HISTORY OF ASKARI BANK

1
 HISTORY OF ASKARI BANK

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 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 network of 200 branches / sub-
branches, including 20 dedicated Islamic banking branches, and a wholesale
bank branch in Bahrain. A shared network of 2,991 online ATMs covering all
major cities in Pakistan supports the delivery channels for customer service. As
at December 31, 2008, the Bank had equity of Rs. 12.97 billion and total assets of
Rs. 206.19 billion, with 816,629 banking customers, serviced by our 6,496
employees.
Askari Bank Ltd is the only Private Sector bank that has been
approved by the World Bank as a participating Financial Institution for the US$
200 Million Line Credit sanctioned to the Government of Pakistan for the
Financial Sector and Intermediate Project.
Askari Bank Ltd emphasis on further broadening its core foreign
trade business translated into handling a higher volume of Export and Import
business. This enhanced foreign trade business was secured arrangements with
our correspondent banks.
Askari Investment Management Limited and Askari Securities Limited are
subsidiaries of Askari Bank engaged in managing mutual funds and shares
brokerage, respectively.

2
 VISION

“To be the bank of first choice in the region”

“Our vision to be the bank of first choice in the region demands continuous
strives for creation of business opportunities with innovation while
maintaining our core values to meet our commitment to all our
stakeholders.”

MISSION

“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
stakeholders, and contributing to society.”

Our Thinking

“Consolidation and creating opportunities with innovation.”

3
Our Values
 Commitment
 Integrity
 Fairness
 Teamwork
 Service

Our Commitment to Stakeholders

Customers: Passionate about our customers’ success, delighting them with the
quality of our service.
Investors: A distinctive investment, delivering outstanding performance,
superior returns and value.
Regulators: Exemplary compliance, governance and business ethics.
Employees: Caring for our people and helping them to grow.
Communities: Dedication towards social development and improvement in
quality of life.

Corporate Objectives

 To build and sustain a high performance culture, with a continuous

improvement focus.
 To build and sustain a high performance culture, with a continuous
improvement focus.
 To achieve sustained growth and profitability in all areas of business.
 To manage the Bank’s portfolio of businesses to achieve strong and
sustainable shareholder returns and to continuously build shareholder
value.
 To effectively manage and mitigate all kinds of risks inherent in the
banking business.
 To deliver timely solutions those best meet the customers’ financial
needs.
 To build an enabling environment, where employees are motivated to
contribute to their full potential.
 To explore new avenues for growth and profitability.

4
Corporate Information

5
 Corporate Information

Board of Directors
 Lt. Gen. Javed Zia
(Chairman)
 Lt. Gen. (R) Imtiaz Hussain
 Mr. Kashif Mateen Ansari, FCMA
 Mr. Zafar Alam Khan Sumbal
 Mr. Muhammad Riyazul Haque
 Mr. Shahid Mahmud
 Mr. Ali Noor Mahomed Rattansey, FCA
 Dr. Bashir Ahmad Khan
 Mr. Tariq Iqbal Khan, FCA

Audit Committee
 Dr. Bashir Ahmad Khan
(Chairman)
 Mr. Ali Noormahomed Rattansey, FCA
 Mr. Zafar Alam Khan Sumbal
 Company Secretary
 Mr. Saleem Anwar, FCA

Auditors
 F. Ferguson & Co
Chartered Accountants

Legal Advisors
 Rizvi, Isa, Afridi & Angell

6
Shariah Advisor
 Dr. Muhammad Tahir Mansoori

Registered / Head Office

AWT Plaza, The Mall, P.O. Box No. 1084
Rawalpindi, Pakistan.
Tel: (92 51) 9063000
Fax: (92 51) 9272455
E-mail: webmaster@askaribank.com.pk
Website: www.askaribank.com.pk

Registrar & Share Transfer Office

THK Associates (Pvt) Limited
Ground Floor, State Life Building No. 3,
Dr. Ziauddin Ahmad Road, Karachi-75530
P.O. Box: 8533, Karachi.
Tel: (92 21) 5689021, 5686658, 5685681
Fax: (92 21) 5655595

7
Management

8
 MANAGEMENT

MANAGEMENT HIERARCHY:

PRESIDENT

MEMBER BOARD

SENIOR EXECTIVE VICE-PRESIDENT

EXECUTIVE VICE PRESIDENT

SENIOR VICE PRESIDENT

VICE PRESIDENT

ASSISTANT VICE PRESIDENT

OFFICER GRADE I
BRANCH HIERARCHY

OFFICER GRADE 2

OFFICER GRADE 3

MESSENGER

PEON

SWEEPER

9
HEAD OFFICE:

 M.R. Mehkari,
President & Chief Executive

 Agha Ali Imam, SEVP

Group Head – Consumer Banking Services

 Tahir Aziz, SEVP

Group Head – Corporate & Investment Banking

 Muhammad Arif Mian, SEVP

Chief Risk Officer

 S. Suhail Rizzvi, EVP

Group head – Operations

 Javed Iqbal
Chief Information Officer

 Moghis Bokhari, EVP

Country Head- Human Resource

 Rehan Mir, EVP

Acting Group Head, Treasury & International Banking

 Saleem Anwar, EVP

Country Head – Strategic Planning & Corporate Affairs

 Khalid Mehmood Khan, EVP

Country Head – Compliance & Data

 Hashim Khan Hoti, EVP

Country head – Islamic Banking Services

10
 M. Farooq Abid Tung, EVP
Country Head –Agriculture & Rural Business

 Rana Shahid Habib, EVP

Country Head – Inspection & Audit

 Tariq Maqbool, EVP

Country Head – Risk Management

 Mian Shoukat Ali Arif Sirhindi, EVP

Country Head –Consumer Banking Services

 Mohammad Munir Ahmed, EVP

Country Head – Electronic Technology

 Lubna Azam, SVP

Chief Credit Officer

 Adil Ziadi, SVP

Country Head – Centralized Foreign Trade Unit

 Syed Hassan Sajjad

Country Head - Operations

 Mahmood Ahmed Nasir, VP

Acting Chief Financial Officer

11
 Entity Ratings

Long term AA
Short term A1+

Definitions by “Pakistan Credit Rating Agency Limited (PACRA)”:

AA
Very high credit quality. ‘AA’ ratings denote a very low expectation of credit risk.
They indicate very strong capacity for timely payment of financial commitments.
This capacity is not significantly vulnerable to foreseeable events.

A1+
Obligations supported by the highest capacity for timely repayment.

12
 BRANCH MANAGEMENT
NAMES
Mr. Azher Rashid
Mr. Sultan Mahmood Bajwa
Mr. Muhammad Farrukh
Mr. Muhammad Akram
Mr. Abbad Raza
Mrs. Ali Hayat
Mr, Muhammad Sohail
Mr. Arsalan Tariq
Mr. Muhammad Yaqoob
Mr. Burhan Ahmed
Miss. Maryam
Mr. Ahmed Ali
Mr. Tariq Ahmed
Mr. Sarwat Ali
Mrs. Sadia Ikram
Mr. Ali Raza
Mr. Kahlid Qadri
13
POSTS / GRADES
Branch Manager / VP
Manager Operation / AVP
Incharge Lockers/ OBC, IBCA Deptt
Manager Foreign Trade
Manager Credits
Assistant Manager Credits
Manager General Banking
Incharge Accounts
CD Incharge
Online Incharge
Incharge Account Opening
Chief Cashier
Cashier Grade II
System Administrator
Operator
Clearing Officer Grade II
ATM Deptt Grade I
 BRANCH NETWORK IN LAHORE

1. Main / SAT Branch, Lahore Branch Code : 0006

2. Tufail Road Branch, Lahore Branch Code : 0011

3. Circular Road Branch, Lahore, Lahore Branch Code : 0017

4. GULBERG BRANCH, LAHORE, Lahore Branch Code : 0021

5. Badami Bagh, Lahore Branch Code : 0022

6. DHA 1, Lahore Branch Code : 0027

7. BANK SQUARE THE MALL, Lahore Branch Code : 0045

8. Township Lahore, Lahore Branch Code : 0056

9. Baghbanpura, Lahore Branch Code : 0063

10. DHA-II, Lahore, Lahore Branch Code : 0064

11. SHAHDRA BRANCH, Lahore Branch Code : 0066

12. Shah Alam Branch, Lahore Branch Code : 0073

13. Shad Bagh, Lahore Branch Code : 0087

14. Ravi Road, Lahore Branch Code : 0092

15. Allama Iqbal Town-Lahore, Lahore Branch Code : 0095

16. JOHAR TOWN BRANCH, Lahore Branch Code : 0100

17. Model Town, Lahore Branch Code : 0107

18. Cavalry Ground Branch, Lahore Branch Code : 0111

19. Park Lane Towers Branch, Lahore Branch Code : 0120

20. Main Market,, Lahore Branch Code : 0132

21. Qartaba Chowk, Lahore Branch Code : 0139

14
22. Urdu Bazar, Lahore Branch Code : 0141

23. Zarrar Shaheed Road, Lahore Branch Code : 0152

15
 FIELDS OF ACTIVITIES

 Account Opening.

