I In nt te er rn ns sh hi ip p R Re ep po or rt t o on n F Fa ay ys sa al l B Ba an nk k

S Su ub bm mi it tt te ed d T To o: :
Sir Furrkh Naveed Sb
S Su ub bm mi it tt te ed d b by y: :
Omer Saleem
Roll No. 86
BS 8
th
Semester (Eve)
S Se es ss si io on n 2 20 01 10 0- -1 14 4


D De ep pa ar rt tm me en nt t o of f C Co om mm me er rc ce e
T Th he e I Is sl la am mi ia a U Un ni iv ve er rs si it ty y o of f B Ba ah ha aw wa al lp pu ur r

i


Dedication:








At first dedicating this work to Almighty ALLAH, who is most
merciful and beneficial who give me a chance to write this
report, and without his mercy and sympathy I was not able to
accomplish this work, I also dedicate this work to my lovely
parents with deepest gratitude whose love and prayers have
always been a source of strength for me. And I am also
dedicated my honorable teachers who always there to
make things right for and helping me in every aspect
where I needed

ii


Preface:
In order to be able to cope with the changing environment, it is necessary to some
practical experience, as the student of Commerce we have to pass through a series
of various managerial techniques. During this practical course we are provided
with an opportunity to learn that how the theoretical knowledge can be
implemented in practical ground. Banking plays an important role in the
commercial economic development of the country.
Now a days banks are using different modern technologies, which influence the
managerial activities, thats why I decided to do my internship training in the
Faysal Bank in the preparation of this report I had tried my best to provide the all
possible information, about the operations function & the task of FBL, on the brief
& comprehensive form. It also includes a brief department worked during
internship. I have also tied my best to use simple & easy words & languages. Then
internship report ends with some recommendations after identification of some
problems observed during the course of internship.


iii

Acknowledgement:
In the name of Allah who is most beneficent and merciful, who has enabled me to
do this entailing hard work. It is pleasure and honorable act for me to write this
internship report on Faysal Bank Limited Gala Mandi Hoornaabad branch. I am
pleased to acknowledge the help which I received to write this report.
I would like to thank Sir Farrukh Naveed for giving us the opportunity for doing
this internship. This work helped us to apply the theoretical concepts and learn the
practical aspects of a bank. I would also like to thank Mr. Mazhar for her valuable
guidance and help throughout this period.
I would like to thank , Manager of Faysal Bank, Gala Mandi Hoornaabad Branch
who allowed me to work with their team. I am most humbly thankful to all the
employees of Faysal Bank, Gala Mandi Hoornaabad Branch and especially to these
personalities
Mr. Raja Tariq (Manager)
Mr. Malik Anwer (OM)


iv

Table of Contents:
Page #
Executive Summary 1
History of FBL 4
Mission & Vision 5
Departmental Division 8
Board of director of FBL 27
Organizational Structure 28
Product and services 29
Financial Analysis 40
Ratio analysis 50
PEST analysis 69
SWOT Analysis 71
Conclusion 73
Suggestions and Recommendation 75

1


Executive Summary:
As we all know very well that time and tide wait for none. So because of this rapid
change in time and era we have to cope with it. During this era I got an opportunity
of getting practical knowledge about the banking system in Pakistan . so to quench
the thirst of practical exposure and for getting the basic knowledge about bank.
This internship report is actually is brief discussion of the function, which are
being performed at Faysal Limited. Faysal bank was incorporated in 1987 as the
branch of Faysal Islamic bank of Bahrain, in 1995 the bank started its operation as
the locally incorporated bank. The isthmus bank is the ultimate hobbling company
of the Faysal bank.
Today Faysal bank improving its operation day to day in the all provinces, and
Azad Kashmir with Approximately 200 branches all around the Pakistan but
when RBS purchased by FBL its total branches reached up to 230. Faysal abnk has
implemented different polices to make it one of the best bank of the Pakistan
which include introducing new products and services and increase its operate by
opening two new branches in Pakistan.
Faysal bank is the full service banking institute offering consume corporate
investment banking facility. Major sources in the coracle investing blankly

2

financially Faysal bank is sound. There are different types of
deposits scheme that offer for notice deposits and term deposits there are also
different scheme for the short term and fixed deposits.
This shown that FBL gives mark up on these schemes which are fixed by
management. This profit rate is viewed in care of profit. Local remittances are
transfer of fund which in the country . Remittances are in the shape of T/T
(telegraphic transfer), DD (demand draft), pay order and pay slips. Cheques
clearance is separated section where all the cheques are checked and the authorized
officer verifies balance of each account holder. After that process encashment is
completed on the cash counter.
The tasks I have performed in these departments are the best source of gaining
practical knowledge about the banking sector. This internship give me realistic
review of the banks and it operation. In the internship I found a lot of positive
change in my attitude learning behavior.
From the financial analysis of bank it has concluded that as in a condition of
economic recession, other banks are fulfilling their cost but the FBL is still
enjoying profit. There is little decline of profit from the last year. AS their deposit
rates are high people are attracting towards this bank. The non performing loans
are fewer results in blooming the profit.


3

Bank:
A bank is a place where people deposit money and save their incomes. Bank
offer interest on money saved and also offer other services such as loans and
mortgage.
In other words:
A bank is a firm which collects money from those who have it spare. It lends
money to those who require it.


4

History of faysal bank:
Faysal Bank is a bank based in Pakistan. Faysal Bank Limited (FBL) was
incorporated in Pakistan on October 3, 1994, as a public limited company under
the Companies Ordinance, 1984. Currently, the Bank shares are listed on the
Karachi, Lahore and Islamabad Stock Exchanges (FABL).
Faysal Bank is engaged in Corporate, Commercial, Retail and Islamic Banking
activities. The Pakistan Credit Rating Agency Limited (PACRA) and JCR-VIS
Credit Rating Company Limited have determined the Banks long-term rating as
AA and short term rating as A1 + with Stable outlook. FBLs footprint now
spreads over more than 260 branches in over 70 cities, with combined business
assets of over PKR 300 billion, further strengthening its balance sheet and placing
it amongst the top ten banks in Pakistan.
According to the Pakistan credit Rating Agency Limited and the JCR-VIS Credit
Rating Company Limited, the bank has a long term credit rating of "AA" and a
short term credit rating of "A1+". With assets exceeding 250 billion rupees, it is
one of the largest banks in the country and has shares listed on the Karachi Stock
Exchange, Lahore Stock Exchange and Islamabad Stock Exchange.


5

Vision statement
Excellence in all that we do
Mission statement
Achieve leadership in providing financial services in chosen markets through
innovation.

Values of faysal bank:-
Integrity:
We are recognized by our reliability, credibility and character.
We believe in ethical, honorable, time-proven principles of uprightness.
We stand for and abide by honesty, truth and transparency.
Our Integrity: Our Identity.

Respect:
We hold our customers, investors and regulators in high esteem.
We uphold our customer's rights to demand efficient service.
We appreciate and respect our profession and, above all, our bank.
Our Respect: Our Duty.



6

Teamwork:
We function as a team. Within functions, we cooperate.
Between functions, we collaborate.
Together, we aim for excellence and leadership in our chosen markets.
Our Team: Our Asset.

Professionalism:
We are proficient and efficient in all that we do.
We provide banking services knowledgeably and skillfully.
We uphold regulatory obligations
Our Professionalism: Our Competence
Passion
We bring zeal and enthusiasm for banking to work.
We are excited to provide customers with the best or the best-suited.
We go the extra mile in legitimate, acceptable ways.
Our Passion: Our Worth.

Responsiveness
We are receptive to the need for change and improvement.
We are proactive and anticipate our customers needs and wants.

7

We act quickly to modify, adjust or prepare for new realities.
Our Responsiveness: Our Distinguisher.

Innovation
We pioneer novel and more efficient ways to deliver solutions.
We are dedicated to a culture of improvement and modernization.
We stand for originality, in thought, in action and in belief.
Our Innovation: Our Strength.

Compassion
Our concern for our colleagues, our customers, our communities, and our country
sets us apart.
To each other, we are a family.
For each other, we are a meaningful source of shared humanity.
Our Compassion: Our Gift.


