INTERNSHIP REPORT ON ALLIED BANK LTD

Prepared By

Shahid Iqbal BSc Accounting & Finance Bahauddin Zakariya University Multan 2009-2013

DEDICATION

All My Words Dedicated With Respect, Reverence Love and Affection to My Loving Grand Parents, Parents, Sisters &My Loving Brother Mr. OMAIR HASSAN who taught and hold my hands on several occasions and help me to reach this stage.

AKNOWLEDGMENTS
I wish to praise almighty Allah, the most Merciful, who gave courage and enable me in accomplishment and submission of this report. Many people have contributed in the successful completion of this internship report. My great appreciation goes to the whole team of ALLIED BANK LTD MULTAN who provided me every kind of help in completion of my report. Last but not least I would like to thank my respected teachers especially Mr. ALLAH BAKSH KHAN who taught me all core concepts of Financial Management and Islamic Finance Mr. SAIF-UL-LAH QURESHI who brief me with all concepts of Financial & Managerial Accounting.

Table of Contents
1. Introduction..5 1.1 Executive Summary.5 2. Overview of an Organization..6 2.1 Vision Statement.6 2.1.1 MissionStatement....6 2.1.2 Values...7 2.1.3 Historical Review.8 3. Organizational Structure.10 3.1 Management Hierarchy10 3.2 Functional Hierarchy11 3.3 Board Of Directors...12 3.4 Management Team13 4. Products......14 4.1 Consumer Products14 4.2 Finance Products17 6. Structure and Functions of various Department..18 6.1 Current saving Department.18 6.2 Accounts Department.19 6.3 Remittance Department22 6.4 Cash Department..24 6.5 Clearing Department25 7. Critical Analysis...26 7.1 Financial Analysis...26 7.2 Common Size Analysis...26 7.3 Industrial Analysis...27 7.4 Ratio Analysis.34 8. Organizational Analysis.........35 8.1 SWOT Analysis.35 9. Recommendations and Suggestions.39 10. References.45 4

EXECUTIVE SUMMARY
This report is about my internship whey I learnt from my internship at Allied bank limited. It also includes how it makes or deals with its employees and Internship programs are designed to make students known to the practical work and to give them proper experience that would help them in their future endeavors. For my MSc course requirement I got an opportunity to work as an internee in any organization. I decided to take up Allied Bank Limited for my internship because it's competing bank now days and gives a good training to the internees. So in order to learn more this was my choice. This report is about my internship that I have undergone at Allied Bank Limited Multan Branch from 05-07-2012 to 15-08-2012. During my internship I am able to learn practical aspect of business, and get good working experience. On the very first day of my internship I reported to Customer service manager Mr. WAheed. He gave me small introduction of the bank and introduced me to some staff of the bank. Every internee is rotated among the banks departments and so was I. This rotation is done in order to have general concept regarding banks functions, operations and policies. In this rotation the stay in department is usually a week or fifteen (15) days. I worked in the operations department that has clearing, account opening funds transfer and remittances have given below the caption of activities I was involved in during the period of six weeks. The working environment in Allied bank is something that can be found only in a challenging and in a reputed multinational corporation. The senior staff is always open for any kind of suggestions and help for the junior staff and the internees. Apart of completing a course requirement, I learnt a lot from this internship in terms of how to deal with people while you are on a job.

Objectives of Studying the Organization

Purpose of studying this organization is that, I have my own interest in this bank, because of my friend and good repute of this bank. My friend is doing job in this bank and I think this bank provide better jobs opportunity as compare to other organizations, thats why I choose this organization for internship. Another reason for studying this organization is that, the bank manager was my father friend, therefore my father recommend this bank for internship program and here I gained practical experience related with my course and I come to know how bank use the policies and strategies and how evaluate its performance. I feel pleasure and honor that I got the opportunity to work in such a privileged and reputable bank of the country. During my internship program I tried my every best to equip myself with all important knowledge. In this report, I have tried to humble endeavor to cover various aspects of bank like, introduction, its history, main departments, culture, objectives and working financial analysis.

INTRODUCTION TO THE ORGANIZATION

ABL is one of the largest banks in Pakistan, serving the Country for over 60 years in all spheres at banking and financial Services

2.1 VISION
To become a dynamic and efficient bank providing integrated solutions and the first choice of bank for all customers.

2.2 MISSOIN
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

VALUES
Integrity Excellence in Service High Performance Innovation and Growth

ABL has emerged as one of the foremost-privatized financial institutions in Pakistan endeavoring to gear up its operations to meet the demands of the future.

2.4. MEANING OF BANK

Some authors write that the word bank is derived from Italian word bancus OR banque which means a bench. Because in the old days the Jews were used to make banking settlements by sitting on the benches & to deal the exchange of money in the market place. When any one of them becomes insolvent means that he is unable to fulfill his requirements. Then his bench was destroyed by the customer & this practice given birth to the word BANKRUPT. Some other Authors are of the opinion that the word bank is derived from a German word back, which means Joint Stock Fund. & when the major part of Italy was occupied by the German then this word back was Italianized in to the word Bank. However, no confident record is available to believe upon. Therefore, we are not in a position to give any bounded meanings to bank inspire of all these we can define bank as follow. The imperial dictionary defined a bank as An establishment for deposits & issue of money & also for granting loans discounting bills & facilitating the transaction from one place to another place. 1 It is an institution, which deals with money. 2 It buys & sells the uses of money. 1 In other words, we can say A bank is an institution for exchange of money, sanctioning credit, transferring funds by domestic & foreign bills of exchange. We can also say that it is a pipeline through which money moves into & on of circulation. Shortly & conclusively we can say that the Bank is an institution that facilitates the matters in which the money is involved.

2.5 MEANING OF BANKING

he Banking companies Ordinance, 1962 defines Banking as Banking means accepting for the purpose of lending or investment, of deposits of money from public, repayable on demand or otherwise and withdrawal by checks, drafts, order, or otherwise

PROGRESS THROUGH THE COURSE OF HISTORY (1880) commanding presence of the Hindus in Industry Commerce/Trade. Founder Khawaja Bashir Bux. Australasia bank ltd first Muslim bank in Pakistan, December 1942. Only fully Operational Muslim bank on 14th August, 1947. 1970 it had 101 branches. Renamed Allied bank in 1974 after nationalization. Branches increased from 353 in 1974 to 748 in 1991. Privatization in September 1991. August 2004 ownership transferred to Ibrahim Group.

