Bank Alfalah Limited

Bank Alfalah Limited
Al-Quran
OH! PROPHET SAY! IF OCEANS ARE CONVERTED INTO INK TO WRITE QUALITIES OF MY CREATOR, THEN WHOLE OCEANS WOULD CONSUME IN WRITING BEFORE IS QUALITIES COME TO AN END. AND EVEN IF WE PRODUCE THE LIKE OF INK WOULD INSUFFICIENT.
Hadith
ALLAH DOES NOT LOOK AT YOUR FRAMS AND POSSESIONS BUT HE LOOKS YOUR HEATS AND DEEDS.
(Muslims)
Preface
The requirement of education by training for future MBA is met by professional program by involving a combination of theoretical education and practical training. It equips student with skill, knowledge and professional values, sufficient for performing as qualified professional and to continue to grow in their career through an unending process of learning to learn. Our department has therefore been seized with the need f or developing training regulation, which not only cater for the above stated requirements but would also help in providing experience to trainees to meet the future needs of the market place. In this concern I was given an opportunity to having a six weeks training in todays well reputed ALFALAH BANK. During my whole time I was visited through different cells of the bank and was thoroughly briefed about the procedure and working by cordial senior staff of there. My report is all based on what I have learnt there. I hope that my report will given you good overlook of all the banking related matters.
Tariq Mehmood
Acknowledgement
All praises are for Allah almighty that has bestowed upon human being the crown of creation and has endowed him with knowledge and wisdom. After Allah, is the last prophet Mohammed (SAW) who brought for us revelation and unlimited knowledge and civilized the barbarian human being.
Although this report base only my name but numerous people were very important to the development of this report without the support of them I could never successfully completed the internship as well as the report.
I am highly thanking full to the staff member of bank Alfalah limited. Who really cooperated with me and provide me their complete guidance. As banks are very much sensitive about their secrecy, even then after taking an understanding, they let me handle their delicate operations.
My special thanks to Mr. Tahir Manzoor (Branch manager), MR. Ahmed Adeel (Operation Manager), Mr. Irfan Siddique (Operation Officer) and Muhammad Naveed Khalid (Account Opening Officer).
My special thanks to Sir Incharge of internship and placement who arranged internship and provided me with his kind guidance at each and every step whenever I felt difficulty and he made me capable of making financial analysis of financial statement of this organization.
Tariq Mehmood
Table of content
S. No Content Page No.
History of banking
09
Introduction of BAL
12
Accounts Opening Department
24
Remittances Department
41
IT Department
56
Accounts Department
63
Credit Department
77
Financial Analysis
117
SWOT Analysis
121
10
Suggestion & recommendation
113
Executive summary
According to our internship program, I completed my nine weeks internship at BAL Bahawal Nagar Branch Bahawal Nagar. The Bank is currently operating through 210 branches in 30 cities, with the registered office at B.A.Building, I.I.Chundrigar, Karachi. The bank ALFALAH is service oriented organization, which perform numerous functions. In order to facilitate the working, there are different department. Very skilled and experienced people are working in bank. Bank ALFALAH comprises three main departments which are General Domestic Banking, Advances, and foreign exchange. The function of general banking is as under.
1. Account opening Department
2. Remittance Department
3. IT Department
4. Accounts Department
5. Credit Department
Deposit department provides various type of accounts to customer. All parties are getting benefit from them whether individual, sole proprietorship, partnership, private or public limited companies. Remittance department deals with DD/TT/MT Pay order. Advances or Credit department provide fund base and non fund base facilities to its clients An account department is actually a concluding department, which summarizes and consolidate all the accounts of different department.
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Bank is derived form Bancus or Banque it is Italian word. History of Banking is traced to 2000 B.C in Greece. Priests and goldsmiths acted as financial agents by keeping money and valuables of people in temples in strong safes. Thus the first stage in the development of modern banking thus was accepting of deposits of cash from those who had surplus money with them.
Banking in Pakistan:
At the time of independence there were practically no industries and resources so it was very difficult of Pakistan to run its own banking system immediately. There were 487 offices of scheduled banks in the territories now constituting Pakistan. Therefore in accordance with the provision of India independence Act of 1947, and expert committee was appointed to study the issue. The committee recommended that the Reserve bank of India should continue to function in Pakistan until 30th September 1948. It was also stipulated that Pakistan would take over the management of public debt and exchange control Reserve bank of India on 1st April 1948. Then Indian notes would continue to be legal ender in Pakistan till 30th September1948. By 30th June 1948, the number of offices of scheduled banks in Pakistan decline from 487 to 195. In order to establish a full-fledged control bank the Governor General of Pakistan Quaid-E-Azam Muhammad Ali Jinnah, inaugurated the state bank of Pakistan on July1st, 1948.
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Bank Alfalah Limited was incorporate on June 21st, 1997 as a public limited company under the Companies Ordinance 1984. Its banking
operations commenced from November 1st ,1997. The bank is engaged in commercial banking and related services as defined in the Banking companies ordinance, 1962. The Bank is currently operating through 45
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branches in 21 cities, with the registered office at B.A.Building, I.I.Chundrigar, Karachi. Since its inception, as the new identity of H.C.E.B after the privatization in 1997, the management of the bank has implemented strategies and policies to carve a distinct position for the bank in the market place. Strengthened with the banking of the Abu Dhabi Group and driven by the strategic goals set out by its board of management, the Bank
has invested in revolutionary technology to have an extensive range of products and services. This facilitates our commitment to a culture of innovation and seeks out synergies with clients and service providers to ensure uninterrupted services to its customers. We perceive the requirements of our customers and match them with quality products and service solutions. During the past five years, we have emerged as one of the foremost financial institution in the region endeavoring to meet the needs of tomorrow today.
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H.E. Sheikh Hamdan Bin Mubarak Al Nahayan
Mr. Mohammad Saleem Akhtar Chief Executive Officer
Mr. Abdulla Khalil Al Mutawa
Mr.Khalid Mana Saeed Al Otaiba
Mr. Abdulla hawalileel AL-Mansoor
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Mr. Ikram Ul-Majeed Sehgal
Mr. Nadeem Iqbal Sheikh
Customer Relationship:
Before we discover we must explore Knowing customer and their needs is the key for the success of a bank , Alfalah client relationship managers are well equipped and well trained to provide most efficient and personalized service to each and every customer. Alfalah products are as diverse as the market segment. Alfalah has structured and syndicated financing arrangements , working capital , replacement facilities , financing of international trade , consumer credit , small business loans unparalleled investment products for the individual saver.
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Dedicated Professionals:
Unusual efforts on the part of the employees who are apparently ordinary workers is one of the key indicates of the superior enterprise Staff is the most valuable asset of nay organization. The human resource philosophy at Alfalah bank focus on multi-talent hiring, professional grooming , requisite training and meritocracy based reward system. Staff welfare has been a priority. Employee productivity enhancement is organized through in-house and external training programs. Bank continues to offer opportunity for people to develop their knowledge, skills and personalities, thus ensuring greater self-fulfillment and progression in the organization. In short bank Alfalah team comprise of dedicated professionals equipped with a diverse array of skills and vast experience. The management concentrate its energies on making informed economic decisions, translating it into greater returns for our investors and customer. The prudent attitude has created a synergistic organizational structure leading to improvements in profitability and a sustainable competitive advantage for the bank.
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Training & Development:
Bank Alfalah is committed to the personal welfare and professional development of all our team members. Proper training of human resource is essential, not only for the more productive and satisfied work force but for also homogenous corporate culture. The bank continuous to follow its strategy of hiring batches of young and energetic Management Trainees who are sent to our Training and Development Center for training in all areas of banking. Our Training
and Development Center is a state of the art facility with an impressive faculty.
Technological innovation:
Modern science is not an option, it is an obligation
Technology is rapidly changing the way we think, act and do business. Is has played pivotal role in enhancing customer expectation, particularly with respect to speed and quality of service. Alfalah bank enjoys a strategic competitive advantage overall domestic players by virtue of its leadership in technological innovation.
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Phone banking service and Internet banking facility allows customer to enjoy routine banking services from anywhere in the world. 365 days a year, 24 hours a day.
Ethical values:
Professionalism without integrity is like a book without pages Because the right may not always be obvious, we must be guided in our every action by set of well-defined values, governing our decision. Alfalah bank understands that its commitment to satisfy customer needs must be fulfilled within in a professional and ethical framework. The following primary core values, providing the guiding principles for the corporate behavior.
Commitment
Integrity
Fairness
Teamwork
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Product portfolio:
Not only comprehensive but also customizable to match the needs and preferences of our customers. These strategic characteristics of our portfolio have helped us to face challenging economic conditions. Our product lineup continues to fulfill and satisfy the banking requirements of not just the conventional consumer, but the demanding financial needs of the corporate sector as well. The lineup includes.
Car financing
Rupee Travelers Cheques
Anmol Saving Certificates
MoneyGram Remittance Services
Monthly Income Plan
Credit Card
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ATMs
Home Loans
Online Banking
To develop & deliver the most innovative products, manage customer experience, deliver quality service that contribute the brand strength, establish a competitive advantage and enhances profitability, thus providing value to the stakeholder of the bank.
To be the premier organizations operating locally & internationally that provides the complete range of financial services to all segment under one roof.
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Excellence in service Quality performance Product innovation
Chief Executive Officer
Executive In charge
Credit Card
Credit
Audit
Internation al Banking
Marketing
Finance
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Branch Setup
Assistant
Credit Mktg
Credit Admin
Operations
Consumer Finance
Business Develop
Help Desk
Trade Finance Import Export
Accounts
Consumer Banking
IT
CROS
Bkg/Ops/ Cust serv
Cash
Clearing/ Collection
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Peons
Guards
Driver
Others
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TYPES OF ACCOUNT OPENING FORM