8

Department of Faysal Bank:
Account opening Department
The first step in the business of banking is to create the relation of public with the
bank and the customer. Now customer become the credits of the Bank, it is the
most important department of the faysal bank and the bank officers must take the
special cure before opening the account.
Account of the general customer:
Illiterate person account
Joint account
Account of special customer:
Proprietorship account
Partnership Account
Limited company
Agent account
Account opening procedure:
Generally in all banks the procedure of accounts opening is same but the
documents required open the account id different according to the type of bank.
The branch manager is responsible to handle the job of account opening but in the

9

some cases it is assigned to other responsible officers. The bank
officer has to assume that the customer has the following characteristic.
The customer must have this age of majority it means that he must be at the age of
18 according to the law.
The customer must be of sound mind
The customer must not be insolvent and bankrupt.
Account opening form
The bank officer must assure that the customer fills each and every column of the
account opening form correctly with all necessary details. It is preferred that the
customer in the presence of introduced fills the account openi g form.
Introduction of account:
Most important column of the account opening form is this.
Without the proper introduction the new account cannot be opened the bank
officers consider the following perception in this respect.
the introducer should come with the prospective customer to the bank so there will
be no doubt about the identity of the customer.
If the introducer doesnt come they the bank officer must take extreme case about
the signature verification.
Specimen signature card:

10

The bank officer takes the signature of the customer in the
account opening form and the specimen signature card.
National identity card:
The bank officer check the number of national identity card is correctly recorded in
the account opening form and the copy of the national identity card is kept in the
record by the bank.
NADRA verification:
Verification of the customer ID card is also necessary from the NADRA. NADRA
also provides this software to the (FBL) & they personally take the verification of
the bank.
KYC (know your customer form)
In this form the bank write all information about the customer.

Photograph of customer:
With form two photographs of the customer is also attached with the form.
If the customer is elevate and use thumb impression use lead of signature. If the
signature is in the Urdu then the photograph is must.


11

Letter of thanks:
A letter of thanks is sent to the customer through mail to verify his address if the
address is not sending at his address then bank quickly take the action and can
lease the account.
Accounts For General Customers:
Individual Account:
Documented required to open the individual account are
i. Account opening form
ii. Specimen signature card
iii. Copy of CNIC

In the case of illiterate ladies of gentleman three photographs
are required.
Two is pasted on the account opening form and the other is
pasted on the SS card.
Left hander thumb impressions are obtained on the specimen
signature card.
If right handed thumb impression form the ladies is obtained.
At the encashment of cheque, those customers are advised to
attend the Bank personally of put their thumb impression on the
cheque.
If the cheque is presented through the clearing then it. Will also
only pay to the customer.


12

Joint Account:
It any member dies then there will be no transaction in the
account & the balance in the account will be paid according the
to instruction recorded at the account opening form.
The member of the joint account can delegate the authority to
any their party to operate the account.
The bank will fulfill the step payment instruction of any cheque
lodged by any member of joint account but the removal of
these instructions must be signed by all the members.
All the members sign such mandate, but it will be cancelled, if
any of the member dies or insolven
Partner Ship Firm Account:
The documents required for these accounts are:
Partnership firms can open only current account due to
business concern.
All partners must sign the account opening form.
Account is opened with the name of company.


13

Public Limited Company:
Promoters & the general public contribute the share gained of these
companies.These companies are listed in the stock exchange & their
shares are
Transferable & sold freely in the stock exchange.
The documents required for these accounts are:-
Account opening form
Up-to date Memorandum Article of the association
Certificate of incorporate
Certificate to commerece business
SS card
Resolution of the board passed under the company seal to open the
account
Passport of all the authorized signatures.
List of directors authorized signature.
The specific conditions to open the account of joint stock company
are:-
Introduction is not required for these accounts, because the
company are the legal entities deaths, retirement or dismissal of
any director does not effect operation in the account.
How even death, retirement or dismissal of the director authorized
to operate upon the account, temporarily put embargo in the
operations of account.
The cheques signed by the directors before their death retirement or
the dismissal will be considered as the valid instrument.

14

Issuance of the Cheque Book:
The customer fills the requisition slip for the issuance of the
cheque book along with the account opening form (AOF)
The requisition slip is duly signed by the bank officer enter the
cheque book series on it.
The officer enter the series of the cheque book in the register in
a sequence The bank issue 25,50,100 leaves cheque books.
On 25 leaves cheque book charges are Rs. 125
On 50 leaves cheque book charges are Rs.250
On 100 leaves cheque book charges are Rs.500
When the cheque book issue then the bank take signature on the
cheque book register & also on the requisition form.
Maintains of Account:
If the amount in the current account is less than 5000 then Rs.50 per month will be
deduct as the maintained charges.
Inactive Account:
If there is no transaction in the account within 6 months then the account will
become inactive.
Now the account will be active only by crediting some amount. Basically account
is deactivation for the verification of customer.



15

Closing of Account:
I f the customer wants to close the account then he will fill the closing application
form along with unused cheque book in the bank.
The will pay the remaining balance to the account holder.
Locker service &western Union Department:
Basically the locker shall be rented out to the most valued customer of the Branch,
the terms 7 the conditions are mentioned on the form, which is used for providing
the services of lockers.
Renting of Lockers:
On granting the locker to the customer the relationship b/w the
bank & the customer is treat of licenser & licensee, where the
bank shall be licensor & the customer is licensee.
Locker may be hired in the joint name, however lockers in the
joint name shall be granted only where the both or all the
customer sign the application form.
Operation on Lockers:
The signature of the licensee shall be verified from the
specimen signature card or from the specimen signature
card or from the computer system. As the signatures are
scanned in the EOC Software.
The access to the lockers is allowed during the working
hours from 9am to 5pm.

16

One key of locker is under the custody of
the Bank & other key is operated by the customer.
The locker cant be opened unless both the keys are used.
In the case of terminating of the contract the licensee will be
required to surrender the original keys of the locker.
Two or more than two person can also operate the locker.
Account of the licensee is necessary in the bank.
Charges of Lockers:
The key charges of all the all types of lockers either small,
medium or large lockers Rs.1, 500/-.
Small Locker: Rs.1,200 Rent/Year+1,500 Key
Charges
Medium Locker: Rs.1,700 Rent/Year+1,500 Key
Charges
Large Locker: Rs.3,500 Rent/Year+1,500 Key
Charges
Insurance of Lockers:-
Insurance of small lockers Rs. 500,000/-
Insurance of medium lockers Rs. 800,000/-
Insurance of large lockers Rs. 1000,000/-
It is necessary for the customer that never put things,where
worth in aggregate is more than the insurance of locker.


17

Lost of Keys:
Lost of keys are lost then its charges are 4500/Locker small,
medium or the large locker. Actual charges of keys 1500, if the
keys are lost their locker are repaired & the new keys are used.
If the owner is dying:
If the owner who operate the locker is die then its relatives
consult the court & the locker is broken under the custody of
court. There all the things which are found in the locker are sold
& the amount is divided in the relatives.
Why Break the Locker:-
When the bank come to know in that in the locker there can be
illegal or the dangerous thing then the bank can break the
locker. If the customer dont pay all its dues or rent of then the
locker can also break. Locker is broken under the custody of
three bank officers & makes the list of all things which are
found in the lockers & the officer signature the list.
Maintain of Lockers:
Bank has contract with the Abdullah & sons company for the
repairing of lockers they charge Rs. 4500/- per locker Maintain.
Locker is repaired every time when the customer terminated the
locker.


18

Western Union Department:
Basically Western Union Dept. provides services for the receiving of the money
from the different countries. Through Western Union you can receive only money
but cant send money to the other country.
The main advantage of the Western Union is that it is not necessary that the person
who is going to receive money have account in the bank. He cant receive money
without account, because the money is not transfer in the account. The customer
directly receives the money from the bank. Mostly the amounts are in the form if
(PKR), Dollar, EURO & in the pond.

Charges
On 1500 Rs. 100
Above 15000 Rs. 400
Advantage:
The main advantage of the Western Union is that account is not necessary of the
person who is going to receive money.
Disadvantage:
The disadvantage of the Western Union is that the money which is received
through the Western Union is never recorded in the bank so the money is not
accepted in the legal affairs, because this money has no record that from where it is

19

earned, so it is not accepted. Through the Western Union you can
only receive the money but you cant send the money to any other country.
Alternative:
To overcome the disadvantage of the Western Union, FBL
provide the facility of the bank to transfer the money. The
money is transfer from (FBL) to the foreign bank.
Document required for Western Union:
Western Union Form
CNIC Copy
Process of Western Union:
The person who is going to transfer the money, he had the swift
code which is issued by the foreign bank from where he is going to
transfer the money. The person already mentioned the name to
which the transfer the money. When he transfers the money in the
(FBL) then that person came with its ID card & after the
verification he can receive the money.
Cash Department:
Cash department is the most important because it is point of contact b/w
The bank & the customers. The (FBL) provides efficient & personalized Services
to their customers. This department creates the impression of the bank
commitments of the professionalism in its system & procedures. So the staff of
each cash department is well equipped & trained not only in technical handing of
cash but also in the art of the customer.

