INTERNSHIP REPORTMuazzam Imtiaz ROLL # 22 ± MBA (Morning) DEPARTMENT OF MANAGEMENT SCIENCES The Islamia University of Bahawalpur Preface The purpose of writing this report is to explain and evaluate my internship. It consists of several parts which include history of the ABL, its introduction, Mission, Vision and objectives of the ABL, organizational structure, divisions and departments, performance of ABL, the work I¶ve learnt there, SWOT and Financial Analysis and after that the brief conclusion and suggestions for the ABL. When I had to choose the organization for my internship, my priority was a banking organization. Banking is an essent al of an i economy and specifically for the student of Finance. The modern day banking is way more advanced and fast than the traditional system. It provides opportunity to learn how to manage your tasks within the constraints of time. At ABL (New Sadiq Bazar Rahim Yar Khan), I was provided with opportunity to deal with real time work, the banking mechanism, functions and operations. It was an amazing experience working there with a cooperative staff and I¶d so much to learn in these few weeks. This report will address my practical work experience in the branch and various tasks which were assigned to me and how I fulfilled them. I¶ve wrote about the issues which could be of important factor in performance of the branch and possible suggestions to overcome them. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 2 Acknowledgements ³Praise be to Allah, Lord of the Worlds, The Beneficent, the Merciful.´ All acclamations are to Allah, the most Merciful and Compassionate, who has empowered and enabled me to accomplish this task successfully. After that I submit my earnest thank to my affectionate parents, who pray for my success and always been a source of encouragement for me. Secondly, I am grateful to my prestigious institute that made this learning opportunity a part of my education, espec ially I would like to thank my Professors as the knowledge imparted by them enable me to gain knowledge and learning exposure of the organization in the best way. Also I express my appreciation to all staff members of Allied Bank of Pakistan New Sadiq Bazar Branch, specifically Mr. Arshad Ali Mazari (Branch Manager), Miss Farzana Irshad (CSM) and Mr. M. Shafiq (RM) who were very cooperative and guided me a lot. I also express my greatest gratitude to my kindhearted supervisor Sir Nazik whose supervision enabled me to accomplish this report successfully. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 3 Dedication I dedicate this report to my parents, teachers and friends who supported me through everything and encouraged me to write and share my experiences in internship. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 4 Internship Letter The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 5 Table of Contents Preface ................................ ................................ ................................ ........................ 1 Acknowledgements ................................ ................................ ................................ ..... 3 Dedication ................................ ................................ ................................ ................... 4 Internship Letter ................................ ................................ ................................ .......... 5 Table of Contents ................................ ................................ ................................ ........ 6 Executive Summary ................................ ................................ ................................ .... 9 Banking in Pakistan................................ ................................ ................................ ....11 What is Banking Company? ................................ ................................ ...................11 A Brief History of Banking in Pakistan: ................................ ................................ .11 Banking Organizations in Pakistan ................................ ................................ .........12 Importance of Banking Sector ................................ ................................ ................13 Various Phases of Banking in Pakistan ................................ ................................ ...14 First Phase (1947-74) ................................ ................................ ............................. 14 Second Phase (1974--79): ................................ ................................ ....................... 15 Third Phase (1979-91): ................................ ................................ ........................... 17 Fourth Phase (1991-2000): ................................ ................................ ..................... 18 History ................................ ................................ ................................ ....................... 20 Overview:................................ ................................ ................................ ...............20 Pre-Independence History (1942 ± 1947):................................ ............................... 20 Australasia Bank (1947-1974): ................................ ................................ ...............21 Allied Bank (1974 to 1991): ................................ ................................ ...................21 Allied Bank (1991 to 2004): ................................ ................................ ...................21 Allied Bank (2005 to date): ................................ ................................ ....................22 Allied Bank and Ibrahim Group:................................ ................................ .............23 The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 6 Vision ................................ ................................ ................................ ........................ 25 Mission ................................ ................................ ................................ ...................... 26 Values & Objectives................................ ................................ ................................ ...27 Values: ................................ ................................ ................................ ...................27 Objectives: ................................ ................................ ................................ .............27 Board of Directors................................ ................................ ................................ ......28 Executive Committee ................................ ................................ ................................ .29 Organizational Setup ................................ ................................ ................................ ..30 Important Information ................................ ................................ ................................ 31 Consumer Banking ................................ ................................ ................................ .....35 Commercial Banking................................ ................................ ................................ ..46 PLS Account ................................ ................................ ................................ ..........46 Current Account ................................ ................................ ................................ .....46 Allied Business Account................................ ................................ ......................... 46 Allied Rising Star ................................ ................................ ................................ ...47 Allied Basic Banking Account................................ ................................ ................48 Allied e-Savers Account ................................ ................................ ......................... 49 Foreign Currency Deposits ................................ ................................ ..................... 49 Rewarding Term Deposit................................ ................................ ........................ 50 Monthly Profit Plus ................................ ................................ ................................ 50 Allied Advance Profit scheme ................................ ................................ ................ 51 Rewarding Profit Account ................................ ................................ ...................... 51 Behtar Munafa Account................................ ................................ .......................... 52 Behtar Munafa Term Deposit ................................ ................................ ................. 53 Allied Bachat Scheme ................................ ................................ ............................ 53 Corporate Banking ................................ ................................ ................................ .....61 Learning at Branch ................................ ................................ ................................ .....65 The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 7 Financial Highlights ................................ ................................ ................................ ...71 Financial Highlights in Graphs ................................ ................................ ...............72 Balance Sheet ................................ ................................ ................................ .............74 Profit and Loss Account ................................ ................................ ............................. 75 Balance Sheet ± Vertical Analysis ................................ ................................ ..............77 Balance Sheet ± Horizontal Analysis ................................ ................................ ..........78 P&L Account ± Vertical Analysis ................................ ................................ ..............80 P&L Account ± Horizontal Analysis ................................ ................................ ..........81 Return on Equity ................................ ................................ ................................ ..... 833 Return on Assets ................................ ................................ ................................ .......84 Return on Capital Employed................................ ................................ .................... 855 Loan to Deposit Ratio................................ ................................ .............................. 866 Cost to Revenue Ratio ................................ ................................ ............................... 87 Gross Profit Margin ................................ ................................ ................................ ...88 Weighted Average Cost of Debt ................................ ................................ ................89 Capital Adequacy Ratio................................ ................................ ............................. 90 Earning per Share................................ ................................ ................................ ......91 Dividend per Share................................ ................................ ................................ ....92 SWOT Analysis ................................ ................................ ................................ .........93 Suggestions ................................ ................................ ................................ ................95 Conclusion ................................ ................................ ................................ .................96 Annexure ................................ ................................ ................................ ...................97 The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 8 Executive Summary Praise be to Allah, Lord of the Worlds, The Beneficent, the Merciful. My name is MUAZZAM IMTIAZ and I did my MBA from The Islamia University of Bahawalpur ± Rahim Yar Khan Campus. Internship is a practical experience of 6-8 weeks which is mandatory for every individual pursuing MBA degree. Therefore I applied for the internship and got a chance to work in Allied Bank Limited Pakistan in new Sadiq bazar branch. During my internship I learnt about Banking, procedures and how things work there. It was quite a good experience working there in real environment. The staff at ABL New Sadiq Bazar was kind enough to accommodate me and teach me with their work.I started with slips and ended up with vouching and making R.T.Cs and Pay orders. This was all I could learn being an internee due to some restrictions. In this report, I have given an introduction of the ABL as the organization, their structure and history. Then the detailed overview of the products and services they are providing. From consumer banking to corporate banking I have tried to cover all areas. Then it comes to the financial data of the organization. I have prepared common size analysis which includes vertical and horizontal analysis of both Balance sheet and Profit and Loss account. A ratio analysis of the bank which depicts financial performance. SWOT analysis is close overview of the Bank¶s Strengths, Weaknesses, Opportunities and threats. I have written what ever I feel during internship and reading their financial statements and economic outlook. Then there is a small conclusion of the report which covers various actors of the f organization and suggestions which I felt to be given to the top management of the organization which could have an impact on performance of the company. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 9 CHAPTER ² 1 Introduction of Banking Sector The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 10 Banking in Pakistan 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 thedevelopment of modern banking thus was accepting of deposits of cash from those who had surplus money with them. What is Banking Company? Section 5 of banking ordinance 1962 says that ³Banker means a person transacting the business of accepting, for the purpose of lending or investment of deposits and withdrawals by Cheque, drafts, orders of otherwise and includes any post office saving Bank´. A Brief History of Banking in Pakistan: In subcontinent, before independence, most of the banking business was inthe hands of Hindus of British people and only two banks, Habib bank limited and Muslim commercial bank were established just few months before independence. Habib bank was established in early 1947 in Bombay while Muslim commercial bank was established n i July 1947, in Calcutta. When Pakistan came into being then it was decided that reserve bank of India would continue in working in Pakistan until September 30,1948 and as for as take over of the management of the public debts and exchange control from thereserve bank of India are concern will be made on April 1, 1948. Due to efforts of govt. of Pakistan and keen interest of Mr. Muhammad Ali Jinnah the creation of state bank of Pakistan was done July 1, 1948. After one year of the creation of State bank of Pakistan, in November 1949, national bank of Pakistan was established in Dacca (east Pakistan). The main purpose of which1 was to act as an agent of state bank of Pakistan. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 11 Banking Organizations in Pakistan 1. State Bank of Pakistan (central bank) 2. Commercial Banks 3. Exchange Banks 4. Co-operative Banks 5. Saving Banks 6. Agricultural banks 7. Industrial banks 1. STATE BANK OF PAKISTAN: SBP is functioning as the Central Bank of country with its offices at Karachi, Lahore, Peshawar, D.I.Khan, Quetta, Faisalabad, Rawalpindi, Islamabad, Multan, Gujranwala, Sialkot, Sukkur, Hyderabad and Bahawalpur. 2. COMMERCIAL BANKS: Commercial banks have been the most effective mobilizers of saving and have been providing short-term requirements of working capital of trade, commerce and industry. So far twelve Banks have been established in private sector and they have been allowed to open five branches each in various parts of the country initially but provisions exist for their future expansion. These banks are authorized to carry on all the banking business. 3. EXCHANGE BANKS: Foreign banks other than Indian banks have been commonly known as Exchange Bank¶s due to the fact that prior independence foreign banks the Indo -Pakistan sub-continent were engaged primarily in the finance foreign trade. 4. COOPERATIVE BANKS: Cooperative banks are and integral part of the cooperative movement which aims at the promotion of thrift, self-helped mutual aid amongst agriculturists and others with common economic needs so as to bring about better living, better business and better methods of production etc. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 12 5. SAVINGS BANK: There is only two Savings Banks in Pakistan i.e., Post Office Savings Bank, and Nation al saving scheme. Post Office Savings Bank wholly controlled by the Government of Pakistan. I accept deposits from public and invest them in various Government projects. Its operation, therefore, is very limited. 6. AGRICULTURAL BANKS: Agricultural banks are set up to provide the financial assistance to the agriculturist. The agricultural banks provide short-term credit to the farmers for the purchase of seed, manure, etc. they also make long term advances for buying tractors and introduing c modern technologies in the farming. In Pakistan Agricultural Development Bank of Pakistan was set up in 1981 to meet the financial requirement of agriculture. Now it is named as Zarai traqiati bank limited. 7. INDUSTRIAL BANKS: The industrial banks provide long-term credit to the industries. Since the industrial banks have long-term deposits, so they are in position to permit long -term investment in industries. In Pakistan the Industrial Development Bank (IDBP) set up in 1961.The other institutions engaged in financing financial assistance to industries are PICIC, NDFC, ICP, etc. Importance of Banking Sector Banks play very important role in the economic life of a nation. The growth of the economy is dependent upon the soundne of its banking system. Although banks do not ss create new wealth but borrow, exchange and consume. These make generation of wealth. In this way they become most effective partners in the development of that country. To encourage the habit of saving and to mobilize these savings is its basic purpose. Banks deposit surplus from the public and then advances these surpluses in the form of loans to the industrialists, agriculturists, businessmen and unemployed people under different schemes so that they set up their own business. Thus banks help in capital formation. If there are no banks, then there would be concentration of wealth in few hands and great portion of wealth of a country would be idle. In the fewer developing countries rate of The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 13 saving is very low and due to this, rate of investment and rate of growth is also very low. We can take bank just like a heart in the economic structure and capital provided by it is like blood in it. As long as the blood is in circulation, the organs will remain sound and healthy. If the blood is not provided is not provided to any organ then the organ would become useless. So if the finance is not provided to agriculture sector or to industrial sector, it will be destroyed. Loan facility provided by bank works as an incentive to the producer to increase production. Banks provide transfer of payment facility, which is cheaper, quicker and safe. Many difficulties in the international payment have been overcome and volume of transactions has been increased. These facilities are very much helpful for the development of trade and commerce. Various Phases of Banking in Pakistan Broadly speaking we can divide the development of commercial banking into 4 phases: PHASE-1 PHASE-2 PHASE-3 PHASE-4 1947-74 1974-79 1979-91 1991-2000 Establishment of commercial banking system Nationalization of banks Islamisation process Deregulation process First Phase (1947-74) SET UP OF COMMERCIAL BANKING SYSTEM: This was the first phase of developments of Pakistan¶s commercial banking system, which consists of the circumstances under which the development of banking was started in the country. INITIAL POSITION OF BANKING IN PAKISTAN: There were 19 non-Indian foreign banks in Pakistan at the time of independence with the status of small branch network, whose policies and operations were controlled by their head offices abroad. These banks were solely engaged in export of crops from Pakistan. There were only two banks in Pakistan at the time of Partition, Habib Bank, which had transferred its head office from Bombay to Karachi after the announcement of the The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 14 partition, and Australian Bank, which has been working in Pakistani territories prior to June 1947. The government of Pakistan tried hard to eliminate the banking crises. The imperial bank of India closed down most of its offices in Pakistan, which had been working as the agent of Reserve Bank of India was not willing to purchase even token amounts of the government of Pakistan. Securities on the plea that they were not marketable. The Reserve Bank of India was hardly of any help. It refused to help the govt. of Pakistan with advance argument adhoc securities to enable them to make essential disbursements such as salaries and other obligations to add to the difficulties. The Indian govt. withheld Pakistan¶s share of 750 million in cash balances held by her at the time of independence. The forgoing developments clearly brought home the urgency of assuming the control and currency in Pakistan and brought to the fore the need to setup a central banking institution to take the place of reserve bank of India. Therefore it was th agreed between the Govt. of India and Pakistan to authority of Pakistan from 30 September 1947 to 30th June 1948. In order to make necessary arrangements of the establishment of the central bank of Pakistan a committee was appointed to recommend the necessary steps. Consequently the Governor General of Pakistan and father of the nation Quaid -e-Azam Muhammad Ali Jinnah inaugurated the state bank of Pakistan of 1st July 1948. After the SBP order was promulgated on 12th May 1948. When it assumed full control of banking and currency in Pakistan the first important task before the SBP was to issue of currency notes and withdrawal of reserve bank of India, which had been in circulating in Pakistan so far. Second Phase (1974--79): NATIONALIZATION OF BANKS: The banking reforms turned out to be a transitional and temporary step and hardly after 18 months had the government nationalized the banking system. Thus through the Nationalization Bank Act 1974, SBP and all commercial banks incorporated in Pakistan and carrying on business in or outside the country were brought under the government ownership with effect from January 1974. The ownership and management of all Pakistan banks stood transferred and rested in the federal government. The shareholders were The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 15 provided compensation in the form of federal government bonds redeemable at par any time with in a period of fifteen years. The amount of compensation was equal to the break up value of the shares in case of commercial banks. For the SBP shares the amount of compensation was estimated on the basis of average of the clearing quotations during the 6 working days preceding nationalization. The chairman, director and chief executive of various banks were removed from their offices other than those appointed by the federal government and the state bank. The central board of banks, managing committees and similar other bodies were dissolved. A Pakistani banking counsel was established for nationalized commercial banks to co-ordinate their activities. As a result of merger of banks the following five major banking companies were formed: 1: 2: 3: 4: 5: National Bank of Pakistan Habib Bank Limited United Bank Limited Muslim Commercial Bank Limited Allied Bank of Pakistan CAUSES OF NATIONALIZATION: The nationalization of banks may be justified on the following grounds: 1. Large business and industrial houses dominate the lending policies of the commercial banks; this brought forward the problem of concentration of wealth. 2. Commercial banking operations were guided by profit motives and as a result the backward regions and the small entrepreneurs were never been their favorite customers. 3. The operation of banks, unlike after business, have direct implication on the entire national economy. For instance if the banks raise the cost of their credit, the cost of every thing may go up. 4. Unhealthy complications among banks can lead to finan cial and economic problems. 5. The flow of bank advances towards national priority sector in general is not forthcoming because private banks are profit oriented. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 16 RESULTS OF NATIONALIZATION: Although there are doubts about the positive results of the nationalzation but we can say i that the nationalization of banks provided efficient professional management to expand banking services in every nook and corner of the country. Banks laid full emphasis on their lending policies on priority sector and national build projects, which discouraged ing non-productive and unhealthy activities like speculation and hoarding, there was also a recorded increase in the number of foreign branches of Pakistani banks. The growth of Pakistani banking system was significant. The bank facilities expanded ing in the rural areas. The bank credit increased sharply especially in the public sector. A part from this expansion the banking system¶s activity seeking to gain credit targets laid down by National Credit Consultative Counsel (N.C.C.C) and to conform to the priorities over the year to enlarge the flow of credit for the small banker and agriculturist as well as for exports. Bank deposits rose very substantially during a period when total monetary assets also registered a sharp rise. In a remarkable short time banks and their management had adjusted to the realities and compulsion of the new situation and the system as a whole was completely geared to government objectives and policies. Third Phase (1979-91): INTRODUCTION OF ISLAMIC BANKING: In 1977 the Bhutto government was toppled. The martial law government planned to reform the banking sector in a novel way. The overall policy was to Islamize the economy and the banking system, being based on interest was an important target of the ne w policy. The most preferred form of Islamic bank financing profit and loss sharing would receive banks to receive deposit without guaranteeing any return. The Islamic bank has to acquire a high degree of confidence of the saver to make him deposit his money with them. not even the return of the principal amount if guaranteed. The Islamic bank cannot finance the project of an investor merely on the furnishing of collateral. The bank will have to be a partner in the project. This will require to careful security of the project and the assessment of risk involved because profits are the function of the amount of risk in the project. Honesty and trust from both sides of the market are more important to the system of Islamic Banking. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 17 Fourth Phase (1991-2000): PRIVATIZATION AND DE-REGULATION: The government headed by Prime Minister Mr. Nawaz Sharif was not fully satisfied with the performance of nationalized. The areas, which were severely criticized, were the falling standard of banking services and common red -tapism. There were complaints about the services as delay in home remittances, dispatch of cheques, drafts, inefficient counter services, bad debts of the banks etc. were on sector application for privatization of other banks namely UBL and HBL were also inv ited but the bidding response was quite poor. The privatization of these banks is under consideration. Legislation was enacted to permit the establishment of new banks and the government approved 10application from the private sector for the grant of comme rcial bank licenses by SBP, out of these 9 new banks have since been incorporated. Till March 1994 there were 20 domestic scheduled banks with 9825 branches and 21 foreign banks with 66 branches in operation in the country. Overall investment of the schedu banks in the current year led rose to 76.7%. At present there are 24 domestic scheduled with 8137branches and 19foreign banks with 71 branches are in operation in the country? Total assets of th domestic scheduled banks were amounting to Rs.1563.73 billion on 30 March 1996. Overall investment of the domestic scheduled banks in the current year is declined by 80% over the same period last year. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Bank of Commerce Al Habib Ltd. Soneri Bank Ltd. Union Bank Ltd. Mehran Bank Ltd. Askari Commercial Bank Ltd. Capital Bank Ltd. Indus Bank Ltd. Prime Commercial Bank Ltd. Bolan Bank Ltd. Republic Bank Ltd. Now Mehran bank has been absorbed by National Bank Ltd. due to its poor performance and ultimate failure. Now the ABN Amro Bank has also been included in the list of foreign scheduled banks. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 18 CHAPTER ² 2 Introduction of the Organization The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 19 History Overview: Allied Bank was the first Muslim bank to have been established in Pakistan. Established in December 1942 as the Australasia Bank in Lahore with a paid-up share capital of Rs. 0.12 million under the Chairmanship of Khawaja Bashir Bux, the Bank attracted deposits equivalent to Rs. 0.431 million in its first eighteen months of business. Today, Allied Bank's paid up Capital & Reserves exceed Rs. 13 billion, deposits exceed Rs. 325 billion and total assets exceed Rs. 418 billion. Pre-Independence History (1942 1947): In the early 1940s, the Muslim community was beginning to realize the need for its active participation in the fields of trade and industry. Since the late 1880s, Hindus had established a commanding presence in the areas of industry, trade and commerce and were especially dominating in the Sub-continent area. Banking, in particular, was the exclusive forte of Hindus and it was popularly and wrongly believed that Muslims were temperamentally unsuited for this profession. It was particularly upsetting for Khawaja Bashir Bux to hear that ³Muslims could not be successful bankers´. He decided to step-up to that challenge and take the lead in establishing this first Muslim bank by the name Australasia Bank Limited in Punjab, which was to become Pakistan in December 1942. The initial equity of the Bank amounted to Rs 0.12 million, which was raised to Rs. 0.5 million by the end of the first year of operation, and by the end of 30th June 1947 capital increased to Rs. 0.673 million and deposits raised to Rs 7.728 million. ³Australasia Bank was the only fully operational Muslim bank in Pakistan on August 14th, 1947.