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National Bank of Pakistan

1. Executive summary
This report starts with the introduction and history of National Bank of Pakistan with their
mission, vision and goals. Then there is an explanation about the operations of NBP in which
deposit section comes first which explains that which types of deposits the bank is offering. Then
how a customer can open his account. Then it comes to remittance and clearing department in
which it is explain that what type of remittance the bank is using and how inward and outward
clearing is done. Bank also provides the facility of letter of credit to support export and import.
Bank also gives loans to their customers by using different types of advances. There is also a
government department in which customers pay their bills and receive their pensions. There are
some similarities and differences between theory and practical experiences. As well as there is a
three years financial analysis performed. The PESTEL analysis, SWOT analysis and Competitors
analysis is the best way to check out that how bank compete with their competitors, what are
their strengths and weaknesses. The opportunities through bank can do better and the threats that
are dangerous for bank. In the end there are some suggestions for the bank through which they
can improve themselves.

2. Introduction of National Bank of Pakistan


Present status

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National Bank of Pakistan

National Bank of Pakistan was established under the National Bank of Pakistan Ordinance 1949.
It is now the biggest financial institution with assets of Rs. 1.035 trillion in 2010. National Bank
of Pakistan became the first financial institution in the country to surpass the one Trillion Rupee
mark in 2010. In 2014, the assets of bank increased by 13%. National bank of Pakistan is a
semipublic bank and it functions like other commercial banks. Therefore it receives funds from
the depositors and provides loans in all sectors including trade, industry and agriculture. It also
acts as an agent of State Bank of Pakistan. The National Bank of Pakistan was also nationalized,
along with other banks, in January 1974.
Branches
With the geographical development of its branches, the bank has been able to extend it services
to a much larger number of people all over the world. Today it has more than 8.9 million
accounts. Bank maintains its 22 overseas branches and 9 representative offices as well as 1431
domestic branches and 29 regional offices.
Vision
To be recognized as a leader and a brand synonyms with trust, highest standards of service
quality, international best practices and social responsibility.
Mission
NBP will aspire to the values that make NBP truly the Nations Bank, by: Institutionalizing a merit and performance culture
Creating a distinctive brand identity by providing the highest standards of
services.
Adopting the best international management practices
Maximizing stakeholders value
Discharging our responsibilities as a good corporate citizen of Pakistan and in
countries where we operate
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National Bank of Pakistan

Goals
To enhance profitability and maximization of NBP share through increasing leverage of existing
customer base and diversified range of products.

3. Overview of organization
Brief history
At the freedom of Pakistan the banks services were badly affected by the political conditions of
the country and banks were not working according to the mark, in order to cope with the crisis
conditions which were developed after trade deadlock with India and devaluation of Indian rupee
National Bank of Pakistan was established on November 9, 1949 as a semi public commercial
bank under the National Bank of Pakistan. The main purpose of the National Bank of Pakistan at
its initial stage is to extend credit to the agriculture sector. At that time the crises were on their
peak so the main purpose of National Bank of Pakistan was to face the problems that had arisen
with regard to financing of jute trade. National Bank started its functions with very important
eight jute centers in the East Pakistan. Mr.Ghulam Farooq was announced the first chairman of
Jute Board and Mumtaz Hassan was announced the first chairman of National Bank of Pakistan.
National Bank of Pakistan was remained totally under the Jute Operations till 1950. During the
time of Mr. Mumtaz Hassan the MD of NBP, the number of branches, deposits and the number of
employees had increased significantly.

Financial Highlights

(Rupees in millions)
2014

2013

2012

Total Assets
Deposits

1,543,054
1,233,525

1,364,926
1,101,139

1,309,528
1,036,739

Advances
Investments

626,704
561,764

615,420
397,959

654,690
343,538

Capital & Reserves

178,329

156,287

139,981

Capital Adequacy Ratio


Pre-Tax Profit

17.39%
22,001

15.24%
7,078

15.50%
21,378

After Tax Profit

15,028

5,500

14,941

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National Bank of Pakistan

Earnings per share (Rs.)

7.06

2.59

7.02

Breakup value per share (Rs.)


No. of branches

56
1,377

60
1,365

62
1,306

No. of employees

16,190

16,619

16,921

Organization Chart
PRESIDENT

DIRECTORS
SENIOR EXECUTIVE VICE PRESIDENT
EXECUTIVE VICE PRESIDENT
SENIOR VICE PRSIDENT
VICE PRESIDENT
ASSISTANT VICE PRESIDENT
OFFICER GRADE - 1
OFFICER GRADE 11
OFFICER GRADE 111
CLERICAL & NON-CLERICAL STAFF

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National Bank of Pakistan

4. Major operations of the NBP


Deposit Department
Account Opening Department
Remittance and Clearing Department
Advances Department
Government Department
Cash Department

Deposit Department
Banks deals in money and they are merely mobilizing funds within the economy. Deposits are
the blood of the banks which cause the body of an institution to get to work.

Types of Deposits
NBP has various types of deposits:-

i.

Current Accounts

In this type of account, the client is allowed to deposit or withdraw money as and when he likes.
Usually businessmen open this type of account and bank pays no profit on it. NBP current
account can be opened with minimum amount of Rs. 500/- but there is a requirement of
maintaining balance of Rs. 5000/- otherwise Rs. 50/- will be deducted every month.

ii.

