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Internship Report of SCB

Internship Report of SCB

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STANDARD CHARDTED BANK INTERNSHIP REPORT
STANDARD CHARDTED BANK INTERNSHIP REPORT

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Standard Chartered Bank

INTERNSHIP REPORT ON THE STANDARD CHARTERED BANK OF PAKISTAN, PESHAWAR BRANCH,

SUPERVISED BY Mr. Amir Hussain SUBMITTED BY Ayesha Hashmi

INSTITUTE OF MANAGEMENT STUDIES UNIVERSITY OF PESHAWAR
Session: 2005-2009

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INTERNSHIP REPORT ON THE STANDARD CHARTERED BANK OF PAKISTAN, PESHAWAR BRANCH

Internship report submitted to the Institute of Management studies in partial fulfillment of the requirements for the degree of Bachelors of Business Administration

January 2010

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INSTITUTE OF MANAGEMENT STUDIES UNIVERSITY OF PESHAWAR

INTERNSHIP REPORT ON THE STANDARD CHARTERED BANK OF PAKISTAN, PESHAWAR BRANCH SUPERVISOR
Signature

Name

Mr. Amir Hussain

Designation

Organization

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EXTERNAL EXAMINER
Signature

Name

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Scanned certificate

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TABLE OF CONTENTS
S. No.

TITLE
Preface Acknowledgement List Of Tables List Of Graphs List Of Charts List Of Acronyms Executive Summary

PAGE NO
I Ii Iii Iv V Vi Vii

Section 1
Chapter – 1

INTRODUCTION OF THE REPORT
1.1. 1.2. 1.3. 1.4. 1.5. Background Purpose Of The Study Scope Of The Study Methodology Of Research Scheme Of Report 1 1 2 2 3

Section 2

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REVIEW
Chapter – 2 An Overview Of Standard Chartered Bank 2.1. 2.2. 2.3. 2.4. 2.5. 2.6. 2.7. Meaning Of Bank Meaning Of Banking Introduction To SCB SCB Today Branches Important Statistics About SCB Role Of SCB In Banking Sector 6 6 7 7 8 9 9

Chapter – 3 Organizational Structure And Management Of SCB

3.1.

Organizational Structure 3.1.1. Organizational Structure Of SCB Internationally 3.1.2. Organizational Structure Of SCB Pakistan 3.1.3. Organizational Structure Of SCB Peshawar Main 3.1.4. Management Team At SCB Main

12 12 13 14 17 17 18

3.2.

HRM 3.2.1. Recruitment Of Staff

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3.2.2. Method Of Recruitment 3.2.3. Training And Development 3.2.4. Motivation Chapter – 4 Department Of SCB Peshawar Branch 4.1. Departmentalization 4.1.1. Sales Department 4.1.2. Priority Banking Department 4.1.3. Banking Support Unit 4.1.4. It Department 4.1.5. Credit Card Department Chapter – 5 Products And Services Offered By SCB 5.1. 5.2. 5.3. 5.4. 5.5. Accounts Lockers 24 Hours Banking E-Statements Propriety Treatment

18 19 20

22 23 24 25 27 28

29 32 32 35 35

Section 3 ANALYSIS

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Chapter – 6 Critical Analysis 6.1. Financial Analysis 6.1.1. Ration Analysis 6.2. 6.3. Comparative Analysis SWOT Analysis 6.3.1. Strengths 6.3.2. Weakness 6.3.3. Opportunities 6.3.4. Threats 37 37 47 52 52 56 60 62

Section 4 Findings And Recommendations
Chapter 7 Recommendations

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7.1. 7.2. 7.3. 7.4. 7.5. 7.6. 7.7. 7.8. 7.9. 7.10. 7.11. 7.12. 7.13. 7.14. 7.15. 7.16. 7.17.

Extension Of Branches In NWFP Check On Employees Activities Advertisements Appointment Of Female Staff Proper Guidance Of Less Educated Customers Increases Number Of Cash Counters Employees’ Behavior With Customers Enough Space For Customers Training And Development Job Rotation Revival Of Charges ATM Network Problem Fair Employee And Inters Selection Encourage Team Work Internship Program Work Burden Centralization

65 65 66 66 66 66 67 67 67 68 68 68 68 69 69 69 70

Section 5 ACTION PLAN
Chapter 8 Implementation Plan 71

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Persons Interviewed Bibliography Annexure

79 80 81

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PREFACE

Learning the emerging skills is one of the means to keep the pace with time. Business is most dynamic and ever progressing field. Newer skills are developing day by day. Hence to keep the pace, learning of basics of, is taking the first step. Internship is compulsory requirement of Bachelors Degree in Business Administration. The main purpose of internship is to develop skills to perform well in professional life and to have an experience of working in real life situation. After completing the internship program, the student has to develop a comprehensive internship report. The appeal of being a part of an organization, which has its root in the history of 19th century, augmented with a rich cultural background, was extremely fascinating and finally I decided to see and explore this multinational organization. I joined Standard Chartered Bank as an internee and worked there for a period of eight weeks after clearing the test and interview. The reason for choosing, this bank for internship was to enhance my skills, to have the practical know how of business organization and to develop a comprehensive internship report for completing my professional degree of business administration. Utmost efforts are made to complete this internship report in all respect. However, I think, there is always room for improvement. Internship

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report in the hand is simplest possible approach of writing a report. I believe that the process of learning never stops. This report is the first step towards the long journey of acquisition of knowledge .May Allah is with me in all times of tests. Amen!

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ACKNOWLEDGEMENT

All praise for ALMIGHTY ALLAH whose Uniqueness, Oneness, and Wholeness is unchallengeable, guided me in difficult circumstances. All respects are for His Holy Prophet Hazrat Muhammad Peace Be Upon Him, who enabled us to recognize the Oneness of The Creator. I am greatly in debited to my supervisor Mr. Amir Hussain who supervised my internship report and guided me throughout the period with great patience and kindness. In this first meeting of eight weeks with my practical life, I have the honor of working with some highly talented, successful, initiative, impressive, and inspiring banking executives specially Miss Noor, Mr. Akmal Khan, and Mr. Adil Khan who guided me in learning the works performed by them in their routine tasks. Special thanks also go to the librarian, Institute of Management Studies (IMS) for his help. He provided me with lots of relevant material for references. Finally, heartiest thanks go to my family whose guidance and encouragement always helped me succeed in my goal.

