Spring 2011_FIN619_9_MC060200242

8/3/2019 Spring 2011_FIN619_9_MC060200242

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HAIDER TAJAMMALHAIDER TAJAMMALMC060200242MC060200242

MBAMBAFINANCEFINANCE

Department of Management Sciences,Department of Management Sciences, Virtual University of Pakistan Virtual University of Pakistan

8/3/2019 Spring 2011_FIN619_9_MC060200242


PROFITABLITY RATIOPROFITABLITY RATIO

ANALYSISANALYSIS

HABIB BANKHABIB BANK

ASKARI BANKASKARI BANK. .

MUSLIM COMMERCIAL BANKMUSLIM COMMERCIAL BANK

FOR THE FINANCIAL YEARS 2008,2009 & 2010FOR THE FINANCIAL YEARS 2008,2009 & 2010

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Introduction of profitability ratioIntroduction of profitability ratio

A A classclass of of financialfinancial metricsmetrics thatthat areare usedused toto assessassess aa business¶sbusiness¶s abilityability toto

generategenerate earningsearnings asas comparedcompared toto itsits expensesexpenses andand other other relevantrelevant costscosts

incurredincurred duringduring aa specificspecific periodperiod of of timetime.. For For mostmost of of thesethese ratios,ratios, havinghaving aa

higher higher valuevalue relativerelative toto aa competitor¶scompetitor¶s ratioratio or or thethe samesame ratioratio fromfrom aa previousprevious

periodperiod isis indicativeindicative thatthat thethe companycompany isis doingdoing wellwell..

SoSo whenwhen wewe discussdiscuss aboutabout thesethese ratiosratios toto calculatecalculate andand findfind resultresult thethe basicbasicaimaim isis toto findfind outout thethe financialfinancial strengthstrength of of aa companycompany becausebecause inin businessbusiness

oneone mustmust wantwant toto knowknow wherewhere your your businessbusiness stands,stands, whichwhich deficienciesdeficiencies thethe

companycompany havehave andand howhow thesethese deficienciesdeficiencies areare removedremoved soso for for thisthis wewe alsoalso

useuse thethe termterm namednamed SWOTSWOT analysisanalysis inin order order toto makemake thethe businessbusiness fruitfulfruitful

eveneven inin thethe presencepresence of of manymany competitorscompetitors alreadyalready availableavailable or or enteringentering thethe

marketmarket..

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TheThe mainmain aimaim of of anyany producer producer or or businessbusiness isis toto startstart aa businessbusiness for for profitprofit.. InIn

Pakistan,Pakistan, thesethese daysdays especiallyespecially thethe onlyonly industryindustry whichwhich isis growinggrowing andand makingmakingprofitprofit isis bankingbanking industryindustry.. TheThe reasonreason toto choosechoose thisthis topictopic isis alsoalso basedbased onon thethe

aboveabove mentionedmentioned factsfacts..

TheThe threethree banksbanks chosenchosen inin mymy projectproject areare duedue toto thethe factfact thatthat thesethese areare oneone of of

thethe oldestoldest banksbanks workingworking inin Pakistan,Pakistan, secondlysecondly thesethese banksbanks areare alwaysalways goodgood inin

businessbusiness andand profitsprofits markingmarking despitedespite of of allall thesethese typetype of of circumstancescircumstances ininPakistanPakistan withwith thethe passagepassage of of timetime thethe introductionintroduction of of thesethese banksbanks areare asas followsfollows

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Introduction of banksIntroduction of banks

HBL was incorporated on 25th August 1941 and operated in the private sector

until its nationalization in 1974. HBL has been approved for privatization and

the privatization commission has selected a Financial Advisor to prepare a

comprehensive plan and assist in the sale process. The government hasappointed a professional management team to restructure the bank and to

recover and clean its doubtful and classified portfolio.HBL is one of the largest

commercial bank of Pakistan. It accounts for a substantial share (20%) of the

total commercial banking market in Pakistan with a network of 1,705 domestic

branches; 55 overseas branches in 26 countries spread over Europe, 33 HBLHBL

whollywholly ownedowned SubsidiariesSubsidiaries namelynamely HabibHabib BankBank FinancialFinancial ServicesServices (PVT)(PVT) LTDLTD..

Karachi,Karachi, HabibHabib FinanceFinance InternationalInternational LTDLTD (Hong(Hong Kong)Kong) andand HabibHabib FinanceFinance

Australia Australia LtdLtd.. ± ± SydneySydney;; 22 JointJoint VenturesVentures namelynamely HabibHabib NigeriaNigeria BankBank LtdLtd..

((4040%%)) andand HimalayanHimalayan BankBank LtdLtd.. ((2020%%)) andand 22 representativerepresentative officesoffices inin IranIran andand

EgyptEgypt.. HBLHBL isis aa BankingBanking Company,Company, whichwhich isis engagedengaged inin CommercialCommercial && RetailRetail

BankingBanking andand relatedrelated servicesservices domesticallydomestically andand overseasoverseas

Introduction of Introduction of HabibHabib BankBank

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HabibHabib BankBank GroupGroup isis aa leader leader inin Pakistan'sPakistan's servicesservices industryindustry.. An An extensiveextensive

networknetwork of of 14251425 domesticdomestic branchesbranches ± ± thethe largestlargest inin PakistanPakistan andand 5555

internationalinternational branchesbranches hashas enabledenabled HBLHBL toto provideprovide comprehensivecomprehensive servicesservicesthatthat meetmeet customer customer needsneeds.. ThisThis hashas ensuredensured thrivingthriving clientclient relationshipsrelationships thatthat

formform thethe backbonebackbone of of thethe Bank'sBank's operationoperation..

Today,Today, HBLHBL playsplays aa centralcentral rolerole inin Pakistan'sPakistan's financialfinancial andand economiceconomic

developmentdevelopment.. ItIt hashas comecome aa longlong wayway fromfrom itsits modestmodest beginningsbeginnings inin MumbaiMumbai onon

August August 2525,, 19411941 whenwhen itit commencedcommenced operationsoperations withwith aa fixedfixed capitalcapital of of 2525,,000000rupeesrupees.. ImpressedImpressed byby itsits initialinitial performance,performance, QuaidQuaid--ee--Azam Azam MohammedMohammed Ali Ali

JinnahJinnah askedasked thethe BankBank toto movemove itsits operationsoperations toto KarachiKarachi after after thethe creationcreation of of

PakistanPakistan.. HBLHBL establishedestablished itit self self inin thethe Quaid'sQuaid's citycity onon August August 77,, 19481948 andand

becamebecame aa symbolsymbol of of pridepride andand progressprogress for for thethe peoplepeople of of PakistanPakistan..

Habib

Habib

Bank

Bank hashas beenbeen aa pioneer pioneer inin providingproviding innovativeinnovative bankingbanking servicesservices.. TheseThesehavehave includedincluded thethe installationinstallation of of thethe firstfirst mainframemainframe computer computer inin PakistanPakistan

followedfollowed byby thethe firstfirst ATM ATM andand moremore recently,recently, internetinternet bankingbanking facilitiesfacilities inin allall our our

14251425 domesticdomestic branchesbranches

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³Banking means the accepting, for the purpose of lending, or investment, of deposits of money from the public, repayable on demand or otherwise, and

withdraw able by cheque, draft, order or otherwise.´

³Banking companies mean companies which transact the business of banking in

Pakistan.´

The banking sector has witnessed a dramatic change during the last ten years withthe development of Askari Bank, which is not only redefining priorities and focus of

the banks, but also threatening the domination of traditional players.

The story begins with the incorporation of Askari Bank limited in Pakistan on

October 09, 1991, Askari Bank Commenced (begin) to operations in April 1992, as a

public limited company. The bank is listed on the Karachi, Lahore and IslamabadStock Exchanges and the initial public offering was oversubscribed by 16 times.

While capturing the target market share amongst the view banks, Askari has

provided good value to its shareholders. Its share price has remained approximately

12% higher than the average share price of quoted banks during the last four years.

