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1.2 History
1949 National Bank of Pakistan (NBP) was established under the National Bank of
Pakistan Ordinance 1949 and was 100% govt.-owned. NBP acted as an agent of the
Central Bank wherever the State Bank did not have its own Branch. It also undertook
Government Treasury operations. Its first branches were in jute growing areas in East
Pakistan. Offices in Karachi and Lahore followed.
1950 NBP established a branch in Jeddah, Saudi Arabia.
1955 By this time NBP had branches in London and Calcutta.
1957 NBP established a branch in Baghdad, Iraq.
1962 NBP established a branch in Dar-es-Salaam, Tanganyika.
1964 The Iraqi government nationalized NBP's Baghdad branch.
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1965 The Indian government seizsd the Calcutta branch on the outbreak of hostilities
between India and Pakistan.
1967 The Tanzanian government nationalized the Dar-Es-Salaam branch.
1971 NBP acquired Bank of China's two branches, one in Karachi and one at
Chittagong. At separation of East Pakistan NBP lost its branches there. NBP merged
with Eastern Mercantile Bank and with Eastern Bank Corporation.
1974 The government of Pakistan nationalized NBP. As part of the concomitant
consolidation of the banking sector, NBP acquired Bank of Bahawalpur (est. 1947).
1977 NBP opened an offshore brain Cairo.
1994 NBP amalgamated Mehran Bank (est. 1991).
1997 NBP's branch in Ashgabat, Turkmenistan commenced operations.
2000 NBP opened a representative office in Almaty, Kazakhstan.
2001 State Bank of Pakistan and Bank of England agree to allow only 2 Pakistani
banks to operate in the UK. NBP and United Bank agreed to merge their operations to
form Pakistan International Bank, of which NBP would own 45% and United Bank
55%.
2002 Pakistan International Bank renamed itself United National Bank Limited
(UNB). The ownership structure of the UNB remained as before. The only change to
the shareholding structure is that UBL had recently been privatised in Pakistan and
was now owned 49% by the Government of Pakistan and 51% by a joint foreign
consortium of Abu Dhabi.
2003 NBP received permission to open a branch in Afghanistan.
2005 NBP closed its offshore branch in Cairo.
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1.3 Hierarchy
PRESIDENT
PRESIDENT
MEMBER
MEMBERBOARD
BOARD
SENIOR
SENIOREXECUTIVE
EXECUTIVEVICE-PRESIDENT
VICE-PRESIDENT
EXECUTIVE
EXECUTIVEVICE
VICEPRESIDENT
PRESIDENT
SENIOR
SENIORVICE
VICEPRESIDENT
PRESIDENT
HIERARCHY
BRANCHHIERARCHY
VICE
VICEPRESIDENT
PRESIDENT
BRANCH
ASSISTANT
ASSISTANTVICE
VICEPRESIDENT
PRESIDENT
OFFICER
OFFICERGRADE
GRADE II
OFFICER
OFFICERGRADE
GRADE 22
OFFICER
OFFICERGRADE
GRADE 33
MESSENGER
MESSENGER
PEON
PEON
SWEEPER
SWEEPER
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1.4 Branches
The Bank had a network of 1531branches in the country and 28 branches in foreign
countries. These countries are as follows:
1)- United States of America
2)- United Kingdom
3)- France
4)- Germany
5)- Africa, Middle East Region
6)- Bahrain Obu
7)- Asia Pacific Region
8)- Japan
9)- Republic of Korea
10)- Central Asian States
11)- Bangladesh
12)-Peoples Republic of China
13)-Pakistan.
From the 1st to 10th of every month this branch is full with pensioners & salaried
persons. This branch advance loans in the shape of Cash Finance (Hypo, Pledge),
Demand Finance (Advance Salary, Saiban, Gold Finance), Running Finance
(Mortgage), Agri Finance (Production, Development), etc.