AYESHA HASHMI
Student of BBA HONS Institute Of Management Studies University of Peshawar

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January 2010

LIST OF TABLES

TITLE Important Statistics Management team at SCB Accounts

TABLE NO: 2.6. 3.1. 5.1.

PAGE NO: 9 17 30

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LIST OF GRAPHS

TITLE Graph no Gross Profit 6.1. Margin Return On Assets 6.2. Return On Equity 6.3. Current Ratio Debt To Asset Ratio Debt To Equity Ratio Asset Turnover Ratio Total Assets 6.4. 6.5. 6.6. 6.7. 6.8.

PAGE NO. 39 40 41 43 44 45 47 48 49 49 50 51 51

Profit Before Tax 6.9. Net Revenue Earnings Per Share Loans Net Investments 6.10. 6.11. 6.12. 6.13.

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LIST OF CHARTS

TITLE Organizational Structure Of SCB HRM Process

CHART NO. 3.0. 3.1.

PAGE NO. 16 19

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LIST OF ACRONYMS

AM BFC BOM CRO DFI EBBS FM GBP MCB NBP PFC SBP SCB

Accounts Manager Banca Financial Consultant Branch operations manager Customer Relationship Officer Development Finance Institutions Electronic basis banking system Floor Manager Great Britain Pound Muslim Commercial Bank National Bank Of Pakistan Personal Financial Consultant State Bank Of Pakistan Standard Chartered Bank

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EXECUTIVE SUMMARY
The purpose of this report is to evaluate the performance of Standard Chartered (SCB), Peshawar Branch. The internship experience of the students of Institute of Management Studies is a partial requirement for the fulfillment of their Bachelors Program. The presentation of the internship experience in the form of an internship report also carries great importance and a student is judged based on the quality of the material that has been produced. The report aims at appraising the working of Standard Chartered Bank, its functions and operation and attempts to assess its performance. Certain recommendations are presented for the potential areas of improvement. An implementation plan of the recommended steps is given at the end of the report. Standard Chartered is the oldest foreign bank in Pakistan. Its name is generally considered for quality and reputation. It offers a broad range of products to target different market segments. A very serious problem at SCB is that it is understaffed. Employees are overburdened with work, which leads to errors in their work. This also gives rise to poor customer service as the employees find it difficult to answer queries, hence most of the times they avoid arguments, and customer are left neglected and disappointed. Understaffing is also one main reason for the hostile relation between the employees of the bank.

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The financial analysis of the bank shows that bank had a sound financial status in the previous years as compared to 2009 due to global economic recession and the current situation of law and order. Recommendations and suggestion are based on the personal observations of internee relating to irregularities and general mistakes that occasionally take place in the organization. The implementation plan deals with solving the underlying problem of several other problems, the understaffing of the bank. The possible solutions are specifically focused. A short-term plan and a long-term plan are devised to deal with the rooted dilemma that threatens to affect several other departments of the bank also. The implementation of the plan seems to surely prove beneficial to bank in several aspects, i.e. improved customer service, friendly employee structure, and pleasant working environment inside the bank.

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SECTION 1 INTRODUCTION OF THE REPORT CHAPTER 1 INTRODUCTION

1.1.

BACKGROUND OF STUDY

For the attainment of bachelor’s degree, many universities have requirements of projects or internships, which need to be fulfilled. In Institute Of Management Studies, University of Peshawar, we have to attain practical knowledge through an eight-week internship program. The report required by institute is based on practical and theoretical knowledge gained by student during his or her internship period.

The focus of this internship report is to study, analyze, and give recommendations on the performance, working conditions and market position of Standard Chartered Bank, Peshawar Main Branch. SCB is considered one of the most outstanding and prominent banks of Pakistan as far as its reputation and services are considered. SCB is a British bank that opened its first branch in Karachi in 1963.

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1.2.

PURPOSE OF STUDY

Broad Purpose a. To get acquaintance with the practical environment b. To improve communication skills c. To see the practical application of our professional studies

Specific Purpose a. To get introduction to the modern banking practices b. To analyze financial position of the bank c. To explore strengths and weakness of the bank d. To objectively observe banking operations and working closely specially of SCB Peshawar Main Branch e. To make recommendations for the improvement of the currently employed banking operations on the basis of study

1.3.

SCOPE OF WORK

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The scope of the study covers two areas and their related variables. a. Variables related to bank b. Variables related to branch This report covers bank’s financial analysis, products offered by bank along with branch’s consumer banking departments, SWOT analysis, and layout of branch.

1.4.

METHODOLOGY OF RESEARCH

The methodology for the collection of information and analyzing data is based on following tools

1.4.1. Primary Tools a.Personal observation (participant and non-participant observation) b. Interviews of personal (unstructured interviews) c.Briefing given by bank’s employees

1.4.2. Secondary Tools a. Annual reports b. Internet c. Brochures of bank d. Books

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1.4.3. Limitation While collecting data there were many limitations faced which if not were present may resulted in a better and more accurate report. Some of the limitations are a. b. c. d. e. Lack of sufficient written material Current adverse situation of Peshawar Confidential nature of data Insufficient time given for briefing Busy schedules of employees

1.5.

SCHEME OF REPORT

The arrangement of report is in the following sequence

Section 1 Introduction to Report This section has one introductory chapter Chapter 1 This chapter contains Background, Purpose, Scope, Methodology, and Scheme

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Section 2 Review This section deals with review of literature and introduction of organization. It contains following chapters Chapter 2 Introduction to Bank Meaning Of Bank And Banking, Banking Sector In Pakistan, Banks Operating In Pakistan, Over View Of SCB, Branches, Head Office, Position In Pakistan’s Economy, Vision, Mission Etc Chapter 3 Organizational Structure and Management Over All Organization, Structure Of Bank, Organizational Structure Of SCB Main Branch, Management At SCB, HRM Activities. Chapter 4 Departments of Bank Chapter 5 Products and Services Offered Section 3 Analysis Chapter 6

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Financial Analysis SWOT Analysis of Branch Section 4 Findings and Recommendations Chapter 7 Recommendations Section 5 Action Plan Chapter 8 Implementation Plan

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SECTION 2 REVIEW CHAPTER 2 HISTORY OF SCB

2.1. MEANING OF BANK
Some authors write that the word bank is derived from Italian word “bancus” or “banque” which means a bench. Because in the old days the Jews used to make banking settlements by sitting on the benches, therefore it was given the name of bancus, which changed to bank.1 Some other authors are of the opinion that the word bank is derived from a German word “back”, which means “joint stock fund” & when the major part of Italy was occupied by the German then this word ‘back’ was Italianized in to the word bank.