Introduction of Introduction of AskariAskari BankBank

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Askari Askari BankBank hashas expandedexpanded intointo aa nationwidenationwide presencepresence of of 8383 Branches,Branches, andand anan

OffshoreOffshore BankingBanking UnitUnit inin BahrainBahrain.. A A sharedshared networknetwork of of over over 800800 onlineonline ATMs ATMs

coveringcovering allall major major citiescities inin PakistanPakistan supportssupports thethe deliverydelivery channelschannels for for customer customer

serviceservice.. As As onon December December 3131,, 20062006,, thethe BankBank hadhad equityequity of of RsRs.. 66..016016 billionbillion andand

totaltotal assetsassets of of RsRs.. 107107..168168 billion,billion, withwith over over 475475,,000000 bankingbanking customers,customers, servicedserviced

byby aa totaltotal staff staff of of 22,,118118..

Askari Askari bankbank isis thethe onlyonly bankbank whichwhich isis havinghaving itsits operationaloperational headhead officeoffice inin thethe twintwin

citiescities of of RawalpindiRawalpindi--Islamabad,Islamabad, whichwhich havehave relativelyrelatively limitedlimited opportunitiesopportunities asascomparedcompared toto KarachiKarachi andand LahoreLahore.. ThisThis createdcreated itsits ownown challengeschallenges andand

opportunities,opportunities, andand forcedforced asas toto evolveevolve anan outwardoutward--lookinglooking strategystrategy inin termsterms of of

marketmarket.. As As aa result,result, bankbank developeddeveloped aa geographicallygeographically diversifieddiversified assetsassets basebase

insteadinstead of of aa concentrationconcentration andand heavyheavy reliancereliance onon businessbusiness inin thethe major major

commercialcommercial centerscenters of of KarachiKarachi andand Lahore,Lahore, wherewhere mostmost other other banksbanks havehave their their

operationaloperational HeadHead officesoffices..

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Introduction of MCB bankIntroduction of MCB bank

MCBMCB (Formerly(Formerly MuslimMuslim CommercialCommercial Bank)Bank) isis thethe largestlargest privateprivate sector sector bankbank inin

PakistanPakistan.. TheThe Adamjee Adamjee groupgroup incorporatedincorporated inin 19481948.. ItIt proposedproposed duringduring thethe 19501950¶s¶sandand 6060¶s¶s.. InIn 19751975 itit waswas nationalizednationalized withwith allall other other privateprivate sector sector bankbank.. ThenThen 19911991

itit waswas privatizedprivatized.. SinceSince thethe bankbank hashas beenbeen headwayheadway inin improvingimproving of of technologytechnology.. InIn

thethe year year 20062006 bankbank namename waswas changedchanged toto MCBMCB LimitedLimited.. TheThe bankbank isis nownow includedincluded

asas oneone of of thethe toptop mostmost banksbanks of of thethe nationnation..

MCB

MCB

hashas beenbeen awardedawarded asas EuroEuro moneymoney Award Award 20082008 for for thethe "B

est"B

estB

ankB

ank inin Asia" Asia"TheThe ChairmanChairman of of MCBMCB isis MianMian MohammadMohammad ManshaMansha andand thethe PresidentPresident // CEOCEO isis

Mr Mr.. Atif Atif Aslam Aslam BajwaBajwa.. MCBMCB isis oneone of of thethe leadingleading banksbanks of of PakistanPakistan withwith aa depositdeposit

basebase of of aboutabout RsRs.. 280280 billionbillion andand totaltotal assetsassets of of aroundaround RsRs..300300 billionbillion..

IncorporatedIncorporated inin 19471947,, MCBMCB soonsoon earnedearned thethe reputationreputation of of aa solidsolid andand conservativeconservative

financialfinancial institutioninstitution managedmanaged byby expatriateexpatriate executivesexecutives.. InIn 19741974,, MCBMCB waswas

nationalizednationalized alongalong withwith allall other other privateprivate sector sector banksbanks.. TheTheB

ankB

ank hashas aa customer customer basebase of of approximatelyapproximately 44 millionmillion andand aa nationwidenationwide distributiondistribution networknetwork of of 11,,026026

branches,branches, includingincluding 88 IslamicIslamic bankingbanking branches,branches, andand over over 300300 ATMs, ATMs, inin aa marketmarket

withwith aa populationpopulation of of 6060 millionmillion.. DuringDuring thethe lastlast fifteenfifteen years,years, thethe BankBank hashas

concentratedconcentrated onon growthgrowth throughthrough improvingimproving serviceservice quality,quality, investmentinvestment inin

technologytechnology andand people,people, utilizingutilizing itsits extensiveextensive branchbranch network,network, developingdeveloping aa largelarge

andand stablestable depositdeposit basebase..

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MCB¶sMCB¶s mainmain focusfocus remainsremains onon consumer consumer bankingbanking andand itsits growinggrowing reputationreputation asas aa

fullfull serviceservice provider provider givesgives thethe bankbank anan edgeedge inin frontfront of of increasedincreased competitioncompetition inin thethe

bankingbanking sector sector inin PakistanPakistan.. WithWith aa networknetwork of of over over 12001200 branchesbranches andand aa teamteam of of

dedicateddedicated professionals,professionals, MCB

MCB

withwith anan internationalinternational outlookoutlook andand aa regionalregional focusfocusensuresensures promptprompt customer customer serviceservice andand innovativeinnovative solutionssolutions toto businessbusiness andand

personalpersonal needsneeds..

MCBMCB isis oneone of of thethe leadingleading banksbanks of of PakistanPakistan withwith aa marketmarket shareshare of of 1212..55%%.. ItIt isis

alsoalso thethe pioneer pioneer inin innovativeinnovative consumer consumer bankingbanking inin PakistanPakistan.. ItIt isis thethe largestlargest

privateprivate sector sector bankbank inin PakistanPakistan.. ItIt isis thethe mostmost preferredpreferred provider provider of of qualityquality financialfinancial

servicesservices andand isis usuallyusually consideredconsidered thethe bestbest placeplace toto workwork.. ItIt hashas developeddeveloped aa largelarge

stablestable depositdeposit basebase.. TheThe bankbank todaytoday boastsboasts of of largestlargest onlineonline branchbranch andand ATM ATM

networknetwork inin thethe countrycountry..

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ObjectivesObjectives

TheThe mainmain objectiveobjective of of choosingchoosing thisthis specificspecific topictopic isis toto makemake comparativecomparativeanalysisanalysis inin bankingbanking industryindustry andand toto reusereuse thethe secondarysecondary datadata inin differentdifferent

kindkind of of analysisanalysis.. TheThe purposepurpose isis toto obtainobtain thethe profitabilityprofitability ratioratio of of fewfew mainmain

unitsunits inin bankingbanking industryindustry && toto analyzeanalyze thethe reasonsreasons of of their their consistentconsistent growthgrowth

inin thisthis fieldfield..

ToTo analyzeanalyze thethe abilityability of of givengiven banksbanks toto earnearn profitprofit over over aa periodperiod of of timetime..

To analyze the selected companies efficiency managing their resources for To analyze the selected companies efficiency managing their resources for

generating profit.generating profit.

To find out the operating profit over the year for banks.To find out the operating profit over the year for banks.

To find out that how effectively selected companies are maximizing their To find out that how effectively selected companies are maximizing their

profit by controlling their cost/expenses.profit by controlling their cost/expenses.

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SignificanceSignificance It can be the major source of information for investor to make investment or businessIt can be the major source of information for investor to make investment or business

with the mentioned banks.with the mentioned banks. Study will show the major banking tools being used in banking now days in PakistanStudy will show the major banking tools being used in banking now days in Pakistan

It will show the positively in business in Pakistan despite of critical condition of It will show the positively in business in Pakistan despite of critical condition of

economy and all other problem encountering these days.economy and all other problem encountering these days.

To work out the profitability.To work out the profitability.

Help in analysis of financial statement.Help in analysis of financial statement.

Helpful in comparative analysis of a performance.Helpful in comparative analysis of a performance.

To simplify the accounting information.To simplify the accounting information.

Helpful for forecasting purpose.Helpful for forecasting purpose.

To workout short term financial position.To workout short term financial position.