20

.
Functions of cash department:
Receiving cash from the customers.
Making payment to the customer against their cheques or the
other payment instrument.
Handling cash withdrawal & deposit into the bank account with
the State Bank of Pakistan & with other branches of the bank.
Ensuring proper storage safety & security of cash.
Ensuring proper cash management & sorting out of issue able
cash.
Maintaining daily cash position in the (symbol) system.
Transfer of cheques from the one account to another.
Cash Department Counter:
Cash receipt counter
Cash payment counter.
Cash Receipt Counter:
If the customer wants to deposit in his account then he fill the deposit
slip. In the deposit slip, the customer writes his account title, account
no, the amount in the figures & words. Particulars mention the mode
of payment either cash or cheque. Customer makes the payment to the
cashier along with the deposit slip. The cashier checks the details of
the deposit slip & the officer credits the customer account with the
same account 7 sign on the deposit slip.

21

But if the deposit it in the form of cheque then he
makes the deposit slip of the same account, which is written on the
cheque 7 also write the name of branch bank name & the cheque No.
Finally the customer copy is returned to the customer as the receipt.
This department of the bank deals in the operation to the cash A/C.
Cash Payment Counter:
When the customer presents the cheque to withdraw the money the
cashier check its date amount in figure & signature. The officer will
feed the account no to check the demanded amount is available in
their account. If the amount is available than he verifies his signature
from the SS Card already feed in the computer.
The officer passes the cheque &debits the customer account with the
same amount & posts the stamp of transfer on it. The cashier makes
the payment to the customer & writes the detailed of notes on the
bank of cheque to maintained the daily cash position. The cheque can
be returned to the customer due to following reasons.
If the cheque is post dated i.e. some future date is written on it.
If the date is of 6 months back.
If the amount in figure & words is different.
If any cutting is made on the cheque.
If the one account holder wants to transfer some amount from
the one account to another then he will give the cheque
favoring the other account holder & also filled the deposit slip
the cashier after checking the details & entered in the register

22

transfer to the offices. The officer transfer the
mentioned amount from one account to another.

Bill and Remittance Dept:
The Remittance Dept. plays an important role in the transfer of
the funds from one place to another. Faysal Bank provides
these services to their customer, as well as the general clients.
Following instructions are used to remit the funds in the (FBL)
are.

Demand draft
Pay order
Call deposit receipt
Demand Draft:
Demand draft is wed to transfer the amount from the one city to
another city, where these is no branch of (FBL) then in that city
there will be another bank which provide agency services to
that bank. Habib Bank provide the agency service to (FBL)
e.g.in the Kanpur there is no branch of FBL then Demand draft
will pay to the Habib Bank.
But now day FBL does not issue the demand draft.
Pay order:
Pay order is issued for the payment in the same city because it
is issued form the one branch, can only be payable from the

23

same branch through the pay order the
customer can transfer money from one branch to another branch
FBL charges Rs75/- per pay order in the start the pay order is
only payable in that branch from where it is issued, but now a
days it is payable in any branch of (FBL) in Pakistan.
Difference b/w pay order of demand draft
The main difference between DD and Pay order is that pay order is payable within
city and DD is payable outside the city. Pay order is payable in only that branch
from where it is issued while DD is payable in any branch of FBL.

Call deposit receipt (CDR)
It is also called the pay slip and is used for the security purpose. If any person
makes contract with the Govt. for the specific purpose e.g. for the construction of
roads then he makes the (CDR). Bank (DR) the account of the client and credit the
(CDR) if the road is damaged before time. But if the road is not damaged till
contract then the bank refund the money.


Clearing department:
All the cheque and the negotiable instrument, which are drawn and received from
other bank and proceeds and subsequently settle by the clearing department. For a
bank, following are the requirements of being a member of the clearinghouse.
It must be the schedule bank i.e. it is registered.

24

It must have account with the state bank of Pakistan.
Sufficient balance should be in this account
Normally clearing is carried out in the (SBP), but in the city where there is no
branch of (SBP), then the national bank work as the subsiding of (SBP).
Types of clearing
There are two types of clearing.
Inward clearing
Outward clearing
In the inward clearing the cheque of the other bank comes in the comes in the
Faysal Bank,
While in the outward clearing the cheque of the Faysal bank goes to the other
banks.

Process of clearing
At 10:00 am the authorized representative of all the banks of city get tighter
in (SBP) or the NBP for the 1
st
clearing where exchange of the cheque take place.
Representative of (FBL) takes the cheque; these cheque are entered in the inward
clearing register and then delivered to the respective branches of (FBL).
Consumer wants
Faysal bank gives the special attention to the customer wants, need of demand.
Faysal bank look on the wants of the customer what the customer wants, how to
attract the customer on the different produced. Everyone wants to have his own

25

transport which become the necessity of today taking the vehicles
on the installment is easy way for all the customers. Faysal bank offers the quality
products to its customers.
Faysal bank is also offering consumer product which is Faysal finance. Faysal
finance is the small loan which is unsecured and varies from 100.000 to 500,000.
This is the unsecured loan and used to help the customer in their difficult day,
Faysal financing in attraction the customer. This is the small loan unit that is used
to fill the necessity the customer.
Advertising department:
Advertizing is very important tool for any kind of organization. Good advertising
can attract the customer. Faysal bank is giving the special attention to the
advertising. Faysal bank is giving its advertisement about the car leasing and home
financing in the leading newspapers like "DAWN""JANG" and "NAWAI WAQT".
So the advertising can play the big role in the marketing. Faysal bank is also giving
the advertising in the leading magazines like Time and Mag.

Electronic Media
Faysal bank ia also spending the huge amount by advertising on the electronic
media. By choosing the peak time on the "Geo News""Geo super"and"ARY
Digital". These are the hit channel now a days and proper advertising on the
electronic media can attract the lot of customer. For attracting the matured
people the Faysal bank has selected the "Geo News" the Geo News is watched
all over the Pakistan by the all kind of people.

26

For attracting the young generation the Faysal bank has
selected the sport of entertainment channel like "Geo Super Ten Sport and super
sport".

Bills boards and posters
Faysal bank is also advertising by the posters and boards. Boards are hanged
along the road and posters and brochures are used to attract the customers.
o Competitors
Major competitor of this bank are Askari bank, bank Al Falah bank are
also working well in the car leasing. But their processing time is more
than the Faysal bank and this is the plus point of the Faysal bank.
Minimum documents required by the other banks. Faysal bank insuring
the vehicles form the beat insurance Co. that (EFU Insurance Co)
So the best insurance company is the plus point of Faysal bank and better
way to attract the customers. The better insurance Co well pay the
customer more insurance claims. And this will be better for the bank to
entertain their customer. The Faysal bank staff is always willing to attend
their customer.


27

BOARD OF DIRECTORS
Naved A. Khan President & CEO
Syed Naseem Ahmad Chairman
Lt.Gen. Muhammad Maqbool (Retd) Director
Hassan Mohammed Mahmood Hassan Director
Graham Roderick Walker Director
Farooq Rahmatullah Director
Mohamed A. R. Hussain Director
Shahid Ahmad Director



28

Organization Structure





















Company
Secretary &
legal
Audit
Committee
Internal
Audit
Equity capital
Markets
Islamic Banking
Treasury Corporate &
Investment
Banking
Retail
Banking
Product
Development &
Management
Islamic
Commercial
Shariah
Advisor
Corporate
Banking
Investment
Banking
Cash
Management
Trade
Products
Commercial
Banking
Financial
Institution
Business Banking
Service Quality
& Marketing
Operations
Support
E-Banking &
Wealth
Products
Agri/SME
Consumer
Finance
Branch
Banking
President & CEO
Board of Directors


CEO Secretariat

29

PRODUCTS
ACCOUNTS
1: Faysal Savings
Faysal Savings is specially designed to cater to your hard earned
savings.
Features
Account can be opened with an initial deposit of Rs. 10,000/.
Profit is calculated on monthly minimum balance.
Profit is paid on six monthly basis.
Access to account through on-line banking at all Faysal Bank
branches across Pakistan.
Easy access through cheque book and Pocketmate Visa Debit card.
Pocketmate can be used at more than a million ATMs and 29
million point of sale (POS) terminals around the world
2: Faysal Sahulat
Faysal Sahulat is a transactional account specially designed for
individuals and business customers who seek instant access to their funds at
any Faysal Bank branch in Pakistan.
Features
Account can be opened with an initial deposit of Rs. 5,000.
Free access to account through online banking at all Faysal Bank
branches countrywide.
Unlimited transaction facilities.
On maintaining a monthly average balance of Rs. 500,000 or more
following additional facilities are provided , free of cost.
Cheque Book.
Pay orders
Small Locker (subject to availability)
Visa ATM/Debit Card
Statement of account

30

Easy access through cheque book and
Pocketmate Visa Debit card. Pocketmate can be used at more than
a million ATMs and 29 million point of sale (POS) terminals
around the world.