2.2. MEANING OF BANKING
The banking companies’ ordinance, 1962 defines banking as “banking means accepting for the purpose of lending or investment, of deposits of money from public, repayable on demand or otherwise and withdrawal by checks, drafts, order, or otherwise.”2
1 2

(on-line) Available http://www.wikipedia.com (on-line) Available http://www.wikipedia.com

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2.3. INTRODUCTION TO SCB
Standard chartered is the world’s leading emerging bank, head quartered in London. Its business however has always been overwhelmingly international. The bank is currently operating in Africa, Asia pacific, America, Middle East, south Asia, and Europe. Standard chartered is named after two banks, which merged in 1969. They were originally known as the standard bank of British and South Africa and the chartered bank of India, Australia, and china. Both banks were keen to capitalize on the huge expansion of trade between Europe, Asia, and Africa and to reap the handsome profits to be made from financing that trade. The bank is trusted across its network for its standard of governance and corporate responsibility as well as its commitment to making a difference in the communities in which it operates. Standard chartered expanded its network, and has an office in every country in the Asia pacific region. Standard chartered is now focused on providing cross border services to its Latin American core customer base, composed of multinational corporations, international financial institutions and large local corporations. In 1999, standard chartered acquired the global trade finance business of union bank of Switzerland. This acquisition makes standard chartered one of the leading clearers of dollar payments in the USA.

2.4. STANDARD CHARTERED TODAY
Standard chartered employs 38,000 people in 950 locations in more than 56 countries in the Asia pacific region, south Asia, the Middle East,

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Africa, the United Kingdom, and the America. Standard chartered is one of the world’s most international banks, with employees representing 80 nationalities. It serves to consumer and corporate banking. Consumer banking provides credit cards, personal loans, mortgages, deposit taking and wealth management services to individuals and small to medium sized enterprises. Wholesale banking provides corporate and institutional clients with services in trade finance, cash management, lending, securities services, foreign exchange, and corporate finance. Standard chartered is well established in growth markets and aims to be the right partner for its customers. The bank combines deep local knowledge with global capability. The bank is trusted across its network for its standard of governance and its commitment to making a difference in the communities in which it operates. Standard chartered is one of the world’s best international banks. In all their markets they are committed to being the right partner to their customers, employees and the communities in which they operate.

2.5. BRANCHES
The bank with its long heritage of nearly 150 years is capable to change with time, offering quality products by means that are convenient to the

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potential customers. The bank has currently 162 online branches across Pakistan in all the four provinces and major cities, which ensure that the services are being performed quickly and efficiently. There are four branches of SCB in Peshawar offering unmatched services to the customers. Among them, one is providing Islamic banking services to the customers (SCB Sadiq). The Main Branch of Peshawar is located on mall road, on which this internship report is based on.

2.6. Important Statistics about SCB World Wide3
Total branches in world Total braches in Pakistan Total branches in Peshawar Countries of Operations Total clients in Peshawar region Table: 2.1. Source: www.standardcharteredbank.com 735 162 4 56 145,000

2.7.

ROLE OF SCB IN BANKING SECTOR

SCB is one of the most dynamic and progressive bank in the banking industry of Pakistan. This is due to its impressive growth and
3

www.standardchartered.com

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development, which it achieved during sixty years of its existence. It did not take long for standard chartered bank to grow into one of the leading bank in the country overtaking the several other banks, which were its competitors, were established earlier. SCB used fresh methods of customer’s service instead of usual ways of the day, which was market oriented and appealed to its customers. SCB’s dynamic, radical, and personalized style of banking differed significantly for the conventional business patterns of the period. In fact every feature and aspect SCB’s behavior reflected highlighted those differences most significantly, the commitment to serve the customers. The expansion and growth of the banking sector in Pakistan has been remarkable. Until 1942, the growth of banking comprised the phases of laying the foundation of the banking structure. The establishment of SCB has started a new era in the banking system. This was the phase competition with the already established giants. Banking underwent a complete change; clients were naturally attracted to the bank, which provided better and quicker banking services. When standard chartered bank challenged the major banks of the time they began evaluate their policies and were surprised to find that they had a lot to change before long. They began to change and adopt a more modern and relevant strategy. The banking sector as a whole and SCB in particular has played an important role in helping to mobilized savings. The bank has always played key role in the promotion of foreign trade especially in financing of exports. The bank’s achievement in the area is

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commendable, as it has not only to compete with the domestic banks but with the large international financial agencies as well. SCB also plays it part in the development of society as well. It has established public libraries in many cities and towns.

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CHAPTER 3 ORGANIZATIONAL STRUCTURE AND MANAGEMENT OF SCB

3.1.

ORGANIZATIONAL STRUCTURE

In a business organization it is defined as, “formal hierarchy for management decision making, reporting and control, and establishing accountability and responsibility; the structure defines the line of authority and specifies who is answerable for what and to whom for business operations and performance of the organization. The structure is based on the functions of the organization and its business, segmented into departments, but interlinked according to the nature of the activities performed.”4

3.1.1. Organizational Structure Of SCB Internationally SCB is a functional organization with its headquarters in London where a CEO heads the whole SCB group. Based on geography Standard Chartered has been divided into different regions like China, Middle East,
4

(on-line) Available http://www.answer.com

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Africa, South Asia, Europe, North, and Central America etc with an office for each region. Furthermore, Standard Chartered has also functional divisions like consumer banking, corporate and institutional banking, human resource, etc, which are headed by the functional managers. Reporting to the regional heads, we have the CEOs of different countries and the country heads of various functional departments. The country head of Pakistan who is the senior group representative reports to the regional head in Dubai they have a board that provides a good balance
4.1

of support and challenge to the group’s senior management. They

believe good governance and good performances reinforce each other. In the past 4.2 year there has been an intensified focus on regulation in the financial 4.3 4.4 services industry and they are working even more closely with their regulators

around the world.
3.1.2. Organizational Structure of SCB Pakistan

Standard chartered group in Pakistan is headquartered at Karachi with branches in all major cities of the country. Branches are classified as main and sub branches and all these branches report to the country distribution manager in Karachi. In cities with more than one SCB branch, there exists one main branch, all other branches report to the main branch. Apart from this SCB has divided

