single person. The NBP due to the fraudin ATM card operation ban the transaction with other banks and the ATM card of
NBP not operative in those banks. They also cannot provide the facility of Credit
Card because the people cannot repay their dues to the bank.
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CHAPTER - 5
ANALYSIS OF FINANCIAL STATEMENTS(FOR THE YEAR 2011 & 2010)
Financial Analysis
Financial analysis is an evaluation of a firms performance. The source of financial
analysis is the financial statements & Director Reports. The main purpose of the
financial analysis is to give a clear picture of the financial position by studying the
relationship & comparison between the items in the statement.
The financial statements are the balance sheet and income statement. The balance
sheet summarizes the assets, liabilities and owner s equity of a business at a point
of time, and the income statement summarizes revenues and expenses of the over a
particular period of time.
Seven Years Performance of NBP at a Glance (Rs. In million)
Year 2010 2009 2008 2007 2006 2005 2004ItemsTotal assets 762,193 635,133 577,719 553,23
1468,972432,80
3415,089
Deposits 591,907 501,872 463,427 465,572
395,492362,866
349,617
Advances 340,677 316,110 268,839 220,794
161,266140,547
170,319
Investments 210,787 139,947 156,985 149,350
166,196143,525
71,759
Shareholders equity 70,907 53,045 37,636 24,900 18,134 14,279 11,959Pre-tax profit 28,060 26,311 19,056 11,978 9,009 6,045 3,016
After-tax profit 19,033 17,022 12,709 6,195 4,198 2,253 1,149Earning per share (EPS) 23.34 20.88 17.92 10.48 8.53 5.49 3.08Return on assets (ROA) 2.49% 4.3% 3.4% 2.4% 2.0% 1.4% 0.8%
No of Branches 1,243 1,250 1,242 1,226 1,199 1,204 1,245 No of employees 14,079 14,019 13,824 13,745 13,272 12,195 15,163
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On the basis of the view of financial experts I also study and explain the financial
performance of the NBP of the last seven years. (2004 to 2010).
The above table shows the performance of NBP in the last seven years. The total
assets in 2004 are 415,089millions and that increase to 553,231millions in 2007and also show increasing trend in 2010 is become 762,193 millions.
Similarly the deposits increase up to 2007 and than slightly decline in2008, and
than start increasing later from 2009 to 2010.
The advances are decrease from 2004 to 2005 and than start increasing up to 2010.
The investment is fluctuating in the seven years period.
The shareholder equity is increasing through the period from 2004 11,959millions
to 2010 70,907millions.
The pre-tax profit and after- tax profit is increasing through the period. The
earning per share is move upward from2004 to 2010. The return on assets is also
increase up to 2009 and than decline in 2010. The number of branches and the
number of employees is decrease from 2004 to 2005 and start increasing up to
2010.
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NATIONAL BANK OF PAKISTANBALANCE SHEET
AS AT 31 STDECEMBER, 2011& 20102011
(Rupees in 000s)2010
(Rupees in 000s)ASSETSCash &Balance with other BanksLending to FinancialInstitutioninvestmentAdvanceOperating Fixed Assets
Deferred tax assetsOther Assets
94,873,249
37,472,83221,464,600210,787,868340,677,10025,922,979-30,994,965
78,625,227
40,641,67923,012,732139,946,995316,110,4069,681,974-27,113,698
TOTAL ASSETS 762,193,593 635,132,711LIABILITIES
Bills Payables
10,605,663BorrowingsDeposits & other accountsSub-ordinated loansLiabilities against assetssubject to finance leaseDeferred tax liabilities-net
Other liabilities
7,061,902
10,886,063591,907,435-
33,5545,097,83130,869,154
10,605,663
11,704,079501,872,243-
13,2352,387,07326,596,300
TOATAL LIAILITIES 645,855,939 553,178,593NET ASSETS 116,337,654 81,954,118