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This branch is also providing the facility of “Lockers” for general public. These
lockers are stored in Strong Room. This is attested by head of building department
that it is secure from earthquake and bullet proof. This branch has authority to keep
cash up to 4 Million. In case of excess amount it transfers to main branch
Bahawalnagar. Branch has 3 guards of which 2 are present there at every time for
security purpose.
National bank of Pakistan is also a commercial organization and its main objective is
profit maximization. This is achieved in two ways:
1. By increasing deposits.
1. Increase in deposits:
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2. Extension of loans:
The profitability of a bank largely depends on the amount given to people as loan and
the type of people to whom credit is given i.e. the credit worthiness of the borrowers.
This strategy has worked quite well for NBP. Deposits are collected from the people
and invested in different projects. NBP prefers to give loans to financially sound and
reliable parties, after securing the collators. NBP has an extremely well organized
section. The staff is adequately trained, and educated and competent. They carry out
extensive financial analysis before deciding on the loan. Interest charged on the loans
potentially contributes to higher profits.
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CHAPTER # 2
Current Accounts
Current A/c is basically used to meet the daily transactions. Current account provides
safety to the customer’s money, gives the advantage for paying debts by the
convenient and safe means of sending cheques through the post thus avoiding the
trouble and loss that units in PKR, Us$ GBP and DM.
Saving Account
In case of saving accounts, account holder gets profit. There is a time limit for
drawing cash; customer cannot draw money before a certain time.
In NBP saving a/c is used as current a/c & there is no main difference between current
& saving account except profit.
This account can be opened by limited company, partnership company ,club societies
& associations, joint & sole proprietorship.
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2.3 How to Open an Account (General)
When a person intend to open account. A card is filled & signed by customer. This
card contain:
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2.4 Procedure to Open an Account
When a customer wants to open an account, the bank officer gives application form to
him. All information, which is necessary to be known by the bank, is requirements of
the application form. From also requires the essential documents to be attached by the
customer.
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2)- Private Accounts
For individual or private accounts following documents & information has to be
given:
⇒ Name
⇒ Residence address
⇒ Mail address
⇒ Foreign address
⇒ Office address & office ph. No.
⇒ Position to title
⇒ Passport or identification No/
⇒ Matrimonial status
⇒ Date and place of birth
⇒ Nationality
⇒ Residence visa No.
⇒ Name and address of other Banks in Pakistan
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⇒ Certified true copy of the certificate of incorporation or registration.
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⇒ Certified true copy of the certificate of commencement of business ( in case of
public limited companies).
⇒ I.d. Card copy of each director
⇒ Original is also enclosed for inspection and return
⇒ List of persons authorized to operate on the account.
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⇒ Telephone, Cable & Telex
⇒ Nature of Company
⇒ Business registration certificate number
⇒ Date of incorporation
⇒ Nature of Business
⇒ Names of main managers & director
⇒ Names & address of parent companies
⇒ Names & address of other banks
⇒ And, introducer’s declaration
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2.9 Issuance Of Cheque Book
When a customer opens an account with the bank, he is provided with cheque book
for withdrawals of account. However, the first cheque book is given to the customer
only when all the required documents are checked. 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. This slip is duly filled and singed by the customer.
The signature of the customer is verified by the bank and new cheque book is issued
to the customer and serial numbers of the cheque are duly entered in the book of the
bank. Along with the signature, person should also write his full name & address.
Usually only one cheque book is issued at a time, however big concerns who need a
number of cheque books at a time, may ask the bank to stock as number of cheque
books in their name and to point their name on these cheque books.
Bank debits the client’s account for excise duty of Rs.2.50/- per cheque and keeps the
cheque book ready for the customer, as on his advice.
The officer keeps and maintains the cheque book register Cheque book inventory and
cheque books issued are recorded in this register. The account number for which the
cheque book is issued and the number of leaves are also recorded in this register when
the cheque book issued an entry is passed in the cheque book issue register.