3: Basic Banking Account
As per SBP prudential communicated via BPD circular No.30, Faysal
Bank has introduced the Basic Banking Account (BBA) to cater the needs of
low income groups having the following features.
Features
Account can be opened with Rs. 1000/.
No requirement for maintaining a minimum balance
Maximum of two free deposits and withdrawals through
counters/clearing are allowed in a month.
Unlimited transaction facility through ATMs.
Free of charge statement of account for customers once a year. In
case more statements are required than standard charges would be
applicable.
Free ATM transactions on Faysal Bank ATM machines. However
charges would apply on non Faysal Bank ATM machines as per
SOC.
4: Rozana Munafa Plus Account
Rozana Munafa Plus is a savings account in which profit is calculated
on day end balance, and is disbursed on a monthly basis. It provides
customer with the option of a high value, monthly profit account.
Features
Account opening and minimum balance requirement of Rs.
100,000 for individual customers and Rs. 500,000 for corporate
customers.
Profit is calculated on daily balance basis.
Profit is disbursed on monthly basis.

31

Access to account through online banking at all
Faysal Bank branches countrywide.
Easy access through cheque book and Pocketmate Visa Debit card.
Pocketmate can be used at more than a million ATMs and 29
million point of sale (POS) terminals around the world.

Current e expected rate of profit are as follows:


For investment banks only:



32

5: Faysal Muavin
Faysal Moavin is a Savings account made for genuine individual
savers like you. Faysal Moavin offers the perfect combination of savings
account matched with the flexibility of a current account.
Features
Account can be opened with an initial deposit of Rs. 20,000/
No restriction on the number of transactions.
Profit is calculated on daily balance basis.
Profit is paid on monthly basis.
Tiered profit structure providing an incentive to save more.
Access to account through on-line banking at all Faysal Bank
branches across the country.
Easy access through cheque book and Pocketmate Visa Debit card.
Pocketmate can be used at more than a million ATMs and 29
million point of sale (POS) terminals around the world.
6: Faysal Premium
Faysal Premium is a savings account specially designed for high value
deposits with attractive profit rates having the following features.
Features
Account can be opened with an initial deposit of Rs. 5 million
Profit is calculated on daily balance basis.
Profit is paid on monthly basis.
Access to account through on-line banking at all Faysal Bank
branches across Pakistan.
Easy access through cheque book and Pocketmate Visa Debit card.
Pocketmate can be used at more than a million ATMs and 29
million point of sale (POS) terminals around the world.
7: Faysal Izafa
At Faysal Bank we realize that every customer's financial needs are
different. As a result, the Faysal Izafa Term Deposit is designed to provide
individuals and corporate customers an opportunity to grow their money
securely and earn attractive profits.

33

Features
Minimum required investment as low as Rs. 25,000/.
Tenure from one year to five years.
Annual, six monthly and monthly profit payment option available.
Financing facility of up to 90% of the invested amount.
First cheque book is provided free on investment of Rs. 300,000/
or more.
Access to profit through online banking at all Faysal Bank
branches and more than 3,000 ATMs countrywide.
8: Mahfoz Sarmaya
Faysal Bank endeavors to build and strengthen customer relationships
by providing innovative banking products and services. To provide
convenience and value to customers with foreign currency related needs,
Faysal Bank's Mahfooz Sarmaya foreign currency account offers attractive
features:
Features
a) Account can be opened in three major international currencies: US
Dollars, Pound Sterling and Euro.
b) Minimum balance for opening Mahfooz Sarmaya is 1000 units of
the currency in which the account is opened.
c) Account can be opened in any of the following types:
o Savings Account
o Term Deposit Account
o Current Account
With Mahfooz Sarmaya Account, you become eligible for Pak
Rupee financing facility of up to 75 percent of the deposit in your
account at very competitive financing rate.
With Mahfooz Sarmaya Account, you automatically qualify for
special rates for car and home financing.
9: FCY Saving Plus
FCY Saving Plus is a new foreign currency savings account with
attractive profit rates where customers get their profit on a monthly basis.

34

Features
Account can be opened in US Dollars, Pound Sterling and Euro
currency.
Minimum balance for opening FCY Saving Plus is 500 units of the
currency in which the account is opened.
Profit is calculated on monthly average balance.
Profit is disbursed on monthly basis.
Tiered profit structure providing an incentive to save more.
No FCY cash deposit charges
On maintaining the monthly average balance equivalent to USD
50k or above, the following additional facilities are provided.
o Free online banking
o Priority Banking
o Borrowing in PKR up to 90% of FCY
o Preferential rates on consumer finance



35

CUSTOMER LOANS
1: Faysal Car Finance
Features
Vehicle
Type:
Locally manufactured
Lease Term: up to 5 Years
Markup
Rate:
Variable (12Mths Kibor+5% - Annually revised)
Equity: Minimum 20%

2: Faysal Housing Finance
Features
Buying a new Home 1
Building a new Home 2
Buy a Land plus construction 3
Remodeling or Renovation of Existing home 4
Minimum
Financing:
Rs.500,000/- or maximum 70% of the property value (50% in
renovation)
Repayment
Period:
1 year to 20 years
Markup Rate: Variable (12Mths Kibor+5% - Annually revised)
Repayment: Equal monthly installment
Disbursement: In single tranche 1
In tranches against approved amount 2

In tranches against approved amount, first tranche will not be
more than 50% of the sanctioned facility limit or 50% of land
value whichever is lower 3

In pre-agreed installment against approved amount 4



36

3: Faysal Finance
Features
Maximum
Financing:
Rs.500,000/- (up to Rs.1M in secured cases residential
property)
Repayment: Equal monthly installment
Repayment
Period:
3 Months to 60 Months
Markup Rate: Fixed (Variable in secured cases)
Residency: Pakistani / NRPs
Collateral: Liquid / Residential Property
Financing
Margin:
90% & 70% (for Liquid / Residential Property)
Income Clubbing: Facility of clubbing of spouse income is available
CORPORATE FINANCE AND INVESTMENT
Corporate Financing
Faysal Bank Limited is fully geared to meet the changing economic
challenges present in Pakistan. We are ever striving to build meaningful
relationships with our customers and become partners in their growth and
progress by acting as financial advisors and consultants as well as financiers.
Our Corporate Finance Group extends both short and long term financing
facilities designed to fulfill the individual need of each corporate customer.
SME Finance
Small and Medium Enterprise (SME) unit of the Bank is geared
towards catering to the banking requirements of small to medium businesses
in a timely and therefore cost effective manner. All the branches of Faysal
Bank are equipped to speedily attend incoming financing requests from
SMEs. We help our customers grow from strength to strength by acting as
their bankers and financial advisors.
Trade Financing
Faysal Bank has established a strong presence globally in Trade
Financing through its network, affiliates and correspondents. The Bank has

37

conveniently maintained relationships with major banks in
the international financial market and continues to develop new ones
wherever needed. Our Trade Finance services include a full range of import,
export and guarantee products, thus offering tailor-made solution to fit the
individual need of each customer.
Treasury & Capital Market
Faysal Bank's Treasury is one of the leading market makers in quoting
competitive prices in all major currencies and provides dynamic corporate
and institutional marketing teams with up-to-date market information. Our
cutting edge is the in-time advice and execution of deals for our customers.
Faysal Bank's treasury team strives to satisfy the customer's financial needs
in a timely and a flawless manner. Faysal Bank has earned immaculate
reputation in the field of Capital Markets, which is quite evident from our
track record and market share in this area
Investment Banking
With the ever-changing business environment in Pakistan, companies
need expert partners with a keen understanding of business to help achieve
profit objectives. At Faysal Bank, we offer the leaders of businesses and
institutions, corporate advisory services and a wide array of tools to help
them accomplish their goals. We advise and facilitate the arrangement of
commercial paper, syndications, mergers, acquisitions and underwriting
arrangements amongst many others. Whether the customers require
financing of a project or managing of investments, we can guide them
through the markets and tailor a solution to meet their specific needs.
Cash Management
Faysal Bank's Cash Management department has emerged as one of
the leading cash management solution providers in strategic markets such as
local corporate, multi-national companies, and mid-tier markets. Faysal
Bank's role in these segments span the entire spectrum of services including
but not limited to Strategic Receivables/Payables Management, Corporate
Electronic Banking, Payroll and Fund Management Services, Dividend
Processing, and Process Re-engineering. Success of Cash Management
services is primarily attributable to its focus on providing streamlined and
customized solution that adds value to business process of its clients.