H

elpful for investor to make decision of investment.H

elpful for investor to make decision of investment. Its also shows that who much credibility of the given bank is strong or weak.Its also shows that who much credibility of the given bank is strong or weak.

This analysis shows that what are the opportunities that investor enjoy whileThis analysis shows that what are the opportunities that investor enjoy while

investing.investing.

This help the management to know that what the weaker parts of the bank are so it isThis help the management to know that what the weaker parts of the bank are so it is

easy for the management to work on it and this will help management to make someeasy for the management to work on it and this will help management to make some

arrangements for rectifying the weak points of the bank.arrangements for rectifying the weak points of the bank.

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Data collectionData collection

WeWe collectcollect allall thethe requiredrequired datadata fromfrom thethe internetinternet of of thethe particular particular banksbanks sitessitesasas wewe areare overseasoverseas wewe areare notnot ableable toto visitvisit thethe headhead officesoffices soso wewe havehave onlyonly

internetinternet sourcesource toto findfind outout thethe requiredrequired informationinformation wewe trytry our our bestbest toto collectcollect

allall thethe relatedrelated informationinformation andand after after thatthat wewe selectselect thesethese banksbanks for for analysisanalysis

their their profitprofit ratioratio inin PakistanPakistan.. DueDue toto thisthis thethe datadata collectioncollection sourcesource isis

secondarysecondary.. SecondarySecondary sourcesource isis beenbeen usedused becausebecause thethe topictopic itself itself needneed itit..

ProfitabilityProfitability ratioratio cancan onlyonly bebe calculatedcalculated byby thethe financialfinancial reportsreports of of thethe saidsaidbanksbanks thatthat areare alreadyalready issuedissued byby banksbanks..

DATA COLLECTION TOOLS:DATA COLLECTION TOOLS: Capture comprehensive and historical information.Capture comprehensive and historical information.

Using existing information.Using existing information.

Web based material and search engines are readily availableWeb based material and search engines are readily available

Complete financial statements of all these banks available on there webComplete financial statements of all these banks available on there web

sites.sites.

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ParticipantParticipant::

Internet.Internet.

Newspapers.Newspapers.

Financials Reports.Financials Reports.

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Data processing & analysingData processing & analysing

As As wewe knowknow thatthat our our organizationsorganizations areare usedused MicrosoftMicrosoft excelexcel softwaresoftware toto

enter enter datadata andand analyzeanalyze soso mymy basicbasic softwaresoftware whichwhich II amam usingusing whilewhile

analyzinganalyzing isis ExcelExcel.. SoSo whenwhen II amam startstart doingdoing analyzinganalyzing II amam usingusing excelsexcels

softwaresoftware for for thisthis processingprocessing andand analysisanalysis purposespurposes thisthis softwaresoftware helpshelps usus totoshowshow datadata inin allall typestypes of of formform whichwhich maymay bebe tabular tabular graphicalgraphical.. II alsoalso usedused

MicrosoftMicrosoft Power Power pointpoint for for thethe presentationpresentation of of our our datadata..

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Data Analysis (Cont«)Data Analysis (Cont«) H ABIB B ANK www.hbl.com

http://www.hbl.com/downloads/pdf/annual/2010/2010-financial-statements-group.pdf

http://www.hbl.com/downloads/pdf/annual/2009/financial-statements-group.pdf

http://www.hbl.com/downloads/pdf/annual/2008/financial-statements-group.pdf

² Askari Bank www.askaribank.com

http://www.askaribank.com.pk/Reports/Askari%20Financials%202009.pdf

http://www.askaribank.com.pk/Reports/Askari%20AR2010%20(Final%20Version).pdf .

http://www.askaribank.com.pk/Reports/Askari%20Financials%202008.pdf

Muslim Commercial Bank www.mcb.com

http://www.mcb.com.pk/uploads/FCG/docs/MCB%20Annual%20Report%202010..pdf

http://www.mcb.com.pk/uploads/FCG/docs/MCB%20Annual%20Report%202010..pdf

http://www.mcb.com.pk/uploads/FCG/docs/MCB%20Annual%20Report%202008.pdf

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Net Profit Margin Ratio AnalysisNet Profit Margin Ratio AnalysisNet Profit Margin Ratio = Net Profit after tax * 100

Sales/RevenueSales/Revenue= Markup/ Return/ Interest Earned

Year 2008 Year 2009 Year 2010

HABIB

BANK 10,864,112/63,376,047*100=

17.142 %

13,400,749/76,076,347*100=

17.614 %

17,034,380/81,325,028*100=

20.946 %

ASKARIBANK

415,055/18,395,142*100=

2.256 %

1,068,864/22,665,248*100=

4.715 %

919,461/27,954,956*100=

3.289 %

MCBBANK

15,323,227/40,049,505*100=

38.260 %

15,665,403/51,621,911*100=

30.327 %

16,872,126/54,829,365*100=

30.772 %

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TrendTrend AnalysisAnalysis && InterpretationInterpretation

Graph Net Profit Margin RatioGraph Net Profit Margin Ratio

17.14 17.6120.94

2.25 4.71 3.28

38.26

30.32 30.77

0

5

10

15

20

25

30

35

40

45

2008 2009 2010

NET PROFIT MARGINHBL

ASKARI BANK

MCB

In HBL from FY 2008-2009 % change in profit after tax has increased and the

% change in net sales of the bank has also increased that¶s why the net profit

margin has increased as compared to FY 2009-2010 because in year 2010 %

change in profit after tax of bank and the net sales has increased more than

the FY2008-2009.So the net profit margin has more increased in 2009-2010

as compared to FY2008-2009.

HBL

ASKARI

MCB

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In ASKARI BANK from FY 2008-2009 % change in profit after tax has

increased and the % change in net sales of the bank has also increased that¶s

why the net profit margin has increased as compared to FY 2009-2010 because

in year 2010 % change in profit after tax of bank has decreased but the netsales increased So due to decrease in profit after tax the net profit margin has

decreased.

While MCB from FY 2008-2009 % change in profit after tax has increased and

the % change in net sales of the bank has also increased but the net profit

margin ratio is decreased because in FY 2008-2009 net profit after tax is not as

increased as the net sales so due to slightly increase in profit after taxdecreases the net profit margin ratio in year 2010 % change in profit after tax of

bank and the net sales has increased more than the FY2008-2009.So the net

profit margin has slightly increased in 2009-2010

The above mentioned results have been shown in the graph 3.3.1 the trend for

HBL bank is showing continuously increasing trend in FY 2008-2010 while MCB

and Askari bank is showing mix trend as Askari bank shows first increasing andthen increasing trend and MCB is having opposite trend as compared to Askari

bank

Comparative analysis shows that HBL has taken the lead in FY 2009-2010 as

compared to other two banks. The reason is HBL has increasing their net sales

ratio and profit after tax ratio in a ways that the net profit margin ratio is

continuously increasing

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Working for Total AssetsWorking for Total Assets

Return on Assets = Profit before tax * 100

Total Assets

Return On Assets Ratio AnalysisReturn On Assets Ratio Analysis

Bank

s

Particulars 2008 2009 2010

HBL Cash and balance

Balances with other Banks

Lending to financial institutions

Investments- Net

Advances- Net

Operating Fixed Assets

Deferred Tax Assets- NetOther Assets net

56,533,134

39,364,297

6,193,787

129,833,446

456,355,507

35,588,444

14,751,25212,186,848

750,806,715

79,839,836

40,366,687

5,352,873

216,467,532

454,662,499

41,116,582

16,766,668

863,778,621

81,640,246

37,413,185

30,339,344

254,909,116

459,750,012

16,155,290

9,572,203

924,699,403

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Banks Particulars 2008 2009 2010

ASKARI

Cash and balance



Investments- Net

Advances- Net


Deferred Tax Assets- Net

Other Assets net

16,029,666

3,967,816

4,479,754

35,464,972

128,818,242

8,345,054

-

9,021,883

206,127,387

19,385,850

8,374,640

4,649,059

66,885,617

135,039,901

9,917,192

-

10,101,179

254,353,438

22,565,190

3,787,538

9,194,186

102,100,063

152,784,254

10,084,422

-

14,264,476

314,780,129

MCB

Cash and balance



Investments- Net

Advances- NetOperating Fixed Assets


Other Assets net

39,631,219

4,106,526

4,100,079

97,790,391

262,508,83017,320,485

-

19,828,228

445,285,758

38,774,871

6,077,354

3,000,000

169,484,647

253,248,26518,099,010

-

23,057,731

511,741,878

45,407,264

1,551,518

4,401,781

215,747,844

254,565,47121,061,787

-

27,746,198

570,481,863

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BanksBanks Year 2008 Year 2009 Year 2010