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2.11 Checking And Payment Of Cheques
It is the primary function of the bank to repay the money received from his customer’s
account usually by honouring his cheques. It is a contractual obligation of a banker to
honour his customer’s cheque, if he has checked the following on a cheque:
⇒ Name of the Bank & branch
⇒ Amount in figure and words
⇒ Signature of the Drawer (verification)
⇒ Posting mark by the computer operator
⇒ Cancellation by the authorized
⇒ Cheque should not be damaged
⇒ Funds must be sufficiently available
⇒ No legal bar prohibiting payment.
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CHAPTER # 3
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⇒ Amount in words & figure should be same.
⇒ Alternation in date / figure / word require drawer’s full signature with
signature on the cheque.
a) Bearer Cheques
Bearer cheques are cashable at the counter of the bank. These can also be collected
through clearing.
b) Order cheque
These types of cheques are also cashable on the counter but its holder must satisfy the
banker that he is the proper man to collect the payment of the cheque and he has to
show his identification. It can also be collected through clearing.
c) Crossed Cheque
These cheques are not payable in cash at the counters of a banker. It can only be
credited to the payee’s account. If there are two persons having accounts at the same
bank, one of the account holder issues a cross-cheque in favour of the other account
holder. Then the cheque will be credited to the account of the person to whom the
cheque was issued and debited from the account of the person who has actually issued
the cheque.
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3.6 Computer Terminal Process
The cheque is received in computer terminal, where the computer operator checks the
balance of the account holder. The operator also sees whether the stop payment
instructions are received from account holder or not. After considering these two
points computer operator posts the cheque in account holder ledger & returns the
cheque back to the officer.
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Pin (Personal Identification Number) Mailer
A pin mailer issued to the ATM card holders carries the PIN number in a sealed
envelope. Card holder is required to keep the PIN number in a safe place as all the
operations on the ATM are carried out through the same.
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CHAPTER # 4
4.2 Clearing
We can define clearing as, ”the transfer of funds from one branch of bank to the other
branch of the same bank or the other bank on which the instrument is drawn, without
involving cash through “State Bank’s clearing house” or we can say in other that
cheques which can not be cashed at the ash counter of the bank.
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These types of cheque are:
1)- Local cheque
2)- Out station cheque
3)- In house cheque
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4.7 Outward Clearance
Similarly cheque which are drawn on other bank and presented to NB Main branch,
Lahore are known as outward clearance for NBP Main Branch. So outward clearing
results in inflow of funds from paying bank into the clearing account maintained with
clearing house increasing the balance in the clearing account.
Outward clearing thus may be:
⇒ Local clearing
⇒ Outstation clearing
Excess of outward clearing over inward clearing produces a net increase in the
clearing account balance. Excess of inward clearing over outward. Clearing produces
a net decrease in the clearing account balance. The first case is referred to as favorable
clearing & the second case as unfavorable clearing.
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CHAPTER # 5
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5.3 Principles of Advances
There are five principles, which must be duly observed while advancing money to the
borrowers.
⇒ Safety
⇒ Liquidity
⇒ Dispersal
⇒ Remuneration
⇒ Suitability
a) Cash Finance
This is a very common form of borrowing by commercial and industrial concerns and
is made available either against pledge or hypothecation of goods, produce or
merchandise. In cash finance a borrower is allowed to borrow money from the banker
up to a certain limit, either at once or as and when required. The borrower prefers this
form of lending due to the facility of paying markup/services charges only on the
amount he actually utilizes.
If the borrower does not utilize the full limit, the banker has to lose return on the un-
utilized amount. In order to offset this loss, the banker may provide for a suitable
clause in the cash finance agreement, according to which the borrower has to pay
markup/service charges on at least on self or one quarter of the amount of cash
finance limit allowed to him even when he does not utilize that amount.
b) Overdraft/Running Finance
This is the most common form of bank lending. When a borrower requires temporary
accommodation his banker allows withdrawals on his account in excess of the
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balance, which the borrowing customer has in credit, and an overdraft thus occurs.