PRESENTED BY
Share capitalReservesUnappropriated profit
8,154.31915,772,12445,344,188
7,090,71213,879,26032,074,677
Surplus on revaluation of assets
69,270,631
47,067,023116,337,654
53,044,649
28,909,66981,954,118
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NATIONAL BANK OF PAKISTANPROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 st DECENBER 2011& 2010
2011
Rupees in000's
2010
Rupees in000's
Mark-up /return/interest earnedMark-up return/interest expensed
50,569,48116,940,011
44,100,93413,947,218
Net mark-up/interest income 33,629,470 30,153,716
Provision against non-performing loans and advanceReversal of provision for diminution in the value of investmentsBad debts written off directly
4,723,084
(40,084)
39,899
30,075,723
(709,461)
5,284 4,722,735 2,371,546
Net mark-up/ interest income after provision 28,906,735 27,782,170
NON-MARK-UP/INTEREST INCOME
Fee, Commission and brokerage incomeDividend incomeIncome from dealing in foreign currenciesGain on sale and redemption of securitiesUnrealized loss on revaluation of investmentclassified as held-for-tradingOther income
6,781.6833,263,2461,042,8272,341,690
(31,964)
147,363
6,144,6282,891,7551,333,8401,169,515
(4,464)
627,618
Total non-markup/interest income 13,544,845 12,162,892 42,544,845 39,945,062
NON- MARK-UP/INTEREST EXPENSESAdministrative ExpensesOther provision/write offsOther charges
14,205,911168,02717,141
13,443,441(17,283)208,327
Total non mark-up/interest expenses 14,391,079 13,634,485 Extra ordinary items - -
Profit before taxation 28,060,501 26,310,577Taxation-Current
-Prior years-Deferred
8,311,500391,497323,731
8,695,598530,65261,981
9,026,728 9,288,231Profit after taxation 19,033,728 17,022,346Unappropriated profit brought forwardTransfer from surplus on revaluation of fixed assets onaccount of incremental depreciation
32,074,67739,007
19,372,52341,060
Profit available for appropriation 51,147,457 36,435,929Basic earning per share
Diluted earning per share
23.34
23.34
20.88
20.88
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HORIZONTAL ANALYSIS:Profit & Loss AccountBalance Sheet
The horizontal analysis shows the comparison between the current and past year
performance of the organization by comparing the Balance sheet ant profit and
loss statement items. The formula use for horizontal analysis as follow.
VERTICAL ANALYSIS:Profit & Loss Account
Balance Sheet
In vertical analysis all the items of balance sheet and profit and loss statement are
divided by the total assets and total equity and liabilities and the revenue or sales
in balance sheet and profit and loss statement respectively.
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National Bank of PakistanHORIZANTAL ANALYSIS
BALANCE SHEETAS AT 31 STDECEMBER, 2011& 2010
ASSETS2011Rupees in 000s 2010Rupees in 000s
Increase/
decreaseRupees in 000s %age
Cash &Balance with other Banks
Balance with other Banks
Lending to Financial Institution
Investment
Advances
Operating Fixed Assets
Deferred tax assets
Other Assets
94,873,249
37,472,832
21,464,600
210,787,868
340,677,100
25,922,979
-
30,994,965
78,625,227
40,641,679
23,012,732
139,946,995
316,110,406
9,681,974
-
27,113,698
16,248,022
(3,168,847)
(1,548,132)
70,840,873
24,566,694
16,241,005
-
3,881,267
20.67
(7.79)
(6.72)
50.62
7.77
167.74
-
14.31
Total Assets 762,193,593 635,132,711 127,060,882 20.00
LIABILITIESBills PayablesBorrowingsDeposits & other accounts
Sub-ordinated loansLiabilities against assets subjectTo finance leaseDeferred tax liabilities-netOther liabilities
7,061,90210,886,063591,907,435
-33,554
5,097,83130,869,154
10,605,66311,704,079501,872,243
-13,235
2,387,07326, 596,300
(3,543,761)(818,016)
90,035,192
-20,319
2,710,7584,272,854
(33.41)(6.98)17.93
