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    CHAPTER 1

    INTRODUCTION

    Internship is an integral part of all the management courses at Comsats Institute of

    Information Technology, Abbottabad Campus. The Students of MBA (Finance) are also

    required to undergo an internship program of 8 weeks in any Foreign or Domestic Bank

    of the country. Comprehensive report writing follows the internship. The internee is

    required to submit an internship report to the Head of Management Science Department,

    which is properly evaluated. The internee is also required to undergo a viva-voca, in

    which he/she is asked about the different activities he/she has performed in the

    organization.

    To fulfill my academic requirement of MBA (Finance) course, I did my internship in

    Askari Bank Ltd., Abbottabad Branch. Although the internship was carried out in the

    entire bank departments, like

    Deposits Department

    Bills & Remittances

    Accounts Department

    Credits Department

    1.1 Purpose of the study

    Apart from the degree requirement of MBA, the basis idea of this report is to analyze the

    activities preformed by the bank during the internship, also to analyze the operations

    carried out in each department especially Deposits Department & Credits Department of

    Askari Bank Ltd., Abbottabad Branch. Besides the analysis, certain recommendations are

    also made for the improvement.

    In addition this study would be helpful for the students of banking and finance as well as

    professional bankers to gain an additional insight into the banking sector of our country.

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    1.2 Background of the study

    Banks play extremely important role in modern economic activities in the form of trade

    and commerce by providing short-term loans and in managing exports and imports. Thus

    a well-developed banking sector is a pre requisite for the development of a country like

    Pakistan.

    Pakistans economy remained buoyant during fiscal 2006 despite the impact of a sharp

    rise in international oil prices and massive spending or rehabilitation and reconstruction

    activities after the earthquake of October 2005.

    Though the economy of Pakistan is passing through a difficult phase, presently it requires

    a growing banking sector in order to curb the macro economic imbalances of budget

    deficits, acceleration of economic growth and reduction in unemployment.

    The banking sector in Pakistan has shown good progress during last years and has

    increased in size. As a result of increase in size, the banks are now adopting new

    approaches to their existing banking operations, keeping in view changes in demand of

    time and emphasizing more on personalized service, electronic fund transfer, auto teller

    machine and evening banking.

    1.3 Purpose of the report

    The purpose of the report is to critically evaluate the operations of each department of

    Askari Commercial Bank at branch level. The internship was carried out to evaluate the

    efficiency o\f management structure. Based on the analysis certain recommendations are

    made for the improvement.

    The study was carried out and the report being presented for the fulfillment of degree

    requirement of Master in Business Administration (MBA) at the Comsats Institute of

    Information Technology, Abbottabad Campus.

    1.4 Scope of the study

    The main focus of the study is to describe the working of Askari Bank at branch level. An

    evaluation of selected departments is carried out, and after some critical analysis

    recommendations are given.

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    1.5 Methodology of the study

    The study makes use of one kind of data, secondary source.

    1.5.1 Secondary Data

    Certain types of information such as the background details of the organization can be

    obtained from available published records, the web site www.askaribank.com of the

    organization and other sources. Other types of written information such as company

    policies, procedures and rules can be obtained from the organizations records and

    documents. The advantage of this data is that we dont have to search for the needed

    information and the disadvantage of this data is that the information may not be up to

    date as changes occur in the organization time. For this report the secondary data is taken

    from annual reports of 2006.

    Askari Report of

    ASKARI BANK LIMITED

    for the year ended December 31, 2006

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    CHAPTER 2

    INTRODUCTION OF ASKARI BANK

    2.1 History of Askari Bank Limited

    Askari Bank was incorporated in Pakistan on October 9, 1991, as a public limited

    company. It commenced operations on April 1, 1992, and is principally engaged in the

    business of banking, as defined in the Banking Companies Ordinance, 1962. The Bank is

    listed on the Karachi, Lahore and Islamabad Stock Exchanges and its share have

    consistently remained amongst the highest quoted in the banking sector in Pakistan.

    Askari Bank has expanded into a nation-wide presence of 121 branches, including 6

    dedicated Islamic Banking Branches, and an Off-Shore Banking Unit in Bahrain. A

    shared network of over 1,300 on-line ATMs covering all major cities in Pakistan supports

    the delivery channels for customer service. As at December 31, 2006, the Bank had an

    equity of Rs.11.1 billion and total assets of Rs.166.0 billion, with over 665,000 banking

    customers, serviced by our 4,585 employees.

    2.2 Mission statement

    To be the leading private sector bank in Pakistan with an international presence,

    delivering quality service through innovative technology and effective human resource

    management in a modern and progressive organizational culture of meritocracy,

    maintaining high ethical and professional standards, while providing enhanced value to

    all our stake-holders, and contributing to society.

    2.3 Vision Statement

    To be the Bank of first choice in the region

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    2.4 Objective of Askari Bank Limited

    The aim is to channels the private saving and public funds for investment

    purpose.

    The bank is committed to its identity of Security and Trust and will

    endeavor to uphold this image at all the times.

    Askari Bank Limited is interested in being one of the more financially

    viable institutions. Therefore, it lays emphasis on gradual building up of a healthy

    deposit mix.

    2.5 Business & Operations Review

    During 2006, Askari Bank continued with its growth momentum and posted substantial

    earnings despite highly competitive business environment. Although monetary tightening

    helped in reducing inflationary pressures in the economy during fiscal 2006, aggregate

    demand remained high as indicated by the strong GDP growth, high growth in private

    sector credit, sluggish decline in core inflation and large external account deficit. In ahighly competitive environment, Askari Bank continually reviewed its policy pertaining

    to the sectoral exposures to derive optimum competitive advantage, maintain the risk

    profile and achieve greater customer satisfaction.

    On the operations side, during the year under review, Askari Banks has taken various

    initiatives to improve the ways of doing business. The significant ones include re-

    organization of management structure and technology initiatives. The primary objective

    of re-organization is to consolidate and align internal capacities to best serve eachbusiness segment. The technology initiatives are aimed to improve the service quality

    standards and strengthen control environment and to prepare the Bank for the future

    challenges.

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    2.6 Corporate Banking

    This business is managed by a central corporate banking division based at head office

    Rawalpindi and supported by dedicated marketing and back office units in Karachi,

    Lahore and Rawalpindi. The division maintains a diverse portfolio and primarily offers

    structured financing solutions to cater for the business needs of its clients. During 2006,

    corporate banking further expanded its customer base and new relationships were

    established in telecommunications sector, fuel and energy, and fertilizer sector. In order

    to enhance focus on relationship management and service quality, more dedicated and

    experienced staff is being assigned to this division.