1) Personal account opening form
2) Business account opening form 1) Personal Account Opening
OPENING OF AN INDIVIDUAL ACCOUNT Following are the requirements for opening of an individual account. 1. 2. A photocopy of National Identity card. Filled Account Opening Form 3. Photographs if the person is not able to sign. OPENING OF JOINT ACCOUNT For this account in addition to above said documents national ID card f all the account opening parties is required. It should be clearly mentioned that one persons signatures will be enough to get it honored the check or there should be signatures of all the parties.
2)
Business Account Opening
OPENING OF A PARTNERSHIP ACCOUNT

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Along with the other document, partnership deed is also required. A partnership deed is a document that shows the nature of the business that will be carried out by the partners, number of the partners, their share. Who will run the business, what will be the profit and loss sharing ratio, what will be the initial investment of each partner, who will be the limited partner and who will maintain the account with the bank. According to bank point of view the most important thing is the persons name who will maintain the account with bank. National identity card of the person who will maintain the account is required. OPENING OF AN ACCOUNT OF A SOLE PROPRIETORSHIP ACCOUNT Along with the other documents, sole proprietorship declaration is also must. In this declaration the proprietor of the concern will declare that he is the sole proprietor of the concern.
OPENING OF AN ACCOUNT OF A PRIVATE LTD. COMPANY If someone is interested in opening an account of a private limited company then in addition to above documents following documents are required. RESOLUTION
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This is a document that states that the meeting of the directors of the firm has taken place on the place mentioned and these person have been selected to open and operate the bank account and they can sign all the negotiable instruments on the behalf of the company. The specimen signatures of the persons are attached. This document is very important with bank point of view. With the help of this document the bank comes to know that who will operate the account with the bank.
CERTIFICATE OF INCORPORATION
This is a certificate that shows that the company is registered according to companies act and the nature of the business, which will be carried out by the company. The number of shares by which the company is limited is also mentioned on this document.
LIST OF DIRECTORS.
This list contains the names of the directors of the company MEMORANDUM AND ARTICLES OF ASSOCIATION
This contain the full name of the company, the location of the registered office, the objectives of the company, information about the liability of the member that whether it will be limited or unlimited, the
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capital of the company, who will be the director and how he will be selected and what will be the duties and powers of the director. OPENING OF AN ACCOUNT OF A CLUB OR ASSOCIATION For opening the account of a club or association articles & memorandum of that club or association is required. List of directors is also attached with the account opening form and the identity cards of the directors are also levied with it.
Specimen Signature Card

This card contains account number, title of the account and the specimen signatures of the account holder. When this form is submitted in bank the bank officer admits the signatures of the applicant and keeps this specimen card in record.
Cheque Requisition Slip

This is a request made by the client to the bank to issue him a checkbook containing number of leaves mentioned. When this slip is submitted in bank, the bank as per instruction the account of the person is debited or the client pays the amount in cash.If the account is to be debited then party debit voucher is prepared which isactuallyintimation to the party that her account has been debited. But if the amount paid is in
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cash, then cash is debited which is actually cashiers stamp. Regardless whether the account is debited or cash is debited the account heads of Central Excise duty and Sales Tax are credited.
Custody of cheque books

The cheque books are most sensitive item of the security stationery and due care should be exercised in their issue process as well as
management of their stock. Custody of cheque books:i) Stock of cheque books must be kept in joint custody of Manager / Accountant or Second Officer.
ii)
Stock of the cheque books must be placed in the Fire Proof Safe.
Types of account
i) Current Account
ii)
PLS Savings
iii)
Royal Profit
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iv)
Saving Account
v)
Royal Patriot
CURRENT ACCOUNT
i) That is cheapest account. Minimum limit of money that require for that account is 10,000.No profit is given on that account.
ii)
PLS SAVING/ TERM DEPOSIT

In PLS amount is fix for some time period and according to that time period the profit is given. Minimum range of amount that require for pls saving is 25000 and above. In Pakistan, PLS account was introduced in January 1982.
Deposit PLS Saving Deposit (on balance upto RS.24,999 /=). PLS 7-29 Days Notice Deposit PLS 30 Days Notice Deposit PLS Term Deposit 1 Month PLS Term Deposit 3 Months PLS Term Deposit 6 Months PLS Term Deposit 1 Year PLS Term Deposit 2 Years PLS Term Deposit 3 Years
Rate (P.A)% 2.00 2:00 2:00 2:00 2.25 2.50 2.75 6.00 6.50
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PLS Term Deposit 4 Years PLS Term Deposit 5 Years PLS Saving Deposit On Rs.25,000 /=) and above
7.00 7.50 2.00
iii)
ROYAL PROFIT
Minimum limit of amount is 50,000.

