Professional Documents
Culture Documents
DEFINATION OF BANKING:
Evaluation of Banking:
It has not so far been decided as to how the word ‘bank’ originated. Some authors opine
that this word is derived from the word ‘bancues’ or ‘banque’ which mean a bench. The
explanation of this origin is attributed to the fact that the Jews in Lombardy transacted
the business of money exchange on benches in the market-place; nad hewn the
business failed, the ‘banco’ was destroyed by the people incidentally the word ‘bankrupt’
is said to have been evolved from this practice the opponents oh this opinion argue that
if it was so, then how is it that the Italians money changer were never called ‘Banchierei’
in the middle ages?
Other authorities hold the opinion that the word ‘bank’ in derived from the German word
‘back’ which means ‘joint stock fund’ latter on when the Germans occupied major part of
Italy the word ‘back’ was Italianized into ‘bank’.
It is therefore not possible to decide as to which of the opinions is correct, for no record
is available to ascertain the validity of any of the opinions.
Modern Banking:
In 1854 the joint Stock Companies Act opened an era of corporations; and the Limited
Liability Act, 1855, restricted the liability of the share holder of the limited company.
Types of Banks:
Primarily all banks gather temporarily idle money for the purpose of lending to other and
investment gain in the form of return, profits and dividends etc. however, due to the
verity of resources of money and the diversity in lending and investment operations,
banks have been place in various categories, such as
Commercial bank
Savings bank
Merchant banks
Mortgage banks
Consumer bank
Investment bank
Central bank
Commercial Bank:
The commercial banks received deposits from the general public, which are repayable
on demand upon written orders of the depositors. As their most distinctive feature the
commercial banks maintain the checking accounts for the constitutions.
Te commercial banks are also distinguished for providing short-term finance to trade,
commerce and industry to enable these sectors to expand their productive activities
Savings Banks:
The basic purpose of these banks is to inculcate the habit of saving in the people the
savings banks deposits are not repayable upon only the written order of depositor but
the depositor of his agent has to appear personally at the saving banks to make
withdrawal and for this purpose he must present a pass book a certificate of deposit or
some similar documents to prove his right to receive his payments. Post office savings
banks and savings accounts at national saving organizations are well known national
saving banks in Pakistan.
Mortgage Banks:
These banks mainly deal in loans for acquisition or construction of real estate against
the securities of mortgage.
Consumer Banks :
These banks providing finance for purchasing consumption goods for the use of
Brewers
Investment Banks:
These banks assists business houses and governmental bodies to raise money through
the sale of stocks and bond for usually long term purposes these banks perform the
usual functions of raising deposits of idle money from the public and finance the
business houses other bodies.
Islamic Banking:
Islamic banks appeared on the world scene as active players over two decades ago.
But "many of the principles upon which Islamic banking is based have been commonly
accepted all over the world, for centuries rather than decades".
Roughly 20% of the world's population is Islamic. While some in the Western world
think this population is only in the Middle East, the religion is truly global: from the
Middle East, to Afghanistan, to the US, to Indonesia, and every where in between.
Attention to Islamic finance obviously accelerated since 9-11, but it is worthy to note that
an Islamic finance meeting was actually scheduled for 9-12 in the WTC and that the
Islamic Finance movement was already growing very rapidly. According to estimates in
the Wall Street Journal Islamic finance is roughly a $150 billion dollar market.
Sharia:
An Islamic Economy is an economy that is regulated by a set of rules based on outlines
set by the Islamic “Sharia”
Sharia is the set of guidelines mentioned in the Quraan.
Islamic Financing:
Is a concept that emerged in scientific manners in the second half of the past century.
With the expanding role that the banking system and money handling, many Muslim
communities were faced with a problem over the concept of INTEREST.
Riba:
By Definition, Riba is an Arabic word that literally means “extra”
In regards to Islamic Sharia, Riba means the lending of money for a specific time where
upon the lender receives his money with an EXTRA amount agreed upon. It was what
most people in finance call interest.
Modarba:
Modaraba (Participation Financing) falls under three categories
• Demand Deposits
• Mutual Investment Deposits
• Special Investment Deposits
Morabaha:
Another form of a relationship between a customer and an Islamic bank is that of buyer
and seller. This contract is known as ‘Morabaha’ (Financing Resale of Goods).
The bank buys goods or products from its owner directly on the request of the customer
and then resells it to the customer, at a selling price higher than the purchase price. The
Ijara:
The third method, or ‘Ijara’ (leasing), requires an Islamic bank to purchase equipment
and lease them to the customer for a specific period of time. At the end, in most cases,
the Bank will transfer the title to the customer either by executing a sale agreement for a
normal value or by way of donations.
A broader definition of a bank is any financial institution that receives, collects, transfers,
pays, exchanges, lends, invests, or safeguards money for its customers.
This broader definition includes many other financial institutions that are not usually
thought of as banks but which nevertheless provide one or more of these broadly
defined banking services. These institutions include finance companies, investment
companies, investment banks, insurance companies, pension funds, security brokers
and dealers, mortgage companies, and real estate investment trusts.