PLS Saving Account

This type of account is for those persons who want to make small savings. The PLS savings
account can be opened for Zakat, provident fund of companies and educational institutions. This
type of account is opened with a minimum deposit of Rs. 100/-.

iii.

Basic Banking Account

This account is for salaried person account. Normally different companies, schools, colleges
opened their employees account. There will be no deduction or penalties in case of minimum

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National Bank of Pakistan

balance. The only precaution to operate this account to make sure that balance should not be
zero.

iv.

PLS Term Deposit

In this type of account a certain amount is deposited for a certain period such as six months, one
year or longer. A fixed deposit receipt is issued in the name of the depositor. In this case the rates
of profit will be different depending upon the time period.

v.

Foreign currency account

In this account deposits in foreign currencies like US Dollars, Pound, Japenese Yen, Euro etc.
Whether the customer is a resident or non-resident of Pakistan, NBP invites all to operate in a
foreign currency account.

Depositing an amount
Account holder can deposit the amount in cash or draft etc. in his account through credit voucher.
In N.B.P. two types of vouchers are used for this purpose.
Green voucher which is used for Cash Receipts
Pink voucher, which is used for all Non Cash Receipts like drafts, cheque, payment
orders etc.

Account Opening Section


A customer can open his account over here:-

How to open an account


When a person intends to open an account three forms and one card is filled and signed by a
customer.
1. Account opening form
2. KYC form
3. Signature specimen card
Basic following information is required: Name
Address
Telephone no
Currency of account
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National Bank of Pakistan

Type of account
Nature of business
Signature of the applicant
CNIC copy

Types of accounts
When a customer wants to open an account, the above mentioned forms must filled by the
customer. Following persons can open an account.

i.

Private account

Private account is also known as individual account. Following documents and information has
to be given: Name
Residence Address
Phone number
Date and place of birth
Name and address of other banks in Pakistan
Customer CNIC copy
Next of Kin CNIC copy
If a customer is illiterate: Two passport size photographs
Right and left thumb impression on all forms
If a customer is opening a Zakat account: Application from chairman of Zakat committee is required in case of Zakat deduction.
If there is a salary account: Attested service card is required

ii.

Joint Account

If someone wants to open a joint account the following information is needed: Full name
Address
Specimen of signatures of the joint account holders
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National Bank of Pakistan

In joint account there is two modes of operation first are Jointly and second is E or S. In
jointly mode both the persons must sign the cheque. And for any kind of transaction they must
dually signed the documents while the either or Survivor mode any one of them can sign the
cheque and withdraw his money.

iii.

Joint company

For joint company account the following documents are required by the bank so that the bank
could take action in case of any fraud or discrepancy: Certified true copy of Memorandum
Certified true copy of Articles of Association
Certified list containing names and signatures of the directors
CNIC copy of each director
List of persons authorized to operate on the account

iv.

Sole Proprietors account

The person who is sole owner of a business can open an account with national bank of Pakistan
after providing following documents to the bank officer: CNIC copy
Business registration certificate number
Evidence of assets
Statement undertaken

v.

Partnership Account

The partnership firms can also open an account with the bank. But for this purpose they have to
provide the certain type of information to the bank: Full names
Address
Specimen of signatures of partners
Certified true copy of partnership deed
C-form (business agendas)

Account opening register

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National Bank of Pakistan

The name of the customer and the amount of his initial deposit will be recorded in account
opening register, and from here the account no. of the customer will be written on (top most
corners) account opening form and on specimen signature card.

Letter of thanks
It is the letter issued by the bank to the customer for two purposes:1) First is to say thanks to the customer for opening the account in their bank.
2) Second is to conform the address that provided by the customer while opening the

account.

Issuance of cheque book


When a customer opens an account with the bank, the customer is provided with cheque book for
withdrawals of account. A cheque book contains twenty-five; fifty or hundred leaves. The cheque
book also carries a requisition slip for the issuance of the new cheque book. The following
information centers in the cheque book issuance register.
Issuance date
Name of account holder
Account number
Type of account

How to close an account


The customer is required to submit an application for closing an account. Then the account is
closed and the balance of customer is paid to him. Cheque book is returned back to bank. If the
currency of an account is PAK Rupees then Rs.250/- will be charged for closing an account. If
the foreign currency account is going to be closed then $5 will be charged.

Procedure to open an account


When a customer wants to open an account, he/she has to fill the above mentioned forms and
provide all the documents to the bank officer according to the type of account. The account
opening officer signed the forms, stamped them, write a statement on the top of the form please
open an account and then send the form to the operation manager of the branch for the sake of
approval. Operation manager checked it completely and sign it. Then the form again comes back
to the account opening officer for the issuance of account number. The officer issue an account
number to the customer and then the customer deposit the amount in his/her account and the
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National Bank of Pakistan

bank open an account. After this letter of thanks has been send to the customers place, after
which the customer can apply for cheque book.

Remittance and clearing department


Transfer of money from one place to another place without directly involving cash. Two types of
bills:-

Remittance inward
Cheque & Drafts received for payment and clearance or drawn on us from customer or other
banks on behalf of their customers is called remittance inward.