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Pakistan into regions. In each region, a regional manager overlooks the activities of whole region. The total number of branches of SCB operating in Pakistan is 162. A single chief executive officer heads the SCB group in Pakistan. Working under the CEO are the heads of various departments of the bank. They are the consumer banking head, corporate banking head, investment head, international operations head, human resource head; treasury and information technology head. Then this Pakistan’s CEO has to report to the regional head at Dubai. 3.1.3. Organizational Structure Of SCB Peshawar, Main Branch At the SCB Peshawar branch, the workforce has been divided into different groups on a functional basis and raked according to their positions at the bank. SCB main head office of Peshawar is headed by the regional operational manager (ROM) and regional manager (RM). ROM is responsible for working of operations department while RM overlooks the consumer banking and priority banking departments. Working under the regional head is floor manager and customer relations manager of priority banking department. The FM supervises accounts manager and Banca financial consultant (BFC). In main branch, there is one PFC and one senior AM while two junior AMs and one BFC. CRO also comes under the supervision of FM. PFCs are responsible for marketing the bank’s products and services and bringing in fresh business. This is why they have the direct sales

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representatives (DSR) assisting them in discharging their duties. PFCs are there to provide guidance to customers and help them with their queries. BOM heads the cash operation department. This department handles physical cash directly at the bank. Branch operations manager (BOM) works under ROM who supervises tellers and lockers custodian. In main branch, there are two BSU tellers, one BSU supervisor, and one lockers custodian. The locker division also falls under the control of operations head and the locker custodian reports to him. Other department at the bank is credit card department. The credit card department does not report to the floor manager but rather to the credit card regional manager in Islamabad. One collection and service officer forms it. Two sales agents also work in this department. The collection and the services officer is salaried worker while the sales agents work on the commission basis. The bank also hires a telephone operator on contract basis. Organizational structure of the branch is as follows

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3.1.4. Management Team at SCB Main

Designation Regional Operations Manager Regional Manager Floor Manager Branch Operations Manager Customer Relations Manager CRM Banca Financial Consultant Accounts Manager PFC BSU Supervisor BSU Teller Locker’s Custodian AM AM CRO

Name Mr. Shahab Khan Mr. Emran Assad Mr. Adil Khan M. Yousaf Iilyas Mr. Akmal Khan Mr. Hashim Mr. Zulfiqar Mr. Naveed Mr. Awais Mr. Rizwan Mr. Mohsin Mr. Zeshan Mr. Hamza Mr. Mughes Miss Noor

Grade 6 6 7 7 8 8 8 8 8 8 9 9 9 9 9

Table No. 3.1. Management Team at SCB Source: Floor Manager, M. Adil Khan, SCB main, Peshawar Branch

3.2.

HUMAN RESOURCE MANAGEMENT

Human resource management has always been the key factor in an organization’s achievements. The employees of an organization forever determine the route of success for the business. The primary concern of HRM has been on the subject to mould the personality of employees in a manner, which formulates the individual goal of the staff into the

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organizational objective. SCB has devised its own policies for the recruitment, training, and motivation of employees. 3.2.1. Recruitment of Staff Recruitment is the development of a pool of applicants for a job. The selected one recruit serves the organization with their skill and qualification. The requisites of SCB recruitment policy are as follows: a. Qualification requisite is masters in business or public administration, management sciences, and honors/first, degree from HEC recognized university. b. Third division or d- grade in any examination after matriculation onwards of is unacceptable. c. 26 years is the age requirement. 3.2.2. Method of Recruitment SCB has developed its own recruitment process based on the requirements of the bank’s policies. The first step is advertisement, online advertisements and advertisements in print media are given which are main source of pools of applicants. Among the pools, selection of candidates is done based on the above-mentioned criteria. These selected candidates are called for a written test. Those qualifying the tests are further asked for an interview in the main branch of the region. The committee including the manager of retail banking services and treasury manager evaluates the candidates based on the personality, communication skill, and educational qualifications. Short listing restricts

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a small group of candidates selected for the final interview. The committee including chief manager administration seeks the potential candidates, evaluating their subject knowledge, analytical experience, general know how and particular information about the job. The successful candidates are enlisted for the job. The selected candidates go through a medical checkup as well. After that, they are engaged in a 3 months service-training program. This enables them to be acquainted with all the functions in the bank.

Chart No. 3.1. Source: (on-line) available http:// www.standardcharterd.com 3.2.3. Training and Development Training enables the employees to explore their potential; development polishes that talent and skill, as well as it seeks the opportunities to use their expertise professionally. Their approach aims to ensure that all employees are clear about what they are expected to achieve, their personal development goals, and their contribution to business performance. They work alongside employees to support career growth. This includes personal development planning, strengths identification,

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mentoring and structured learning and development is encouraged for all staff and is essential to enhance and develop their employee capabilities. SCB exercise two kinds of training and development programs for the employees. a. Initial training
b. On the job training

Training before service is given to the staff at preliminary period i.e. immediately after the appointment of fresh candidates. The time is 16 months for theory-related topics such as banking operational disciplinary courses and 3 months for operational practice. In-service training is offered to employees on the job to familiarize them to newest expertise and technique of business. Training courses are presented which include lectures, movies, diagrams, and reading materials about latest system and equipment. This training is facilitated three or 4 times during entire service of the workers. The duration varies from 3 days to 3 weeks. 3.2.4. Motivation Motivation refers to forces that energize, direct, and sustain a person’s efforts. A highly motivated person will work hard towards achieving performance goals. With adequate ability and understanding of the job, such a person will be highly productive. Diverse techniques are exploited at SCB for the motivation and performance appraisal of employees. The procedures are as follows: a. Promotion

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Promotion is chiefly on the base of capability, aptitude, talent and performance of the employees. Bank has a performance management system that aims to provide an objective view of employee performance. A standardized process and performance management tools are used to ensure objectivity across the bank.
b.