BRANCH NTWORK Online banking has been started and there are 834 CRBG (customer retail banking group) and 4 CIBG (corporate and investment banking group) in 300+ cities. There are total 601+ ATMs working only from ABL ltd. There are 4 groups which are divided into 30 regions. The groups are as follows; Central group 1 Central group 2 North group South group 241 branches 118 branches 259 branches 215 branches

BRANCH BANKING JOB ASSIGNMENT BRM (relationship branch manager) CSM (customer service manager ) GBO (general banking officer ) o CD In-charge o Credit In-charge/Officer o Trade In-charge/Officer
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o Lockers In-charge/Officer o Clearing In-charge/Officer o Remittance In-charge/Officer BUSINESS GROUPS CRBG (customer retail banking group) CIBG (corporate & Investment banking group} TG (treasury group) OG (operations group) A&RRG(audit & risk review group) CG (compliance group, SQG ) RMG (risk management group ) SAMG (special asset management group ) HRG (human resource group ) ITG (information technology group ) CAG (corporate affairs group ) BSIG (business system implementation group ) FG (finance group )

PERFORMANCE & ACHIEVEMENTS Years 2010 2011 Profit 8.2 10.2 Deposits 371.3 399.6 Advances Total Assets 267.78 449.9 262.14 515.7 Equity 35.98 43.35 NPLS 18.7 20.5

In 2011, ABL ltd achieved two prestigious awards; o Bank of the year in Pakistan in The bankers magazines o Best retail bank in Pakistan Asian banker

MANAGEMENT HIERARCHY
The management hierarchy represents the different positions and designations in the hierarchy of the ABL. However, this is not the reporting hierarchy but merely represents the positions and grades on the basis of seniority and grades.

President Senior Vice President Vice President Executive Vice President

Senior Executive Vice President[rosodmemtPresident Regional General ManagerManagerxecutive Vice President Branch Manager
Figure 2.1 Management hierarchy

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2.11 FUNCTIONAL HIERARCHY

The functional hierarchy represents the reporting order in the hierarchy of ABL. The hierarchy has president and directors at top management level and officers Grade I, II and Grade III at the lower level management of ABL. The middle level management consists of regional general Manager and Regional Controller of Operations. These positions are not fixed. Any person in the hierarchy above the branch manager can be appointed as RGM and controller operations.

President and CEO

Board of Director

Head of Departments

Regional General Manager

Controllers of Operation

Branch Manager

Office G-I, II and other lower Staff

Figure 2.2 Functional hierarch

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2.12 BOARD OF DIRECTORS

Pervaiz (Director)

Iqbal

Butt

Mohammad WaseemMukhtar (Director) Sheikh Mukhtar Ahmed (Director)

FarrakhQayyum (Director) Abdul Aziz (Director) Sheikh Jalees (Director) Khan

Tasneem (Director) Nazrat (Director) Mubashir (Director)

M.

Noorani

Ahmed

Bashir

Mohammad AftabManzoor\ (CEO) Mohammad NaeemMukhtar (Chairman)

A.

Akhtar

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2.13 MANAGEMENT TEAM

AsimTufail (Group Chief, Consumer & Personal Banking) Iqbal Zaidi (Group Chief, Compliance) Mohammad AftabManzoor (Chief Executive Officer) Muhammad Yaseen (Group Chief, Treasury) Shafique Ahmed Uqaili (Group Chief, Human Resources) Tahir Hassan Qureshi (Chief Financial Officer) WaheedurRehman (Company Secretary)

FareedVardag (Chief Risk Officer) Mohammad Abbas Sheikh (Group Chief, Special Assets Management) Muhammad Jawaid Iqbal (Group Chief, Coprate& Investment Banking) Mujahid Ali (Group Chief, Information Technology) Syed Shahid Raza (Head, Business Transformation Team) Tariq Mehmood (Group Chief, Operations) Zia Ijaz (Group Chief, Commercial & Retail Banking)

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PRODUCTS & SERVICES

ALLIED BUSINESS ACCOUNT

ALLIED RISING STAR ACCOUNT

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ALLIED PAY ANYONE FACILITY

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ALLIED PHONE BANKING (call center) 0800-22522

ALLIED CASH SHOP+VISA DEBIT CARD

ALLIED e-banking

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2.8 MAIN OBJECTIVE

The main objective of the bank is to accept deposits and provide loans to its customers and also to be more efficient in providing services. The bank maintained its commitment to most efficient and personalized services to its customers. Allied Bank of Pakistan introduces many remunerative schemes for its depositors and introduces computer services for the first time in the banking history of Pakistan. Allied bank gives advances to small, medium and big industries, commercial establishment, agriculture, construction companies and other needy persons. Allied bank collects electricity gas and telephone bills from public and over hundred branches of Allied Bank Ltd. deal in foreign exchange were facilities are given to financial and commercial so its ultimate objective is to receive funds from the depositors and provides loans\credit facilities to different sector including trade, industry and agriculture in its most branches.

FINANCIAL PRODUCTS Types of finance

Short Term Finance
Allied Bank Ltd. receives the saving of the people and lends it for short term to its customers. Short-term finance is generally given for a period of one year or less in duration.

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 Medium Term Finance

The duration range of the intermediate term finance is from one year to three years. It is also called term loan. Intermediate term finance is usually given for the expansion of an existing business or for the purchase of new equipments.

Long Term Finance

This type of finance is required for the period of more than five years. Long term finance is generally given for the compilation of big projects, for the construction of building and for the purchase of machineries.

Producer of Applying for Loan

Any customer who applies for loan should have an account (usually current account) with ABL branch concerned. That account must be in running position. When approval from head office is given, branch gives tern & condition to the party. Bank does not advance 100% loan against a security, rather the profit margin is different in different type of loan.

DEPARTEMENT
SHAH RUKN-E-ALAM BRANCH
(Branch code = 0249)ADDRESS: T-CHOWK SHAH RUKN-E-ALAM MULTAN I did my internship of six weeks in ABL SHAH RUKN-E-ALAM BRANCH (0249) from 05-07-12 to 15-08-07. It is one of the small branches of ABL, which is yet to be renovated. I selected this branch because of two reasons. First, its the a retail branch and have a large volume so more opportunities to learn and Secondly its near to my residence and is using TEMENOS software. In the same branch different departments of ABL are working. So I got the opportunity to know briefly about every department

CURRENT SAVING DEPARTMENT

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In ABL Branch current saving department mainly deals with cheques, vouchers and advices. First of all a cheque holder have to present his/her cheque to the person responsible for issuing the tokens. . Then cheque is passed on to the computer operator to entry it in computer. Afterward it will go for signature verification after which it will be given to cashier for payment.

COMPUTER OPERATIONS In ABL Shah rukn-e-alam branch the computer section performs several duties that are as under; 1. Daily Transactions

To record all the transactions in case of deposits made by the people and also to record all the withdrawals made by the people or customers. Each transaction has to be recorded in its appropriate head of account with the help of prescribed codes. 2. Vouchers

To record all the vouchers made by the remittance department. Remittance department have to prepare debit and credit vouchers for about every transaction recorded in their department. Then these vouchers are sent to computer operator to record those in computer. 3. Advices To record all advices received from other branches. Most of the-inter branch or intra branch- remittances are subject to ultimate receipt of advices from the corresponding branch to materialize the transactions. These advices also have to be recorded in computer. 4. Statements To close the daily record a number of statements have to be printed out. Statements like: Days transactions (sequence) Overdrawn facilitated a/c statement Markup sheet Inter branch transactions Detail of PLS and Current a/c 19

Days transactions (a/c wise) Operative, Dormant, Inoperative and Unclaimed a/c All ATM transactions Detail of GL entries (official & non customer transactions) Summary of all a/c (debits, credits & balances) Profit due, transferred, disbursed, etc.