 Clearing.

 ATM Card.

 Remittance.

 Accounts.

 Consumer Banking Services.

 Foreign Trade.

16
 ACCOUNT OPENING

Account Opening Department consists of all the working regarding opening of

accounts. In the view of important nature of the function, Account Opening shall
be entrusted to an experienced officer, at least an OG-I with the minimum of 3
years branch banking experience, having power of attorney and well versed in
carrying out a discrete, but in depth, interview of the Account Opener which
should include background, employment details etc with reasonable seniority.
While opening an Account, the Account Opening officer should be well aware of
the Bank’s policies and regulatory requirements. However, opening of corporate
accounts, sole proprietorship, partnership, limited Liability companies, clubs,
societies etc shall be handled directly by the Deposit Incharge/ Manager
Operation.
Following are the types of the Account Holders who can open an account
with the Askari bank:
1. Resident
2. Non-Resident

NATURE OF ACCOUNTS
If a customer wants to open the account with Askari Bank then he has to fulfill
the following requirements and these requirements vary as per the nature of
Account, the nature of Account may be:

Individual Account / Joint Account

Sole proprietorship Account
Partnership Account
Company Account
Charity Account

17
TYPES OF ACCOUNTS
Following types of accounts are open in this bank:

1) Current Account
2) Saving Account
3) Basic Banking Account
4) ASDA
5) PLS Term Deposit Account

Little description about all these accounts is given as follow:

1) CURRENT ACCOUNT:

a) Code of Current Account is 01010.

b) Minimum deposit requirement for opening a current account Is Rs.
100
c) Current Account is Non- Zakatable account. Zakat is not deducted
on current accounts and there is no need of declaration as well.
d) There is no profit generated on Current account.
e) Customer can make maximum withdrawals and deposits in a
month. There is no restriction regarding withdrawals and deposits.
f) Current account can be open individually or jointly. In case of Joint
Current account signatures and other documents regarding all the
account holders are required.
g) Customers can provide special types of instruction regarding the
operations of the account.

2) SAVING ACCOUNT:

a) Code of saving account is 01100.

b) Account is for those people who have huge saved amount and they
deposit this amount with the bank.

18
 c) Zakat is deducted on saving Accounts but it can be marked non
zakat-able Account after taking the declaration from the customer.
d) Saving Account is profit generating account. Profit is added in the
Customer’s account according to certain terms and conditions.
e) Minimum amount required for opening of saving account is rupees
100.
f) The amount in the Saving Account must not be less than 10,000
every month. If the balance will be less than 10,000 then bank will
charge penalty and deduct some amount from customer’s account.

3) BASIC BANKING ACCOUNT:

a) Basic Banking Account is opened in Pakistani Currency only.

b) Basic Banking Account is non – zakat able account.
c) No profit is generated on Basic Banking Account.
d) In basic Banking Account only 2 deposits and 2 withdrawals are
allowed within a month. If a customer exceeds this limit then bank
charge 50 rupees as penalty.

4) ASKARI SPECIAL DEPOSIT ACCOUNT:

a) Individuals, joint A/C holders and corporations may open the

account.
b) The minimum balance required for Askari Special Deposit Account
is Rs. 50,000/- or as amended by the Head Office from time to time.
c) The rate of profit payable will be on daily product basis and
computed every month.
d) The entitled of profit rate on Askari Special Deposit Account
(ASDA) would be computed on the basis of average balance during
the month. For this purpose all daily products will be taken into

19
 account even if on any day the balance falls below prescribed
minimum amount.
e) No profit will be paid if the average balance for a month falls below
the Lowest limit of 1st tier i.e., Rs. 50,000/-
f) Zakat and withholding Tax shall be deducted as per regulations in
the same way as deducted on PLS Saving Account, automatically
through UNIBANK.

5) PLS TERM DEPOSIT ACCOUNT:

a) Deposits under PLS Term Deposits shall be accepted for the

periods/ terms as advised by the Head Office from time to time.
b) PLS Term Deposit Account may be opened with a minimum
balance of Rs. 5,000.
c) Special instructions, if any, shall be authenticated by the account
holder under his full signatures.
d) Credit voucher for the deposit amount shall be prepared which
should bear the name of the depositor, term of deposit etc. In case
of cash, the Amount should be deposited at cash department;
vouchers shall be entered in the Receiving Cashier Book.
e) On receipt of released vouchers, Term Deposit Receipt (TDR) shall
be prepared and entered in the Term Deposit Register. The
number of TDR Issued should also be recorded on the relevant
voucher.
f) The designated officer should also check the particulars of the TDR
entered on its counter-foil in the TDR block, register and initial the
counter-foil as well.
g) All TDR’s must be issued under joint signatures, one of which shall
be the Operations Manager or Deposits Incharge or in their
absence the next senior officer in the branch.

20
h) Unused leaves of TDR shall be balanced every day at the close of
the business with the help of vouchers pertaining to the issuance
of TDR’s during the day. TDR block shall be kept under lock and
key.

21
 CLEARING

Clearing is of two types, and is defined as a system by which banks exchange

cheques and other negotiable Instruments drawn on each other within a
specified area and thereby secure payment for their clients through the Clearing
House at a specified time. There are two types of clearing:

1. Inward Clearing (where customer’s a/c debited)

2. Outward Clearing (where customer’s a/c credited)

PROCESS OF CLEARING:
(Inward Clearing)
In the morning officers receives which are drawn on branch customers,
debit all the accounts of their customers. Amount entered shown as the floating
Amount in the customer’s account because now cheques will send for clearance
to NIFT. As the cheques clear the amount in floating balance becomes nill and the
customers account will be finally debited.

PROCESS OF CLEARING:
(Outward Clearing)
Outward clearing received in afternoon by the Clearing Officer. This
Clearing consist of those cheques which were lodge for clearance One day before.
Cheques are in favor of customers and credited to the Customer’s account.
Another interesting is that as the cheque is received It is credited in the
customer’s account but the amount is transferred into Floating amount /
suspense amount. As the cheques are received by the NIFT representative along
with the IBCA floating amount will be nill.

22
NIFT:
NIFT stands for National Institute of Facilitating Techniques. It is a
specialized institution which is used to transfer cheques from NIFT to different
branches and from branches to NIFT. NIFT representatives receive cheques from
different banks throughout the city, sort the cheques according to different
branches and then send it to the branches accordingly.

23
 ATM Card

 ATM Card is issued to the Account Holders of the bank against an

application form. After submition of form application is sent to the head
office and RS. 400 are deducted from the customer’s account as the ATM
Card issuance fee. After that Rs. 230 are deducted from customer’s
account after every 6 months.

 ATM card prepared and received by the bank within 10 to 20 days. After
that customer can collect his ATM Card from the branch along with the
PIN CODE. PIN CODE is provided by the Operation Manager or any other
authority.

 While using the card for the first time customer has to enter the PIN CODE
provided by the branch and after that he has to change his code. The
CODE must be easy to remember.

 Customer has three chances in which he/she can change his/her PIN
CODE. After that customer has no choice except to apply for a new ATM
CARD.

 Customers are used to forget their PIN CODE. In some other cases
customer’s card capture by the ATM machine. In all these cases the
concerned Officer provide instructions to the customers.

