Banking & Finance Prof.

Riaz Ahmed Mian NIB Bank

Awais Farooq
M11MBA028

Sheikh Abdul Rehman

M11MBA031

Muhammad Waleed
M11MBA052

Acknowledgement
We at first bow our head before Allah Almighty Who is always there for us whenever we need him, He has always been everything we have ever wanted him to be, and Who has given us this chance and has helped us to complete this project.

We also wish to place our deep sense of thanks to Prof. Riaz Ahmed Mian who provided us with this opportunity and guided us to complete this project in its true sense. His valuable experience and knowledge has been a source of inspiration for us.

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Table of Contents
Bank Information
1. Introduction to Bank......................... Error! Bookmark not defined.
1.1 Vision and Mission ................................... Error! Bookmark not defined. 1.2 NIB Quick Facts ........................................ Error! Bookmark not defined. 1.3 Goal of the Bank ..................................................................................... 8

2. History of the Bank ....................................................................... 11 3. Management Profile ..................................................................... 13

3.1 President .............................................................................................. 13 3.2 Board of Directors ................................................................................ 14

4. Stockholders Relations ................................................................. 15

4.1 Ownership Profile................................................................................. 15 4.2 Temasek Shareholding ......................................................................... 16

5. Company Information .................................................................. 17 6. Corporate Governance ................................................................. 18 7. Products and Services ................................................................... 19 7.1 NIB Retail Banking ................................................................. 19
7.1.1 Current Accounts: ......................................................................... 19 7.1.2 Savings and Investments ............................................................... 21 7.1.3 Insurance Products ....................................................................... 27

7.2 SME and Commercial Banking ................................................ 29

7.2.1 Loans and Services ........................................................................ 29 7.2.2 Trade Finance ............................................................................... 31 7.2.3 Chain Management....................................................................... 35

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7.3 Corporate & Investment Banking Group ................................ 38

7.3.1 Corporate Banking ........................................................................ 38 7.3.2 Investment Banking ...................................................................... 38 7.3.3 Financial Institutions ..................................................................... 40 7.3.4 Correspondent Banking Products & Services ................................ 40 7.3.5 Trade Processing Centres In Pakistan ............................................ 43

7.4 Treasury and Capital Markets Group ...................................... 44

7.4.1 Money Market .............................................................................. 44 7.4.2 Fx Trading and Advisory ................................................................ 44 7.4.3 Foreign Exchange .......................................................................... 45 7.4.4 Structured Solutions .................................................................... 45

8. Alternative Channels ................................................................... 46

8.1 A.T.M.................................................................................... 46

Bank Analysis
1. Financial Analysis ......................................................................... 52 2. S.W.O.T. Analysis .......................................................................... 56 3. PEST Analysis ................................................................................ 58 4. Recommendations ....................................................................... 61 5. Conclusion .................................................................................... 61

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Hailey College Of Banking And Finance University Of The Punjab

NIB BANK
Outline
Bank Information

Vision And Mission Quick Facts History of Bank Management Profile President Board of Directors

Ownership Profile Tamasek Holdings Shares Products and Services Retail Banking SME and Commercial Banking Corporate and Investment Banking

Bank Analysis

Financial Analysis S.W.O.T Analysis P.E.S.T. Analysis Recommendations

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Conclusion

Legal merger of PICIC & PCBL into NIB took place on 31st December 07, once all regulatory approvals were obtained.

Total assets as of March 31, 2011 are Rs. 150 bn. Present paid-up capital of Rs. 40.4 bn is amongst one of the highest in banks in Pakistan. Temasek Holdings remains the largest single shareholder with approximately 74% shareholding.

NIB has over 2900 employees.

NIB business units include:

Retail Banking and Transaction Banking Small Medium Enterprises and Commercial Banking Group Corporate and Investment Banking Group / Financial Institutions Treasury of Capital Market Group

Goal of the Bank

NIB, after turning the corner, is now destined to revive its glory through dynamic business activity which includes:

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Enhancing Recovery of Loans. Resource Mobilization for On-Lending. Revival of Sick Units. Out Of Courts Settlement Even In The Cases Under Litigation Fund Management And Expanded Merchant Banking Operations. Growth in Lease Financing.

With all such activities, NIB has started to earn sizable profit, and has started to pay dividend to its shareholders NIB has reemerged as a viable financial supermarket. The scope of NIB financing which was previously confined mostly to providing long term foreign and local currency assistance for setting up industrial ventures has been further expanded to encompass provisions of other credit facilities and services. Commensurate with the growing competitive business environment, through the acquisition of a commercial bank.

NIB has realized that in order to meet the challenges of future especially the Third Millennium, NIB needs to diversify from its traditional role of provider of subsidized credits to sub-borrowers. Realizing this NIB is diversifying itself with the changing financial and operational scenario; it has to readjust itself into a financial institution which covers a wide variety of business operations. With the privatization process in vogue and development of a free market economy, the rules of business are substantially changing.

The era of subsidized credits has been substituted with real market forces requiring effective and efficient ability to conduct into the new business order.

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NIB is presently exploring the possibilities of new business areas as part of its diversification plan.

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History of the Bank

NIB Bank Limited started as NDLC-IFIC Bank Ltd. which was incorporated in March 2003 as a public limited company. It started operations in October 2003 when all assets, liabilities, rights and obligations of the former National Development Leasing Corporation (NDLC) and Pakistan operations of IFIC Bank were amalgamated with and into the Bank with a paid up capital of Rs.1.2bn. In April 2004 the Pakistan operations of Credit Agricole Indosuez were also amalgamated with and into NIB. In March 2005 Temasek Holdings of Singapore acquired 25% shareholding in NIB Bank, through Bugis Investments. This shareholding was further enhanced to over 70% in June '05 following an increase in NIB's paid up capital to Rs 3.4 bn. NIB Bank has since grown rapidly from a base of 2 branches in 2003 to 45 in the 4th quarter of 2007, with a corresponding increase in its assets and deposits base. NIB Bank's vision is to rank amongst the top 5 banks in the country. Therefore towards the end of June 2007 it acquired majority shares of PICIC with the aim of merging PICIC and its commercial banking subsidiary PICIC Commercial Bank Limited (PCBL) into NIB. The acquisition was financed through the country's largest private sector rights issue, with resultant increase in NIB's paid up capital to Rs.22.0 bn. The PICIC acquisition bought with it another subsidiary "PICIC AMC" and an affiliate "PICIC Insurance". The legal merger of PICIC & PCBL into NIB took place on December 31, 2007, once all regulatory approvals were in place. NIB Bank continues to be led by Khawaja Iqbal Hassan, supported by four business heads and ten business enabling function heads. The merger resulted in a vastly expanded branch network and total assets of Rs 176.6 bn on merger date. NIB has the highest paid up capital of Rs. 40.4 bn amongst all banks in Pakistan. Merger synergies

