INTERNSHIP REPORT ON

NATIONAL BANK OF PAKISTAN

Brief introduction of organization
National Bank of Pakistan was established on November 9, 1949 under
the national bank ordinance of 1949.

NBP has been awarded with AAA and AAA+1 rating by JCR-VIS Credit
co. Ltd and affiliated of Japan Credit Rating Agency for 2001 and 2002
respectively.

It occupies a unique position in the financial sector of Pakistan both
by offering treasury services on behalf of State Bank of Pakistan and
undertaking the function of government receipts and payments.

National Bank of Pakistan extensive domestic branch network of about
1287 branches all over the country and global presence through 22
overseas offices. And now online banking facility is available in 30
braches of NBP
OVERVIEW OF THE ORGNIZATION
BRIEF HISTORY
It was incorporated in 1949 under the National Bank of Pakistan
Ordinance 1949. Initially, it was owned by Govt. of Pakistan and later on
moved to modern commercial banking.

The Bank commenced its operations from November 20, 1949 at six important jute
centers in the East Pakistan and directed its resources in financing of jute crop.

The Banks Karachi and vu solutions Lahore offices were subsequently
opened in December 1949. The National Bank of Pakistan was also
nationalized, along with other banks, in January 1974. The Bank of
Bahawalpur was also merged into this Bank.

The Bank of the Year 2001, 2002, 2004 and 2005 Award by The Banker
Magazine, the Best Foreign Exchange Bank Pakistan for 2004, 2005,
2006 and 2007




NATURE OF THE ORGNIZATION
National Bank of Pakistan provides both commercial as well as pubic
sector services. NBP is serving as a lead player in the debt equity market.
NBP has extended its area of services beyond the country.

The bank is engaged in providing commercial banking and related services
in Pakistan and overseas. NBP is the main business partner for the
Government of Pakistan, with special emphasis on fostering Pakistan's
economic growth.

Corporate Banking NBP further consolidated its position as one of the top players
in corporate and investment banking of the country in 2007 and has built a strong
customer relationship with the premier corporate client.



NATURE OF THE ORGNIZATION
VISION
To be recognized as a leader and a brand synonymous 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 vu solutions copy right data management
practices
Maximizing stake holder's value.
Discharging our responsibility as a good corporate citizen of Pakistan and
in countries Where we operate.

NATURE OF THE ORGNIZATION
GOALS
To enhance profitability and maximization of NBP share through increasing leverage
of existing customer base and diversified range of products.
CORE VALUES
Highest standards of Integrity.
Institutionalizing team work and performance culture.
Excellence in service.
Advancement of skills for tomorrows challenges.
Awareness of social and community responsibility.
Value creation for all stakeholders.

BUSINESS VOULUME
NUMBERS OF SHARES ISSUED BY NBP IN 31/12/2009

Categories of share holders No of share
holders
SHARESHELD PERCENTAGE
GOVERNMENT OF PAKISTAN 3 4,338,409 0.4031
STATE BANK OF PAKISTAN 1 809,408,116 75.1979
DIRECTORS CEO &
CHILDEREN
1 22,347 0.0021
ASSOCIATED COMPANIES 2 5,808 0.0005
EXECUTIEVES 22 69,838 0.0065
NIT & ICP 3 10,089,752 0.9374
BANK DF AND NBPF 40 14,818,881 1.3767
INSURANCE COMPANIES 24 10,639,396 0.9885
BUSINESS VOULUME
NUMBERS OF SHARES ISSUED BY NBP IN 31/12/2009

Categories of share holders
No of share
holders
SHARESHELD
PERCENTAGE
MODARBA & MUTUAL FUNDS
41 54,300,194 5.0448
GENERAL PUBLIC LOCAL
16,237 60,604,356 5.6304
GENERAL PUBLIC FOREIGN
17 204,856 0.0190
OTHERS
335 38,012,089 3.5315
FOREIGN COMPANIES
34 50,069,644 4.6517
PUBLIC SECTOR COMPANIES
4 23,786,260 2.2099
TOATAL 16764 1,076,370,226 100.000
PRODUCT LINES
Competitors of National Bank of
Pakistan
Allied Bank Limited
Bank Al-Falah Limited.
Bank of Punjab Limited
Habib Bank Limited
United Bank Limited
VU solutions Limited
Muslim Commercial Bank Limited
Standard Chartered Bank Limited
Askari Commercial Bank Limited
Bank Al-Habib Limited
Training Program
I worked in the following departments of NBP:
A brief introduction of these departments is as
under

Deposit of Current and PLS Saving Accounts (2
Week)
Account Opening (2 Weeks)
Remittances and Bills (2 Weeks)
Utility Bills Collection (2 Weeks)
Govt. Payments and Receipts (2 Weeks)

Training Program
Account Opening Department:

In this department, I have acquired the knowledge regarding
dealings of this department

National Bank of Pakistan has subsequent kinds of customers
under this department.