ATM’s Controlled by the Branch

1. Township Branch
2. Pace Model Town Link Road
3. Zainab Tower Model Town Link Road
4. Ittefaq Hospital

24
 ATM Network in Lahore

No Branch/location Type Of Location City

1. Lahore Main Branch Lahore
2. Lahore Cantt Branch Lahore
3. Gulberg Branch Lahore
4. LCCHS Branch Lahore
5. Township Branch Lahore
6. Allama Iqba Town Branch Lahore
7. Ravi Road Branch Lahore
8. Shad Bagh Lahore Branch Lahore
9. Shah Alam Market Branch Lahore
10. Shahdara Branch Lahore
11. DHA Phase-II Branch Lahore
12. Bank Square Branch Lahore
13. Tufail Road Branch Lahore
14. Circular Road Branch Lahore Branch Lahore
15. M.A Johar Town Branch Lahore
16. Model Town Branch Lahore
17. Cavalary Ground Lahore Branch Lahore
18. Zarrar Shaheed Branch Lahore
19. Gulberg Branch ATM-2 Branch Lahore
20. Siddique Trade Center Branch Lahore
21. Milli Shoes Offsite/Third Party Lahore
22. Pace Link Road Offsite/Third Party Lahore
23. Zainab Tower Link Road Offsite/Third Party Lahore
24. Ittefaq Hospital Offsite/Third Party Lahore

25
 REMITTANCE

Remittances mean transfer of funds from one place to another. Now a day’s
remittance is considered as one of the important function of commercial banks.
The transfer of money required not only by the business community but also
needed by general public. Commercial bank not only earns a reasonable amount
of commission, through providing remittances facility to public but they can also
increase the number of their account holders.

MODES OF REMITTANCES:

There are three modes of remittances:

 Pay Order
 Demand Draft
 Telex / Swift Transfer

PROCESS OF ISSUING OF PAY ORDER:

Let suppose a customer comes to his branch and request the Officer to
prepare a pay order in favor of a person e.g. Mr. B for an amount of RS. 1000. The
officer will give the application form to the customer and take all the necessary
details from him/her. After that the signatures will be verified, after the
verification of the signatures Officer will debit the customer’s account and credit
the bank or branch’s pay order issued during the day account. Commission will
be charge RS. 60 as mentioned above. At the end of the day the commission will
be separated from the principal amount. After that the principal amount will be
transferred to the separate folder of payables and after that credited to the
beneficiary account.

26
PROCESS OF ISSUING OF DEMAND DRAFT:

Let suppose a customers comes to the bank for the issuance of Demand
Draft. Bank always made the Demand Draft for that city in which their branches
are available. For example there is no branch of ASKARI BANK LIMITED in Gilgit.
The customer comes to the Lahore branch of Askari bank and he wants to
prepare a draft in favor of the person having the account in Islamabad.

As described in Pay Order, same the case with the Demand Draft. Customer
will fill up the application form and verify the signatures after the verification of
the signatures; customer will give the form to the Officer for the preparation of
Demand Draft. The Officer will debit the customer’s account and credited
Demand Draft issuing during the day account. Commission will be calculated by
the system automatically according to the amount. At the end of the day
commission will be separated from the principal amount. Principal amount is
transferred to the Islamabad branch. Islamabad branch credit the amount into
the Demand Draft payables and after that transfer to the beneficiary account.

PROCEDURE OF ISSUE OF TELEX / SWIFT TRANSFER:

The remitter has to fill the prescribed application form. When the
following form is presented by the remitter, it should be scrutinized on the
following points:

1) Full name of payee along with his account number, if maintained at

the drawee branch or his complete address along with his contact
number.
2) Amount is correctly mentioned both in words and figures.
3) Purchaser has signed the application format prescribe place. In
case the remitter being an account holder his account number is
mentioned.

27
The charges such as commission / telex etc are calculated by the remittance
Department as per effective schedule of charges mentioned on the application
form.

28
 ACCOUNTS

Accounts department deals in seven heads:

1) Current.
2) Saving.
3) ASDA
4) Online.
5) MO (IBCA)
6) GL (Daily basis Working, Income/Expenses, Remittance etc)
7) FCY (Foreign Currency e.g. UD, VPCD, CDR/TDR etc)

WORK DONE IN ACCOUNTS DEPARTMENT:

All the work done in a day in a bank is come to the Accounts Department
next day. All the instruments like cheque, different memos like credit memo and
debit memo, IBCA’s, pay orders, drafts, all are included. After that all these
instruments are sorted according to the account numbers. After sorting the
Instruments these instruments are attached with their concerned reports.
Reports Including the instrument number, amount, and other related
information stated on it.

Daily reports are also prepared under accounts department. These

reports are related to every authorized person of the branch. Reports consist of
all the details regarding the work done by the authorized persons under their
heads. These reports are also signed by those persons on daily basis and at the
end reports are signed by the Manager Operation and then the Manager of the
branch. Some important types of reports are given as follow along with their
description:
1) UNIDD 100
2) UNIDD 110

29
 3) UNIDD 113
4) UNIDD 170
5) MPR (Monthly Progress Report)

1) UNIDD 100:
UNIDD 100 report generate on daily basis, having the title of Statement of
Condition as on ……. Report contains the assets and liabilities, their
description, G/L head and balances. It contains different types of deposits like
current deposit, value plus time deposits, Askari Special deposits, Saving
Deposits etc.

2) UNIDD 110:
UNIDD 110 is also generated on daily basis. Report having the Title of
Subsidiary Ledger Printing Amounts In Local Currency. It contains numbers
description, opening and closing balances and today movements. Movements
contain debits and credits. Every head is managed separately along with the
transaction Perform on it i.e. debits and credits.

3) UNIDD 170:
As like above mentioned reports it is generated on daily basis, having the
title of Customer against G/L Balance Printout, containing the G/L
description with G/L balances and customer balance. This report tells us that
how many accounts are active and live in the branch or bank or how many
are inactive or dormant. So we can check out the total no of active and
inactive accounts through this report.

4) UNIDD 113:
This report is also generated on daily basis, having the title of General
Ledger Assets and Liabilities, containing both the general and ledgers and
liabilities, transactions perform on them in debit and credit and balances as
well.

30
4) Monthly Progress Report (MPR):
Monthly Progress Report is prepared on monthly basis. In this report, we
compare the actual budget and used budget of the particular branch. Actual
budget have a particular limit and if the branch exceeds this limit then it
needs approval from head office and there are separate heads available.

31
 CONSUMER BANKING SERVICES

1. Askari Mahana Bachat Account (1 + 3 Years Term)

Askari Mahana Bachat Account is a Term Deposit facility available to

individual customer with the option of 1 and 3 Years tenure. It has been
designed keeping in view savings needs of
individual investors who don’t want to block their
funds for longer terms, with a competitive rate of
return paid monthly on the 1st of every month. A
financing facility up to 90% will be available for
customers if required.

2. Askari Roshan Mustaqbil Deposit

Askari Bank has launched the Askari Roshan Mustaqbil Deposit, a saving plan
specially designed for individual investors who wish to invest now for a
regular return at a later stage while keeping their principal amount intact.
With Askari Roshan Mustaqbil Deposit you can
double your investment in a time period of ten
years. Invest now in the form of monthly deposits
for five years and get paid back the same amount for
the next five years while receiving your principal
amount in full at the end of the tenure.

3. Askari Deposit Multiplier Account

Aim higher with your investments with Askari

Deposit Multiplier account. This account is for
individual investors whose purpose is long term
savings with high returns. With a tenure of 10 Years
and a competitive rate of return on maturity this

32
 account is ideal for investors who wish to start saving for their future today.

4. Value Plus Deposit

Askari Bank leads the way, yet again with the

introduction of Askari Value Plus Rupee Deposit
Accounts, which promise greater financial freedom
and security, in an un-matched way. Customer can
open a "Value Plus Account" while enjoying the
flexibility of a normal checking account.