    The corporate Banking will continue to play a major role in loan syndications and

    structured financing transactions with the objective of providing a range of corporate

    banking solutions to its valued clients.

    Products

    Loan syndications (arranger/co-arrangers & lead manager)

    Structured finance

    Equity financing

    Working capital financing

    Corporate finance advisory services

    Debt swaps

    Balance sheet restructuring

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    2.7 Investment Banking

    The investment banking activity mainly coves, debt/capital markets, advisory services

    and trading (both equities and bonds). This division also offers advisory and loan

    syndication services. Equity Market transactions are handled by Capital Market Desk,

    based at Karachi, which include equity portfolios segregated into trading, investment and

    futures, and continuous funding system (CFS). Investment banking participated in

    various debt and capital raising instruments during the year.

    Products

    Commercial paper

    Debt capital markets

    Capital raising

    Trading activity (equities and derivatives)

    Discretionary Portfolio management

    2.8 Consumer Banking Services

    During 2006, the consumer banking services offered by the Bank were reorganized by

    combining consumer financing business and credit card business under one umbrella and

    were renamed as consumer banking services group. The reorganization is aimed to bring

    in business synergies and to enable active cross sale of different product to the same

    market segment.

    2.9 Consumer financing

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    Consumer financing offers auto, mortgage, personal and business finance as the core

    products, this business grew by 28% during 2006. The Banks debit card with the brand

    name of ASKCARD registered an increase of 25% in the number of cards issued. Also,

    Rupee Traveler Cheques float increased by 55% during 2006.

    Products

    AskCard (Debit/ATM card)

    AskPower (Prepaid card)

    Askari Banks mortgage finance (Home loans)

    Askari Banks business finance (Business loans)

    Askari Banks personal finance

    SmartCash

    Askar (auto loans)

    Askari Pouch N pay (on-line utility bill payment services)

    Askari Value Plus (flexible deposit accounts)

    Cash Management Services

    Rupee traveler cheques

    Askari investment certificates

    2.10 Credit Cards

    Despite strong competition, the credit card business, under the MasterCard brand,

    maintained its growth in all areas of the business. Net card issuance increased by 59%

    during the year, cards in force crossed 230k and its loan portfolio increased by 36%,

    while NPLs remained well within the industry norms.

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    Askari MasterCards rewards program continues to offer attractive features to our valued

    customers. Also, strategic alliances with leading service providers in the market benefit

    Askari MasterCard customers with exclusive travel and leisure facilities.

    Products

    Askari MasterCard (credit card facility)

    Balance Transfer Facility

    Smart Installment Plan

    2.11 Treasury and International operations

    The monetary tightening aimed at reducing inflationary pressures and fostering economic

    growth was reflected in the money market conditions throughout the year. In order to

    manage the money market liquidity, SBP used the combination of Overnight Money

    market operations (OMOs) and increased cash reserve requirement. During the year,discount rate was also increased by 50 bps. As a result the overnight rates remained under

    pressure during most of 2006.

    The bank increased its overall foreign trade business during 2006/ the import business

    increased to Rs.119.3 billion, i.e. growth of 11% over last year, while the exports

    increased by 6% over last year, to Rs.97.3 billion.

    Products

    Foreign Currency Accounts

    Foreign Trade Services (Import & Export)

    Import & Export Financing

    Travelers Cheque Issuance

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    Foreign remittances (Demand Draft/Telegraphic Transfer) Inward & Outward

    Sale & Purchase of Foreign Currency Cash

    Issuance of Guarantees & Bid Bonds

    Handling of Securities

    Offshore Banking Services

    2.12 Offshore Banking Unit

    During the year, Askari Banks Offshore Banking Unit (OBU) in Bahrain increased its

    share of contributions in the overall earnings of the Bank. The OBU remains on a

    constant look out for opportunities on the international scene, which are both profitable

    and provide the Bank with a strategic edge. OBU enhances our capability in terms of

    offering a wider range of services to our customers, and also acts as a look-out for new

    business opportunities and relationships in the international markets.

    2.13 Advances and Credit quality

    Askari Banks funded credit portfolio increased by 16% to close at Rs.102.73 billion as

    compared to 23% last year as the Bank remained watchful of the impact of growth of riskassets on capital adequacy.

    A review of the securities held against credit limits reveals that the credit portfolio of the

    Bank is well collateralized, with adequate exposure being covered by securities of liquid

    nature, such as deposits, trade documents, equity or debt instruments, guarantees from

    yeare, Banks non-performing advances increased to Rs.3.6 billion, from 2.3 billion last

    year due to further downgrade of certain large exposures. Consequently NPLs as a

    percentage of gross advances increased from 2.7% to 3.6%. However, despite this

    increase, the percentage is well within the industry average.

    During 2006, Askari Bank made net provisions or Rs.1, 128 million. Also during the

    year, the method of making general provision, on credit portfolio other than consumer

    portfolio, was standardized, as explained in audited financial statements. General

    provisions against consumer finance portfolio continue to be made in accordance with the

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    guidelines provided in SBP Prudential Regulations for Consumer Finance. The

    cumulative provisions at the close of 2006 increased to Rs.3.5 billion. These provisions

    provide 97% coverage to the total NPLs as compared to 102% last year.

    Products

    Term Loans

    Overdrafts

    Short term facilities for local trading

    Cheque purchase facility(foreign & local)

    Letters of Credit (Domestic as well

    Guarantees

    Pledge loans

    Finance Against Trust Receipts

    Stand by letters of credit

    Financing against foreign bills

    Foreign currency financing

    Export re-finance from SBP- Finance Against Packing Credit I&II

    Finance against Imported Merchandize

    2.14Departmentation

    Departmentation means grouping of jobs into some logical arrangement. Departmentation

    is a mean for better performance of different activities of the organization as well as the

    effective management of each unit. The basis for departmentation in Askari Bank

    Limited is geographical as well as functional.

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    2.15 Departmentation at Head Office

    At the Head Office, various departments have been established in corporate function of

    similar nature. The head of each division is responsible to the President of ABL.

    2.15.1 Human Resource Division

    The most important division at the head office is the human resource division. It performs

    the functions of recruitment, staff training and evaluation.

    2.15.2. Finance Division

    This division is responsible for book keeping and accounts. It prepares all financial

    returns through its Management Reporting Wing. It is actively involve in preparing

    market comparative analysis, consolidation of Banks budgets, its monitoring and constant

    review of various financial indicators. Preparing the Banks Annual Accounts and

    coordinating external audits is also a direct function of Finance.