Chapter No: 2
INTRODUCTION AND HISTORY OF FAYSAL BANK:
Faysal Bank started operations in Pakistan in 1987, first as a branch set-up of Faysal
Islamic Bank of Bahrain and then in 1995 as a locally incorporated Pakistani bank under
the present name of Faysal Bank Limited. On January 1, 2002, Al Faysal Investment
Bank Limited, another group entity in Pakistan, merged into Faysal Bank Limited which
resulted in a larger, stronger and much more versatile institution. In fact it has the
Faysal Bank Limited is a full service banking institution offering consumer, corporate
and investment banking facilities to its customers. The Bank’s widespread and growing
network of branches in the four provinces of the country and Azad Kashmir, together
with its corporate offices in major cities, provides efficient services in an effective
manner.
The strength and stability of Faysal Bank Limited is evident through the Credit Rating
assigned by JCR-VIS Credit Rating Company Limited of “AA” (Double A) for long to
medium term and “A-1+” (A One Plus) for short term.
The majority share holding of Faysal Bank Limited is held by Ithmaar Bank B.S.C an
investment bank listed in Bahrain.
Group Information:
Ithmaar Bank B.S.C. is licensed by the Central Bank of Bahrain and listed on the
Bahrain Stock Exchange (ITHMR). It has a paid-up capital of US$360 million, total
equity of US$1.1 billion and is a full investment bank with its direct business covering
the Middle East and North Africa (MENA) region, as well as South Asia, Asia-Pacific
and Europe. Besides holding significant investments in the banking, financial services
and real estate sectors in different markets, the main activities of the Bank include
underwriting (equity and other financings), private equity (structuring, participation and
portfolio management), Islamic financing, private banking, and advisory services
covering project financing, investments, capital markets and mergers & acquisitions.
To be the bank of first choice with the highest ethical principles as our guiding force.
MISSION STATEMENT:
To excel in providing innovative, value based banking solutions to meet changing needs
of customers and to strengthen the image of trust and reliability.
Corporate governance:
Our goal is to respond a rapidly changing business environment in a timely manner to
improve corporate citizenship and transparency by reinforcing our ethical standards and
building a relationship of trust with customers and stakeholders.
Teamwork:
As a team, we play to win from the smallest unit to the enterprise as a whole. We
achieve far more as a team than as individuals.
Our Team: Our Assets
Respect:
We appreciate our diversity and believe that respect for our employees, customers,
stakeholders, and all those with whom we interact are an essential element of all
positive and productive business relationships. We treat everyone as we wish to be
treated with dignity and respect.
Our Respect: Our Values
Board of Directors:
Manger Manger
Credit manager
Operations Credits
Chairman
Accounts
Departmen Imports Leasing
t Departmen Departmen
Secretary of
t the t
Board
Cash
Departmen
t
Director Home finance
Director
Exports CEOB Department
Director Director Director (Govt. (Govt.
Department (Member)
Nominated) Nominated)
Account opening
Department
Car finance
Departmen
Foreign Exchange t
Department
Debit
Organ Card of Faysal Bank– Model Town Branch:
gram
Department Credit card
Departmen
t
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY JINNAH CAMPUS LAHORE 13
Chapter No: 4
CUSTOMER SERVICES DEPARTMENT:
Requirements for Account Opening and closing of Account:
Terms and Conditions:
Customer:
Customer is the person who comes with the purpose of opening the account
Introducer:
Introducer is a person having the account in same branch and gives guarantee about
the customer. If the introducer is not proper than state bank charges RS 5000/- per
head from that employee of the bank who has opened the account of the customer on
the request of the introducer.
Next of Kin:
In the next of kin the customer authorized the bank to pay the proceedings of his/her
PLS/Current foreign currency account to the related person by describing the
relationship of the person with the customer after the death of the customer.
Letter of Thanks:
Letter of thanks is the latter issued by the bank to the customer for two purposes
• 1st purpose is to say thanks to the customer for opening the account in their bank
• 2nd purpose is to confirm the address provided by the customer while opening the
account.
Closing of Account:
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY JINNAH CAMPUS LAHORE 17
The customer can close the account. The customer is required to submit an application
for closing the account. The account is closed out and his balance is paid to him after
deducting the closing charges.
When the concerned officer is satisfied then he opens the account and gives an account
number that will be used in all communications with the bank in regard to the account
and when making deposits and withdrawals.
Procedure of Payment:
WUMT just needed identification, no need of a/c, it’s a counter payment.
Procedure of payment is that the customer came to specific person who is dealing with
WUMT tell him the
1) MTC NO
2) Receiver name
• First name
• Middle name
• Last name
3) Sender name
• First name
• Middle name
• Last name
4) Telephone no
5) Photo copy of ID card
6) Expected amount
7) Test question
WUMT Form:
It form is divided into three sections
• 1st for receiver information, his name, address and telephone number
• 2nd section for sender, his name, address telephone number
• 3rd section is for expected amount, MTC number, test question, signature
There are three copies of form 1st for counter payment, 2nd for customer and 3rd for
branch record.
FBL LOCKERS:
Basically there are four types of Lockers
• Small
• Medium
• Large
• Extra large
• But Rahim Yar khan branch of FBL is providing only first three types.