5. Personal Finance

Personal Finance is a parameter driven product for catering to the needs of

the general public belonging to different segments.
One can avail unlimited opportunities through
Askari Bank's Personal Finance. With unmatched
finance features in terms of loan amount, payback
period and most affordable monthly installments,
Askari Bank's Personal Finance makes sure that
one gets the most out of his/her loan. Once a good credit history is
established, the door to opportunity opens much wider.

6. Mortgage Finance

Askari "Mortgage Finance" offers the convenience of owning a house of

choice, while living in it at its rental value. The
installment plan has carefully designed to suit both
the budget & accommodation requirements. It has
been designed for enhancing financing facility
initially for employees of corporate companies for
purchase/ construction/ renovation of house.

33
7. Business Finance

In pursuance of the National objectives to revive the economy of the country,

ACBL is providing loans to small and medium size business enterprises under
Askari Bank's Business Finance Scheme. Our goal
is to offer a loan, which enables business
community to receive the financing required by
them based on their cash flows. Our valued
customers can enjoy the convenience of getting
financing on attractive terms with the minimum
processing turnaround time.

34
 FOREIGN TRADE

The main topic covered under this department is

Letter Of Credit (LC).

“LETTER OF CREDIT”

It is a letter (or more often these days, a telex or

other form of electronic transmission) written by the
buyer's bank, and addressed to the exporter. The letter promises that upon
presentation of a series of documents listed in the LC, the bank will pay the
exporter is critical to note that the bank promises to pay upon presentation of
documents, not upon receipt of goods. The most basic tenant of LC’s is
"banks deal in documents, not goods"

Issuing the LC

After the buyer and seller agree on the terms of the sale, the buyer
approaches his bank and asks them to issue an LC. He will need a line of
credit to do so, as the bank is promising payment to a total stranger -
they rely completely on the buyer's ability to pay. An LC is similar a
commitment similar to money made available for working capital or other
purposes.
The bank has very limited security in that, when the goods are shipped,
they are consigned to the bank; whether or not they could sell them to
cover their loss if the buyer default is another question. A classic
anecdote concerns a New York bank which had title to a freighter of green
bananas moored off Crete. They recovered about 30% of the shipment's value
in a distress sale.
If the buyer doesn't have a line of credit, or it is insufficient to cover
the purchase, banks will sometimes issue LC’s against cash collateral. In
general, however, banks will not issue LC’s for non-customers.

35
Transmitting (Advising) the LC
When the bank has authenticated the LC, they will notify the exporter in
one of any number of ways: phone, mail, telex, etc. They may mail the LC
to him directly, or require him to pick up the instrument at their
counters. In either case, there will be a charge for the service.
While not necessary, it is excellent practice for the buyer to separately
advise the seller who the issuing and advising banks are, to simplify
inquiries should the LC not be received promptly. Other information such
as the date the LC was issued, the exact amount, and the issuing bank's
reference number may also be notified to the exporter.
Upon receipt of the LC, the exporter should read it at once, with extreme
care. If there are terms which are unacceptable, he should contact the
buyer and advising bank immediately. If there are terms he does not
understand, he should clarify them with his banker immediately.
Finally, the exporter has the right to specify who the advising bank will
be. Normally, it is best to designate his house bank, if they process LC’s.
Sometimes the issuing bank may not be able to comply with his request,
because they lack testing arrangements with his bank.

Testing (Authenticating) the LC

Banks which frequently do business with each other maintain ciphers for
authenticating messages which involve the transfer of money or other
critical issues. If the LC was sent by telex, a private "telegraphic test
key" is used. If both banks are members of the "SWIFT" system (an advanced
proprietary telex system owned by a group of international banks), the test is
automatic. In those rare instances when the LC is sent by mail, the
advising bank will verify the signatures on the document against the
issuing bank's signature list in their files. Unauthenticated LC’s should NEVER be
accepted. Most banks will not advise unauthenticated credits to an exporter, and
no bank will negotiate one. There is normally no separate charge for this service.

36
Changing (Amending) LC’s

If all parties to the LC (the buyer, his bank, the seller and confirming
bank - if any) must all agree to any changes in the LC. The amount of the
credit may be increased, expiry date extended, or virtually any term
changed - but only after all parties agree. The amendment is advised to
the exporter in the same manner as an LC, with the same requirements for
verification. Banks usually charge a fee about the same as their advising
commission for this service.

Confirming LC’s

Confirmation of an LC means having a second bank guarantee payment. The

exporter now no longer looks to the issuing bank for payment, but rather to the
confirming bank. This second bank will be of better credit
standing, or else located in a country where political or economic risk is not a
factor. If you wish to have an LC confirmed, it is best to specify this in the sales
contract between buyer and seller, so that they buyer can make arrangements
before the LC is issued. LC’s can also be confirmed after receipt by the seller, but
this complicates matters considerably. Confirmations incur substantial
additional banking charges.

Negotiating LC’s

When shipment has been made, the exporter must gather and prepare all of
the documents required by the LC. These typically include evidence of
shipment in the form of a bill of lading or airway bill, insurance
documents, a commercial invoice, and a draft. Other documents, such as a
certificate of weight or quality, origin of goods, or export or import
license may be required. The buyer must ensure that all necessary
documentation is listed in the terms of the LC, and the seller -
immediately upon advice of the credit - must make sure he can gather and

37
present all the items. When goods are shipped and the documents have been
prepared, the exporter takes them, along with the original LC, to a bank (in this
case we will assume it is his own house bank.) The bank will examine the
documents to see if they comply with the terms of the LC. If there are documents
missing, or if they do not exactly match the terms of the credit, the documents
are deemed "discrepant", and the bank will not pay until a) the discrepancies
have been corrected or b) they have contacted the issuing
bank and received approval to pay.

Reimbursement ("Payment") of LC’s

There are substantial technical differences among the terms "negotiation",

"payment" and "reimbursement" of LC’s, but these are issues of concern
mainly to the banks in the LC transaction, and we will not discuss them
here. From the viewpoint of the buyer and seller, we have referred to the
presentation of documents by the seller to a bank as "negotiation".
"Reimbursement" of the LC concerns the payment made by the issuing bank
(or his agent) to the exporter's bank. We will use the term "payment" to
refer to the actual transfer of funds by the exporter's bank to the exporter. Every
LC must include information on how the bank which examined documents (the
"negotiating bank") will be reimbursed. They will in turn pay the funds to the
exporter.
The concept here is that the exporter receives his funds almost
immediately after making shipment. This used to be a basic tenant of LC’s, and
those issued by banks in the Far East, the Mid-East, Latin America, and most
credit sensitive countries are still written this way.

CONCLUSION

The previous pages are intended as a brief introduction to letters of

credit, and are by no means exhaustive or complete. While LCs are

38
essentially simple instruments, they can become extremely complex, and may
pose substantial risk to buyers and sellers who are not familiar with all
the mechanics. If you are contemplating an LC transaction, be certain to
discuss all its aspects with your banker or a qualified trade finance
representative.

39
WORK DONE DURING INTERNSHIP

40
 WORK DONE DURING INTERNSHIP

I worked in all the fields mentioned above in field of activities here is a little
description of worked I have learnt during my internship at Askari Bank.

ACCOUNT OPENING
I have started my internship from ACCOUNT OPENING. In ACCOUNT
OPENING, the account opening officer Miss Maryam told me about the different
types of accounts like Current account, saving account, ASDA, BBA etc. She told
me about the necessary document required for the opening of different type of
accounts e.g. Individual, Partnership, and Company account. The officer also told
me about cheques books which have different number of leaves like 10, 25, 50
and 100. I have prepared some Cheque Books for the customers. I have applied
the stamps of the specified account numbers on the cheques. I have also filled up
the forms for the customer’s account.

CLEARING
In Clearing Department, the officer Mr. Ali Raza has told me about the
clearing process. In inward clearing I have checked the different stamps require
for the clearance of cheques. I have also checked that the cheques are filled up
correctly like amount in figures and words is correct, date is correct, payees
name is correct and so on. I have also filled up the cheques return memos and
Deposit Slips for the customers. I have also worked on Excel for the preparation
of the list of those cheques which are returned. Retired Army Officers pensions
are also maintained under this department after fulfillment of certain formalities.
I have also put stamps on the cheques on daily basis like clearing stamp, payees
account credited stamp, payment received stamp, and crossing.