ACCOUNT DEPARTMENT
Deposits the Life Blood of a Bank Bank borrowing funds from outside parties is more important because the entire banking system is based on it. Receiving of deposits is a basic function of all commercial banks. Commercial banks do not receive these deposited for safekeeping purpose only. When the bank receives the amount of deposited as a depositor, it become the owner of it. The bank may therefore use these deposits, as it deems appropriate. But there is an implicit agreement that the amount owned by the bank will be paid back to the depositors on demand or after a specified period of time. The borrowed capital of the bank is than the bank own capital. Banks borrowing is mostly in the form of deposits. These deposits are lend-out to different parties. Larger the difference between the rate at which these deposits are borrowed and the rate at which they lendout the greater will be the profit margin of the bank. Larger the funds lend-out the greater will be the return earned on them and greater the amount of return on these deposits earned greater will be the profit for the bank. It is because of this interrelated relationship. Deposits are referred to as the life blood small for any banking sector. KINDS OF ACCOUNT There are numbers of account that ABL offers to its customer keeping in mind their needs and dealing 1. SAVING BANK ACCOUNT P & LOSS ACCOUNT . In Pakistan the saving Bank accounts are known as profit and profit and loss sharing accounts (PLS A/C) fowling the illumination of bank. The owners of such account are not allowed to withdraw money more than once are twice a week. In case of withdrawal of large sum, the depositor is required to give to prior notices a week or two. Thus the bankers are not

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required is always available to bank for giving to loans to their customers. Thus these deposits also serves as source of credit certain by the commercial banks. The rate or profit on this type of account varies from time to time. All the commercial banks declare the rate of profit every year that is paid on these accounts on the basis of their monthly credit balance. The bank will determine the proportion of profit & its decision will be final. Profit will be determined on daily product basis while it will be paid on monthly basis & will be paid on the minimum balance between the first day & last day of the month. Zakat will be deducted on the exceeding amount as exempted from the Zakat deduction. Taxes will be imposed according to the rules & regulation.In Pakistan post offices & national saving centers also maintain this savings bank account to encourage saving habits among the people. At the time of opening this account, a minimum amount of Rs.500 is to be deposited. Subsequently the account is opened & account number is located. The depositor is given a cheque book. The depositors who are wishing to close his account are required to present his cheques to the bank in order to draw the credit balance and to close the account. In this type of account you can open joint account also which can be operated by anyone.

2.

CURRENT ACCOUNT

There is no limit of withdraw of money from these accounts. In practice the bankers do not allow any profit to such deposits in Pakistan. The customers are required maintaining the minimum credit balance in their account in case of failing incidental charges are recovered from defaulters. This is because the depositors may withdraw current deposits at any time and as such the bank is not entirely free to employ such deposits. In general, the bank allows the overdraft facilities to current account holders & the prevailing rate of markup is charged from these customers. In ABL the minimum amount required to open the current account is Rs. 500. No profit is paid to account beside this that the account holder has the facility to taking s much money as he wants. Individual account is opened in the name of the single personal one person on whose name it is opened only conduct it. While two opens joint account and partnership account are 21

more person and the bank fallow their instructions for the conduct of the account. Similarly limited companies can also open their current account. 3. FIXED DEPOSIT ACCOUNT/TERM DEPOSITS

These deposits are also called as time deposits because these deposits are based on the fixed duration. The period for which these deposits are kept with bank are ranged from seven days to ten years in light of the agreement between the customer and the banker. The profit allowed on these account depend on the duration longer the duration of the deposits the higher will be the rate of profit. The operation of fixed account is different from saving & current accounts. Every time money is deposited with the bank an application from filled and the bank issue a fixed deposit receipt for amount deposited along with specific period. Fixed deposit receipt is given to the depositor and the bank retains the counterfoil of the same receipt. Fixed term deposits may be in the joint names of two or more person. The payment to one of those people will not discharge by the bank without the authority of others. OPENING AND OPERATION OF BANK ACCOUNT As discuss earlier there is a prescribed procedure for opening different types of account. Following steps re followed while opening a new account. 1. Application from for Opening of Accounting

A person who wishes to open a bank account is required to complete this from the personal information is to be furnished. The application signs the declaration to effect that he has understood the rules and regulation of the bank. 2. Introduction

As required by the banking law the new customer needs to be introduced by the account holder of the same branch where the account is being opened. The manager or any other bank officer may introduce the new customer if they know them personally. I. Signature card At the time of opening an account a specimen signature card containing two signature of the customer is required which the manager of the branch attaches with application

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form. During the operation of account the for payment. II. Cheque Book

signature is verified when the cheque is presented

After completing formalities for opening saving and current a cheque books issued to the customer for withdrawing cash from his or her account at the time of need. The cheque contains minimum 25 pages & maximum 100 pages. The bank also charges excise duty on cheque book.

REMITTANCES DEPARTMENT
Another important department in ABL Shah Rukn-e Alam Branch is Remittances Department. The remittances department transfers the funds from one bank to other bank and from one place to another place. In remittances department the collection take place. The ABL made payment of only open cheques on the counter and prohibits the payment of crossed cheques.ABL transfers money from one place to another by the following means: Mail Transfer

When a customer requests the bank to transfer his money from this bank to any other bank or the branch of some other bank, the first thing he has to do is to fill an application form. In which he states that he/she wants to transfer the money from this bank to that bank by mail. If the customer is the account holder of the bank, operating personal will proceed further with steps like: Writing a debit voucher for a/c holders a/c Preparing an advice in favor of stated bank/branch Writing credit voucher for GL

Mail the advice If the customer is not the account holder of this bank, then firstly, he has to deposit the money and then above procedure will be adopted to transfer his money. Telegraphic Transfer

With the changing requirements of the customer, ABL has introduced the fastest transfer of money. The sender is required to apply through a form in which he will give all the necessary details about the sender and beneficiary. The sender deposits the money to be transferred plus 23

bank charges at the bank counter. The remittances officials send a telegram to concerned branch with specified code words and the receiving branch makes payment to the beneficiary. Vouchers are sent by ordinary mail to keep the record. On TT, no excise duty is charged only commission and telegram charges are charged. Pay Order

Pay order is the most convenient simple and secure way of transfer of money. It is issued by, drawn upon and payable by the same branch of the bank. It is neither transferable nor negotiable and as such it is payable to the payee named there in. The following are the parties to a pay order. Purchaser is a person, firm, company or local authority. Issuing/paying branch is one which issues/pays on presentation. Payee is a person named there in. Demand Draft

Demand Draft is another way of transfer of money from one bank to another bank. Unlike pay order, a form is required to be filled for the issuance of the demand draft in which necessary particulars about the beneficiary and sender are given. The sender deposits the amount of DD plus commission and other charges on the bank counter, from where he is given a receipt and in accordance with this receipt he is issued The following are the main essential of draft: It is a Negotiable Instrument. Filling a form and depositing the amount written on it prepare 2} Draft. It is a written order to its branches or to another bank to pay the stated amount on draft.

