Internship Report

on

Submitted By: Amir Masood

Submitted to: Virtual University of Pakistan

Brief Introduction of the Organization

Allied Bank Limited was the first bank to be established in Pakistan. It started out in Lahore by
the name Australasia Bank before independence in 1942; was renamed Allied Bank of Pakistan
Limited in 1974 and then Allied Bank Limited in 2005. In August 2004, because of capital
reconstruction, the Banks ownership was transferred to a consortium comprising Ibrahim
Leasing Limited and Ibrahim Group.
Today, with its existence of over 60 years, the Bank has built itself a foundation with a strong
equity, assets and deposit base. It offers universal banking services, while placing major emphasis
on retail banking. The Bank also has the largest network of over 800 online branches in Pakistan
and offers various technology-based products and services to its diverse clientele.
ABL provides comprehensive services that meet customer needs, such as having internet banking
facilities, Deposit in Local Currency, Client Deposit in Foreign Currency, Remittances, Advances
to Business, ATM
Allied Bank aim to ensure customer satisfaction by providing high quality banking services

Organizational Hierarchy Chart

Khalid Sherwani
President

Islamic
Banking
&

Finance

Audit
&
Inspection

International
Division

Treasury

Regional
Offices
(16)

M. Neveed Masud

Branches
(856)

Establishment

Human
Resource

Business
Promotion

Special
Assets
Management

Credit

Finance

Information
Technology

Training Program
Business Development :
Daily Collection of Marketing Calls, List of Valued Clients, Data feeding for KPIs in a
Software (excel) Customers Complaints

Account Opening Department:

Offering the customer application form with signature specimen cards.

Assisting him in filling the form and then compiling the record of customer
Preparing its file to forward to the head office the record is maintained in
registers and as well as in computer records
After confirmation when the account of such customer is opened then there is
process of cheque book issuance to the customer.

Training Program
Dispatch Department:
My task in this department is to dispatch the different kinds of letters (other than

confidential) like accounts statements of clients and their accounts information

and send letters to those customers whose accounts balances are less than 5000
because when account balance is less than 5000 then bank charged a fix rate on
his/her money.
Sorting of Inward Mail and delivered to Relevant Persons/ Department.

Sorting Outward Mail (local, HO, Personal etc) entering in O/W mail Book of

Different Couriers

Training Program
Credit Department:
I was informed through the way of financing and procedures and documentation regarding
financing or sanctioning a loan to the customer. While issuing the loan the credit
department makes credit proposal for credit report the following information are
required before preparing the credit proposal:

Account number of borrower and the type of account whether current or PLS or KBA.
Nature and structure of the borrower business and its main products.
Name of the borrower, whether proprietor, partners and directors.
Types of ownership whether proprietorship, partnership or company.
Details of all firms and companies associated with borrower business.
Current financial condition of borrower business.
Accurate and up to date financial statement of last two year( if the borrower business life
is two year or more).
Market report on borrower when borrower has maintained an account with another bank
and in this case report from this bank is also obtained.

Training Program
CASH MANAGEMENT DEPARTMENT:
In this department the tellers are the persons who receives and give cash to the

customers during my internship I came to know about their working and none of
the persons other than authorized staff was allowed to visit that department the
duties of the tellers were to receive cash for deposits and manage withdrawals,
feeding cash in ATM machine prepare remittances on behalf of customers and day
to day tally of cash and close the daily balance. Cash department is interested
department for me. Here I have learnt
Cash deposit procedure
Cash payment procedure
Online fund transfer

Training Program
CLEARING DEPARTMENT:

Inward Cheques, Checking With Schedule, Sorting of Cheques (Credit,

Deposit Deptt.) Entering Data in excel Format, under the Supervision of
Clearing Officer and Handed over the Concerned officers,
Returned Cheques, prepare Schedule of cheques returned and along with
IBCO (less amount of Returned Cheques) and handed over the Clearing
Officer.
Outwards Cheques, Preparing of Schedule of O/W Cheques (excel
format) After Balancing Handed over the Clearing Officer, Balancing of
Returned Cheques.

Training Program
Accounts Department :
I also worked under Mr. Farrukh Sb. Accounts Department is very important
department of any bank or organization; it plays a very important role in all
aspects. My main task in this department is to write the transfer book, arranging
the vouchers, give the customers account details on the phone.
Writing of Transfer Book.