41
ATM CARD
ATM card issuing department is not very hard working department just
fill up the form by the customer and send it to the Head Office for issuance of
ATM card. Moreover capture of card, blockage, or re issuance also done under
this department by sending a request to the Head Office. All the documents and
forms are filed by the officer carefully.

REMITTENCE
In Remittance Department I have learnt a lot about the Pay Orders and
Demand Drafts (local & foreign). I have also learnt the whole process of issuing
the Pay order and Demand Drafts. I have also taken the signatures of the
authorized persons on the Demand Draft, the Pay Order. In accounts department,
I have daily sort out the vouchers in a sequence; like account wise, branch wise
etc, after sorting out I used to attach the vouchers with the concerned
statements.

CREDITS
In credits department I enjoy the work done there. The officer Mr. Abbad
Raza told me about different types of products that are offered to the different
type of costumers under some certain conditions. Personal finance facility is
offered to the individuals running business under sole proprietor ship, Mortgage
finance facility is for individuals seeking for their own house. Business finance
facility is for corporate customers it’s for running business or newly established
business entity. Letter of Guarantee is issued only to the well reputed corporate
customers.

FOREIGN TRADE
The incharge Foreign Trade Mr. Akram is a very experienced person
having 11 years experience of work in Foreign Trade. He told me about the
operations performed in Foreign Trade Department e.g. Procedure of opening a

42
local or foreign Letter of Credit (LC) and the necessary documents require to
perform all the procedure of International Trade.

43
FINANCIAL ANALYSIS

44
 FINANCIAL ANALYSIS

"Financial statement analysis is the process of identifying of financial strengths

and weaknesses of the firm by properly establishing relationship between the
items of the balance sheet and the profit &loss account," and it is done through
ratio analysis.

Ratio Analysis

Involves methods of calculating and interpreting financial ratios to analyze and

monitor the firm’s performance.

Current Ratio

It is one of the most commonly cited financial ratios, measures the firms ability to meet its
short term obligations.

Ratio Formula 2008 2007

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠
Current Ratio 6.170 4.310
Current Liabilities

Current ratio for the year 2008 is increased due to increase in current assets and
decrease in current liabilities

Total Assets Turnover

It measures the firm’s ability how effectively it used its assets to make sales.

Ratio Formula 2008 2007

Sales
Total Assets Turnover 0.089 0.083
Total Assets

45
The assets turnover ratio for year 2008 is increased.

Debt to Total Assets Ratio

It measures the firm’s ability to meet its outstanding debts.

Ratio Formula 2008 2007

𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡
Debt to Total Assets Ratio 0.088 0.113
Total Assets

The debt to total assets ratio increased due to increased in assets in year 2008.

Debt to Equity Ratio

It measures the shareholders ability to meet firm’s outstanding debts.

Ratio Formula 2008 2007

𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡𝑠
Debt to Equity Ratio 4.481 6.835
Shareholder′s Equity

Debt to equity ratio for the year 2008 is improved due to increase in
shareholders equity and decrease in outstanding debts.

Interest Coverage Raito

It measures the firm’s ability to make contractual interest payments.

Ratio Formula 2008 2007

𝐸𝐵𝐼𝑇
Interest Coverage Ratio 1.727 1.422
Interest Expense

The interest coverage ratio for the year 2008 is increased due to increase in
interest income as compared to year 2007’s income.

46
 Gross Profit Margin

It measures the percentage of each sale (dollar) remaining after the firm has paid for its
goods.

Ratio Formula 2008 2007

𝐺𝑟𝑜𝑠𝑠 𝑃𝑟𝑜𝑓𝑖𝑡
Gross Profit Margin 0.421 0.426
Total Sales

The gross profit margin for the year 2008 is slightly as compared to last year’s
gross profit margin which was 0.426.

Net Profit Margin

It measures the percentage of each sale (dollar) remaining after all cost and expenses
including: interest, taxes and preferred stock dividend.

Ratio Formula 2008 2007

𝐸𝐴𝐶𝑆
Net Profit Margin 0.138 0.296
Total Sales

Net profit margin for the year 2008 is decreased as compared to year 2007, due to
decrease in profits for the year.

Return on Total Assets Ratio

It measures overall effectiveness of management in generating profits with available its

assets.

Ratio Formula 2008 2007

𝐸𝐴𝐶𝑆
Return on Total Assets 0.012 0.025
Total Assets

Return on total for the year 2008 is decreased over the time.

47
 Return Shareholders Equity Ratio
It measures the return earned on shareholders investment in the firm.

Ratio Formula 2008 2007

𝐸𝐴𝐶𝑆
Return on Shareholders Equity 0.624 1.490
Shareholder ′ s Equity

Shareholders equity ratio for the year 2008 is decreased due to decrease in
earnings available for the stockholders.

Return on Deposits Ratio

It measures the firm’s portion of profit earned by depositors on their deposits

Ratio Formula 2008 2007

Profit After Taxation

Return on Deposits 0.0020 0.0187
Deposits

Return on deposits ratio for year 2008 is increased due to increase in profit after
tax for the year.

Earning Per Share Ratio

It represents the amount earned on each share.

Ratio Formula 2008 2007

𝐸𝐴𝐶𝑆
Earning per Share 0.95 6.61
No. of Common Shares

Earning per share for the year 2008 is decreased due to decrease in earning
available for shareholders for the year.
*

*
The calculations for different ratios showed in annexure “F1”

48
Financial Highlights – 2008
Rupees in Million 2008 2007 Change Percent

Profits
Operating profit 4,534 6,222 - 27.13
Profit before taxation 461 2,300 - 79.96
Profit after taxation 386 2,681 - 85.60

Balance Sheet
Shareholders’ funds 12,971 12,226 + 5.75
Customer Deposits 167,677 143,037 + 17.23
Advances - net 128,818 100,780 + 27.82
Total assets 206,191 182,172 + 13.18

Information Per Ordinary Shares

Earning (Rs.) 0.95 6.61 - 85.63
Cash Dividend (Rs.) - 1.50 - -
Stock Dividend (%) 25.00 35.00 - 28.57
Net assets value at year end (Rs.) 31.96 40.80 - 21.67
Market value at year end (Rs.) 14.57 99.75 - 85.39

Capital Adequacy Ratio 9.22 9.35 - 1.39

49
Balance Sheet
As at December 31, 2008

Rupees in 000 2008 2007

Assets
Cash and balances with treasury banks 16,029,635 13,356,055
Balances with other banks 3,954,814 3,497,054
Lending’s to financial institutions 4,479,754 14,444,143
Investments 35,677,755 39,431,005
Advances 128,818,242 100,780,162
Operating fixed assets 8,266,458 5,128,428
Deferred taxes - -
Other assets 8,964,480 5,535,038

206,191,138 182,171,885

Liabilities

Bills payable 2,584,828 2,627,051

Borrowings 15,190,148 17,553,525
Deposits and other accounts 167,676,572 143,036,707
Sub-ordinated loans 2,996,100
Liabilities against assets subjects to finance lease - -
Deferred tax liabilities 12,987 471,519
Other liabilities 4,759,140 3,219,796

193,219,775 169,905,898

Net Assets 12,971,363 12,265,987

Represented By

Share Capital 4,058,774 3,006,499

Reserves 7,667,141 6,948,336
Unappropriated Profit 308,980 2,144,810

12,034,895 12,099,645
Surplus on revaluation of assets – net of tax 936,468 166,342

12,971,363 12,265,987

M. R. Mehkari Dr. Bashir Ahmad Khan Lt. Gen. (R) Imtiaz Lt. Gen. Javed Zia
Hussain
President & Chief Director Director Director
Executive

50
Profit & Loss Account
For the Year Ended December 31, 2008

Rupees in 000 2008 2007

Mark-up / return / interest earned 18,393,313 15,143,241

Mark-up / return / interest expensed 10,650,719 8,685,624

Net mark-up / interest income 7,742,594 6,457,617

Provision against non-performing loans and advances 3,824,778 3,920,240

Provision for impairment in the value of investments 508 1,501
Bad debts written off directly 247,311 -