• Charges for various Lockers:
• For Small Locker-----------Rs.1200 per annum
• For Medium Locker--------Rs.1750 per annum
• For Large Locker-----------Rs.3500 per annum
Features:
• Account can be opened with an initial deposit of Rs. 5,000.
• Unlimited transaction facilities.
• On maintaining an average balance of Rs. 300,000 following additional facilities
are provided.
1. Unlimited cash deposit facility
2. One small locker and one ATM free.
3. 365 Pay orders, 365 Demand Drafts, 365 cheque leaves per year free.
• Access to account through on-line banking at all Faysal Bank branches across
Pakistan.
Features:
• Account can be opened with Rs. 1000/.
• No requirement for maintaining a minimum balance
• Maximum of two free deposits and withdrawals are allowed in a month.
• Free of charge statement of account for customers once a year. In case more
statements are required than standard charges would be applicable.
• Free ATM transactions on Faysal Bank ATM machines. However charges would
apply on non Faysal Bank ATM machines as per SOC
Features:
• Account can be opened with an initial deposit of Rs. 10,000/.
• No restriction on the number of transactions.
• Profit is calculated on monthly average balance.
• Profit payment on six monthly basis.
• Access to account through on-line banking at all Faysal Bank branches across
Pakistan.
To provide the best possible returns for individual, corporate and business customers,
the Rozana Munafa Plus Account offers you the opportunity to earn profit every day
and get your profit month.
Features:
• Account can be opened with an initial deposit of Rs. 100,000/ for individuals
and Rs. 500,000/ for corporate customers.
• Profit is calculated on monthly average balance.
• Profit payment on monthly basis.
• Tiered profit structure providing an incentive to save more.
• Access to account through on-line banking at all Faysal Bank branches across
Pakistan.
Faysal Premium:
Features:
• Account can be opened with an initial deposit of Rs. 5 million
• Profit is calculated on monthly average balance.
• Profit payment on monthly basis.
• Tiered profit structure providing an incentive to save more.
• Access to account through on-line banking at all Faysal Bank branches across
Pakistan.
Term deposit:
Faysal Izafa:
Features:
• Account can be opened with an investment as low as Rs. 25,000/.
• Tenure from one year to five years.
• Annual and monthly option available.
• Financing facility of up to 90% of invested amount.
• No annual fee for the ATM/ Debit card for the entire tenure.
• First cheque book on investment of Rs. 300,000/ or more.
Features:
• Account can be opened in three major international currencies: US Dollars,
Pound Sterling and Euro.
• Minimum balance for opening Mahfooz Sarmaya Foreign Currency Account is
1000 units of the currency in which the account is opened.
• Account can be opened in any of the following types:
• Savings Account
• Term Deposit Account
Current Account:
On maintaining the monthly average balance equivalent to USD 50k or above, the
following additional facilities are provided.
Chapter No: 5
Services:
PocketMate (Visa Debit Card):
No monthly installments:
Since with PocketMate you are using your own funds there is no risk of over spending
nor any worries to pay monthly bill on time.
Product Features:
Worldwide Acceptance:
Travel the world and enjoy the freedom of using your PocketMate Visa Debit Card. It
Countrywide Acceptance:
Your PocketMate Visa Debit Card is accepted at over 40,000 merchant establishments
in Pakistan i.e. restaurants, department stores, grocery stores, petrol pumps, etc.
Besides, you can use it conveniently at more than 2,000 ATMs all over Pakistan.
Maximum Security:
The PocketMate Visa Debit Card contains additional security features, it can only be
used ‘Electronically’, which means lesser probability of fraudulent attempts on the card.
Easy Traveling:
Your PocketMate Visa Debit Card saves from carrying cash or writing cheques. It
means customers no longer have to stock up on traveler’s cheques or cash when they
travel.
Overview of Expenses:
Each single charge and each withdrawal of cash at ATM made using your PocketMate
shall be clearly itemized on your bank statement enabling you to easily check the status
of your account.
Three Supplementary Cards:
PocketMate also gives you the facility of having up to 3 supplementary cards issued
How to Apply:
Existing Faysal Bank Debit Card holders have to fill a simple application form to obtain
PocketMate. Existing account holders not possessing any card presently can also apply
for PocketMate by submitting the application form. To be a part of PocketMate family,
one must have a Current or Saving account at Faysal Bank.
Delivery of PocketMate:
Your PocketMate will be delivered to your branch within 5-7 days of your application
submission.
Travelers cheque:
You may purchase American Express, US Dollar and Pound Sterling Travelers
Cheques at selected branches of Faysal Bank.
Transfer of Funds:
You can deposit and withdraw cash from any branch of Faysal Bank, regardless of
which branch your account is in. You need only to carry your chequebook.
.Chapter No: 6
Features:
• Car Financing for locally manufactured new and used cars and imported cars.
• Car Financing up to five years
• Down payment only 20% of the car value
• Minimum documentation charges.
• Fast processing.
• Option to prematurely terminate the facility.
Eligibility:
Now you can swiftly, easily and cost effectively owns a car if you are:
Housing Finance:
• Buy a Home
• Build a House
• Home Renovation
• Balance Transfer Facility
Features:
• Flexible repayment options
• Option to partially or fully terminate the facility.