-153.52
113.5616.06
Total liabilities 645855939 553178593 92,677,346 16.75NET ASSETS 116,337,654 81, 954,118 34,383,536 41.95Share capital
Reserves
Unappropriated profit
8,154.319
15,772,124
45,344,188
7, 090,712
13,879,260
32, 074, 677
1,063,607
1,892,864
13,269,511
15.00
13.63
41.37
69,270,631 53, 044, 649 16,225,982 30.58
Surplus on revaluation of
Assets-net
47,067,023 28,909,469 18,157,554 62.80
116,337,654 81,954,118 34,383,536 41.95
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NATIONAL BANK OF PAKISTANHORIZONTAL ANALYSIS
PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 31 st DECENBER 2011& 2010
NATIONAL BANK OF PAKISTAN
2011Rupees in 000's
2010Rupees in
000's
Increase/DecreaseRupees in
000s
Changein %age
Mark-up return/interest earnedMark-up return/interest expensed
50,569,48116,940,011
44,100,93413,947,218
6,468,5472992793
14.6621.46
Net mark-up/interest income 33,629,470 30,153,716 3475754 11.52Provision against non-performingLoans and advancesReversal of provision for diminutionin the value of investments
bad debt written off directly
4,723,084
(40,248)
39,899
3,075,723
(709,461)
5,284
1647361
(749709)
34615
53.56
(105.67)
655.09
4,722,735 2,371,546 2,351,189 99.14Net mark-up/ interest income after provision
28,906,735 27,782,170 1124565 4.04
Fee, commission and brokerageIncomeDividend incomeIncome from dealing in foreigncurrenciesGain on sale and redemption of SecuritiesUnrealized loss on revaluation of investments classified as held for trading
other income
6,781,683
3,263,2461,042,827
2,341,690
(31,964)
147,363
6,144,628
2,891,7551,333,840
1,169,515
(4,464)
627,618
637055
371491(291013)
1172175
(36428)
(480255)
10.36
12.84(21.82)
100.22
(816.03)
(76.52)
Total non-mark-up/interestexpenses
13,544,845 12,162,892 1381953 11.36
42,451,580 39,945,062 2506518 6.27NON MARK-UP /INTEREST EXPENCES Administrative expenseOther provisions/writeOther charges
14,205,911168,02717,141
13,443,441(17,283)
208,327
762470150744(191,186)
5.67872.20(91.77)
Extra ordinary items
-- - - -
Profit before taxation 28,060,501 26,310,577 1749924 6.65Taxation-Current
-Prior years-Deferred
8,311,500391,497323,731
8,695,598530,65261,981
(384098)(139155)261750
(4.42)(26.22)422.30
9,026,728 9,288,231 (261503) (2.81)Profit after taxation 19,033,773 17,022,346 2011427 11.81
Unappropriated profit/(loss) broughtforward
Transfer from surplus onrevaluation of fixed assets on accountof incremental depreciation
32,074,677
39,007
19,372,523
41,060
12702154
(2053)
65.56
(5.00)
Profit available for appropriation 51,147,457 36,435,929 14711528 40.37Rupees
Basic earning per share 23.34 20.88 2.46 11.78
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VERTICAL ANALYSISBALANCE SHEET
AS AT 31 STDECEMBER, 2011& 20102011
Rupeesin 000s
%2010
Rupeesin 000s
%
ASSETSCash &Balance with other Banks
Balance with other Banks
Lending to Financial Institution
Investment
Advances
Operating Fixed Assets
Deferred tax assets
Other Assets
94,873,249
37,472,832
21,464,600
210,787,868
340,677,100
25,922,979
-
30,994,965
12.44
4.91
2.81
27.65
44.69
3.40
-
4.06
78,625,227
40,641,679
23,012,732
139,946,995
316,110,406
9,681,974
-
27,113,698
12.37
6.39
3.62
22.03
49.77
1.52
-
4.26
Total assets 762,193,593 100 635,132,711 100LIABILITIES
Bills PayablesBorrowingsDeposits & other accountssub-ordinated loans
Liabilities against assets subjectTo finance leaseDeferred tax liabilities-netOther liabilities
7,061,90210,886,063591,907,435
-33,554
5,097,83130,869,154
0.921.42
77.65-
4.40
0.664.05
10,605,66311,704,079501,872,243
-13,235
2,387,07326,596,300
1.661.8479.01
-2.08
0.374.18
Total liabilities 645855939 84.73 553178593 87.09NET ASSETS 116,337,654 15.26 81,954,118 12.90Share capital
Reserves
Unappropriated profit
53,044,649 8.