HBL

16,931,932/749,806,715*100=

2.25817 %

21,381,636/863,778,621*100=

2.475360 %

27,040,030/924,699,403*100=

2.924196 %

ASKARI

502,770/206,127,387*100=

0.243912 %

1,069,897/254,353,438*100=

0.42063 %

1,249,627/314,780,129*100=

0.396984 %

MCB

21,886,740/445,285,758*100=

4.915054 %

23,349,146/511,741,878*100=

4.562680 %

26,509,636/570,481,863*100=

4.646884 %

Calculation for Return On AssetsCalculation for Return On Assets

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2.25 2.472.92

0.24 0.42 0.39

4.914.56 4.64

0

1

2

3

4

5

6

2008 2009 2010

RETURN ON ASSETS

HBL

ASKARI

MCB

Graphs for Return on AssetsGraphs for Return on Assets


InIn HBLHBL fromfrom FYFY 20082008--20102010 %% changechange inin profitprofit beforebefore taxtax andand thethe %% changechange inin totaltotal

assetsassets of of thethe bankbank hashas continuouslycontinuously increasedincreased that¶sthat¶s whywhy thethe returnreturn onon assetsassets hashas

alsoalso continuouslycontinuously increasedincreased fromfrom FYFY 20082008--20102010..

HBL

ASKARI

MCB

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In ASKARI BANK from FY 2008-2009 % change in profit before tax has increased

double and the % change in total assets of the bank has also increased that¶s why

the return on assets has increased as compared to FY 2009-2010 because in year

2010 % change in profit before tax of bank and return on assets has increased but

not as increased as in FY 2008-2009 So due to small increase in profit before tax thereturn on total assets has decreased.

While MCB from FY 2008-2009 % change in profit before tax has increased and the

% change in total assets of the bank has also decreased because the ratio or

increasing profit before tax and total assets are not favorable so return on total

assets has decreased but FY 2009-2010 % change in profit before tax of bank andthe net sales has increased more than the FY2008-2009.So the return on total

assets has slightly increased in 2009-2010

The above mentioned results have been shown in the graph 3.3.2 the trend for HBL

bank is showing continuously increasing trend in FY 2008-2010 while MCB and

AskariB

ank is showing mix trend Askari bank is showing increasing trend in first FYbut then showing Decreasing Trend in Second Financial Year and MCB is opposite

to Askari bank


compared to other two banks. The reason is HBL has increasing their return on total

assets and profit before tax ratio in a ways that the return on total assets iscontinuously increasing.

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Working for Return On Assets Working for Return On Assets

DROA= Net Income X Sales * 100Sales Total Assets

DuPont Return On Assets RatioDuPont Return On Assets RatioAnalysisAnalysis


HBL Cash and balance



Investments- Net

Advances- Net


Deferred Tax Assets- NetOther Assets net

56,533,134

39,364,297

6,193,787

129,833,446

456,355,507

35,588,444

14,751,25212,186,848

863,778,621

79,839,836

40,366,687

5,352,873

216,467,532

454,662,499

41,116,582

16,766,668

863,778,621

81,640,246

37,413,185

30,339,344

254,909,116

459,750,012

16,155,290

9,572,203

924,699,403

8/3/2019 Spring 2011_FIN619_9_MC060200242



ASKARI

Cash and balance



Investments- Net

Advances- Net



Other Assets net

16,029,666

3,967,816

4,479,754

35,464,972

128,818,242

8,345,054

-

9,021,883

206,127,387

19,385,850

8,374,640

4,649,059

66,885,617

135,039,901

9,917,192

-

10,101,179

254,353,438

22,565,190

3,787,538

9,194,186

102,100,063

152,784,254

10,084,422

-

14,264,476

314,780,129

MCB

Cash and balance



Investments- Net

Advances- NetOperating Fixed Assets


Other Assets net

39,631,219

4,106,526

4,100,079

97,790,391

262,508,83017,320,485

-

19,828,228

445,285,758

38,774,871

6,077,354

3,000,000

169,484,647

253,248,26518,099,010

-

23,057,731

511,741,878

45,407,264

1,551,518

4,401,781

215,747,844

254,565,47121,061,787

-

27,746,198

570,481,863

8/3/2019 Spring 2011_FIN619_9_MC060200242



HBL

10,864,112/749,806,715*100=

1.448921 %

13,400,749/863778,621*100=

1.551410 %

17,034,380/924,699,403*100=

1.842153 %

ASKARI415,055/206,127,387*100=

0.201358 %

1,079,150/254,353,438*100=

0.4242718 %

919,461/314,780,129*100=

0.292096 %

MCB

15,323,227/445,285,758*100=

3.4412120 %

15,665,399/511,741,878*100=

3.061191 %

16,872,126/570,481,863*100=

2.957521 %

Calculation for DuPont Return On AssetsCalculation for DuPont Return On Assets

8/3/2019 Spring 2011_FIN619_9_MC060200242


Graphs for DuPont Return on AssetsGraphs for DuPont Return on Assets


In HBL from FY 2008-2010 % change in profit after tax and the % change in total

assets of the bank has continuously increased that¶s why the DuPont return on

assets has also continuously increased from FY 2008-2010..

1.44 1.551.84

0.20.42 0.29

3.44

3.06 2.95

0

0.5

1

1.5

2

2.5

33.5

4

2008 2009 2010

DUPONT RETURN ON ASSETS

HBL

ASKARI BANK

MCB

HBL

ASKARI

MCB

8/3/2019 Spring 2011_FIN619_9_MC060200242


In ASKARI BANK from FY 2008-2009 % change in profit before tax has increased

double and the % change in total assets of the bank has also increased that¶s why

the return on assets has increased as compared to FY 2009-2010 because in year

2010 % change in profit before tax of bank and return on assets has increased but

not as increased as in FY 2008-2009 So due to small increase in profit before tax

the return on total assets has decreased.

While MCB from FY 2008-2009 % change in profit before tax has increased and the

% change in total assets of the bank has also decreased because the ratio or

increasing profit before tax and total assets are not favorable so return on total

assets has decreased but FY 2009-2010 % change in profit before tax of bank and

the net sales has increased more than the FY2008-2009.So the return on total

assets has slightly increased in 2009-2010


bank is showing continuously increasing trend in FY 2008-2010 while MCB and

Askari Bank is showing mix trend Askari bank is showing increasing trend in first FY

but then showing Decreasing Trend in Second Financial Year and MCB is opposite

to Askari bankComparative analysis shows that HBL has taken the lead in FY 2009-2010 as

compared to other two banks. The reason is HBL has increasing their return on total

assets and profit before tax ratio in a ways that the return on total assets is

continuously increasing.

8/3/2019 Spring 2011_FIN619_9_MC060200242


Working for Operating ProfitWorking for Operating Profit

Operating Profit MarginOperating Profit Margin

Banks 20082008 20092009 20102010

HBL

16,931,932+26,525,556=

43,457,488

21,381,636+33,405,813=

54,787,449

27,040,030+34,330,255=

61,370,285

ASKARI 502,770+10,647,277=

11,150,047

1,599,611+13,542,210=

15,141,821

1,249,627+17,931,715=

19,181,342

MCB 21,886,740+11,592,922=

33,479,662

23,349,146+15,835,581=

39,184,727

26,509,636+18,027,372=

44,537,008

Operating Profit Margin = Operating profit * 100

Net SalesOperating Profit= Profit before Tax + Markup/ Interest Expense

8/3/2019 Spring 2011_FIN619_9_MC060200242



HBL

43,457,488/63,376,047*100=

68.570%

54,787,449/76,076,347*100=

72.016 %

61,370,285/81,325,028*100=

75.462%

ASKARI

11,150,047/18,395,742*100=

60.612 %

15,141,821/22,590,230*100=

67.028 %

19,181,342/27,954,956*100=

68.615 %

MCB

33,479,662/40,049,505*100=

83.595 %

39,184,727/51,621,911*100=

75.90716%

44,537,008/54,829,365*100=

81.228 %

Calculation for Operating Profit MarginCalculation for Operating Profit Margin

8/3/2019 Spring 2011_FIN619_9_MC060200242


Graphs for Operating Profit MarginGraphs for Operating Profit Margin


In HBL from FY 2008-2009 % change in operating profit has increased and the %

change in net sales of the bank has also increased that¶s why the operating profit

margin has increased as compared to FY 2009-2010 because in year 2010 %

change in operating profit of bank and the net sales has increased more than the

FY2008-2009.So the operating profit margin has more increased in 2009-2010 as

compared to FY2008-2009.