• Financing tenor up to 20 years!!!
• Fast processing.
• Minimum processing charges
• Enhancement option available
• Financing available up to 80% of the market value of the property.
Eligibility:
A Pakistani Resident and National holding the New Computerized Identity Card
(NADRA) or Non-Resident Pakistani holding a NICOP.
• Aged between 25 to 60 years if you are a salaried person and of 65 years if you
are in business
• In continuous employment for 3 years and at least 1 year with the existing
employer.
• In business with at least 3 years of business or professional experience
Faysal Finance:
Faysal Finance gives you an opportunity to liberate yourself from financial anxieties and
fulfill your dreams and aspirations in an easy and affordable manner.
Eligibility:
You are eligible for “Faysal Finance” if:
• A Pakistani National holding the New Computerized Identity Card (NADRA).
• Your age is between 21 to 60 years for salaried and 21 to 65 years for SEB/SEP.
• Your minimum verifiable monthly income is Rs. 15,000 for salaried and Rs.
25,000/- for SEB/SEP.
Chapter No: 7
Corporate and Investment:
Corporate Investment:
Investment Banking:
With the ever-changing business environment in Pakistan, companies need expert
partners with a keen understanding of business to help achieve profit objectives. At
Faysal Bank, we offer the leaders of businesses and institutions, corporate advisory
services and a wide array of tools to help them accomplish their goals. We advise and
facilitate the arrangement of commercial paper, syndications, mergers, acquisitions and
underwriting arrangements amongst many others. Whether the customers require
financing of a project or managing of investments, we can guide them through the
markets and tailor a solution to meet their specific needs.
Agricultural Financing:
Faysal Bank offers specialized products for the agricultural sector. Our branches located
in agricultural areas of Pakistan are all equipped to help the local farmers improve their
yield and methods of farming by offering timely and affordable modes of financing to suit
their needs. To increase its outreach into agricultural regions of Pakistan, Faysal Bank
has entered into strategic alliances with other specialized banks through which it will be
financing the needs of farmers.
Cash Management:
Faysal Bank's Cash Management department has emerged as one of the leading cash
management solution providers in strategic markets such as local corporate, multi-
national companies, and mid-tier markets. Faysal Bank's role in these segments span
the entire spectrum of services including but not limited to Strategic
Receivables/Payables Management, Corporate Electronic Banking, Payroll and Fund
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY JINNAH CAMPUS LAHORE 35
Management Services, Dividend Processing, and Process Re-engineering. Success of
Cash Management services is primarily attributable to its focus on providing streamlined
and customized solution that add value to business process of its clients.
Chapter No: 8
Marketing DEPARTMENT:
Competitive Strategy:
FAYSAL Bank strongly believes that the customers can be attained and retained only by
providing them the services they want. FAYSAL bank’s competitive strategies are
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY JINNAH CAMPUS LAHORE 36
focused on making their existing customers loyal because they believe that it is their
existing customers who attract new customers. Bank uses KYC (Know your customer)
forms to have complete acquaintance with their new customers.
Marketing Strategy:
The process of analyzing marketing opportunities, selecting target markets, developing
the marketing mix and managing the marketing efforts
Factors Influencing Faysal Bank Marketing Strategy
Target Market:
Bank’s main focus is not on the retail banking but on the corporate banking rather. In the
retail banking they target salaried individuals, housewives, retired individuals and
anyone who has the potential of providing legal deposits to the bank.
Corporate customers being the main target of the bank get handsome packages of loan
and other financial services. The bank’s main source of revenue earning is also the
corporate sector customers.
VARIETY in PRODUCTS:
FAYSAL bank has skillfully crafted their products to use them as their core
competencies and also as their tools for competitive strategy. The products include
Agricultural Finance, Import Export Business/Trade Finance, Running Finance, and
Demand Finance. These products serve multiple purposes to bank.
Call Center:
Faysal Bank is now open with a 24 hour call center to facilitate customers. Just dial
0800-11325 and get connected to our call center agent.
Features Online:
Faysal Bank now offers free online banking to its customers on Faysal Sahulat Current
Account. The account is specially designed to address the needs of those individual
(joint, salaried, retired) and business customers who seek instant access to their funds
at any Faysal Bank Branch across Pakistan.
Internet Banking:
Banking at consumer fingertips Internet Banking offers the customers convenience to
manage and control his banking and finances when he wants, where he wants! It's
• 24x7 Access The customers now have access to your account 24 hours a day, 7
days a week. They can transfer funds or even pay bills even if it's a holiday.
• Secure and Faster Secured & encrypted with latest tools and technologies,
internet banking is the choice for secure and fast Internet Banking.
• Simple and Convenient Easier navigation and help provided at every step, so
the customers can have most out of this service. With convenience is just a click
away.
Convenience:
Why visit the bank when you can better use your precious time to meet other
commitments? With ONLINE, our special discounted charges also offer you substantial
savings.
Give yourself the advantage of breakthrough innovation and cutting edge and get time
on your side
Faysal Bank is a pro-active, people driven organization where the employees are our
top most priority. The Bank not only provides challenging career opportunities but also
excellent training in all areas of banking.