38

SERVICES
1: Pocket Mate Visa Debit Card
Combining the wide acceptability of a credit card and the thoughtful
prudence of an ATM card, Faysal Bank Pocketmate is the most convenient
way to carry cash. No more fear of overspending. No more searching for the
nearest ATM. Pocketmate Visa Debit Card provides you with the freedom of
worldwide acceptability at over 27 million merchant outlets as an ATM card
operative at all ATMs in Pakistan plus at over 1 Million ATMs worldwide
bearing VISA logo.
2: Travelers Cheques
You may purchase American Express, US Dollar and Pound Sterling
Travelers Cheques at selected branches of Faysal Bank.
3: Transfer of Funds
You can deposit and withdraw cash from any branch of Faysal Bank,
regardless of which branch your account is in. You need only to carry your
chequebook!
4: Safe Deposit Lockers
At Faysal Bank, we offer our customers Safe Deposit Lockers in a
pleasant and secure environment. All lockers are discretely placed within the
Banks professionally guarded premises. Lockers are available in three
different sizes to suit individual customer needs at reasonable rentals. Faysal
Bank also offers an added insurance feature with locker.
5: Non Stop Banking
All branches of Faysal Bank remain open for business from 9 a.m. to
5 p.m. from Monday to Thursday and Saturday. On Friday, the bank is open
from 9 a.m. to 12.30 p.m. and then again from 3 p.m. to 5 p.m. To suit your
needs, we have extended our banking hours on Saturdays. Now you can
enjoy our consistent and quality service from 9 a.m. to 5 p.m.

39

Activities performed during internship

Following are the Departments of FBL
1) General Bank Account Opening
2) Clearing Department
a. Clearing Cheques
b. Bills And Remittances
c. Locker Service
d. ATM Card issuance

3) Cash Department

4) Credits and Advances Department

5) Deposits Slips


40

Financial Analysis
SUMMARIZED BALANCE SHEET FOR 5 YEARS
Years 2012 2011 2010 2009 2008
In Million
Assets:
Cash and balances with
treasury banks 18,445 17,429 8,427 8,928 6,872
Balance with other Banks 4,685 5,728 509 877 3,708
Lending to Fin. Institutions - - 15,018 2,861 7,078
Investments 93,409 86,419 56,531 36,153 31,553
Advances 148,161 133,707 91,346 83,512 87,346
Operating Fixed Assets 10,849 8,726 2,788 2,647 2,515
Differed Tax Assets-net 5,188 5,017 1,280 - -
Other Assets 11,828 10,295 4,966 3,264 2,204
Total Assets 292,567 267,321 180,865 138,242 141,276
Liabilities:
Bills Payable 3,075 3,219 1,465 1,537 2,407
Borrowings 39,696 34,636 34,986 13,027 9,996
Deposits and Other
Accounts 214,614 195,315 123,655 102,777 102,067
Sub-ordinate loans 4,395 4,595 999 1,000 1,000
Liabilities against assets
subject to financial lease - - - 4 8
Differed tax liability

- - 2,483 2,691
Other Liabilities 11,572 13,038 6,977 6,642 6,951
Total Liabilities 273.354 250,803 168,082 127,470 125,120
Share Holders Equity
Share Capital ( including
proposed shares to be
issued) 8,243 7,337 6,091 5,296 5,296
Capital Reserve 6,591 7,355 4,030 3,790 3,567
Unappropriated Profit 2,959 1,951 1,215 1,050 1,482
Surplus on Revaluation of
Assets 1,419 (125) 1,447 636 5,811

41

Total Share Holders
Equity 19,213 16,518 12,783 10,772 16,156
Total Liabilities And
Equity 292,567 267,321 180,865 138,242 141,276

BALANCE SHEET
VERTICAL ANALYSIS FOR 5 YEARS
Years 2012 2011

2010 2009 2008
Composition %
Assets
Cash and balance with treasury
banks 6% 7% 5% 6% 5%
Balance With Other Banks 2% 2% 0% 1% 3%
Lending To Financial Institutions - - 8% 2% 5%
Investments 32% 32% 31% 26% 22%
Advances 51% 50% 51% 61% 62%
Operating Fixed Assets 4% 3% 2% 2% 2%
Deferred Tax Assets-Net 2% 2% 1% - -
Other Assets 4% 4% 3% 2% 2%
Total Assets 100% 100% 100% 100% 100%
Liabilities
Bill Payable 1% 1% 1% 1% 2%
Borrowing From Financial
Institutions 14% 13% 19% 9% 7%
Deposits And Other Accounts 73% 73% 68% 74% 72%
Sub-Ordinate Loans 2% 2% 1% 1% 1%
Liabilities Against Assets Subject
To Finance Lease - - - 0% 0%
Deferred Tax Liabilities-Net - - - 2% 2%
Other Liabilities 4% 5% 4% 5% 5%
Total Liabilities 94% 94% 93% 92% 89%
Share Holders Equity
Share Capital 3% 3% 3% 4% 4%
Reserves 2% 3% 2% 3% 3%
Inappropriate Profit 1% 1% 1% 1% 1%

42

Surplus On Revaluation Of Assets .4% (0) 1% 0% 4%
Total Share Holders Equity 7 6 7 8 11
Total Liabilities And Equity 100% 100% 100% 100% 100%


BALANCE SHEET:
HORIZONTAL ANALYSIS FOR 5 YEARS
Years 2012 2011 2010 2009 2007
Variance %
Assets
Cash and balance with treasury
banks 100% 107% (6)% 30% (5)%
Balance With Other Banks 100% 1025% (42)% (76)% 29%
Lending To Financial Institutions 100% (100)% 425% (60)% 54%
Investment 100% 53% 56% 15 40%
Advances 100% 46% 9% (4)% 17%
Operating Fixed Assets 100% 213% 5% 5% 12%
Deferred Tax Assets-Net 100% 292% 100% - -
Other Assets 100% 107% 52% 48% 43%
Total Assets 100% 48% 31% (2)% 22%
Liabilities
Bill Payable 100% 120% (5)% (36)% (47)%
Borrowing From Financial
Institutions 100% (1)% 169% 30% (33)%
Deposits And Other Accounts 100% 58% 20% 1% 37%
Sub-Ordinate Loans 100% 360% (0) - 100%
Liabilities Against Assets Subject
To Finance Lease 100% - (100)% (50)% (43)%
Deferred Tax Liabilities-Net 100% - (100)% (8)% 46%
Other Liabilities 100% 87% 5% (4)% 17%
Total Liabilities 100% 49% 32% 2% 23%
Share Holders Equity
Share Capital 100% 20% 15% - 25%

43

Reserves 100% 83% 6% 6% 16%
Inappropriate Profit 100% 61% 16% (29)% (18)%
Surplus On Revaluation Of Assets 100% (109)% 128% (89)% 25%
Total liabilities and equity 100% 29% 19% (33)% 17%