    2.15.3. Corporate Division

    This division is engaged in the provision of the financing facilities to large corporate

    clients including multinationals. Principle activities include syndicated loans, guarantees,

    and working capital finance, underwriting and advisory services.

    2.15.4 International Division

    They are responsible for managing correspondent relationships and planning for the

    overseas operations. This division plays vital role in the Foreign Trade Transactions.

    2.15.5 Treasury Division

    They are responsible for managing money market and foreign exchange transactions.

    Conditions in the money market and foreign exchange market were very challenging and

    volatile during 2004. The low interest rate environment that dominated the first half of

    2004, changed with the rising interest rates in the international market.

    2.15.6 Credit Card Division

    The Credit Cards Division (CCD) is responsible for managing the Credit Cards business

    of the Bank. CCD is headquartered in Karachi, as a separate strategic business unit (SBU)

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    of the Bank, with all internal functions including credit, operations, marketing, sales,

    finance and audit, performed independently. Its present focus is on managing the Askari

    MasterCard brand, accepted worldwide and at over 4000 locations in Pakistan. This

    product was successfully re-launched in 2001, with a new fully automated transaction

    processing system, supported by a focused marketing campaign, achieving monthly

    profitability in record time.

    2.15.7 Systems and Operation Division

    This division has been instrumental in development of procedures and manuals for

    various operating requirements of the Bank. The division recommends automation and

    re-engineering requirements to improve transaction efficiencies. This division also

    manages the protection of fixed assets of the bank.

    2.15.8 Audit Division

    The Audit Division acts independent of the Management and is responsible for checking

    and reporting on the Management compliance with the Boards policies and directives

    and other directives of State Bank of Pakistan (SBP). This Division is responsible for

    every aspect of Banks operations with the goal of improving the effectiveness of risk

    management and internal control.

    2.15.9 Legal Affairs Department

    The Legal Affairs Department is mainly engaged in advising the Bank on applicable laws

    and the negotiations of contracts, and providing legal assistance by reviewing, examining

    and scrutinizing various documents and matters connected therewith the department

    carries out analysis, prepare research studies, drafts, address legal queries and advise on

    pre contractual investigations.

    2.15.10 Asset Products Division

    The Asset Products Division (APD) is responsible for the development and managing of

    retail credit schemes, and is presently offering several innovative consumer credit

    products. In order to cater for the increasing demand for retail credit, APD, during 2003,

    started five more retail asset units, taking the total number to ten, country-wide.

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    APD currently offers six products: Personal Finance, Business Finance, Mortgage

    Finance, Revolve Credit Line, Car Financing and Consumer Durables Financing in

    association with major suppliers of consumer products. All these products have been well

    received and volumes have been building steadily. Computer Loans were launched in

    July 2002 to promote IT Technology in the country.

    2.15.11 Investment Product Division

    The Investment Product Division (IPD) is responsible for developing and managing the

    brands that serve the investment needs of the customer market. It focuses on deposit

    mobilization and provision of value added services based on modern technology cards.

    The division continuously makes an effort to provide value added services and products

    to the clients.

    IPD offers a range of products designed to cater for diverse customer needs, such as:

    ASKCARD (Debit Card), Cash Management Services, Rupee Travelers Cheques and

    customer deposit products such as Askari Banks Value Plus.

    2.15.12 Credit Division

    This division provides extensive support to branches for credit administration, control

    and monitoring, and has played a pivotal role in helping theBank to achieve a remarkable

    loans growth. Most of the loans are for short term trade financing. This Division has a

    Special Assets Management team, which is responsible for low ratio of bad debts,

    effective monitoring of delinquent advance and close follow up of recoveries.

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    Branch Network

    15

    President, Chief Executive

    Regions/Areas

    North Region

    Central Region

    Lahore

    Area

    East

    Area

    West

    Region

    Rawalpindi/ Islamabad

    South-1

    South-2

    North

    Area

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    2.17 Control of Branch

    The system of regional and area offices has been introduced since 1999 for the effective

    supervision and control of branches. The scope of the system also spans the development

    and management of the Banks business and activities, on a regional basis. Under this

    system, the Regional Heads have the primary responsibility for business development,

    profitability, productivity, operational efficiency and credit quality. It has now enabled

    the Bank to further expand and diversify its geographical reach and business activities.

    Geographically, the bank is divided into the following regions and 74 branches.

    2.18 Rawalpindi/Islamabad

    This region comprises of 22 branches located in the twin cities of Rawalpindi and

    Islamabad, of which 5 at Chaklala scheme 111, raja bazaar and satellite town, were

    opened in the year 2002. This expansion is primarily targeted to reach household, small

    and medium enterprise customers of the region.

    This region continues to contribute the largest portion of the total bank deposits base.

    With the untiring efforts of the team, this otherwise non-commercial region booked large

    guarantee business, which is almost 50% of the entire bank. Despite limited investment

    avenues, this region has increased its assets base and trade business significantly.

    This region achieved good growth in all areas of activity particularly in foreign trade and

    guarantee business.

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    2.19 North Region (Peshawar)

    This region covers 8 branches. Significant portion of the business activities carried out in

    N.W.F.P. was in the hands of Afghan immigrants, who are leaving for their homeland.

    This has adversely affected business of imports, exports and real estate.

    All these factors have adversely affected business in the region. However, with the new

    openings in the shape of development of Afghanistan, the banks economic activity has

    revived and results in the generation of deposits and trading business.

    Even with limited potential for credit and foreign trade, this region made useful

    contributions to the banks deposits and foreign trade business. The teams rigorous

    efforts to raise low cost deposits and attention to remedial management resulted in the

    revival if delinquent accounts and reversal of markup suspense, which partly accounts for

    the sharp increase in profits during 2004.

    2.20 Central Region (Lahore)

    This region now covers 41 branches located in

    Lahore Area I

    Lahore Area II

    Faisalabad Area

    Multan Area

    Gujranwala Area

    . The region serves both households and business community around Lahore and carries

    the advantage of matching its deposit generation with deployment.

    2.21 East

    This region has the largest number of branches 15 in comparison with any other region of

    the bank, stretching from Rahim Yar khan in the south to Gujrat in the north. During the

    one year branch was added to this region in the city of Gujrat.

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    2.22 South-I

    This region comprises of 37branches out of which 7 were opened during the last two

    years.

    The regions strength lies in the fact that it manages 12 of the main branches of Karachi,

    which have contributed significantly towards the bank bottom line as well as trade related

    volumes to the bank. It has one each branch in Gawadar, Sukkar, Dharki and Ghotki.