68.57 72.016 75.462

60.61267.028 68.615

83.59575.907

81.228

0

10

20

30

40

50

60

70

8090

2008 2009 2010

OPERATING PROFIT MARGIN

HBL

ASKARI

MCB

HBL

ASKARI

MCB

8/3/2019 Spring 2011_FIN619_9_MC060200242


In Askari Bank from FY 2008-2009 % change in operating profit has increased and

the % change in net sales of the bank has also increased that¶s why the operating

profit margin has increased as compared to FY 2009-2010 because in year 2010 %

change in operating profit of bank and the net sales has increased more than the

FY2008-2009.So the operating profit margin has more increased in 2009-2010 as

compared to FY2008-2009.

While MCB from FY 2008-2009 % change in operating profit has increased and the

% change in net sales of the bank has also increased but the net profit margin ratio

is decreased because in FY 2008-2009 operating profit is more increased but the

net sales is not as increased as operating profit so due to less increase in net salesthe operating profit margin ratio is decreased but in year 2010 % change in

operating profit of bank and the net sales has increased more than the FY2008-

2009.So the operating profit margin has slightly increased in 2009-2010


and Askari bank is showing continuously increasing trend in FY 2008-2010 while

MCB is showing mix trend first decreased then increase

Comparative analysis shows that HBL and Askari bank has taken the lead in FY

2009-2010 as compared to MCB. The reason is HBL and Askari has increasing their

net sales ratio and operating profit ratio in a ways that the operating profit margin

ratio is continuously increasing.

8/3/2019 Spring 2011_FIN619_9_MC060200242


Working for Operating AssetsWorking for Operating Assets

Operating Assets Turnover = Net Sale

Operating Assets

Operating Assets Turnover Operating Assets Turnover


HABIB

Cash and balance with treasury banks

Balances with other banks

Operating fixed assets

56,533,134

39,364,297

14,751,252

110,648,683

79,839,836

40,336,687

16,766,668

136,973,191

81,640,246

37,413,185

16,155,290

135,208,721

ASKARI Cash and balance with treasury banks



16,029,666

3,967,816

8,345,054

28,342,536

19,385,850

8,374,640

9,917,192

37,677,682

22,565,190

3,787,538

10,084,422

36,437,150

MCB Cash and balance with treasury banks



39,631,219

4,106,526

17,320,485

61,058,230

38,774,871

6,077,354

18,099,010

62,951,235

45,407,264

1,551,518

21,061,787

68,020,569

8/3/2019 Spring 2011_FIN619_9_MC060200242



HBL63,376,047/110,648,683=

0.572 Times

76,076,347/136,973,191=

0.555 Times

81,325,028/135,208,721=

0.601 Times

ASKARI18,395,742/28,342,536=

0.649 Times

22,665,248/37,677,682=

0.601 Times

27,954,956/36,437,150=

0.767 Times

MCB40,049,505/61,058,230=

0.655 Times

51,621,911/62,951,235=

0.820 Times

54,829,365/68,020,569=

0.806 Times

Calculation for Operating Assets Turn Over Calculation for Operating Assets Turn Over

8/3/2019 Spring 2011_FIN619_9_MC060200242


0.572 0.5550.601

0.6490.601

0.767

0.655

0.82 0.806

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

2008 2009 2010

OPERATING ASSETS TURNOVER

HBL

ASAKARI

MCB

Graphs for Operating Assets Turn Over Graphs for Operating Assets Turn Over

HBL

ASKARI

MCB

In HBL from FY 2008-2009 % change in net sales and the change in operatingassets of the bank has increased but due to more % change in operating assets

the operating assets turnover has decreased in FY 2008-2009. And in FY 2009-

2010 % change in net sales and the change in operating assets of the bank has

decreased but to more % change in net sales operating assets turnover has

increased in FY 2009-2010.


8/3/2019 Spring 2011_FIN619_9_MC060200242


In Askari Bank from FY 2008-2009 % change in net sales and the change in

operating assets of the bank has decreased that¶s why the operating assets

turnover has decreased in FY 2008-2009. And in FY 2009-2010 % change in net

sales and the change in operating assets of the bank has increased that¶s why the

operating assets turnover has increased in FY 2009-2010.

In MCB from FY 2008-2009 % change in net sales and the change in operating

assets of the bank has increased that¶s why the operating assets turnover has

increased but in FY 2009-2010. % change in net sales and the change in operating

assets of the bank has increased but due to more % change in gross profit the

operating assets turnover has increased in FY 2009-2010.


and Asakri bank is showing decreasing trend in first financial year and increasing

trend in second financial year while MCB is showing increasing trend in first

financial year and decreasing trend in second financial year.

Comparative analysis shows that HBL and Askari bank have showing increasing

trend FY 2009-2010. The reason is all banks are increasing their operating assets

and net sales ratio in a ways that the operating assets turnover is continuously

increasing.

8/3/2019 Spring 2011_FIN619_9_MC060200242


Working for Operating AssetsWorking for Operating Assets

Return on Operating Assets = Profit before Tax * 100

Operating Assets

Return On Operating AssetsReturn On Operating Assets


HABIB

Cash and balance with treasury banks



56,533,134

39,364,297

14,751,252

110,648,683

79,839,836

40,336,687

16,766,668

136,973,191

81,640,246

37,413,185

16,155,290

135,208,721

ASKARI Cash and balance with treasury banks



16,029,666

3,967,816

8,345,054

28,342,536

19,385,850

8,374,640

9,917,192

37,677,682

22,565,190

3,787,538

10,084,422

36,437,150

MCB Cash and balance with treasury banks



39,631,219

4,106,526

17,320,485

61,058,230

38,774,871

6,077,354

18,099,010

62,951,235

45,407,264

1,551,518

21,061,787

68,020,569

8/3/2019 Spring 2011_FIN619_9_MC060200242



HBL16,931,932/110,648,683*100=

15.3024 %

21,381,636/136,973,191*100=

15.610 %

27,040,030/135,208,721*100=

19.998 %

ASKARI502,770/28,342,536*100=

1.773 %

1,069,897/37,677,682*100=

2.839 %

1,249,627/36,437,150*100=

3.429 %

MCB21,886,740/61,058,230*100=

35.845 %

23,349,146/62,951,235*100=

37.090 %

26,509,636/68,020,569*100=

38.972 %

Calculation for Return on Operating AssetsCalculation for Return on Operating Assets

8/3/2019 Spring 2011_FIN619_9_MC060200242


Graphs for Return on Operating AssetsGraphs for Return on Operating Assets


In HBL from FY 2008-2010 change in profit before tax and the change in operating

assets of the bank has continuously increased that¶s why the return on operatingassets turnover has also continuously increased from FY 2008-2010.

In Askari Bank from FY 2008-2010 change in profit before tax and the change in

operating assets of the bank has continuously increased that¶s why the return on

operating assets turnover has also continuously increased from FY 2008-2010

15.302 15.6119.998

1.773 2.839 3.429

35.845 37.09 38.972

0

10

20

3040

50

2008 2009 2010

OPERATING ASSETS TURNOVER

HBL

ASKARI BANK

MCB

HBL

ASKARI

MCB

8/3/2019 Spring 2011_FIN619_9_MC060200242


In MCB from FY 2008-2010 change in profit before tax and the change in operating

assets of the bank has continuously increased that¶s why the return on operating

assets turnover has also continuously increased from FY 2008-2010.