Recruitment:
In Faysal bank relies on two channels.
• Internal
• External
Internal:
If employees are competent and can perform well then they are promoted.
External:
Faysal bank also hires competent people from outside. For this purpose they give
advertising on Newspaper & website. Some times hiring is from external and on
deposits base.
Selection:
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY JINNAH CAMPUS LAHORE 42
Two type of employees are selected
Employees are selected by written test. Those candidates who clear test, they are
called for interview. Then employees are selected. Some times selection is without test
& only on interview bases. In faysal bank employees become permanent after two
years.
Orientation:
In Faysal bank R.Y.K branch no proper orientation takes place. When new
employees come then bank not introduce them with other employees.
Training:
In Faysal bank training are done when it is necessary.
• If training is at micro level then employees go to Multan.
• If at macro level then trainer comes in R.Y.K branch.
Promotion:
Promotion is very slow in faysal bank. faysal bank uses grading system.
• OG-1
• OG-11
• OG-111
Few employees are on permanent basis. Most employees work as third party contract.
Compensation:
Medical Facilities:
Faysal bank gives the medical facilities to their employees.
Chapter No: 10
Balance Sheet
As On December 31st 2003-2007
2007 2006 2005 2004 2004
Assets
Cash An Balance With
Treasury Banks 239.755% 251.476% 233.638% 176.131% 100.000%
Balance With Other Banks 571.710% 444.461% 315.402% 549.445% 100.000%
Lending To Financial
Institutions 811.586% 528.384% 1231.791% 506.503% 100.000%
Investment 281.260% 200.788% 212.933% 105.183% 100.000%
Advances 294.828% 251.361% 209.396% 169.629% 100.000%
Operating Fixed Assets 212.535% 189.247% 243.590% 200.231% 100.000%
Deferred Tax Assets-Net 0.000% 0.000% 0.000% 0.000% 100.000%
Other Assets 213.943% 149.246% 230.196% 147.294% 100.000%
Total Assets 296.761% 242.552% 232.455% 165.884% 100.000%
Liabilities
Bill Payable 558.628% 1048.156% 276.957% 210.191% 100.000%
Borrowing From Financial
Institutions 153.080% 229.180% 234.245% 129.836% 100.000%
Deposits And Other Accounts 325.159% 236.799% 238.080% 180.199% 100.000%
Sub-Ordinate Loans
Liabilities Against Assets
Subject To Finance Lease 47.714% 89.393% 747.068% 112.375% 100.000%
Deferred Tax Liabilities-Net 1617.360% 1106.482% 762.496% 100.000%
Other Liabilities 527.272% 449.370% 267.515% 174.062% 100.000%
Total Liabilities 315.268% 256.024% 242.263% 172.414% 100.000%
Share Capital 200.028% 160.023% 139.150% 110.000% 100.000%
Reserves 168.575% 145.536% 118.914% 106.763% 100.000%
Unappropriated Profit 177.899% 224.295% 229.151% 127.597% 100.000%
Minority Interest 78.126% 100.000%
Surplus On Revaluation Of
Assets 245.323% 196.901% 259.555% 167.304% 100.000%
Total Liabilities And Equity 296.761% 242.552% 232.455% 165.884% 100.000%
Current Ratio
RATIO
2.5
2
1.5
1 Current
0.5 Ratio
0
3
7
0
0
0
0
0
0
0
0
2
YEAR
Current ratio of company in 2007 is 2.08. It means company has Rs. 2.08 current assets
to pay Rs. 1 of current liability. When we see trend it is increasing from 2003 to 2004
and then it decreased in 2005 and then it is again increasing.
2.5
2
1.5 Quick Acid
1 Test Ratio
0.5
0
3
7
0
0
0
0
2
2
YEAR
It increased from 2003 to 2004 and then decreased in 2005 and then increased. In 2007
it is 2. It means company has Rs. 2 of the most liquid assets to pay current liability of
Rs. 1
• Cash Ratio:
7
3
0
0
0
0
2
2
year
It increased from 2003 to 2004 and then decreased in 2005 and then again it has
increasing trend. As compared other years it was high in 2004. It means in 2004
company had more liquid cash to pay current liabilities.
• Working Capital:
PROFIT-ABILITY ANALYSIS:
40.00%
30.00%
20.00% Net Profit Margin
10.00%
0.00%
3
7
0
0
0
0
0
0
2
year
In 2007 it is 9.15%. It means on Rs.100 company earns Rs 9.15. This ratio decreased in
2007 as compared to previous years.
margin
150%
100% OperatingProfit
50% Margin
0%
7
0
0
0
0
0
2
2
year
This ratio in year 2007 is 37.70%. It means company generates Rs. 37.70 operating
income on Rs. 100. It decreased as compare to previous years.