´ The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 20 Australasia Bank (1947-1974): However, it was severely hit by the riots in East Punjab. The Bank was identified with the Pakistan Movement. At the time of independence all the branches in India, (Amritsar, Batala, Jalandhar, Ludhiana, Delhi and Angra (Agra)) were closed down. New branches were opened in Karachi, Rawalpindi, Peshawar, Sialkot, Sargodha, Jhang, Gujranwala and Kasur. Later, the network spread to Multan and Quetta as well. The Bank financed trade in cloth and food grains thus, played an import nt role in maintaining consumer a supplies during the early months of 1948 affected by riots. Despite the difficult conditions prevailing and the substantial set back in the Bank¶s business in India, Australasia Bank made a profit of Rs. 50,000 during 1947-48. By the end of 1970 it had 101 branches. Unfortunately, it lost 51 branches in the separation of East Pakistan. But the Bank did well despite losing a lot of its assets and by the end of 1973 had 186 branches in West Pakistan. Allied Bank (1974 to 1991): In 1974, the Board of Directors of Australasia Bank was dissolved and was renamed Allied Bank. The first year was highly successful; profit exceeded Rs. 10 million, deposits rose by over 50 percent and approached Rs. 1460 million. Investments rose by 72 percent and advances exceeded Rs. 1080 million for the first time in the banking history. 116 new branches were opened during 1974 and the Bank started participating in the Government¶s spot procurement agriculture program. Those seventeen years saw a rapid growth for the Bank. Branches increased from 353 in 1974 to 748 in 1991. Deposits rose from Rs. 1.46 billion, and Advances & Investments from Rs. 1.34 billion to Rs. 22 billion during this period. It also opened three branches in the U.K. Allied Bank (1991 to 2004): As a result of privatization in September 1991, Allied Bank entered a new phase, and became the world¶s first bank to be owned and managed by its employees. In 1993 the ³First Allied Bank Modaraba´ (FABM) was floated. After privatization, Alli d Bank e became one of the premier financial institutions of Pakistan. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 21 Allied Bank¶s capital and reserves were Rs. 1.525 billion; its assets amounted to Rs. 87.536 billion and deposits to Rs. 76.038 billion. Allied Bank enjoyed an enviable position in Pakistan¶s financial sector and was recognized as one of the best amongst the major banks of the country. In August 2004, as a result of capital reconstruction, the Bank¶s ownership was transferred to a consortium comprising Ibrahim Leasing Limited and Ibrahim Group. Today, the Bank stands on a solid foundation built over 63 years of hard work and dedication, giving it a strong equity, an asset and deposit base and the ability to offer customers universal banking services with more focus on retail banking. TheBank has the largest network of online branches in Pakistan and offers various technology -based products and services to its diverse clientele through its network of more than 700 branches. In August 2004 as a result of capital reconstruction, the Bank¶s o wnership was transferred to a consortium comprising Ibrahim Leasing Limited and Ibrahim Group. Today the Bank stands on a solid foundation of over 63 years of its existence having a strong equity, assets and deposits base offering universal banking service with higher s focus on retail banking. The bank has the largest network of on -line branches in Pakistan and offers various technology based products and services to its diversified clientele through its network of more than 700 branches. Allied Bank (2005 to date): In May 2005, Ibrahim Leasing Limited dissolved and the company was vested into Allied Bank Limited. ALL the shareholders were issued ABL shares instead of the all shares held by them. An application for the listing of ABL shares in all the Stock Exchange Companies of Pakistan was made; ABL was formally listed and the Bank¶s share trading began on the following dates: Islamabad Stock Exchange Lahore Stock Exchange Karachi Stock Exchange 08th August 2005 10th August 2005 17th August 2005 Today, all Allied Bank Limited shareholders can trade in the Bank¶s shares at their will. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 22 Allied Bank and Ibrahim Group: The group started with a cloth trading business in the industrial city of Faisalabad. Late Haji Sheikh Mohammad Ibrahim, founder of the Ibrah Group, settled in Faisalabad im after partition of India in 1947 and re-established his ancestral business of cloth trading by the name of ³Ibrahim Agencies´. What is known in business today as Ibrahim Group with diversified business interests from Spinning to PSF, Financial Institutions to Banking and Energy, started off as a mere cloth trading agency just half a century ago. Under the scheme of reconstruction proposed by State Bank of Pakistan, Consortium of Ibrahim Leasing Limited, Ibrahim Group and its sponsors acquired more than 75% of the shareholding of Allied Bank of Pakistan Limited. Management and control of the Bank was handed over to Ibrahim Group on August 19, 2004. At present Ibrahim Group is holding more than 80% shareholding of this bank. One of the top five banks of Pakistan, Allied Bank has more than 742 branches across the country with 7,139 employees and financial assets of Pak Rupees 234 billion. The Group plans to inject its own dynamism and energy in the bank to turn it into a premier fnancial i institution of the country. After the acquisition of the bank Ibrahim Leasing Limited has been merged into Allied Bank limited. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 23 CHAPTER ² 3 ALLIED BANK LIMITED The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 24 Vision To become a dynamic and efficient bank providing integrated solutions and the first choice of bank for all customers. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 25 Mission To provide value-added services to our customers To provide high-tech innovative solutions to meet customer requirements To create sustainable value through growth, efficiency and diversity for all stakeholders To provide a challenging work environment, and reward dedicated team members To play a proactive role in contributing towards the society The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 26 Values & Objectives Values: Integrity Excellence in Service High Performance Innovation and Growth Objectives: Allied Bank has following objectives: Prime focus to earn profit by providing values to its customers To provide superior services to its customers To provide assistance in the development of the commerce and trade industry Focus on blending skills and experience towards creating an enabling environment Core focus is to inculcate a culture of collaboration intended to deliver world class customer service The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 27 Board of Directors ³The people who draw the picture of the organization on the broader canvas of strategy and planning, the pioneers of prosperity and world of wisdom that paves the path to long term success´ Mr. Mohammad Naeem Mukhtar Mr. Mohammad Aftab Manzoor Mr. Khalid A. Sherwani Mr. Pervaiz Iqbal Butt Mr. Mohammad Waseem Mukhtar Mr. Farrakh Qayyum Mr. Sheikh Mukhtar Ahmed Mr. Abdul Aziz Khan Mr. Tasneem M. Noorani Mr. Sheikh Jalees Ahmed Mrs. Nazrat Bashir Mr. Mubashir A. Akhtar Chairman (CEO) President & (CEO) Director Director Director Director Director Director Director Director Director The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 28 Executive Committee Mr. Khalid A. Sherwani Mr. M. Naveed Masud Mr. Akhter Ali Khan Mr. Tahir Saeed Effendi Mr. Mohammad Yaqoob Mr. Masud A. Sidique Mr. Anwar Zaki Mr. Khalid Mehboob Mr. Sayed Mujtaba Gillani President & (CEO) Senior Executive Vice President Head Credit Head I.T & Financial Officer Head Islamic Banking & Planning Div Head Human Resource Head Treasury Head Business Promotion Head Special Vigilance Unit The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 29 Organizational Setup MANAGEMENT HIERARCHY: President Senior Vice President Vice President Executive Vice President Senior Executive Vice President Regional General Manager Branch Manager The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 30 Important Information Audit Committee: Sheikh Mukhtar Ahmad Chairman Farrakh Qayyum Member Mubashir A. Akhtar Member Sheikh Jalees Ahmed Company Secretary: Waheed-Ur-Rehman, FCA Auditors: M. Yousuf Adil Saleem & Co. Chartered Accountants KPMG Taseer Hadi & Co. Chartered Accountants Legal Adviser: Haider mota and Company, Advocates and Solicitors Shares Registrar: Technology Trade (Pvt.) Ltd. Central Office Bath Island, Khayaban-e-Iqbal, Main Clifton Road, Karachi ± 75600 UAN: (92 21) 111-110-110 Head Office/Registered Office 8-Kashmir Egerton Road, Lahore The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 31 Website & Email: www.abl.com E-mail:
[email protected] Toll Free Number: 0800-22522 BRANCH NETWORK: There are Four Provincial Headquarters of Allied Bank Limited situated in Lahore (Punjab), Karachi (Sindh), Peshawar (NWFP & Azad Kashmiri and Quetta (Baluchistan). 800 domestic branches arrangements with large number of Correspondent Banks Exchange Companies. y y y y Over 200 branches of Foreign Currency Accounts Over 70 branches for trade finance. Large number of branches for Inland Remittances Large number of branches for Rupee Travelers Checks PROVINCIAL HEADQUARTERS: PUNJAB SINDH NWFP AZAD KASHMIR BALUCHISTAN 196 Upper Mall Lahore Jubilee Insurance House, I.I. Chundriyar Road. Karachi 1st floor State Life Building, The Mall Peshawar Cantt. C.C, & I Building, Zarghoon Road, Quetta. Now with its network of over 8OO branches located in the urban and rural areas throughout Pakistan, Allied Bank is positioned to provide personalized banking services to its customers at locutions convenient to the customers. ABL has invested extensively in The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 32 branch automation. 560 branches out of a total of 819 branches are computerized Mr. Khalid A. Sherwani, look over as President, of Allied Bank in October 2000. The President gave policy guide lines and the strategy to run the affairs of he Bank in the t light of changed requirements of the banking industry. He emphasized that the Bank Executives, officers & staff must work fearlessly and put in all-out effort In ensure steady growth of the Bank. He emphasized that customers have to be given the best possible service as it is they who are the source of our growth & success. TRAINING ACADEMIES: Allied Bank Limited has five training academies, two in Lahore, two in Karachi, and one in Islamabad. In these training academies the new as well as the existing staff gel training. When a new employee comes in ABL then most often he is sent to any of these academies for training. The training period may tie minimum of one-month up to maximum of one year. The training period depends upon the nature ofthe job. During the training the new employees are acquainted with all the necessary information about their jobs. When any change occurs in the policies of the Bank, then the seminars are held in these academies in which employees as well as executives pa rticipate to get information about the new policies of the Bank. For example if the Bank policy regarding the financing schemes change then the Managers of the Advances Section are invited in these seminars. They learn about the new changes and then implem these changes in their branches. In ent These academies a permanent staff is present for the training of employees. However, if requires, subject specialists are invited to deliver lectures on certain subjects. For example the Bank has a contract with Sajjad Associates which send its executives to deliver lectures on project financing. Exams are also held in these training academies. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 33 CHAPTER ² 4 Services by Allied Bank The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 34 Consumer Banking In line with the Bank¶s aim to provide a host of products and services to its customers, substantial ground work has been done to establish a strong consumer banking business. Furthermore, to achieve this objective, professionals from across the industry have been recruited into areas of product development, sales, credit policy, research, consumer analytics, call centers and service quality departments. The consumer portfolio, comprising the debit card, credit cards, auto loans, personal loans and mortgages will be established phase by phase. However, we are confident that our strengths, together with our largest network of online branches, a superior technology platform and a big customer base, will take the Bank¶s profitability to new heights. Visa Credit Cards: Allied Visa Gold Credit Card: Welcome to the world of privileges, benefits and savings with your Allied Visa Credit Card. In order to cater to your growing financial needs we are proud to introduce Allied Visa Credit Card with The Lowest Service Charge ever! So now you can save money where it counts and spend lavishly at your favorite places with greater flexibility, convenience and most important-Affordability! With your Allied Visa Credit Card you can enjoy a variety of state-of-the-art features and unmatched value by spending at over 49,000 merchants across Pakistan and 27 million merchant outlets worldwide! And what more, you can also use your credit card at over 1 million ATMs internationally! The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 35 Features: The Most Attractive Service Charge Your Allied Visa Credit Card helps you save money where it counts. Your Allied Visa Credit Card currently carries the most attractive Annual Percentage Rate in the market, i.e. 28%*. So use your Allied Visa Credit Card at your favorite places and enjoy savings like never before. *Any change in APR will be intimated accordingly. Buy Now, Pay Later With your Allied Visa Credit Card, your free credit period allows you to pay for your purchases up to 50 days after the date of purchase. So now you can buy all the things you want, whenever you want, at your earliest convenience. Global Acceptance In addition to being accepted by over 49,000 merchants in Pakistan, your Allied Visa Credit Card is also accepted at over 1 million ATMs and 27 million merchants worldwide. This provides you with the added flexibil ty and security of being