Remittance outward
All instruments issued by us, which are drawn on other branch of the same bank or instruments
deposited for collection from other bank locally or out of the city is called remittance outward.
Bills remittances & collection are mainly laying under two heads:a)

Local short credit

All bills for remittance & collection from customer or bank within the city are recorded under
this head in LSC book. These bills are passed along with a covering schedule & Advice/ Exadvice to main branch of the bank, from where an agent of SBP received those bills for
clearance.
b)

Short credit

Bills for remittance and collection from customers or bank outside the city are recorded under
this head in SC book. If bill is drawn on the bank itself then it passed along with a covering
schedule and an Advice/Ex-Advice directly by courier service to the concerned branch. If bill is
drawn on another bank then its passed to the main branch of the bank of mentioned city

Types

of remittance
Demand Draft
Demand draft is a written order given by the one branch of a bank on behalf of customer to
another branch outside the city of the same bank for a certain amount to the certain person. A
draft slip is filled which contains the following information:-

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National Bank of Pakistan

Name of the parties involved

Amount to be sent

Account number (if DD is crossed)

Payment Order
A pay order is a written order issued by the bank on its own branch, drawn upon and payable by
itself to pay a specified sum of money to the person. The purpose of a pay order is to transfer the
fund from one place to another. Usually the pay order is issued for the local transfer of money
between two parties. Every purchase of bank is paid through Payment Order.

Mail Transfer
It is the transfer of money from one branch to another branch of the same bank through mail
service. In mail transfer there is no need of advice as the amount is directly credited to the
receivers account. They charges Rs 50/- exchange rate and RS 75/- postage charges on issuing
mail transfer.

Telegraphic Transfer
This is the most urgent method of remitting the money from one place to another place. This
method is used when the sender desires to send money urgently, in this case the sender request
the manager of the branch to issue TT. It is the message, which is sent from one branch to
another on the order of payer to payee through wire. It is one of the quickest means to transfer
fund through the use of internet.

Letter of Credit
It is often used in international transactions to ensure that payment will be received. Due to the
nature of international dealings, the use of letters of credit has become a very important aspect of
trade. Four parties are involved in L/C: Applicant

Importer

Beneficiary

Exporter

Issuing Bank

Bank of Importer
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National Bank of Pakistan

Advising Bank

Bank of Exporter

Travelers Cheque
Negotiability:
Validity:
Availability:
Encashment:
Limitation:
Safety:

What is clearing?
A bank can clear checks for its clients regardless of whether or not the check originates from the
same bank. A clearing house is a place where representatives of all the bank of a city get together
and settle the receipts and payments of cheques drawn on each other bank.

Types of clearing
Inward clearing
It is the type of clearing in which bank records all the checks that are being received by the bank.

Outward clearing
It is the type of clearing in which bank delivered the checks for the sake of clearing to other
banks.

Advances Department
The function of advances department is to lend money in the form of clean advances, against the
promissory note, as well as secured advances against tangible and marketable securities.

Types of securities
The word security means any thing given to protect or safeguard the repayment of an advance
and to justify this term the thing so given should itself be safe; otherwise the object for which it
is given is defeated. NBP has three ways in which securities can be made available.

Hypothecation
In case of hypothecation, the property in goods is charged as security for a loan from the bank. In
case of hypothecation, neither the property in goods and nor the possession of property pass to

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National Bank of Pakistan

bank, but only the security is granted in a form of letter of hypothecation, which usually gives
the banker' charge on the hypothecated goods.

Mortgage
In a mortgage, the property in the thing mortgage is conveyed to the mortgagee conditionally.
The possession, until default in repaying the loan, generally, remains in the original owner
subject to the mortgagees rights.

Pledge

In a pledge, the possession of the property but not the ownership passes to the creditor. The
pledge is entitled to the exclusive possession of the property until the debt is repaid but the
ownership remains in the pledge subject to the pledges right.

Types of Advances
Demand Finance
These are those advances which are allowed in lump sum for a fixed period and are repayable in
lump sum.
Characteristics
Gold is used as a security.

Single debit entry is recorded at the time of granting loan

This is a short term loan

Required Documents

Valuation certificate by gold smith

Insurance letter

Promissory Note

Letter of Pledge

Agreement Form

Running Finance
Running finance is provided where the amount goes beyond rupees three hundred thousand.
Security against running finance is that which is easily convertible in to cash. There are two main
types of running finance:Page 13

National Bank of Pakistan

Secured
Under this, the bank allows his customers to withdraw more than his deposits after giving
securities against the amount withdraw e.g. saving certificates.

Un-secured
Under this type, the bank relies upon the personal securities of the customer or customers
account.

Cash Finance
Under the cash credit arrangement a customer is granted an advance up to certain limit, which he
can draw time to time as required by him. In this case, a new cash credit account is opened in the
name of customer. These types of loans are giving against the following:

Against locally manufactured goods

Against rice and paddy

Against pledge

Procedure for Granting Of Loan


Loan Application Form & Specimen Signature Card
The bank provides a prescribed application form to the borrower. The borrower will fill the form. In that form
the borrower will tell about: -

Type of the loan.