    2.23 South-II

    In appreciation of the depth and dimension of Karachi market, south region was split in

    two regions south-I and south-II. This region started off with 37 branches. This region

    has excellent potential for deposits, advances as well as foreign trade. Of all the graphical

    regions of the bank, south-II posted the strongest all-round growth.

    2.24 West

    Operating with 7 branches in the comparatively less developed province of Baluchistan,

    this region relies heavily on retail customers with some potential for deposit mobilization.

    The marketing philosophy reflects the core value of serving the customer. Though small

    in its quantum, the region attained excellent growth in its profits and advances.

    2.25 Departmentation at Head Office

    18

    Board of Directors

    Executive

    Committee

    FinanceCredit Cards

    Region/

    Area

    Audit

    System

    &

    Operati

    Asset Products

    Legal Affairs

    Investment Products

    Produscts

    Group Head Corp.Bank& financial

    Institute

    Corporate Banking

    Exports

    Group head

    Retail Banking

    Merchant Banking

    Group Head

    Operations & credit

    Bills

    International

    Remittances

    Electronic

    Technology

    Treasury

    Credits

    Term

    Deposi

    ts

    President &Chief Executive

    Presidents SupportOffice

    HumanResource

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    Source: Askari Bank Limited Newsletter

    2.26 Corporate Profile

    Lt. Gen. Waseem Ahmed Ashraf Chairman

    Lt. Gen. (R) Masood Parwaiz Chairman Executive Committee

    Mr. Kalim-ur-Rahman President & Chief Executive

    Brig (R) Muhammad Shiraz Baig Director

    Brig (R) Asmat Ullah Khan Niazi Director

    Brig (R) Muhammad Bashir Baz Director

    Brig (R) Shaukat Mahmood Chaudhari Director

    Mr. Zafar Alam Khan Sumbal Director

    Mr. Kashif Mateen Ansari Director

    Mr. Muhammad Najam Ali Director

    Mr. Muhammad Afzal Munif Director

    Mr. Tariq lqbal Khan Director (NIT Nominee)

    Auditors

    Ford Rhodes Sidat Hyder & Co Chartered Accountants

    Legal Advisors

    Rizvi. Isa, Afridi & Angell

    Registrar & hare Transfer Office

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    Askari Associates (Private) Limited,

    6th Floor, AWT Paza, the Mall,

    P.O. Box 678, Rawalpindi,

    Tel: (051) 9272442-44

    Fax: (051) 9272447

    Registered Office/Head Office

    AWT Plaza, the Mall,

    P.O.Box No. 1084,

    Rawalpindi-Pakistan.

    Tel: 9051) 9272150-53

    Fax: (051) 9272455

    E-Mail:[email protected]

    Web Site: www.askaribank.com.pk

    Askari Report of

    20

    mailto:[email protected]:[email protected]://www.askaribank.com.pk/http://www.askaribank.com.pk/mailto:[email protected]://www.askaribank.com.pk/
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    ASKARI BANK LIMITED

    for the year ended December 31, 2006

    2.27 Organizational Chart of Askari Bank Limited

    Organizational Chart is the visual representation of Organizational Structure.

    Organizational Chart is prepared to show formal organization relationships, which are

    intended to prevail. It shows who supervises whom and how the various units are related

    to each other. It also shows main line of communication, downward flow of authority andupward flow of responsibility.

    Organizational chart of Askari Bank gives us the view that how greater delegation of

    authority can be made possible at different levels.

    A board of directors comprising of 11 director heads of Bank. Board of Directors in a

    limited company with large number of shareholders, they are elected by the shareholders

    using their voting rights. They are responsible for the affairs of the company including

    operation management and control of company business, taking important decisions and

    formulating broad polices and objectives of company.

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    2.28 Organization chart of Askari Bank Limited

    22

    Chief Executive

    Manager Operations

    Incharge

    Deposits

    Inchargeadvance

    s

    In charge

    Computer

    Incharge

    Forex

    Audit

    Incharge

    Cash

    In chargeRemittanc

    es

    In charge

    Accounts

    FC

    Account

    s

    Imports Exports

    Loans &

    Advance

    s

    Credit

    CardsBills Remittances

    Account

    Opening

    Cheque

    Posting

    Term

    Deposits

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    SORUCE: ASKARI BANK Newsletter

    CHAPTER 3

    ABBOTTABAD BRANCH ANALYSIS

    Following are the departments at the Abbottabad branch

    3.1 Deposit department

    3.2 Computer department

    3.3 Cash department

    3.4 Remittance department

    3.5 Credit and advance department

    3.6 Foreign exchange department

    3.7 Dispatch department

    3.8 Accounts department

    3.9 Types of Accounts

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    3.1 Deposit Department

    This department deals with retail banking i.e. opening customers account. Without

    opening an account, customer cannot operate in the bank. Once the account is opened

    relationship between customer and bank is created. Following functions are performed bythe deposit department at Abbottabad Branch.

    3.1.1 Opening of an account

    A relationship is created between the customer and bank when an account is opened.

    Certain document is required for account opening. These include the filling of account

    opening form that require the introducer, N.I.C copy, signature specimen card, form

    A/form B and deposit slip.

    3.1.2 Issuance of Cheque books

    Whenever an account is opened at the bank, the customer is given a cheque book by

    filling form A. This includes the accountholder account number that is stamped on every

    page. The date is stamped too. The charges are debited from accountholder as RS two per

    leaf. For a new cheque book, the account holder detaches the requisition leaf from oldone and presented to bank.

    In case of loss of a cheque book, the customer informs the bank and required to fill the

    form B for issuance of new cheque book.

    3.1.3 Issuance of bank statement

    The bank issues statement to the account holder periodically that possesses their account

    information.

    3.1.4 Closing of an account

    When a customer wants to close account, he/she requires giving direction to the bank and

    returning the cheque book.

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    3.1.5 Lockers

    Deposit department allots lockers to the customers. There are three types of lockers.

    Small, medium and large size lockers. A person willing for having locker should have

    minimum of Rs.10, 000 in his/her account.

    3.2

    Computer Department

    Askari Bank limited Abbottabad Branch is fully computerized. The main task of the

    computer officer is to look after and monitor the branch working. The functions are

    following

    Introduction to new programs

    Proper training to the user at branch

    Assisting branch to produce daily reports

    Co-coordinating between the head office and branch

    Daily operations are based on their system UNIBANK. It was purchased from United

    Bank Limited .Its run in COBOL language with UNIX as its operating system. The

    computer database in branch helps to keep recordof all transactions taking place. Also

    handles automated teller machine.