8,154.319
15,772,124
45,344,188
1.06
2.06
5.94
7,090,712
13,879,260
32,074,677
1.11
2.18
5.05
69,270,631 9.08 53,044,649 8.35Surplus on revaluation of
Assets-net
47,067,023 6.17 28,909,669 4.55
116,337,654 15.26 81,954,118 12.90
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NATIONAL BANK OF PAKISTANVERTICAL ANALYSIS
ROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 31 st DECENBER 2011& 2010
2011
Rupees in000's % age
2010Rupees in
000's%
ageMark-up/ return/ interest earnedMark-up/ return/ interest expensed
50,569,48116,940,011
10033.49
44,100,93413,947,218
10031.62
Net-mark up/interest income 33,629,470 66.50 30,153,716 68.37
Provision against non-performingloans and advancesReversal of provision for diminutionin the value of investments
bad debt written off directly
4,723,084
(40,248)
39,899
9.33
(0.07)
0.07
3,075,723
(709,461)
5,284
6.97
(1.60)
0.01
4,722,735 9.33 2,371,546 5.37
Net-mark up/interest incomeafter provision28,906,735 57.16 27,782,170 62.99
NON MARK UP /INTERESTINCOMEFee, commission and brokerageIncomeDividend incomeIncome from dealing in foreigncurrenciesGain on sale and redemption of SecuritiesUnrealized loss on revaluation of investments classified as held for tradingother income
6,781,683
3,263,2461,042,827
2,341,690
(31,964)
147,363
13.41
6.452.06
4.63
(0.06)
0.29
6,144,628
2,891,7551,333,840
1,169,515
(4,464)
627,618
13.93
6.553.02
2.65
(0.01)
1.42
Total non mark-up/ interest 13,544,845 26.78 12,162,892 27.5742,451,580 83.94 39,945,062 90.57NON MARK-UP /INTERESTEXPENCESAdministrative expenseOther provisions/write offs/(reversals)Other charges
14,205,911168,027
17,141
28.090.33
0.03
13,443,441(17,283)
208,327
30.48(0.03)
0.47
Total non mark-up / interestexpenses
14,391,079 0.47 13,634,485 30.91
28,060,501 28.45 26,310,577 59.65Extra ordinary / unusual items - - - -PROFIT BEFORE TAXATION 28,060,501 55.48 26,310,577 59.65Taxation- current
-prior years
-deferred
8,311,500391,497
323,731
16.43077
0.64
8,695,598530,652
61,981
19.711.20
0.149,026,728 17.85 9,288,231 21.06PROFIT AFTER TAXATION
17,022,346 38.59
19,033,773 37.63 17,022,346 38.59
Unappropriated profit broughtforward
19,372,523 43.92Transfer from surplus on revaluation
32,074,677
39,007
63.42
0.07
19,372,523
41,060
43.92
0.09
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of fixed assets on account of incremental depreciationProfit available for appropriation
51,147,457 101.14 36,435,929 82.61
Basic earning per share 23.34 20.88
RATIO ANALYSIS
Financial analysis is the process of identifying the financial strengths and
weakness of the firm by properly establishing relationship between the items of
balance sheet and profit and loss statement, in order to make rational decision in
keeping with the objective of the organization, for that purpose the management
use analytical tools. To evaluate the financial condition and performance of the
business entity.
The financial ratio is a number that expresses the value of one financial variable
relative to another. Put more simply, a financial ratio is the result you get when
you divide one financial number by another. Calculating an individual ratio is
simple, but each ratio must be analyzed carefully to effectively measure a firms
performance.