Arranging the Vouchers.

Allied Bank Limited

Financial Statements
of
2007, 2008, 2009

Balance Sheet
Assets

2007

2008

2009

Cash & balances with treasury bank

29,739,857

23,653,754

26,435,633

668,449

2,096,779

1,280,443

Lending to financial institutions

18,419,241

15,793,183

28,122,932

Investments

83,958,463

82,631,118

94,789,492

168,407,280

212,972,008

237,344,038

10,705,374

17,369,691

17,955,045

Operating fixed assets

7,548,628

11,134,436

12,446,748

Deferred tax asset-net

662,431

1,029,223

320,109,723

366,680,192

Balances with other banks

Advances

Other Assets

Net Investment in finance lease

Capital work in progress
Total Assets

418,374,331

Balance Sheet
Liabilities
Bills Payable

2007

2008

2009

3,494,384

2,952,490

3,162,429

22,933,656

27,778,151

39,818,532

263,972,382

297,475,321

328,875,037

Subordinated loans

2,499,000

2,498,000

5,497,000

Other liabilities

7,332,059

13,620,616

11,059,484

Borrowings from financial Institutions

Deposits and other accounts

Deferred tax liabilities

Total Liabilities

1,871
300,231,481

344,324,578

388,414,353

Balance Sheet
Share Holder Equity

2007

2008

2009

Share Capital

5,386,370

6,463,644

7,110,008

Capital Reserves

6,050,713

5,804,776

6,582,845

Unappropriated Profit and other reserves

6,971,308

8,536,697

12,198,425

18,408,391

20,805,117

25,891,278

1,469,851

1,550,497

4,068,700

19,878,242

22,355,614

29,959,978

Surplus on revaluation of fixed assets

Total Liabilities and Owner equity

Income Statement
2007

2008

2009

Mark-up / return / interest earned

21,201,422

30,570,540

41,121,503

Mark-up / return / interest expensed

10,086,420

16,559,806

22,421,694

Net mark-up / interest income

11,115,002

14,010,734

18,699,809

Provision against non-performing loans and advances - net

2,712,936

1,372,155

3,162,963

719

178,110

1,054,046

Charge / (reversal) against off-balance sheet obligations Charge / (reversal) of provision

against diminution in the value of investments
Provision against lending to financial institutions
Bad debts written off directly

280,595
1187

2736

2,714,842

3,156,001

4,497,604

8,467,576

10,854,733

14,202,205

2,062,677

2,291,459

2,708,002

Income / gain on investments

147,184

1,420,364

1,374,967

Income from dealing in foreign currencies

194,879

230,060

761,934

Gain on investments in associate

1439387

151,068

1,085,043

Unrealized loss on revaluation of investments classified as held for trading-net

-1463

-7,897

Other income

77,435

59,154

35,985

3,920,099

4,152,105

5,958,034

12,387,675

15,006,838

20,160,239

Net mark-up / interest income after provisions

Non mark-up / interest income
Fee, commission and brokerage income

Total non-mark-up / interest income

Income Statement
Non mark-up / interest expense

2007

2008

2009

6,018,346

8,089,913

9,423,503

(Reversal)/Provision against other assets-net

119,579

214,284

-56,431

Other provisions / write offs - net

39,805

190,824

-25,353

Other charges

256,869

390,877

67,377

215,023

Administrative expenses

Workers welfare fund

Total non mark-up / interest expenses

6,434,599

8,885,898

9,624,119

Profit before taxation

5,953,076

6,120,940

10,536,120

Taxation - current

1,887,299

1,829,425

3,546,462

-10,381

134,829

-132,509

1,876,918

1,964,254

3,413,953

4,076,158

4,156,686

7,122,167

- prior years
- deferred

Profit after taxation

Cash Flow Statement

Cash Flow from Operating Activities

2007

2008

2009

Profit before taxation

5,953,076

6,120,940

10,536,120

Less: Dividend Income

(147,184)

(1,420,364)

(1,374,967)

5,805,892

4,700,576

9,161,153

341,656

420,242

633,056

2,712,936

1,372,155

3,162,963

719

1,781,110

1,054,046

280,595

Unrealized loss on revaluation of held for trading securities

1,463

7,897

Provision against off balance sheet obligation-net

39,805

190,824

(25,353)