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include lower cost deposits, enhanced customer service delivery channels and overall improved efficiencies. These help provide a competitive edge in the face of increasing competition in the banking sector. Temasek Holdings continues to be the largest single investor in NIB Bank with approximately 74% shareholding. The powerful franchise of the three merged entities has been brought together to form a much larger and stronger bank to complete in the market place.

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Management Profile
President
Badar Kazmi:
President & CEO

Mr. Kazmi brings with him wealth of experience spanning over 31 years including almost all facets of the banking business in Pakistan, Middle East, South Asia and Africa. Mr. Kazmi started his career with BCCI in 1980 and worked for 11 years in Pakistan and the Middle Eastern Region in the areas of Retail Banking, Corporate Banking, Organization Learning and Treasury. Mr. Kazmi joined Standard Chartered Group (SCB) in 1991 and held various positions including Regional Head of Global Markets for MESA (Middle East and South Asia) and Africa. Mr. Kazmi developed the business to become a major revenue contributor to SCB Group. In 2003, Mr. Kazmi was appointed as CEO of SCB Pakistan, a position he held till late 2010. He subsequently moved to Saudi Arabia where he was instrumental in setting up the Investment Bank for SCB. Post the start of operations of Standard Chartered Capital Saudi Arabia in early 2011, Mr. Kazmi decided to leave SCB and returned to Pakistan. During his association with SCB Pakistan, he was instrumental in positioning the Bank as a significant force in banking in Pakistan. He not only successfully managed the acquisition of Union Bank but also executed an organic growth strategy thereby growing the Bank from a small network with 21 branches in11 cities to being a major financial institution with 162 branches in 41 cities. In recognition for his services to banking in Pakistan, Mr. Kazmi was also decorated with the civil award 'Sitara-e-Imtiaz' by the President of Pakistan.
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Board of Directors
NIB Bank Ltd is managed by a Board of Directors with representation Temasek Holdings shareholders. The Board of Directors, which is the highest policy making body of NIB, consists of eight directors. The Board deals with all policy matters and applications involving financial assistance up to the maximum lending limit, accordingly to NIB total net worth both in foreign and local currencies. The Board's Executive Committee, comprising of eight Directors, deals with matters other than those involving policy and applications for financial assistance. The following gentlemen presently comprise NIB Bank ltd Board of Directors:

Mr. Teo Cheng San, Roland

Chairman & Director

Mr. Syed Aamir Zahidi Director Mr. Tejpal Singh Hora Director Mr. Chia Yew Hock Wilson Mr. Asif Jooma Mr. Muhammad Abdullah Yusuf Mr. Najmus Saquib Hameed Mr. Khawaja Iqbal Hassan Mr. Badar Kazmi Director Director Director Director Director President / CEO

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Stockholders Relations
Ownership Profile
NIB BANK LIMITED
Stockholders' Information as of December 31, 2011 Particulars Sponsors, Directors, CEO & children NIT & ICP Banks, DFI & NBFI Insurance Companies Modarabas and Mutual Funds General Public (local) General Public (foreign) Others Foreign Companies Shares held by 27,222 Shareholders Shareholding 9,148,812,533 Percentage 88.7988

31,514,484 124,075,920 242,209,719 6,565,225 558,247,678 15,147,064 115,037,689 61,240,852

0.3059 1.2043 2.3509 0.0637 5.4184 0.1470 1.1166 0.5944

10,302,851,164 100.0000

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Temasek Shareholding
Temasek Holdings is an Asia investment house headquartered in Singapore. With a multinational staff of over 400 people, Temasek Holdings manages a portfolio of US$193 billion, focused primarily in Asia and Singapore. Guided by an independent board, Temasek Holdings operates autonomously on commercial principles to maximize long term returns. Its total shareholder return since inception 37 years ago is 17% compounded annually.
Chairman S Dhanabalan

Temasek Holdings has a corporate credit rating of AAA/Aaa by Standard & Poor's and Moody's respectively.

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Company Information
Chief Financial Officer Auditors Legal Advisors Audit Committee Muhammad Abdullah Yusuf Syed Aamir Zahidi Najmus Saquib Hameed Company Secretary Share Register Chairman Member Member Ather Ali Khan THK Associates (Pvt.) Limited, Ground Floor, State Life Building # 3, Dr. Ziauddin Ahmed Road, Karachi 75530 UAN: (021) 111 000 322 NIB Bank Limited First Floor, Post Mall, F-7 Markaz, Islamabad 111-333-111 communications@nibpk.com www.nibpk.com AAA1+ Yameen Kerai M/s. KPMG Taseer Hadi & Co. Chartered Accountants M/s. Mandviwalla & Zafar, Advocates and Legal Consultants

Registered Office

UAN Email URL Credit Rating Long Term Short Term:

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Corporate Governance
Being aware of our responsibilities under by the Code of Corporate Governance issued by the Securities and Exchange Commission of Pakistan, the following statements are made with regard to the corporate and financial reporting framework to meet with the requirement of the Code:

The financial statements prepared by the management of the Bank present fairly its state of affairs, the result of its operations, cash flows and changes in equity. Proper books of account of the Bank have been maintained. Accounting policies have been consistently applied in the preparation of financial statements and accounting estimates are based on reasonable and prudent assessments. International Accounting Standards, as applicable in Pakistan, have been followed in the preparation of financial statements. There are no doubts upon the Bank's ability to continue as a going concern. There has been no material departure from the best practices of corporate governance as detailed in the listing regulations of the stock exchanges of Pakistan. There are no statutory payments on account of taxes, duties, levies and charges which are outstanding, except as disclosed in the financial statements.