Deposit From 50,000 to 999,999 From 1,000,000 to 9,999,999 From 10,000,000 to 49,999,999 From 50,000,000 to 149,999,999 From 150,000,000 & Above Rate (P.A)% 2.75 3.00 3.50 4.00 Contact us
iv)
SAVING ACCOUNT
It is expensive than current account. Minimum limit for this account is 5000 and 2%
Profit is given after six month.
v)
Tenure 1 Month 3 Month 6 Month 1 Year
ROYAL PATRIOT
25000-999,999 2.00 2.25 2.50 2.75 1,000,000-4,999,999 2.10 2.35 2.60 2.85 5,000,000 & Above 2.20 2.45 2.70 2.95 32
2 Year
5.50
5.58
5.95
Phases In Personal Account Opening
For coming customer who wants to open the account will pass through different phases of account opening. 1) currency of account There are five types of currencies in which customer can open an account. He will select only one currency. Currency like PKR, USD, GBP, DM, JPY
2) Types of account
i)
Current Account
ii)
PLS Savings
iii)
Royal Profit
iv)
Saving Account
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v)
Royal Patriot
3) Title of account
It includes the name of the person who wants to open the account. Name must be Written in block letters.
3) Address
It includes the address of the person who is going to open the account.
5) Personal Account There are two types of personal account. i) ii) Individual Joint
i)
Individual
The individual account, which is opened only for an individual.
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ii)
Joint
Theyre the account of two or more persons who neither partner nor trustee. When such an account is opened the banker obtains clear directions to whether one or more of them shall operate upon the account. In the absence of such directions the bank allows the operations under the signature of all the joint account holders. Both individual and joint provide their personal information like i) ii) Name Father name
iii)
Occupation
iv)
Nationality
v)
Country of residence
vi)
Telephone number
vii)
N.I.C / Passport number
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viii)
Date and Place of issue
6) Nominee / Next of Kin That portion is important in case of death or any incident of account holder. In order to make money more secure the person who wants to open the account he tell the name of the person who will owner of his or her money in case of any incident. After death of that person the bank will contact with that nominee and tell them that now you are the owner of the money.If account holder leaves blank that portion than after the death the money will become ownership of bank. 7) Zakat Deduction 8) Details of other bank account 9) Introducer (Introduction of new accounts As per existing procedure, an introduction is obtained from a customer of the branch/bank in the account opening form. The signature of introducer is also verified/ authenticated from banks record.
Further steps to be taken and additional inquires are to be made as under:36
i. Introduction preferably be obtained in person to establish the authenticity of introduction. ii. Account of introducer is checked to ensure good conduct in operation. The introducer should be a well-known person to the bank preferably Banks customer.
iii. A brief enquiry be made to establish relation, business or otherwise, between introducer and new customer.
iv. Original NIC along with photocopy of the same be obtained and original be returned after authentication/ certification of photocopy. However, extensive use of NIC be applied wherever it is applicable. v. Other official papers document such as passport, Driving license and Service identity card bearing signature and photograph of applicant for an account are to be checked, wherever possible. vi. Name, address, signature and other particulars mentioned in Account Opening Form be tailed with that of appearing in any of the above documents. vii. Current account is opened on proper introduction preferably by the Current account holder.
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viii. Managers and other holders holding power of Attorney/ IBS /AS May introduce accounts only for those who are personally known to them and whose credentials are absolutely clean.
10) 11)
Applicant signature Initial Deposit
Initial deposit must be in cash. Cheque may only be accepted, as part of Initial deposit in the case of undoubted parties and on the personal responsibility of Manager. In all such cases, the cheque when tendered if uncrossed should be crossed by the customer before being lodged for collection. Cheque book should only be issued after the proceeds of crossed cheque have been actually realized.
2) Phases in Business Account

1) Currency of Account
2) Type of Account
3) Title of Account
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4) Business Address
5) Name
6) Father Name/Husband Name
7) Designation
8) Nationality
9) Country of Residence
10)
Contact Number
11) 12)
NIC number Type of Organization
i) Sole proprietorship
ii) Partnership
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iii) Limited Companies
iv) Club/society Information of types of organization is mentioned above in business account opening point.
Closing of account
It is also the responsibility of account opening department, for this purpose the account holder for closing of account purpose gives an application. Then the department closes the accounts and gives all the deposit amount to the account holder the bank takes the chequebook from the related person and extracts him from the books.
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Transferring of funds from person to person, and from place to place, constitute the concept of a remittance. Remittance is very important service provided by banks to customer as well as non-customer. It is not a free service hence is a continuous source of income for the bank.
PARTIES TO A REMITTANCE
1) REMITTER
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One who make a remittance. He comes to the issuing or originating branch, ask for a remittance to be made, and deposits the money to be remitted. The bank charges him for the remittance. He may or not be the banks customer. 2) REMITEE Also sometimes called the beneficiary, or the payee. The person to whom the remittance is made. The one who receives the payment. 3) ISSUING BANK The bank that effect the remittances, through the Demand Drafts, Telegraphic Transfer, or Mail Transfer. 4) PAYING BANK Also known as the drawee branch. The branch on whom the instrument is drawn. It has to make the payment. (usually located in a different city or country)
MODES OF TRANSFERING FUNDS IN REMITTANCES
1) Demand Draft
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2) Telegraphic transfer
3) Mail Transfer
4) Pay Orders
6)Pay Slip
6) Rupee Traveler Cheque
1) DEMAN DRAFT
Demand draft is a written order , drawn by one branch of a bank upon another branch of the same bank , or upon another bank under special arrangements to pay a certain sum of money to or to the order of a specified person. Demand draft is a negotiable instrument.
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Demand draft is neither issued payable to bearer nor drawn on branches situated within the same city. It is to be insured that the purchaser of Demand Draft is able to at least sign his name. Thumb impression is not to be accepted on DD. A person unable to sign and not having an account may be advised to apply for DD through a literate person to sign on his behalf . To avoid complications DD are not to be issued to Minors. The followings are the parties to a Draft:
Purchases: Is a person, firm, company or local authority. Issuing or Drawing Branch:
Which issues a draft on another
branch.
Drawee Branch: Is one on which a draft is drawn.
Payee:
Is a person named in the Demand Draft to whom or to
whose order the money is directed to be paid.
PROCEDURE FOR ISSUANCE OF DRAFTS

i) An application on printed form is obtain for issue of demand draft.
It should be properly filled in and signed by the purchaser.
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iii)
Before issuing the demand draft it must be seen that the cheque is in order and sufficient amount is available in the account of the drawer. If the manager is satisfied with the creditability of the customer , he may issue a demand draft on application and subsequently must obtain a cheque. Application form should be used as a credit
voucher , where as the cheque is to be as a debit voucher. The printed number of the cheque in such cases should be reported on the application form of the customer.
Entry of DD
Entry in BAL bwp branch
Yellow slip DD Payable credit H Off debit
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Entry in H off Karachi branch H off DD