CASH DEPARTMENT
This is the most important and critical department in a Bank. There are two basic functions performed by the cash department. These are Receipts

An individual who has account in the Bank can deposit money in his account. For deposit of the money the individual has to fill the deposit slip in which the account holder writes his name, Account number, amount of the money both in figures and in words. 24

After filling the deposit slip the Cash amount along with the deposit slip is submitted with the cashier. The cashier collects the cash and counts it and after verification the cashier stamps the deposit slip. One part of the deposit slip is given back to the customer and the other part of the deposit slip remains with the bank for the record purposes . The cashier also record the deposits made by the customers in credit sheets daily. The deposits of all customers of the bank are controlled by mean of ledger account. Every customer has its own ledger account and has separate ledger cards in which his / her total record is kept. Bill collection is also one of the main functions of bank. Cashier has to prepare a list of bills serial number, a copy of which is to be sent to the corresponding organization.

Payments

The procedure of clearance of a cheque or payments is as following. First of all the customer presents his cheque to the cashier the cashier records the account number and the amount, which is to be drawn. Then the cashier check the cheque number in the computer for the verification whether the account holder has such amount in his account which he is demanding or not. If the computer passes the cheque, the Passing officer signs the cheque and sent it to the cash counter then cashier pays the written amount to the customer and then in the end cashier records the amount paid in computer.

3.8 CLEARING DEPARTMENT

In clearing process, if the account holder of ABL receives the cheque of other bank like City Bank, Habib Bank Limited etc., and he submits it in ABL branch to be cashed. At the same time the clearing process starts. First the bank name. Cheque number and the amount are written in the register. After this three kind of stamps are required first bank name stamp, secondly clearing stamp of next date and If the cheque is not local then the intercity clearing stamp is required. Some cheques are local and some are outstation. The institution N.I.F.T. provides the services in clearing the cheque. They send the different cheque to different banks. The N.I.F.T service is only in few cities, like Karachi, Lahore, and Rawalpindi. The cheque of inter city is

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send through N.I.F.T. And where, the N.I.F.T service is not available so the cheque is sent through T.C.S. The clearance of cheque is informed through advice. Some cheque is not passed so they should return so Rs. 100 is deducted and if the cheque is intercity then the postage charges is deducted. For this purpose the Debit & Credit voucher is used. When the cheque is cleared the today stamp is required. Some cheque is drawn on ABL. This is called outward clearing. These cheques will be entered in the outward clearing register. And the advice is sent for the clearance of cheques. The account holder account is credited.

OUT WARD BILL FOR COLLECTION

OBC means the cheque of other banks. When they sent OBC the OBC is credit & OBR is debited and the advice is made on that time, one copy is remain in the bank and the other copy is sent to the related branch. When they realized the opposite entry is made. It is entered in the OBC register. The income A\c commission is credited, and postage

FINANCIAL ANALYSIS
RECENT RESULTS - 1H10
During the 1H10, the profit after tax grew by 18.26% reaching the level of Rs 3,260 million. The mark-up income grew by 9.2% mainly attributing to the increase in volume growth. On the other hand Mark-up expense, declined by 0. 4% due to improvement in deposit mix. The non-mark-up income showed a decline in 1H10 compared to 1H09, as the income decreased from Rs 3,363,444 to Rs 2,620,649. On the contrary, the non-mark-up expense has shown an increase of 11.8% in 1H10. The increase is due to inflationary pressures and upgradation of technology. Moving towards the asset side, ABL s gross advances as at June 30, 2010 were higher by Rs 24,466 million or 10.9% from June 30, 2009 level. Gross investments too have increased to Rs 112,655 million as at June 30, 2010, a growth of 27. 4% over June 30, 2009. The increase was attributed to marginal increase in lending to financial institutions and investments, which tend to be the earning assets of all the banks. Advances amounting to Rs 17,269.455 million is placed under NPLs, where majority of NPLs considered as loss. The majority of banks also fall in the same category in case of loss of non-performing loans. 26

The liabilities side of ABL, the borrowing from financial institutions has declined in 1H10. It is reduced from Rs 39,818,532 to Rs 29,333,042 whereas deposits and other accounts have marginally increased. The main reason for this increase is the consumers have kept their deposits in mainly current accounts, could be the reason of the liquidity condition in the economy. Some comparable results of top 5 banks along with ABL is done. We see HBL on the top list in the case of after-tax profit growth for 1H10 of 29%, followed by NBP of 24.5% and then by UBL of 21%. ABL has also performed well in consideration to the profit growth as it amounted to 18. 26%. MCB remains the lowest in terms of growth in After-tax profit as it marginally increased by 1. 5%. MCB was not able to gain a higher mark-up return in 1H10 of only 2. 11%, which led to a trickledown effect resulting in a lower profitability growth. On the asset side, the leading earning asset tends to remain investments and lending to financial institutions. In terms of gross investments, UBL posted a healthy growth of 24%, along with ABL with 16%. Most of the investments tend to remain at short-term securities as the buying and selling of T-bills and MTBs remain high for the majority of banks.

On the liabilities side MCB stood at top with the highest growth in Deposits of 14% in 1H10. Followed by NBP with 12% and then ABL with 7%. A general trend was observed in Deposits, as the deposit base increased mainly on account of Current Accounts and Saving Deposits.

OUTLOOK FOR THE REMAINING QUARTERS OF FINANCIAL YEAR 2010

Higher inflation, liquidity crunch and inevitable rupee depreciation may pose pressure on the countrys operating environment, unless flows from IMF and other multilateral agencies start pouring in and international oil prices come down. Under these circumstances tightening of monetary policy by SBP in upcoming review started gaining weight. Hence ABL, being cautious of the prevailing economic conditions would continue with its strategy of achieving steady growth by taking exposure in selected avenues following stringent risk management policies, proactive monitoring of the credit portfolio, focusing on further improving the deposit mix and optimizing cost efficiencies. INDUSTRY REVIEW CY09

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During the period under review Banking Sector has shown signals of improvement and growth. The total asset base of the sector has increased from Rs 5,627 billion in CY08 to Rs 6,529 billion by the end of quarter December 09. The net investments of the sector have also shown improvement. They stood at Rs 1,753 billion on the quarter ended December 09, from levels of Rs 1,080 billion. Even the deposit base of the sector has shown improvement. They have increased from levels of Rs 4,217 billion in CY08 to Rs 4,787 billion in CY09.