This accommodation is generally allowed against collateral securities. When it is
against collateral securities it is called “Secured Overdraft” and when the borrowing
customer cannot offer any collateral security except his personal security, the
accommodation is called a “Clean Overdraft”. The borrowing customer is in an
advantageous position in an overdraft, because he has to pay service charges only on
the balance outstanding against him. The main difference between a cash finance and
overdraft lies in the fact that cash finance is a bank finance used for long term by
commercial and industrial concern on regular basis, while an overdraft is a temporary
accommodation occasionally resorted to.
c) Demand Financing/Loans
When a customer borrows from a banker a fixed amount repayable either in periodic
installments or in lump sum at a fixed future time, it is called a “loan”. When bankers
allow loans to their customers against collateral securities they are called “secured
loans” and when no collateral security is taken they are called “clean loans”.
The amount of loan is placed at the borrower’s disposal in lump sum for the period
agreed upon, and the borrowing customer has to pay interest on the entire amount.
Thus the borrower gets a fixed amount of money for his use, while the banker feels
satisfied in lending money in fixed amounts for definite short periods against a
satisfactory security
d) Agricultural Finance
NBP provides Agricultural Finance to solidify faith, commitment and pride of farmers
who produce some of the best agricultural products in the World.
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Agricultural Credit:
The agricultural financing strategy of NBP is aimed at three main objectives:-
⇒ Providing reliable infrastructure for agricultural customers
⇒ Help farmers utilize funds efficiently to further develop and achieve better
production
⇒ Provide farmers an integrated package of credit with supplies of essential
inputs, technical knowledge, and supervision of farming.
e) Farm Credit:
NBP also provides the following subsidized with ranges of 3 months to 1 year on a
renewal basis.
⇒ Operating loans
⇒ Land improvement loans
Equipment loans for purchase of tractors, farm implements or any other equipment
Livestock loans for the purchase, care, and feeding of livestock
f) Production Loans:
Production loans are meant for basic inputs of the farm and are short term in nature.
Seeds, fertilizers, sprayers, etc are all covered under this scheme.
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If you require any further information, please do not hesitate to e-mail us.
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g) Corporate Finance
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CHAPTER # 6
Remittance Department
Remittance means a sum of money sent in payment for something. This department
deals with either the transfer of money from one bank to other bank or from one
branch to another branch for their customers. NBP offers the following forms of
remittances.
⇒ Demand Draft
⇒ Telegraphic Transfer
⇒ Pay Order
⇒ Mail Transfer
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6.2 Pay Order
Pay order is made for local transfer of money. Pay order is the most convenient,
simple and secure way of transfer of money. NBP takes fixed commission of Rs. 25
per pay order from the account holder and Rs. 100 from a non-account holder.
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CHAPTER # 7
7.2 Functions
There are many other important functions performed by accounts department of NBP.
So I ma going to discuss these functions in three steps:
⇒ General Ledger;
⇒ Voucher system;
⇒ Types of voucher used.
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Debit vouchers are used in two cases:
The account of the customer is debited with the amount and debit voucher is prepared.
Now in second set these three important functions of Account department of NBP are
described briefly.
⇒ All expenses vouchers are routed ask through Accounts Department.
⇒ Preparation of various statements.
⇒ Preparation daily activity report at the end of each day.
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7.6 Expense voucher:
All the expense vouchers passed by each department are routed through accounts
department. These expenses include:
Salary included
Bonuses
These bonuses are credited after every six months i.e. June and December. These are
first and second profit bonuses and are equal to one month's basic salary.
Allowances:
Allowances included house allowances, transport allowance and utility allowance.
Provident fund:
Provident fund is provided to each employee on his retirement. Contribution by
employer and employee is 8.3%.
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7.8 Preparation of Statements:
These weekly statements are sent at first to NBP head office Karachi.