----
debit credit
---------------------------------------------------------------------------------------------------
Issuance Pink Slip

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H off DD
credit debit
------------------------------------------------------------------------------------------------------
Entry when customer will draw amount from DD DD payable debit
Customer
credit
-----------------------------------------------------------------------------------------------------------
Precautions For Issuance Of Drafts:
i) Scrutiny Of application Form:
ii) Rate of commission / charges:
i)
Scrutiny Of application Form:
There should be our banks branch at the place where payment is desired to be made. Full name of the payee should be mentioned.
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Amount in words and figure should not differ. Purchasers name address and telephone numbers are complete. ii) Rate of commission / charges Commission and other charges should be recovered at the rates mentioned in the banks schedule of charges, as advised from time to time, withholding tax will also be recovered wherever applicable.
2) TELEGRAPHIC TRANSFER
Transfer of funds from one branch to another branch of the same bank or upon other bank under special arrangements for the payment to the beneficiary through Telegram / Telex / Fax is called a Telegraphic Transfer (TT). Telegraphic Transfer is not negotiable. Telegraphic Transfer of funds to a branch situated with in same city should not be effected. Remittance can be made for credit of the account of the payee / beneficiary if maintaining account with the drawee branch or
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may be paid in cash.If the customer wants to send amount through TT then he will provide information of the beneficiary like id card number, name. Then bank will make a credit advice and send it to branch on which it should be drawn .Now the beneficiary will go to that branch and show his ID card number and other information and bank will make TTR and customer will get that amount from cash department.
The followings are the parties to a TT i) Applicant: A person, firm, company, or local authority etc who desire to remit funds from one branch to another branch. ii) Remitting or drawing branch: Which remits the funds on another branch. iii) Drawee branch: On which TT is issued. The person named in the TT whom the
iv) Beneficiary / payee: money is payable.
Precautions For Issuance Of TT Full name of payee / beneficiary or account number should be mentioned in the application form along with his address. Instruction regarding mode of payment should be obtained i.e whether the amount of TT is credited to the payees account or
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beneficiary should be advised to receive the amount of the TT from a drawee branch either in cash on proper identification. Special Request For Enhancement of cheque Because there is no real time banking so cheque is scanned and fax that the Head Office.
Entry in Head Off KRC branch
Cheque
debit
H. Off
credit
-----------------------------------------------------------------------------------
If cheque is going in KRC main branch then they will make an IBC and again Send it to BAL Bahawalpur.
Entry of BAL bwp
H. Off
debit
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Customer
credit
----------------------------------------------------------------------------------
3) MAIL TRANSFER
Transfer of funds from one branch to another branch of the same bank within or outside the city or upon other bank under special arrangement for the payment to the beneficiary through Mail/ Courier services is called MAIL TRANSFER.
Mail transfer is not negotiable.
The funds remitted by Mail transfer are not payable to bearer.
Like TT , funds can be remitted by MT for the credit of the payees Account Or the payee / beneficiary can be advised to
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receive the amount from the drawee branch either on cash on proper identification
4) PAY ORDER
Payment order is meant for banks own payments but in practice these are also issued to our customer for making payments. A pay order is written authorization for payment, made in a receipt form issued and payable by the bank, to the person named and addressed therein on his giving a proper discharge thereon. It is issued by and drawn upon and payable by the same branch of the bank. It is neither transferable nor negotiable and as such it is payable to the payee named therein.
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Pay order cannot be issued to a minor. Sometime bank dont want to give its deposits to customer. So in that case pay order is given to that customer and he can use it for making payments. When customer wants to cash the pay order then the amount of the pay order will be debited from the bank. If pay order submit to other bank like mcb, abl then the process of claring will be adopt. Entry of issuance pay order Customer debit
Pay order credit --------------------------------------------------------------------------------
Entry when customer get amount from pay order Pay order debit
Customer credit -------------------------------------------------------------------------------Following are the parties to a pay order: i) purchaser: Is a person , firm , company or local authority ii) issuing / paying branch: which issues / pays on presentation.
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iii) payee:
is a person named therein.
5) PAY SLIP
Pay slip is for payment of branch expenses. Entry of pay slip Expense A/C debit Pay slip credit
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6) RUPEE TAVELER CHEQUE
BAL always provide to its customers different type of services. Which are safe and quality services. RTC is very popular among the
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people of the country. The bank provides RTC in the following categories.
1,000 5,000 10,000
Purchases of RTC
The person who wants to purchase RTC is required to fill a form. The form contains name, address, amount or denomination and other necessary information. The purchaser deposits the amount in the bank and gets a voucher from the cashier. And then RTC is providing to the purchaser. Before handing over to the purchaser, signature is taken from him on the RTC and on the copy of form. BAL rupee travelers Cheques are acceptable in all the branches of BAL in Pakistan.
Features
Following are some features of RTC. It is acceptable in all the branches of BAL in Pakistan. In case of lost the purchaser inform to BAL in 24 hours. Then there is no way of loss of purchaser and his amount is safe.
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Available easily in all the branches of BAL Acceptable by major businesses of Pakistan.
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General Trouble Shouting Creating A Client Day Start / Day End SS Card Scanning Creating And Storing Daily Backup Maintenance Of System
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General Trouble Shouting

In general trouble shouting we mainly deal in day to day problems that appear all at once i.e. any problem with printer or with any system on network or any thing like this which could create trouble and you have to resolve that problem applying best of your efforts in minimum time is part of trouble shouting.
Creating A Client
For creating or making a new system and client we have to install different software required to make a client and then install most importantly LAN card driver in it so that it may detect the whole network. Whole that procedure is known as client making.
Day Start And Day End Procedure

At the start of every working day before making any transaction we have to follow few step that are known as day start step or procedure , after that
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you are allowed by software to make any transaction are finished we again follow few step that is known as day end procedure.
SS Card Scanning
In this procedure first of all scan all the SS card and through the bank software we upload them on server.
Creating And Storing Of Daily Backup