Table 1. 1: Highlights of the Banking System (Billion Rupees)

Items Total Assets Investment (net) Advances (net) Deposits Equity Profit before tax Profit after tax

2004 3043 679

2005 3660 800

2006 4353 833

2007 5172 1276

2008 5627 1080

Sep 09 6105 1593

Dec 09 6529 1753

1574

1991

2428

2688

3183

3119

3248

2393 202 52

2832 292 94

3255 402 124

3854 544 107

4217 563 63

4483 641 70

4787 662 91

35

63

84

73

43

42

54

Provisioning 11 changes

19

22

60

106

64

85

28

NPL NPL (net)

200 59

177 41

177 39

218 30

359 109

422 128

432 125

Another major change that has been identified in the overall banking sector of Pakistan is change in the asset structure of the system. There has been a decline in the proportion of advances by the sector but a slight increase in the investments over the years. The private sector slow demand for bank credit has been reinforced by banks risk aversion due to heightened credit risk. In this scenario the public sector has emerged as a major consumer of bank credit.

The year 2009 was an extraordinary year for the global economy and the financial markets. Impact of the financial crisis was reflected in the performance of the real economy. Although Pakistan did not have a direct impact of the global financial crisis, but law and order, slow economic growth and lack of political stability had a lot of stress. Another major change that has been identified in the overall banking sector of Pakistan is change in the asset structure of the system. There has been a decline in the proportion of advances by the sector but a slight increase in the investments over the years. The private sector s low demand for bank credit has been reinforced by banks risk aversion due to heightened credit risk. In this scenario the public sector has emerged as a major consumer of bank credit.

The year 2009 was an extraordinary year for the global economy and the financial markets. Impact of the financial crisis was reflected in the performance of the real economy. Although Pakistan did not have a direct impact of the global financial crisis, but law and order, slow economic growth and lack of political stability had a lot of stress on many industries and in turn the financial sector. Industry wide NPLS were on the rise.

The NPLs have increased from Rs 109 billion in CY08 to Rs 125 billion by the quarter ended December 09. The reason for this growth has been the increase in the loans classified under the loss category which required the full provisioning coverage, and so banks set aside relatively higher amount of provisions.

During the year under review, SBP changed the policy discount rate thrice; it reduced it by 100 bps each time - in April 2009, August 2009 and by 50 bps in November 2009.

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FINANCIAL PERFORMANCE

During the year ended FY09, the profitability of Allied Bank Limited has improved. The bank posted a profit after tax of Rs 7,122 million as compared to Rs 4,157 of FY08, showing a growth of 71%. This improvement in the profits of the bank also translated into the improvement in the ROA and ROE of ABL. The ROA in FY09 rose to 1.81% as compared t0 1. 21% of FY08. Also the ROE increased tremendously by 43. 86% in FY09 to reach 30.5% as compared to 21.2% in FY08. The net interest income of the bank increased by 40.6% to Rs 18,700 million in FY09 as compared to Rs 13,298 million in FY08. The non-interest income also increased by 21.7% in FY09 to reach a level of Rs 5,958 million. The gross income to expense ratio has improved to 2. 57 times during the year under review from 2.04 times in FY08. The mark-up earned on loans has increased from Rs 21,942 million in FY08 to Rs 30,142 million in FY09, whereas that earned on investments has also increased from Rs 6,618 million in FY08 to Rs 8,624 million in FY09. On the non-interest income side, the income from fee, commission and brokerage has increased from Rs 2,307 million in FY08 to Rs 2,708 million in FY09. The interest income expensed by the bank has also increased mainly on deposits and call money borrowing. The overall interest income expensed has increased from Rs 17,272 million in FY08 to Rs 22,421 million in FY09. The major interest expense is that incurred in deposits which have increased from Rs 13,978 million in FY08, to Rs 17,946 million in FY09. Also the interest expensed in call money borrowings has increased from Rs 790 million in FY08 to Rs 1,158 million in FY09 showing an increase of 47%.

The net interest income of the bank increased mainly due to the growth in average earning assets and improvement in deposit mix towards low cost core deposits.

The asset base of ABL has increased. The total assets of the company have increased to Rs 418,374 million in FY09 as compared to Rs 366,696 million in FY08. There has been an increase in the gross advances by the bank. The gross advances have increased from Rs 223,640 million to Rs 249,987 million in FY09. The loans in Pakistan have increased from Rs 215,733 million in FY08 to Rs 243,166 million in FY09. The net investments in finance leases in Pakistan have also increased from Rs 768 million in FY08 to Rs 847 million in FY09. Even the gross investments of the bank have increased. In commercial and retail banking steps were taken to enhance focus on SMEs, commercial and agricultural sectors with a view to diversify and increase its share in total loan book of the Bank. A team of well-experienced agricultural credit officers were hired to further penetrate into the agricultural sector.

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Another major component of the assets of the bank is the investments. The gross investments by the bank have increased from levels of Rs 84,602 million in FY08 to Rs 96,975 million in FY09. The investments on an average basis grew by 12. 4%compared to 2008. Bank decided to revisit its investment portfolio with a view to rationalize exposure in certain segments with the intention to deploy resources into other profitable avenues. In this regard the exposure in open-end mutual funds has been reduced from Rs 12,761 million (14. 7% of total investments) in FY08 to Rs 4,348 million (4. 6% of total investments) in FY09. The exposure in TFCs has increased by 98. 4% to Rs 36,312 million (38. 1% of total investments) inFY09 compared to Rs 18,302 million (21. 1% of total investments) FY08. This was mainly due to reclassification of Banks existing lending exposure as an outcome to adjust the circular debt. The banks Sukuk portfolio includes exposure of Rs 3,190 million to Maple Leaf Cement Factory Limited.

A major concern on ABL s balance sheet has been the increase in the non-performing loans. The loans have increased to Rs 16,281 million FY09 as against Rs 13,772 million FY08, thus showing a net increase of Rs 2,509 million. The infection ratio of 6. 5% in FY09 was slightly above 6. 2% of the previous year; whereas coverage ratio remained at previous years level of 77%. The bank has accounted for a provision of Rs 3,163 million against NPLs during the year under review. No benefit of FSV has been taken while determining the provision against NPLs as allowed under BSD Circular No 10 of 2009 dated October 20, 2009. The deposit base of the bank has also increased. The deposits of the bank have increased from Rs 297,475 million in FY08 to Rs 328,875 million in FY09. During the year stable and low cost deposits remained the major focus of the business strategy. In order to accomplish the desired goal, new branches and existing branches are being built or renovated to improve the ambience. Service standards are being improved. Services like internet banking and online transfers are being launched to attract additional deposits. The bank has been able to restrict the cost of deposits to 6. 1% in FY09 as against 5.1% during FY08. The debt ratios of the bank have declined, indicating increasing equity portion of the bank s assets. Generally, this has been the trend in the entire banking industry perhaps due to higher interest rates resulting in higher cost of borrowings and the MCR requirements as proposed by the State Bank. The equity of the bank has increased from Rs 344349 million in FY08 to Rs 388414 million in Fy09. The debt to asset ratio has declined from 0. 98 in FY04 to 0.93 in FY09. The debt to equity ratio has declined from 41. 82 in FY04 to 12.96 in FY09. Also the deposits times capital has decreased from 37. 91 in FY04 to 10.98 in FY09. 31