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Products and Services

NIB Retail Banking
Retail Banking offers you a wide array of NIB products and services made available in your local community.

At NIB we believe that people who live and work in proximity with you understand your needs better. Being embedded within your local community, we are aware of your daily challenges and are prepared to provide you financial solutions. So come bank at NIB Retail Banking because we know that nobody understands you better than your Retail Banker.

Current Accounts:
NIB Current Account
With NIB Current Account, you can keep your money safe with minimum hassle. NIB Current Account offers you the following:
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Minimum threshold maintenance amount The threshold amount for maintenance in NIB Current Account is Rs. 5000/=. No Restrictions on Withdrawals and Deposits NIB Current Account places no restrictions on the number of withdrawals and deposits. So you can make unlimited transactions whenever you please.

Basic Banking Account

NIB-BBA account will be a non remunerative PKR current (checking) account:

The initial minimum deposit to open the account will be Rs. 1,000; however, there will be no minimum balance charges, if the balance falls below the above threshold. If the balance in the account remains Nil' for a continuous six month's period, the account will be closed. However, exemption to this effect may be solicited from business head. The account should not be overdrawn. The Bank is not obliged to honor any cheques drawn by the account holder if in doing so the account would become overdrawn and would debit the account with the charge of each returned cheque, presented through clearing, as per its Schedule of Charges. The balance in the account can be offered as collateral for obtaining loan from the bank, if such a facility is offered to the customer by the bank. Maximum two deposit transactions and two cheque withdrawals are allowed, free of charge, through cash/clearing per month. Unlimited, free of charge, ATM withdrawals from the banks' own ATMs will be allowed. In case of withdrawal from BBA through the ATM

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machines of other banks, charges as applicable from time to time will be levied.

Statement of account will be sent once a year, irrespective of the balance in the account. Service charges will be levied as per Schedule of Charges, if the customer requires the statement at higher frequency or requires duplicate/additional copies.

Savings and Investments

Khazana
Interested in more profit? Want extra cash every month? NIB offers you just that. With NIB Khazana Daily Product Account, you can see your money grow-every day, every month. Attractive Returns Every Month NIB Khazana enables you to earn profit daily, on the basis of your day-end balance, which is credited to your account every month. Higher the Balance, Higher the Profit NIB offers you the opportunity to earn as high as 5%. The higher the balance, the higher the return. No Restrictions on Withdrawals and Deposits NIB Khazana places no restrictions on the number of withdrawals and deposits. So you can make unlimited transactions whenever you please. DEPOSITS Rs. 0/- to Rs. 2,999,999/Rs. 3,000,000 & Above RATE (PER ANNUM) 5.00%* Treasury

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Azadi Account
Reward yourself with Extra Profit NIB offers yet another attractive opportunity to earn an even higher rate of return on investment. Now you can get as much as 5% on a deposit of Rs. 50,000 and above. Whether Salaried or Self-employed, Trader or a Businessman, Housewife or a Pensioner, Proprietor or a Partnership concern, the Azadi Account is designed to offer each one a host of special benefits: Maximum Freedom NIB Azadi Saving Account places no restrictions on withdrawals and deposits. So you are free to make as many transactions as you please. Maximum Returns With NIB Azadi Saving Account, you become one of the privileged few to earn a profit rate as high as 5%. Personalized Service At NIB, you receive the services of professional and dedicated Personal Bankers. Always keen to provide excellent customer care you deserve, the Personal Bankers assist you in fulfilling all your banking needs and requirements. DEPOSITS RATE (PER ANNUM) For Individuals & Corporate 5.00%* Treasury

Rs. 0/- to Rs. 2,999,999/Rs. 3,000,000/- & Above

Term Deposit
Profit Like Never Before!

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Flexible Tenor NIB Term Deposit Scheme are available from 1-5 year period giving you the advantage of choosing the tenor that best suits you. Highest Returns, Extra Monthly Income NIB Term Deposit Scheme offers you profit as high as 10.50%. The profit is credited to your designated account every month, giving you additional monthly cash flow. Loan Facility In case of need you can borrow up to 95% of your Term Deposit amount. Additional Benefits * Free Cheque Book. * No Minimum Balance Requirement. With NIB Term Deposit Scheme, you will receive a Free Cheque Book for the designated account with NIB Bank where your monthly balance will be credited and this account will not be subject to any minimum balance requirement.

Amanat
DEPOSITS RATE (PER ANNUM) for Individuals & Corp 6.00 % 6.25 % 6.50 % 7.25 %

PLS Term Deposit (1 month) PLS Term Deposit (3 month) PLS Term Deposit (6 month) PLS Term Deposit (1 year)

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Special Features *Profit paid at maturity. *Minimum Balance requirement is Rs. 100,000/-.

Committee
NIB Committee is a unique product that combines the benefits of a saving plan with an insurance cover. It enables households to regularly put aside a portion of their income for savings to achieve their desired amount while also availing the financial security of an insurance plan. NIB Committee enables our valued customers a highly accessible, convenient and attractive avenue for regular savings by providing increasing incentives over time.

Promise
NIB Promise is a unique product that combines the benefits of a saving plan with an insurance cover. It combines the wealth building power of term deposits and the financial security of an insurance plan.

NIB Promise thus provides our valued customers a high return @ 12.5%* on their investment as well as the security and peace of mind that their loved ones will get the full financial return of this investment (plus a gift) when they need it the most.