After following the day end procedure the changes which are made final in system database are stored as backup on system and this backup is kept in three to four different systems.
Backup Of Data 1) Before End Of The Day Backup 2) After End Of The Day Backup
That backup is store on different places:
a) Hard Disk
b) CD
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c) CD-R
d) CD-RW
e) On Work Station
Maintenance Of System
It mean general maintenance i.e. time to time up gradation
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Voucher Sorting Rectification of vouchers (Adjustment of back date wrongly posted entries) Preparation of cash payment voucher Preparation of profit and loss sheet (on daily basis) Monthly budgeting Payment of outstanding invoices of H/O
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Advances department plays a vital role in the functions of a bank. In BAL its sharing ration in profit is high. The main source of Advances department is mark up. Their Advances department is working under the trustworthy, enthusiastic and committed a staff. The efforts of the staff
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are providing good services to their customers and getting a good amount for contributing the overall profit of BAL.The BAL provides loans to customers. These loans are sanctioned by the head office. There are different types of loans that are provided to customers. The types are as under.
Current Finance Term Finance FATR FIM FAPC I & II FAFB
Current Finance
The bank provides Current Finance for short period less than one year. The customers Pay markup in current finance on monthly basis. On the expire date of limit he will just pay principal amount.
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Term Finance
Customer utilized the sanction limit or not the markup will be charged on whole amount. Customer can withdraw whole amount at once.
FATR
There are two types of FATR Import related type Export related type There are two modes of import related type FIM FATR
FIM
Loan is provided for import purpose. By using that loan the customer will import merchandise. The merchandise are pledges with the bank.
FATR
64
In FATR credit is given against trust receipt . Customer will sign the trust receipt and import the goods and pledge these goods with the bank. As sales proceeds the FATR will be liquidate. There are two modes of export related type. FAPC I FAPC II
Different document required for facilities FACILITY 1) CF

1. Demand promissory note 2. Letter of arrangement 3. Letter of continuity 4. Markup agreement 5. Latter of authority of debit markup
2) Term finance
1. Demand promissory note 2. Letter of disbursement 3. Letter of arrangement 4. Markup agreement
65
5. Latter of authority of debit markup 6. letter of installment
3)FATR
1. Demand promissory note 2. Letter of arrangement 3. Markup agreement 4. Letter of disbursement 5. Trust Receipt 6. Latter of authority of debit markup
4)FIM
1. Demand promissory note 2. Letter of arrangement 3. Mark up agreement 4. Latter of authority of debit markup 5. Letter of authority
5)FAPC I FAPC II
66
1. Demand promissory note 2. Letter of authority 3. Letter of disbursement 4. Latter of authority of debit markup 5. Packing credit letter
6)Finance against Foreign bills

1. Demand promissory note 2. Letter of arrangement 3. Letter of disbursement 4. Latter of authority of debit markup 5. Mark up agreement
Loans to staff members House loan

The house loan is provided to its staff members up to a certain limit. And up to this limit there is no interest.
Car loan
This is expensive loan and interest is charged on this type of loan.
67
Motorcycle loan
Mainly this type of loan is provided to clerical staff. But the officers can also apply for this loan.
Feature of credit department

It provides loans to different organizations, and against these loans kept securities, Proper judgment of these securities is also their duty. Proper judgment of securities is the most crucial event in the process of lending. Because in the case of default the securities are the only compensation to the bank. Default mostly is the result of improper judgment. In the process of judgment they follow the following principles:
1. SAFETY character capacity capital 2. LIQUIDTY 3. DISPERSAL 4. REMUNERATION

68
5. SUITABILITY
Now I will discuss these principles in brief
(1)SAFETY
As the funds with BAL are mainly comprised of money borrowed from depositors. They deposited their funds because they have trust and confident on them. Therefore they are very much careful while lending, so that the money goes in safe hands where the risk of loss does not exist. The elements of character, capacity and capital help them in arriving at a conclusion regarding the safety of advances.
1. 1 CHARACTER
This is the management ability factor that tells how successful business has been in the past and what is its future. This factor indicates whether borrower will be able to pay the interest and principle amount borrowed through the functions of the business or not.
1.2
CAPACITY
This is the management ability factor that tells how successful business has been in the past and what is its future. This factor indicates whether borrower will be able to pay the interest and principle amount borrowed through the functions of the business or not.
1.3 CAPITAL
69
This is the monetary base, because the money invested by the borrower himself represents his faith in the business and its future. BAL provide short term capital for commerce and industry, yet some borrowers insist that bank provide them most of the capital required. So the bank while lending must consider the amount requested for is reasonable in relation to borrowers own resources or investment.
2) LIQUIDITY
It means the ability of recovering the advances in emergency, because all money borrowed is repayable in lump sum on demand. The BAL has to ensure that the funds being lent are not blocked for an undue logon period of tie, and borrower is in such a position to pay the entire amount outstanding against them on a short notice
3) DISPERSAL
The dispersal of the amount of the advances should be broadly based so that a larger number of borrowing customers may benefited from the bankers funds. It is also restricted, by the SBP, a bank cannot lend more than 20% of its capital to one party. Dispersal of loan is very necessary from the point of security as well, because it reduces the risk of recovery when something goes wrong in one sector or in one field. For
70
BAL security is the main concern, so they act on this principle and follow it.
4) REMUNERATION
The BAL needs sufficient earning to meet the following obligations. Interest payable to the money deposited with him. Salaries and fringe benefits payable to the staff members. Overhead expenses and depreciation and maintenance of the fixed assets of the bank. An adequate sum to meet possible losses. Provision for reserve fund to meet unforeseen contingencies. Profit to be remitted to head office by the operations in Pakistan. A major portion of BAL earnings comes from the interest charged on the money borrowed by the customers. In order to meet his above mentioned expenses BAL runs a great risk; and he has to think twice that the advances should not become bad or doubtful and should not lent to borrower with whom the remuneration may not be much, but also equally risky.
5) SUITABILITY
It means that advances should be allowed not only to the carefully selected and suitable borrowers; but also in keeping with the overall national development plans chalked out by the authorities concerned.
71
Before accommodating a borrower BAL has to ensure the lending is for a purpose in conformity with the current national credit policy laid down by the SBP. Credit control is very efficiently exercised in Pakistan by the SBP, so BAL should never ignore any of the restrictions issued by it. Credit facilities are extended by the BAL, to the following borrowing parties:
1. COMPANY 2. PARTNERSHIP 3. INDIVIDUALS 4. GOVERNMENT

While lending to any of these parties the credit officer of BAL has to check the following things.
1. COMPANY:
Where a company is a borrower the credit officer must ask and keep on record following information: The certificate of incorporation The memorandum and articles of association The certificate of commencement of business and The last annual report containing accounts and balance sheet, to ensure that the company is legally qualified to do business.
72
To ensure that the company is currently existing and is in good standing. Credit officer should check with the registrar of joint stock companies, and request the borrower to furnish certified List of shareholders (current) List of directors With public limited company verify its existence and standing on the stock Exchange. It is important that the borrowing company and its directors should have requisite authorization and power to borrow which should be reflected in the memorandum and article of association Also see corporate resolution to borrow.
2. PARTNERSHIP
Where the borrower is a partnership, the credit officer must ask to see, following documents; Original partnership agreement/deed and the original certificate of registration which will contain the name of the partners and the date of their joining the partnership. An individual financial statement from each partner along these, also obtain the following document: normal loan documents signed by all partners
73
continuing guarantee duly signed by all partners Resolution/authorization to borrow and execute loan documents, signed by all partners. A letter signed by all partners, requesting the bank to extend credit facilities to the firm Certified copy of the partnership deed and certification of registration.
3. INDIVIDUAL
Lending to an individual the credit officer must ask him to see. His financial statements for, at least the previous three years. A continuing guarantee. The decision of extending credit to an individual borrower is necessarily a decision for the officer concerned based on the reputation and credit standing as a client. Depending on the amount advanced, the loan should be secured by a pledge, hypothecation, or mortgage.
4.
GOVERNMENT
Where the government is a borrower, the credit officer must ensure
that the documents of indebtedness are signed by an officer of the government who is duly authorized in writing and or by the rules of business. Legal counsels opinion should be taken in these cases.
74
75
Balance Sheet As At December 31,2005 & December 31,2006