44

SUMMARIZED PROFIT & LOSS ACCOUNT FOR 5 YEARS

Years 2012 2011 2010 2009 2008
In Million
Mark up / interest income 28,825 19,710 16,958 13,404 11,611
Mark up/ interest expensed 19,619 13,919 11,968 8,455 7,459
Net mark-up/interest
income 9,206 5,791 4,990 4,949 4,152
Less Provisions:
(Reversal)/Provision against
non-performing loans and
advances-net 3300 1,906 1,966 1,544 1,797
(Reversal)/Provision for
consumer loans-general (77) (90) (27) (105) 75
Provision for diminution in
the value of investments 409 287 252 608 207
Bad debts written off
directly 33 99 - - -
Net mark up/interest
income after provision 8,511 3,589 2,799 2,902 2,073
Non mark-up/ interest
income
Fee, commission and
brokerage income 1,773 1,141 885 814 743
Divided income 618 335 668 1,207 1,221
Income from dealing In
foreign currencies 850 519 400 347 314
Gain/(loss) on sale of
securities (255) 1,340 825 (134) 1116
Unrealized (loss) on
revaluation of investments
classified as held for trading (57) 68 (46) (3) 3
Other income 114 609 81 79 44
Total non mark-up/interest
income 4,070 4,012 2,813 2,310 3,441
Add Net mark up / interest
income 12,581 3,589 2,799 2,902 2,073
Gross profit 16651 7,601 5,612 5,212 5,514

45



Less: Operating Exp.
Administrative expenses 10,813 6,644 4,284 3,258 2,800
Other provisions 224 62 (6) 97 6
Other charges 64 68 33 61 10
Total operating expenses 11,103 6,774 4,311 3,416 2,816
Profit before tax 1,478 827 1,301 1,796 2,698
Less: tax (257) (363) (100) (682) (426)
Profit after tax 1221 1,190 1,201 1,114 2,272

46

PROFIT & LOSS ACCOUNT:
VERTICAL ANALYSIS FOR 5 YEARS
Years
2012 2011 2010 2009 2008
Composition %
Mark up / interest income 100 100 100 100 100
Mark up/ interest expensed 68% 71 71 63 64
Net mark-up/interest
income 32 29 29 37 36
Less Provisions:
(Reversal)/Provision against
non-performing loans and
advances-net 1 10 12 12 15
(Reversal)/Provision for
consumer loans-general (0) (0) (0) (1) 1
Provision for diminution in
the value of investments 1 1 1 5 2
Bad debts written off directly - 1 - - -
Net mark up/interest
income after provision 30 18 17 22 18
Non mark-up/ interest
income
Fee, commission and
brokerage income 6 6 5 6 6
Divided income 2 2 4 9 11
Income from dealing In
foreign currencies 3 3 2 3 3
Gain/(loss) on sale of
securities - 7 5 (1) 10
Unrealized (loss) on
revaluation of investments
classified as held for trading (0) (0) (0) (0) (0)
Other income 4 3 0 1 0
Total non mark-up/interest 14 20 17 17 30

47

income
Gross profit 44 39 33 39 47
Less: Operating Exp.
Administrative expenses 38 34 25 24 24
Other provisions 0 0 (0) 1 0
Other charges 0 0 0 0 0
Total operating expenses 39 34 25 25 24
Profit before tax 5 4 8 13 23
Less: tax (2) (2) 1 5 4
Profit after tax 4 6 7 8 20



48

PROFIT & LOSS ACCOUN
HORIZONTAL ANALYSIS FOR 5 YEARS
Years
2012 2011 2010 2009 2008
Variance %
Mark up / interest income 100% 16 27 15 19
Mark up/ interest expensed 100% 16 42 13 22
Net mark-up/interest income 100% 16 1 19 14
Less Provisions:
(Reversal)/Provision against
non-performing loans and
advances-net 100% (3) 27 (14) 248
(Reversal)/Provision for
consumer loans-general 100% 233 (74) (240) (29)
Provision for diminution in the
value of investments 100% 14 (59) 194 100
Bad debts written off directly 100% 100 - - -
Net mark up/interest income
after provision 100% 28 (4) 40 (31)
Non mark-up/ interest
income
Fee, commission and
brokerage income 100% 29 9 10 23
Divided income 100% (50) (45) (1) (2)
Income from dealing In
foreign currencies 100% 30 15 11 160
Gain/(loss) on sale of
securities 100% 62 (716) (112) 238
Unrealized (loss) on
revaluation of investments
classified as held for trading 100% (248) 1,433 (200) -
Other income 100% 652 3 80 (90)
Total non mark-up/interest
income 100% 43 22 (33) 25

49

Gross profit 100% 35 8 (5) (4)
Less: Operating Exp.
Administrative expenses 100% 55 31 16 50
Other provisions 100% (1,133) (106) 1,517 100
Other charges 100% 106 (46) 510 (70)
Total operating expenses 100% 57 26 21 48
Profit before tax 100% (36) (28) (33) (30)
Less: tax 100% (463) (85) 60 (60)
Profit after tax 100% (1) 8 (51) (19)



50

RATIO ANALYSIS:
Short Term Liquidity Analysis:
Current Ratio
Current ratio =Current Assets/Current liabilities
Year 2008 2009 2010 2011 2012
Current
ratio(times) 0.65 0.54 0.51 0.47 0.45

Interpretation:
Current ratio is a quick and general measure of liquidity of a firm. A relatively
high current ratio is an indication that the firm is liquid and has the ability to pay
its current obligations in time. FBL in starting was good in paying its short term
debt but now in 2011 it is not good in short term paying ability.

0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
2008 2009 2010 2011 2012
current ratio
current ratio

51

Quick Acid Test Ratio
Acid-test ratio =Current assets Inventory/Current liabilities


Interpretation:
Acid test ratio is useful in measuring the liquidity position of the firm. It is
more liquid ratio than current ratio. Here the result of current ratio and Acid
test ratio is almost same because the reason is that FBL has no inventory. So,
the result of both ratios is same.

0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
2008 2009 2010 2011 2012
Quick Acid Ratio
Quick Acid Ratio
Year 2008 2009 2010 2011 2012
Quick
acid test
ratio 0.64 0.65 0.54 0.51 0.47

52

Loan to Deposit Ratio:
Loan to Deposit ratio = Loans /deposits x 100


Interpretation: Loan to Deposit ratio is an indicator of the ability of the bank to
convert deposits into loans. This ratio has a variety of meanings. From a liquidity
point of view a high loan to deposit ratio indicates a banks ability to manage with
a low level of cash and marketable investments. An implicit assumption here is
that loans are more profitable than investments ( in government securities and
other securities). FBL has decreasing trend from 2007 to 2011 , indicating low
ability to convert deposits into loans

0
10
20
30
40
50
60
70
80
90
100
2008 2009 2010 2011 2012
Loan to Deposit Ratio
Loan to Deposit Ratio
Year 2008 2009 2010 2011 2012
Loan to
deposit
ratio 91.69 83.41 77.22 70.55 69.03

53

Profitability Analysis Ratio:
Net Profit Margin
Net profit margin = Net profit / Total income

Year 2008 2009 2010 2011 2012
NPM (%)
29.92% 15.35% 15.37% 12.13% 10.17%



Interpretation:
This ratio is used to measure the overall profitability and indicates the firms
capacity to face adverse economic conditions, higher the ratio better the
profitability. The ratio of FBL decreases from 2007 to 2011; this thing indicates
that FBL is not in position of profitability.

0
5
10
15
20
25
30
2008 2009 2010 2011 2012
Net profit margin
net profit margin

54

Return on Average Asset
Return on average assets = Net operating income/ Total assets

Year 2008 2009 2010 2011 2012
ROA (%)
1.77% 0.80% 0.75% 0.53% .9%



Interpretation:
It is also called firms return on investment (ROI). It measures the overall
effectiveness of management in generating profit with its available assets. Higher
this ration better is company, but FBL ROA show decreasing trend expect from
2004. This show that FBL is not in good in profitability.

0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2008 2009 2010 2011 2012
Return On Average Asset
Return On Average Asset

55

Return on Average Equity
Return on average equity (ROE) = Net Income/ Average stockholders equity

Year 2008 2009 2010 2011 2012
ROE (%)
23.33% 10.89% 11.18% 8.51% 6.56%


Interpretation:
It measures the overall effectiveness of management in generating profit
with its Shareholders equity. Shareholders of the bank may be interested in
this ratio as to check the firms effectiveness in using the capital provided by
them. This ratio measure both common and preferred shareholders. Higher
this ratio, more effective the firm is. Return on total asset ratio of FBL
shows decreasing trend

0
5
10
15
20
25
2008 2009 2010 2011 2012
Return on average equity
Return on average equity

56

Long term Solvency Ratio:
Debt Ratio
Debt Ratio = Total Liabilities/Total Assets


Interpretation:
The debt ratio indicates the percentage of assets financed by creditors, and how
well creditors are protected in case of solvency. The higher this ratio, the greater
the amount of other peoples money being used to generate profit. Here the debt
ratio of FBL is increasing from 2006 to 2010, so, this thing is not better for FBL,
as higher the ratio, greater the firms indebtness.