These monthly statements are sent at first to NBP head office Karachi and then these
statements are sent to head office affairs in consolidated form. All vouchers and
statements signed and approved by manager accounts or who has authority to sign on
behalf of the bank and whose signatures appear in one of the bank’s book of specimen
signatures or a person who has authority to sign internal vouchers and records extent
of its authority will be made by the country manager.
⇒ Loans transactions
⇒ General ledger transactions
⇒ Foreign currency related transactions
⇒ Fixed deposits transactions
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In third and last step the following functions of accounts department of NBP are
described as follows:
⇒ Approval of daily expenses voucher
⇒ SBP balance
⇒ Tax returns
⇒ Budgeting
⇒ Forward Cover Fee
⇒ Debit Balance Calculation
⇒ Pay order/telegraphic commission transfer
⇒ Deposit entry
⇒ Depreciation
⇒ Result/budget
⇒ Head office report
⇒ Trial balance / Fx position
⇒ Commitment return
⇒ Sources and uses
⇒ Activity report
⇒ Statistics of activity
⇒ Monthly assets and liability
⇒ Liquidity 1, 2, 3, 4, 5 years
⇒ Excise duty balancing
⇒ EOM/EOY Print files floppy
⇒ Customer's/internal A/c statements
⇒ Computer complete back up
⇒ Quarterly statements size wise
⇒ FCY interest reporting
⇒ FCY interest checking
⇒ Service Charges
⇒ A/c to be dormant
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⇒ Letters to customers
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⇒ Classification of deposits
⇒ List of deposits
⇒ A/c opening and closing
⇒ Staff loans
⇒ A/c blocked and unblocked
⇒ Monthly resident and non resident
⇒ Zakat Calculations.
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CHAPTER # 8
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CHAPTER # 9
Financial Analysis
In this report financial analysis is done in two ways:
Trend analysis
• Horizontal analysis
• Vertical analysis
Ratio analysis
Horizontal Analy
Here I have done Horizontal analysis using fixed base method. For which values of
the year 2007 are taken as base.
Formula:- Current Year / Base year * 100
Vertical Analysis
Vertical analysis helps us to show the actual increase or decrease in various items of
Profit and Loss Statement with regard to a specific base as Markup Interest Earned
and for balance sheet items Total Assets are taken as base. This analysis is also called
Common- size Analysis.
Vertical analysis of the balance sheet shows the percentage increase and decrease in
various items in terms of total assets. The above analysis is done by taking total assets
as base and considered this figure equal to 100%.
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Vertical Analysis
Balance Sheet
For the year ended
December 31, 2007, 2008, 2009
ASSETS 2007 2008 2009
Cash and balances with treasury banks 12.45 13.02 12.27
Balances with other banks 4.92 4.69 3.01
Lendings to financial institutions 2.82 2.09 2.07
Investments 27.66 20.89 23.05
Advances 44.70 50.50 50.33
Operating fixed assets 3.40 2.96 2.66
Deferred tax assets - 0.39 0.32
Other assets 4.07 5.45 6.28
TOTAL ASSETS 100 100 100
LIABILITIES
Bills payable 0.93 1.25 1.12
Borrowings 1.43 4.95 4.80
Deposits and other accounts 77.66 76.42 76.94
Sub-ordinated loans - - -
Liabilities against assets subject to
finance lease 0.0044 0.0031 0.0045
Deferred tax liabilities - net 0.67 - -
Other liabilities 4.05 4.85 4.48
TOTAL LIABILITIES 84.74 87.47 87.34
NET ASSETS 15.26 12.53 12.66
REPRESENTED BY
Share capital 1.07 1.10 1.14
Reserves 2.07 2.44 2.40
Unappropriated profit 5.95 6.41 6.50
Surplus on revaluation of assets - net 6.18 2.58 2.62
TOTAL EQUITY 15.26 12.53 12.66
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the value of investments
Provision against off balance sheet
obligaions bad debts written off directly - 0.01 0.03
Bad debts written off directly 0.08 - -
9.34 18.00 14.97
Net mark-up / interest income after