• Return on Assets:
Return on Assets
6.00%
4.00%
Return on
2.00% Assets
0.00%
2003 2004 2005 2006 2007
year
This ratio decreased from 2003 to 2004 and then again it increased in 2005. In 2007 it is
1.77% which means that the company generates Rs. 1.77 on assets of Rs. 100
R
etu
rno
nto
talEq
uity
5
0.00
%
4
0.00
%
3
0.00
% Re
turnonto
tal
2
0.00
% Eq
uity
1
0.00
%
0.0
0%
3
7
4
6
0
0
0
0
2
y
e ar
It decreased from 2003 to 2004 then it increased in 2005 & then again increased in
2006 & 2007. In 2007 it is 23.33%. It means on Rs. 100 of total equity the return is
Rs.23.33.
Debt Ratio
debt ratio
90.00%
88.00%
86.00%
Debt Ratio
84.00%
82.00%
80.00%
2003 2004 2005 2006 2007
year
800%
600%
Debt To Equity
400%
Ratio
200%
0%
2003 2004 2005 2006 2007
year
This ratio is also very high, which means that creditors are not very well protected. This
ratio decreased from 706% in 2003 to 117.9% in 2004. it again increased to 119.6% in
2007.
EarningPerShare
10
8
Rs
6 EarningPer
4 Share
2
0
3
7
0
0
0
0
0
2
year
The earning per share is decreased from 2003 to 2004. In 2005 it is increased up to Rs.
8.33 & then it decreased in 2006 & 2007. It shows that earning on a share of common
stock has decreased from 2005 to 2007.
20.00%
15.00%
PriceE arning
10.00%
Ra tio
5.00%
0.00%
1 2 3 4 5
year
Price per Earning Ratio of the company has increasing trend. In 2007 it is 15.53% it
means that stock has been selling for about15.53% earnings.
• Dividend Payout Ratio:
DividendPayout Ratio
percentage
80
60
Dividend
40
Payout R atio
20
0
3
7
0
0
0
0
0
0
2
year
This ratio is increasing from 2003 to 2004, decreased in 2005 increased in 2006 and
then again decreased in 2007. In 2007 it is 58.27% which means in 2007 company paid
58.27% as dividend of the earnings per share to the share holders.
• Dividend Yield:
DividendYield
percentage
15
10
Dividend
5 Yield
0
2003 2004 2005 2006 2007
year
• The dividend yield has decreasing trend when compared with previous year.
BookValuePerShare(Rs)
23
22
Rs
21 BookV aluePer
20 Share(Rs)
19
18
3
7
0
0
0
0
0
2
year
Graphs:
Balance Sheet Composition:
Assets:
70
60 Adavances
50 Investment
40
Cash and bank
30 balance
20 lending to financial
institution
10 other assets
0
Assets%
Shareholder’s Equity:
60
50
Share Capital
40
Statutory Reserve
30
20 Capital Market
Reserve
10
Unappropriated Profit
0
shareholder's
equity%
Advances:
Advances Growth:
60
50
40
30 Advances Growth%
20
10
0
2002 2003 2004 2005 2006 2007
Advances by Currency:
100
90
80
70
60
50
40 Local Currency
30
Foreign Currency
20
10
0
advances
by
currency%
Deposits:
Deposits Growth:
60
40
20
deposits growth%
0
-20
-40
2002 2003 2004 2005 2006 2007
Chapter No: 11
PEST ANALYSIS:
Political Situation:
Political challengers also remained in the limelight during the year. Recent elections
have been one of the most watched for in our history. Though the political environment
Technology:
The bank also continued its policy of upgrading technology to meet the challenges of
modern banking.
During the year the bank achieved the distinction of having successful completed the
mammoth project of changing of the core banking system commenced in 2005 and fully
migrated to a modern centralized processing system SYMBOLS acquired from a
reputable international vendor and being used by a large number of banks in Europe,
Asia, the Middle East, and Africa. With the successful implementation of new centralized
database system, the bank also achieved remarkable progress in business process re-
engineering, turnaround time compliance by centralizing outward remittances, issuance
of payorders and draft, account opening and credit administration.
Together with a new centralized core banking system, the bank is in the final stages of
implementation of Oracle Financials that will give it significant MIS flexibility, ease of
operation and improved internal controls.
To address its need for modern technology based banking and for managing a
360degree view of its customers for better client service, the bank has now embarked
upon implementing the world renowned Customer Relationship Management (CRM)
solution Siebels and a FULL FUNCTIONAL Contact Centre.
The bank has also initiated implementation of Oracle HRMS, a powerful human
resource management system for efficient and improved human capital management
framework in the bank.
Economic Review:
Pakistan’s economic continued to show resilience and strong performance. It grew by
7% in 2006-07 and is expected to grow by over 6% in 2007-08, which is one of the
highest in the region. Investment a key determinant of growth reached a record level of
23% of GDP. This was mainly caused by higher FDI and a remarkable surge in
investment in the local stock market and GDRs issues. Pakistan received USD 5.1
billion of FDI during FY07, which was 46% higher than FY06. Another encouraging
aspect was the remarkable growth of 19.4% YOY in workers remittances during FY07 to
reach USD 5.5 billion. However, higher commodity prices and a rising oil import bill are
pushing inflation and the current account deficit.