Medical Allowance

Bank provides medical allowance to the employees on production of medical certificates by employees showing that they have paid. Bank provides a certain percentage to the employees. c. Punishment

Punishment may be conferred in case of misconduct by halting promotion and bonus. It is an efficient means for improving the performance of the employees. d. Salary

Beside a basic pay scale bonus is given to employees if they achieve more than their targets.
e.

Inspection and Audit

Inspection teams are sent from time to time from main head office Karachi to evaluate the performance of employees. Apart from this audit, reports are also made annually on the performance of employees, which are sent to the main head office that are helpful in promoting and appraising employees thus a positive mean of motivation.

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CHAPTER 4 DEPARTMENTS OF SCB PESHAWAR BRANCH

4.1. DEPARTMENTALIZATION
“A department is a unique group of resources established by management to perform some organizational task. Departmentalization is the process of establishing departments within the management system.”5 Every organization is divided into definite departments. Each department performs different kind of job and requires staff with specialized skill to handle the particular job. The Peshawar branch of SCB is comprised of several departments. The division is made on the base of functions and job they perform. Hence, it can be concluded that SCB has adapted to the policy of functional departmentalization. The main departments at the SCB Peshawar branch are mentioned below. The branch is divided into 1. Sales and service department 2. Priority banking department 3. Banking support unit • •
5

Strong room Teller services

(on-line) Available http://www.hrdictionary.com

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• • •

Locker services Remittances Deposit

4. IT department 5. Credit card department 1. Sales Department The job of sales department is to attract the customers to open account in the bank. Sales department is headed by Mohammad Adil Khan (floor manager). He mainly is responsible to look for the whole sales personal along with the customer relation departments. Assisting the floor manager are PFCs (personal financial consultants), direct sales representatives (DSR), and customer relations officers (CRO) reporting to him. PFCs report directly to the floor manager. The main functions of the personal financial services sub-division are account opening and closing, customer queries, deposits, filling out forms, and other services related to accounts. There are four accounts managers (AM) responsible for the account opening services and attending customers when they make a visit to the bank. They too convince customers for the banks varied product they are further responsible to look for the activities of DSRs (direct sales representative). Every AM has a group of DSRs who report to them. DSRs are mainly the runners of bank they visit different peoples from various fields of life and motivate them to open accounts with the bank. Apart from this sales department has also one BFC, Banca financial consultant, who comes under sales department and is responsible for selling insurance products. In the current branch, Mr. Zulfiqar is BFC. In the SCB, main branch, priority banking

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department and customer relations department also come under sales department. The main function of customer relation department is to provide customer related services like helping customers in their problems, filling deposit slips, balance enquiry, providing statements of accounts and many services. Female interns are mainly employed there to help the CRO (customer relation officer). In SCB, main branch there was only one CRO (Miss Noor) therefore; interns were assisting her in her daily activities. The basic responsibility of this division is to entertain customer queries about account balances, ATM, chequebooks, certificates etc and provide them with guidance.

2.

Priority Banking Department

Priority banking is a special banking system offered to the upper class customers of the bank. Since these customers are having accounts worth 3 million, therefore they are given separate special treatment, as they are important source of capital to the bank. These priority customers have a separate CRM who helps them in investing their capital in useful bank’s products and is available to help them in bank. In the main branch of SCB, the priority-banking department has two managers. Akmal khan Khattak is CRM (customer relation manager) and Hashim khan both deal with priority customers and come under reporting of the Branch manager.

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3.

Banking Support Unit

The main branch has a BSU in which many activities are performed. Cashiers and tellers are also part of it. Normally BSU is related to the operations department and they carry out activities collectively. Entry in BSU is not for everyone specific code is given to the workers of BSU to enter in by putting the code. This dept is backbone of all activities of the bank. BSU and universal tellers work in this division and they coordinate the activities of the front office. This division deals with operational issues. This BSU is also located in the cash section and only authorized personnel can enter. Universal tellers do not handle cash directly. Instead, they offer other services. BSU has further many divisions but before going into details of sub divisions let us have a quick review of basic functions of BSU a. Receipt of all documents from PFCs for checking and onward dispatch of such items for processing after signature of the BOM b. c. d. e. f. g. Remittances Receipt of clearing/collection cheques and onward dispatch Cheque book custody and deliveries Issuance of counter cheques Cheque book destruction Marking of stop payment/cheques

Now we will have a look at the sub division of BSU department.

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a. Strong Room All the money at the bank is kept in the strong room, which is located within the cash department. Only authorized personnel are allowed inside the department, and no one else. b. Teller Services Cashiers working in the BSU dept are called tellers. The department is headed by a TSM. This department handles all physical cash. The functions of this department are: a. b. c. d. e. c. Cash transactions(all currencies) Cash balancing Custody and delivery of welcome packs ATM servicing and attending to routine faults Solving CDM related queries

Locker Services

The bank also offers locker service for the safe custody of valuables. The locker service also falls in the BSU division. Lockers are provided to customers who maintain an account with the bank. The fee varies with the size of the locker. Locker Rent The rent of locker is determined by the Bank. Charges for year 2008 are: • Small size lockers are rented for Rs. 4000 P.A.
• Large lockers are rented for Rs. 6000 P.A.

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d.

Remittances

The remittances department transfers the funds from one bank to other bank and from one place to another place. In remittances department the collection take place. The SCB made payment of only open cheques on the counter and prohibits the payment of crossed cheques. e. Deposit

Deposits are the main source of collection of money from individuals, firms, and companies. They are although considered as liabilities of the bank but the makes a bank’s financial position sound and stable. Banks forward money to investors and earn profit on it. This Deposit Department is responsible for the performance of the following jobs. a. Dealing in account issues b. Cheque book issuance c. ATM Cards provision

4.

IT Department

In Peshawar branch, the whole system is computerized and each computer is linked with one another through networking. The programming language that they have used is java and its database is at Karachi. The database they use is developed by the bank for only their use known as EBBS. The overall system is linked with the headquarters. The IT

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department at Peshawar branch is a restricted area and only the senior staff is allowed inside. Credit Card Department This is a separate unit at the bank with a regional manager in Islamabad. The credit card department of Peshawar main is located outside the bank in Mall Towers. The cards department falls in to the consumer banking division. In Peshawar, the bank has approximately 5000 credit card members and to serve them is the responsibility of a credit and collection executive that is also called customer services officer.