Provision against other assets-net

119,579

214,284

(56,431)

Operating fixed assets written off

20,711

9,373

(14,297)

(9,889)

(4,220)

1,187

2,736

3,203,048

3,992,173

5,061,926

9,008,940

8,692,749

14,223,079

Lending to financial institution

630,998

2,626,058

(12,610,344)

Held for trading security

203,250

32,397

(67,385)

(27,087,769)

(45,939,619)

(27,534,993)

(292,887)

(5,114,895)

(2,069,966)

(26,546,408)

(48,396,059)

(42,282,688)

Adjustment for non-cash charges

Depreciation/amortization
Provision against non-performing loans and advances (including general provision) net
Provision against diminution in the value of investments
Provision against lending to financial institution

Gain on sale of operating fixed assets

Bad debt written off directly

Increase/Decrease in operating assets

Advance - net

Other assets (excluding advance taxation)

2007

2008

2009

Bills payable

1,216,377

(541,894)

209,939

Borrowing from financial institute

4,845,011

4,767,184)

11,811,971

deposits

57,941,058

33,502,939

31,399,716

Other liabilities

2,145,627

6,074,203

(2,546,450)

66,148,073

43,802,432

40,875,176

48,610,605

4,099,122

12,815,567

Income tax paid

(2,260,777)

(3,535,489)

(2,004,490)

Net cash flow from operating activities

46,349,828

563,633

10,811,077

Net investment in available-for-sale security

(39,525,522)

1,347,298

(11,288,568)

Net investment in held-to-maturity security

2,782,945

(3,749,608)

1,865,280

Net investment in subsidiaries

(437,512)

149,956

1,362,722

1,374,038

(1,493,897)

(2,659,638)

(1,971,579)

63,021

155,480

21,058

(38,461,009)

(3,543,746)

(3,543,746)

(1,000)

(1,000)

2,999,000

Dividend paid

(1,902,755)

(1,753,971)

(2,073,173)

Net cash flow used in financing activities

(1,903,755)

(1,754,971)

925,827

Increase in cash and cash equivalents

5,985,064

(1,754,971)

1,737,133

Cash and cash equivalents at beginning of the year cash equivalents

24,302,648

29,842,093

25,189,600

64,999

510,618

428,027

Increase decrease in operating assets

Cash flow from investing activities

Dividend income

Investment in operating fixed assets

Proceeds from sale of operating fixed assets

Net cash flow used in investing activities

Cash flow from financing activities
Repayment of sub-ordinate loan

effect of exchange rate change on cash and Cash equivalents

Allied Bank Limited

Ratio Analysis

Current Ratio
Allied Bank Limited
Ratio
Analysis
Current
Ratio

Current Ratio = Current Asset / Current liabilities

2007

2008

2009

219,147,230/
201,886,462
=1.09

252,271,556/
208,108,809
=1.21

260,277,768/
244,671,265
=1.06

1.25

1.21

1.2
1.15

1.09
1.06

1.1

Current Ratio

1.05
1
0.95
2007

2008

2009

Working of Current Assets

Current Assets

2007

2008

2009

29,739,857

23,653,754

26,435,633

668,449

2,096,779

1,280,443

Lendings to financial institutions

18,419,241

15,793,183

28,122,932

other assets

10,705,374

17,369,691

17,955,045

short term investment

122,134,447

158,648,132

152,487,239

short term advances

37479862

34,710,017

33,996,476

Total

219,147,230

252,271,556

260,277,768

Cash and balances with treasury banks

Balances with other banks

Working of Current Liabilities

Current Liabilities

2007

2008

2009

Bills payable

3,494,384

2,952,490

3,162,429

Deposits & others account

7,332,059

297,475,321

328,875,037

Other liabilities

263,972,382

13,620,616

11,059,484

- fixed deposits

(72,912,363)

(105,939,618)

(98,425,685)