Chapter No: 12
SWOT ANALYSIS:
• Bank has also invested heavily in information technology resources, which has
now allowed the bank to develop one of the most comprehensive and advanced
systems available. With the help of this system, Bank has now achieved an
"online" status via real time facilities and features available through nationwide
network. With a team of highly qualified professional, FAYSAL Bank is able to
use its real time system resources to provide customers with a comprehensive
account of their transactions on a daily basis. With the new improved system,
FAYSAL Bank is able to map all transactions and is able to provide all
necessary details to cash management clients.
• Bank has been successful in employee retention, customer satisfaction and high
profit generation. Happy employees help create happy customers. Good
reputation of the bank is because of good behavior and response of the
employees.
• Bank has undoubtedly become one of the most progressive and well-networked
banks in Pakistan. Customers are allowed to give suggestions regarding
banking services. If there is any complaint by the customer the bank authorities
investigate the reasons for complaint. Complaint monitoring system is an
excellent one at FAYSAL Bank that shows that bank values more to its
customers.
• FAYSAL bank has achieved marked success in its strategy of expanding and
diversifying its customer base and launching new and innovative financial
products.
• Good and friendly attitude of the workers is the result of excellent management of
bank. The entire environment of the bank gives the impression that customers are
very important to the bank. They are offered seats even when they come for a
small purpose.
• Credit setup at FAYSAL bank is such that the credit customer is handled at
different counters. Such segmentation of credit approval processing is useful for
handling credit related tasks but customer who comes to the bank for getting credit
facility.He wants that he must be handled at one place.
Weaknesses:
• FAYSAL bank has the centralized system of processing trade related transactions.
Any customer who wants to export or import any product needs spontaneous
transactions to take place. But due to centralized system the approval of all the
transactions has to taken from head office. Although this system is good on part of
bank but not favorable on part of customer, as the processing time for transactions
lengthens which create bad impact on customers.
• Organizational structure of FAYSAL bank is Functional based. Functional structure
groups the members of organization based on their work activity. Every employee
is responsible for his own operations and no co-ordination exists among
departments.
• The advertising media used by FAYSAL Bank for publicity include mostly
newspapers and journals. Although this media is good one in attracting customers
to bank with FAYSAL Bank, but the most powerful media is of television through
which people within Pakistan as well as outside Pakistan can have instant
Opportunities:
• For banking industry acquisitions are the best way and FAYSAL Bank has
adopted this strategy for the acquisitions of funds and for strengthening and
expanding itself through affiliation with leading international brands and acquiring
the operations of leading banks. It’s the fastest growing bank in
• FAYSAL Bank is an active player in the loans business. Its strength in loaning
stems from its ability to forge strong relationships not only with borrowers but also
with bank investors. Bank can capture more markets by introducing new products
for business community, as it is the only group, which can contribute more
towards increasing the assets of the bank. The products, which the bank
currently offering includes, Ready cash, Business Power, and Business Account.
Bank can touch new customer segments through these products
• FAYSAL bank is now looking in to new ways of providing banking service to its
customers. New concept of mobile banking has been introduced by the bank,
which will prove to be a remarkable success in the field of consumer banking
group.
• Competition in the field of consumer banking has been intensified as large
consumer banks continued to play a significant role in terms of products and
services. FAYSAL bank is preparing for this competition by establishing a
Threats:
• Although merging and acquisitions are a good way of expanding the operations
but at the same time competition and challenges also increase. Bank is required
to maintain competitive rates and facilities for its depositors and its borrowers.
Bank has to maintain a balance between its liabilities and assets structure. Turn
• Turn Over rate is very high.
• The sad part is that our industrial base isn't growing and industrial demand for
credit is, therefore, low. Banks is aggressively lending in the consumer sector.
Cars, motorcycles, home mortgages. Industrial sector is the most powerful sector
which can contributes towards assets of bank. But in Pakistan due to instability in
economic condition this sector is not flourishing too much. As a result the rate of
industrial loaning is also very low. If bank continues in advancing consumer loans
then it will become a threat for the assets of bank and resources of the bank will
continue to be wasted.
• New incoming local and especially foreign banks are making tough competition
among banks
• The employees of Faysal Bank are Dissatisfied.
Proper supervision:
There is a proper supervision system to check and evaluate the performance of each
employee. It is the duty of Operations Manager to make sure that every employee is
giving the desired performance.
Increased workload:
Due to the new regulations of the state bank to deduct tax on every check amounting to
more than Rs. 25000, the customers started issuing too many checks to avoid this tax.
As a result the overall work load on employees has been significantly increased.
Chapter No: 14
OBSERVATIONS:
FAYSAL bank is a financially sound bank. It is now financially more powerful and secure
with superior operational capabilities, wider distribution, and greater depth in human
resource skills. This development has led to the formation of one of the largest local
private bank in Pakistan. The bank has come a very long way in a very short span of
For FAYSAL bank customers are the first priority. Sole of any business are the
customers and their satisfaction is an achievement for the organi. Management believes
that satisfied customers are one of the key factors for future growth of bank.