Amount of the loan he needs.
Period of time.
Applicant will also be provided a specimen signature card, which he will fill.
Declaration of properties form
This form will provide the information about the business he is involved, and also provide the information
about his properties in Pakistan.

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National Bank of Pakistan

Government Department

Govt.receipts

Govt.payments

Govt. receipts:Utility bills:


Electricity Bills
Telephone Bills
Sui Gas Bills
Procedure:
The cashier in cash section receives utility bills. The cashier posts the amount of bill in
respective scroll and at the end all the amount of collected bills is transferred to the respective
account. Then representative of the concerned department collects the amount in the shape of
M.T. (Mail Transfer). The bank takes the collection commission from each type of bill.

Taxes
Federal taxes
Provisional taxes
Federal Taxes
Income Tax
Domicile Fee
Sales Tax
Provisional Taxes
Duplicate Fee
Transfer Fee
Provincial Misc. Tax
Provincial property Tax

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National Bank of Pakistan

Agricultural Tax
Procedure
The customer deposits two or three copies of tax Performa with cash or through transfer. The
cashier enters this Performa in govt. scroll and one copy returned to the customer. At the end of
the day a summary is prepared and the total amount is credited to the relevant head.

GOVT. PAYMENTS
Disbursement of pension
NBP is fully authorized to disburse the pension of Govt. and Army retired persons.
Required documents
Pension payment order
Two specimen signature, thumb and finger impression
Pension book

Procedure
For the distribution of pension the branch maintains the pension register. In order to get the
pension, first the pensioner submits his pension voucher with his pension book, that voucher sent
to the cash department for the payment to the pensioner after posting into his account.

Cash Department
Cash department of National Bank of Pakistan works under the operation department. The
complete responsibility of cash in on this department.The cash department is that through which
all the receipts and payments of bank are made. Also the banks cash record remains with this
department. There are two types of books used in this department.
Cash Receipts Book.
Cash Payment Book.

Cash receipt book


In which the cashier records the entry when some one comes to deposit some amount. The clients
come with pay in slips and the cashier the amount according to the pay in slip, sort outs the
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National Bank of Pakistan

notes, puts a signature, stamps it and record in his book. After stamping the slip the cashier
returns the pay in slip to the customer. Then customer goes to the another bank officer, he again
record this voucher into his cash scroll and returns one part of the pay in slip to the customer and
keeps the other part for the record.

Cash payment book


When some client comes to the branch to withdraw some amount from the account, after getting
the token from deposit section he goes to the cashier, cashier checks his token and cheque which
is referred to him from deposit section. The cashier makes to him required payment and receives
the token from the customer. After recording all the cheque in his book he returned the cheque in
to the deposit section.

5. NBP Retail Products

Unprecedented Safety - Unprecedented Return

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Affordable, Flexible & Convenient home financing for all


Take upto 20 Advance Salaries - Affordable Installations
from 1 - 60 months

One Card does it all - ATM plus Debit Card in one

Invest with Confidence - Marginal Finance Facility

Meet your need for ready cash against your idle gold
jewelry with no minimum limits

NBP KISAN Taqat

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National Bank of Pakistan

NBP's affordable agricultural program offers you a wide


range of financing

Personal Accident Insurance

NBP Student Loan Scheme


A Student Loan Scheme for Education was launched by the Government of Pakistan in
collaboration with major commercial banks of Pakistan. National Bank of Pakistan is the
administrator of the scheme.
Types of Loans
Schedule fee
Boarding expenses excluding meal charges
Procurement of textbooks..Disbursed directly to the student

6. Other Services
Western Union Money Transfer
WESTREN UNION MONEY TRANSFER (WUMT) is a financial institute that conducts online
transfer of funds all over the world. The code of (WUMT) consists of 10 digits.
Parties
I.

Sender

II.

Receiver

III. Bank acting as an agent


Procedure:-

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National Bank of Pakistan

NBP only receives money. Sender from all over the world deposit funds in WESTREN UNION
MONEY TRANSFER (WUMT) by recording their name & CNIC number. WUMT exchange the
funds received in terms of receivers country currency by existing exchange rate.
After deducting commission from sender a code is issued that is called MTCN (Money Transfer
Code Number). This MTCN is used by receiver in receiving that certain fund. NBP head office
receives a certain amount of commission from (WUMT) at the end of a specific time period. The
MTCN issued by the (WUMT) holds a validity of 20days only after that the given code must be
refreshed by (WUMT) otherwise the code will not be acceptable.