Asakri bank and MCB is showing continuously increasing trend in FY 2008-2010

Comparative analysis shows that all three banks have showing increasing trend FY

2009-2010. The reason is all banks are increasing their operating assets and net

sales ratio in a ways that the operating assets turnover is continuously increasing.

8/3/2019 Spring 2011_FIN619_9_MC060200242


Sales to Fixed AssetsSales to Fixed AssetsSales to fixed Assets = Net Sale

Fixed Assets


HBL 63,376,047/14,751,252=

4.296

76,076,347/16,766,668=

4.537

81,325,028/16,155,290=

5.033

ASKARI 18,395,742/8,345,054=

2.204

22,590,230/9,917,192=

2.277

27,954,956/10,084,422=

2.772

MCB 40,0449,505/17,320,485=

2.312

51,621,911/18,099,010=

2.852

54,829,365/21,061,787=

2.603

Calculation for Sales to Fixed AssetsCalculation for Sales to Fixed Assets

8/3/2019 Spring 2011_FIN619_9_MC060200242


Graphs for Sales to Fixed AssetsGraphs for Sales to Fixed Assets


In HBL from FY 2008-2010 change in net sales has continuously increased morethan the fixed assets of the bank that¶s why the sale to fixed assets has increased

so the sale to fixed assets has continuously increased.

In Askari Bank from FY 2008-2010 change in net sales has continuously

increased more than the fixed assets of the bank that¶s why the sale to fixed assets

has increased so the sale to fixed assets has continuously increased.

4.296 4.5375.033

2.204 2.2772.772

2.3122.852 2.603

0

1

2

3

4

5

6

2008 2009 2010

SALES TO FIXED ASSETS

HBL

ASKARI

MCB

HBL

ASKARI

MCB

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While MCB has shown mixed trend as its sale is increase and fixed assets is

also increase so the sale to fixed assets is increase in FY 2008-2009 as

compared to FY2009-2010 the ratio of increase in net sales and fixed assets

are not favorable with respect to percentage so as a result the sales to fixed

assets is decreases

The above mentioned results has been shown in the graph 3.9.1 the trend for

HBLand Askari bank is showing continuous increase while MCB is showing

opposite trend than other two banks as its increasing in both financial year but

MCB has shown the decreasing trend in second financial year.

Comparative analysis shows that askari bank and HBLand Askari bank has

taken the lead in FY 2008-2010 as compared to MCB. The reason is HBL and

askari bank has adopted an efficient strategy as it increases its fixed assets

more than the increase in the net sales.

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Return on EquityReturn on EquityReturn on Equity = Net Profit after tax* 100

Share holders equity


HBL 10,864,112/63179222*100=17.1953 %

13,400,749/75,133,715*100=17.835 %

17,034,380/83,842,059*100=19.615 %

ASKARI415,055/12,086,226*100=

3.43411 %

1,079,150/13,164,224*100=

8.197596 %

919,461/14,819,933*100=

6.204218 %

MCB15,313,227/54,120,812*100=

28.3130 %

15,665,403/63,120,371*100=

24.818299 %

16,874,019/71,225,105*100=

23.6911744 %

Calculation for Return on Equity

8/3/2019 Spring 2011_FIN619_9_MC060200242


Graphs for Return on EquityGraphs for Return on Equity


In HBL FY 2008-2010 % change in net profit after tax of bank has continuouslyincreased while the net sale of the bank has also continuously increased. So the

return on equity has increased

17.19 17.8319.61

3.43

8.196.2

28.31

24.8123.69

0

5

10

15

20

25

30

2008 2009 2010

RETURN ON EQUITY

HBL

ASKARI BANK

MCB

HBL

ASKARI

MCB

8/3/2019 Spring 2011_FIN619_9_MC060200242


Askari bank in year 2008-2009 % change in net profit after tax has almost

doubled and share holder equity has also increased. That¶s why return on

equity has increased but in contrast in FY 2009-2010 net profit after tax has

decreased but share holder equity remain increased so as a result net profit

after tax has decreased the return on equity is also decreased

In MCB from FY 2008-2010 % change in share holder equity has decreased

more than the net profit after tax of the bank that¶s why the net profit after tax

has decreased So the net profit after tax has decreased continuously.

The above mentioned results has been shown in the graph 3.10.1 a trend for

HBL bank is showing increasing trend from FY 2008-2010 while askari bank is

showing mix trend both increasing and decreasing trend.MCB is showing

continuous decreasing trend in all financial years

Comparative analysis shows that HBL has taken the lead in FY 2009-2010 ascompared to askari and MCB. The reason is HBL generating good profit after

utilizing its share holder¶s equity.

8/3/2019 Spring 2011_FIN619_9_MC060200242


Gross Profit MarginGross Profit MarginGross profit Margin= Gross Profit * 100

Net Sales


HBL 36,850,491/63,376,047*100=58.14577 %

42,670,534/76,076,347*100=56.08909 %

46,994,773*81,325,028*100=57.7863 %

ASKARI7,748,456/18,395,742*100=

42.12092 %

9,048,020/22,665,248*100=

39.92023 %

10,023,241/27,954,956*100=

35.85496 %

MCB28,456,583/40,049,505*100=

71.05351 %

35,786,330/51,621,911*100=

69.323915 %

36,801,993/54,829,365*100=

67.12095 %

Calculation for Gross Profit Margin

8/3/2019 Spring 2011_FIN619_9_MC060200242


Graphs for Gross Profit MarginGraphs for Gross Profit Margin


In HBL from FY 2008-2009 % change in gross profit of the bank in FY 2008-2009is more than % change in Gross profit that¶s¶s why there is decrease in gross profit

margin ration. Incontrast in FY 2009-2010 the situation is opposite as a result there

is increase in gross profit margin

58.14 56.08 57.78

42.12 39.9235.85

71.05 69.32 67.12

0

10

20

30

40

5060

70

80

2008 2009 2010

GROSS PROFIT MARGIN

HBL

ASKARI

MCB

HBL

ASKA

RI

MCB

8/3/2019 Spring 2011_FIN619_9_MC060200242


In ASKARI BANK from FY 2008-2010 % change in net sale has increased but

% change in gross profit of the bank in FY 2008-2010 is more than % change

in Gross profit that¶s¶s why there is continous decrease in gross profit margin

ratio

While MCB from FY 2008-2010 % change in net sale has increased but %

change in gross profit of the bank in FY 2008-2010 is more than % change in

Gross profit that¶s¶s why there is continous decrease in gross profit margin

ratio

The above mentioned results has been shown in the graph 3.11.1 trend HBL

is showing decreasing trend in first financial year and than showing increasing

trend in second financial year. While Askari bank and MCB is showing

continous decreasing trend fron FY 2008-2010


compared to Askari & MCB The reason is HBL has increases its net sales inorder to get continuous increase in its gross profit margin.

8/3/2019 Spring 2011_FIN619_9_MC060200242


Conclusion/FindingsConclusion/Findings HabibHabib Bank:Bank:

HBLHBL isis clearlyclearly thethe firstfirst choicechoice of of everyoneeveryone becausebecause theythey areare performingperforming wellwell andandleadingleading trendtrend inin netnet profitprofit marginmargin analysisanalysis theythey areare havinghaving largelarge salessales soso theythey

generategenerate or or produceproduce highhigh profitsprofits inin order order toto makemake their their bankbank isis oneone of of thethe mostmost

consistentconsistent andand leadingleading bankbank inin PakistanPakistan..

HBLHBL isis oneone of of thethe mostmost leadingleading bankbank toto generategenerate returnreturn onon itsits assetsassets theythey increaseincrease

their their totaltotal assetsassets toto produceproduce or or generategenerate profitprofit soso HBLHBL isis performingperforming andand producingproducing

profitprofit veryvery intelligentlyintelligently asas comparedcompared toto other other banksbanks.. HBLHBL alwaysalways receivereceive goodgood resultresult whenever whenever wewe talktalk aboutabout profitprofit after after taxtax or or profitprofit

beforebefore taxtax or or operatingoperating profitprofit soso wewe cancan saysay thatthat HBLHBL isis oneone of of thethe leadingleading bankbank thatthat

generategenerate profitprofit whenwhen theythey utilizeutilize their their assetsassets asas comparedcompared toto other other bankbank..