Total

201,886,462

208,108,809

244,671,265

Acid Test Ratio

Allied Bank Limited
Ratio
Analysis
Acid Test
Ratio

Current Assets Inventory Prepayments/Current Liabilities

2007

2008

2009

219,147,230717,618/
201,886,462
=1.08

252,271,5561,416,853/
208,108,809
=1.2

252,271,5561,416,853/
208,108,809
=1.2

1.2

1.2
1.18
1.16
1.14
1.12
1.1

1.2

1.08

Acid Test Ratio

1.08
1.06
1.04
1.02
2007

2008

2009

Working of Prepayments
Prepayments

2007

2008

2009

Prepayments

717,618

1,416,853

916,713

Note: Prepayments Figures are taking from Notes to the financial statements

Net Working Capital Ratio

Allied Bank Limited
Ratio
Analysis
Net
Working
Capital
Ratio

Net Working Capital = Current Assets Current Liabilities

2007

2008

2009

219,147,230201,886,462
=17,260,768

252,271,556208,108,809
=44,162,747

260,277,768244,671,265
=15,606,503

44,162,747
45,000,000
40,000,000
35,000,000
30,000,000
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
0

17,260,768
15,606,503

2007

2008

2009

Net Working
Capital Ratio

Time Interest Earned Ratio

Allied Bank Limited
Ratio
Analysis

Time Interest Earned

Time
Interest
Earned
Ratio
1.6

EBIT / Interest Charges

2007

2008

2009

16,039,496/
10,086,420
=1.59

22,680,746/
16,559,806
=1.37

32,957,814/
22,421,694
=1.47

1.59

1.55
1.47

1.5
1.45

Time Interest
Earned Ratio

1.37

1.4
1.35
1.3
1.25
2007

2008

2009

Working of EBIT
EBIT

2007

2008

2009

earning before income tax

5,953,076

6,120,940

10,536,120

Mark-up / return / interest expensed

10,086,420

16,559,806

22,421,694

Total

16,039,494

22,680,746

32,957,814

Working of Interest Expense

Interest expense
Mark-up / return / interest expensed

2007

2008

2009

10,086,420

16,559,806

22,421,694

Debt Ratio
Allied Bank Limited
Ratio
Analysis
Debt
Ratio

Debt Ratio =

Total Liabilities / Total Assets

2007

2008

2009

300,231,481/
320,109,723
=93.79 %

344,324,578/
366,680,192
=93.90 %

388,414,353/
418,374,331
=92.84 %

94.00%

93.79%

93.90%

93.80%
93.60%
93.40%
93.20%
93.00%
92.80%

92.84%

92.60%
92.40%
92.20%
2007

2008

2009

Debt Ratio

Working Of Total Liabilities

Total Liabilities

2007

2008

2009

Bills Payable

3,494,384

2,952,490

3,162,429

Borrowings from financial

Institutions

22,933,656

27,778,151

39,818,532

Deposits and other accounts

263,972,382

297,475,321

328,875,037

Subordinated loans

2,499,000

2,498,000

5,497,000

Other liabilities

7,332,059

13,620,616

11,059,484

1,871

300,231,481

344,324,578

388,414,353

Deferred tax liabilities

Total

Working of Total Assets

Total Assets

2007

2008

2009

29,739,857

23,653,754

26,435,633

668,449

2,096,779

1,280,443

Lendings to financial
institutions

18,419,241

15,793,183

28,122,932

Investments

83,958,463

82,631,118

94,789,492

Advances

168,407,280

212,972,008

237,344,038

Operating fixed assets

10,705,374

17,369,691

17,955,045

Deferred tax assets

7,548,628

11,134,436

12,446,748

662,431

1,029,223

320,109,723

366,680,192

418,374,331

Cash and balances with

treasury banks
Balances with other banks

Other assets
Total

Debt Equity Ratio

Allied Bank Limited
Ratio
Analysis

Debt Equity Ratio = Total Liabilities / Total Equity

Debt
Equity
Ratio

2007

2008

2009

300,231,481/
18,408,391
=16.31

344,324,578/
20,805,117
=16.55

388,414,353/
25,891,278
=15.00

17
16.31

16.55

16.5
16
15.5

15

15
14.5
14
2007

2008

2009

Debt Equity Ratio

Working Of Shareholders Equity

Shareholder Equity

2007

2008

2009

Share Capital

5,386,370

6,463,644

7,110,008

Capital Reserves

6,050,713

5,804,776

6,582,845

Un-appropriated
Profit and other
reserves

6,971,308

8,536,697

12,198,425

18,408,391

20,805,117

25,891,278

Total

Tangible Net Worth Ratio

Allied Bank Limited
Ratio
Analysis

Tangible
Net
Worth
Ratio

Tangible Net Worth Ratio = Total Assets - Total Liabilities Intangible Assets
2007