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Foreign Currency Account

DEPOSITS RATE (PER ANNUM) USD Savings (US $ only)* 7-29 Days** FDR One Months** FDR Three Months** FDR Six Months** FDR One Year** As per LIBOR As per LIBOR As per LIBOR As per LIBOR As per LIBOR As per LIBOR EURO As per LIBOR As per LIBOR As per LIBOR As per LIBOR As per LIBOR As per LIBOR GBP As per LIBOR As per LIBOR As per LIBOR As per LIBOR As per LIBOR As per LIBOR

Special Features *Profit is earned monthly on minimum balance during the month & paid semiannually. **Profit is paid at maturity.

NIB Plus
NIB Plus is a term deposit account with an annual rate of return of 9%. Product Features Maximum Amount: Eligibility

Rs. 5,000,000

Tenor:

12 months*

Resident and non-Resident Pakistanis only.

Time Deposit - Premature Encashment

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In case of premature encashment, the applicable rate of profit to be paid to the depositor shall be calculated on the basis given as below:

Premature Encashment 5% annual

NIB Perfect
NIB Perfect is a term deposit product with an annual expected rate of return pegged to the monthly KIBOR. The rate will be revised on the 1st of every month; the rate of return prevalent that month will be the average of the last months KIBOR. For example the rate of return for the month of December will be the average of Novembers KIBOR. Product Features Minimum Amount: Rs. 5,000,000 Maximum Amount: Rs. 10,000,000 Tenor: 12 months* * Profit payment will be made monthly Eligibility Resident and non-Resident Pakistanis only. Time Deposit - Premature Encashment In case of any request for premature/ early termination of the NIB Perfect TERM DEPOSIT, the processing for termination may take up to five (5) working days from the date of request for early termination. In case of premature encashment, the applicable rate of expected profit to be paid to the depositor shall be calculated on the basis given as below: Premature Encashment 5% annual

Financing Facilities
NIB Bank provides agricultural loans of several types such as given below: NIB Agriculture Inputs Loans NIB Agriculture Tractor Loans

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NIB Mechanization Support Loans NIB Agriculture Transport Loans NIB Live Stocks Loans (For Dairy / Meat) NIB Poultry Loans NIB Fisheries Loans Other Agriculture Credit Facilities

Insurance Products

CashGuard
NIB CashGuard safeguards your cash withdrawn through ATMs and Over-theCounter against the risks of forced snatching through armed hold-ups or burglaries. We offer a pre-underwritten insurance coverage in two different packages to our customers in collaboration with New Jubilee Insurance Company Limited.

Future
We all feel that it is important to plan for tomorrow and everyone wants to set aside some money for a rainy day. But very few of us actually follow the discipline of investing and protecting our own and our familys future.

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NIB joined hands with EFU Life Assurance Limited to bring for its customers a long term savings and investment plan along with a protection plan that keeps pace with their changing needs at every stage of life. Be it a child's future or an early retirement plan, NIB is there to prepare for all the important milestones in a customer's life and protects loved ones in unexpected times of trouble.

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SME and Commercial Banking

Small Medium Enterprises and Commercial Banking Group (SMEC) began its operations in June 2006. Within a short span of time, SMEC has developed business solution expertise in many areas. These include and are not limited to necessary infrastructure, management information systems and a competent human resource capability of 1000 plus employees.

Through these resources, we offer a diverse range of products catering to private sector enterprises having an annual sales turnover between PKR 30 Million to PKR 1 Billion. We at SMEC aim to become a dominant player in Pakistan with an aggressive growth trajectory fortified with teamwork and full inculcation of sales and credit programs.

Loans and Services

Financing Facilities
Short Term Loan At Small Medium Enterprises and Commercial Banking Group (SMEC) short term demand loans are offered to satisfy immediate & seasonal needs of clients with satisfactory track record. Short-term demand loans provide a good

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source of working capital for your business and need to be secured by adequate collateral. Running Finance At Small Medium Enterprises and Commercial Banking Group (SMEC) we have got a great flexible business loan for your general business needs. You can use it for short-term finance, such as settling a bill or purchasing inventory, or for working capital growth. Under this type of financial accommodation the borrower is allowed withdrawal in the current account to the extent of the limit sanctioned. The facility is generally provided against pledge or hypothecation of goods or any other tangible security acceptable under the credit program. You would be required to adjust the advance periodically or within a specific period. The loan may be renewable annually depending upon the agreed terms. Long Term Financing Planning to acquire equipment, plant & machinery, commercial trucks and other assets for your operation needs? Or do you require a long-term loan for land and building? We can assist you in meeting your business needs with minimal initial capital outflow and hassle. Our credit package offers innovative packages that are flexible and customizable to meet your specific needs. Long-term loans extended by Small Medium Enterprises and Commercial Banking Group (SMEC) will be of over 12 months with a fixed repayment schedule. SMEC considers the extension of term loans to those transactions that fulfill the following conditions:

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Tenor not more than 5 years from the date of disbursement to the date of final maturity, including the grace period. Has a clear purpose, strong financials, resourceful management, viable cash flow, properly perfected tangible security. Repayments: Principal equally distributed, divided by the number of months, will determine the installments, preferably quarterly stating from the final take down. A grace period of up to two years may be allowed before beginning repayment; depending upon the terms of the loan transaction.

Transaction Solution
SME and Commercial Banking is focused on providing you with financial solutions and takes into account the parameters to provide exclusive and tailored product and services. We excel at:

Foreign Exchange. Mark up rate risk. Inflation and credit risk

Trade Finance
To support your global business needs, SME and Commercial Banking offers you a full suite of trade finance solutions to facilitate as well as finance your trade transactions, be it international or domestic.

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Export
Emerging Businesses Group offers a wide range of export services designed to assist you in building on your strengths, so that your company can seize new business opportunities around the world. Routing all your export related transactions through us could eliminate many of your exporting hassles. Our customers experience quick payment receiving, require less effort in locating collection information details, gain increased control over foreign receivables and experience improved cash flows. With our expertise and experience, we can structure and customize solutions for your specific requirements.