    3.3 Cash Department

    One of the most important functions of the cash department is the honoring of cheque for

    deposit of money. The cash department is responsible for the two functions.

    Firstly the honoring of cheques and verification of the signature of the

    customer and then payment of the money.

    Size Charges Per Year Refundable

    1. Small Rs.1000 500

    2. Medium 1500 500

    3. Large 2500 500

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    The second function is the deposit of money in the customers account

    using deposit slip, which the customer fills it.

    3.3.1 Cheque

    Cheque is a written order of a depositor upon the bank to pay or orders of the designated

    party, a specified sum of money on demand. Cheque is of two types.

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    3.3.2 Open cheque

    Cheques that are paid at the counter in cash. These are of two types

    Bearer cheque that authorize the drawer to be paid.

    Order cheque that has some order restricted to a particular person.

    3.3.3 Crossed Cheque

    Here no payment is done at the counter. It is done through account. The cheque has

    parallel two lines.

    3.4 Remittance Department

    Remittance through banks has become popular due to the safety and easy source.

    Remittance department acts as an agent on behalf of the customer in safe transferring of

    money to different cities and countries.

    This department performs following functions

    3.4.1 Outward bills for collection (OBC) and,

    3.4.2 Inward bill for collection (IBC)

    OBC stands for outward bill for collection. The checks outside the city for collection are

    honored.

    IBC standards for Inward Bill for Collection. The checks inside the city for collection are

    honored.

    3.4.3 Demand draft

    DD stands for Demand Draft. It is made on demand in the favor of party by the

    bank to the bank, locally & out side the city.

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    3.4.4 Telegraphic transfer

    TT means Telegraphic Transfer. It is the quickest & fastest mode of transfer of

    money. This involves transfer of funds to other cities with telegraphic message.

    3.5 Credit and advance Department

    Credit is one of the most important departments in the bank as it provides money to the

    bank. A bank is a profit seeking institution. Its income depends upon the type and nature

    of credit facilities provided to customers. The formation of credit has made it more

    effective.

    3.5.1 Askari Bank Limited provides two modes of financing

    Non Fund Based Financing

    Fund Based Financing

    Non Fund Based Financing

    In non-fund based financing the funds of bank are not involved. There are three types of

    non-fund based facility provided by Askari Bank Limited

    Letter of Guarantee

    Financial Guarantees

    Performance Guarantees.

    3.6 Foreign Exchange Department

    This department is a separate bank into itself, carrying out all the functions of a bank.

    Foreign currency accounts are opened; deposits & withdrawals are done here. It deals in

    foreign remittance. It also works to facilitate the export and import business by opening

    letter of credit and interacting with Foreign Bank to carry out to transaction. The

    following functions are carried by this department.

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    3.6.1 Foreign currency accounts

    Askari Bank Limited deals with three types of foreign currency accounts

    US Dollar account

    Pound Sterling

    Euro

    3.7 Dispatch department

    Abbottabad Branch mainly holds the clerical functions of the bank. It deals in the mailing

    of the official documents in and out of the branch. It also maintains the mail record.

    The functions performed by dispatch department are following

    Receiving mails

    Sending mails out

    Maintenance of mail dispatch register

    Maintaining the record of stamps and postal envelops

    The dispatch officer performs the two in one job as he/she maintains the mailing system

    and also delivered the mail to the required officer.

    3.8 Account Department

    It plays vital role in bank operations. This department deals with the record keeping of

    voucher daily. Also keep the track of expenses incurred; verifications of utility bills and

    disbursement of salaries & staff. The safekeeping & provision of stationery is also the

    responsibility of this branch.

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    3.9 Types of accounts

    An account is the creation of relationship between the person and the bank. There are a

    number of accounts that are provided to the customer according to their need.

    Following are the accounts:

    3.9.1 Current account (CD)

    The minimum account opening limit is Rs.5000/- the distinguishing feature is that it has

    no profit and no interest. The code number for such an account is 01010.

    3.9.2 Saving account (PLS)

    The minimum account opening limit is Rs.2500/- such account is for those people who

    want to save money and earn interest on their deposits. The profit is calculated on

    monthly basis and credited on six monthly bases. The profit is calculated on the lowest

    balance during the month. The account code for the cheques is 01010.

    3.9.3 Askari special deposit account (ASDA)

    The minimum amount required to open an account is Rs.50, 000/- profit is calculated on

    daily basis and credited on monthly basis. The code No. for cheques is 01165.

    Term Deposit or Fixed Deposit

    In this term deposit or fixed deposit the amount deposited cannot be removed before the

    date of maturation. Deposit can be from 1 month to 6 months. Interest is given which is

    more than interest on the saving deposits.

    Notice Deposit

    In notice deposit the money is saved for 7-10 days and interest is given every day. The

    funds can be called at any time and the profit is given for the numbers of days, they were

    kept there.

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    Joint account

    It is the account of two or more persons who are neither partners nor trustees. Here the

    authorization for the operation of the account is required at the time of opening such

    account.

    Proprietorship

    Here the applicant needs to fill in separate form declaration for proprietorship concern.

    All the essential documents are collected by bank.

    Partnership

    The applicants are required to submit the copies of partnership deed, national tax form,

    license to commence business etc.

    Company account

    Here the names of the directors and company are required for account opening. The

    documents required are the article of memorandum and association, list of directors,

    commencement certificate.

    Club society

    A club has to certify that it was resolved to open an account. Signatures and stamps are

    required.

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    CHAPTER 4

    FINANCIAL ANALYSIS

    4.1 Introduction

    The importance of financial statement analysis lies in their utility to satisfy the question

    in the mind of stakeholders. Different classes of people are interested in the financial

    statements with a view to assessing the economic and financial position of any business

    or industrial concern in term of profitability, liquidity or solvency etc. for example, the

    commercial banks are mainly interested in short term liquidity and profitability while

    prospective investors may be investors may be interested in long terms liquidity and

    solvency.

    Financial statements among other things include balance sheet and income statement.

    Balance sheet presents assets and liabilities of the business at a given date. Besides

    showing the ability of the business to service the loans on the strength of its financial

    structure and its profitability, helps in judging the impact of financial and fiscal support.

    Purpose of Financial AnalysisThe analysis of Financial Statements (FS) is to examine past and current financial data so

    the companys performance and financial position can be evaluated and future risk and

    potentials can be estimated. The analysis can yield valuable information about tends and

    relationship, the quality of a companys earnings, and its financial strengths and

    weaknesses.