85
86
87
88
89
90
91
92
93
94
2008 2009 2010 2011 2012
Debt Ratio
Debt Ratio
Year 2008 2009 2010 2011 2012
Debt
Ratio (%) 88.56% 92.20% 92.93% 93.82% 93.43%

57

Debt to Equity Ratio
Debt equity ratio =Total liabilities/Shareholders Equity
Year 2008 2009 2010 2011 2012
Debt to
Equity
ratio 12.09% 12.57% 14.82% 15.06% 14.22%


Interpretation:
It also tells that creditors are protected in case of insolvency. The lower the ratio
the better the company's debt position. Debt/Equity Ratio indicate the outsider's
portion of equity. The outsider's proportion in total equity is increasing each year
in previous 5 years because its proportion is so high.

0
2
4
6
8
10
12
14
16
2008 2009 2010 2011 2012
Debt equity ratio
Debt equity ratio

58

Interest Rate Risk Management Ratios
Asset Interest Yield
Interest Income/Average Assets x 100



Interpretation:
Asset Interest Yield gives us information about the average interest earned per
Rupee of asset deployed by the bank. FBL has increasing trend till 2009 with
highest yield at 10.62 while it decreases in 2010 to 8.79.And then increase to 9.2

0
2
4
6
8
10
12
2008 2009 2010 2011 2012
Asset Interest Yeild
Asset Interest Yeild
Year 2008 2009 2010 2011 2012
Asset
Interest
ratio 9.04 9.59 10.62 8.79 9.2

59

Rate Paid on Fund:
Interest Expense/ Average Assets x 100


Interpretation:
Break Even Yield also called Rate Paid on Fund gives information about the
average interest expense the bank has to pay for generating funds for one Rupee of
asset deployed. Similar to asset interest yield it increases till 2009 and decreases in
2011 to 5.77.

0
1
2
3
4
5
6
7
8
2008 2009 2010 2011 2012
Rate Paid on Fund
Rate Paid on Fund
Year 2008 2009 2010 2011 2012
Rate paid
on funds
ratio 5.81 6.04 7.5 6.21 5.77%

60

Net Interest Margin:
Net Interest Income/ Average Assets x 100


Interpretation:
Net Interest Margin shows net interest income per Rupees of assets and is arrived
at by deducting Break Even Yield from Asset Interest Yield. A banks ability at
managing interest rates is revealed by looking at the Net Interest Margin. If Net
Interest Margin is Shrinking this could be an indication of poor interest rate risk
management.

0
0.5
1
1.5
2
2.5
3
3.5
4
2008 2009 2010 2011 2012
Net Interest Ratio
Net Interest Ratio
Year 2008 2009 2010 2011 2012
Net
Interest
Ratio 3.23 3.54 3.12 2.58 2.11

61

Capital Account Management Ratios
Leverage Multiplier
Total Assets/ Shareholders Equity


Interpretation:
It is a number which shows how much of assets the bank has created for every one
rupee of equity. A high leverage indicates a higher level of risk compared to a low
leverage figure. FBL has kept the leverage high in 2007 while it decreases in the
following years

24
25
26
27
28
29
30
2008 2009 2010 2011 2012
Leverage Multiplier
Leverage Multiplier
Year 2008 2009 2010 2011 2012
Leverage
Multiplier 29.69 26.10 26.67 27.25 27.32

62

Capital-to- Asset Ratio
Shareholders Equity / Average Assets



Interpretation:
A banks capital-to-asset ratio is a gauge for determining how much capital it
needs as a cushion against credit risk. FBL has decreasing trend from 2008 till
2010.and now increase in 2011.

0
0.5
1
1.5
2
2.5
3
3.5
4
2008 2009 2010 2011 2012
Capital-to-Asset Ratio
Capial Asset Ratio
Year 2008 2009 2010 2011 2012
Capital-to-
Asset Ratio 3.74 3.83 3.36 2.74 3.97

63

Cost Management Ratio:
Overhead Burden Ratio
Non Interest Expense other income / Net Interest Income


Interpretation:
Overhead burden ratio shows the expense burden (net of other income) on
the banks net interest income. In an ideal situation is all the non-interest
expenses are taken care of by other income a bank would have zero
overhead burden ratio and the bank would be in a position to adopt
aggressive pricing strategies and FBL is not in a position because of high
overhead burden ratio. Smaller the ratio better the performance
0
20
40
60
80
100
120
2008 2009 2010 2011 2012
Overhead Burden ratio
Overhead Burden Ratio
Year 2008 2009 2010 2011 2012
Overhead
Burden
Ratio 65.55 67.42 84.76 106.45 61.20

64

Analysis for the Investor:
Earnings per Share
Earnings per share (EPS) = Net Profit after tax/ Weighted average no of shares
outstanding
Year 2008 2009 2010 2011 2012
EPS (Rs.) 3.11 1.58 1.64 1.63 1.88


Interpretation:
It represents the number of rupee earned on behalf of each outstanding share of
common stock. The graph shows the decreasing trend in 2008, 2009 and in 2011
while in 2006 the ratio is high but after that it starts decreasing.

0
0.5
1
1.5
2
2.5
3
3.5
2008 2009 2010 2011 2012
EPS
EPS

65

Price Earnings Ratio
Price earnings ratio = Market price per share of common stock / Earning per share.

Year 2008 2009 2010 2011 2012
P/E (%) 21.22% 7.55% 10.69% 9.56% 8.29%


Interpretation:
It measures the amount investors willing to pay for each rupee of the firms
earning. It also shows the degree of confidence of investors on firm. Higher this
ratio higher is the investors confidence. Here this ratio indicates the increasing
trend from 2006 to 2007 but then it decreases in 2008 and slightly increases in
2009.And then decrease.

0
5
10
15
20
25
2008 2009 2010 2011 2012
Price Earning Ratio
Price Earning Ratio

66

Dividend Payout Ratio
Dividend payout =Dividend per Common share/ Earning per share

Year 2008 2009 2010 2011 2012
Dividend
payout
ratio 58.27% - - - -


Interpretation:
This ratio indicates that from earnings what percent of it given to outsiders in form
of dividends. Here it shows that from 100 Rs earnings a big portion of it is given to
outsiders. This thing FBL is very attractive for investors but only till 2007 as from
2008 to 2011 dividends are not generated.

0
10
20
30
40
50
60
2008 2009 2010 2011 2012
Dividend payout ratio
Dividend payout ratio

67

Dividend Yield
Dividend Yield =Dividend per common share/ Market price per common share

Year 2008 2009 2010 2011 2012
Dividend
yield ratio
(%) 3.79% - - - -


Interpretation:
This ratio indicates that from investment how much dividend is generated. The
higher the ratio, the better the position of company. Here the ratio has decreasing
trend from 2006 to 2007 and it is very disappointment for investors. While from
2008 to 2011 no dividends are generated.

0
500
1000
1500
2000
2500
2008 2009 2010 2011 2012
Dividend Yield Ratio
Dividend Yield Ratio

68

Book Value per Share (Rs)

Total stockholder equity preferred stock equity/ No. of common shares
outstanding

Year 2008 2009 2010 2011 2012
Book Value per
share(Rs) 19.53 19.14 18.61 22.77 24.07


Interpretation:
It indicates the amount of stockholders equity that relates to each share of
outstanding common stock. It also compare with market price per share. If book
value is less than market price per share its mean it is overprice share bur if book
value is high than market value per share than it is under price.
0
5
10
15
20
25
2,008.00 2,009.00 2,010.00 2,011.00 2,012.00
Book value per share
Book value per share

69

PEST ANALYSIS:
A examine of the outside macro environment in which the firm operate be able to
expressed in the subsequent factors;
1. Political factors
2. Economic factors
3. Social factors
4. Technological factors
Political Factors:
Political factors also remain in the attention during the year. Although the
political situation is liable to remain unstable for a while we suppose law and order
situation is the most significant medium of its power on the economic activity.
Political factors might also contain goods & services which the government desires
to give or be provided (merit goods) & those that the government does not want to
be provided. Privatizing, deregulation and focus on foreign investment is the main
pillar of economic policies of all the most important party.