Import
We offer a comprehensive range of import services. As a valued client of SMEC, you will be partnering with a trusted banking institution that is highly respected in the world of international finance and cross border transactions. Through our expertise and experience, we can structure and customize solutions suited to your specific business requirements. Letter of Credit Small Medium Enterprises and Commercial Banking Group (SMEC) issues Import Letters of Credit on your behalf that gives you the advantage with your suppliers. We extend Sight Letter of Credit (DP) and Usance Letter of Credit (DA) facilities to your clients for undertaking transaction for the import of goods. Letter of Credit is widely used to give protection to the exporter against the buyers and the countrys risk. At SMEC the LC is a payment undertaking given to the exporter by the importers bank. In effect, SMEC backs the transaction with its own credit standing and reputation. We offer our

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customers a binding payment undertaking to pay the seller, provided that the seller can present documents representing the goods supplied. Documentary Collection Import documents received under Usance Letter of Credit (DA) are lodged in a funded account and are released against:

Acceptance of bill of exchange and execution of Trust Receipt. Pledge of imported goods. In case goods are pledged with NIB Bank, goods will be cleared through SMECs approved clearing & forwarding agent and delivery orders issued against cash receipts. Collateral security against mortgage of property, pledge of Government Bonds, Postal Deposit Certificates, Banks own Deposit Certificates etc. For relaxation in obtaining collateral security, approval of Branch Credit Committee will be required.

Shipping Guarantees At the request of the importer, SMEC issues a shipping guarantee in favor of the concerned shipping company to enable the importer to obtain delivery of goods without submission of the relevant bill of lading. The shipping guarantee will be issued after obtaining the following:

Upfront proper documentation of the client. Standard indemnity from client stating irrevocably and unequivocally to accept the documents with or without discrepancies. An undertaking from the client to bear any exchange fluctuation difference in addition to all other charges.

Finance Against Trust Receipt (FATR)

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SMEC may at the request of the customer, at the time of opening of the LC or at a later stage, release the import documents of related goods received under the LC against bills under collection either inland or foreign. This may be done to enable the party to obtain delivery of the goods and arrange to retire the documents out of the sale proceeds of goods or from other sources. The documents of title are delivered against the customers signature on the prescribed Trust Receipt form/related security documents covering hypothecation of goods. Finance Against Imported Merchandise (FIM) Wherever necessary at partys request, the facility for financing imported goods against import LC established through SMEC will be made available for a short period (not exceeding ninety or (120) days). The financing may be repaid within the validity period either in installments or in a lump sum amount.

Guarantees
To protect you against currency fluctuation, SMEC provides services to hedge against foreign exchange risks for foreign currency payments expected to be made or received by you. In the normal course of business we issue the following guarantees: Performance Guarantee At the request of the customer, SMEC issues a performance guarantee, guaranteeing completion of work or supplies, as per terms of contract. Bid Bond NIB Banks issues bid bond in lieu of deposit of earnest money against bids for tenders. Letter of Credit Stand-by letter of credit is used as a substitute for the commonly used

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performance bond. This type of letter of credit may be issued to cover nontrade transactions and to guarantee performance of a contractor as supplier Advance Payment Guarantee At your request we will guarantee you the amount of advance payment for satisfactory performance of a contract or other work as specified in the guarantee. It ensures that:

Instrument obligates SMEC to pay the guaranteed amount or the adjusted part thereof, without any dispute regarding improper use of the advance funds. Guarantee shall become operative only upon receipt of the advance money by SMEC for credit to your account. (This clause is incorporated in the guarantee).

Security Deposit Guarantee At your request SMEC will issue you a guarantee in lieu of security deposit, generally to utility service organizations. Retention Bond SMEC also provides Retention Bond facilities to its customers.

Chain Management
In today's competitive market place, effectively managing cash flow can make a difference between success and failure. SMEC offers a wide range of collection and payment services to meet your complex chain management needs through effective utilization of our widespan distribution footprint. We help you manage payments received from your buyers and made to your suppliers by efficiently processing them to optimize your cash flow position and to ensure the effective management of your business' operating funds. The flow of receivables and payables can also be seen through our customized and tailored solutions. Above all, our quick adaptation of the latest technology
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differentiates us from the other competing banks. Our chain management solutions are there to support you through:

Online Real-Time Funds Transfer

SMEC has deployed a new online real-time funds transfer system which enables an instantaneous transfer of funds, speeding up the flow of money, and enabling more efficient utilization of your financial resources with businesses and individuals. Its an online, real time and a secure system that is now being used by all the customers for electronic payments made on accounts of their customers or on their own account. The processing and settlement of such transactions takes place in real-time, online mode, with final and irrevocable intra-day settlement. This means that anyone, whether an individual, a business organization or a bank itself, can make electronic payments to whomsoever they like, with the value of such payments received almost instantaneously, as against two to four days previously.

A Wide network of Branches

Our wide network of branches enables us to collect, maintain, and disburse your funds in a way that minimizes the risk of misuse, maximizes profitable cash flow, and supports your operations and mission.It helps us to deliver you better services but also to reach remote customers. Through an extensive branch network in todays scenario, chain management results in:

Significant savings in time, decrease in interest costs. Less paper work & greater accounting accuracy. Quick business transactions with no hassle Creates more control over time & funds.

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Provides timely access to information. Results in faster reconciliation. Earns interest income or reduces interest expenses. Allows Corporations with subsidiaries worldwide to pool everything internationally so that the company can offset the debts with the surplus from various subsidiaries. The end result will transform treasury function as a profit centre by optimizing cash and putting it to good use.

Our wide network of branches enables us to collect, maintain, and disburse your funds in a way that minimizes the risk of misuse, maximizes profitable cash .

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Corporate & Investment Banking Group

Corporate Banking
The Corporate Banking business operates through 5 centers in the Country Karachi, Lahore, Faisalabad, Multan and Islamabad. We offer a full spectrum of banking products, from plain vanilla debt to structured solutions to meet the operational, financial and capital-raising needs of top-tier corporates and institutions. The team leverages the structuring capabilities and industry expertise of our Investment Banking resources to restructure and rehabilitate customers.