The liquidity position of the bank looks favourable. The ratio of earning assets to assets of the bank has remained almost consistent around 85%. The ratio of advances to deposits has increased from levels of 41% in FY 04 to 64% in FY07 to 72% in FY09. The yield on earning assets has improved. The yield has increased from 5% in FY04 to 11% in FY09. The reason for these increases has been an increase in the interest income earned on advances, investments and lending to the financial institutions. Thesolvency ratios of the bank have persistently shown an upward trend throughout 20042009. This indicates bright prospects of long-term sustainability of the bank. The solvency ratios of the bank for the last five years have been maintained in the vicinity of each other. The increasing equity portion of the bank explains this. This may be regarded as a move against the rise in deposits rates and a decrease in the banking spread of the banking sector. This healthy trend in solvency may be predicted to continue in the future. During FY09the bank gave a dividend of Rs 4 per share on cash basis and proposed 1 bonus issue per share as compared to Rs 2.5 per share in FY08 along with 1 bonus issue per share. The pay-out ratio has however declined from 66% in FY07 to 54% in FY08 to 50% inFY09. The EPS of the share has increased to Rs 10. 02 in FY09 as compared to Rs 5.85 per share in FY08. The following graph depicts the trend related to DPS and EPS of ABL.

During the FY09 the price of ABL s stock has shown a fluctuating trend. The P/E ratio declined in FY08 to 4. 9 from level of 17.2 in FY07. However it has improved to 5. 9 in Fy09. The market value to book value ratio has also been declining. The ratio declined from 3. 09 in FY07 to 1.01 in FY09.

A comparison of the stock price and the KSE 100 Index for the year FY09 for the stock shows that the price has moved in almost the same fashion as the index. The highest price reached by the stock was Rs 66. 3 and the lowest price was Rs 19. 85 during FY09. COMPARISON WITH TOP PLAYERS

The banking sector is dominated by National Bank of Pakistan, Allied Bank Limited, Habib Bank Limited, United Bank Limited and MCB Bank. The following graph indicates the trend of growth of deposits for the players.

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As can be witnessed from the above graph that the deposit growth rate has been fluctuating over the last 5 years. A major decline was seen in the growth of deposits for ABL in 2008, when it fell from 28% to 13%. The reason for this slowdown was the slow growth of M2.

The advance growth rate for the top players has shown a similar trend, all the fluctuations for all the banks have been witnessed in the same direction. As can be observed ABL s performance in terms of advances growth rate has been better from the top players during the last 5 years. The advances of ABL grew by 11% in FY09 as compared to 5. 58% of NBP and -4% of UBL and MCB each during the year under review.

Another major trend seen in the banking sector has been the growth in profits after tax for the top players. It can be clearly seen that the growth in PAT of ABL has been much above the other top players. During FY09 there was a growth of 71% in ABL s PAT, as compared to 14% of UBL and 2% of MCB. Another major comparison between ABL and the other top players is that in the growth of the net interest income. Even in this area ABL has outperformed other major players. The growth in the net interest income is 41% in FY09 as compared to 18% of UBL, 16% of MCB and 3% of NBP.

In case of the non-interest income, the growth for ABL has been in line with that of its peer except for NBP whose growth though has fluctuated but still is above the other players in the market. The growth in non-interest income for ABL in FY09 is around 22%, as compared to 45% of NBP.

FUTURE OUTLOOK

The recent economic trends suggest the possibility of a modest recovery during 2010. The major impetus for growth is expected to come from the services sector, while LSM has also lately shown signs of recovery. The positive improvement in macroeconomic indicators, mainly inflation and contraction in external imbalances bodes well for the revival of economic activity. However, risks to these improvements remain as inflationary pressures have not completely abated, the commodity prices may spur again to unmanageable levels and foreign inflows (for instance from FoDP and other bilateral arrangements) may not materialize on time.

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Meanwhile, the severe energy shortages and the sensitive security situation remain a major threat to the potential output of the economy. The rising fiscal slippages, deficit of 1.5% of GDP for Q1-FY10 as compared to 1. 1% in Q1-FY09 poses another challenge. A sizeable portion of it also relates to increasing expenditure on defence and security. The continuing pressure in the operation environment suggests that the challenges for the banking sector would persist in 2010. ABL, while remaining prudent under the circumstances would continue to emphasize on improving cost effective deposit mix, building risk weighted assets by ensuring quality and optimizing costs to pursue the strategy of maintaining steady growth.

RATIO ANALYSIS
Return on Assets (%) Return on Deposits (%) Return on Equity (%) 0. 1% 1. 8% 2. 0% 0. 1% 2. 1% 2. 4% 8. 0% 28. 0% 30. 0% 1. 4% 1. 2% 1. 81% 1. 7% 1. 5% 2. 3% 23. 5% 21. 2% 30. 5%

Quality Ratios:
NPL to Advances Provisions to NPLs Non-Performing Loans NPLs Growth 26% 10% 11% 3% 7% 6% 7% 24% 6% 7%

10% 19%

15,383 000 12,699,000 10,479,000 11,355. 00013. 772,000 16,28. -17% -17% 8% 21% 18%

Market Value Ratios:

Price to Earnings Market Value to Book Value 0.00 0.00 12.56 2.92 9.54 2.37 17.20 3.09 4.90 2.89 5. 9 1. 01

Debt Management Ratios:

Debt to equity 41.82 13.83 13.46 15.10 15.40 12. 96 34

Deposit times capital Debt to asset

37. 91 0.98

12.34 0.93

11.98 0.94

13.28 0.94

13.31 0. 93

10. 98

0.93

Liquidity Ratios:
Earning assets to assets Advance to deposit Yield on earning assets Cost of funding earning assets 84% 41% 5% 1% 85% 59% 7% 1% 84% 69% 9% 4% 8% 4% 85% 64% 85% 86% 72% 72%

10% 11% 5% 6%

Solvency Ratios:
Equity to assets (%) Equity to deposits (%) Earning assets to deposits (%) 2% 2. 64 7% 8. 10 7% 6% 6% 7% 7. 52 9. 110

8. 35

7. 53

95. 17 101. 91 100. 99 102. 58 104. 68 109. 54

Dividend Pay-out Ratios:

Dividend yield Dividends cover 2. 90% 2.70% 2.30% 2. 76 2.18 1.402 8.0% 6. 80% 2. 505 -

3.214

Growth Rates:
Profits After Tax Advances Deposits Investments 42% -7% 2% 71% 26% 13% -2% 11% 11% 15% -

87% 28% -22%

30% 28% 5%

17% 28% 79%

SWOT ANALYSIS
The SWOT analysis is a comprehensive and critical overview of the operations, procedures, rules and regulations, services and other related activities, the analysis include the analysis of ABL Bank Khyber Bazaar branches in the light of the entire branch and Bank specific variables which directly or indirectly affect the operations of the branch. The tool selected for the analysis of organization is SWOT analysis.