70

Economic Factors:
Ec o n o my o f n a t i o n i s d i r e c t l y i n f l u e n c e o n a n y f i n a n c i a l
institute. Economic indicator includes GDP, inflation, balance of payment, debt of
the government. Pakistans economy has observer the most complicated era after
posting six successive years of healthy financial development. When planning for
international marketing this is true
You require seeming at:
Interest rates.
The stage of inflation Employment stage per capita.
Long-term forecast for the economy (GDP) per capita, & so on.
Social Factors:
Social factors similar to values, demographic characteristics such as age,
gender etc. are also disturbing FBL as well as the bank division. For the reason that
of these morals some professional dont desire to connect banking section, & some
people dont remain their funds in the banks, for the reason is that of religious
believes. FBL has misplaced many clients because of this reason due to move from
Islamic banking to conventional banking.
Technological Factors:
The bank sustained its strategy of improvement technology to assemble up
the challenge of up to date banking. With the successful accomplishment of new
central database system bank is in the last stages of accomplishment of prediction
Financials that will give it important MIS flexibility, easiness of process &
superior interior controls. As the new technologies introduced Faysal bank
implement those technologies in their operations. On line banking and ATMs are
also launched in the Faysal bank. Due to this the Faysal bank grabs the customers
of other banks.

71

SWOT analysis:
Strengths:
FAYSAL bank has achieved marked success in its strategy of expanding and
diversifying its customer base and launching new and innovative financial products
Faysal Bank has been operating in Pakistan since 1987 and is listed on the Karachi
and Lahore Stock Exchanges.
The bank has approximately 2000 employees, a branch network of 129 branches, 2
sub-branches, one sale and service center and an ATM network of 93, in 38 cities
across Pakistan.
Faysal Banks strength is validated by its credit rating of AA (Double A) for long
term and A1+ (A1 plus) for the short term assigned to it by both by PACRA and
JCR VIS.
Weaknesses:
But due to centralized system the approval of all the transactions has to take from
head office. Organizational structure of FAYSAL bank is Functional based. Every
employee is responsible for his own operations and no co-ordination exists among
departments.
Most of the hiring is on contract basis.
Promotion is slow. Salary package is not so much attractive.
Clients of Faysal Bank are less in number as compare to its some competitors
Opportunities:
FAYSAL bank is now looking in to new ways of providing banking service to its
customers. New concept of mobile banking has been introduced by the bank,
which will prove to be a remarkable success in the field of consumer banking
group.

72

Competition in the field of consumer banking has been
intensified as large consumer banks continued to play a significant role in terms of
products and services. FAYSAL bank is preparing for this competition by
establishing a dynamic platform that will enabled it to launch a series of new
products in years to come. This dynamic platform will be supported with a robust
operational infrastructure and delivery mechanism.
Threats:
Bank has to maintain a balance between its liabilities and assets structure. Turn
Over rate is very high. The sad part is that our industrial base isn't growing and
industrial demand for credit is, therefore, low. Banks is aggressively lending in the
consumer sector. Cars, motorcycles, home mortgages. Industrial sector is the most
powerful sector which can contributes towards assets of bank. But in Pakistan due
to instability in economic condition this sector is not flourishing too much. As a
result the rate of industrial loaning is also very low. If bank continues in advancing
consumer loans then it will become a threat for the assets of bank and resources of
the bank will continue to be wasted. New incoming local and especially foreign
banks are making tough competition among banks. The employees of Faysal Bank
are Dissatisfiedcurrencies and provide dynamic corporate and institutional
marketing teams with up-to-date market information. Our cutting edge is the in-
time advice and execution of deals for our customers. Faysal Banks treasury team
strives to satisfy the customers financial needs in a timely and a flawless manner.
Faysal Bank has earned immaculate reputation in the field of Capital Markets,
which is quite evident from our track record and market share in this a


73

Conclusion
In implementation of structural reforms in banking sectors, FbL identified less
making branches and decided to merge such branches with the nearest profit
generating once. Approximately over 120 identified losses making branches were
closed or merged during the last two to three years. FBL has been a pioneer among
banks in Pakistan, particularly in intruding a number of innovative banking
products and services.
For the first time in the history of Pakistan, these multifarious products, mostly in
the shape of saving scheme, have both local and foreign, have since followed in
FBL. This has set the trend and many other banks, both local and foreign, have
since followed in FBL footsteps by launching new products and services. FBL has
also attached top priority to personalized services to clients.
The project of on line banking has been successfully introduced and provide
customer with the facility to operate from any branch customer on the network.
The bank has also started replacing system for fund transfer, L/C opening etc. by
connecting on line with the worldwide inter bank financial telecommunication
network (SWIFT) so for FBL has online 20 branches in Karachi, Lahore,
Faisalabad, Gujranwala and Sialkot on (SWIFT) to meet foreign correspondence
requirements.
After introducing the ATM facility. The deposits of FBL have been increased
tremendously which is very vital in the field of commercial bank. It works,
anytime in Pakistan and aboard with an over growing number of ATMs operating
internship report across the nation the FBL ATM network is the largest and most

74

advanced with convenient that suits your most. And now the
FBL ATM has gone global.
In short we conclude that despite keen competition among among banks operating
in Pakistan and rapid changes in panking and economic scenario, both local and
international, FBL made remarkable performance in every sphere of its activity.
After the completion of my over all analysis and the studies of the Faysal abnk Ltd
and the banking system, I come to the conclusion :
Faysal bank will remain an aggressive and innovative financial institution and
continue to adhere to the tradtion of understanding the customer needs and looking
for the new ways to serve them. Further integration and the productivity gain will
result in the stronger performance in the trms of revenue asa well as the service
quality in the coming years. There staff at the Faysal bank will be offer more
superior products and services to the customer and to contribute more to economic
and the social development of the Pakistan while developing the bigger future for
it.Faysal bank won many awards because of its best performances.
The salaries of the employees are very attractive as compare to the other banks.
The location and lay out of the Faysal bank is up to the mark, but it needs more
new technology to complete with its competitor like Faysal bank. At the end I can
say that the faysal bank plays an important role in the Haroonabad where there is
much need of the commercial bank plays its role very well to gain the economy of
scale.


75

Recommendation
After spending six week in the bank indifferent departments, interacting
with the employees, getting their views, behaviors of the employees
toward peers and the internee's and to the upper level and lower level of
hierarchy of management, observing the organizational structure and
design I have come up with the suggestion that in my view, will defiantly
improve a few weakness observed in the bank by me.
Provide permanent jobs to its Employees
The most of the employees of the bank on the contract basis and they no
ensure about the job after the completion of the contract. The contract
employees do not achieve the benefits of the permanent employees.
Bank continues the contract if they perform in excellent percentage they
must permanent in the bank and they take all the advantages which is
taken by the other employees.
Fresh hiring
The fresh hiring not be to be made on the permanent basis. The fresh
hiring on the basis of 1-2 year contract and if they perform they become
permanent after the required time period.
Training programs for the new employees
The bank should place emphasis on the organization of effective training
and development programs for its new as well exiting employees. These
training programs increase the efficiency of the employees.
Perquisites and Allowances
The number of allowance and perquisite for the employees should be
increased to ensure that they put their body and soul in the jobs assigned
to them.

76

Reduction in the bank charges
The bank charge to its customer is a bit high to another bank and its
services is good also but the bank should decrease in the bank charges to
compete the other banks and they lead the other. This increase the
number of the customer of the bank.
Opening of new ATM sites
More ATM sites are must open to easy to use of ATM. Bank ATM is
now every business place and the bank contract to FBL that the
customers of the Faysal banks use some FBL ATM machines for taking
cash. And bank itself pay the charges to FBL bank.
Increase in deposits rates
Bank must increase in the deposit rates as compare to other bank to
attract to more customers.
Reduction in interest rates on loans
Bank should reduce the interest rate on loans this reduction increase the
loans from the banks and increase the business of the bank.
Quick delivery from head office
Due to centralization delays are there in the derisory of customer to
income by some times. Bank makes sure to its customer that they
account should be record in the system and you use your account within
one or two days and their credit cards and ATM cards should reach in the
local branch within 2-3 days.