able to i make transactions on your card just about everywhere you go. Flexible Repayment When paying back your credit card bill, your Allied Visa Credit Card gives you the option to either pay the entire amount as according to your statement or a minimum of 5% of your total outstanding balance or Rs. 500 (whichever is higher). Cash Advance Facility As an Allied Visa Credit Card member, you are entitled up to 50% of your credit limit in cash. Just go to your nearest ATM with the withdrawing cash 24 hours a day. For example, Service Charge @ 28% per annum or 2.33% per month will be charged from the day of the cash advance transaction. or sign and avail the facility of The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 36 (The current applicable rate may differ from the example giv above. Please refer to the en latest Schedule of Charges for the applicable rates). Calculation of Cash Advance Facility The calculation can further be explained as per the following example: If an amount of Rs. 10,000 is transacted on 20-04-09 and the statement generation date is 30-04-09, then the amount will attract a mark-up of 28% per annum equaling to 0.077% on a daily basis from the date of transaction till the complete payment is made. Since in this example the time period between the transaction da and the statement date is 10 te days, therefore the finance charges are calculated for 10 days. The total finance charges in this case amounting to Rs. 76.71 for 10 days will be reflected on the credit card statement. Transaction Date Statement Date APR Calculation Finance Charges Total Payable Amount 20-04-09 30-04-09 28% 10,000x28%/365x10 76.71 10,076.71 In addition to the above, a flat fee will also be charged as mentioned in the SOCs for every transaction. Supplementary Cards Want to share the benefits of your Allied Visa Credit Card with others? Now you can! Treat up to two people with Supplementary Credit Cards and pass on the many privileges of your Allied Visa Credit Card to friends, family and anyone else you choose! Zero Loss Liability The Allied Visa Credit Card¶s zero loss liability feature protects you from paying any unauthorized transactions on your card in the event that it is lost or stolen. Please The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 37 immediately notify Allied Phone Banking on 0800-22522 (within Pakistan) or on 922135301094 (outside Pakistan) in case your card is lost or stolen. Balance Transfer Facility In case you have outstanding balances on other cards, consolidate these onto your Allied Visa Credit Card with a BTF rate and save more on your outstanding payments than ever before. Calculation of Balance Transfer Facility: The calculation can further be explained as per the following example: If an amount of Rs. 10,000 is transacted on 20-04-09 and the statement generation date is 30-04-09, then the amount will attract a mark-up of 20% per annum equaling to 0.055% on a daily basis from the date of transaction till complete payment is made. Since in this example the time period between the transaction date and the statement date is 10 days, therefore the finance charges are calculated for 10 days. The total finance charges in this case amounting to Rs. 54.79 for 10 days will be reflected on the credit card statement. Transaction Date Statement Date APR Calculation Finance Charges Total Payable Amount 20-04-09 30-04-09 20% 10,000x20%/365x10 54.79 10,054.79 In addition to the above, a flat fee will also be charged as mentioned in the SOCs for every BTF transaction. Allied Phone Banking In case you require any additional help regarding your Allied Visa Credit Card, Allied Phone Banking is there to provide you with immediate help, 24 hours a day. Just give us a call on 0800-22522. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 38 Free CIP Lounge Access As an Allied Visa Credit Cardholder, you are eligible to avail the complimentary lounge facility at Quaid-e-Azam International Airport, Karachi and enjoy a variety of complimentary features. Relax while you watch leading television channels or select something to read from an updated library of newspapers and periodicals.Also feel free to plug in your laptop and mobile phone into the charging facilities provided or browse the internet or send and receive faxes while you wait. You can also treat yourself to a wide assortment of high quality snacks, beverages and fresh frui s. t SMS Banking Know immediately when your card is being used. With Allied Bank's SMS Banking facility, you have the option to receive an SMS every time your card is used, so that you can quickly take action in case your card is stolen or misused. Also, ke track of your ep spending by receiving your credit card statements at the beginning of every month. Check your total outstanding amount and minimum balance or simply enjoy our latest promotional offers and greetings via your mobile phone. A flat fee will b charged for e subscribing to the facility as mentioned in the Schedule of Charges. GCAS Our Allied Visa Gold / Platinum Credit Card holders can now avail Global Customer Assistance Service (GCAS) regarding their Visa Gold / Platinum Credit Card while traveling in any of the countries. Allied Visa Platinum Credit Card Welcome to the world of privileges, benefits and savings with your Allied Visa Credit Card. In order to cater to your growing financial needs we are proud to introduce Allied Visa Credit Card with The Lowest Service Charge ever! So now you can save money where it counts and spend lavishly at your favorite places with greater flexibility, convenience and most important-Affordability! With your Allied Visa Credit Card you can enjoy a variety of state-of-the-art features and unmatched value by spending at over 49,000 merchants across Pakistan and 27 million merchant outlets worldwide! And what more, you can also use your credit card at over 1 million ATMs internationally! The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 39 Features Platinum Life Platinum Life is a unique platform that showcases exclusive programs and events specially designed for Allied Visa Platinum Credit Cardholders. These are: y y y y Visa Platinum Club Visa Platinum Dining Visa Platinum Golf Visa Experiential Travel Visa Platinum Club The Visa Platinum Club is a unique recognition program that rewards you with exclusive privileges from internationally reputed Club Partners offering unmatched quality of service. Unlike other cardholder reward programs, your Allied Visa Platinum Credit Ca rd immediately entitles you to the various Club privileges without having to earn points or accumulate credit charges. As a Visa Platinum Club member, you can enjoy complimentary room upgrades at five-star hotels, attractive retail discounts, special rates on car rentals, personalized golf tips by professional trainers and much more- all courtesy of your Visa Platinum Club privileges and the Club Partners. For more details on the Club Partners and the various perks they offer, visit the Visa Platinum websie at t www.visaplatinum.com Visa Platinum Dining Visa Platinum Dining is a program offering you fine dining privileges at over 200 restaurants in Asia Pacific with your Allied Visa Platinum Credit Card. You can enjoy an assortment of complimentary beverages, priority reservations and free parking when dining at participating restaurants. So whether you are in the mood for exotic Mediterranean fare, traditional Japanese cuisine or a lavish Chinese banquet, you can always expect the most luscious trea with ts your Allied Visa Platinum Credit Card. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 40 To search for a preferred restaurant either by country/city location or cuisine all over the world, you can visit the Visa Platinum website at www.visaplatinum.com Visa Platinum Golf Being an Allied Visa Platinum Credit Cardholder, Visa Platinum Golf offers you complimentary tee-offs, discounted green fees and exclusive access to the world's most celebrated golf clubs. You can visit the Visa Platinum website at www.visaplatinum.com for more information. Visa Experiential Travel Visa Experiential Travel brings you travel adventures with exceptional experiences. Working with renowned partners, the program offers 15 packages every quarter. For more information, you can visit the Visa Platinum website at www.visaplatinum.com Priority Pass Airport Lounge Program Priority Pass is the largest independent Airport VIP Lounge Program in the world, giving you access to over 600 worldwide exclusive airport VIP lounges. As an Allied Visa Platinum Credit Cardholder, you can avail the option of including this airport lounge access program at preferred rates in your overall Visa Platinum benefits. To be admitted into these lounges, you must present your Priority Pass membership card. Priority Pass membership cards can be used at any participating airport lounges regardless of your choice of airline or class of ticket. For any further information you may visit www.prioritypass.com or call Allied Phone Banking on 0800-22522. Visa Platinum Websites The Visa Platinum websites have been designed to keep you up-to-date on the latest perks and benefits being offered on your Allied Visa Platinum Credit Card. In addition, the sites have functionalities such as Concierge Online to further enhance your Platinum experience. The website with an easy to remember URL, www.visaplatinum.com provides you access to: The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 41 y The latest information on Visa Platinum regional programs, such as the Visa Platinum Club, Visa Platinum Dining, Visa Platinum Golf Holidays and Visa Platinum Experiential Travel facilities y The latest information on local country promotions and events. These details can be found in the section called "Platinum Life" y y Online applications such as Concierge Online Directory of toll-free numbers for reaching VPCC from all key global destinations Visa Platinum Customer Center (VPCC) The Visa Platinum Customer Centre (VPCC) is a one-stop shop to handle all your needs. Staffed by highly trained professionals who provide a wide range of travel and entertainment Concierge Services, emergency lost/stolen card services, telephone translation services, transfer to issuers, etc., for Allied Visa Platinum Credit Cardholders all over the world, the VPCC is operational 24 hours a day, 7 days a week, and can easily be accessed via a comprehensive network of international toll-free numbers. Concierge Service As an Allied Visa Platinum Credit Cardholder, you can also avail the travel and entertainment Concierge Service with the best in personalized customer service, 24 hours a day, 7 days a week. Whether at home or overseas, you can have access to a host of travel and entertainment services, as well as emergency assistance such as card replacement, cash disbursement, medical assistance, etc., through a dedicated network of global toll-free numbers. Information, reservations, referrals, etc., are all available at no cost. However, the cost of any goods or services purchased will be billed directly to your Allied Visa Platinum Credit Card. Concierge Online You can also avail the Concierge Online facility, wh provides an alternative to the ich conventional telephony Concierge Service. With a simple click of the mouse, you can easily request for Trip Planning Assistance, Hotel Reservations, Flight Reservations, Car Rentals, Restaurant Reservations and Performance Ticket Bookings, all from the comfort of your home. To use Concierge Online, you must first register yourself in order to gain The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 42 access to the secure Concierge Online website. You just need to choose the user name and password you wish to use for logging on to Concierge Online. For this, simply log on to abl.com and, in the Allied Visa Platinum Credit Card section, click on www.visaplatinum.com. To submit a request, you simply need to fill an online form that will be automatically sent to the VPCC for fulfillment. A Customer Service Executive will respond to you with the relevant details via your preferred mode of communication (email, phone or fax). Allied Phone Banking In case you require any additional help regarding your Allied Visa Credit Card, Allied Phone Banking is there to provide you with immediate help, 24 hours a day. Just give us a call on 0800-22522. Free CIP Lounge Access As an Allied Visa Credit Cardholder, you are eligible to avail the complimentary lounge facility at Quaid-e-Azam International Airport, Karachi and enjoy a variety of complimentary features. Relax while you watch leading television channels or select something to read from an updated library of newspapers and periodicals. Also feel free to plug in your laptop and mobile phone i to the charging facilities provided or browse n the internet or send and receive faxes while you wait. You can also treat yourself to a wide assortment of high quality snacks, beverages and fresh fruits. SMS Banking Know immediately when your card is being used. With Allied Bank's SMS Banking facility, you have the option to receive an SMS every time your card is used, so that you can quickly take action in case your card is stolen or misused. Also, keep track of your spending by receiving your credit card statements at the beginning of every month. Check your total outstanding amount and minimum balance or simply enjoy our latest promotional offers and greetings via your mobile phone. A flat fee will be charged for subscribing to the facility as mentioned in the Schedule of Charges. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 43 Allied Cash+Shop Visa Debit Card Features Get Cash You are always on the move, now your bank account is too. You can use your Allied Cash+Shop Visa Debit Card to withdraw cash directly from your bank account from over 3,500 ATMs in Pakistan - including Allied Bank's largest network of ATMs - and over 1 million ATMs worldwide Shop Anywhere Use the Visa power of your Allied Cash+Shop Visa Debit Card to shop at over 49,000 retailers in Pakistan and over 27 million retailers internationally. Dine Out Go to all your favorite restaurants and order whatever you want without having to worry about how much cash you have in your pocket - thanks to your Allied Cash+Shop Visa Debit Card. Enjoy Traveling Imagine traveling without carrying cash. With your Allied Cash+Shop Visa Debit Card, you can buy your plane tickets and do all your shopping abroad without worrying about spending too much or running out of cash. Get Groceries Go groceries shopping with your Allied Cash+Shop Visa Debit Card and you will never have to worry about having enough cash in your pocket when you're standing in line at the cash counter. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 44 Have Fun Whether you feel like taking the family to see a movie at the cinema or treating some friends to a night of bowling, you can do it all and more with your Allied Cash+Shop Visa Debit Card. Fuel Up Now you can fuel up your car without emptying your wallet. Pay for all your fuel purchases with your Allied Cash+Shop Visa Debit Card. Stay Alert Now, be more secure and keep better track of your spending. With your Allied Cash+Shop Visa Debit Card, you can get SMS alerts when you make transactions on your Card. You can also access the details of your transactions via internet banking at abl.com The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 45 Commercial Banking Deposit Accounts: PLS Account Allied Bank offers the PLS Savings Account facility to its customers with the following attractive features. y y y Free Cash Deposit / Withdrawal / account to account transfer within city. Free Cash Deposit / Withdrawal / account to account transfer within city. Free Online Transactions, DD/TT/PO for depositors maintaining an average monthly balance of Rs. 2.500 (M) & above. y Free issuance of cheque book at the time of account opening. Current Account Allied Bank offers the Current Account facility for individuals as well as for institutions and commercial customers. y There are free Online Transactions, DD/TT/PO for depositors maintaining an average monthly balance of Rs. 0.5 (M) & above. y y Free issuance of cheque book at the time of account opening. Free Cash Deposit / Withdrawal / account to account transfer within city. Allied Business Account Enjoy unlimited freedom and convenience with numerous free services ± all with Allied Business Account Now with your current account you can make unlimited tran sactions via 779 online Allied Bank branches. On maintaining a daily minimum balance of just Rs. 50,000, you can enjoy the following services FREE of charge: The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 46 y y y y y y y y y FREE Pay Orders FREE Demand Drafts FREE Deposit FREE Withdrawals FREE Funds Transfer FREE Telephonic Transfer FREE Internet Banking No Cheque return charges FREE Nationwide Real-time Online Banking Allied Rising Star Allied Rising Star - Youth¶s 1st Bank Account is a savings account for all youngsters below 18 years of age. It can help you save your pocket money and earn daily profit. And when you¶ve collected enough, there¶s so much you can do with your savings« like buy your favorite books and toys or a special present for your mummy or daddy, or even carry on saving! So if you¶re below 18 years of age, you can open your very own Allied Rising Star Youth¶s 1st Bank Account and have all the fun that goes with it! When you open your account, it¶s in your name, but you still have to take mummy¶s, daddy¶s or your guardian¶s help to use it - like with: y y y Signatures General banking activities General banking activities You can use your account any time ± which means you can take money out with your parent¶s or guardian¶s help, or deposit money yourself, whenever you need to . You get 2 accounts when you become an Allied Rising Star. One is your Main Account, which has all the money that µyou¶ deposit in it. The second is called your Wallet Account, in which all your profit is collected. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 47 You get to make µdaily¶ profit! Your profit goes in your Wallet Account everyday, which means your total savings increase everyday! But that¶s not all! The Bank gives you Bonus Cash on your profit too! You and your parent or guardian gets to enjoy the following goodies and benefits: y y y y y A cash box for you to save money everyday Your first bank account certificate to be the pride of your bedroom wall Your very own picture ID card that you can show off to all your friends An exciting gift for you to enjoy at home The Allied Cash+Shop Visa Debit Card to use anywhere in the world. This Card will give your parent/guardian access to both your accounts y 2 cheque books ± one to go with your Main Account and the second to go with your Wallet Account y y y y Free Internet Banking to access your account from anywhere, any time SMS Alerts for extra convenience Free Insurance Cover of up to Rs. 500,000 in case of any mishap or misfortune So you see, being an Allied Rising Star will make saving so much more fun than regular saving! Allied Basic Banking Account In order to provide basic banking facilitie to its lower-middle class customers, Allied s Bank has introduced the ³Allied Basic Banking Account´ (ABBA). y y y y Account can be opened with an initial deposit of Rs 1,000/= It is a non-remunerative account with a no minimum balance requirement. The Statement of Account is issued on a yearly basis. The account will be closed automatically if the balance remains ³zero´ for one year. y No service charges on the account for a maximum of 2 -withdrawals and 2deposits during a calendar month. Additional transactions will be subject to a service charge as per the Bank¶s Schedule of Charges for every withdrawal/deposit. y Unlimited withdrawals from ATMs. Rahim yar Khan Campus The Islamia Univresity of Bahawalpur ² 48 Allied e-Savers Account Saving has never been so flexible! The Allied e-Savers Account is a unique savings plan where you can earn returns as high as 7.5% with the convenience of 4 withdrawals a month! ALLIED E-SAVERS Slabs Rs. 400,001 up to Rs. 500,000 Rs. 300,001 up to Rs. 400,000 Rs. 200,001 up to Rs. 300,000 upto Rs.200,000 Salient Features y y y y Investment: Rs. 10,000 to Rs. 500,000 Profit: payable on Half Yearly basis. Expected Profit Rate: Up to 7.50% p.a. Eligibility: Individuals Profit Rate 7.50% 6.00% 5.00% 5.00% Additional Benefits y y y y 24 hours phone banking service Free Internet Banking facility SMS transaction alerts Allied Cash+Shop Visa Debit Card for cash withdrawals through any ATM including our largest network of ATMs across Pakistan and for debit transactions at various retail outlets y First free cheque book - A/c Payee only Foreign Currency Deposits Allied Bank offers the facility of opening Current, Savings and Term deposit Accounts. Foreign Currency accounts can be opened in US Dollar, Pound Sterling, Euro, and Japanese Yen at designated branches. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 49 Rewarding Term Deposit A term deposit scheme which gives a high rate of return and the flexibility of various tenure. Investment can be made with the minimum of PKR 25,000 only. Rate Of Profit : Rewarding Term Deposit Scheme Rs.25,000 to Rs.9,999,999 Rs.10,000,000 & Above Salient Features: y y y y y Account Type: Term Deposit Term Period: 1-12 months Investment: Rs. 25,000 & above Profit: Payable on maturity Eligibility: Individuals & Institutions 1 Month 7.50% 8.50% 3 Months 6 Months 9.00% 10.00% 9.75% 10.75% 12 Months 11.25% 11.75% Monthly Profit Plus Saving has now become all the more appealing with our Monthly Profit Plus Scheme, which provides you monthly profits on investments. The scheme is designed for a period of 1 Year with the following profit rates: Tenure Profit Rate Profit Payment 1 Year 11.00% p.a. Rs.917 * per month Approximate monthly returns calculated on the investment of Rs.100, 000 Withholding tax, Zakat or other Government Levies are applicable separately Salient Features: y y Account Type: Term Deposit Term Period: 1 year Rahim yar Khan Campus The Islamia Univresity of Bahawalpur ² 50 y y y Profit: Payable on monthly basis Minimum Deposit Amount: Rs.25,000 Eligibility: Individuals & Institutions (other than financial institutions) Additional Benefits: y y y y y Chequing Account for monthly profit credit 24 hour phone banking service Free internet banking facility SMS transaction alerts Allied Cash + Shop Visa Debit Card Allied Advance Profit scheme In keeping with our objective to bring you new and innovative services and banking products, we now introduce Allied Advance Profit Scheme that gives the entire profit upfront. Product Specifications: Minimum Investment Amount ± Rs. 25,000 Investment Terms: y y 18 months Auto roll-over (optional) Profit Payment: Profit of Rs.14,000* will be immediately credited in the customer¶s current account. *on an investment of Rs.100,000 Tax/Zakat will be applicable as per rules Rewarding Profit Account Rewarding Profit Account is introduced for the customers who have liquidity and can manage to maintain sizeable monthly average balance and earn greater profit on it. Rate Of Profit : The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 51 Rewarding Profit Account Rs.10 Million to less than Rs. 50 Million Rs.50 Million to less than Rs. 100 Million Rs.100 Million to less than Rs. 250 Million Rs.250 Million to Rs. 1 Billion Profit Rate 8.00% 8.50% 9.25% 10.00% Salient Features : y y y y Account type: Chequing Profit: Payable on monthly basis Maximum Investment Amount: Rs. 1 Billion Eligibility: Individuals, and institutions Additional Benefits: y 24-hour phone banking service Behtar Munafa Account A profit bearing chequing account with attractive rate of return, paid on monthly basis. Rate Of Profit: Behtar Munafa Account Upto Rs.5,000,000 Rs.5,000,001 to Rs.25,000,000 Rs.25,000,001 to Rs.50,000,000 Rs.50,000,001 to Rs.100,000,000 Rs.100,000,001 to Rs.250,000,000 Rs.250,000,001 to Rs.500,000,000 Rs.500,000,001 & above 5.00% 6.00% 7.00% 7.50% 8.00% 8.50% 9.00% Salient Features: y y y y Account Type: Chequing Account Profit: Payable on monthly basis Highest Profit: Upto 9.00% p.a Eligibility: Individuals, and institutions Additional Benefits: The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 52 y y y y 24-hour phone banking service Free internet banking facility SMS transaction alerts Allied Cash + Shop Visa Debit Card Behtar Munafa Term Deposit If you want to fix your money now to secure your future, this is the product for you. Rate of Profit: Behtar Munafa Term Deposits Upto Rs. 5,000,000 Rs.5,000,001 to Rs.25,000,000 Rs.25,000,001 to Rs.50,000,000 Rs. 50,000,001to Rs. 100,000,000 Rs.100,000,001& Above Salient Features: y y y y Account Type: Fixed Term Deposit Profit: Payable on maturity Highest Profit: Upto 9.00% p.a. Eligibility: Individuals, and institutions 1 Month 5.00% 5.25% 5.50% 5.75% 6.00% 3 Months 6.00% 6.50% 7.00% 7.50% 8.00% 6 Months 6.50% 7.00% 7.50% 8.00% 8.50% 1 Year 7.50% 8.00% 8.50% 8.75% 9.00% Allied Bachat Scheme Allied Bachat Scheme is a PLS Term Deposit Scheme based deposit scheme whereby you can double your investment in just 7.5 years. Maturity Period: 7.5 years Minimum Deposit: Rs. 50,000/- with multiples of Rs. 10,000/Expected rate of Profit: The deposit amount will be doubled in 7.5 Allied Bachat Scheme is a PLS Term Deposit Account, whereby you can double your investment in just 7.5 years. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 53 This scheme comes with the following schedule of profit rates: No. of Years 0 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 Salient Features: y y y y y Maturity Period: 7.5 years Free Internet Banking facility Minimum Deposit: Rs. 50,000 (additional investment in multiples of Rs. 10,000) Expected Profit Rate: Up to 13.33% p.a Eligibility: All individuals and institutions ABL Projected Rates 0 7.00% 7.50% 8.00% 8.75% 10.00% 10.25% 10.50% 10.75% 11.00% 11.25% 11.50% 11.75% 12.00% 13.33% Repayment amount 50,000.00 53,500.00 55,625.00 58,000.00 60,937.50 65,000.00 67,500.00 71,000.00 74,187.50 77,500.00 80,937.50 84,500.00 88,187.50 92,000.00 100,000.00 SME (Small and Medium Enterprises): The Commercial and Retail Banking Group (CRBG) caters to the needs of commercial entities and small and medium enterprises. A dedicated team of Relationship Managers first identifies the specific needs of each customer segment, then designs and delivers a facility package, which is in conjunction with those needs, and provides customers the full support and opportunity to take advantage o the various business prospects available f in the market. Following are the main credit facilities we offer: The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 54 RF/CF: These are short term credit facilities (maturity of up to one year) lent to customers to meet their day-to-day business/working capital requirements and finance their inventories, receivables, etc. Generally, in addition to collateral security, these facilities also entail security in the form of hypothecation of stocks and receivable/pledge of stocks. Export Refinance Facility: This is mainly the same as RF/CF, but as per the Terms and Conditions set by SBP, is meant exclusively for exporters. Foreign Bill Purchase/Bill Discounting Facility: This loan/facility is provided to exporters against their export bills under LC and a contract to faciitate their cash flow, l while they are waiting receipt of their payments. LC (Sight /Usance): This facility allows importers to import goods and machinery. FIM/FATR: These facilities allow customers to finance imported goods against Pledge & Trust Receipts, backed by collaterals. Demand Finance Facility: This is a medium/long term credit facility available to establish new projects for BMR and capacity expansion with a repayment term of more than one year, which can be paid back in installments. This faciliy meets clients¶ long t term needs such as, financing factory constructions or machinery expenses. Inland LC (Sight/Usance): This facility allows customers to purchase commodities within the country. Letter of Guarantee (LG): On behalf of the customers, the Bank issues a guarantee in favour of the beneficiary, against the performance of a particular job/contract, within a particular time. Import Export: Allied Bank provides highly efficient trade finance services for import/export businesses through a large number of authorized branches where trained and motivated staff is available to handle the business on the customer¶s behalf. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 55 Agriculture Finance: The Bank, under the guidelines of the State Bank of Pakistan, extends short, medium and long term Agriculture credit facilities to farming community of Pakistan on easy terms to increase the credit flow to Farm and Non-Farm segments of Agriculture sector. Farm credit is extended for the purpose of production of crops to meet working capital expenses and Development of Agri land. Non-Farm Credit facilities are offered for Livestock (Cow, Buffaloe, Goats, and Sheep etc.), Poultry (Eggs, Day Old Chicks, Layer, Broiler, Hatchery) and fisheries (inland and marine, excluding deep sea fishing). Farm Loans Production Loans y Inputs like seeds, fertilizers, pesticides, weedicides, herbicides, labour charges, water charges, vegetables, floriculture, forestry etc. y Working capital finance to meet various farming expenses Development Loans y y y y y Improvement of agricultural land, orchards, etc. Construction of Godowns Purchase of Tractors, Machinery & other equipments Installation of Tube wells Farm Transportation, etc. Non-Farm Loans Livestock 1. Working capital y Purchase of animal fodder and feeds, Vaccinations, Vitamins and other medications for animals including artificial insemination y Overhead expenses i.e. labor, fuel, electricity etc 2. Term loan y y y Purchase of mature milk yielding buffaloes/cows, Purchase of Young animals for rearing for dairy farming Purchase of Milk storage chilling tanks and milk carrying containers, feed grinders, tokas, feed mixing machines and feed/milk containers etc. Construction/Procurement of permanent sheds, water tanks, water pumps etc. Rahim yar Khan Campus The Islamia Univresity of Bahawalpur ² 56 Poultry 1. Working capital y Purchase of Eggs, Birds / Day old chicks, bird feed and feed raw material and vaccination y Overhead expenses i.e. labor, utility bills, Cost of fuel for generators & vehicles, transportation etc. 2. Term loan y y Purchase of Equipment/Machinery for Broiler/Layer farm & Hatchery Farm construction for broiler, layer, hatchery and procurement of other items required for the establishment of poultry farming industry etc. Fisheries Forestry Internet Banking: Banking is now at your fingertips! Allied Direct Internet Banking offers you the convenience to manage and control your banking and finances - when you want, where you want! It's Simple, Convenient, Secure and Faster. So, just get clicking! Some of the advantages of Allied Direct Internet Banking are: Simple and Convenient Easier navigation and help provided at every step so you can make full use of this service. With Allied Direct convenience is just a click away. Secure and Faster Encrypted with latest tools and technologies, Allied Direct is the choice for secure and fast Internet Banking. 