provisions 57.16 42.81 34.37
NON MARK-UP/INTEREST INCOME
Fee, commission and brokerage income 13.41 13.00 11.46
Dividend income 6.45 4.72 2.46
Income from dealing in foreign
currencies 2.06 6.51 3.88
Gain on sale and redemption of
securities 4.63 0.65 5.89
Unrealized loss/gain on revaluation of
investments classified as held-for-
trading -0.06 0.00 0.00
Other income 0.29 2.04 0.71
Total non mark-up / interest income 26.78 26.94 24.41
83.95 69.74 58.78
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Horizontal Analysis
Balance Sheet
For the year ended
December 31, 2007, 2008, 2009
ASSETS 2007 2008 2009
Cash and balances with treasury banks 100.0 112.3 122.1
Balances with other banks 100.0 102.3 75.8
Lendings to financial institutions 100.0 79.8 91.3
Investments 100.0 81.0 103.3
Advances 100.0 121.2 139.5
Operating fixed assets 100.0 93.4 97.0
Deferred tax assets - 100.0 95.6
Other assets 100.0 143.7 191.4
TOTAL ASSETS 100.0 107.3 123.9
LIABILITIES
Bills payable 100.0 144.7 150.4
Borrowings 100.0 371.7 415.9
Deposits and other accounts 100.0 105.6 122.7
Sub-ordinated loans - - -
Liabilities against assets subject to
finance lease 100.0 75.3 127.0
Deferred tax liabilities - net 100.0 - -
Other liabilities 100.0 128.5 136.9
TOTAL LIABILITIES 100.0 110.8 127.7
NET ASSETS 100.0 88.1 102.8
REPRESENTED BY
Share capital 100.0 110.0 132.0
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Reserves 100.0 126.4 143.8
Unappropriated profit 100.0 115.7 135.3
Surplus on revaluation of assets - net 100.0 117.5 136.8
TOTAL EQUITY 100.0 88.1 102.8
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Total non mark-up / interest expenses 100.0 135.5 163.4
100.0 82.0 79.5
Extra ordinary / unusual items
PROFIT BEFORE TAXATION 100.0 82.0 79.5
Taxation - Current 100.0 141.5 110.9
- Prior years 100.0 - -1055.8
- Deferred 100.0 -1303.6 -308.9
TOTAL TAX 100.0 83.6 45.3
PROFIT AFTER TAXATION 100.0 81.2 95.7
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9.2 Ratio Analysis
Ratio Analyses is a tool used in financial analysis. It is the most popular technique of
financial analysis. A ratio is the indicator of the quantitative or arithmetical
relationship between two variables. it can be expressed in terms of fraction,
percentage or proportion. In financial analyses a ratio is used as a yardstick for
evaluating the financial position and performance of a firm.
ANALYSIS
This ratio, a comparison of funds generation and its funds mobilization, indicates the
total loans sanctioned by the bank in relation to total amount of money deposited with
the bank, stands highest in 2008 ( 66.08%) as compared with the previous year
figures. This shows that the bank has greater potential to advance additional loans.
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During all other years the ratio is quiet satisfactory representing National Bank of
Pakistan’s credit management decision.
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9.4 Leverage Ratios
Any ratio used to calculate the financial leverage of a company to get an idea of the
company's methods of financing or to measure its ability to meet financial obligations.
There are several different ratios, but the main factors looked at include debt, equity,
assets and interest expenses.
Debt Ratios:-
A debt ratio of greater than 1 indicates that a company has more debt than assets,
meanwhile, a debt ratio of less than 1 indicates that a company has more assets than
debt. Used in conjunction with other measures of financial health, the debt ratio can
help investors determine a company's level of risk.
Debt/Equity Ratio
To a large degree, the debt-equity ratio provides another vantage point on a
company's leverage position, in this case, comparing total liabilities to shareholders'
equity, as opposed to total assets in the debt ratio. Similar to the debt ratio, a lower the
percentage means that a company is using less leverage and has a stronger equity
position.