Rupees 000 2006 2005 3,885,612 1081208 1698969 11396616 19131494 1180775 1424883 298538 40,098,09
Assets
Cash & balance with Treasury Banks Balance with other banks Lending to financial institutions Investments Advances Other assets Operating fixed assets Deferred tax assets 4,540,486 232728 4634398 24694397 28319401 984847 1760774 65,167,031
Liabilities
Bills payable Borrowing from financial institution Deposits and other accounts Sub-coordinated loans Liabilities against asset subject to finance lease Other liabilities Deferred tax liabilities 758,961 6,037,576 51,684,984 650,000 1,196,342 1,186,501 61,514,364 305,658 6,709,054 30,207,324 716,475 37,938,411 2,159,684
Net Assets
Presented By Share Capital Reserves Unappropriated profit
3,652667
1,000,000 3,65,727 250,050
750,000 361,591 249,701
76
Surplus on revluation of assets
2,036,890 3,652,667
798,392 2,159,684
Balance Sheet As At December 31,2003 & December 31,2004

2004 Rupees 000 2003
Assets
Cash Balance with other banks Money at call and short notice Investments Advances Operating fixed assets Other assets 2,044,725 1,798,086 890,000 4,967,542 15,242,317 1,231,161 1,403,328 1,678,256 1,161,434 100,000 4,993,035 10,327,324 1,153,607 1,596,952
27,577,159 21,019,608 Liabilities

Bills payable Borrowing from other banks, agents Deposits and other accounts Other liabilities Deferred liabilities 106,353 4,639,130 20,481,568 625,312 6,694 25,859,057 120,,868 2,972,240 15,820,473 372,855 6,892 19,923,328 1,726,280 600,000 286,399 8,931 895,330 895,330 830,950
Net Assets
Presented By Share Capital Reserves Unappropriate profit Shareholders equity Surplus on revluation of investment surplus on revaluation of fixed assets
1,718,102 600,000 299,469 1,211 900,680 (13,528) 887,152 830,950
1,718,102
1,726,280
77
Profit and Loss Account For the year ended December 31,2006 & December 31,2005
Mark-up / return / interest earned Mark-up / return / interest expensed Net Mark-up / interest income Rupees 000 2006 2005 4,630,494 3,391,935 3,112,313 2,515,074 1,518,181 876,861 13,705 13,705 890,566
Provision against non-performing loans (53,169) and advances net provision for diminution in the value of investment bad debts written off directly (1,447) (55,066) Net Mark-up / interest income after provisions 1,463,115
Non Mark-up / interest income

Fee , commission and brokerage income Dividend income Income from dealing in foreign currencies Other income Total Non Mark-up / interest income 316,368 62,077 95,165 141,808 615,418 2,078,533 147,277 41,910 113,923 74,756 377,866 1,268,432
Non Mark-up / interest expense

Administrative Expense Other provision / write offs Other charges Total non-markup / interest expense 1,182,887 993 1,183,880 894,653 (448,974) 743,602 666 744,268 524,164 (213,552)
Profit Before Taxation

Taxation
Profit After Taxation
445,679
310,612 78
Unappropriated profit brought forward 249,701 Transfer from general reserve 85,000 Transferred from surplus on revaluation of fixed asset - prior year 38,098 - current year net of tax 20,708 58,806 profit available for appropriation 839,186
1,211 311,823
Appropriations
Transfer of statutory reserves (89,136) Issue of bonus shares-interim @33.33%(2001:Nil) (250,000) Cash dividend @ 25%(2001 : Nil) (250,000) (589,136) Unappropriated profit carried forward Basic and diluted earning per share 250,050 4.46 (62,122) (62,122) 249.701 3.65
79
Profit and Loss Account For the year ended December 31,2003 & December 31,2004
Rupees 000 Mark-up / return / interest earned Less: Cost/ return on deposits, borrowing etc.. 2004 2,258,527 1,724,041 534,486 2003 1,905,808 1,474,343 431,465
Fee , commission and brokerage income Profit from investment securities Dividend income Other operating income Total Non Mark-up
103,838 19,617 8,951 138,963 271,369 805,855
58,043 13,792 114,250 186,085 617,550
Operating Expense
Administrative Expense Provision against non-performing advances Bad debt written off directly Provision for other losses 503,256 (103,950) 7,619 406,925 402,559 (136,076) 175 266,658
Other Income Profit before taxation Taxation current - Prior - Deferred
398,930 1,420 400,350 (170,000) 175,000 (190,000) (185,000)
350,892 3,523 354,415 (220,000) 58,663 (36,554) (197,891) 156,524
profit after taxation
215,350
80
Unappropriated profit brought forward profit available for appropriation
8,931 224,281
3,712 160,236
Appropriations
Transfer of statutory reserves (43,070) Transfer from general reserve 30,000 Proposed dividend @RS.3.5 per share(1999 RS 2) (210,000) (223,070) Unappropriated profit carried forward 1,211 (31,305) (120,000) (151,305) 8,931
INCOME STATEMENT FOR ANAYLISIS FOR THE YEAR ENDED DEC 31,2005 & 2006
2006 4,630,494 Rupees 000 2005 3,391,935 81
Mark-up Income
Non Mark-up / interest income
615,418
377,866
Total Income
5,245,912
3,112,313 2,133,599
3,769,801
2,515,074 1,254,727
- Interest Expense
Gross profit
- operating expense
Administrative expense Other provisions Other charges Provision against not performing Loan & advances bad debts written off directly 1,182,887 993 53169 (1,447) 1,238,046 895,553 448,974 743,602 663 13705 757,970 496,757 213,552
Total Expense
Operating profit
- Tax Net Profit
446,579
283,205
INCOME STATEMENT FOR ANAYLISIS FOR THE YEAR ENDED DEC 31,2003, Dec 31, 2004
2004 2,258,527 271,369 Rupees 000 2003 1,905,808 186,085
Mark-up Income Non Mark-up / interest income
Total Income
2,529,896
2,091,893
82
- Interest Expense
oss profit
1,724,041 805,855
1,474,343 617,550
- operating expense
Administrative expense Provision against not performing bad debts written off directly provision for other assets 503,256 (103,950) 7,619 406,925 398,930 185,000 402,559 (136,076) 175 266,658 350,892 197,891
Total Expense
Operating profit
- Tax Net Profit
215,350
160,236
Horizontal analysis of income statement for the year ended 31,2006