Trust
Staff
Firm
Company
Individual
Account Opening Department
Following steps are done in this department.
Opening of an account after verification of customer
from NADRA database.
Recording of account number and name of applicant in
account opening register.
Issuance of letter of thanks
Issuance of cheque book and pass book
Recording of first deposit with the bank by customer in
general ledger
Closing of account after receiving application from
customer.

Clearing Department
I also have performed working for two weeks in this
department. The main branch receives the cheques
from all of its branches and makes the lots of these
cheques again. Main branch sends these cheques to
the state bank of Pakistan, vu solutions copy right data
where a clearinghouse
exits. In this clearinghouse, the representatives
receive their cheques and go back to their bank's main
branch.
Later on, the main branch sends these cheques to their
relevant branches where the validity of these cheques
is verified and the accounts of the relevant clients are
affected.
Remittances Department

This department deals in transfer of money
from one place to another or country by:
Demand drafts
Mail transfer
Telegraphic transfer
Govt. Payments and Receipts
Department

National Bank of Pakistan is functioning as an agent of
SBP. All types of Government Payment i.e. Pension,
Salaries, Grants, Zakat, Benevolent Fund, Treasury
Refund and Taxes Refund proceed through National
Bank of Pakistan.
Moreover, in this department all types of Government
receipts i.e. Revenues, Taxes, Abyana, Agriculture
Tax, Government Fees, EOBI Funds and Utility Bills
are deposited. In this way, the NBP is serving great job
of revenue collection.
During my training program I spent two weeks in bills
collection department. Here I collected utility bills like gas,
electricity, water and telephone etc.
Bills Collection Department
Credit Department
NBP give loans to the borrowers for different purposes.
These loans are given for various sectors for different
periods. Small Finance, Cash Finance, Agriculture Finance,
Cash & Gold Loan, Personal Loans, Demand Finance,
Running Finance, Corporate Finance, Export Import
Financing, House Building Finance (Saiban) and NBP
Karobar Scheme.
Structure of Finance Department
Branch Manager



Operation Manager


Credit Officer
Accounting System of the National
Bank of Pakistan

The accounting system of national bank of Pakistan is double entry
which is highly recognized in banking sectors of globalization, the main
GAP ( generally accepted principles) are like increase in assets is
debit, decrease in assets is credit, increase in liability is credit,
decrease in liability is debit, increase is expense is debit, decrease in
expense is credit, increase in capital is credit, decrease in capital is
debit, these are the principles of accounting which is also using current
National bank of Pakistan by posting cheques, crediting amounts in
accounts, because these are useful for working.

All activities of accounting department are based on authenticity and
deficiency. Every transaction all monetary action is verified very strictly
before taking them into account.
Finance System of the National Bank
of Pakistan

Tracking of your company's financial information is the key to success.
The fast pace of today's business environment makes it absolutely
essential to get your finance and accounting department automated
quickly and easily. Being able to produce comprehensive and tailored
financial reports and balance sheets will allow you to track your
revenue and expenses and see at a glance where you need to trim
costs and increase revenue in order to improve profitability and
meet your financial objectives.

The finance system of National Bank of Pakistan shows, how the bank is
collecting funds, what are the sources of collecting funds and how the
allocation of funds, bank is collecting money through shares, bonds, deposits
and different other income schemes. Currently, NBP finance system is very
strong as the NBP net profit rate is very high which shows enough customers
are making investment in company business.
Use of Electronic Data
Information system is the fundamental system of any
organization which consists of connective data of all the
departments. These days we are living in technology age
despite of Stone Age although the technology affects the
internal work of organization as well as external work.
Rapidly emergence of technology increased the reliability
of business world on effective Information systems.