If If wewe talktalk aboutabout fixedfixed assetsassets wewe alsoalso havehave nono hesitationhesitation toto saysay thatthat HBLHBL isis performingperforming

thethe leadingleading trendtrend toto increaseincrease their their fixedfixed assetsassets inin order order toto generategenerate their their netnet salesale soso

accordingaccording toto mymy findingfindingHBLHBL

isis alsoalso thethe leadingleading bankbank inin salesale toto fixedfixed assetsassets analysisanalysis.. BankBank isis enjoyingenjoying healthhealth markingmarking shareshare andand tastetaste of of goodgood statusstatus inin termterm of of itsits

operativeoperative featuresfeatures andand customer customer supportsupport HBLHBL utilizingutilizing hishis shareshare holder holder equityequity inin aa

veryvery efficientefficient manner manner inin order order toto generategenerate goodgood profitprofit HBLHBL isis performingperforming veryvery wellwell inin

order order toto achieveachieve goodgood ratingrating inin thethe fieldfield of of givinggiving their their shareholder shareholder aa goodgood returnreturn soso

wewe cancan saysay thethe HBLHBL isis oneone of of thethe leadingleading bankbank whilewhile analyzinganalyzing thethe returnreturn onon equityequity..

8/3/2019 Spring 2011_FIN619_9_MC060200242


After my finding the gross profit margin trend is more suitable for HBL as After my finding the gross profit margin trend is more suitable for HBL ascompared to other banks this bank is performing very efficiently andcompared to other banks this bank is performing very efficiently andeffectively when we talk about any profitability ratio analysis. So in myeffectively when we talk about any profitability ratio analysis. So in myopinion HBL is the leading bank asopinion HBL is the leading bank as

AskariAskari bank:bank:

Askari Askari BankBank isis notnot asas strongstrong asas MCBMCB andand HBLHBL butbut theythey areare goinggoing wellwell andand

tryingtrying their their bestbest inin order order toto makemake goodgood profitprofit toto maintainmaintain their their namename inin thethe

marketmarket..

Askari AskariB

ankB

ank isis gettinggetting edgeedge whilewhile analyzinganalyzing operatingoperating assetsassets turnover turnover theytheyareare usingusing their their operatingoperating assetsassets inin wayway toto achieveachieve goodgood profitprofit fromfrom their their

operatingoperating assetsassets..

Askari Askari bankbank isis oneone of of thethe mostmost leadingleading bankbank after after analyzinganalyzing salesale toto fixedfixed

asstsassts ratioratio theythey alsoalso generategenerate goodgood profitprofit fromfrom their their fixedfixed assetsassets..

Askari Askari bankbank alsoalso havinghaving edgeedge whenwhen wewe talktalk aboutabout operatingoperating profitprofit marginmargin

theythey areare alsoalso havinghaving edgeedge whilewhile increasingincreasing their their profitprofit marginmargin becausebecause theytheyactuallyactually adoptadopt veryvery efficientefficient andand effectiveeffective strategystrategy toto increaseincrease their their salessales..

TheThe commitment,commitment, teamworkteamwork andand fairnessfairness of of bank¶sbank¶s employeesemployees andand thethe

integrityintegrity of of allall of of itsits activitiesactivities areare focusedfocused atat effortsefforts drivendriven towardstowards success,success,

customer customer satisfactionsatisfaction andand eventuallyeventually longlong termterm profitableprofitable relationshipsrelationships..

8/3/2019 Spring 2011_FIN619_9_MC060200242


Muslim Commercial BankMuslim Commercial Bank

MCBMCB isis thethe secondsecond mostmost leadingleading bankbank toto generategenerate returnreturn onon itsits assetsassets theytheyincreaseincrease their their totaltotal assetsassets toto produceproduce or or generategenerate profitprofit soso MCBMCB isisperformingperforming andand producingproducing profitprofit veryvery intelligentlyintelligently asas comparedcompared toto other other

banksbanks MCBMCB alwaysalways receivereceive goodgood resultresult whenever whenever wewe talktalk aboutabout profitprofit after after taxtax andand

netnet salessales soso wewe cancan saysay thatthat MCBMCB isis thethe secondsecond mostmost leadingleading bankbank thatthatgenerategenerate profitprofit whenwhen theythey utilizeutilize their their assetsassets asas comparedcompared toto other other bankbank..

ItIt isis evidenceevidence fromfrom thisthis reportreport andand thethe financialfinancial statementstatement of of MCBMCB thatthat itit isismakingmaking progressprogress byby leapsleaps andand boundsbounds

TheThe profitprofit of of MCBMCB hashas growngrown considerablyconsiderably fromfrom thethe fewfew year year ThereforeTherefore weweconsider consider thatthat MCBMCB hashas aa veryvery prosperousprosperous presentpresent andand futurefuture

TheyThey assureassure thethe shareholder shareholder of of wealthwealth andand maximizationmaximization.. SideSide byby sideside IIthinkthink thatthat if if bankbank wouldwould bebe ableable toto cover cover andand controlcontrol over over thethe belowbelowmentionedmentioned recommendationrecommendation thenthen itit wouldwould bebe inin suchsuch aa situationsituation

TheyThey willwill reallyreally leadsleads itit towardtoward thethe roadroad of of prosperityprosperity developmentdevelopment andand

integrityintegrity andand withwith thethe aboveabove mentionedmentioned sentencesentence II thinkthink therethere isis thethe tootoofaultfault of of thethe customer customer andand inin order order toto makemake thethe proper proper workingworking of of thethe bankbank

TheThe customer customer shouldshould alsoalso cooperativecooperative withwith thethe bankbank whichwhich willwill bebe reallyreally aagoodgood ambitiousambitious andand diligentdiligent conditioncondition of of thethe bankbank..

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RecommendationsRecommendationsHabibHabib BankBank LtdLtd

As As wewe seenseen fromfrom thethe previousprevious analysisanalysis of of thethe financialfinancial statementstatement wewe havehaverealizedrealized thatthat thethe habibhabib bankbank isis performingperforming wellwell sincesince thethe lastlast inspectioninspection itit isisquitequite difficultdifficult toto givegive suggestionsuggestion toto improveimprove thethe bankingbanking conditioncondition of of habibhabibbankbank ltdltd asas wewe knowknow thatthat nothingnothing isis perfectperfect inin thisthis worldworld therethere isis alwaysalways aaroomroom for for improvementimprovement

After After overalloverall findingfinding wewe comecome toto knowknow thatthat HBLHBL isis havinghaving weakweak strategystrategy for for generatinggenerating operatingoperating profitsprofits soso wewe recommendrecommend themthem toto utilizeutilize their their

operatingoperating assetsassets inin suchsuch aa manner manner thatthat thesethese assetsassets givegive youyou reasonablereasonableoperatingoperating profitprofit inin order order toto competecompete thethe marketmarket..

OverallOverall HBLHBL isis performingperforming veryvery wellwell inin alal analysisanalysis of of profitabilityprofitability ratiosratios butbutthethe onlyonly problemproblem isis thisthis thatthat theythey areare notnot havinghaving goodgood qualityquality of of servicesservices sosowewe recommendrecommend themthem toto improveimprove givegive trainingtraining toto their their staff staff

NowNow daysdays inin PakistanPakistan somesome other other banksbanks introducedintroduced goodgood qualityquality of of

servicesservices toto their their customer customer soso nownow peoplepeople notnot onlyonly wantwant toto savesave thethe moneymoneytheythey alsoalso wantwant carecare soso habibhabib bankbank isis notnot havinghaving goodgood qualityquality of of servicesservices..