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    4.3 Financial Highlights 2006

    Rupees in million 2006 2005 +/- Chang

    Profit

    Operating profit

    profit before taxation

    profit after taxation

    4475

    3347

    2250

    3461

    2859

    2022

    +

    +

    +

    29.30%

    17.07%

    11.28%Balance Sheet

    Shareholders funds

    Deposits from customers

    Advance to customers

    Total assets

    11,053

    131,839

    99,179

    166,033

    8813

    118,795

    85,977

    145,100

    +

    +

    +

    +

    25.42%

    10.98%

    15.36%

    14.43%Information per ordinary share

    Earnings (Rs.)

    Cash dividend (Rs.)

    Stock dividend (%)

    Net asset value at year end (Rs.)

    Market value at year end (Rs.)

    Capital adequacy ratio (%)

    11.23

    1.00

    50.00

    55.16

    104.95

    10.93

    10.09

    1.50

    33.00

    43.98

    126.80

    11.18

    +

    -

    +

    +

    -

    -

    11.30%

    33.33%

    51.52%

    25.42%

    17.23%

    2.24%

    Source: Annual Report of 2006

    4.4 Balance sheet

    as at December 31, 2006

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    Rupees in thousand 2006 2005

    Assets

    Cash and balances with treasury banks 11,766,925

    Balances with other banks 7,333,002 5,550,148

    Lending to financial institutions 8,392,950 10,172,242

    Investments 28,625,915 25,708,194

    Advances 99,179,372 85,976,895

    Operating fixed assets 3,810,331 3,192,862

    Deferred tax assets - -

    Other assets 3,812,788 2,732,641

    166,033,588 145,099,907

    Rupees in thousand 2006 2005

    Liabilities

    Bills payable 1,839,077 1315680

    Borrowings 14964087 10562338

    Deposits and other accounts` 131,839,283 118,794,690

    Sub-ordinate loans 2998500 2999700

    Liabilities against assets subject to finance lease - 1459

    Deferred tax liabilities 736,298 567,217

    Other liabilities 2603113 2045340

    166,033,588 145,099,907

    4.5 Profit and Loss Account

    For the year December 31, 2006

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    Rupees in thousand 2006 2005

    Mark-up/return/interest earned.

    Mark-up/return/interest expensed

    12,596,921

    6,977,313

    8,780,698

    4,278,374

    Net mark-up/interest income

    Provision against non-performing loans and advance

    Provision / for impairment in the value of investments

    Bad debts written off directly

    5,619,608

    1,128,137

    376

    -

    1,128,513

    4,502,324

    638,547

    (36,555)

    -

    601,992

    Net mark-up/interest income after provisions

    Non mark-up/interest income

    Fee, commission and brokerage income

    Dividend income

    Income from dealing in foreign currencies

    Gain on sale of securities-net

    Unrealized loss on revaluation of investments

    Other income

    Total non-mark/interest income

    4,491,095

    1,013,660

    109,326

    584,344

    112,474

    (2,308)

    321,758

    2,139,254

    3,900,332

    838,218

    51,143

    356,218

    100,407

    (582)

    206,819

    1,552,566

    Non mark-up/ interest expenses

    Administrative expenses

    Other provisions/write offs

    Other charges

    Total non-mark

    6,630,349

    3,277,353

    -

    6,141

    3,283,494

    5,452,898

    2,591985

    -

    1,832

    2,593,817

    Profit before taxation

    Taxation - current

    - prior years

    3,346,588

    983,875

    -

    2,859,081

    828,774

    (188,247)

    -deferred 113,006

    1,096,881

    196,558

    837,085

    Profit after taxation

    Un appropriated brought forward

    2,249,974

    1,617,597

    2,021,996

    1,538,432

    Profit available for appropriation 3,867,571 1,538,432

    Basic/diluted earnings per share Rupees 11.23 10.09

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    4.6 Analysis

    The financial data of Askari Bank Limited is analyzed in the following two ways

    4.6.1 Common Size Analysis

    4.6.2 Ratio Analysis

    Common size analysis and ratio analysis are techniques that can be used to identify trends

    in financial statement; common size analysis is also useful in comparative analysis, and

    some source of industry data.

    4.6.1 Common Size Analysis

    There are following two types of common size analysis

    4.6.1.1 Vertical Analysis

    4.6.1.2 Horizontal Analysis

    4.6.1.1 Vertical analysis of Assets

    Vertical analysis shows the year performance by comparing all the items with the total assets and

    the owners equity. Here the figures show that the cash increased 0.85 in 2006 as compared to

    2005. This figure has been improved from last years. Other assets are increased 0.41 in 2006.

    And other figures also increased in 2006.

    Vertical Assets Analysis

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    Rupees in thousand 2006 2005 2006 2005

    Assets

    Cash and balances with treasury banks 14,879,230 11,766,925 8.961578 8.109533

    Balances with other banks 7,333,002 5,550,148 4.416577 3.82503

    Lending to financial institutions 8,392,950 10,172,242 5.054971 7.010509

    Investments 28,625,915 25,708,194 17.24104 17.71758

    Advances 99,179,372 85,976,895 59.73452 59.25358

    Operating fixed assets 3,810,331 3,192,862 2.294916 2.200458

    Deferred tax assets - - 0 0

    Other assets 3,812,788 2,732,641 2.296369 1.883282

    166,033,588 145,099,907100 100

    Vertical Analysis of Liabilities

    Rupees in thousand 2006 2005 2006 2005

    Liabilities

    Bills payable 1,839,077 1315680 1.107654 0.906741

    Borrowings 14964087 10562338 9.012687 7.279355

    Deposits and other accounts` 131,839,283 118,794,690 79.40519 81.87096

    Sub-ordinate loans 2998500 2999700 1.80569 2.067334

    Liabilities against assets subject to finance lease - 1459 0 0.001006

    Deferred tax liabilities 736,298 567,217 0.443463 0.390915

    Other liabilities 2603113 2045340 1.567823 1.409608

    Total Liabilities 166,033,588 145,099,907 100 100

    4.6.1.2 Horizontal analysis of Assets

    Horizontal analysis compares each amount with a base amount for a selected base year. The base

    year item we take 100%. This is good tool the vertical analysis to understand change of each

    percentage.