Information system is used by top management; inform
them about strength to weakness and opportunity to threat
of the organization.
Sources of funds

NBP is collecting money through shares which is giving
dividend money to share holds. Moreover, the NBP is
collecting money through bonds which is giving fixed
payment and also the principle payment back as
compare to shares.
NBP is collecting money through different income
schemes to investment in business.
NBP is collecting money for financing through deposits
like profit and loss account, current account and
premium saver account.
Allocation of funds

Offers and Products of NBP are best example of its
allocation of funds. NBP is earning reasonable profit, as the
NBP obtains 17.5% interest per annum on advance
salaries. NBP cash against loan through bank is taking
15.5% interest per annum. NBP Home Saiban loan is also
giving reasonable installment markup to NBP. Moreover,
NBP uses different methods of investments and allocating
its funds, like purchasing shares and bonds of different
companies which has good market value and profit.
Ratio analysis is the calculation and comparison of ratios
which are derived from the information in a company's
Financial statements. Financial ratios are usually
expressed as a percent or as times per period.
Ratio Analysis

a) Current Ratio
Particulars 2007 2008 2009
Total Assets 762,193,593 817,758,326 944,232,762
Less Operating
Fixed Assets -25,922,979 -24,217,655 -25,147,192
Less Deferred
tax assets - (3.204.572) -3,062,271
Less other Assets -30,994,965 -44,550,347 -59,316,438
Current Assets 705,275,649 745,785,752 856,706,861
Total liability 645,855,939 715,299,108 824,676,384
Less liabilities
against asset -33,554 -25,274 -42,629
Less deferred tax
liabilities net -5,097,831
Less other
liabilities -30,940,041 -39,656,831 -42,269,623
Current Liability 609,784,513 675,617,003 782,364,132
C.R = Current
Assets
Current
Liabilities
1.16 1.10385 1.9502
Current Ratio
Sales to Working Capital
a) Sales to Working Capital Ratio
Particulars 2007 2008 2009
REVENUE /
SALES (NET) 50,569,481 60,942,798 77,947,697
Working
Capital 95,491,136 70,168,749 74,342,729
Sales to
Working
Capital 0.53 0.87 1.05
Working Capital
a) Working Capital
Particulars 2007 2008 2009
Current Assets 705,275,649 745,785,752 856,706,861
Current
Liabilities 609,784,513 675,617,003 782,364,132
W.C=
Current
Assets
Current
Liabilities 95,491,136 70,168,749 74,342,729
Debt to Equity Ratio
a) Debt to Equity ratio
Particulars 2007 2008 2009
Total Debt 645,855,939 715,299,108 824,676,384
Total Equity 69,270,631 81,367,002 94,791,919
Total Debt /
Total Equity 9.324 8.8 8.7
Gross Profit Margin
Particulars 2007 2008 2009
Gross profit 33,629,470 37,058,030 38,458,048
Sales Revenue 50,569,481 60,942,798 77,947,697
Gross profit /
Sales Revenue
*100 66% 61% 49.33%
Net Profit Margin
Particulars 2007 2008 2009
Net Profit 19,033,773 15,458,590 18,211,846
Sales Revenue 50,569,481 60,942,798 77,947,697
Net profit / Net
Sales * 100 37.64% 25.36% 23.36%
Pretax Margin
Particula
rs 2007 2008 2009
Pretax
Profit 28,060,501 23,000,998 22,300,173
Net Sales 50,569,481 60,942,798 77,947,697
Pretax
Profit /
Net Sales
* 100 55.48% 38% 29%
Return on Operating Assets
Particulars 2007 2008 2009
Net Income 19,033,773 15,458,590 18,211,846
Operating Assets 25,922,979 24,217,655 25,147,192
Net income /
Operating assets 73.40% 63.80% 72.40%
Sales to Fixed Assets
Particulars 2007 2008 2009
Sales Revenue 50,569,481 60,942,798 77,947,697
Fixed Assets 25,922,979 24,217,655 25,147,192
Sales / Fixed
assets 1.95 2.52 3.1
Total Assets Turnover
Particulars 2007 2008 2009
Net Sales 50,569,481 60,942,798 77,947,697
Total Assets 762,193,593 817,758,326 944,232,762
Net Sales / Total
Assets 6.63% 7.45% 8.25%
Total Advances / Total Deposits
Particulars 2007 2008 2009