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CHAPTER 5 PRODUCTS AND SERVICES OFFERED BY SCB

5.1. PRODUCTS AND SERVICES
SCB has introduced various types of products to meet different class of customer’s requirement. It offers accounts in Pak rupee as well as foreign currencies. Standard chartered is committed to being a high performing organization, which delivers excellent results and standards of service and products to all our stakeholders. Standard chartered offers different kind of services to its customers. The bank charges its customer according to the schedule of charges. However, it also offers some complimentary services free.

Some of the products and services offered at SCB Peshawar branch are below 5.1. Accounts 5.2. Lockers 5.3. 24 hours Banking 5.4. E-Statements
5.5. Priority Treatment

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5.1. ACCOUNTS
Different kinds of accounts are offered by SCB. Accounts can be in Pakistan currency or some foreign currency. Some of the currencies in which accounts are available are PKR USD GBP JYP EUR Table No. 5.1. Source: Broachers of SCB Apart from the verity of currency accounts some of the other types offered are below a. Current account b. Easy saver account c. Xtra Mile Account Pak rupee account U s dollar account Great Britain pound a/c Japanese yen account Euro account

a.

Current Account

A current account can be opened in Pak rupee or US dollars. An individual Pak rupee account holder will also have access to 24 hours banking through the banks money link ATMs, SMS banking, phone banking, free of charge. It has the following features:

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a. Minimum balance requirement is Rs. 5000 per month b. Welcome pack provided for its PKR accounts c. Free 24 hours phone banking d. Free 24 hours deposit and withdrawal facilities through ATM/ CDM network e. Account can be accessed through any branch in Pakistan, every branch is customer’s branch b. Easy Saver Account

It is a type of saving account. It offers the dual advantages of earning profit on daily balances with liquidity and having full access to your money at any time. The profit on easy saver account will be calculated on the minimum balance held in the account each month, every month for a six-month period. The convenience of savings 24 hours a day by using the personal account link ATM card, and by accessing phone-banking services at the customer’s own preferred banking hours, is also provided. Its features are: a. Easy deposit and withdrawal from SCB anywhere in Pakistan
b. Minimum opening balance as low as PKR 5,000 and minimum

monthly balance requirement is 25,000. c. Profit is credited to account on a six monthly basis in January and July
d. Profit of 7% p.a. on all balances

e. Taxes and zakat are applicable

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c.

Xtra Mile Account “You enjoy the ride we will take you Xtra mile”

Now customers can open Xtra mile account and maintain an average balance of 15000. They will get a debit card, which they can use at all fuel stations across Pakistan. Account opening balance is 15000 only.

Apart from above mentioned accounts there are many different types of accounts that are available but could not be covered due to shortage of time. 5.2. LOCKERS Lockers are provided to customers who maintain an account with the bank. The fee varies with the size of the locker. At SCB, safe keeping service is also provided to customers. To acquire a locker,
a.

The customer must attach a copy of ID card with the locker rental form. He must be an account holder at the bank.

b.

5.2.1. Locker rent The rent of locker is determined by the bank. New charges for year 2008 are: a. Small size lockers are rented for Rs. 4000 p.a.
b. Large lockers are rented for Rs. 6000 p.a.

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5.3. 24 HOURS BANKING “Your business does not stop, neither do we” SCB provides 24 hours banking facility to its customer through every possible and convenient means their customers can think of. Some of the means of 24 hours banking are

a. ATM/ CDM b. Phones banking c. SMS banking d. Internet banking e. Standard Chartered alerts

a.

ATM / CDM

SCB’s branches are open 9 am to 5 pm but customers can have cash withdrawals and deposit facility 24 hours a day, 7 days a week through ATM and CDM. Through ATM cards, the banking has been made very easy for the customers because they can have access to their account anywhere at any time. b. Phone Banking

Customers can carry out the transactions through phone. With phone banking services now, customers can avail following facilities

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• • •

Balance inquiries Transactional details Cheque book request ATM cards replacement request

c.

SMS Banking

SCB offers SMS banking through this customer can check balance and last five transactions on the go. SMS alerts can also be activated and get informed on every transaction.

d.

Internet Banking

“You like to bank in your own time we provide you instant access online” Online, real time access to account can be done. Online banking is an internet banking service that allows customer to access your bank from the comfort of customer’s home or office. Though online banking facility customer can do following tasks • Account information, updated balance of account and keep track of transactions. • • Buy mobile prepaid cards online Check cheque status online

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• • • • • •

Download or request online statements Order free cheque books View all your accounts and credit cards in one window Pay credit card bills Transfer of funds online within Standard Chartered bank Email alerts can be activated and get informed about every transaction

e.

Standard Chartered Alerts “Your banking activities are important our alerts keep you updated”

Receive free SMS and email alerts on your transactions. Stay informed anywhere, anytime! Customers can receive bank accounts alerts and credit card alerts. Any deposit in account, withdrawal, transfer, or purchase on debit card can be received through alerts.

5.4. E-STATEMENTS Any customer with an e-mail can receive an e-statement and it is fast, reliable, and ultra efficient and it is designed to minimize paper work and to maximize convenience. Customers can receive advice through e-mail

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free. This offers customers 24-hour access to their financial standing. Customers receive e-statements as often as they have specified in their account opening forms. No bank charges are involved. All anyone needs to get started is an e-mail address. The e-statements can be delivered to more than one e-mail address.

5.5. PRIORITY TREATMENT “You have banking needs we will give you priority” As an exclusive program of personalized banking for those who wish to get more benefits out of their bank. SCB priority banking caters to the banking and investment needs of successful individuals who are busy with work and family commitments. Priority banking offers privilege and preferred financial solutions tailored according to the individual needs of the priority customer. Individual attention as well as international banking and investment opportunity is offered to meet the current and future needs of priority customers. Besides providing unique financial planning service, that provides customized solutions for the financial needs, investment and risk profile, and priorities in life of customers.

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SECTION 3 ANALYSIS CHAPTER 6 CRITICAL ANALYSIS

Critical analysis of an organization discovers its potential areas of improvement and evaluates its performance of the past period. It identifies the possible solutions to problems faced inside the bank and gives an insight of the opportunities, which can be exploited to reap benefits. The critical analysis is divided into 2 parts financial ratio analysis and SWOT analysis. The financial analysis is divided into two parts one is comparative analysis of the financial statements and other is ratio analysis of the bank based on its national performance. The different ratios calculations are taken from the semiannual financial statements for the period ended June 30, 2009 and June 30, 2008. The SWOT analysis comprise of the strengths it has, the weaknesses that are a part of it, the opportunities that it can exploit and the threats it faces from competitors. However, it encompasses generally the Peshawar main branch.