It is important way to state meaningful relationship between two components of a
financial statement. Ratios are guides or shortcuts that are useful in evaluating acompany s financial position and operations and making comparisons with results
in previous years or with other companies. The primary purpose of ratios is to
point out areas needing further investigation.
Therefore in my report I include some of the ratio to show the financial position of
the NBP.
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Shareholders Equity
2011 2010
19,033,773,000
________________x 100
69,270,631,000
= 27.47%
17,022,346,000
______________x 100
53,044,649,000
= 32.09%COMMENTS:
The ROE (return on equity) is also not show the satisfactory result because the net profit
is increased but on the other hand the holder equity is also increase and that is way the
result cannot show favorable sign.
Advances To Total Deposits = __ Advances ____ x 100 Total Deposit
2011 2010
340,677,100,000
________________ x 100
591,907,435,000
=57.55%
316,110,406,000
______________x 100
501,872,243,000
= 62.98%
COMMENTS:
The advance to total deposit is increase but by small amounts that are way the result is
not favorable show by ratio result.
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Advances To Total Assets Ratio = Advances____ x 100Total Assets
2011 2010
340,677,100,000
________________ x 100
762,193,593
=44.69%
316,110,406,000
______________x 100
635,132,711
= 49.77%
COMMENTS:
The advances is increased but by less amount as compare to the increased in total assets
therefore the ratio result is not good.
Debt To Equity Ratio = Total Debt __________ x 100Shareholders Equity
2011 2010
645,855,939,000
________________ x 100
69,270,631,000
=932.36%
553,178,593,000
______________x 100
53,044,649,000
=1042.85%
COMMENTS:
The total debt is increased and on the other side the share holder equity is also increased
also that is the ratio is decrease show favorable trend for share holders.
Long Term Debt To Fixed Assets Ratio = Long Term Debt x 100Fixed Assets
2011 2010
10,886,063,000
________________ x 100
25,922,979,000
=41.99%
11,704,079,000
________________ x 100
9,681,974,000
= 120.88%COMMENTS:
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The long term debt is decreasing from 2010 & fixed assets are increased more than debts
that are good symbol.
Debt Ratio : = Total Liabilities x 100Total Assets
2011 2010
645,855,939,000
__________________x 100
762,193,593,000
=84.73%
553,178,593,000
______________ x 100
635,132,711,000
= 87.09%
COMMENTS:
The debt ratio is show that the liabilities are increased at the slow rate than total assets
and that is favorable for NBP.
STOCK HOLDER EQUITY TO TOTAL LIABILITIES: =
STOCK HOLDERS EQYITY X 100TOTAL LIABILITIES
2011 2010
69,270,631,000
_________________ x 100
645,855,939,000
= 10.72%
53,044,649,000
_______________ x 100
553,178,593,000
= 9.58%
COMMENTS: The stock holder equity is show favorable trend from 2010.
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INVESTMENT TO TOTAL ASSETS = INVESTMENT X 100TOTAL ASSETS
2011 2010
210,787,868,000
_________________ x 100
762,193,593,000
= 27.65 %
139,946,995,000
_______________ x 100
635,132,711,000
= 22.03% COMMENTS: The investment ratio also increase that show the growth of NBP.
DEPOSITS TO TOTAL ASSETS RATIO = DEPOSITS X 100TOTAL ASSETS
2011 2010
591,907,435,000
_________________ x 100
762,193,593,000
=77.65%
501,872,243,000
_______________ x 100
635,132,711,000
= 79.01 %COMMENTS:
The deposit ratio as compare to total assets is decreasing that show that the total assets
figure is increased more than the previous year.
PROPRIETARY RATIO = STOCK HOLDERS EQYITY X 100TOTAL ASSETS
2011 2010
69,270,631,000
_______________ x 100
762,193,593,000
= 9.08%
53,044,649,000
_______________ x 100
635,132,711,000
= 8.35 %
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COMMENTS:
The proprietary ratio is increasing from 2007to 2008that is good news for shareholders.
That show the contribution of shareholders is increased.