Investment Banking
In July 2008, the Investment Banking business & team of Global Securities Pakistan Limited (Global) became a part of NIBs Corporate & Investment Banking Group. Global had been the leading investment banking player having
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successfully structured and executed some of the largest and most complex advisory and fundraising transactions in Pakistan. At NIB, Investment Banking is structured along two separate product lines which allows for product specialization and customized approach:

Advisory

The leading player in the domestic privatization, M&A, restructuring markets. Commands a significant market share of all privatization transactions in Pakistan including both strategic sale as well as capital markets transactions. Domestic Financial Advisor to the Privatization Commission for the privatization of PTCL which is the largest privatization transaction in the history of Pakistan. Executed two of the largest banking sector privatizations. Extensively worked with the PC on developing new transaction structures for strategic sales.

Capital Markets & Syndications

The leading capital markets player in Pakistan having structured some of the largest and most innovative issues in Pakistan. Lead managed offer for sale of 7.5% GOP owned shares of HBL - the largest IPO in the history of the country worth PKR 12,161 million. Lead managed the public offer for sale of up to 20% GoP owned shares of KAPCO - the most successful equity offering in the country. Pioneered the development of the subordinated TFCs by banks.

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Executed two of the largest banking sector privatizations

Financial Institutions
The FI and Correspondent Banking dept facilitates NIBs different business segments involved in international trade and advises them on the competitive rates for their different options. This advice is culled from the research undertaken by the FI and Correspondent Banking Department in order to ensure the profitability of the positions taken by NIB in the Nostro-Vostro accounts market. This research takes into consideration variable market trends and the major events occurring at the time. The FI and Correspondent Banking dept also arranges for large ticket credit facilities for the bank. Depending on the financial requirements of the client, FI and Correspondent Banking will offer a variety of services ranging from structured financing to syndicate financing. The FI and Correspondent banking dept also acts as a consultant to the various departments within the bank and clients who are in the process of market study or setting up a business plan.

Correspondent Banking Products & Services

NIB offers the following products and services to various financial institutions:

Documentary Letters of Credit Nostro Accounts Collections of Clean & Documentary Bills Guarantees Treasury Remittances

Documentary Letters of Credit:

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Documentary credit is our main product which we offer to our FI customers. You can advise your letters of credit and amendments freely anywhere in Pakistan through NIB Trade Processing Centers. Our standard level of service is to advise L/Cs and amendments within 24 hours. You can be assured that the beneficiary will receive the letters of credit in a short time. We have Centralized Trade Processing Centres located in Karachi and Lahore, Pakistan (BIC Code: NIBPPKKA) Scrutiny and processing of documents by very dedicated and experienced staff. Credit lines can be made available on case to case basis for confirmation and negotiation of your documentary credits. Nostro Accounts: We offer all FI customers to open their nostro account in Pakistan for reimbursement of Letters of Credit, Transfer of funds, Remittances, Collection of proceeds etc. We offer competitive prices and maintain your nostro account professionally.

Collections
a)Documentary Bills: NIB can collect the proceeds of your clean documentary bills faster and at the lowest possible cost. The bills can be sent to any of our designated Trade Processing Centers in Pakistan (see processing centers list). b)Clean Collections: You may send all your clean collections of Pakistan in any of our Trade Processing Centers (see processing centers list) Guarantees: NIB would be pleased to issue Guarantees, Bid Bonds and Performance Bonds against your counter guarantees to the beneficiaries in Pakistan. We are capable to handle guarantee business quite efficiently. NIB has the fastest turn around time and very competitive in pricing. Centralized control enables us to
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record each guarantee, monitor its validity and ensure efficient service. For any inquiry regarding issuance of your guarantees or competitive pricing, please feel free to contact any trade processing centers in Lahore or Karachi ( see processing centers list) OR your FI contact persons. Treasury: NIB Bank is actively involved in treasury dealing with a team of high caliber professionals and full fledged dealing room equipped with state-of-the-art technologies. Our treasury is well placed for providing best money market and foreign exchange rates of all its customers with efficient, dedicated and quality services. Remittances: The Home remittances business in Pakistan has taken a quantum jump due to various reasons during the last couple of years, Pakistan Remittance Initiatives (PRI) of State Bank of Pakistan is promoting Home Remittances in Pakistan. NIB Bank is extending their full support and cooperation to PRI to increase countrys home remittances. To increase banks market share in Home remittances in Pakistan, NIB Bank is providing prompt services to beneficiaries maintaining account in NIB as well as non-NIB customers, NIB is proactively involved to disbursement of home remittances in Pakistan. A mechanism has been established by PRI whereby member banks can transfer funds through RTGS same day and exchange of data electronically for same day credit into beneficiary accounts NIB Bank is offering the following services for customers:

Account to Account Transfer Cash over the Counter PRI member banks Account Holders Issuance of bankers cheque

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Trade Processing Centres In Pakistan

KARACHI TRADE PROCESSING CENTRE - SOUTH 8TH FLOOR MUHAMMADI HOUSE I.I. CHUNDRIGAR ROAD, KARACHI PAKISTAN Tel: 0092-21-111-333-111 Ext:7225 Fax: 0092-21-3240 0553 Swift: NIBPPKKA Contact Person: Mr. Aqeel Muslim - Trade Head South Tel: 0092-21-35277225 E-Mail:aqeel.muslim@nibpk.com Mr. Asif Inam Siddiqui - Incharge Imports Tel: 0092-21-35276222 E-Mail:siddiqui.asif@nibpk.com Mr. Syed Muhammad Akbar - Incharge Exports Tel: 0092-21-35276222 E-Mail:syed.akbar@nibpk.com LAHORE TRADE PROCESSING CENTRE - NORTH 14-A OLD RACE COURSE ROAD NEAR CHINA CHOWK, LAHORE PAKISTAN Tel: 0092-42-111-333-111 Ext:7251 Fax: 0092-42-9920 0510 Swift: NIBPPKKA Contact Person: Mr. Khalid Hussain, Trade Head North Tel: 0092-42-36282751 E-Mail:khalid.hussain@nibpk.com Mr. Syed Arshad Ali - Incharge Imports Tel: 0092-42-36282754 E-Mail:sarshad.ali@nibpk.com
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Mr. Sufi Rehan Nazar- Incharge Exports

Treasury and Capital Markets Group

In todays dynamic world with its financial complexities, it is imperative that you have access to innovative, cutting edge financing and risk management solutions that are tailor-made to suit your needs, and an attractive range of diversified investment options backed by world-class expertise and experience. NIB Bank Limited boasts one of the finest Treasuries in Pakistan, providing corporate and individual clients with a wide selection of products ranging from the traditional to the customized.