    Assets Analysis

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    Rupees in thousand 2006 2005 2006 2005

    Assets

    Cash and balances with treasury banks 14,879,230 11,766,925 126.4496 100.00

    Balances with other banks 7,333,002 5,550,148 132.1226 100.00

    Lending to financial institutions 8,392,950 10,172,242 82.50836 100.00

    Investments 28,625,915 25,708,194 111.3494 100.00

    Advances 99,179,372 85,976,895 115.3558 100.00

    Operating fixed assets 3,810,331 3,192,862 119.339 100.00

    Deferred tax assets - - 0 100.00

    Other assets 3,812,788 2,732,641 139.5276 100.00

    Total Assets 166,033,588 145,099,907 114.4271 100.00

    Liabilities Analysis

    Rupees in thousand 2006 2005 2006 2005

    Liabilities

    Bills payable 1,839,077 1315680 131.7815 100.00

    Borrowings 14964087 10562338 141.674 100.00

    Deposits and other accounts` 131,839,283 118,794,690 110.9808 100.00

    Sub-ordinate loans 2998500 2999700 99.96 100.00

    Liabilities against assets subject to finance lease - 1459 - 100.00

    Deferred tax liabilities 736,298 567,217 129.8089 100.00

    Other liabilities 2603113 2045340 127.2704 100.00

    Total Liabilities 166,033,588 145,099,907 114.4271 100.00

    4.6.2 Ratio analysis

    Financial ratios Year 2005 Year 2006

    Return on average shareholders funds % 27.7 22.6

    Return on average assets (RoA) % 1.6 1.4

    Profit before tax ratio % 32.5 26.6

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    Gross spread ratio % 51.3 44.6

    Income / expense ratio times 1.4 1.3

    Advance to deposits % 72.4 75.2

    Price earning ratio times 9.6 9.3

    Dividend yield ratio % 1.2 1.0

    Dividend payout ratio % 11.2 8.9

    4.7 Financial Review

    4.7.1 Profit

    Askari Bank successfully maintained the growth pattern during 2006. The Banks

    operating profit was recorded at Rs.4.47 billion compared to last years Rs.3.46 billion,

    an increase of 29% in operating profit (i.e. profit before provisions and taxation) over last

    year. Pre-tax profit grew by 17% while profit after tax increased by 11%, over last year.

    So core banking profits increased by 29% over last year and continue to be the primary

    source of Banks profits.

    4.7.2 Non mark-up / non interest income

    The non mark-up / non interest income recorded an increase of 38% over last year.

    Analysis of components of non mark-up / non interest income reveals that fee,

    commission and brokerage income increased by 21% benefited by the substantial

    increase in foreign trade and guarantees business and overall business and overall

    increase in banking operations, while income from dealing in foreign currencies,

    increased by a significant 64% over the previous year.

    4.7.3 Operating Expenses

    During the year, the operating expenses increased by 26% over last year. The increase

    was primarily attributable to the expansion plan actively pursued by the Bank. Although,

    the operating expenses increased, cost to income ration (CIR) registered slight

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    improvement confirming that the increase in income was more than the increase in

    operating expenses.

    4.7.4 NPLs and Provisions against NPLs

    NPLs increased by 54% during the year to Rs.3,656 million from Rs.2,373 million from

    last year due to further downgrade of few large exposures. While these NPLs are being

    closely monitored for revival/recovery, Rs.1, 128 million have been appropriated as

    provisions against non-performing advances, against previous years Rs.639 million.

    During the year, the basis of general provision was revised from judgmental to consistent

    basis and now general provision is maintained @0.5% on all performing advances except

    consumer advances-general provision on consumer advances is maintained as per SBP

    prudential regulations for consumer finances.

    4.7.5 Current, Savings and other deposits

    Customer deposits increased to Rs.131.8 billion by end 2006, an increase of 11% over

    last year. A comparison of deposits by type reveals that current accounts i.e. non-

    remunerative accounts increased by 19% followed by saving deposit accounts, which

    increased by 11% over the previous year. The deposits increased by 6%.

    4.7.6 Earnings per share (EPS)

    Earnings per share increased by 11% from Rs.10.09 last year-restated for issue of bonus

    shares during the year, to Ts.11.23 at the close of year.

    4.7.7 Return on average assets

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    Return on average assets was 1.4% at the close of 2006, showed 13% decrease from 1.6%

    last year due to increase in average assets by 23% as compared to last year in which

    average assets increased by 31%.

    4.7.8 Shareholders funds

    The aggregate shareholders funds increased to Rs.11, 053 million by end 2006 from

    Rs.8, 813 million last year-restated for change in appropriation policy more fully

    explained in note 5.1 of the audited financial statements. The increase was contributed by

    the profits earned during the year, and the unrealized surplus on revaluation of

    investments, mainly equity portfolio. The return on average shareholders funds decreased

    to 22.6% from 27.7% last year, mainly 77% increase in provisions for non-performing

    advances.

    4.7.9 Capital adequacy

    The capital adequacy ratio at 10.93% showed decline at the close of 2006 as against

    11.18% at the close of 2005. This fall was mainly attributable to increase in risk weighted

    assets and change in accounting policy for recognition of dividends. CAR at current

    levels is considered as comfortable over the minimum requirements of 8% and for further

    expansion in risk assets.

    Askari Report of

    ASKARI BANK LIMITED

    for the year ended December 31, 2006

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    4.8 SWOT ANALYSIS

    SWOT is abbreviations that show the strengths, weaknesses, opportunity and threats for

    an organization. It is the knowledge of the factors that indicates the ups and downs of an

    organization. It also involves the evaluation of the future position and forces affecting the

    organization.

    With this background, Askari Bank Limited has been sorted out for its strengths,

    weaknesses, opportunities and threats confronted in the period of internship.

    4.8.1 STRENGTHS

    1. The bank is spreading its branches all over the country very rapidly.

    2. It has a largest international correspondent network.

    3. It offers product innovation day by day.

    4. It offers a range of products to enhance retail banking.

    5. It is workings in Islamic banking sector.

    6. The bank has achieved many awards for its sound management.

    4.8.2 WEAKNESSES

    1. The selection criteria for employees are not on merit basis.

    2. It has high markup rates, thus discouraging the middle investors.

    3. The upward communication channel is not satisfactory.

    4. The branch is overstaffed.

    5. Major account benefits are for army officials.

    6. Feedback from employees is weak.

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    4.8.3 OPPORTUNITIES

    The means and ways for an organization to remove its loopholes. These are to be

    recognized with the circumstances.

    1. Different products should be offered for customers with attractive

    packages.

    2. For the customer ease, the banking hours should be increased.

    3. Lowering the credit card rates to lower income group.

    4. Telephonic banking service should be launched for customer facility.

    5. The installment rates on automobiles are to be lowered.

    6. The bank buildings need to be renovated.

    4.8.4 THREATS

    These indicate the pinch points after which the production and profitability of any

    organization hampers. These are the obstacles in the external environment. Some

    obstacles are found against the banking practice of ABL.