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6.1. FINANCIAL ANALYSIS
The financial analysis is based on comparative analysis of the financial statements and ratio analysis of the bank, based on the financial statements. 6.1.1. RATIO ANALYSIS The relationship of one item to another expressed in simple mathematical form is known as a ratio.6 Ratio analysis of the bank shows how the bank is performing in the competitive market for a certain period. Different ratios analyze the bank’s capability. Varied relations are drained based on this examination. Financial ratios have their own importance in analyzing the firm’s performance. An increase or decrease in one ratio does not mean anything superior or terrible it is always linked to another one that is more important. Considering the example of higher interest, if the bank wants to have most of the deposits of the market, it has to offer higher interest rates. This would bring the deposits, thus deposits will increase, but on the other hand, it will have to pay higher interest as well, thus decreasing the profit ratio. Financial ratio analysis involves the use of various financial statements. These statements do several things. First, the balance sheet summarizes the assets, liabilities, and owner's equity of a business at a moment in time, usually the end of a year or a quarter. Next, the income statement
6

(on-line) Available http://www.financaildictionary.com

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summarizes the revenues and expenses of the firm over a particular period, usually a year or a quarter. While the balance sheet represents a snap shot of the firm's financial position at a moment in time, the income statement depicts a summary of the firm's profitability over time. In this report, half-yearly statements of 2008 and 2009 are analyzed and compared. Balance sheet and profit and loss account are given at the end in annexure one and two. 1. PROFITABILITY RATIOS This ratio indicates how much a company’s revenue is eaten up by expense, sales, asset investment, and equity. a. Gross Profit Margin This ratio measures the margin of gross profit in the overall sale. The rest of the margin represents the portion occupied by the cost of services. Formula Gross profit margin = gross profit/ sales 2008 = 31.97% 2009 = 40.91% Graphical Representation Graph 6.1.

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Source: Half-Yearly Report of SCB 2008 & 2009 Interpretation SCB has been able to increase the level of gross margin from 31.97% in 2008 to 40.91% in 2009. The ratio means that SCB has earned Rs. 0.31 and 0.40 against sales of Rs.1 in 2008 and 2009 respectively. The higher the ratio the better is the cost controls compared to its sales revenue. If we look at the sales revenue volume, it is almost the same and there is hardly any difference or improvement during the one-year period. The increase in gross margin is because of the decrease in cost of services. b. Return On Assets The return on asset ratio indicates how much income each rupee of asset will generate on average. It shows the efficiency of the investment of business. Formula Return on assets = net income / total assets 2008 = 2.81 %

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2009 = 2.56 % Graphical Representation Graph 6.2.

Source: Half-Yearly Report of SCB 2008 & 2009 Interpretation This ratio indicates a low-income generation for each rupee of assets but it is a normal figure for commercial banks. The ratio tells us that SCB is able to earn 2.81% and 2.56% on single rupee investment in capital in the year 2008 and 2009 respectively. From the values, we can see that SCB’s return on assets has decreased showing that in 2009 the investments were not efficient compared to 2008. This decrease can be due to management’s inefficiency in controlling costs or decrease in net profit. c. Return On Equity This ratio indicates how much rupees were generated from each rupee investment by the shareholders. The net profit is the ultimate result of the operations of the firm. After all the claims are satisfied, the net profit is the

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share of the owner of the capital. The prime objective of the owner of the capital is to earn profit and if the firm is not able to achieve that objective, the firm is useless. Formula Return on equity = net income / common equity 2008 = 42757140/ 38715850 = 11% 2009= 4398915/38715850 = 11.3% Graphical Representation Graph 6.3.

Source: Half-Yearly Report of SCB 2008 & 2009 Interpretation This ratio tells us how much income will be generated for each rupee of investment made by the owners. From the above figures, we can see that the owners of the bank will get more return on equity in 2009 as compared

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to 2008. It is a very high return for shareholders and thus too much attractive for investors. 2. LIQUIDITY RATIOS Liquidity ratio indicates how quickly and easily a company can generate cash for its needs. They compare short-term obligations to short-term or current resources available to meet these obligations. From these ratios, much insight can be obtained into the present cash solvency of the firm and the firm's ability to remain solvent in the event of adversity. Some of the ratios used to identify liquidity of firm are following a. Current Ratio Current ratio compares the current liabilities of the bank with its current assets and measures the bank's ability to pay its current liabilities out of its current assets. The owner would like to have a low level of current ratio because current assets are supposed to be less productive. On the other hand, creditors would like to see a higher level of the liquidity ratio because it is a guarantee for them that their loans will be paid to them when they come due. Formula Current ratio = current assets / current liabilities 2008 = 0.86 2009 = 0.83 Graphical Representation Graph 6.4.

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Source: Half-Yearly Report of SCB 2008 & 2009 Interpretation The current ratio of SCB Pakistan was 0.86 in the year, 2008 and has decreased to 0.83 in 2009. There is no significant change. This means that for single rupee of current liability bank has less than a rupee of current assets. The bank is able in the short run to pay its current liabilities with its current assets. SCB needs to improve its current ratio. 3. DEBT RATIOS Debit ratios measure how much a company owes to others. The financial analyst uses the debt ratio to assess the relative size of a firm’s ability to pay off the debt. a. Debt To Asset Ratio It shows the proportion of assets financed by liabilities. Formula Debt to total asset ratio = total debt / total asset 2008 = 221860038/264617178= 83.8%

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2009=243548342/287538157= 84.7% Graphical Representation Graph 6.5.

Source: Half-Yearly Report of SCB 2008 & 2009 Interpretation These values show that in the year 2009 SCB has financed assets form liabilities more as compared to equity. The difference between the two figures is nominal. This means that for each Rs. 1 invested in the total assets of the Bank, the creditors have brought Rs. 0.83 and Rs. 0.84 during the years, 2008, and 2009 respectively. This ratio states to what extent the firm assets are financed through debt. A low debt ratio would indicate that we have sufficient assets to cover our debt load. Creditors and management favor a low debt ratio.