Money Market
NIB Bank Limited Money Market Desk Manages Liquidity and cash flow, Funding retail and corporate book, Maintains and manages the liquidity while dealing in Inter bank market as well as lending/borrowing swaps & other derivative tools.

Fx Trading and Advisory

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NIB Bank Limited Treasury provides full foreign exchange service available in all major currencies with the ability to monitor and track prices.

Foreign Exchange
As a premium provider of traditional and value added Treasury services, NIB bank Limited provides its customers and consumers with effective and efficient execution of Treasury products. We cover all major financial centers and we are just a phone call away. Our foreign exchange team helps institutional, corporate, and commercial clients to manage the risk and opportunities associated with volatile FX markets.

Structured Solutions
At NIB Bank Limited, we appreciate that each client is unique with a different risk/return profile. As such, we take pride in our ability to structure investment products that are tailored to match those very unique requirements. With access to a full range of market instruments, our team provides tailormade structured products linked to a range of underlying exposures, including:

Interest Rates Foreign exchange

We seek to provide our clients with the broadest possible range of opportunities around the world. Our global relationships, coupled with our understanding of economies, markets, industries, and cultures, help us to consistently deliver high quality products and service time and again. Our team-based approach allows us to maintain a high level of quality and integrity in developing and executing solutions for our clients' requirements.

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We are committed to identifying, creating, and providing access to the best and most innovative investment ideas and opportunities for each of our clients, helping them build and structure their investment ideas in today's complex and challenging environment.

Alternative Channels
A.T.M.
At NIB Bank we are dedicated towards providing our valued customers with the state of the art banking facilities. Our ever expanding Branch network currently spreads over 170 locations in major metropolis of Pakistan with 125 strategically located NIB Onsite and Offsite ATMs. These 125 integral ATMs combined with more than 4400 accessible ATMs on 1-Link & M-net network, makes NIB ATM card the most reliable and convenient alternate. .

Features:
Make Cash Withdrawals Get access to your accounts and make cash withdrawals 24x7. Per Transaction Limit: Rs. 20,000. Daily Limit: Rs. 50,000.

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Pay Bills Add, View and Pay your Utility & Mobile Bill, Reload / Top-up your Prepaid Mobile connections. Utility Companies SSGC, SNGPL, KESC, PTCL, IESCO, HESCO Mobile Companies Ufone, Mobilink, Telenor. Prepaid Vouchers Buy Prepaid Electronic Vouchers of ISPs, Calling Cards and Mobile Phones. ISPs (Gerrysnet, Cybernet). Calling Cards (PTCL & VPTCL) Mobile Vouchers (Mobilink, Ufone, Zong, Telenor, Warid). Funds Transfer from NIB to Other Banks Through Inter Bank Funds Transfer from NIB to any 1-Link member Bank. Daily Transaction Limit: Rs. 100,000. Transfer Funds within NIB Instant funds transfer from NIB-to-NIB Accounts. Daily Transaction Limit: Rs. 100,000. Balance Inquiry Keep an eye on your accounts and balances with the Balance Inquiry facility available at NIB ATMs. Mini Statement Print last 10 Transactions of your account anytime. PIN Change Change your ATM PIN at your convenience.
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NIB CashGuard An optional Cash withdrawal ATM Insurance service that allows the customer to be covered for any unfortunate event of having their money snatched after an ATM transaction.

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Value Added Services

DirectPay
NIB DirectPay is a convenient bill payment and funds transfer facility whereby you can instruct instant payment of your bills and transfer funds from your NIB bank account at your own convenience and luxury. Your payments are made quickly and conveniently, and you no longer have to track payment due dates, wait in long queues or suffer late payment charges. You can easily pay your bills or transfer your funds through ATMs and/or Phone Banking 24 hours a day, 7 days a week. You can also ensure automatic payment of your bills and transfer of funds from your NIB bank account by setting up direct debit instructions and specifying your payment schedule.

NIB Phone Banking

NIB Phone Banking is a distinctive and efficient 24/7 Non-Stop Banking service available for NIB customers. It is a virtual medium for existing and prospect customers to fulfill their day to day financial needs through the telephone.

Call our phone banking at 021-111-NIB(642)-111 and make use of our phone banking for the following:
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Product Information Loan Account Information

Product Information Application Status Installment Repayment Inquiry

Branch Banking Information Deposit Account Services

Account Inquiry Balance Inquiry ATM Card Activation ATM Card Blocking ATM PIN and TPIN Generations ATM Card status and inquiry ATM cash disputes Updating customer personal information

ATM Card Services

Value Added Services DirectPay - Bill Payments

Funds Transfers Bill Payments Mobile top up and other payments Inquiry Complaints Activations Deactivations TPIN and ATM PIN Change Loan Installment Details Last 5 transactions Balance Inquiry Product Information

CashGaurd ATM insurance

IVR Services

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Financial Analysis S.W.O.T Analysis P.E.S.T. Analysis

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Financial Analysis
Seeing the financial reports of NIB bank we see the following pattern in their profits and losses:

Banks unappropriated profit for year 2004 was 114 million Rupees Unappropriated profit for the year 2005 increased to 197 million Rupees Unappropriated profit for the year 2006 increased to 298 million after which the profits of the bank started declining The profit of the bank was reduced to 89 million rupees in year 2007 after this the bank had started facing losses In the year 2008 the bank faced accumulated losses of more than 8 billion rupees In year 2009 the losses of the bank were reduced to 7 billion rupees The accumulated losses of the bank increased to whooping 41 billion rupees in year 2010.