4,072,597 3,921,741

Net mark-up / interest income after provisions 3,669,997 2,535,876

Non mark-up / Interest Income

Fee commission and brokerage income 1,257,584 1,072,868
Dividend income 173,621 137,079
Income from dealing in foreign currencies 873,512 655,761
Gain on sale of securities – net 36,743 2,361,251
Unrealized gain on revaluation of investments
classified as held for trading – net 22,384 17,728
Other income 343,156 336,809

Total non mark-up interest income 2,707,000 4,565,496

6,376,997 7,101,372
Non mark-up / Interest Expense
Administrative expenses 5,904,169 4,789,536
Other provisions / write-offs 459 -
Other charges 10,987 12,051

Total non-markup / interest expenses 5,915,615 4,801,587

461,382 2,299,785
Extra ordinary / unusual items - -

Profit Before Taxation 461,382 2,299,785

Taxation – current year 17,363 98,535

– prior years’ (50,000) (233,950)
– deferred 107,794 (245,812)

75,157 381,277

Profit After Taxation 386,225 2,681,012

Unapproriated profit brought forward 2,144,810 1,799,979

Profit available for appropriation 2,531,035 4,480,991

Basic / diluted earnings per share - Rupees 0.95 6.61

51
Statement of Changes in Equity
For the Year Ended December 31, 2008

Capital
Revenue for
Share Issue of Statutory General Unaaprori
Rupees in 000 Capital bonus shares Revenue Revenue -ated Profit Total

Balance as at January 1, 2007 2,004,333 - 2,299,264 3,151,490 1,799,979 9,619,066

Net profit for the year ended
December 31, 2007 - - - - 2,681,012 2,681,012
Transfer to:
Statutory reserve - - 536,202 - (536,202) -
General reserve - - - 597,380 (597,380) -
Final dividend for the year
ended December 31, 2006
declared subsequent to end - - - - (200,433) (200,433)
Bonus share declared / issued
subsequent
to year ended December 31,
2006 1,002,166 - - - (1,002,166) -

Balance as at January 1, 2008 3,006,499 - 2,835,466 4,112,870 2,144,810 12,099,645

Net profit for the year ended
December 31, 2008 - - - - 386,225 386,225
Transfer to:
Statutory reserve - - 72,245 - (72,245) -
General reserve - - - 641,560 (641,560) -
Final dividend for the year
ended December 31, 2007
declared subsequent to end - - - - (450,975) (450,975)
Bonus share declared / issued
subsequent
to year ended December 31,
2007 1,052,275 - - - (1,052,275) -

Balances as at Dec 31, 2008 4,058,774 - 2,912,711 4,754,430 308,980 12,034,895

M. R. Mehkari Dr. Bashir Ahmad Khan Lt. Gen. (R) Imtiaz Lt. Gen. Javed Zia
Hussain
President & Chief Director Director Director
Executive

52
Cash Flow Statement
For the Year Ended December 31, 2008

Rupees in 000 2008 2007

Cash Flow form Operating Activities

Profit before taxation 461,382 2,299,785
Less: Dividend income (173,621) (137,079)

287,761 2,162,706
Adjustments:
Depreciation 511,063 400,230
Provision against non-performing 3,824,778 3,920,240
Provision for impairment in the value of investments 508 1,501
Bad debts written off directly 247,311 -
Net loss / (profit) on sale of operating fixed assets 3,989 6,255
Provision against other assets 459 -

4,588,108 4,315,716

4,875,869 6,478,422
Increase / decrease in operating assets
Lending’s to financial institutions 9,139,389 6,051,193
Held for trading securities 310,530 153,654
Advances 32,110,169 5,521030
Other assets (excluding advance taxation) 2,501,809 831,246

25,162059 12,557,123
Increase / decrease in operating liabilities
Bills payable 42,223 787,974
Borrowings 2,363,377 2,589,438
Deposits and other accounts 24,639,865 11,197,424
Other liabilities (excluding current taxation) 1,532,773 617,958

23,767,038 15,192,794

Cash flow before tax 3,480,848 9,114,093

Income tax paid (884,285) (743,711)

Net cash flow form operating activities 2,596,563 8,370,382

Cash Flow form Investing Activities

Net investments in available-for-sale securities 2,447,452 (11,682,052)
Net investments in held-to-maturity securities (617,596) (228,876)
Net investments in subsidiaries / associate (72,000) (40,789)
Dividend income 162,451 137,192
Investments in operating fixed assets – net of adjustment (1,843,902) 1,758,105
Sale proceeds of operating fixed assets – disposed off 48,976 46,033

Net cash flow form / (used) in investing activities 155,381 (13,526,597)

Cash Flow form Financing Activities

Payment of sub-ordinated loans (1200) (1200)
Dividends paid (444,404) (201,708)

Net cash flow used in financing activities (445,604) (202,908)

Increase / (decrease) in cash and cash equivalents 2,306,340 5,359,123

53
Cash and cash equivalents at beginning of the year 18,353,109 23,712,232

Cash and cash equivalents at end of the year 20,659,449 18,353,109

M. R. Mehkari Dr. Bashir Ahmad Khan Lt. Gen. (R) Imtiaz Lt. Gen. Javed Zia
Hussain
President & Chief Director Director Director
Executive

54
Balance Sheet Horizontal Analysis
2008
Vs.
2008 2007 2007
Rupees in Million Variance
Assets
Cash and balances with treasury banks 16,030 13,356 20%
Balances with other banks 3,995 3,497 13%
Lending’s to financial institutions 4,480 14,444 -69%
Investments 35,678 39,431 -10%
Advances 128,818 100,780 28%
Operating fixed assets 8,266 5,129 61%
Other assets 8,964 5,535 62%
206,191 182,172 13%

Liabilities
Bills payable 2,585 1,839 -2%
Borrowings 15,190 14,964 -13%
Deposits and other accounts 167,677 131,839 17%
Sub-ordinated loans 2,996 2,999 -10%
Deferred tax liabilities 13 736 61%
Other liabilities 4,759 2,603 62%
193,220 169,906 14%

Net Assets 12,971 12,266 11%

Represented By
Share capital / Head office capital account 4,059 3,007 35%
Reserves 7,667 6,948 10%
Unappropriated Profit 309 2,124 -86%
12,035 12,100 -1%
Surplus on revaluation of assets – net of tax 936 166 464%

12,971 12,266 6%

55
Balance Sheet Vertical Analysis

2008 2007 2008 2007

Rupees in Million Composition
Assets
Cash and balances with treasury banks 16,030 13,356 8% 7%
Balances with other banks 3,995 3,497 2% 2%
Lending’s to financial institutions 4,480 14,444 2% 8%
Investments 35,678 39,431 18% 22%
Advances 128,818 100,780 62% 55%
Operating fixed assets 8,266 5,129 4% 3%
Other assets 8,964 5,535 4% 3%
206,191 182,172 100% 100%

Liabilities
Bills payable 2,585 2,627 1% 1%
Borrowings 15,190 17,553 7% 10%
Deposits and other accounts 167,677 143,037 81% 78%
Sub-ordinated loans 2,996 2,997 2% 2%
Deferred tax liabilities 13 472 - -
Other liabilities 4,759 3,220 3% 2%
193,220 169,906 94% 93%

Net Assets 12,971 12,266 6% 7%

Represented By
Share capital / Head office capital account 4,059 3,007 2% 2%
Reserves 7,667 6,948 4% 4%
Unappropriated Profit 309 2,124 - 1%
12,035 12,100 6% 7%
Surplus on revaluation of assets – net of tax 936 166 - -

12,971 12,266 6% 7%

56
Profit & Loss Account Horizontal Analysis
2008
Vs.
2008 2007 2007
Rupees in Million Variance
Mark–up / return / interest earned 18,394 15,143 21%
Mark–up / return / interest expense 10,651 8,686 23%

Net mark–up / interest income 7,743 6,457 20%

Provision against non–performing and advances 3,825 3,920 -2%

Provision for impairment in the value of investments 1 1 -
Bad debts written off directly 247 - 100%
4,073 3,921 4%

