SWOT ANALYSIS OF ASKARI BANK

SWOT means: S=STRENGTHS W=WEAKNESSES O=OPPORTUNITIES T = THREATS

INTERNAL

EXTERNAL

STRENGTHS

OPPORTUNITIES

WEAKNESSES

THREATS

SWOT Analysis of Askari Bank is below:

STRENGTHS

 Holds a sound repute in the financial circle

 Personalized services of the staff to the employees

 Located in the commercial area, so that the customers face no problems in reaching to the bank.

 Maintaining the healthy correspondent relationships with foreign banks

 Provide a record business in exports sector

 It has a reliable and easy to use internal computer system.

 All the transactions and information regarded the customers deposits has been computerized. Currently, Unibank System is being practiced for this purpose. Now Askari Bank is decided to change the Unibank System

 ACBL has launched its Mobile ATM Bus Service, which is the Pakistans First Mobile ATM Bus Service. No other bank has taken initiative of mobile ATM Bus yet.

WEAKNESSES  No advertisement on electronic media has been seen yet.

 Since, ACBLs major competitors are Union Bank Limited and Bank Alfalah has started large media campaign, so keeping in view these threats, Askari Bank should emphasize more on its advertisement.

 some of the employees are burdened with over work.

 Division of work and description of job is not properly defined to each and every staff member.

OPPORTUNITIES

 All the opportunities of the 21st century are to be availed in the information technology. Information technology is the future. Therefore ACBL should emphasize much on IT,

 ABL should emphasize on E - Banking. In which Bank can design a universal account like other foreign banks, to enhance online facilities.

 Askari Banks growing business requires an extensive branch network. There are great opportunities for ACBL for the expansion of its business.

THREATS

 Askari Bank is facing a strong competition by its major competitors; Union Bank and Bank Alfalah. Business of these banks is also growing with very high pace. So in order to achieve the sustainable growth in a market, ACBL has to remain vigilant about the ever changing environment and the competitors.

 All the competitors are using different means and methods to popularize their product and services. So ACBL should keep in mind that a customer cannot come to the bank until he know that my demands will be fulfilled over here.

 ABL should enhance the Pay Packages given to the employees, because it has been noticed that the competitors of the ACBL are giving more suitable pay package to their employees.

 ACBL should enhance its Branch Network, in order to capture the market of different areas.

The SWOT analysis of the Askari Bank signifies that its strengths overcome its weaknesses and its opportunities are more than its threats. This is positive sign for any Organization

PEST and Porters Five Forces Analysis of AskariBank

PEST Analysis:
PEST means: P=Political E=Economical S=Social T =Technical PEST Analysis of Askari Bank is below: Political Analysis:
Askari Bank is operating in one of the worlds most volatile political environment. On one side there is a very week and unpopular government and on the other there is war against terror going on. Since Askari bank is part of Askari Welfare Trust which is run by Pakistan Army so it has the advantage of not being interfered directly by the government but political forces impact Askaris business through consumers and businesses which are affected directly by political instability. There is also a great awareness about some of the global challenges such as climate changes, poverty, scarcity of resources, and demographic shifting.

Economic Analysis:
The outlook for the Pakistani banking sector remains relatively downbeat despite the potentially vast consumer market in the country. Pakistan has several characteristics that make for a favourable banking sector outlook for instance buoyant demographics, a domestic economy geared towards private consumption and an extremely under-banked population. However, we should not expect rapid sector development over the medium term as these positive factors are neutralised by an unstable security outlook and a below-potential growth path for the economy and recent floods who have put a lot of pressure on the economy.

Social Analysis:
There has been a marked increase in the use of credit cards in Pakistan but the usage is currently limited to educated middle class only. At the same time accelerated by the spread of internet in the country people are more inclined to us the net to do banking transactions specially bill payments and within the bank transactions. Since Askari bank has the reputation of being a conservative bank so its consumers are quite loyal and will stay with the bank even under tough economic situation or in the presence of alternatives.