2008

2009

320,109,723300,231,48138,008
=19,840,234

366,680,192344,324,578106,906
=22,248,708

418,374,331388,414,353155,541
=29,804,437

29,804,437
30,000,000
25,000,000

19,840,234

22,248,708

20,000,000

Tangible Net
Worth Ratio

15,000,000
10,000,000
5,000,000
0
2007

2008

2009

Working of Total Assets

Total Assets

2007

2008

2009

29,739,857

23,653,754

26,435,633

668,449

2,096,779

1,280,443

Lendings to financial
institutions

18,419,241

15,793,183

28,122,932

Investments

83,958,463

82,631,118

94,789,492

Advances

168,407,280

212,972,008

237,344,038

Operating fixed assets

10,705,374

17,369,691

17,955,045

Deferred tax assets

7,548,628

11,134,436

12,446,748

662,431

1,029,223

320,109,723

366,680,192

418,374,331

Cash and balances with

treasury banks
Balances with other banks

Other assets
Total

Working Of Total Liabilities

Total Liabilities

2007

2008

2009

Bills Payable

3,494,384

2,952,490

3,162,429

Borrowings from financial

Institutions

22,933,656

27,778,151

39,818,532

Deposits and other accounts

263,972,382

297,475,321

328,875,037

Subordinated loans

2,499,000

2,498,000

5,497,000

Other liabilities

7,332,059

13,620,616

11,059,484

1,871

300,231,481

344,324,578

388,414,353

Deferred tax liabilities

Total

Debt to Tangible Net Worth Ratio

Allied Bank Limited
Ratio
Analysis

Debt to Tangible Net Worth Ratio = Total Debt / Tangible Net

Worth

Debt to
Tangible Net
Worth Ratio

15.5

2007

2008

2009

300,231,481/
19,840,234
=15.13

344,324,578/
22,248,708
=15.48

388,414,353/
29,804,437
=13.03

15.13

15.48

15
14.5
14
13.5

13.03

13
12.5
12
11.5
2007

2008

2009

Debt to Tangible
Net Worth Ratio

Total Capitalize Ratio

Allied Bank Limited
Ratio
Analysis

Total
Capitalize
Ratio

Total Capitalize Ratio=Long term debt/ Long term debt +

Shareholders Equity
2007

2008

2009

98,345,019/
(98,345,019+
18,408,391)
=0.84

136,215,769/
(136,215,769+
20,805,117)
=0.87

143,743,088/
(143,743,088+
25,891,278)
=0.85

0.87

0.87
0.865
0.86
0.855
0.85
0.845

0.85

Total Capitalize
Ratio

0.84

0.84
0.835
0.83
0.825
2007

2008

2009

Working of Long Term Debt

Long-Term Debt

2007

2008

2009

Borrowing from financial

institution

22,933,656

27,778,151

39,818,532

Subordinate loans

2,499,000

2,498,000

5,497,000

1,871

Fixed deposit

72,912,363

105,939,618

98,425,685

Total

98,345,019

136,215,769

143,743,088

Deferred tax liability

Working Of Shareholders Equity

Shareholder Equity

2007

2008

2009

Share Capital

5,386,370

6,463,644

7,110,008

Capital Reserves

6,050,713

5,804,776

6,582,845

Un-appropriated
Profit and other
reserves

6,971,308

8,536,697

12,198,425

18,408,391

20,805,117

25,891,278

Total

Net Profit Margin Ratio

Allied Bank Limited
Ratio
Analysis

Net Profit Margin = EAIT / Net Sales * 100

Net Profit
Margin
Ratio

20.00%
18.00%
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%

2007

2008

2009

4,076,158/
21,201,422
=19.23%

4,156,686/
30,570,540
=13.60%

7,122,167/
41,121,503
=17.32%

19.23%
17.32%
13.60%

Net Profit Margin

Ratio

2007

2008

2009

Return on Assets Ratio

Allied Bank Limited
Ratio
Analysis

Return on Assets = {EAIT / Total Assets * 100}

Return on
Assets

2007

2008

2009

4,076,158/
320,109,723
=1.27%

4,156,686/
366,680,192
=1.13%

7,122,167/
418,374,331
=1.70%

1.70%

1.80%
1.60%
1.40%
1.20%

1.27%
1.13%

1.00%
0.80%
0.60%

Return on Assets

0.40%
0.20%
0.00%
2007

2008

2009

DuPont Return on Assets Ratio

Allied Bank Limited
Ratio
Analysis

DuPont Return on Assets = {Net Income/Sale X Sale/Total

Assets}

DuPont
Return on
Assets
1.80%
1.60%
1.40%

2007

2008

2009

0.19X
0.07
=1.27 %

0.14X
0.08
=1.13 %

0.17X
0.10
=1.70 %

1.70%
1.27%
1.13%

1.20%
1.00%
0.80%

DuPont Return
on Assets

0.60%
0.40%
0.20%
0.00%
2007

2008

2009

Working of DuPont Return on Assets

Net Income/Sale
= 4,076,158/21,201,422 = 0.19
4,156,686/30,570,540 = 0.14
7,122,167/41,121,503 = 0.17
Sale/Total Assets
= 21,201,422/320,109,723 = 0.07
30,570,540/366,680,192 = 0.08
41,121,503/418,374,331 = 0.10

2007
2008
2009

=
=

2007
2008
2009

=
=

Operating Income Margin Ratio

Allied Bank Limited
Ratio
Analysis

Operating Income Margin = {Operating Income / Net Sales}

Operating
Income
Margin
Ratio
81.00%
80.00%
79.00%
78.00%
77.00%
76.00%
75.00%
74.00%
73.00%
72.00%
71.00%