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Analysis
The debt to equity ratio of National Bank of Pakistan does not show fluctuation in
2008 it was just about constant to 80% but deceased in 2009 by 4%.
• A ratio under 1 means a majority of assets are financed through equity, above
1 means they are financed more by debt. Furthermore you can interpret a high
ratio as a "highly debt leveraged firm".
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9.5 Profitability Ratios:-
The profitability ratios indicate the efficiency of operations and the organization’s
pricing policies. Profitability imitates not only the quantity but also the trend of
earning during a specified period but also influences the maintenance of earnings.
Analysis:
In 2007 it was 37.64% and decreased to 25.37% in 2008 but again decreased to
23.36% in 2009 so the year 2007 was best year from profitability point of view in
these years.
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Total Asset Turnover:-
This ratio shows the overall efficiency of the bank in utilizing its assets to earn mark
up return.
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Return on Equity:-
This ratio shows that what is the ratio of profit after tax to capital funds
Analysis:
In 2007 this ratio was 27.48% and it decreased to 19.00% in 2008 that was a not good
sign especially for shareholders and was slightly increased to 19.21% in 2009. This is
a healthy decrease in view to 2007 and is due to the decrease in profit after tax.
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CHAPTER # 10
Swot Analysis
SWOT analysis is an acronym that stands for strengths, weakness, opportunities, and
threats SWOT analysis is careful evaluation of an organization’s internal strengths
and weakness as well as its environment opportunities and threats.
10.1 Strengths:
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10.1.5 Broad Network
The bank has another competency i.e. it has broad-basses network of branches
throughout the country also more than one branch in high productive cities. The
customers are provided services at their nearest possible place to confirm customer
satisfied.
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10.2 Weaknesses
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10.2.6Lack Of Computerized Network
The bank lack the strength of being powered by the network of computers, which
have saved time, energy and would have lessened the mental stress, the employees
have currently. This would add to the strength if it were powered by network of
computers.
10.3 Opportunities
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10.4 Threats
10.4.3 Downsizing
The bank is currently acting upon the policy of downsizing which threaten the
environment of the bank Employees feel insecurity in doing their jobs and work,
hence affecting the over all performance of employees negatively.
10.5.1 Political
Pakistan despite all international and public perceptions, today is a functioning
democracy and gradually there is a change in complexion and composition of
legislatures with more educated people and women (27% of National Assembly and
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17% of Senate) entering into politics. Similarly it helps in designing best strategies to
implement that could support the revival of bank industry. Like in the era of
nationalization bank had to suffer as other industry that¶s why that impact is still
found in the performance of this industry.
10.5.2 Economical
Although banking sector development is important at the early stage of economic
growth, general liberalization presuming a homogeneous bank role may not
necessarily promote growth. The estimated cost structure indicates that state-owned
commercial banks are large enough, while development financial institutions and
private banks can expect to obtain cost-saving advantages by expanding their
operations. Since scope economies are significant, portfolio diversification generally
increases bank profits. In addition, privatized banks are the most efficient, followed
by foreign and private banks. Public banks are the least efficient.
10.5.3 Social
Banks always helped people in improvement of living condition of poor people in
various forms like giving loans to poor for starting business or directly providing
them the instruments that could enhance their living conditions. Similarly National
Bank always tried to provide the needy people loans on soft terms and also helped to
eradicate unemployment by providing job opportunities Recent high growth trends
coupled with enhanced spending on social and 005/2006 has together begun to pay
some dividends a
Technological
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CHAPTER # 11
My Internship Programme
⇒ Individual
⇒ Firm
⇒ Company
⇒ Trust
⇒ Staff
⇒ Others
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11.1.2 Deposits:
The procedure undertaken upon receiving deposits from the customers is as follows:
⇒ Examining the deposit slip to ensure that the name and the account numbers
are clearly indicated.