Rupees 000
in amount
Mark-up Income Non Mark-up / interest income 1238559 237552
% age 36.51 62.86
83
Total Income
1476111
39.15
- Interest Expense
Gross profit
597239 878872
23.74 47.59
- operating expense
Administrative expense Other provisions Other charges Provision against not performing Loan & advances bad debts written off directly 439285 330 39914 59.07 49.77 291.2 -
Total Expense
Operating profit
480076
398796 235422
63.33
80.27 110.2
- Tax Net Profit
163374
57.68
Horizontal analysis of Balance Sheet for the year ended 31,2006

Rupees 000
in amount
Assets
Cash & balance with Treasury Banks Balance with other banks Lending to financial institutions Investments Advances Other assets Operating fixed assets Deferred tax assets 654874 (848480) 2935429 13297781 9187907 (195928) 335891 -
% age
16.853 (78.475) 172.77 116.681 48.025 (16.593) 23.573 -
Liabilities
84
Bills payable
453303
148.303 (10.008) 71.100 66.976 62.142 69.129
Borrowing from financial institution (671478) Deposits and other accounts 21477660 Sub-coordinated loans Liabilities against asset subject to finance lease Other liabilities 479867 Deferred tax liabilities -
Net Assets
Presented By Share Capital Reserves Unappropriated profit 18.694 Surplus on revaluation of assets
23575953 1492983
250000 4136 349 254485 1238498 1492983
33.333 1.1438 0.1397 155.12 69.129
Vertical analysis of income statement for the year ended 31,2006 & Dec 31,2005
2002 %
Mark-up Income Non Mark-up / interest income 88.26 11.73
2001 %
89.97 10.02
Total Income
100%
100%
- Interest Expense
Gross profit
59.32 40.67
66.71 33.28
- Operating expense
Administrative expense 22.54 19.72
85
Other provisions Other charges Provision against not performing Loan & advances bad debts written off directly
0.018 1.022 0.275
0.017 0.36 -
Total Expense
Operating profit - Tax
23.06
17.07 8.558
20.10
13.17 5.664
Net Profit
8.51
5.66
Interpretation of income statement

The markup income decrease in 2006. This shows that banks
earn lesser in markup income as compare to 2005.

Non markup income in 2006 is 11.73% where as in 2005 it is
10.02%. This shows non markup income is increase in 2006.

Interest expense is decrease in 2006 as compare to 2005. Due to decrease in interest expense the gross profit is increase in
2006. In the portion of operating expense the Administrative expense increase in 2006. Other charges are increase in 2006 by 0.001%. Provision against not performing Loan & advances are also increase in 2006. Bad debts written off directly is the addition of
86
new expense in 2006. The total operating expense in 2006 are 23.06% where as 20.01% in 2001. That shows total operating expenses are increase in 2006.
Operating profit in 2006 is 17.07% and in 2001 is 13.17%.
That shows the operating profit increase in 2006.

Tax deduction from operating expense in 2006 is 8.558%
and in 2005 it was 5.664%. That shows the interest increase in 2006.
Net profit in 2006 is 8.51% and 5.66% was in 2005. So that
shows the net profit is increase.
87
Vertical analysis of Balance Sheet As At December 31,2003 & Dec 31, 2004
2002 % Assets Cash & balance with Treasury Banks Balance with other banks Lending to financial institutions Investments Advances Other assets Operating fixed assets Deferred tax assets Liabilities Bills payable Borrowing from financial institution Deposits and other accounts Sub-coordinated loans Liabilities against asset subject to finance lease Other liabilities Deferred tax liabilities Net Assets Presented By Share Capital Reserves Unappropriated profit 0.62 Surplus on revluation of assets 6.96 0.35 0.71 37.89 43.45 1.51 0.27 2001 % 9.69 2.69 4.23 28.4 47.71 2.94 3.55
1.16 9.26 79.31 1.00 1.83 1.82
0.76 16.7 75.33 1.78 -
1.53 0.56 0.38 3.125
1.87 0.90 1.99
88
Interpretation of Balance sheet

Assets
a) The liquid assets such as Cash & balance with Treasury Banks
decrease in 2002. It shows that management is investing cash in high quality and maintains balances with other banks. The balance with other banks decreases in 2006 i.e. 0.35 %as compare to 2005 which is 2.69%.
b) The portion of investment in total assets is 37.89% in 2006 and
28.4% in 2005. this is not much favorable trend because management should advance more and invest less.
c) Portion of advances in percentage of total asset is decreased
43.45% as compare to 2005 which was 47.71%.

d) Portion of fixed asset decrease in 2006 as compare to 2005.
89
e) Lending of Financial Institutions decrease in 2006 that is 0.71%
as compare to 2005 that was 4.23%. This shows that management trend of giving loan to financial institution is decreases.
A) REGULATORY RATIOS Advances To Deposit Ratio

This ratio is calculated by dividing the amount of advances by deposits. This ratios shows the relationship of advances to deposits. It means that what is the percentage of advances to deposit of a bank. Whether the advances are enough toms pay its liabilities.
Formula Advances Deposits
2006
28,319,401 51,684,984
90
54.7 %
2005
19,131,494 30,207,324
= 2004
63.33 %
15,242,317 20,481,568
74.41 %
2003
10,327,324 15,820,473
65.27 %
91
Interpretation
This ratio shows the decreasing trend except 2000 where it increase from 65.27 to 74.41. Overall this ratio shows that management is not aggressive toward advancing of loan.
Cash To deposit Ratio

The ration is calculating by dividing the cash on hand and cash with other banks by total deposits of the bank. This ratio shows the percentage of cash available as compared to deposits . this ratio tells that at any time if cash is needed to meet the liabilities of deposit liabilities to what percentage it is available.
Formula Cash on hand and cash with other bank Total Deposit
2006
1,122,962 51,684,984
92
2.17%
2005
772,140 30,207,324
= 2004
2.55%
324,503 20,481,568
= 2003
1.584%
248,251 15,820,473
1.56%
93
Interpretation
This ratio is on increasing trend which is unfavorable. This shows that bank is not proper utilizing its deposits.
B) CAPITAL ADEQUACY RATIOS Equity To Assets

This ratio is calculating by dividing shareholders equity by total assets.
Formula Shareholders equity Total Assets
2006
1,615,777 65,167,031
2.47%
94
2005
1,361,292 40,098,095
= 2004
3.39%
900,680 27,577,159
= 2003
3.26%
895,330 21,019,608
4.25%
Interpretation
This ratio shows continuously decreasing trend. It means that is not favorable for bank.
95
Equity To Deposits
This ratio shows the percentage of shareholders equity to total deposit. This ratio is calculating by shareholders equity by total deposits of the bank.
Formula Total Shareholders equity Total Deposits
2006
1,615,777 51,684,984
0.312 x
2005
1,361,292
96
30,207,324
0.450x
2004
900,680 20,481,568
0.439x
2003
895,330 15,820,473
0.56x
Interpretation
This ratio shows decreasing trend except 2001 which increases from 4.39 to 4.50.
C) EFFICIENCY RATIOS
97
Deposit To Total Liabilities