7. My own activities
I preferred to do my internship at National Bank of Pakistan the reason was that it is largest and
leading commercial banks of Pakistan. When I joined the bank, I had no practical experience
with regard to working of a regular bank. Then I got an opportunity from the university
authorities to join and work with NBP to get experience of the rules and regulations that bank
follows. I left the bank with a thirst to learn more. I seek a chance in order to survive in a
banking environment.
I must acknowledge the support of staff members of CITY BRANCH to help me understand the
procedures and work of bank

I started my internship from the account opening department. I learned how to open an
account and what type of documents are required for opening an account. I used to collect
necessary documents from customers i-e copy of customers CNIC, copy of customers
next of kin CNIC. I filled the account opening form completely with stamps and attached
all the necessary document then I gave it to the designated officer for his signature. I also
issued account number to the customer in this way that there is an account opening
register in which a digit lists of current account and PLS saving account available. If a
customer opens a PLS saving account then according to the digit list I entered the date,
account number, name of the customer and the amount of initial deposit in that register
and also wrote the account number on the account opening form. And if there is a current
account I did the same job as in PLS saving account. After recording the account number
I filled green voucher in which I filled date, customer name, account number and the

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National Bank of Pakistan

amount of his initial deposit, and then I got signed from the customer and hand over him
for the sake of deposit in his respective account. I also filled ATM form which is known
an NBP Cash Card where I asked telephone number from the customer and used to
collect the copy of customer CNIC and then attached it to the form. I used to record the
date, customer name, ATM card number, customers address, mobile number in the ATM
register as well as got the sign from customer on that register.
I worked in remittance and clearing department where I learned that how clearance of
checks occurs. I collected cheques fill the pink slip used as receipt for clearing one part of
it is given to the customer and other is kept along the cheque for the purpose of recording
of transaction. If the clearing was within the city then I record the date in a register called
LSC register in which I entered the date, name of customer, name of bank and the
amount. If the clearing was outside the city then I record all the date in a register known
as SC register. I prepared debit and credit vouchers.

I worked and interacted with customer in Western union. I use to collect necessary
documents from customer i.e. copy of customer identity card plus I use to ask the code of
western union given by the sender, sender name, name of the receiver and the amount
that is sent to the receiver etc ,these pieces of information are entered in the software and
at the end of entries a copy is printed in which the amount is written along with other
information than I stamped it named customer copy and lastly make it signed from the
designated officer and give it to customer to take to the counter and receive payment.

In cash counter where payment and deposits are handed over to customer as I did not
directly interact with the customer because of sensitivity of transactions but observed it
properly.

In government department I worked in pension days. So I was given a task to record all
the details of customers in register in which I entered the customer name, amount of
pension according to the serial number and in the end I did the total.

I made PO, DD and MT. Junior DD is used until 10,000 RS and Senior DD is used above
10,000.on DD. DD is not used until the banker do not have solid reason to use it .the
amount on DD is again written with red pen to verify the amount and to secure the
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National Bank of Pakistan

transaction. In case of just transfer the tax is not deducted but on cash entry of DD the tax
is deducted. On DD stamp naming Payees A/C only is used plus the branch stamp is
also used for security and special crossing.

8. Similarities and differences between theory and practical experience


National Bank of Pakistan is one of the biggest banks in Pakistan which has its own identity.
There are some differences and similarities in theory and my practical experience.

Difference
In National Bank of Pakistan there are separate sections for every department like computer
department, deposit department, cash department etc. As well as customer dealing is also
different in every branch. It is obvious that where there are separate sections for every
department than employees can easily tackle the customers. A part from this all the branches of
NBP are not online, only some branches are online which CITY BRANCH is an online branch. I
practically experienced that in city branch of NBP number of employee is not so much. One
employee has to do multitasking. Like the officer of account opening department is also handling
foreign currencies as well as Western Union Money Transfer. Apart from his work he has to do
other work which is a great burden on a single employee. While in many branches the work is
divided among employees. The branch in which I did my internship is not so big. Customer has
to face so many problems during the pensions or salaries days. The size of branch should be
increased like other branches. ATM facility is not available in all branches. It should be possible
in all branches of the bank.

Similarities
The major similarity in all branches of the NBP is that employees always behave very well with
the customers. All the branches of NBP act as an agent of State Bank of Pakistan because it is a
government bank. As well as in all the branches the work is done manually means that computer
use is not so much. Employees feels hesitate to use computers. It is the age of technology but still
all the branches record their all activities or transactions in registers. Now the branches where
ATM facility is present, ATM now accept cards of all other banks. Practically I observed that
workload is so much on employees. As I did my internship in city branch so the staff is
cooperative with the internees and provides them very friendly environment so that they can
easily do their work.
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National Bank of Pakistan

9. Financial Analysis
NATIONAL BANK OF PAKISTAN
BALANCE SHEET
AS AT 31 DECEMBER (2012-2014)

2014

2013

2012

(RUPEES IN 000)

ASSETS
Cash & balance with treasury
Balances with other banks
Lending to financial institution
Investments net
Advances net
Operating fixed assets
Deferred tax assets net
Other assets - net

97,971,501
12,108,025
111,788,608
561,764,137
626,704,083
31,795,539
9,877,509
91,044,915
1,543,054,
317
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157,930,297
17,457,523
51,938,689
397,958,681
615,419,874
32,702,121
10,955,008
79,979,063

158,332,679
30,222,367
8,272,645
343,537,529
654,690,016
27,949,833
9,848,073
76,674,963

1,364,341
,256

1,309,528,
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National Bank of Pakistan

LIABILITIES
Bills payable
Borrowings
Deposits & other accounts
Sub-ordinate loans
Liabilities against asset
Deferred tax liabilities
Other liabilities