EARNING PER SHARE: = ______NET PROFIT_____NUMBER OF SHARES
2011 2010
19,033,773,000
________________
815,432
= 23.34
17,022,346,000
_________________
709,071
= 24.00
COMMENTS:The earning per share is decreasing from 2010 to 2011 that show unfavorable news for
share holders.
AVERAGE PROFIT PER BRANCH =
NET PROFIT ____________________________
AVERAGE NUMBER OF BRANCHES
2011 2010
19,033,773,000
_______________
1243
= 15,312.76
17,022,346,000
__________________
1250
= 13,617.87 COMMENTS:
The average profit of NBP is increasing that show the efficiency of NBP. The number of
branches is decrease and net profit is increased.
CHAPTER - 6
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SWOT ANALYSIS
INTRODUCTION
SWOT analysis is an acronym that stands for strengths, weaknesses, opportunities,
and threats. SWOT analysis is careful evaluation of an organizations internal
strengths and weakness as well as its environmental opportunities and threats.
SWOT analysis is a situational which includes strengths, weaknesses,
opportunities and threats that affect organizational performance.
The overall evaluation of a company strengths, weaknesses, opportunities and
threats is called SWOT analysis.
In SWOT analysis the best strategies accomplish an organizations mission by:
1. Exploiting an organizations opportunities and strength.
2. Neutralizing it threats.
3. Avoiding or correcting its weakness.
SWOT analysis is one of the most important steps in formulating strategy using
the organization mission as a context; managers assess internal strengths
distinctive competencies and weakness and external opportunities and threats. The
goal is to then develop good strategies and exploit opportunities and strengths
neutralize threats and avoid weaknesses.
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STRENGTHS
Oldest Institution
NBP is one of the oldest bank of Pakistan and first nationalized bank Hence itscustomer base is strength from this plus point as customers have more confidence
in the bank. The additional value services as the privilege for the bank.
Alternate Duties in SBP Absence
The NBP performs additional services for its customers as well as the other bank
customer in the absence of SBP.
More Deposits than Other Banks
NBP has the relative competence in having more deposits than the other bank.
This is because of the confidence the customer have in the bank. The bank being
the privileged and oldest bank in banking sector of Pakistan enjoys this edge over
all others, lacking it.
Employee Benefits
The employers at NBP are offered reasonable monetary benefit. Normally two
bonuses are given Eid-Ul-Fitar & Eid-Ul-Azha. This serves as an additional
benefit and competency for the bank and a source of motivation for the employees.
Broad Network
The bank has another competency i.e. it has broad-basses network of branches
throughout the country also more than one branch in high productive cities. Thecustomers are provided services at their nearest possible place to confirm customer
satisfied.
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Strictly followed rules & regulation :
The employees at NBP are strict followers of rule & regulation imposed by bank.
The disciplined environment at NBP bolsters its image and also enhances the over
all out put of the organization.
Professional Competence
The employees at NBP here have a good hold on their descriptions, as they are
highly skilled Professionals with background in business administration, banking,
economics etc. These professional competencies enable the employees to
understand and perform the function and operation in better way.
Healthy Environment
The working condition in the NBP branch here is very conductive and favorable
for better output. The informal environment affects the performance of the
employees in a positive way.
Relation between Staff And Other Employees.
The bank enjoys a good plus point when it comes to the employee manager
relationship,the hearing as removing of discrepancies if any, between the
employees, and between the manager and employees.
WEAKNESSES
Lack of marketing effort:
The bank does not promote its corporate image, services, etc on a competitiveway. Hence lacks far behind in marketing effort. A need for aggressive marketing
is there in this ERA marketing is now becoming a part of every organization.
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NBP under Political Pressure.
The strong political hold of some parties and government and their dominance is
affecting the bank in a negative way. They sometime have to provide loan under
the pressure, which leads to uneven and adjusted feeling in the bank employees.
Favoritism and Nepotism.
The promotions and bonuses etc in the bank are often powered by seniors
favoritism or depends upon their wills and decision. This adds to the negative
factors, which denominate the employees thus resulting in affecting their
performance negatively.