⇒ Counting the cash and cheques and agree the total with the amount on the
deposit slip.
⇒ After that the pay in slip is validated for cash transaction and transfer and
clearing transfer as appropriate before the counterfoil is handed over to the customer.
⇒ Cheques signed by directors, partners or employees of a company, drawn in
favor of them and credited in their account in the bank are to be scrutinized.
11.1.3 Withdrawals:
Cheques can withdraw amount. The withdrawals can be made only at the branch
where the account is maintained. The officer under his full signature authorizes all
cash withdrawals. No third party withdrawal is permitted. In current account, the
bank does not offer any interest. We can deposit or withdraw any amount during
banking hours.
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⇒ The bank officer gets the signature of that third person to confirm whether he
is the same to whom the accountholder has sent.
⇒ The bank issues the new cheques book and authority letter is kept buy the
bank.
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While issuing a bank draft it is necessary that the draft should be free from
alternations. All the details must be written clearly in ink. After issuance a demand
draft it is handed over to the applicant and its advice containing the particulars of the
draft is sent to drawer branch with its necessary information and payment of the draft
is making on its presentation.
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SUGGESTIONS & RECOMMENDATIONS
Although NBP is included in ten top most banks of the world equity as well as assets
wise, but for the further improvement in various sectors may recommendations to the
bank would be as follows:
NBP should become very specific about its competitors, so that it can understand who
its competitor is in the first degree and who is in the second degree. Then the first-
degree competitors should be watched closely.
A research cell should continuously try to gather information about the present action
so its competitors and expected future actions. So in this way more effective strategies
can be formulated.
Reward System:
The performance reward linkage should be make strong as it is said, "A happy
employee delivers more than he receives from the organization." The NBP should
also try to make its employees happier.
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N.B.P. even does not have a partially computerized system where as other new
competitor banks are now going towards on-line banking services.
⇒ Govt. should take keen interest to recover its bad debts, which can improve its
financial position.
In case of giving the loans, it is necessary to check the repute of customer towards
loan repayment. Bank shouldn’t advance the money to those people who are addict of
rescheduling of loans due to their political influences. Instead providing loans to these
persons, loans must be advanced to the well-reputed businesses and industries having
good record of loan repayment.
⇒ Along with the officers, the training must also be given to the clerical staff.
Because of N.B.P. are running on manual system and the training of its staff directly
improving their efficiency of work.
⇒ Working conditions must be improved for the employees. Bank will definitely
get more benefits after some expenditure on the working conditions as it improves
efficiency and productivity of the employees.
⇒ There is also a need of proper recruitment and selection program. New young
talent should be introduced to inject the new ideas.
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⇒ Special attention should be given to the behavior of the employees towards the
customers, as customer is the most important person for any bank.
⇒ There are many employees who are working on ad-hoc basis creating
dissatisfaction. The deserved should be made permanent employees.
⇒ To motivate the employees of the bank, regular bonuses and incentives should
be given to them.
⇒ There must be a friendly environment among all the employees as it enhances
the trust and sincerity.
⇒ NBP should be focus its attention towards the share of traveler cheque.
⇒ Branch manager should be trained in the field of selling to serve better
according to the expectation of customers.
⇒ The recruitment policy should be fair and transparent.
Management should increase the branch limit of expenditure to fulfill the necessary
expenditure of personnel relation.
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CONCLUSION
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Bibliography
1. The first important thing is the discussions with the staff of the bank especially with
the manager of the branch.
2. The Bank Book of Instructions for the National Bank of Pakistan called the B.B.I.
3. Surfing the website of the National Bank of Pakistan (www.nbp.com.pk)
4. Reading the annual reports of the bank.
5. Reading the economic bulletin of the bank, which is published by the economic and
business research wing of the bank.
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Annexure-1
Profit and Loss Account
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Annexure-2
Balance Sheet
As at December
31, 2007, 2008, 2009
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