NET ASSETS

11,011,827
37,541,497
1,233,525,490
12,738
82,633,864

13,894,667
21,994,839
1,101,138,574
24,034
71,002,438

14,367,639
51,296,579
1,036,739,052
29,619
67,114,616

1,364,725,416

1,208,054,552

1,169,547,505

178,328,901

156,286,704

139,980,600

REPRESENTED BY
Share capital
21,275, 131
21,275, 131
18,500,114
Reserves
32,073,606
31,538,695
28,818,528
Mark-up / return / interest earned
114,173,5
100,092,132
Inappropriate
profit
57,006,813
48,045,93099,027,563 57,418,845
Mark-up / return
/ interest expensed
19
60,822,881
56,417,827
Net mark-up / interest income
110,355, 550
38,204,682 107,737,487
43,674,305
70,007,08 100,859, 756
Provision against non-performing advances-net
Surplus
on
revaluation
of
asset
67,973,351
55,426,948
35,243,113
17,386,401
9,846,287
8
Provision for diminution in the value of investments
44,166,4
1,392,999
842,111
Bad debts written off directly
178,328,901
139,980,600
31 156,286,704
3,020
Provision against off balance sheet obligations
10,973,968
708,230
442,347

Net mark-up / interest income after provisions

19,490,650

10,688,398
32,985,907

11,077,11
5

11,597,601
3,021,798
3,796,857
3,886,156
(139)

10,706,506
3,626,356
3,703,319
3,220,442
(2,472)

3,267,500
25,569,773
44,283,805

2,595,171
23,849,322
56,835,229

36,271,530
910,513
23,395
37,205,438
7,078,367
7,078,367
6,082,908
130,051
(4,634,616)
1,578,343
5,500,024

34,925,107
371,514
160,324
35,456,945
21,378,284
-

NATIONAL BANK OF
PAKISTAN
( 339,200
18,714,032
NON MARK-UP / INTEREST INCOME
)
PROFIT & LOSS ACCOUNT
Fee, commission and brokerage income
Dividend income
FOR THE YEAR ENDED 31 DECEMBER (2012-2014)
Income from dealing in foreign currencies
Gain on sale and redemption of securities - net
Unrealized loss on revaluation of2014
investments
classified as held-for-trading
Other income
Total non mark-up / interest income

NON MARK-UP / INTEREST EXPENSES


Administrative expenses
Other provisions / write offs
Other charges
Total non mark-up / interest expenses
Extra ordinary / unusual items
PROFIT BEFORE TAXATION
Taxation - Current
Bills payable
- Prior year(s)
Borrowings
- Deferred
Deposits & other accounts
Sub-ordinate
loans
PROFIT
AFTER
TAXATION
Liabilities against asset
Deferred tax liabilities
Other
Basic
andliabilities
diluted earnings per share

2013

(RUPEES33,089,31
IN 000)
6

1 2 ,1 3
5,445
2,184,557
4,646,672
8,772,891
145,454
3,587,373
31,472,392
64,561,708

Page 23 9,424,616

1,400,434
1,735,915
42,560,965
22,000,743

2012

2.59

21,378,284
7,810,434
(1,373,160)
6,437,274
14,941,010

National Bank of Pakistan

Ratio Analysis
RATIO

FORMULA

2014

2013

2012

Current ratio

Current assets
Current liability

91,044,915
82,633,864
=1.101
97,971,501
82,633,864
=1.185
15,028,229
1,543,054,317
=0.009
64,561,708
1,543,054,317
=0.041
22,000,743
114,173,519
=0.192
15,028,229
114,173,519
=0.131

79,979,063
71,002,438
=1.126
157,930,297
71,002,438
=2.224
5,500,024
1,364,341,256
=0.004
44,283,805
1,364,341,256
=0.032
7,078,367
99,027,563
=0.071
5,500,024
99,027,563
=0.055

76,674,963
67,114,616
=1.142
158,332,679
67,114,616
=2.359
14,941,010
1,309,528,105
=0.011
56,835,229
1,309,528,105
=0.043
21,378,284
100,092,132
=0.213
14,941,010
100,092,132
=0.149

Cash ratio

Cash
Current liability

Return on
assets

Profit after tax


Total assets

Asset
turnover

Total income
Total assets

Gross profit
margin ratio

Gross profit
Interest earned

Net profit
margin ratio

Profit after tax


Interest earned

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National Bank of Pakistan

Debt ratio

Total liabilities
Total assets

Times interest
earned ratio

Earnings before interest


Interest expense

Fixed asset
turnover

Total income
Operating fixed assets

RATIO

1,364,725,416
1,543,054,317
=0.884
22,000,743
70,007,088
=0.314
64,561,708
31,795,539
=2.030

2012

1,208,054,552
1,364,341,256
=0.885
7,078,367
60,822,881
=0.116
44,283,805
32,702,121
=1.354

2013

1,169,547,505
1,309,528,105
=0.893
21,378,284
56,417,827
=0.378
56,835,229
27,949,833
=2.033

2014

Current ratio

1.142

1.126

1.101

Cash ratio

2.359

2.224

0.185

Return on assets
Assets turnover
Gross profit margin ratio
Net profit margin ratio
Debt ratio
Time interest earned ratio
Fixed asset turnover

0.011
0.043
0.213
0.149
0.893
0.378
2.033

0.004
0.032
0.071
0.055
0.885
0.116
1.354

0.009
0.041
0.192
0.131
0.884
0.314
2.030

10. PESTEL Analysis


Political
As NBP is a government bank so there are lots of political effects on it.
Impact of government policies where government changes, it also affects the projects
running in NBP.
Employment practices, unions and associations also exist in NBP.
Political interference is a lot as well as high taxation is the major factor.