Lack of Financial Product
The bank falls far behind when the innovative and new schemes are considered. It
has not been involved in the tug of war between the competitors to the accounts
and strengthens the existing customer base. This stands out to be the major
incompetence and weakness of the banks.
Inefficient Counter Services In The Rush Hours
During the rush hours, the bank is founded out to be a total flop to handle the mob
of people peaking from windows and doors. The bank has deficiency to operate in
the stages of rush hours where the people find them services entangled in a
situation of nowhere because they are not well served.
Lack Of Computerized Network
The bank lack the strength of being powered by the network of computers, which
have saved time, energy and would have lessened the mental stress, the employees
have currently. This would add to the strength if it were powered by network of
computers.
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Lack Of Modern Equipment
The bank lacks the modern Equipment that is note counting machine computers.
Even if there is any equipment they lack to fall in the criteria of being rearmed as
update and upgraded
Uneven Work Distribution
The workload in NBP is not evenly distributed and the workload tends to be more
on some employees while others abscond away from their responsibilities, which
server as a de-motivation factor for employees performing above average work.
OPPORTUNITIES
Electronic Banking
The world today has become a global village because of advancement in the
technologies, especially in communication sector. More emphasis is now given to
avail the modern technologies to better the performances. NBP can utilize the
electronic banking opportunity to ensure on line banking 24 hours a day. This
would give a competitive edge over others.
Micro Financing
Because of the need for micro financing in the market, there are lot of
opportunities in this regard. Other banks have already initiated, now the time has
arrived when the NBP must realize it and take on step to cater an ongoing demand.
THREATS
Emergence of New Competitors
The bank is facing threats with the emergence of new competitors especially in
terms of foreign banks. These foreign banks are equipped with heavy financial
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power with excellent and innovative ways of promoting and performing their
services. The bank has to take initiative in this regard or will find itself far back in
competition.
Political Pressure by Elected Government
The ongoing shift in power in political arena in the country effects the
performance of the bank has to forward loans to politically powerful persons
which create a sense of insecurity and demoralization in the customer as well as
employees.
Downsizing
The bank is currently acting upon the policy of downsizing which threaten the
environment of the bank Employees feel insecurity in doing their jobs and work,
hence affecting the over all performance of employees negatively.
Customers Complaints
There exists no regular and specific system of the removal of customer
complaints. Now a day a need for total customer satisfaction is emerging and intheir demanding consequences customer's complaints are ignored.
COMPETITIVE ANALYSIS
Porters five forces model:
This approach is widely used for competitive analysis. It is because of the high
intensity of competition among companies there five main competitive forces.
Rivalry among competitive firms:
It is a very powerful force among the competitive forces the strategies pursued by
one firm can be successful only to extent that they provide competitive advantages
over the competitor. These competitive strategies may be lowering prices, best
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quality series. The NBP offering very low charges and demand draft, telegraphy
transfer, mail transfer and give other additional services to the customers and to
the Nation. Because NBP is a Nations Bank.
Potential entry of new competitors:
Whenever new firms can easily enters a particular industry, the competition
increases. The gout restriction, tariffs, patents etc can stop new firm to enter into
the business as per Banking industry is concerned this market is already very
situated in Pakistan and there are banks with quality services and low charges. So
there is no threat to NBP from potential entry and NBP is also a public sector bank
because of that no other new bank not takes over it.
Potential Development of substitute products:
This is the third factor affecting the competitions. There may be some other
product can be substitute the product of that industry. For example banks offering
saving schemes in Pakistan and these schemes are also offered by GPOs in
Pakistan so they must compete them in this field. If they offer low rates than GPOs
so people will go to deposit in GPOs. People concentration high rates so thatswhy saving PLS accounts are more then current accounts. The next examples will
ATM, which substitute presenting cheques at counter and encash it. The NBP is
lacking in this field. It must improve in this field to compete the competitors.
Bargaining Power of Suppliers:
The bargaining power of supplier affects the intensity of competition, especially
when there are a large number of suppliers. In case of banks the suppliers arecustomers they supply the money to banks. Now they must offer good services,
quality, and safety. Low charges etc to customers. In this field NBP is very good.