24x7 Access You now have access to your account 24 hours a day, 7 days a week. You can transfer funds or pay bills, even when it's a holiday. To use Allied Direct Internet Banking, you should be a registered Allied Bank Account holder with a valid ATM Card. If you do not have an account, please visit any of our The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 57 nearest branches and open your account and obtain an ATM Card. Our friendly branch staff will help you open your account quickly. Online Banking: Allied Online Banking is a unique service being offering from Al ied Bank. Through this l service, your account in Allied Bank is available to you from any of our branches countrywide. No matter where you are in the country and whichever branch your account is maintained at, you can have your cheque cashed at any of our 784 online branches located in 250 cities. You can also use the service, from any branch, to deposit cash for instant credit into your account or any other account in Allied Bank. Similarly, the account to-account Funds Transfer facility is also available for instant remittance. Your cheque drawn from a remote branch for credit into a beneficiary¶s account or encashment of a specified amount can also be presented by a third person at any branch. What¶s more, making a Balance Inquiry and getting an Account S tatement are additional services available to Account holders from remote branches. Allied Online provides a secure, efficient and convenient facility for making payments to beneficiary accounts from any of our branches countrywide. Corporate customers requiring fund collection or a disbursement facility can use it for cash management services. Corporate Leasing Allied Bank started lease operations when it integrated with Ibrahim Leasing Limited. Facilities include leases for machinery, commercial vehicles and equipments. The Bank provides lease facilities to corporate and commercial clients in all industrial enterprises for balancing, modernization, replacement and expansion schemes. Leasing is a popular mode of financing because of its distinctive features like tax shield, preserve working capital, easy documentation and less processing time. Lease applications are processed at all Bank branches in Pakistan. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 58 Allied ATM Network: Allied Bank has a vast network of over 538 ATMs installed in over 130 cities, wh ich continues to grow at a rapid pace. 1 Link Network Allied Bank is a member of the µ1-LINK ATM sharing switch¶ comprising of over 2,000 ATMs nationwide, therefore, giving its Allied Cash+Shop Visa Debit Card holders access to even more ATMs across the country . The "1-Link Switch" has the following Bank members: ABN Amro Bank KASB Bank Meezan Bank Ltd National Bank of Pakistan NIB Bank Ltd PICIC Commercial Bank Ltd Soneri Bank Ltd Standard Chartered Bank Pakistan Ltd Union Bank Ltd United Bank Ltd MyBank Ltd Tameer Micro Finance Bank Ltd Habib Bank Ltd M Net Network The Allied Cash+Shop Visa Debit Card can also be used at M Net ATMs, for cash withdrawal. The "M Net Switch" has the following Bank members: JS Bank (American Express Bank) Bank of Khyber Bank of Punjab Citibank First Women Bank Limited Habib Metropolitan Bank HSBC Bank Limited Al Baraka Islamic Bank Allied Bank Ltd Askari Commercial Bank Ltd Atlas Bank Ltd Bank AL Habib Ltd Bank Alfalah Ltd Bankislami Pakistan Ltd Crescent Commercial Bank Ltd Dubai Islamic Bank Pakistan Ltd Emirates Global Islamic Bank Ltd Faysal Bank Ltd First Dawood Islamic Bank Ltd The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 59 Muslim Commercial Bank Saudi Pak Commercial Bank Prime Commercial Bank Other Services: Utility Bill Customers can pay their utility bills (e.g. electricity, gas, telephone) at any of the Bank¶s branches. For further convenience, bills are collected on all working days during normal banking hours and also at certain times during the evening. Bills can be paid with cash or cheque, plus customers can even drop crossed cheques in drop -boxes available at all branches. Furthermore, customers can also pay their bills using any of the Bank¶s ATMs or via Internet Banking for SSGC and SNGP bills. LOCKERS Allied Bank Lockers are available, at an annual fee, in four different sizes - small, medium, large and extra large. Locker holders are not required to have an account with the Bank. Annual Locker Rent (Current) Rs.1,500/Rs.2,000/Rs.4,000/Rs.5,000/Maximum Loss Coverage / Limit Rs.500,000/Rs.1,000,000/Rs.1,500,000/Rs.2,000,000/- S. # 1. 2. 3. 4. Locker Size Small Medium Large Extra Large Hajj Services The Hajj Service is available to all pilgrims. The forms and other related services are provided by the Bank. Hajj applications are available with all branches during Hajj season, immediately after the Hajj policy is announced by the Government of Pakistan. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 60 Corporate Banking The Corporate Investment Banking Group (CIBG) holds the Bank¶s loan portfolio and enjoys a leading position in corporate lending in the country. It offers a wide range of financial services to medium and large sized public and private sector entities. These services include, providing and arranging tenured financing, corporate advisory, underwriting, cash management, trade products, corporate finance products and customer services on all bank related matters. The Bank has played a key role in the count y¶s economic growth by providing a vast r amount of funds to large industrial and corporate sectors of the economy. And because it has played a big part in major investment and corporate banking transactions, Allied Bank is considered one of the top investment banks in the country today. CIBG (Corporate Investment Banking Group) Corporate Banking Investment Banking Financial Institution - Project Finance - Project Finance - Cash Management - Long Term Financing - Syndication - Home Remittances - Short Term Financing - Advisory - Trade Finance Allied Bank-IBG is the most Preferred Investment Banking Outfit because of y y y y y y y Timely Completion of Mandates Highly talented and experienced analysts An employee focused work culture Flexible delivery models to satisfy client specific requirements A cost effective, one window solution for customers Its ability to rapidly adapt to changing industrial & client specific processe s The dedicated µTransaction Manager Model¶ ensuring high quality service at all times The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 61 Investment Banking: Allied Bank ± IBG was established in 2005 and focuses on the Investment Banking market. It has the highest number of Successful Arrangement and Participation in Key Privatization & Acquisition Financing Transactions achieved by any Investment Banking Group in Pakistan. It has already penetrated the investment banking market by taking the lead in a number of major transactions and arranging funding of more than US$ 6 billion to date. Allied Bank ± IBG is reputable for building business on the basis of strong corporate relationships and showing a clear understanding of Structured Finance. The team consists of dedicated and young professionals with extensive experience, who provide various Advisory & Arrangement Services to Corporate Clients. Allied Bank-IBG has played an active role in Debt Origination and Distribution through innovative and tailor made solutions for its target customer base. It is also well known for having successfully completed mandates in a timely manner, and is regarded as one of the most active Investment Banking entities in the country today. IBG ± Range of Services The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 62 Home Remittances: Allied Bank has rolled out its state-of-the-art µe-Remittance¶ services to facilitate international remittances sent to Pakistan by overseas Pakistanis. ABL has been significantly important in originating home remittances to Pakistan, and is continuously working to develop innovative ideas for maximizing its reach to all Pakistanis living abroad. We have identified several strategic partners in the main overseas markets, and will be providing a fully automated, end -to-end solution for nonresident Pakistanis. ABL¶s real-time online branch network ± one of the largest networks in Pakistan, consists of over 760 branches in 350 cities, and provides domestic distribution of remittances to customers receiving money in Pakistan. A host of top international banks, exchange houses and funds transfer companies from across the world, including the Middle East, Europe, Asia-Pacific and North America, have been involved to make this a quality service. By implementing a fully automated, straight-through processing facility, we are in a position to activate an innovati e set of v remittance products. A host of options is available to non-resident Pakistanis under this service, including direct credit to account, cash payment over the counter and issuance of the Allied Express cheque, a payment instrument that can be honoured across the entire ABL network of branches. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 63 CHAPTER ² 5 Practical Experience The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 64 Learning at Branch I did my internship at Allied Bank New Sadiq Bazar Branch Rahim Yar Khan with branch code 0334. The internship was started on 2nd of August 2010. During my internship I did learn a lot about Banking and staff was very much cooperative and friendly. They never hesitated to answer my silly questions as well. I am really thankful to Madam Farzana Irshad and Sir M. Shafiq for their valuable time. Branch Departments CREDIT The credit department is one that deals with all sorts of advances. A bank earns major part of its revenue through interest earnings. This department has key importance in the branch and Mr. M. Shafiq is the RM manager for the bank who deals the credit department. Following finance facilities are generally dealt here: Running Finance Allied Business Finance Letter of Guarantee Letter of Credit OPERATIONS Operations department is an essential area which covers all the operations in the branch. All the activities in the branch are controlled by Operations Manager. Madam Farzana Irshad is the CSM with charge of Operations Manager. DEPOSITS Deposits department handles all the activities related to cash deposits and withdrawals. This is headed by Branch manager Mr. Arshad Ali Mazari and C/D Incharge Mr. Khursheed Ahmad CASH Cash department deals with physical cash dealings, the cash deposited in the branch and withdraw from here are recorded and maintained by Mr. M. Rafiq the Cashier of the Bank and Miss Iffat who is working as teller. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 65 I will log here what I did learn from working in branch. Deposit SLIPS The first thing which I was told to do was to fill a slip for a customer. I found that there are three types of slips. Current Account Deposit Slip PLS Account Deposit Slip Online Funds Transfer Slip A deposit slip is a printed form which accompanies bank deposits. The depositor fills out the deposit slip to indicate what types of funds are being deposited and which account they should be deposited into. Deposit slips are used by a bank to keep track of the money deposited over the course of a business day, and to ensure that no funds slip through the cracks. For bank clients, a deposit slip offers a form of protection, indicating that funds were counted and accepted by the bank. If the deposit is processed improperly, the deposit slip will provide a paper trail. It is a documented evidence for the Audit team as well. A slip carries two parts, both are filled by Date, A/C holder name, A/C number and deposit type with amount in figures and words. On successful transaction, one half is returned to the customer as a documentary proof and other is kept for Bank Record. Online Funds transfer slip is slightly different from others; as the remote branch code, account number and title are mentioned where the funds are to be transferred. It is used for Allied Bank branches all over the Pakistan. The photocopy of CNIC is must to be attached with Online Funds Transfer slip. Allied Xpress Funds Transfer Allied xpress is a facility for the foreign residents to send money in Pakistan. The Allied Xpress Funds Transfer form, shortly known as Xpress Form, carries the information about the Beneficiary. The original CNIC is seen by the officer and a copy is attached to the form for the authentication of the recipient. The form contains Transaction ID and Pseudo code for the reference of the Bank. The form is retained by the bank and payment is issued to the customer. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 66 Account Opening The most exciting part of my internship was to learn about various types of accounts and what documents are necessary for a particular account. The madam was kind enough to not only guide me but also allow me to open accounts for couple of customers. The ABL, New Sadiq Bazar Branch, deals with all the accounts which ABL offers but in common practices following types of accounts are usually used. Savings Account Business Account Salary Account Basic Banking Account Partnership Account Foreign Currency Account Basically there are two basic account natures, Current Account and Savings Account. Other types are just further extension of above mentioned accounts. Business Account A business account is one for the entrepreneurs or business owners. This is a single account and needs a proof of the business as Letter head Pad. It carries the features of a Current account which has been mentioned in detail. Salary Account A salary account is for the employees and it¶s of B.B.A nature. A documentary proof of employment has to be provided in order to open this account. A salary slip or a job certificate from the employer will do the work. Partnership Account A partnership account is hold by two or more persons. It is a joint account which is operated by either all partners or one on the b ehalf of others. It is mostly opened for Partnership business for which a partnership deed has to be provided. Current Account A simple current account is one which is not Business, partnership or salary. Usually people related to farming or agriculture owns such accounts. They have to provide the proof of their land as Jamabandi. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 67 Basic Banking Account A Basic Banking Account or simply a B.B.A account is one with no minimum deposit restrictions. A salary account is also a B.B.A natured account. It is most likely used by students and salaried individuals. Foreign Currency Account A foreign currency account can be opened either of Current of Savings nature.There is a restriction on the currency which is being opted for account. For example, if you have a dollar account then you must make all transactions in dollars, no transaction in Rupees or other currency is allowed. Clearing and OBC Clearing denotes all activities from the time a commitment is made for a transaction until it is settled. Customers deposit cheques to their accounts from other parties. If a cheque is from the same city branch then it is sent for the clearing through NIFT- National Institutional Facilitation Technologies. NIFT is an institution providing clearing house functions for the Bank. The customer account is credited on deposit but the payment is hold until the cheque is cleared by the bank it was drawn from. When the cheque presented is of outside city branch then it is sent as OBC ± Outward Bills Collection. A schedule is filled and sent to the ABL Main branch in that particular city to clear the cheque and transfer amount to our branch. While an OBC is sent a voucher is prepared as Credit OBC and Debit OBR which holds the payment of that cheque until it gets cleared. When an OBC is successful the reverse entry is posted and Amount is available to the customer for withdrawl. A.R.T.C Allied Ruppe Traveler Cheque or ARTC is an instruments used by business persons for security of their money. A traveler cheque guarantees the payment from any branch of the Bank all over Pakistan. It carries the signature of CSM and Branch Manager. A.R.T.C is issued to the Bank Customers only and a cheque against the payment of A.R.T.C is collected. The A.R.T.C is hot cash and it must have two signature of the drawee for payment. Therefore it is considered a secure mode of payment. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 68 Pay Orders & Demand Drafts A pay order is issued when payment has to be made to some one within the city.A pay order is in the name of a particular account holder and it is always Payee only. Allied Bank issues Pay order for any type of payment in expense of branch. A customer can have a pay order in name of a particular party which is payable on demand. When a pay order is issued for outside city, it becomes a demand daft. A r demand draft works same as the pay order. Vouchers A voucher simply tells us which account to debit and which to credit. For every transaction there has to be documentary evidence and voucher is that proof. When funds are deducted from a customer account a debit voucher is posted and for addition of funds a credit voucher. Sometimes bank charge certain charges on a customer account like online charges, R.T.C issuance charges, D.D Issuance charges, Cheque Book charges then Customer account is debited and relevant income account is credited. The above are some works which I practically performed during my internship, other than these there were many tasks assigned to me which I performed. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 69 CHAPTER ² 6 Financial Information The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 70 Financial Highlights Under the current circumstances, ABL effectively pursued its strategy of consolidation and remained focused on the improvement in quality of assets and achievement of a more favorable deposit mix. In line with this strategy, the Bank continued to align its risk management framework to effectively respond to changing dynamics. Meanwhile, efforts to enhance customer¶s satisfaction continued during the year through strengthening delivery capabilities by leveraging technology platform and the Bank¶s extensive outreach and developing innovative products and solutions. Allied Bank¶s Proft before Tax increased to Rs. 10,536 million during 2009 as compared to Rs 6,121 million in 2008, a YoY increase of 72.1%. Proft after Tax also rose to Rs. 7,122 million in 2009 as against Rs. 4,157 million in 2008, showing an increase of 71.3%. Consequently, the ROA and ROE of the Bank increased to 1.81% and 30.5% as compared with 1.21% and 21.2% in previous year. The EPS of the Bank stands at Rs. 10.02 for 2009 compared to Rs. 5.85 in previous year. The balance sheet size of ABL increased to Rs. 418,374 million as at December 31, 2009, a YoY rise of 14.1%. The equity of the Bank increased by 34% to Rs. 29,960 million as at December 31, 2009 consequently, the financial leverage reduced to 13.96 times as at December 31, 2009 compared to 16.40 as on December 31, 2008. The Bank¶s CAR at December 31, 2009 was worked out to at 13.47 %, improving from previous year¶s 10.90%. This shows Bank¶s focus on balance sheet strengthening while also ensuring regulatory compliance. Deposits grew by 10.6% to Rs. 328,875 million as at December 31, 2009 compared to Rs. 297,475 as at December 31, 2008. Gross advances increased to Rs. 249,887 million at December 31, 2009 compared to Rs. 223,640 million at December 31, 2008, a YoY rise of 11.74%. Net Mark-up/Interest Income of the Bank increased by 40.6% to Rs. 18,700 million as compared to Rs. 13,298 million in the previous year. Non -Mark up income rose to Rs. 5,958 million showing a YoY increase of 21.7%. The Bank¶s operating expenses The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 71 increased by 13.9% to Rs. 9,609 million during 2009. The Gross Income to Expense ratio has improved to 2.57 times during 2009 from 2.04 times in 2008. Financial Highlights in Graphs The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 72 The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 73 Balance Sheet As on 31 December, ASSETS Cash and balances with treasury and other banks Lending to fnancial institutions Investments- Gross Advances - Gross Operating Fixed assets Other assets Total assets - Gross Provisions against nonperforming advances Provisions against diminution in value of investment Total assets - net of provision 12,320 18,035 24,745 30,408 25,751 27,716 2004 2005 2006 2007 Rs. in Millions 2008 2009 16,175 5,777 19,050 18,419 15,793 28,123 57,657 45,269 47,156 84,151 84,602 96,975 69,949 119,866 151,705 178,524 223,640 249,887 2,552 4,721 6,445 7,549 11,134 12,447 7,073 7,908 10,800 11,368 18,399 17,955 165,726 201,575 259,902 330,419 379,319 433,103 -10,464 -336 -8,659 -342 -7,672 -203 -10,117 -192 -10,668 -1,956 -12,543 -2,186 154,926 192,574 252,027 320,110 366,696 418,374 Liabilities & Equity Customer deposits Inter bank borrowings Bills payable Other liabilities Sub-ordinated loans Total Liabilities Net Assets / Liabilities Share capital Share premium Reserves Un - appropriated proft / (loss) Equity - Tier I Surplus on revaluation of assets EQUITY 126,392 161,410 206,031 263,972 297,475 328,875 12,538 9,694 18,410 22,934 27,778 39,819 2,534 2,449 2,278 3,494 2,952 3,162 3,206 4,472 5,119 7,332 13,636 11,061 2,500 2,499 2,498 5,497 144,671 178,025 234,339 300,231 344,340 388,414 10,256 14,550 17,688 19,878 22,356 29,960 4,405 10,640 717 -6,314 9,448 808 10,256 4,489 4,316 1,377 2,732 12,914 1,636 14,550 4,489 4,316 1,817 5,608 16,230 1,458 17,688 5,386 3,419 2,632 6,971 18,408 1,470 19,878 6,464 2,341 3,463 8,537 20,805 1,550 22,356 7,110 1,695 4,888 12,198 25,891 4,069 29,960 The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 74 Profit and Loss Account For the Year of Markup / Return / Interest earned Markup / Return / Interest expensed Net Markup / Interest income Fee, Commission, Brokerage and Exchange income Capital gain & Dividend income Other income Non interest income Gross income Operating expenses Profit before provisions Donations Provisions - (charge) / reversal Profit before taxation Taxation Profit / (Loss) after taxation 2004 5,245 794 4,451 1,520 65 155 1,740 6,191 4,115 2,076 -1,594 482 -290 192 2005 2006 2007 2008 Rs. in Millions 9,892 17,216 21,201 30,571 2,025 6,793 10,093 17,273 7,867 10,423 11,108 13,298 1,471 1,636 2,258 3,266 2009 41,122 22,422 18,700 3,470 2,452 36 5,958 24,658 9,609 15,049 97 -4,416 10,536 -3,414 7,122 196 540 273 273 1,940 2,449 9,807 12,872 4,264 5,289 5,543 7,583 15 9 -694 -913 4,834 6,661 -1,744 -2,264 3,090 4,397 1,585 1,571 77 59 3,920 4,897 15,029 18,195 6,174 8,431 8,855 9,764 28 82 -2,874 -3,561 5,953 6,121 -1,877 -1,964 4,076 4,157 The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 75 CHAPTER ² 7 Financial Analysis The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 76 Balance Sheet ² Vertical Analysis Vertical Analysis ASSETS Cash and balances with treasury and other banks Lending to financial institutions Investments - net Advances - net Operating fixed assets Other assets Total assets LIABILITIES & EQUITY Customer deposits Inter bank borrowings Bills payable Other liabilities Sub-ordinate loans Total Liabilities Share capital Reserves Un - appropriated profit / (loss) Equity - Tier I Surplus on revaluation of assets Total Equity 2004 2005 2006 % 2007 2008 2009 8.00 10.40 37.00 38.40 1.60 4.60 100.00 81.60 8.10 1.60 2.10 0.00 93.50 2.80 7.30 -4.10 6.00 0.50 6.50 9.40 3.00 23.30 57.70 2.50 4.10 100.00 83.90 5.00 1.30 2.30 0.00 92.40 2.30 3.00 1.40 6.70 0.80 7.50 9.80 7.60 18.60 57.10 2.60 4.30 100.00 81.80 7.30 0.90 2.00 1.00 93.00 1.80 2.40 2.20 6.40 0.60 7.00 9.50 5.80 26.20 52.60 2.40 3.50 100.00 82.30 7.20 1.10 2.30 0.80 93.70 1.70 1.90 2.20 5.80 0.50 6.30 7.00 4.30 22.40 58.10 3.00 5.00 100.00 81.10 7.60 0.80 3.70 0.70 93.90 1.80 1.60 2.30 5.70 0.40 6.10 6.60 6.70 22.70 56.70 3.00 4.30 100.00 78.60 9.50 0.80 2.60 1.30 92.80 1.70 1.60 2.90 6.20 1.00 7.20 The above table shows that Investment and Advances are two major contributors n Total i Assets of the business. Combine they made almost 89% of the assets in year 2009 which was 75% in 2004. The bank has reduced its lending to Financial institutions and trying spent more on customer advances. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 77 Balance Sheet ² Horizontal Analysis Horizontal Analysis ASSETS Cash and balances with treasury and other banks Lending to financial institutions Investments - net Advances - net Operating Fixed assets Other assets Total assets LIABILITIES & EQUITY Customer deposits Inter bank borrowings Bills payable Other liabilities Sub-ordinate loans Total Liabilities Share capital Reserves Un - appropriated profit / (loss) Equity - Tier I Surplus on revaluation of assets Total Equity 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 127.70 77.30 96.60 139.50 123.10 101.90 40.60 143.40 136.70 202.40 163.00 146.80 89.90 159.70 100.00 162.00 101.90 40.60 188.80 171.80 180.40 208.90 182.90 137.90 228.70 99.60 207.50 122.30 32.10 210.40 194.80 181.90 235.40 221.50 116.50 425.30 99.90 238.00 146.70 22.00 235.20 220.20 191.80 260.20 317.60 124.80 345.00 219.90 268.50 161.40 15.90 293.20 274.10 503.40 100.00 100.00 100.00 100.00 100.00 100.00 100.00 146.40 200.80 246.80 35.70 78.50 171.40 185.00 111.80 121.60 117.80 81.80 216.90 252.50 152.70 156.80 113.90 146.00 255.20 295.80 160.70 199.40 209.00 225.00 97.60 146.70 319.70 436.30 260.10 228.90 173.90 168.20 357.20 487.70 253.90 261.30 2004 2005 2006 % 2007 2008 2009 141.90 172.50 193.80 218.00 292.10 The above table shows us the percentage increase in balancesheet over the years. We will see graphical representation of important variables. The notable item is operating fixed assets which have an increase of 487.70% in 5 years. ABL is trying to spend more on its operating assets to make the more efficient and enhance the productivity. On the other side when we observe the liabilities, we see prominent increase in Inter Bank borrowings and other liabilities. ABL has also started sub-ordinate loans in 2006 which were increased to 220% in 2009. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 78 Total Assets 300.00% 50.00% 150.00% 100.00% 004 005 006 007 008 The above graph shows the percentage increase in the Total Assets of ABL over the years. The constant increase depicts the performance of the Bank and it has increased its assets almost 250% since 2004. Net A va ces 00.00% 50.00% 00.00% 250.00% 200.00% 150.00% 100.00% 50.00% 0.00% Advances, an important word for the Banking sector as it is the main source of generation of income. ABL has been successful in increasing their advances by offering variety of products to the customers. Increasing advances up to 350% in merely 5 years is fantastic. The Islamia Univresity of Bahawalpur ² ¤ 200 2005 2006 2007 2008 2009 Rahim yar Khan Campus ¦ ¥ £ ¢ ¢ ¡ 00.00% 50.00% 0.00% 009 79 P&L Account ² Vertical Analysis Vertical Analysis § 2004 2005 2006 % 2007 2008 2009 Interest / Return / on Interest - Income earned Markup / Return / Interest earned Fee, Commission, Brokerage and Exchange income Capital gain & Dividend income Other income Total § 75.10 21.80 0.90 2.20 100.00 83.60 12.40 1.70 2.30 100.00 87.50 8.30 2.70 1.50 100.00 84.40 9.00 6.30 0.30 100.00 86.20 9.20 4.40 0.20 100.00 87.30 7.40 5.20 0.10 100.00 Interest / Return / on Interest - Expense Markup / Return / Interest expensed Operating expenses Provisions Taxation Total expense - percentage of total income Profit / (Loss) after taxation Total 11.40 58.90 22.80 4.20 97.30 2.70 100.00 17.10 36.20 5.90 14.70 73.90 26.10 100.00 34.50 26.90 4.70 11.50 77.60 22.40 100.00 40.20 24.70 11.40 7.50 83.80 16.20 100.00 48.70 24.00 10.00 5.60 88.30 11.70 100.00 47.60 20.60 9.40 7.30 84.90 15.10 100.00 Markup Earned 90.00% 88.00% 86.00% 84.00% 82.00% 80.00% 78.00% 76.00% 74.00% 72.00% 70.00% 68.00% The above chart shows the variation of markup earnings from the total earning of ABL over the years. It can clearly observe that major source of banks revenues is markup returns on advances. The Islamia Univresity of Bahawalpur ² ¨ 2004 200 2006 2007 2008 2009 Rahim yar Khan Campus 80 P&L Account ² Horizontal Analysis Horizontal Analysis © 2004 2005 2006 % 2007 2008 2009 Interest / Return / on Interest Income earned Markup / Return / Interest earned Fee, Commission, Brokerage and Exchange income Capital gain & Dividend income Other income Total Markup / Return / Interest expensed Operating expenses Provisions Taxation Total expense Profit / (Loss) after taxation Total © 100.00 100.00 100.00 100.00 100.00 188.60 96.70 301.90 176.30 169.40 328.20 107.60 830.60 176.50 281.50 404.20 148.50 2438.90 50.10 359.70 582.90 214.80 2417.80 38.20 507.80 784.10 228.20 3772.80 23.30 674.00 Interest / Return / on Interest Expense 100.00 100.00 100.00 100.00 100.00 100.00 100.00 255.00 104.00 43.60 601.50 128.70 1611.30 169.40 855.40 128.70 57.30 780.80 224.80 2292.70 281.50 1271.00 150.70 180.30 647.40 309.80 2125.40 359.70 2175.10 206.90 223.40 677.50 460.90 2167.40 507.80 2823.50 235.80 277.00 1177.50 588.20 3714.00 674.00 T al Ear i g 00.00% 700.00% 600.00% 500.00% 400.00% 300.00% 200.00% 100.00% The above graph shows the percentage increase in the earnings of the bank over the years. It can be observed that in 5 years the ABL has earned up to 700% of what they earned in 2004. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 0.00% 2004 2005 2006 2007 200 2009 81 CHAPTER ² 8 RATIO Analysis The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 82 1. Return on Equity What is Return on Equity? The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. Formula: Table: 2004 8% 2005 28% 2006 30% 2007 23.54% 2008 21.20% 2009 30.50% Return on Equity Graph: Return on Equity 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 2004 2005 2006 2007 2008 2009 Interpretation: The graph shows that company is generating 30% return on shareholder¶s equity. Since 2004 company has earned more on its equity that ranges between 20 to 30 percent which is a good return. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 83 2. Return on Assets What is Return on Assets? An indicator of how profitable a company is relative to its total assets.ROA gives an idea as to how efficient management is at using its assets to generate earnings. Calculated by dividing a company's annual earnings by its tota assets, ROA is displayed as a l percentage. Formula: Table: 2004 0.14% 2005 1.78% 2006 1.98% 2007 1.42% 2008 1.21% 2009 1.81% Return on Assets Graph: Return on Assets 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 2004 2005 2006 2007 2008 2009 Interpretation: ABL is a service organization and its structure based upon the advances andinvestments. The operating assets are merely small part of the total assets. This ratio shows that ABL is earning around 2 percent on its assets which is little low compared to industry averages. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 84 3. Return on Capital Employed What is Return on Capital Employed? A ratio that indicates the efficiency and profitability of a company's capital investments ROCE should always be higher than the rate at which the company borrows; otherwise any increase in borrowing will reduce shareholders' earnings. Formula: Table: 2004 8% 2005 28% 2006 26% 2007 21% 2008 19% 2009 26% Return on Capital Employed Graph: Return on Capital Employed 30.00% 2 .00% 20.00% 1 .00% 10.00% 0.00% Interpretation: ABL is a service organization and its structure based upon the advances and investments. The operating assets are merely small part of the total assets. This ratio shows that ABL is earning around 2 percent on its assets which is little low compared to industry averages. The Islamia Univresity of Bahawalpur ² .00% 2004 200 2006 2007 2008 2009 Rahim yar Khan Campus 85 4. Loan to Deposit Ratio What is Loan to Deposit Ratio? A ratio that indicates the efficiency and profitability of a company's capital investments ROCE should always be higher than the rate at which the company borrows; otherwise any increase in borrowing will reduce shareholders' earnings. Formula: Table: 2004 47% 2005 69% 2006 70% 2007 64% 2008 72% 2009 72% Loan to Deposit Ratio Graph: Loan to Deposit Ratio 80.00% 70.00% 60.00% 0.00% 40.00% 30.00% 20.00% 0.00% 0.00% Interpretation: Loan to Deposit ratio tells us that Bank is keeping around 30% as reserves and lending 70% of the deposits. This reserve is necessary to meet the short term customer withdrawal and obligations. This shows the strength of the Bank that it needs less percentage of reserves over the years and making more advances. The Islamia Univresity of Bahawalpur ² 2004 200 2006 2007 2008 2009 Rahim yar Khan Campus 86 5. Cost to Revenue Ratio What is Cost to Revenue Ratio? Cost to revenue ratio depicts that how much cost is in percentage to the revenue. That helps to determine whether more or less cost was involved in generating that revenue. Formula: Operating Expense / Gross Income Table: 2004 66.50% 2005 43.50% 2006 41.10% 2007 41.10% 2008 46.20% 2009 39.00% Cost to Revenue Ratio Graph: Cost to Revenue Ratio 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 2004 2005 2006 2007 2008 2009 Interpretation: The trend shows us that cost has increased less than the rate revenue has increased. The decrease in Cost to Revenue Ratio is a positive sign which shows that ABL is doing fewer expenses and generating more revenue. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 87 6. Gross Profit Margin What is Gross Profit Margin? The amount of contribution to the business enterprise, after paying for direct fixed and direct-variable unit costs, required to cover overheads (fixed commitments) and provide a buffer for unknown items. Formula: Gross Profit Margin = (Revenue - cost of revenue)/Revenue Table: 2004 4% 2005 58% 2006 31% 2007 17% 2008 21% 2009 36% Gross Profit Margin Graph: Gross Profit Margin 70.00% 60.00% 0.00% 40.00% 30.00% 20.00% 10.00% 0.00% 2004 200 2006 2007 2008 2009 Interpretation: The gross profit margin is what bank is earning, in year 2004 the ABL was in Losses and its gross profit margin was below 5%. But in next year that shoot to almost 60% which means ABL earned 60% more than what they spend in 2005. In 2009, its 36% which shows the profit cycle ABL is going through. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 88 7. Weighted Average Cost of Debt What is Weighted Average Cost of Debt? The effective rate that a company pays on its current debt; it can be measured as either before-tax or after-tax returns; however, because interest expense is deductible, the after tax cost is seen most often. This is one part of the company's capital struct re, which also u includes the cost of equity. Formula: (Risk free Return + credit risk rate)(1-Tax) Table: 2004 2.45% 2005 6.78% 2006 9.09% 2007 9.96% 2008 11.50% 2009 11.50% Gross Profit Margin Graph: Cost of Debt 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 2004 2005 2006 2007 2008 2009 Interpretation: This ratio shows the cost ABL is paying on its debt. The short term liabilities has increased over the year thus company is paying more cost of debt than previous years. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 89 8. Capital Adequacy Ratio What is Capital Adequacy Ratio? Capital adequacy ratio is the ratio which determines the capacity of the bank in terms of meeting the time liabilities and other risks such as credit risk, operational risk, etc. In the simplest formulation, a bank's capital is the "cushion" for potential losses, which protects the bank's depositors or other lenders. Formula: Table: 2004 16.64% 2005 12.17% 2006 12.80% 2007 10.26% 2008 10.90% 2009 13.47% Capital Adequacy Ratio Graph: Capital Adequacy Ratio 18.00% 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 2004 2005 2006 2007 2008 2009 Interpretation: 1. Tier I Capital: Actual contributed equity plus retained earnings. 2. Tier II Capital: Preferred shares plus 50% of subordinated debt. The CAR trend shows that ABL has maintained its capital adequacy ratio to a reasonable level and it is covering the risk and has enough for unexpected losses. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 90 9. Earning per Share What is earning per Share? Earnings per share (EPS) are the earnings returned on the initial investment amount. The portion of a company's profit allocated to each outstanding share of common stock. Earnings per share serve as an indicator of a company's profitability. Formula: Table: 2004 0.38 2005 4.35 2006 6.18 2007 5.73 2008 5.85 2009 10.02 Earning per Share Graph: Ear i g Per S are 12 10 8 4 2 0 Interpretation: Earning per share or simply EPS is a key factor while considering investing in a business. It is the actual earning of a share holder on his investment. ABL is increasing its EPS over the year. That means it has much potential for an interested investor. The Islamia Univresity of Bahawalpur ² ! 2004 2005 200 # "" ! 2007 2008 2009 Rahim yar Khan Campus 91 10. Dividend per Share What is Dividend per Share? The DPS ratio is very similar to the EPS that shows what shareholders earned by way of profit for a period whereas DPS shows how much the shareholders were actually paid by way of dividends. Formula: dividend paid to equity shareholders / avg no. of equity share holders Table: 2004 2005 2.5 2006 2.5 2007 3 2008 2.5 2009 4 Dividend per Share Graph: Dividend Per Share 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 Interpretation: Dividend per share is an important factor under consideration for investors. A company with payout history is likely to get more investors than the one with no or low dividend payout. ABL has been paying its shareholders a dividend of minimum Rs. 2.5 per share and in year 2008 it was Rs. 4. It shows the financial stability of the ABL. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus ' & % $ 2004 2005 200 200 200 200 92 SWOT Analysis Strengths: ABL has certain strengths which makes it distinct from other banks. y First Muslim bank of the world owned and managed by its own employees.The sense of ownership increases the productivity of the organization and helps to build a sound foundation. y High motivation level of employees not only strengthen the operations of t e h business but also the corporate level strategies and decision making works for the best interest of the shareholders and thus for the ABL itself. y The salaries are reasonable enough to compete in the financial market. The employees are dedicated to their work as they know they are being paid off. y ABL has the largest branch network all across the Pakistan. As it is the oldest bank of Pakistan it covers the areas where other Banks are unable to start their operations. y ABL has large clientage due to its wide spread branch network and it has most of the cash and transaction going around. y Standard Operating Procedures helps all the branches to coordinate with central office in Karachi. All key areas are now centralized and over looked by central office. y Online connectivity of all the Branches and ATM network also give ABL advantage over other banks. Weaknesses: During my work there I¶ve found these weaknesses in the ABL structure. y ABL hasn¶t put much attention on the interior and facilities of the customer. There are few proper seating arrangements. With today¶s fast going life it¶s really difficult for a customer to stand in a queue. y While a customer is waiting for his turn, he has nothing to do there. A proper seating arrangement with news papers and magazines would definitely increase the efficiency. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 93 y ABL hasn¶t focused on advertisement as such, they are using traditional methods and it¶s really hard to retain the existing customers without proper advertisement campaigns about new products and services. y Low level staff is neglected by top management and they are discouraged in bonuses and allowances. Opportunities: ABL can avail these opportunities to make most out of it. y After current economical situation government has made new policies regarding financial sector. ABL with all its strengths can make most out of it and play its character in the rehabilitation of the economy. y The flood effected population needs financial support and small loans to those people will not only help ABL to increase their business but also avail a good chance of developing goodwill. y ABL can approach government for the disbursement of funds to flood affected areas with help of it¶s widely spread branch network. Threats: The following threats are present in the market for ABL. y Political influence is always a major threat to any organization. The BOD needs to make policies best in the interest of shareholders and bank itself by complying with government regulations. y The current economical situation of the country has posses a threat to fin ancial sector on the whole. The borrowing capacity of the people is decreasing and inflation has declined the rupee value. People are mostly interested in gold and real estate rather investing in financial assets. y New International Bank with state of the art technologies and better infrastructure are certainly a threat for ABL in near future. If ABL don¶t pay much attention to its competitors and improve and enhance its infrastructure to meet with current demands they certainly will lack. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 94 Suggestions After analyzing the ABL¶s SWOT factors, I have some suggestions for the bank. y ABL needs to pay more attention on its branch outlook and interior design. A well structured air conditioned environment is a must now a day for banking sector. y Customers are the key figure in any business; ABL needs to facilitate the customers by allocating seating areas and waiting areas for the customers. y The security is although enough but it needs to be enhanced and equipped with latest technology. y y ABL should introduce new products and services meeting the present day demand. ABL charge much for the services like Online Transaction, Demand Draft, Pay Order, R.T.C etc... They should cut down the cost for non -customer individuals to attract them being their customer. y ABL should encourage its low level employees and they must be provided with benefits and bonuses as they are the ones doing most the work there. y The online system of ABL is based on the Linux which needs specialized individuals to handle in case of any problem. There must be enough technicians to resolve the issues at once so branch work is not affected. y ABL is still using traditional postage system to even communicate with city branches. The use of emails and electronic media should be encouraged. y Regional Manager should have authority to appoint internees and issuethose letters, sending postage to Karachi and waiting for the response is a time taking activity. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 95 Conclusion Here I have got a chance to conclude what I have learnt during my internship and while preparing this report. It was a nice experience working in a real environment and I was quite excited for it. I have tried to learn what ever I could, including Opening an account and preparing D.D¶s, R.T.C¶s and even preparing vouchers. I did prepare notices for dormant accounts and also get to know about stock reports and credit documents. Overall it was a nice experience and ABL as an organization is certainly at a higher position in banking sector. Their financial highlight shows us its growth and future prospects. With all the strengths ABL own there are certain threats as well which ABL should address to avoid any downfall and keep its position. Office grade employees in ABL are well paid and satisfied with their jobs but one thing I felt was discrimination on the basis of degree. Work experience is an important factor in any organization and promotions, bonuses and increments are work based. But in ABL I found a bit of discrimination with low grade employees and ones who don¶t possess a relevant degree are neglected irrespective of the plenty of work experience. During preparation of this report, I have worked hard to study in detail the financial statements of the organization and conduct common size analysis and ratio analysis to determine the ABL¶s financial position. The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 96 Annexure Internship Letter from Bank Current Account Deposit Slip PLS Account Deposit Slip Allied Xpress Schedule The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 97 References New Sadiq Bazar Branch (0334) www.abl.com Wikipedia investopedia The Islamia Univresity of Bahawalpur ² Rahim yar Khan Campus 98