Economic
NBP is playing a major role in financing and developmental activities in Pakistan. It helps a lot
in the growth economy.
It is the first bank to introduce schemes of credit to small borrowers like farmers.
In 2010 the interest income of NBP increased by 15.3% as compared to 2009.
The interest rate of NBP also increases during the year 2010. As interest rate increases it
affects the firms cost of capital which shows that to what extent the company can grow
and expand its business.

Social
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National Bank of Pakistan

As NBP not so much human resources but they are still trying to improve themselves. NBP fully
recognize its social responsibilities in the society.

Recently NBP has made significant monetary contribution for improvement in water and
sewerage schemes in Hamid Pur Kanora, a model village of Multan.

NBP also providing social facilities in the form of medical and educational solutions to
far flung areas of the country.

The massive floods that ravaged the country in July-August 2010, NBP start donation
collection campaign and donated very generously towards the plight of the people
affected by these floods.

Technology
As in NBP there are inadequate computer facilities but still they are trying to improve
themselves. Not all the branches of NBP are online but recently they did a major move towards
the automation, NBP has converted all its branches online in Baluchistan Province.
Inadequate IT training is also in the bank. Employees have not so much knowledge about the
computer. So much traditional methods are used in the bank. To improve this management of the
bank is trying to update their employees about the computer by giving them proper training.

Environmental
There is a considerable increase in oil and gas production. The oil production has also been hiked
from 33,128 barrels per day to 38,373 barrels per day and LPG from 118 tons per day to 124
metric tons per day. KESC and a Chinese company Global Mining Limited have inked an
agreement to con vert two Bin Qasim power generation units to be powered by coal. Ten nuclear
power plants will be set up in the country by the year 2030 to help cope with the current
electricity crisis.

Legal
As NBP is government bank so it must follows the rules and regulations made by government.
The tax rate which is determined by the government, bank has to follow it. Apart from this the
rules and regulations may change as government changes. What the new things government will
add in the law that will consider legal and the bank has to follow them.

11. SWOT Analysis


Strengths
1. National bank of Pakistan is owned by government that is why people are more attracted
toward it as they consider their deposits are in safe hands.
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National Bank of Pakistan

2. It works for the state bank of Pakistan as an agent during its absence in cities where state
bank of Pakistan do not have its branches.
3. NBP is also playing role of a developer in country. It is continuously helping during bad
times by extending credit .It simulates the growth economy by creating favorable climate
for capital formation in the country.
4. National Bank of Pakistan has the highest profitable position that its competitors due to
vast operational network and public confidence. According to magazine The Banker
NBP is at No.1 position in Asia and at 8th position in the world on the base of earning
profits.

Weaknesses
1. Due to lack of usage of fully organized computerized systems in all braches of NBP
employees still have to do their most of work manually. In this era of technology NBP
lacks behind in this regard.
2. There is not enough staff in all branches of NBP. There is much work load on employees.
3. National bank of Pakistan does not properly advertise itself in comparison to other banks.

Opportunities
1. National bank of Pakistan is a government owned bank thus it has gain trust of the nation.
Bank should increase its network by opening more branches with all facilities required in
that area plus with good customer service.
2. Bank has a strong deposits base it must work on research and development for its own
growth and must find ways and services through it can attract more customers plus satisfy
their needs.
3. Bank can start mobile banking with organized system on backup.

Threats
1. UBL and HBL are causing threats to the bank in the long run thus snatching away the

market share by attracting a large number of customers due to their rising standards
giving quality services and value added products.
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National Bank of Pakistan

2. The National bank of Pakistan has political influence on it as the government changes it
stops the projects of previous govt.
3. NBP is still not properly utilizing and implementing IT based structure in all its branches.
The software employees use is not really user friendly. They have to remember lots of
coding for handling different types of account and for entering their data.
4. Small branches do not cover the requirement of the banking. Infrastructure is not really
good and feasible. Customer service in branch is not good at all.

12. Competitor Analysis


Competitor analysis has two main primary activities: Obtaining information about important competitors.
Using that information to predict competitor behavior.
NBP has so many competitors in the market but the major competitors are Habib Bank Limited
and United Bank Limited. These are not government banks. Habib Bank Limited (HBL) was
founded in Mumbai 1941 before the existence of Pakistan and NBP. While United Bank Limited
(UBL) was founded after NBP in 1959 but still giving a tough competition to NBP.

Competitors objective
HBLS Objectives
It is the oldest financial institution of Pakistan whose main objective is to earn profit for
bank itself and for its shareholders.
To manage with the changing tends of the modern day financial market.
To help in development and industrialization of the country.
To understand the needs of their customers and adopt their products and services to meet
these needs.
UBLS Objectives
To provide online facility in every branch and adopt modern banking techniques.
To achieve the profitable goals.
Make best efforts to win the trust and confidence of customers.
To offer varieties of services to domestic as well as foreign customers.