Because it offers good quality services to customers. They charge low charges on
remittances. So that it has a competition to other banks.
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Bargaining Power of Consumers:
When customers are concentrated or large, or buy in volume, their bargaining
power represents a major force affecting intensity of competition. Now the number
of customers in Pakistan for banks are very high. Banks offering variety of
products and services to their customers. NBP have a large number of customers.
Now it must offer good services and products to their customers to attract them to
come to NBP.
Summation
The summary of is SWOT Analysis of NBP. To know how NBP can compete well
and how to maintain its position in the market as a best services organization.
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CHAPTER - 7
CONCLUSION & RECOMMENDATIONS
From the above discussion I come to the conclusion that the NBP is prove to a
Nation s Bank because it provides the large number of services to their
customers. On the basis of financial analysis I point out that the trend is positive,
which indicates that profitability; solvency and liquidity position of bank is sound.
It means that the organization (NBP) is working progressively and the
management is performing its role in a very good manner.
The global economic environment has changed, creating challenges and
opportunities for the worlds policy makers. The privatization drive has emerged
as a strong tool of transformation, which is being recognized as an essential
ingredient for the economic well-Being of the countries themselves and for the rest
of the world. Now there is a greater awareness that in an interdependent world all
countries gain individually if these countries become positive contributor to world
economic growth as whole. Banks are playing very important role in the economic
growth of the countries. NBP no doubts a positive contributor in this respect but I
think there are certain points by adopting which can serve more effectively and
efficiently. These points are as under:
1. Uses of computers: This is a computer era. With the use of computer we
can increase our efficiency. NBP should computerize all its branches. By
the use of computer properly these branches can increase there working
efficiency.
2. Services provider: NBP as public service oriented institution has to create
business opportunities for themselves. Now a day there is a competition
between the banks.
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3. Growth oriented: Central Asian Republics (CARs) have great
opportunities of new business so N.B.P should open new branches in these
Republic.
4. Use of electronic media: Model Banks like City Bank, Muslim
Commercial Bank (MCB) is using media very effectively to increase the
business of banks. So NBP should use electronic media for its business
developments.
5. Employees unions: The interference of union in banking business should
be minimized as it decreases the working efficiency of the employee as
well as the bank.
6. Need of improvement: The working of the Peshawar Cantt. Branch
Peshawar is satisfactory but still these working efficiencies are far from the
standard of modern banking system.
7. Self decision making: The bank should finance its loans in those projects
that are meeting the required standard and should avoid the political
pressure.
8. Encourage young employment: The bank should bring forward the new
talent as fresh knowledge and education is considered very important to
increase the efficiency and production.
9. Efficient branches networking: There is needed to make the outlook
situations of branches in those manners that can compete the other modern
banks in the banking market.
10. Performance appraisal: Keeping in view the hard work by the staff
members at all levels of management, staff should be given bonus and
increment every year.
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11. Installing ATM: Credit Cards are issued by the different banks like MCB
and City Bank etc. but NBP dont issued this type of finance scheme, there
is a place for this type of scheme in this bank.
12. Best customers relationship: Separate desk or counter should be
established in every branch to provide the information as required by the
clients.
13. Facilities in bank: The environment of the offices should be comfortable
so that the client and staff must feel comfort during business in bank.
14. Credit monitoring: Unsecured loan are not to be provided in case of banks
directions, their families, companies or firms.
15. Create friendly relation with customers: There are some clients having
sound and successful plan but without financially sound and providing
securities bank should forms such policies that may solve this problem.
16. Reduction in number of employees: I observed that many branches of
NBP are over crowded. Less people can work which extra people perform.
Number of employees should decrease or new branches should opens for
the adjustment of these extra employees.
17. Professional training: There are some employees untrained which
decreases the efficiency of the bank branch. All the employees should well
train.
18. Job rotation: Most of the bank employees are sticking to one seat only,
with the result that they become master of one particular job and loose their
grip on other banking operation. In my opinion each employee should have
regular job change.
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