Technological Analysis:
The technology makes it possible to empower the system and establish a competitive advantage. Pioneering the new ideas, adding the skills and operational excellence are part of the guiding principle of the organization. Askari has recently been investing heavily in Information Technology as a means of competitive advantage against large Pakistani banks.

Porters Five Forces Analysis:

Askari is attempting to expand their business and services. Through the investigation of the competition and entry in these markets, the sustainability of the bank can be identified. The Porters analysis is used to measure the ability of the firm in performing in the Pakistani market. Entry Barriers - High 1. Very high investment required. 2. Many large banks in the market. 3. Strong Regulator 4. High capital reserve requirement. Rivalry among the Existing Competitors High (Net interest margin, ROE if going down) 1. Very high Rivalry. 2. High operational costs. 3. Public and Micro Finance institutions. 4. Strong regulator. Bargaining Power of Suppliers Medium (All supplier of goods and services) There is a medium power among the suppliers of the bank who are definitely the people from whom the banks raise funds. The major source of funds of Askari comes from the customers or depositors that are transformed to be their suppliers. In order to attract the larger funds, the private banks offer high interest rate which is important for the continuous sustainability of the bank. In addition, the Askari Card is introduced to attract more clients and increase the volume of funds. Bargaining Power of the Customers - Stable & Increasing Retail clients do not demand higher interest rates and do not move accounts frequently Corporate clients seek highest return on their deposits and move accounts. There is a high power among the people in terms of utilizing the products such as their cards, loans and other services. The high power on the customers is gained because of the number of banks operating in the market that offer similar services. However, Askari is in advantage because of the e-banking and ATM network. Threat from Substitutes - Low 1. Highly developed capital market. 2. Mutual Funds, Bonds, on-line trading and investment.

MANAGEMENT OF ASKARI BANK

The management of Askari Bank falls in the tall organization. As there are a large number of levels of management hierarchy and it implies a narrow spam of control to the manager.

Askari Bank has many branches in different regional general manager at lower level of organization, instead of concentrated authority, showing that Askari Bank is decentralized organization. Although Askari Bank encourages ownership behavior, but it is using a flexible, adaptive and suitable for dynamic environment thus an organic organization. Specialist knowledge is used to contribute to the common task of organization. Askari Bank is focusing and is customer based.

Risk Management Framework

COMPETITOR'S ANALYSIS Introduction: Bank Al-Falah was established in July 1997. Its head office is in Karachi and bank has 49 branches all over the Pakistan. Bank has one branch in UAE. Services: Bank is offering different types of services for its valued customers. These services are ATM, Online Banking, Home Loan and Car Financing. Human Resource Department: Bank has a HR Department who perform different sort of functions. The department advertises in newspaper for the jobs then recruitment and selection process occurs. Training and development is major task of HR department. In HR department there is one Executive Incharge, One Assistant Executive In charge and personnel managers. Selection And Recruitment: Bank advertises in newspaper and candidates apply for the jobs. After test, interview and other formalities the selected candidates are given six months training. Every year the bank offers 30 vacancies for the post of MTOs. The MTO program is a highly competitive and sought after induction scheme, in which short-listed applicants appear in a written test followed by a panel interview. Successful candidates then receive comprehensive training in essential areas of branch banking at the Bank's state-of-the-art training facility at Karachi They are subsequently posted at the Bank's prior to their posting at various branch locations in Pakistan. Preferred educational background for entry into the MTO scheme includes an MBA degree, MA Economics or M.Com from reputable Pakistani or foreign institutions with GPA of 3 plus, or equivalent. Strong personal character, as well as communication and interpersonal skills are essential pre-requisites to succeed as an MTO Training And Development: Bank Alfalah's management believes in developing the potential of the Bank's employees to the fullest extent. Training & Development Center of the Bank is housed in custombuilt, state of the art facility on the 4th floor of the Head Office building at Karachi. The center is responsible for providing multi-level high quality training programmes to all staff members in the following areas: * * * * * * Consumer Banking Operations Credit Marketing & Credit Proposals Credit Administration/Documentation Trade Finance Operations Marketing & Selling Skills Customer Service Skills *** Performance Appraisal Skills Time Management Personal Effectiveness It is obligatory for each staff member of the bank to attend at least one training programme. Wherever the Training Department is unable to provide focused training for certain groups of staff, reputable external training providers are invited to fill the gap. The candidates are given six month training in which theoretical lectures are given along with different case studies, situations and presentation techniques. Groups are made to enhance the coordination and team building. Candidates with different skills and abilities are appreciated for their creativity. During the job formal and informal meetings are conducted where all employees are free to speak and they can give different ideas and plans. Employees are