The deposit is calculating by dividing total deposits by total liabilities. This ratio shows the percentage of total deposits to total liabilities which is the major liability of the bank.
Formula Total Deposits Total Liabilities
2006
51,684,984 61,514,364
84.01%
2005
30207324 37,938,411
79.62%
98
2004
20,481,568 25,859,057
= 2003
79.20%
15,820,473 19,293,328
=
Interpretation
81.99%
This ratio increases in 2002 that is positive sign that bank has more funds to invest. In 2000 and 2001 this ratio becomes down it mean that management was not properly invest its funds.
Investment To Total Assets

This ratio is calculating by dividing investment by total assets. This ratio shows the percentage of investment to total assets.
Formula
99
Investment
Assets 2006
24,694,397 65,167,031
37.89%
2005
11,396,616 40,098,095
28.42%
2004
4,967,542
100
27,577,159
18.01%
2003
4,993,035 21,019,608
23.75%
Interpretation
The investment to total asset of bank alfalah indicates the portion of investment in banks total assets, in 2002 it is increasing which is not a favorable trend. This shows that management does not work properly and efficiently and not utilizing the assets fully by investment. In 2000 when the ratio decrease from 23.79 to 18.01 it mean management is properly utilizing the asset fully by investment.
D) PROFITIBILITY RATIOS Net Profit Margin
101
This ratio is calculating by dividing profit after tax by total income. This ratio shows that what is the percentage of net profit to the total income.
Formula Profit After Tax
Total Income
2006
446579 5245912
8.51%
2005
310,612 3769801
102
8.23%
2004
215,350 2,529,896
= 2003
8.51%
160,236 2,091,893
=
Interpretation
7.65%
This ratio shows increasing trend which is favorable this shows management work efficiently. Management has ability to operate business with great success.
Operating Profit Margin
103
This ratio is calculated by dividing the operating profit by total income. This ratio shows that what is the percentage of operating profit to the total income.
Formula Operating Profit
Total Income
2006
894653 5245912
17.05%
2005
524,164 3769801
104
= 2004
13.90%
398,930 2529896
15.76%
2003
350,892 2091893
=
Interpretation
16.77%
Operating profit ratio shows the profits of a firm that earn on its income. In 2002 the trend of this ration is 17.05% favorable trend for the bank.. this is a
Gross Profit Margin
105
This ratio is calculated by dividing the gross profit by total income. This ratio shows that what is the percentage of gross profit to the total income.
Formula Gross Profit
Total Income
2006
2133599 5245912
= 2005
40.67%
1254727 3769801
33.82%
106
2004
805855 2529896
31.85%
2003
617550 2091893
29.52%
Return On Equity
107
This ratio is calculating by dividing net profit by total equity. This ratio shows that how much the company is earning on shareholders equity.
Formula Net Profit
Total Equity
2006
445,679 1,615,777
27.58%
2005
108
310,612 1,361,292
= 2004
22.81%
215,350 900,680
= 2003
23.90%
160,236 895,330
=
Interpretation
17.89%
In 2002 the ratio is increase from 22.81% to 27.58% . This shows that management is utilizing its equity in good way. So this is favorable for bank.
Return On Total Assets
109
This ratio is obtained by dividing net profit by total assets. This ratio shows that what percentage of earning the company is attaining on total assets.
Formula Net Profit
Total Assets
2006
446579 65,167,031
0.685%
2005
310,612 40,098,095
0.774%
110
2004
215,350 27,577,159
= 2003
0.780%
160,236 21,019,608
0.762%
Interpretation
This ratio measure bank ability to utilize its assets to create profit by comparing profit with assets generates profit. This ratio shows decreasing trend. this mean that management is not properly using its assets.
111
Six-Year Financial Summary

2001 OPERATIONAL RESULT Total income 5,246 Operating Expense 1,184 Profit before income tax 948 Profit before income tax 895 Profit after taxation 446 BALANCE SHEET Shareholders Equity 1,616 Total assets 40,09865,167 Advances Net of provision 19,13128,319 713 850 895 901 1,362 1,248 181,4 2,096 2,531 233 81 7 337 162 68 145 403 218 354 157 511 304 400 215 3,770 744 510 524 311 2002 2003 2004 2005 2006 Rupees in Million
10,527 14,321 21,019 28,855 4,850 7,758 10,327 15,242
112
Investment Net of provision 11,39724,694 Deposits and other Accounts 30,20751,685 OTHERS Imports 26,65833,676 Exports 25,26133,042
3,349 9,019
3,407 4,993 4,875 11,878 15,821 20,482
1,491 4,313
4,709 5,909 13,856 6,787 10,020 16,756
113
STRENGHTS
BAL provides its customers a complete range of banking products and services including retail banking, corporate and institutional banking, trade finance and consumer finance. BAL has planned to institute major improvements in customer services and internal systems to improve efficiency. It also intends to launch innovative products. The bank is increasing resource mobilization through regular deposit campaigns and accelerating the process of recovery of outstanding advances. The Management of ALFALAH Bank Limited (BAL), in order to further improve the quality of service. Bank has very good financial resources. Bank has good brand name.
114
Banks have competent human resource. Automated process and procedure. The services and Profit rate is competitive in market. BAL has attracted most of customers in Pakistan. BAL has attractive and good Buildings.
BAL RTC is market leading.
BAL is Successive and Market oriented. Investment in human development and social welfare project is high and Less default customer. Bank is providing best services according to the requirement of the customers.
WEAKNESS
Smaller branch network Age of bank is very low. Less banking experience. Some management positons needed are not professional. Customers having accounts with small amounts are not given same services and dealing given to those with high accounts.
OPPORTUNITIES
Business in market
115
Branch network Technology
THREATS
Privatization of HBL & UBL Growing global technological advancement. Emerging banks Innovative services of other banks Change in economic trend Change in international banking services BAL is not using ATM while other banks or providing this facility so that is also technological threat for Bal.
116
SUGGESTIONS & RECOMMENDATIONS

The following are the suggestions that I have recommend for the Alfalah bank limited. Try to establish effective communication between top-level management and executive. Also do marketing through internet Effective training and qualified, dutiful and vigilant inspection teams are inducted per force in all the bank. civil services of the country The branch should improve his position to attract more customers. The behavior with the customers should be improved. There is a great need of proper training of employee. The bank must have to apply the marketing strategies to attract the customers which are depositors.
117
LIMITATION
There was only five to sixe person with proper knowledge of
banking.
No proper material of banking was provided during my internship. The branch, where I did my internship is providing very few
customer services but the capture big guns of the market.
118

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Bank Alfalah Limited