Net mark–up / interest income after provisions 3,670 2,536 45%

Non mark–up/interest income

Fee, commission and brokerage income 1,258 1,073 17%
Dividend income 174 137 27%
Income from dealing in foreign currencies 873 655 33%
Gain on sale of investments – net 37 2,361 -98%
Unrealized gain on revaluation of investments
classified as held for trading – net 22 2 1000%
Other income 343 337 2%

Total non–markup / interest income 2,707 4,565 -41%

6,377 7,101 -10%

Non mark–up/interest expenses

Administrative expenses 5,904 4,789 23%
Other charges 12 12 -

Total non–markup / interest expenses 5,916 4,801 23%

Profit before taxation 461 2,300 -80%

Taxation – current 17 99 -83%

– prior years (50) (234) 79%
– deferred 108 (246) 144%
75 (381) 120%

Profit after taxation 386 2,681 -86%

Basic / diluted earnings per share – Rupees 0.95 6.61 -86%

57
Profit & Loss Account Vertical Analysis

2008 2007 2008 2007

Rupees in Million Distribution

Mark–up / return / interest earned 18,394 15,143 100 % 100%

Mark–up / return / interest expense 10,651 8,686 58% 57%

Net mark–up / interest income 7,743 6,457 42% 43%

Provision against non–performing and advances 3,825 3,920 21% 26%

Provision for impairment in the value of investments 1 1 - -
Bad debts written off directly 247 - 1% -
4,073 3,921 22% 26%

Net mark–up / interest income after provisions 3,670 2,536 20% 17%

Non mark–up/interest income

Fee, commission and brokerage income 1,258 1,073 6.9% 7.1%
Dividend income 174 137 1% 0.9%
Income from dealing in foreign currencies 873 655 4.8% 4%
Gain on sale of investments – net 37 2,361 0.2% 16%
Unrealized gain on revaluation of investments
classified as held for trading – net 22 2 0.1% -%
Other income 343 337 2% 2%

Total non–markup / interest income 2,707 4,565 15% 30%

6,377 7,101 35% 47%

Non mark–up/interest expenses

Administrative expenses 5,904 4,789 32% 32%
Other charges 12 12 - -

Total non–markup / interest expenses 5,916 4,801 32% 32%

Profit before taxation 461 2,300 3% 15%

Taxation – current 17 99 0.1% 1%

– prior years (50) (234) -0.3% -2%
– deferred 108 (246) –0.6% -2%
75 (381) 0.4% -3%

Profit after taxation 386 2,681 2.6% 18%

58
 CONCLUDING REMARKS FOR ANYLASIS

PROFITS
1. Operating Profits: Negative change recorded in operating profit of last
year. For the year 2007 it was Rs. 6222 million which decreased in year
2008 to Rs. 4534 million a significant decrease of 27.13% over a year.

2. Profit before Taxation: Profit before taxation was Rs. 2300 million
which is decreased to Rs. 461 million, a negative change of 79.96 is
recorded.

3. Profit after Taxation: In the year 2007 profit after taxation amounted to
Rs. 2681 million which is decreased to Rs. 386 million a huge negative
change of 85.60 is recorded.

Overall change in profits for year 2008 is negative and in that year the bank had
to suffer a lot.

BALANCE SHEET
1. Shareholders Fund: Shareholders fund for the last year 2007 was Rs.
12,226 million which is increased in year 2008 to Rs. 12,971 million. A
positive change of 5.75% is recorded.

2. Customers Deposits: Customers deposits increased in year 2008 to Rs.

167,677 million which were Rs. 143,037 million in year 2007, a
significant increase of 17.23% is recorded.

3. Advance: Advances issued by the bank were Rs. 100,780 million in year
2007 which are amounting in year 2008 up to Rs. 128,818 million, it is
due to increasing corporate financing activities despite of a huge slump
faced by the world. An increase of 27.82 is recorded.

59
 4. Total Assets: Assets in 2007 year were Rs. 181,172 million which are
now in ear 2008 amounting to Rs. 206,191 million showing a positive
change of 13.18% over a year.

ORDINARY SHARES
1. Earnings: Earnings per share in 2007 were Rs. 6.61 which is now in
2008 decreased to Rs. 0.95 due to decrease in net profit for the year. A
worst decrease of 85.63% is recorded.

2. Cash Dividend: Cash dividend paid per ordinary share in year 2007 was
Rs. 1.50 and in year 2008 no dividend is offered.

3. Stock Dividend: In year 2007 stock dividend offered by the bank was
35% which with decreasing trend in year 2008 is 25%. A negative
change of 28.57% is faced.

4. Market Value at Year End: Market value per share in year 2007 was Rs.
99.75 which with decline in year 2008 valued at Rs. 14.57. The
stockholders have to suffer a lot due to a significant decrease of 85.39%
in a year.

Overall change in profit is negative while on the other hand investors and
depositors didn’t lose their trust upon the bank and an increasing trend is
recorded on both shareholders funds and customers deposits. Where earnings
per share, market value per share and dividends showed a huge declining trend
due to global financial crises arose in the mid of year 2007 to up to the date.

60
SWOT ANALYSIS

61
 OBSERVATIONS

During my internship tenor what I observed in Askari Bank Limited is elaborated

in the following SWOT Analysis:

S TRENGTHS:

Following are the strengths of Askari Bank Ltd.

1. Placement: The branch in the commercial area is known to be a good

place so it is the strength of the bank that it is placed at the main market
which is an accessible to all the near and far areas.

2. Branch Interiors: The branch has a good repute because its interiors are
very good and latest and they change their interior time to time to attract
the customers. They are also very expensive and the décor is also very
attractive which differentiate the branch to other banks and branches.

3. Employees Commitment: Employees at Askari Bank Ltd are very

cooperative and committed to their work. They remain in the office until
the work is not finished. They live there like a family and also treat the
customers as the family members.

4. Environment: The environment is very good there, all the staff members
are very close to each others and very jolly and they mix up with the
customers also very easily so that customers feel like no strange way.

5. Pakistani Bank: It has an advantage because it is one of the best

Pakistani Banks and its working for last 18 years very successfully for
the benefit of people.

62
W EEKNESSES:

Following are the weaknesses of the Askari Bank Ltd.

1. Employees Conflict: The main problem in the branch was the conflict
between the employees because there are less departments and
everyone know each others work so this thing create some kind of
interference and problem between them.

2. Late upward Decision: The decision that manager or the officers take
are very late because they can’t take decisions without the permission of
the head quarter.

3. Strict Rules and Procedure: The rules and regulation are very strict;
even one mistake in the documents or in the services is dealt very
strictly. Sometimes there can be an emergency with the customer but
they follow the rules and don’t let others to cross or break the rules.

4. Less Advertisement: The other weakness is that Askari Bank Ltd has less
advertisement, people know about Askari Bank Ltd only in the branches
but not in the TV channels or the other media. So people got to know
about their packages and new schemes very late.

O
PPURTUNITIES:

Following are the opportunities for Askari Bank

1. Training And development Programs: The bank should give their

employees the training programs to know about the latest technology
and the services, so that they can provide the better services.

63
2. Fresh Graduates: Askari Bank Ltd should hire the fresh graduates
because they can bring the latest and new services and ideas with
enthusiasm.

T
HREATS:

Following are the threats to the Askari Bank Ltd:

1. Entrance Of International Banks: Now a days there are many banks

entering in the market and the competition is increasing day by day, so it
is becoming difficult to manage the customers and to retain the
customers loyalty because the competitors are also providing the better
and new services and facilities.

2. Low Profit Rate: If the bank increased the rates customers will switch to
the other and banks and if decreases its rates then it would have suffer
profits.

3. Competitors: Competition is increasing day by day and the main

competitors are Alfalah Bank, Allied Bank, United Bank, and Muslim
Commercial Bank.

64
MARKETING AND PROMOTION

65
 MARKETING AND PROMOTION

Askari Bank Ltd promotes its products through various Medias, Different ads are
made to promote new products and to introduce different packages offered on
different occasions. Moreover billboards on public places are upright; in
newspaper different printed ads were published from time to time and the same
case with the electronic media. Ads are given on highly favorite and famous
channels of the media to attract the customers through out the world.