Total Advances 340,318,930 412,986,865 475,243,431
Total Deposits 591,907,435 624,939,016 726,464,825
Total Advances /
Total Deposits 0.57495 0.66084 0.65418
Particulars 2009 2008 2007
ASSETS (Base Year)
Differenc
e %age
Differenc
e %age
Cash and balances
with treasury
banks 115,827,868 106,503,756 94,873,249 11,630,507 12.26 20,954,619 22.08
Balances with
other banks 28,405,564 38,344,608 37,472,832 871,776 2.33 -9,067,268 -24.19
Investments net 217,642,822 170,822,491 211,146,038 ######### -19.1 6496784 3.07
Lending to
financial
institutions 19,587,176 17,128,032 21,464,600 -4,336,568 -20.2 -1877424 -8.75
Advances - net 475,243,431 412,986,865 340,318,930 72,667,935 21.35 134924501 39.65
Operating fixed
assets 25,147,192 24,217,655 25,922,979 -1,705,324 -6.58 -775787 -2.99
Deferred tax
assets - net 3,062,271 3,204,572 - - - - -
Other assets net 59,316,438 44,550,347 30,994,965 13,555,382 43.73 28321473 91.37
Total Assets 944,232,762 817,758,326 762,193,593 55,564,733 7.29 182039169 23.88
LIABILITIES
Bills payable 10,621,169 10,219,061 7,061,902 3,157,159 44.71 3559267 50.4
Borrowings 45,278,138 40,458,926 10,815,176 29,643,750 274.09 34462962 318.65
Deposits and
other accounts 726,464,825 624,939,016 591,907,435 33,031,581 5.58 134557390 22.73
Liabilities against
assets subject to
finance lease 42,629 25,274 33,554 -8,280 -24.68 9075 27.04
Deferred tax
liabilities - net - - 5,097,831 - - - -
Other liabilities 42,269,623 39,656,831 30,940,041 8,716,790 28.17 11329582 36.62
Total Liabilities 824,676,368 715,299,108 645,855,939 69,443,169 10.75 178820429 27.68
Share capital 10,763,702 8,969,751 8,154,319 815,432 10 2609383 32
Reserves 22,681,707 19,941,047 15,772,124 4,168,923 26.43 6909583 43.81
Un-appropriated
profit 61,346,510 52,456,204 45,344,188 7,112,016 15.68 16002322 35.29
[2008-2007] [2009-2007]
Horizontal Analysis
Vertical Analysis
Particulars 2009 2008 2007 2009 2008 2007
ASSETS (Base Year) % % %
Cash and
balances with
treasury banks 115,827,868 106,503,756 94,873,249 12.27 13.02 12.45
Balances with
other banks 28,405,564 38,344,608 37,472,832 3.01 4.69 4.92
Investments
net 217,642,822 170,822,491 211,146,038 23.05 20.89 27.7
Lending to
financial
institutions 19,587,176 17,128,032 21,464,600 2.07 2.09 2.82
Advances net 475,243,431 412,986,865 340,318,930 50.33 50.5 44.65
Operating
fixed assets 25,147,192 24,217,655 25,922,979 2.66 2.96 3.4
Deferred tax
assets - net 3,062,271 3,204,572 - 0.32 0.39 -
Other assets
net 59,316,438 44,550,347 30,994,965 6.28 5.45 4.07
Total Assets 944,232,762 817,758,326 762,193,593 100 100 100
LIABILITIES
Bills payable 10,621,169 10,219,061 7,061,902 1.12 1.25 0.93
Borrowings 45,278,138 40,458,926 10,815,176 4.8 4.95 1.42
Deposits and
other accounts 726,464,825 624,939,016 591,907,435 76.94 76.42 77.66
Liabilities
against assets
subject to
finance lease 42,629 25,274 33,554 0.005 0.003 0.004
Industry Analysis
Current
Ratio
Working
Capital
2009 49.33% 1.95 74,342,729 8.7 0.87
2008 61% 1.1 70,168,749 8.8 0.87
2007 66% 1.16 95,491,136 9.32 0.85
2009 57% 1.09 47,639,330 10.68 0.9
2008 54% 1.07 34,890,046 13.3 0.93
2007 58% 1.08 35,282,454 14.34 0.92
2009 33.80% 1.11 47,700,847 7.19 0.86
2008 35% 1.12 43,144,763 7.37 0.87
2007 40% 1.1 34,608,678 7.82 0.87
Askari 2009 56.75% 1.04 11,431,457 18.21 0.94
Commercial 2008 53.50% 1.04 7,713,992 16.05 0.94
Bank 2007 55% 1.06 10,606,378 16.27 0.93
MCB
Debt to
Equity
Ratio
Debt
Ratio
NBP
UBL
Name of
Companies Years
Gross
Profit
Ratio
Liquidity Ratios
i. Trend Analysis
Liquidity Ratios
0
0.5
1
1.5
2
2007 2008 2009
Current ratio
Sales to Working Capital

Profitability Ratio
Profitability Ratios
0
10
20
30
40
50
60
70
80
2007 2008 2009
Net Profit Margin
Return on assets
Pretax Margin
Return on Operating Assets
Sales to Fixed Assets
Return on Total Equity
Gross Profit Margin