SWOT analysis

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SWOT analysis is an acronym that stands for Strengths, Weaknesses, Opportunity and Threats. This is a careful evaluation of an organizations strengths to avail an opportunity by overcoming its weaknesses and phasing out all he threats to its survival in order to grow and survive.

5.1 Strengths

This branch is provided with 3 fax machines, more than 7 telephone connections, which makes communication easier with different branches The branch is linked through a online network of 755 BRANCHES, thus enabling them to serve customer in better way. This branch is provided with latest computer which increases the speed of computer work. The branch is situated in the commercial hub of Peshawar. This location provides a competitive edge to the Branch. The branch is situated in commercial area were business activities perform greater as compare to residential area. Thus it increases the number of customers. The Branch has the most experienced and the least experienced staff, which is a good combination of experienced heads and exuberance of youth. The branch is the main branch in the areas, which is another plus point for the Branch. It holds the Hundi Accounts, where the payments are made through checks. This process provides an opportunity to the Branch to have more of the Hundi customers as the Bank customers.

5.2 Weaknesses
The Branch has a good staff combination on the basis of experience, but their training capabilities are not up to the requirements of the fast changing banking environment. The customers Long-term contacts are not maintained with customers. The technical training of the staff is negligible e.g. in case of the absence of computer there is no alternate trained personal who can record the daily transactions. The organization is very much mechanistic and provides no flexibility to encourage creativity. The lower staff is non-cooperative as compared the lower staff of other branches. The control of manager is not effective. The discretionary powers of manger are very low to offer more incentives and value added services to its customers.

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There is a lack of commitment and professionalism on part of the employees. The staff is always in a hurry to leave the bank as soon as possible. They were also observed to starting their operations comparatively late. The organizational culture is not cooperative Nepotism was observed on part of the manger as well as the top management towards some staff members. The branch has no industrial accounts. The level of technology management in the branch is very low. The technology available is not maintained well mainly because of the lack of technically trained staff. For instance the scanner, in spite of its availability has not been used for scanning the specimen signature cares. In spite of the presence of technology many jobs are done manually such as the letters, drafts for fax messages and other calculations, which could be easily, done in MS Word and MS Excel. The branch lacks some physical facilities such as clean washrooms which can affect employees performance The layout of the branch is such that it is hindering the flow of work on one hand and the documents are lying exposed which can be easily taken away by any person entering the branch. The job distribution is not up to the mark. The immediate result of this immediate result of which is: The filing system is not up-to-date. Much time is wasted while searching for even a week old document. The staff spent more time in collections than required.

Delays were observed because the prescribed procedures are not followed. Though ABL, Khyber Bazaar branch in the area it lack specialized counters or facilities such as: Investment advisory counters; Leasing or leasing arrangements; Credit services. The four branches of Allied bank in Peshawar are closely located where most of the services offered are not at all differentiated. No efforts are made to recover the outstanding debts. There is no facility for receiving and satisfying complaints and inviting suggestions. Foreign currency accounts are not entertained. The main reason for these negative responses that the staff is not trained in dealing foreign currency accounts. 37

Customers coming to the Bank for TTs TCs etc. are not received with open hearts an d thus deprives the bank of revenues. Some shortcomings on part of Allied Bank of Pakistan, which affects the operations of the bank Khyber Bazaar branch: There is a lack of functional and proper research and development, which could scan the micro and macro environmental data for future planning and strategy. Financial audits are conducted but operational audits have not received proper attention as much as it should get. There is no procedure, which could encourage the middle and lower level management to initiate creativity.

5.3 Opportunities A considerable portion of the labor force of the area is serving overseas. Their families can be encouraged to use ABL as channel for remittances. The Internet facility in the area provides an opportunity to ABL to get Online. The Bank has the basic infrastructure, which can facilitate the online process. The location of the ABL, Shah Rukn-e-Alam branch itself provides an opportunity to ABL to get more and less cost deposits. The group from its survey and analysis of IT companies have found out that there are many companies which are not satisfied with its current bank, so Khyber branch with its superior service quality and long working hours can capture those customers

5.4 Threats
The biggest threat to the operational success of the branch is the better competitors services. Many private sector banks are offering higher rates of return to customers than Allied Bank of Pakistan. One of the biggest to the ABL, Shah Rukn-e-Alam branch is the increasing rate of dissatisfies customers. Most of these customers were observed to be dissatisfied with the delays in their servicing. The greatest threats to the performance of ABL, Shah Rukn-e-Alam branch are the decreasing morale of employees. They feel that they are not provided with bonuses. They are not given proper attention to have a say in the annual meetings. The proxy forms are signed on their behalf without letting them know. High-pressure interest groups are developing which poses a constant threat to Allied Bank. 38

FINDING AND RECOMMENDATIONS

The critical analysis ABL in the previous section is the representation of its past, mirror of its present, and an insight into its future. The past data of ABL Shah rukn-e-Alam branch enabled me to study the organization in a historical perspective and understand the nuisances in the banking operations. Study of the present of ABL helped me evaluate the organization in comparison to its future and competitors. The data obtained from the analysis of its present and future in combination with my professional studies resulted in some suggestions and implementation plans, which can help to increase the profitability and operational success of the ABL, Shah Rukn-e-Alam Multan. Some of the major findings suggestions are discussed.

PHYSICAL FACILITIES
The physical facilities or the layout are the most fundamental features in an organization, which the customers observe in forming an opinion, perception or idea about the organization. Therefore, every organization tries to make a good first impression on customers through the presentation of its physical facilities or layout. The physical facilities in the branch are not up to the mark, which requires timely changes to provide good environment to customers. The suggested changes and corrective actions are gives below: The lighting system must be improved and all the out of use lights must be replaced. 39

There is always a stinking smell in the Bank due to the out of order condition of washroom. Therefore the washroom must be brought into order to remover this unpleasant smell. Generators should be made available to the branch to minimize the disruptions due to power failure. Newspaper should be provided to the customers to avoid the pain of waiting long. A cash counting machine can help reduce the time spent in counting cash.

AVAILABILITY OF STAFF
The existing staff in the Bank is overburdened due to the non-availability of more staff. Staff in the branch must be in proportion to the customer has so as to expedite the workflow, avoid overloading of staff and remove the customers grievances arising mainly due to d elay in workflow.

The additional staff required is in the fallowing categories. More technically trained staff should be added to the existing staff Strength. One staff assistant or grade 2 officers properly trained in computer and sufficiently trained in foreign currency accounts. One employee of grade 4 should be hire on daily wages or contract, to maintain filing.

COMMITMENT OF EMPLOYEES
The decreasing commitment of employees can be increased by introducing an effective performance appraisal system, which can reward and recognize the achievements and services of employees for the Bank. The appraisal system must have the following features.

Feed Back:
Periodically provided to employees and recognizing their efforts through reward (bonuses) and publicly appreciation.

Uniform:
The appraisal system must be uniform in evaluating all the employees without any discrimination.

Objectivity:
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The appraisal system must be based on facts and figures and objective evaluation of the facts on grounds.