2007

2008

2009

16,039,496/
21,201,422
=75.65%

22,680,746/
30,570,540
=74.19%

32,957,814/
41,121,503
=80.15%

80.15%

75.65%

Operating
Income Margin
Ratio

74.19%

2007

2008

2009

Working of Operating Income

Operating Income/EBIT

2007

2008

2009

Profit before income tax

5,953,076

6,120,940

10,536,120

Mark-up / return / interest

expensed

10,086,420

16,559,806

22,421,694

Total

16,039,494

22,680,746

32,957,814

Return on Operating Assets Ratio

Allied Bank Limited
Ratio
Analysis
Return on
Operating
Assets

Return on Operating Assets = Net Income/Operating Assets

2007

2008

2009

4,076,158/
7,548,628
=0.54

4,156,686/
11,134,436
=0.373

4,156,686/
11,134,436
=0.373

0.6

0.54

0.5
0.373
0.4

0.373

Return on
Operating Assets

0.3
0.2
0.1
0
2007

2008

2009

Return on Equity Ratio

Allied Bank Limited
Ratio
Analysis

Return on Equity = {EAIT / Equity}

Return on
Equity

2007

2008

2009

4,076,158/
18,408,391
=22.14%

4,156,686/
20,805,117
=19.98%

7,122,167/
25,891,278
=27.51%

27.51%

30.00%
25.00%

22.14%
19.98%

20.00%
15.00%

Return on Equity

10.00%
5.00%
0.00%
2007

2008

2009

Working Of Shareholders Equity

Shareholder Equity

2007

2008

2009

Share Capital

5,386,370

6,463,644

7,110,008

Capital Reserves

6,050,713

5,804,776

6,582,845

Un-appropriated
Profit and other
reserves

6,971,308

8,536,697

12,198,425

18,408,391

20,805,117

25,891,278

Total

Gross Margin Ratio

Allied Bank Limited
Ratio
Analysis

Gross Margin = {Gross Profit / Net sales * 100}

Gross
Margin

54.00%

2007

2008

2009

11,115,002/
21,201,422
=52.43%

14,010,734/
30,570,540
=45.83%

18,699,809/
41,121,503
=45.47%

52.43%

52.00%
50.00%
48.00%

45.83%

45.47%

46.00%
44.00%
42.00%
40.00%
2007

2008

2009

Gross Margin

Working of Gross Profit/Nat Sale

Gross Profit = Net mark-up / interest income

Net Sale = Mark-up / return / interest earned

Total Assets Turnover Ratio

Allied Bank Limited
Ratio
Analysis
Total
Assets
Turnover

Total Assets Turnover = {Net Sales / Net Total Assets}

2007

2008

2009

21,201,422/
320,109,723
=6.62%

30,570,540/
366,680,192
=8.34%

41,121,503/
418,374,331
=9.83%

10.00%
9.00%
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%

9.83%
8.34%
6.62%

Total Assets
Turnover

2007

2008

2009

Fixed Assets Turnover Ratio

Allied Bank Limited
Ratio
Analysis
Fixed
Assets
Turnover

Fixed Assets Turnover = Sale/Fixed Assets

2007

2008

2009

21,201,422/
7,548,628
=2.8

30,570,540/
11,134,436
=2.74

41,121,503/
12,446,748
=3.30

3.5

3.3
2.8

2.74

2.5
2

Fixed Assets
Turnover

1.5
1
0.5
0
2007

2008

2009

Dividend per share Ratio

Allied Bank Limited
Ratio
Analysis

Dividend
per share

Dividend per share = {Dividend paid to share holders/ Average

common Shares outstanding}
2007

2008

2009

1,902,755/
538,637
=3.53

1,753,971/
646,364
=2.71

2,073,173/
711,001
=2.92

3.53

3.5
2.71

2.92

2.5

Dividend Per
Share

2
1.5
1
0.5
0
2007

2008

2009

Earning per Share Ratio

Allied Bank Limited
Ratio
Analysis

Earning per Share ={Net profit available for shareholders/ No

of shares Outstanding}

Earning
per Share

2007

2008

2009

4,076,158/
538,637
=7.57

4,156,686/
646,364