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National Bank of Pakistan

Apart from competitors NBP also has some objectives and they are trying their best to fulfill
them.
To maximize profit
To satisfy customer beyond their expectations
To train its staff
To develop and enhance its system and technology
To serve Pakistan better in order to give socio-economic lift

Competitors Strategies
HBLs Strategy
The bank has a vision to become a universal bank in Pakistan. Thats why the bank wants to
make a dominant position in international banking and trade services. They have plans to invest
in human resources, technology and marketing. The bank has financed these expenditures
through its earning, so to increase its earning the bank is offering new products and services to
their customers. To increase their assets the bank is planning too invest in profitable projects and
to increase their deposits and advances.
UBLs Strategy
UBL recently carried out a manpower plan which will help them in not only to improve
customers satisfaction level but to increase market share. This approach would help them to
develop strong, forward looking and ready to take on the challenges of globalization. For their
convenient they divided their banking services to customers in three divisions: Consumer
Commercial
Corporate
NBP deciding to raise their assets deposits and advances because through this they can earn a lot
and can offer attractive and customers requirement services to them. As well as they have a plan
to implement modern banking technology in branches and train their employees in a best way so
that they can easily use the modern technology.

Competitors Capabilities
HBLs Strengths
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National Bank of Pakistan

It has reliable and easy to use internal computer system in which they all store their data.
It is a market leader in introducing e-banking.
It has the ability to bring innovative products and services e.g. auto finance.
ATM facility is available in all branches of the bank. Through ATM a customer can
transfer his money online to the account of another person from anywhere in the country.
UBLs Strengths
It stands in the list of profitable banks in stock exchange.
It has marvelous image and reputation in the eye of their customer.
Its product positioning is very effective.
The major strength of NBP that it is a government bank. People mostly prefer it. As well as
according to total assets it is a market leader.

Competitors Assumptions
The product and services offered by the competitors by understanding their customers need. As
well as how they can improve themselves and what other types of services they can offer.
HBL has a slogan Jahan Khawb Wahan HBL. They are giving car loans in which what type of
car will customer wants to purchase bank financed up to 85%for it. As well as they are also
providing phone banking to their customers. They also introduce Money Club for children
through which they can raise their deposits. UBL is also doing its best. They have a slogan
Where You Come First. They introduce UBL Omni account in which a person can easily pay
the bills to his nearest shop by opening an account. Apart from this they are also providing these
services like UBL Pay Partner through which a person can easily transfer the salaries of his
employees just by a single click. As HBL introduces Money Club UBL introduces Pehli
Bachet Pehla Account before HBL.
In future both banks can provide a service o their customers in this way that through ATM form
where a customer can withdraw the money a customer can deposit it a s well
NBP has a slogan The Nations Bank. Due to poor IT structure NBP is little bit weak. But it can
also introduce phone banking through which a customer can inquire anything from home. For the
sake of ATM pin generation a customer has to come to bank. As well as they can also introduce
accounts for children fewer than 18. Through proper IT implementation and much more
attractive services the bank can enhance its earning.
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National Bank of Pakistan

13. Conclusion
NBP plays a role in strategic national development. The bank has historically been financial arm
of the government and is enjoying the state support in the form of public sector funds and
deposits. The current management of NBP is hired purely for their international experience,
business orientation to turn around a purely public institution into a sustainable and
commercially viable bank serving public interest along the lines of a large modern commercial
bank.

14. Recommendations/Suggestions

Bank should adopt computerized system. Employees must be given proper training
according to the requirements of banking and practices must be implemented.

Every manager of the branch should have a MIS system for his own use to monitor and
control the operations of his/her branch. It will provide NBP a competitive advantage and
performance of each manager will be monitored by high authority.

There must be more employees in the branches so that workload is divided among them.
As a single employee has so much workload, due to more employees an employee may
easily concentrate on a single work and can do best as well.
Bank should launch advertising campaigns throughout the year to promote the habits of
savings in the people. Bank should open more branches in the remote areas of the country
to get deposits.
Bank should adopt such an induction plan that when a customer opens his account with
the bank, he should be supplied with a booklet which enables him to know the procedure
of filling the cheques and pay-in-slip etc. It will save a lot of time of the bank.
To remain in the market bank need to be vigilant in the eye of customer. One way is
through promotion efforts, so that people aware about the services of the banking and any
addition which the bank as made in the portfolio of its services.
Bank must review its strategy whenever any new entrance in market is visible and
whenever any product comes in market as substitute product of the products of NBP.
The branch should be extended so that customer have comfortable place to wait for their
turn and do not get frustrated in more rushing dates of the month. The branch outlook
should be very attractive and comfortable
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National Bank of Pakistan

15. References
www.nbp.com.pk
Annual reports of NBP (2012-2014)
Financial statements of NBP (2012-2014)
On the job experience in NBP
Customers of NBP
Economic bulletins of NBP
www.hbl.com
www.ubl.com.pk

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National Bank of Pakistan

www.google.com
www.scribd.com
www.docstoc.com
www.wikipedia .com

Page 33

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