    1. Increase in the growth of other private and foreign banks in the country.

    2. Uncertainty in the economy affects the investors.

    3. Political influence on the bank.

    4. The effects of inflation on the deposits.

    5. High rates of turnover as people struggle for the best.

    6. Rapid growth of global technology and techniques.

    7. New technology is expensive.

    8. Rising trend of interest free banking.

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    CHAPTER 5

    FINDINGS/ RECOMMENDATION

    5.1 FINDINGS

    Findings are based on eight weeks internship at Askari Bank Limited, Abbottabad

    branch. Certain points are noted by observation during internship. These are as following

    5.1.1 Communication System

    Communication is the lifeblood for an organization. It is important for efficient

    management. But the communication at Askari Bank Limited is weak and mainly

    downward. There is no upward communication. The communication flows from the

    authority to sub ordinates. But the voice of the employees does not reach to the vice

    president or manager. There is no proper feedback system so the authority knows the

    opinion of the employees.

    5.1.2 Performance oriented environment

    The bank environment is conductive, cooperative and goal oriented. The staff works as ateam in sound environment. All the employees are very cooperative to each other. If an

    employee needs any guidance, the operation manager openly helps him/her.

    5.1.3 Branch network

    The bank has 74 branches and rapidly increasing with the time. It has successfully

    opened an offshore at Bahrain. But these branches are mainly at the big cities of the

    country. The distribution of the branches is not even. Some cities has three to four

    number of branches while there are some areas where its not working.

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    5.1.4 Branch spacing

    The spacing requires expansion. The employees are seated congested .If the customers

    exceed more than fifteen in number, then the branch get filled with lot of disturbance.

    5.1.5 Interacting the services of computer experts

    The computer department is of great value to the bank. Although the experts look out for

    new innovations but at Askari Bank Limited, they are just running the approved program

    with no innovation. They are using the UNIBANK program that has been developed by

    Union Bank in 1990.

    5.1.6 Marketing through media

    Media is the most effective source of marketing Askari Bank Limited is not using

    effectively media as a marketing tool. Although they are advertising at the television but

    it is seen rarely. Moreover, the advertisement did not clear the operations clearly. The

    bank should adopt the policy of sponsorship for the games and other functions.

    5.1.7 Credit Rating

    During the year, the Pakistan credit rating agency upgraded the banks long term entity

    rating from AA to A1+( the highest possible) and maintained the short term rating at

    A1+.moreover the bank won many awards. It has won the award of being The Best

    Retail Bank in Pakistan for the year 2003.In year 2004; it has won the award for The

    Best Consumer Internet Bank in Pakistan.

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    5.1.8 On-line Banking

    The banking world is converting to on line banking to facilitate the customers. In

    Pakistan, Askari Bank Limited is the first bank that offers the service of on-line banking.

    The deposits can be transacted on its site. Another facility is the account checking on-line.

    5.1.9 Mark-up Charges

    This is the main tool to attract customers as to make flexible advances and loans. In this

    bank the mark-up charges are high than the other banks. This high rate discourages the

    customer. Especially, the mark-up on credit card is very high i.e. 75%.

    5.1.10 Merits in Selection

    The bank is largely influenced by the military. The selection process is also affected by

    this influence. Manly the army background people are recruited. They are given priority

    than the others.

    5.1.11 Equal facilities to all Branches

    Although the bank is spreading its branches rapidly; but the facilities are limited to the

    big cities only. Mostly branches lack technical facilities. Some branches have staff

    problems as well.

    5.1.12 Promotion and increment policy

    Mostly the promotion is given on the basis of authority concern. The employees are not

    assessed for promotion. There are no such criteria for the improvement of employee.

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    5.1.13 Turnover rate

    Most of the employees plan to go abroad or in search of another job. This rate is

    increasing due to low incentives for the employees. The employees compared the

    incentives to other banks. And get result of being given low incentives.

    5.1.14 ATM

    The branch is installed with ATM system but it works often. Most of the time it is

    jammed or having technical problem.

    5.2 RECOMMENDATIONS

    5.2.1 Effective communication

    The bank should develop an effective communication channel through meetings and

    counseling with all the employees. This will create a feedback system through which the

    management will know about the employees demands and opinion.

    5.2.2 Computerization

    The bank requires adopting new technology based computer system. It will be helpful to

    employees. It will speed up the work. it is seen that a lot of work at the bank is paper

    based. It needs to be reduced by installment of advance computer system.

    5.2.3 Marketing tools

    A separate department is needed whose function will be the marketing. Proper plans

    should be workout in case of launching new product or services.

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    5.2.4 Revision of markup charges

    If the markup rates on holding accounts especially the special accounts are kept at

    moderate rate, then it will facilitate customers. More profit will be earned on nominal

    rates. It will help the foreign investors too.

    5.2.5 Merit in selection

    The selection should be on merit based. First priority should be given on educational

    background and skills. It would be better if the selection is test based. Now they are

    selecting through test but still the interview plays a big role. Here again the referential

    comes first.

    5.2.6 Full facilities to all branches

    When ever a new branch is opened, it should be provided with all the technical facilities.

    All the branches should be serving the same products and services. There are certain

    branches that are not having ATM. Some branches lack the facility of certain accounts.

    5.2.7 Performance based promotion

    The increments and promotion should be given through performance evaluation. Every

    employee should have the performance appraisal report that evaluates his/her conduct.

    5.2.8 Incentives for employees

    The incentives for the employees need to be revised as to develop the policy that satisfies

    the employees. This step is necessary as to reduce the turnover rate.

    5.2.9 Introducing fresh graduates

    With the advancement in the methods and techniques; it is necessary to introduce fresh

    people in the banking field. This will bring new ideas and concepts for effective work.

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    5.2.10 Smart work

    There are certain officers that are too good for the job while the others lack the ability to

    work properly. Smart work concept should be followed which show the right person for

    the right job. This will increase the efficiency.

    5.2.11 ATM arrangement

    The ATM system should be installed at all the branches as some branches lack this

    service. The bank should adopt the one link ATM system as to facilitate the customers.

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    5.4 Reference:

    1. ABL Abbottabad Branch

    2. ABL Newsletter, January 2006

    3. Annual Report 2006, ABL

    Persons interviewed are:

    4. Mr. Abid Ali Operation Manager

    5. Mr. Hasseb Credit Officer

    6. Mr. Nasir Remittance Officer

    7. Mr. Zaheer Dispatch Officer

    8. Mr. Waseem Gul Account Openers