Keeping in mind the diverse needs of customers, FAYSAL bank has launched several
products and services ranging from deposit generating liability products to mortgage
and financing asset products to ATMs and charge cards. Bank has restructured its
consumer banking division by further dividing it into three major business units:
• Consumer assets
• Personal finance
• Cards
This allows having a more focused approach on different segments of the market
Chapter No: 15
CONCLUSION:
FAYSAL bank will remain an aggressive and innovative financial institution and continue
to adhere to the tradition of understanding its customer’s needs and looking for new
ways to serve them. Further integration and productivity gains will result in stronger
performance in terms of revenue as well as service quality in the coming years. The
SUGGESTIONS:
Financially unsophisticated people might feel bank accounts, cheque books, credit
cards, etc. are difficult to understand and to keep control thereof. Some personal sector
customers prefer not to come to branch. They increasingly want to deal with the bank in
other ways, such as home banking or use of Automated Teller Machines (ATMs), which
need to be at the branch or some important shopping plazas.
It is widely known that there is a substantial Black Economy in Pakistan, Where people
earn income that is undisclosed to the revenues authorities. Payments for goods and
services in the black economy are necessarily in cash, because transactions by
cheques are more likely to be exposed to the revenue authorities. Some people will
therefore avoid bank accounts to preserve secrecy of earnings.
Bank must let potential customers know that all attractions for banking exist. This is
done by advertising on television and obtaining press coverage, in conjunction with
direct mail, window displays, leaflet in branches and in appropriate other locations (such
as hotels, shops, etc.) and including leaflets in statement of accounts sent to existing
customers in the hope that they will tell potential customers about the services provided
by our bank.
Arguably, there has been a little encouragement from banks to persuade people to open
a bank account. Opening hours are restricted, and there is a commonly held belief that
banks operate for their convenience and not for the convenience of the customers.
Logic leads to promotional campaign through employers who are customers of the
banks and their employees are paid in cash. Such business accounts should be
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY JINNAH CAMPUS LAHORE 73
encouraged to open the accounts of their employees with the banks. It might be worth
offering free banking for a specific period to new accounts or simply publicizing the
services available by means of posters at the employer’s premises.
A short term promotional technique is to offer price incentives, for example, low interest
rates on advances or limited issue high profit bearing term deposits. Longer term, a
Loss Leader may be offered. For example, profit bearing current accounts are not very
lucrative but any bank cannot afford not to offer these. The reduced profits can be
augmented by profits made on other products.
There is low trend of training for employees. So there should do more to train its
employees to make them more efficient.
The banks may choose to make its existing products distinctive or to introduce new
products. It is often easier to benefit from adverse changes made by other banks than to
attract customers by innovations.
LEARNING AS INTERNI:
My internship experience has given me a realistic preview of my field of education. Now
I feel that I am better prepared to enter the world of professional work. I have come to
know and been appreciated by a number of professionals who are lending their services
to the banking sector for more than a decade. I feel honored that I have worked with
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY JINNAH CAMPUS LAHORE 74
such experienced professionals. I must admit that such interaction in this respectable
professional community will help me in seeking out job opportunities in the near future.
Each task I performed was a different experience in itself. By the end of it, I must say I
realize my potentials, I have realized that earning money is not so easy after all, it takes
a lot of hard work and devotion, and not to forget time. And I now know that if I want I
can make things possible, and I also know how good it feels to having accomplished
something and being appreciated for it. I definitely have learnt things, which will impact
my career and my character.
The overall experience of my internship was very good; I have learnt the sense of
responsibility in its literal meaning. I am now capable of dealing with different sort of
customers, and how to be patient while doing so. Besides this I also gained knowledge
about banking which I previously lacked and many more products being offered by the
bank. So in a nutshell, this internship gave me the experience, which would no doubt
boost my confidence to work in future
Chapter No: 16
Bibliography
Akhtar, S.M. Economic development of Pakistan 1st Edition (united Publisher,
Lahore, 1987).
Edmister, Robert. Finical Institutions 2nd edition, (Mc Graw Hil] Inc. New York,
1986).
Haque Irfan-ul A Compendium of Pakistan Economy, 1st Edition, (Royal Book Co.
Karachi, 1987).
Johnson, Hazel S. Financial Institution and Markets. A Global perspective, (Mc
Graw Hill Mc. New York 1993)
Chapter No: 17
Glossary:
Liquidity: “The bank’s ability not only to meet possible deposit withdrawals but also to
provide for the legitimate needs of the economy as well”.
Finance: “The science and art of managing resources especially money”.
Remittance: Remittance is transfer of funds from one place to another or from one
person to another.”
Remitter: - One who initiates, or requests for a remittance
Remittee: - A remittee is the one who receive the payment.
Chapter No: 18
Index:
Annexure 1 Internship Certificate
Annexure 2 Evaluation Form
Annexure 3 Deposit Slip
Annexure 4 Account Opening Check List
Annexure 5 Customer Relationship Form
Annexure 6 Specimen Signature Card
Annexure 7 Authority To Issue Cheque Book
Annexure 8 Closing Of Account
Annexure 9 Transfer Of Funds
Annexure12 Request For New Cheque Book
Annexure13 Visa Debit Card Application Form
Annexure14 Demand Draft
Annexure15 Locker Form
Annexure16 Change of Signatures
Annexure17 Western Union Money Transfer Quick Form
Annexure18 Balance Sheets of Faysal Bank