The Financial Reports of the bank shows that the bank which was earning good profits before 2008 has started facing losses at increasing rates beginning from year 2008. The Audited and Consolidated Financial Statement of the bank for the year 2010 is given below.

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NIB Bank Limited Consolidated Statement of Financial Position As at December 31, 2010
2009 2010 (Rupees '000')
8,836,474 2,952,593 6,429,166 50,209,083 74,583,584 2,751,703 4,147,736 9,395,264 5,251,463 164,557,066 8,834,275 3,684,684 5,681,887 59,496,979 84,021,406 3,135,850 28,669,997 6,411,185 6,949,406 206,885,669

ASSETS
Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating fixed assets Intangible assets Deferred tax assets Other assets

LIABILITIES
Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance lease Deferred tax liabilities Other liabilities 1,335,493 42,361,934 99,111,741 3,996,000 3,866,958 150,672,126 13,884,940 1,574,207 62,523,365 92,838,878 3,997,600 4,604,162 165,538,212 41,347,457

NET ASSETS REPRESENTED BY :

Share capital Reserves Accumulated loss Shareholders' equity Advance against proposed rights issue Deficit on revaluation of assets - net

40,437,271 8,464,894 (41,009,961) 7,892,204 6,352,360 14,244,564 (359,624) 13,884,940

40,437,271 8,464,894 (7,081,729) 41,820,436 41,820,436 (472,979) 41,347,457

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On comparison of the deposits of the bank we get the following schedule:

140000 120000 100000 80000 60000 40000 20000 0

Deposits

2004

2005

2006

2007

2008

2009

2010

We can also compare investments of the bank:

70000 60000 50000 40000 30000 20000 10000 0

Investments

2004

2005

2006

2007

2008

2009

2010

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It is clear from above diagrams that bank has good rate of deposits incoming however they have decreased in recent years but other banks have faced the same phenomena. The investments of bank have increased sharply and here is a huge fluctuation in 2007 and 2008 its just because of the fact that the NIB bank acquired the PICIC commercial bank. Similarly we can depict the deposits of the bank in the following schedule:

2000

Profits and Losses

2004
-2000

2005

2006

2007

2008

2009

2010

-4000

-6000

-8000

-10000

However the provision for non recoverable loans has increased sharply in 2008 due to the Acquisition of PICIC Commercial Bank by NIB. The bank had to maintain required provisions for the loans of PICIC.

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S.W.O.T. Analysis

Strengths
1st largest bank in Pakistan as per paid up capital 7th largest bank in Pakistan with 240 branches AAA/Aaa rated sponsored TEMASEK holding The bank has the 7th largest branch distribution in Pakistan The bank is placed in top-10 Pakistani banks in terms of Balance Sheet size and capital Credit Rating by PACRA on Long Term is AA- which is the 2nd highest rating in PACRA, While short term rating is A1+ which is highest credit rating in according to PACRA Financial facilities Advanced infrastructure Strong Advertisement Campaign started recently named NIB SOLUTIONS

Weaknesses
Less confidence of customers

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Segmenation High rateof interest Bank is facing losses at increasing rates in past recent years High provision for unrecoverable loans No proper and timely maintenance of website

Opportunities
Free online banking Wide range of ATM network Strong potential for the growth Program based lending Compatible salary structure

Threats
Lack of proper security measures in Pakistan Very Stiff competition IT Development Economic uncertainty in global market Increase in taxes Increasing losses in recent years High volume of unrecoverable loans

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PEST Analysis
A broad view of market is important when management is interested in introducing better services for customers. Rapid technological change, global competition and the diversity of buyers preferences in many markets require the constant attention of the market vouchers to identify promises business opportunities, see the shifting requirements of the buyers, evaluate changes in competitors positioning and guide the choice of which buyers to target and classify them according to respective segments. Identification of external and macro factors that influence buyers and thus change the size and composition of market overtime involves initially building customer profiles. These influences include: Political and legal environment Economic trends Socio cultural environment Technological factors

Political and Legal Environment

Banks are strongly affected by the political and legal considerations. This environment is composed of regulatory agencies and government law that influence and limit various organizations and individuals. Mostly these laws create new opportunities for business.

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Business legislation has following main purposes: To protect banking companies from unfair competition. To protect consumers from unfair business practices adopted by banking companies To protect the interest of the society from unbridled business behavior.

Economic Trends
A banking market requires better consumer market in volume along with higher borrowing power. The available borrowing power depends on: Consumer income Saving rates Consumption patrons Rates of interest Budget deficit Exchange rates Cost of living Inflation

Socio-Cultural Environment
A society is shaped by beliefs, norms and values. People in a society consciously and unconsciously interact with: Themselves Others

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Organization Society Nature Following are the main factors which arise because of change in socio-cultural environment: Consciousness about services Concern for environment Improved customer relation

Technological Factors
Forces of technological advancement have played the most dramatic role in shaping the lives of people. The rate of change of technology has greatly affected the rate of growth of economy. New technology is creating deep rooted affects which could be observed in long run. The improvement techniques involved in on line banking. In brief PEST analysis affects the overall banking companies and provides us the information about the external macro condition.

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Recommendations
Training of the employs Introduce new policies as terrorism Simplify term and conditions Fair competition in the market Decentralization Increase the advertisement of its products Improvement in HR department

Co n c l u s i o n
NIB Bank is the newly born institution but it is backed by powerful international investors so, NIB Bank is growing rapidly both in size and profit and has a good credibility and repute in the market. Employees are the most important assets of any organization. With their focused strategy and product development initiatives planned for the year, NIB is strongly positioned to meet these challenges. Now competition has increased and new entrants are still coming to the market NIB has to maintain its position through product innovativeness, customer care and advertising and promotion.

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