Askari bank limited has many ways to promote its products and services.
Some of the common promotional strategies are:

 Advertisement
 Sales Promotion
 Public Relation
 Direct Marketing

These promotional strategies are discussed one by one:

 ADVERTISEMENT:

Advertisement is used by the bank to build up a long term image and to

active quick sales of the products and services it offers and the media used
includes both:

 Print Media
 Electronic Media

The Bank follows the policy of aggressive marketing of its products in

order to convert the potential customer into the loyal customers. Advertisement

66
is the one which is the most effective as it efficiently reaches geographically
dispersed customers. The management takes all possible steps to keep its
customers in touch with the development taking place in & outside the branches
in the form of new products, innovative services offering.

The bank resorts to various means of promotion of its products and services
such as:

 Website
 Advertorials (Print Adds)
 Television
 Newspaper
 Magazines
 Billboards & Hoardings

 SALES PROMOTION:

Sales promotion tools showing the incentive and benefits for the customers
are also used by the bank on timely basis. The schemes such as:

 Free services such as phone banking, e-statements etc.

 Discount offered at the qualified outlets for being a part of ACBL.
 Special services offered at shell petrol pumps (outlet boxes to pay off
the utilities bills of ACBL’s customers)

 PUBLIC RELATIONS:

ACBL believes in maintaining good public relations and positive publicity as it

helps in reaching out for the prospects that prefer to avoid sales people and
advertisement.

67
  Publication, events, news, speeches and public-services are from
time to time.

 Sponsorship such as organizing a walk in support of pure and clean

environment is the tactics which help in building up strong public
image.

 DIRECT MARKETING:

 Promotional letters mailed to potential and existing customers about

the bank’s product.
 Telemarketing to potential and existing customers.
 Internet Banking

Beside this the marketing Department of the bank performs a vital job. It
dispatches its sales representatives in the market to promote itself and introduce
a new clientage to the bank. These sales representatives are given targets to
meet over a specified time period. An added advantage of this process is that the
bank gets direct feed Back from its customers as well since these sales personnel
also contact existing customers.

Apart from the sales representatives, the bank’s internee also

plays a major role in promoting the bank’s ability. The internees placed in the
direct Sale department of the bank are kept busy in conducting surveys and
preparing their Research Report on the basis of their integrated survey results.
They visit major commercial area across the city getting the views of the people
regarding the products it is launching, the services it is providing, the facilities it
is offering and the contribution it is paying in the uplift of the economy and
common man as well. Not only they get feedback about its current performance

68
but also what the general public aspires to be in the future. The information such
as:

 The product lacking in the current product mix offered by the bank.
 The updating required in the existing product/ services.
 The defect found in the services and how to eliminate them.
 The standard of customers dealing and so on.

These results are generated through these surveys which help in further
generation, modification and elimination of a product or services. Thus by
following these methods, the Bank is able to keep the public as well as its
customers informed about its new innovations and products offering. Since the
bank targets the upper middle and the rich class so it has to offer such products,
which are useful to them.

69
RECOMMENDATIONS FOR
IMPROVMENT

70
 RECOMMENDATIONS

ACBL is a very good organization on every point of view, i.e. Public dealing and
also with the business point of view. Here the customers do not feel any difficulty
dealing with the bank due to the hard working staff. In spite of this effective and
efficiency I have some suggestions, which can add some input:

CENTRALIZATION:

ACBL is a totally Centralized bank. In order to improve the working condition of

this branch, modern techniques of decentralization must be adopted. Some of the
authority must be delegated to the lower management and the staff, up to some
extend. This will improve the confidence of the employees and their working
performance.

NEED FOR BETTER TRAINING:

It has been noticed that the training program of ACBL is not proper. Special
marketing training should be given to the employees who concerned with
marketing. They should learn the new methods for motivating customers. The
training program of the bank should include scientific techniques to improve the
decision making. Both the specialized and generalized training should be
provided to the fresh as well as the non- job workers to maintain the high
standard of the services.

SOCIALIZING:

The most important recommendation is that the branch should have more of
social parties and events where the employers are invited so that this becomes a
source motivation. Because working the entire time makes a man socially dull.

71
CO-EMPLOYEES:

It is the nature of the human beings that they get affiliation with the persons with
whom they work. If your co-employees are good they will give you a good
environment to work, and feel happy while doing the job on in other words you
will do your work with more devotion. But I see in ACBL that very few employees
have good friendly relations otherwise, most of them are pulling the leg of
others. Here exists a lot of professional jealousy.

CONTRACTUAL HIRING:

ACBL follows the policy of hiring on contractual basis. Generally all the
employees at lower ranks are appointed on one year contract and these
contracts are renewable at the expiry of the contractual period. Which means the
banks can retain the same employee without giving him the status of a
permanent employee and thus benefiting from the lower salary package. This is
what the bank is actually following and I have seen the employees working there
for more than 2 years but still enjoying the benefits of contractual hiring only.
This is the area where the job dissatisfactory element creeps into the employees.

LESS JOB SECURITY:

Based on my observation one reason for the less job satisfaction was that there
was no job security on account of recruitment on contractual basis. The
employees are laid off at any time on short notice.

SALARY PACKAGE:

Contractual recruitment is also discouraging the employees as they don’t enjoy

the benefits of the permanent employees (such as high salary, allowances,
perquisites, facilities etc).

72
STRICT PERFORMANCE EVALUATION CRITERIA:

Another reason seems to be the very strict procedure followed in performance

evaluation, allocation of grades and promotions. The manager is very mean in
appreciating, encouraging and upgrading the employees. It is considered to a
tremendous achievement to achieve a grade point of “2 and above” out of total
grade score of “4”. Despite continuous and breath taking efforts the employees
fail to get a good evaluation of their performance.

JOB TIMINGS:

Employees at ACBL have a long working day which does start at 9:00 a.m. but
there is not end time limit to it. They stay at bank late at night depending on the
work load and nature of the job. This element also exists in all other jobs, but
they paid accordingly. The bank’s employees have the feeling that they are paid
less for more work done by them.

TRANSPORT FACILITY:

No transportation facilities have been provided by the bank and the employees
face problems in getting to the bank. Those employees who have not their
conveyance face problem in local transport.

STRICT ACTION AGAINST MISTAKES:

Finally strict actions are taken against even small mistakes. There is a saying by
CROTHE:
“Correction does well but encouragements do more”

The most important factor in the success of an organization is its employees. It’s
the employees who make up an organization. So its very important for the

73
organization management to raise the moral and the job satisfaction of its
employees, otherwise its financial success may prove to be short lived.

74
CONCLUSION

75
 CONCLUSION

I had wonderful experience of doing internship in ASKARI BANK LTD. I got much
information regarding practical work of bank. ACBL is one of the good banks of
Pakistan. It has a largest network of branches and ATM’s in the country. It is
earning very well just because of its good services and low charges.

Askari Bank Ltd maintains its position as Pakistan's premier bank determined to
set higher standards of achievements. Its most of branches are online so they
have to do little work manually which cause of less error and in case of any
accident they didn’t lose their whole records because they keep back up copies
available with them.

Its products and services are very authentic and people trust on them. Customer
can deposit amount in different accounts either open a local currency account or
foreign currency accounts. Advancing loans is one of the major functions of every
bank. So Askari Bank Ltd is providing loans of different kinds to people at a
reasonable rate of interest.

They provide facilities to rapid transfer money from one place to another
through demand draft, pay orders, mail transfer and through telegraphic
transfer.

They also provide clearing facility for their customers, they collect and pay on
behalf of customers. Due to facility of ATM customer can withdraw the money at
any time by using ATM machine.

Due to its better performance towards contributing the economy and serve the
nation it is rated Long Term AA and Short Term A1+ by PACRA.

76
I have provided the problems faced by the organization through my observation
in bank. I have also provided some recommendations to improve the
deficiencies. I have a very well experience to work here learn a lot of things
regarding banking operations. Staff is very diligent, honest and devoted towards
their work. They all guide me for better work.

77
 REFRENCES

www.askaribank.com.pk
www.wikipedia.com
www.google.com

“Principles of Managerial Finance”

By: “Lawrence J. Gitmann”

78
ANNEXURE AMD DOCUMENTS

79