encouraged for continuous learning and bank even send its employees for special training courses to abroad. Main Training Pressure Point of Bank Alfalah is also same to that of ACBL, i.e.: * The identification that either the training of current employees is necessary or not depends on the results of Annual Performance Report (attached in annexure). Rewards System: Employees are given salary of 10000-12000 per month in training session, after training bank increase their pay and also give them other benefits. Performance Appraisal: Each manager submit the report of his subordinates to his boss in which they evaluate his employees from different dimensions and if audit report of any branch show negative impact than all types of increments are stopped of all employees of than branch. ANALYSIS Analyzing the Training and Development practice of ACBL and comparing it with Training & Development of Bank Alfalah, it is concluded that currently ACBL is effectively meeting its targets, but to encounter with future demands, ACBL needs to overcome some short-comings in order to maintain and gain competitive edge, for this we have concluded some recommendations stated in next chapter. 6. RECRUITMENT AND SELECTION 6.1 Recruitment Recruitment is the first part of the process of filling a vacancy; it includes the examination of the vacancy, the consideration of the sources of suitable candidates, making contact with those candidates and attracting, applications from them. An organization can never be better than the people it hires and this is a concept that askari bank firmly believes in. They boast about never compromising on the quality of its people. SOURCES OF APPLICANTS: 6.1(a) INTERNAL SOURCES: Askari bank is well known of being conservative and this can be justified by the fact that they try their best to fill in any vacancies that crop up by first scanning their current employees for the required qualifications and experience. According to the Human Resources Manager they prefer to go internally because It is considerably less costly than external recruiting. A present employee is more likely to stay at askari bank than an external candidate. The people already working for askari bank are well aware of its culture and employee demands and thus provides a better understanding for their work. The organizational policy of promoting from within enhances the employees' morale, organizational commitment and job satisfaction. 6.1(b) EXTERNAL RECRUITING CHANNELS: At askari bank external recruiting is the last option. In case a need arises for external recruitment they meet it discreetly. When enquired on this issue the HR Manager said that they do not prefer external recruitment because it may have a negative impact on the work group, cohesion and morale. Askari bank uses the following channels for external recruitment; Referrals At askari bank referrals act as an effective recruitment tool. Referrals are most helpful in the cases of highly specialized jobs. Employees while recommending applicants place their own reputation at stake; therefore, they are usually careful to recommend only qualified applicants. Referrals result in maintaining consistency in the work force as the people referring their friends would be well aware of the company culture and environment and would never suggest a person they know isn't capable. Walk-Ins Another common and effective methods of external recruitment are walk-ins and writeins. These methods are quite informal and provide the applicant an opportunity to sell himself/herself to the organization. This method is very appreciated at askari bank because it too gives them the chance to hire fresh, vigilant, determined and confident work force for entry-level jobs. Management Trainees Another channel of external recruitment is a management trainee. These training facilitate market exposure for fresh graduates. Askari bank provides these recruits with an extensive learning program where they are taught how to handle dealings in the corporate world and hence mould them into their culture. These recruits are evaluated after their internship period is over and these appraisals are filed. Whenever external filling is required these trainees are their first option to the bank.