SIMPLIFICATION OF ADVANCES
The biggest source of the bank revenue is advances. The advances of ABL, Khyber Bazaar branch are on him decreasing trend, causing a decrease in the revenue for the bank. The bank should make the advance procedure simple and quick to meet the customers requirements. The following steps are suggested for simplifying the advance procedure. Increasing the discretion of manager for the amount of advance to Rs. 100,000. Speeding up the process of investigation and verification. Expanding its customer base.

MARKETING CONCEPT
The concept of marketing should be followed in every aspect of the organization. Generally, the banks staff considers that marketing is to go to customers, beg them for opening an account with the Bank and to abide by his every just and unjust action They should be taught that marketing is not only to go to customers only. A customer can also be attracted by provided customer oriented services, showing empathy to your customers and attending him personally.

CUSTOMER ORIENTATION
Deposits are the main source of funds for commercial banks. Therefore, the priority of every bank is to increase the number and amount of deposits. The key to successful business does not lie in simply attracting new customers. The real success is to maintain in the old customers and attract new customers at the same time because retaining a customer is more difficult than attracting new customers. Every depositor should be given equal importance and there should be no differentiation between customers so that every customer feels himself as much important as the other customer.

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The attitude of the staff should be friendly to all the customers. The customers should be taken to the concerned person or guided friendly if the concerned person is not available. The attitude of thats not my job should not exist anymore.

MOBILIZATION OF LESS COST DEPOSITS

The analysis of expenses shows that 43% of expenses of the bank are the payments on fixed deposits, which is a very high proportion. Apart from this the interest earned on advances Rs. 0.265 million is smaller than the interest paid on different deposits Rs. 4.1 millions The bank should launch a campaign to get less cost deposits much as high amount current account as well as low cost PLS saving accounts.

INFORMATION ACCESS
The Bank should provide information to all the present and potential customers relating to the new products, services, some services fee structure and other matters, which are likely to affect the customers. It should be made sure that all the customers have access to this information. Conveying information is of no use, unless, there is some feedback from the customers. The following measures are suggested to implement this suggestion. Brochures, handouts, pamphlets and other printed reports must be provided to customers, which should provide all the information necessary to attract and retain customers and to satisfy the customers need for more information. Personal contacts with the customers can help in providing information to customers. All the customers must be provided a chance to get the desired information by personal contact with the Bank staff. Complaint and suggestion box should be maintained at the door of the Bank where the customers can point out drawbacks in the customers services and put forward their suggestions on his improvement of the services quality of the Bank.

PERFORMANEC AUDIT
The financial audit of the bank is conducted on regular basis both as a surprise and routine audit. However, the performance and system audits are completely ignored which, otherwise, should have been a compulsory part of the auditing services of the Bank. The immediate outcome of ignoring performance outcome is shortcoming in the non-financial aspects of this organization such as customer relations, lack of necessary facilities, motivation of employees, and the control of manager. 42

In the light of the above facts it is suggested that the performance audit of the bank must be carried out on both regular and surprise basis to keep the Bank competitive in the run of for more customers, more deposits and high profitability.

CAMPAIGN FOR INCREASING THE DEPOSITS.

The numbers of account holders in a bank make a significant contribution to the deposits of the Bank and determine its business volume, profits and size of a bank. Therefore, ABL, Shah Rukn-e-Alam branch must a clear plan for increasing the number of accounts. The details of plan for increasing the number of accounts are given in the implementation plan.

INCREASES IN BUSINESS SHARE

Along with concentrating on increasing the customer base, the Bank must also emphasize on securing the highest market share in other banking services such as issuance of letter of credit, foreign exchange, remittances, bills identification of productive secure and easily realizable advances etc. to achieve this strategy the Bank should have a clear plans with the consent of the higher management. The plan must be divided into different periods weekly, monthly, semiannual and annual. Every stage of the plan must be monitored and controlled on regular basis.

ATM NETWORK PROBLEM

I have found some problems with ATM network. Many customers have complaints that their requests placed on ATMs dont carry out. It is mainly because of bad PTCL lines. Distortion in lines of PTCL restricts the execution of requests placed on ATM machines by customers. Although there is a network of dedicated lines for ATM machines, a request may not be successfully carried out because of complicated request processing. A successful execution of a request needs to be approved from three places: The branch (online) with which the customer (placing the request) have the account. Main branch of that area (city).

The head office (in Karachi). So connecting to all of these three places simultaneously and getting the request approved is a complicated process. However management claims that there is nothing wrong with processing. The only problem lies with PCL lines. So to solve this problem the bank should hire technicians who can work during public holidays to make the ATM useable while it shows any distortion.

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CASH DEPOSITES USING ATM

Now-a-days in foreign countries ATM machines are also used for deposits of money and utility bills can b paid up through ATM. But in Pakistan these services have not been utilized yet. So if ABL upgrades its ATM technology so definitely it will get the competitive advantage over other banks.

NETWORKING AMONG BANKS

In allied bank the networking is only done with in the bank, means the customer cant transfer his funds to other bank through online. The account holder who has the debit card can transfer his money to other bank account through ATM. But the customer who doesnt have account but someone gave him a Habib bank cheque to transfer it online through near situated Allied bank. So the allied bank cant transfer it to Habib bank via online. So I recommend an idea that there should be a networking among different banks so that they can transfer funds via online.

6.17 ONLINE LOANS

I have found that there is no online facility to apply for a loan. Whereas, in other banks especially in foreign banks the customer who has an account in the same bank, can apply for a loan through internet. So that he can save his time from going physically to the bank.

Function of Credit Department

The main function of the credit department is to lend money to the customer. Allied Bank Ltd. Lends money in the form of clean advances against promissory notes as well as secured advances against tangible and marketable securities. Beside these ABL also lend money against life policies and immovable property..

Lien
Lien is the bank right to withhold property until the claim on the property is paid. The bank looks at their lien as a protection against loss or overdraft or any other credit facility. In ordinary lien the borrower remains the owner of the property, but the actual or constructive possession remains with the creditor or bank though the borrower has no right to sell it.

Cash Credit
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In this the bank lends money to the borrower against tangible security. The total amount of the loan is not paid in one installment. The borrower has to pay markup on the amount borrowed. Cash credit is favorite loan for large commercial & industrial concern.

By Overdraft
This the most common type of bank lending. When a borrower requires temporary accommodation, ABL allows its customer to withdraw an excess of the balance form their account which the borrowing customers have in credit and thus called overdraft. This facility is given to regular reliable & well established customer. When it is against collateral securities, it is called Secured Overdraft & when borrowing customer can not offer any collateral se curity except his personal security then the accommodation is called Clean Overdraft

REFERENCES
References and source used:

http://www.abl.com.pk/ http://www.creditguru.com/ratios/ratiopg1.htm http://www.crfonline.org/orc/cro/cro-16.html http://beginnersinvest.about.com/od/financialratio/Financial_Ratios.htm http://www.investopedia.com/ Revise Credit hand book of ABL internal document. Data from credit approvals.

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