TheThe bankbank isis alsoalso inin processprocess of of computerizingcomputerizing therethere recordsrecords whichwhich isis goodgoodsignsign butbut itit isis goinggoing onon withwith smallsmall progressprogress ComputerizationComputerization mustmust bebe donedoneonon earlyearly basisbasis thisthis willwill helphelp inin increasingincreasing efficiencyefficiency of of workwork done,done, customer customer satisfactionsatisfaction andand decreasedecrease thethe stationerystationery costcost andand resultantlyresultantly itit willwill increaseincreasethethe profitprofit..

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InIn pastpast habibhabib bankbank isis alwaysalways sufferedsuffered fromfrom badbad governmentgovernment policiespoliciesGovernmentGovernment interventionsinterventions shouldshould avoidavoid completelycompletely

Banks

Banks differentdifferent schemescheme mustmust bebe conveyedconveyed toto thethe targettarget customer customer soso thatthat totohavehave aa reasonablereasonable shareshare inin thethe marketmarket..

BanksBanks shouldshould helphelp thethe societysociety byby providingproviding interestinterest freefree loanloan toto thethe talentedtalentedstudentsstudents..

FreshFresh graduatesgraduates mustmust bebe recruitedrecruited asas thethe combinationcombination of of experienceexperience andandfreshfresh cancan bebe producedproduced better better resultsresults andand itit willwill improveimprove thethe efficiencyefficiency of of thethemanagementmanagement..

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AskariAskari Bank:Bank:

Askari Askari bankbank isis aa growinggrowing bankbank soso theythey never never competecompete thethe profileprofile of of HBLHBL or or

MCBMCB butbut theythey areare performingperforming wellwell inin somesome of of thethe profitabilityprofitability analysisanalysis

Askari Askari bankbank isis notnot operatingoperating their their assetsassets equitiesequities inin order order toto generategenerate goodgoodprofitsprofits soso II suggestsuggest themthem toto makemake somesome goodgood salessales inin order order toto generategenerate goodgoodprofitprofit ss

WeWe alsoalso suggestsuggest themthem toto utilizeutilize their their assetsassets inin suchsuch aa mannersmanners thatthat theytheyprovideprovide themthem aa goodgood returnreturn

After After wewe findfind thatthat theythey areare notnot havinghaving goodgood strategystrategy whilewhile utilizingutilizing shareshare holder holder

equityequity theythey mustmust utilizeutilize their their shareshare holder holder equityequity toto generategenerate moremore profitprofit.. A A departmentdepartment shouldshould bebe establishedestablished thatthat collectcollect feedbackfeedback of of thethe customerscustomers andand

asas wellwell asas generalgeneral publicpublic..

OneOne wayway toto retainretain thethe personalpersonal sector sector customer customer isis toto offer offer aa widewide rangerange of of servicesservices suchsuch asas taxtax advice,advice, freefree lifelife insuranceinsurance equivalentequivalent toto thethe amountamountdepositeddeposited ,, shareshare portfolioportfolio management,management, fundsfunds managementmanagement facilityfacility etcetc..

MarketingMarketing departmentdepartment efforteffort toto marketmarket andand introduceintroduce itsits productproduct shouldshould bebeimprovedimproved..

BanksBanks shouldshould helphelp thethe societysociety byby providingproviding interestinterest freefree loanloan toto thethe talentedtalentedstudentsstudents..

FreshFresh graduatesgraduates mustmust bebe recruitedrecruited asas thethe combinationcombination of of experienceexperience andand freshfreshcancan bebe producedproduced better better resultsresults andand itit willwill improveimprove thethe efficiencyefficiency of of thethemanagementmanagement..

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BanksBanks differentdifferent schemescheme mustmust bebe conveyedconveyed toto thethe targettarget customer customer soso thatthat totohavehave aa reasonablereasonable shareshare inin thethe marketmarket..

Staff Staff turnover turnover particularlyparticularly of of trainedtrained staff staff resultresult inin financialfinancial andand other other losseslosses..TheThe amountamount spentspent byby thethe bankbank onon thethe employment,employment, inductioninduction trainingtraining of of anan

outgoingoutgoing officer officer constitutesconstitutes toto beatbeat tilltill another another officer officer shouldshould readyready toto proveprovehishis workwork.. SoSo bankbank trytry toto stopstop or or reducedreduced their their employeeemployee turnover turnover..

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Muslim commercial bank:Muslim commercial bank: After After mymy findingsfindings II comecome toto knowknow thatthat MCBMCB isis notnot performingperforming wellwell inin netnet

profitprofit marginmargin analysisanalysis becausebecause theythey never never increaseincrease their their salesale toto generategenerategoodgood rationration for for netnet profitprofit marginmargin soso wewe suggestsuggest themthem toto increaseincrease their their netnet

salessales toto makemake anan increasingincreasing trendtrend inin netnet profitprofit marginmargin analysisanalysis..

MCBMCB isis alsoalso notnot performingperforming wellwell after after analyzinganalyzing OperatingOperating profitprofit marginmargin thisthisratioratio tellstells thatthat theythey notnot increasingincreasing their their netnet salesale toto produceproduce goodgood operatingoperatingprofitprofit soso wewe suggestsuggest themthem toto their their netnet salessales toto produceproduce goodgood resultsresults ininoperatingoperating profitprofit marginmargin..

MCBMCB isis alsoalso notnot havinghaving goodgood strategystrategy for for utilizingutilizing their their fixedfixed assetsassets thatthat isis

whywhy theythey areare notnot generatinggenerating goodgood netnet salessales soso wewe suggestsuggest themthem toto makemakesomesome efficientefficient utilizationutilization of of fixedfixed assetsassets inin order order toto achieveachieve goodgood netnet salessales..

Almost Almost allall branchesbranches of of MuslimMuslim commercialcommercial bankbank thethe problemproblem of of staff staff isiscommoncommon.. BasicallyBasically thethe mainmain ideaidea behindbehind isis thatthat whenwhen therethere isis shortageshortage of of staff staff inin anyany organizationorganization.. ItIt alwaysalways resultresult inin lotlot of of workwork andand alsoalso boostboost upupthethe destructiondestruction becausebecause peoplepeople workingworking therethere feelfeel that¶sthat¶s theythey cancan dodo whatwhatever ever theythey feelfeel theythey leastleast bother bother aboutabout thethe rulesrules andand regulationregulation asasimplementedimplemented byby thethe headhead officeoffice andand mostlymostly itit resultresult inin corruptioncorruption..

Staff Staff turnover turnover particularlyparticularly of of trainedtrained staff staff resultresult inin financialfinancial andand other other losseslosses..TheThe amountamount spentspent byby thethe bankbank onon thethe employment,employment, inductioninduction trainingtraining of of ananoutgoingoutgoing officer officer constitutesconstitutes toto beatbeat tilltill another another officer officer shouldshould readyready toto proveprovehishis workwork.. SoSo bankbank trytry toto stopstop or or reducedreduced their their employeeemployee turnover turnover..

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MostMost of of thethe employeeemployee areare stickingsticking toto oneone seatseat onlyonly withwith thethe resultresult thatthat theytheybecomebecome master master of of oneone particular particular job job andand losseslosses their their gripgrip onon other other bankingbankingoperationsoperations.. InIn mymy opinionopinion allall employeesemployees shouldshould bebe regularlyregularly changechange fromfromoneone departmentdepartment toto anan other other departmentdepartment of of thethe bankbank..

EveryEvery year year somesome of of thethe employeeemployee shouldshould bebe sentsent for for trainingtraining for for other other countriescountries andand employeesemployees fromfrom other other branchesbranches shouldshould bebe broughtbrought hereheresomesome moremore readingreading materialmaterial shouldshould bebe providedprovided thethe purposepurpose shouldshould bebe totoeducateeducate thethe employeesemployees withwith advanceadvance studiesstudies inin therethere filedfiled.. TheThe employeeemployeeshouldshould bebe attendedattended thethe seminar seminar andand thethe lectureslectures onon bankingbanking

ItIt isis mostmost nearlynearly aa sentencesentence rightright manman for for rightright job job accordingaccording toto hishisqualificationqualification professionalprofessional skillsskills andand experienceexperience withwith thethe job job specificationspecification

mustmust bebe consideredconsidered whilewhile postingposting andand placingplacing thethe employeeemployee..

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Th

ank YouTh

ank You

Spring 2011_FIN619_9_MC060200242

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