=6.43

7,122,167/
711,001
=10.02

12
10

10.02
7.57

6.43

Earning Per
Share

6
4
2
0
2007

2008

2009

Price/Earning Ratio
Allied Bank Limited
Ratio
Analysis

Price/Earning Ratio = {Market price per share/ Earning per

share}

Price/Ear
ning
Ratio
18
16

2007

2008

2009

130.15/
7.57
=17.19

31.3/
6.43
=4.87

58.73/
10.02
=5.86

17.19

14
12
10
8
6
4

4.87

5.86

2
0
2007

2008

2009

Price/Earning
Ratio

Conclusion
The officials have not adopted the financial techniques and modern ways of judgment of firms
potential.

In mostly branches of ABL security is not up to standard, and all branches are not computerized.
The bank has a lot of financing schemes but there is very little advertisement of these schemes.
Liquidity position of Allied Bank is not up to the standard, which means below the Rule of
Thumb Current Ratio (2:1). On the other hand the liquidity ratios of Allied Bank is also below
the industry average ratios. Allied Bank is trying to improve the liquidity position as the earning
assets in which Advances, lending to financial institutions and investments are contained of the
company have been within a good range over the last three years.
Leverage ratios measure the percentage of funds provided by the creditors. The proportion of
Allied banks total assets is being financed with high percentage of borrowed funds which means
the bank is a high leveraged bank.
Profitability ratios of Allied Bank Limited are improving as Profit before Tax & Profit after tax
for the last three years has increased compared to 2007 in spite of increase in operating expenses
due to inflation.
Allied Bank Limited has a good market perception due to continuous declaration of dividends for
last three years.
Earning per Share & Price Earning Ratios of Allied Bank Limited has painted a good picture
owing to higher profitability during the last three years.

Recommendations
Modern forecasting techniques should be adopted in order to meet the dynamic and competing
business environment.
The bank should have the moving cameras in their branches for security purposes, and bank
should be focused on new technology like all branches should be computerized.
Bank should be focused on advertisement to promote the banks products or schemes.
The management of Allied Bank limited should improve the liquidity up to the standard and
industry average for the ability to meets the needs for cash as they arise. The management
should encourage the short term investment and advances.
The management should emphasis a shift to equity from debt as the bank is a high leveraged
bank. They should try to manage the constant decline in debt to assets ratio over the years. The
debt management of the bank indicates a shift to equity. So the management should issue the
bonus shares to the equity holders to shift the equity from debt.

The management should control the financial and operation fixed charges to the minimum
extent in spite of increase in inflation to improve the profitability position of the bank. The
management should improve the net interest and non interest income and administrative costs
and high provisioning growth was compromised.

 Thank You