Activity ratios
Activity Ratio
0
1
2
3
4
5
6
7
8
9
2007 2008 2009
Total Asset Turnover
Fixed assets Turnover

Leverage Ratios
Leverage Ratios
0
1
2
3
4
5
6
7
8
9
10
2007 2008 2009
Debt/Equity ratio
Total Capitalization ratio
Time Interest Earned ratio
Fixed Asset ratio / Equity ratio

Future Prospectus of NBP
The future prospectus of the NBP is so much successful
and bright. If we see the growth rate of the entity is
increasing day by day. The turnover of the entity as
compared to the base year is high and its orders are more
than their capacity. There three types of ratios to check the
Future prospectus of the entity current asset ratio, Gross
Profit Ratio, Working capital. All these represent an
increasing trend. The ability of the company to pay off its
debts is also good. All calculated ratios are favorable which
shows the strength of the entity and confirms its going
concern.
SWOT ANALYSIS
Strengths

NBP is founder of ATM
National Bank of Pakistan is founder of ATM
facility in Pakistan. In this particular vu solutions facility, money
can be withdrawal from account at any time.
Governments bank
National bank of Pakistan is Governments bank.
NBP makes its policies according to The
governments rules and regulations.
Western union founder
National Bank of Pakistan is first bank who started the facility of
Western Union in Pakistan. In this particular scheme money is
transferred in Pakistan from abroad in a fastest way. You can receive
the money from bank by providing the name, CNIC number and password of
recipient client.

Weakness
Communication Gap
During the internship in NBP, I found the problem of lack of communication
Between the employees and management. They have not very much
understanding with each other which adversely affects the performance of
Employees.

Lack Of Modern Equipment
NBP is lacking upgraded and modern equipment. Most of the machines and
computers are back dated.
Few number of Employees
There is shortage of staff in NBP. Staff is not as per requirement. Due to which
, NBP is not efficient in its performance and services.

Opportunities
Micro Financing
Today, there is need of micro financing in banking sector , other commercial
banks have already initiated this regard. NBP should also avail this opportunity
and take initiative in micro financing.


Globally Progress of Banking system
Now-a-days banking system is growing quickly so NBP have opportunities to
improve the standard and get the more share in the market.


Electronic Banking
Due to fast development of technology, world has become global
village especially communication sector. NBP can avail the opportunity
of developed technology and online banking system in order to provide
24 hours services to customers.
Threats
Emergence Of New Competitors
NBP is facing the threat of emergence of new competitors in from of foreign
banks. These foreign banks are equipped with modern and computerized
system and heavy financial power and innovative way of promotions.

Political instability
The frequent and ongoing shifting in political arena affects the performance of
NBP adversely.
Increased number of banks
Increase in no. of banks is a threat for National Bank of Pakistan.
Numbers of private banks (commercial and private) are operating their
business more efficiently and provide the same facilities with more
speed and quality.

Conclusion
During my stay of 10 weeks at National bank of Pakistan, I came
across the number of tasks and felt a credible and professional
change in my attitude. I conclude that NBP is one of the leading
banks in Pakistan.
As analysis shows that NBP is a most growing organization with
highest return on capital, largest market share amongst all Pakistani
banks. NBP carries highest cost to income ratio as compare to all
other commercial banks. But still there is need for improvement to
overcome weaknesses in order to maintain its position as an Asian
Tiger in banking field.
As far as my training and experience is concerned, I have learnt a
lot during my internship because I got practical knowledge before
entering in the practical life after completion of my MBA degree.
I learn a lot about banking practice in Pakistan, rules and regulations
and different procedures followed by banks, the organizational
culture and structure of the bank, National Bank of Pakistan.
Recommendations
According my evaluation and observation during my internship at NBP,
bank can make more progress by implementing following points:
Number of professional and well qualified employees should be enhanced.
Staff should be trained properly and should be familiar with modern
technology in order vu solutions to enhance the over all performance of
NBP.
In order to achieve job satisfaction from employees, their promotion should
be on merit and on time according to their respective performance instead
of seniors own will.
There is need of more investment in area of innovation and organizational
cultural improvements in order to improve the environment and corporate
culture of bank.
It is recommended that there should be specific desk for customers
complaints and for their information.
Bank needs to improve its sitting arrangement, air conditioning in order to
attract new clients and to make their customers feel happy and comfortable.
Heavy work load can be coping nicely with the help of modern computers
software and better control can be achieved.
Online facilities should be enhanced up to 24 hours.