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b. Debt To Equity Ratio This ratio shows the relationship between the debt and equity in financing the assets of the bank. The SCB debt to equity ratio shows that the contribution of liabilities in financing the assets is much higher than owner's equity. The bank has Rs 221 million contributions from liabilities against Rs 38 million contributions from owner's equity in 2008. In 2009, the total liabilities were 243 million against equity of 38 million. Formula Debt to equity ratio = total debt / equity 2008= 221 million/ 38 million = 5.87 2009= 243 million/ 38 million = 6.3 Graphical Representation Graph 6.6.

Source: Half-Yearly Report of SCB 2008 & 2009

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Interpretation Debt to equity ratio shows that firm has increased its creditor-supplied fund in 2009 as compared to 2008. This means that for each Rs. 1 brought by the shareholders, the creditors have brought Rs. 5.87 and Rs.6.3 during the years 2008 and 2009 respectively, to finance the SCB. The lower the debt to equity ratio the lower the financial risk for the creditors and vice versa. The debt to equity ratio of Bank has inclined in the year 2009 as compared to 2009. A higher ratio shows great risk for creditors in case of insolvency and is not a good sign in case of attracting and satisfying the creditors.

4. ASSET ACTIVITY RATIOS Activity Ratios also known as the efficiency or turnover ratios, measures how effectively the firm is using its assets. This shows the efficiency of management in utilizing its resources in generating sales and collecting revenue. a. Asset Turnover Ratio This ratio tells the relative efficiency with which the bank utilizes its assets to generate sales. Wholesale Banking delivered a strong broadly based performance across all geographies, products, and customer segments. Formula Asset turn over = sales / total assets 2008 = 0.1 or 10%

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2009 = 0.05 or 5% Graphical Representation Graph 6.7.

Source: Half-Yearly Report of SCB 2008 & 2009 Interpretation The asset turnover ratio of SCB has decreased to 5% in 2009 as compared to 10% in 2008. The reason behind is that the assets have increased but the income has decreased. A decrease in asset turnover ratio means that firm’s assets are not utilized efficiently. 6.1.2. COMPARATIVE ANALYSIS Comparative statements are useful to the analyst because they contain not only the data appearing on single statement but also information necessary to the study of financial and operating trends over a period of years. These statements bring out more clearly the nature and trends of current changes

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affecting the enterprise; they indicate the direction of movement with respect to financial position and operating results. A comparative balance sheet shows the assets, liabilities and owners equity of a business as of two or more dates. Changes are important because they give an indication of the direction in which a business and its financial characteristics are developing. A comparative income statement shows the operating results for a number of accounting periods. a. Total Assets

There has been an increase in total assets in the year 2009 as compare to 2008 i.e. assets have been increased from 264 million to 287 million. Graph 6.8.

Source: Half-Yearly Report of SCB 2008 & 2009 b. Profit before Tax

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The year 2008 and 2009 has been not very successful for standard chartered bank profit before tax is 2,084,561 (2008) and due to economical recession decreased in 2009 i.e. 295,081 (in 000). Graph 6.9.

Source: Half-Yearly Report of SCB 2008 & 2009 c. Net Revenue

Net revenue is also decreased from 1,311,249 to 205,253 of 2008 and 2009 respectively. Graph 6.10.

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Source: Half-Yearly Report of SCB 2008 & 2009

d.

Earnings per Share

Basic diluted earnings per share decreased from 2008 to 2009 i.e. 0.34 to 0.05. Graph 6.11.

Source: Half-Yearly Report of SCB 2008 & 2009

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e.

Loans and Advances

The loans and advance given to other companies as well as customers have been also decreased from 125 million to 123 million. Graph 6.12.

Source: Half-Yearly Report of SCB 2008 & 2009 f. Net Investments

Total investments given by bank as collateral or held by bank for the year 2008 and 2009 are 29 million and 66 million respectively. Graph 6.13.

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Source: Half-Yearly Report of SCB 2008 & 2009

6.3. SWOT ANALYSIS
An analysis indicating towards the organizations strengths, weaknesses, opportunities, and threat is termed as SWOT Analysis. Such an analysis is very important for the management in retaining the strength, overcoming the weaknesses, capitalizing over the emerging market opportunities, and carving ways to successfully tackle with the threats and ultimately converting them in the strengths for the organization. SCB has some unique factors like being the oldest bank of the area, which adds to its worth. Its foreign background and the look of multinational institutions create appeal for people. The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. 6.3.1. STRENGTHS “A skill or capability that enables an organization to conceive of and implement its strategies” SCB benefit from a few points, which ultimately makes its backing, strengthened. Some of these points are as follows:

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1. Reputation SCB is a renowned bank all over the world. Its branches are spread across all the continents. It is the oldest foreign bank in Pakistan as well. In Pakistan, it has a wide network of branches. This enables customers to make transaction easily inside and outside of the country. This old presence of SCB in the region makes its reliability and its name is generally considered a name of quality and trust. As far as NWFP is concerned, the SCB brand is the most powerful and distinguished name in the region is banking sector. 2. Upper Class Clients Most of the customers of the bank are high-class people with huge deposits. SCB has become a status symbol because it is a foreign bank. SCB believes in maintaining fewer customers with big deposits. Thus, it would make the staff’s job also easier so that they can provide personalized services to their high-class customers. 3. Competent Human Resource SCB believes in hiring active and inspired candidate. Experience is not an important requirement for recruitment. Along with that bank has a good test and training schedule for the recruited candidates to select the best among them. At SCB Peshawar branch, most of the management has communication skills in local as well as foreign languages. The timings of the bank are strictly observed by the staff. All the staff members are supposed to reach the bank at the specified time. Being punctual is a normal practice at SCB. Even the interns were not allowed to leave early or come late.

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4.

Atmosphere Of Branch

The atmosphere of branch is professional and there is a healthy competition between the employees. The higher authorities are easily assessable.

5.

Diversified Product Line

SCB offers a wide range of products to its customers to suit their needs. It offers various kinds of accounts from local to foreign currency in different profit and interest ratios. Its credit and debit cards are also valuable to the customers as they can be used in more than 10,000 outlets across Pakistan providing ease to its customers.

6.

ATM Network

ATM is also a valuable service, which offers 24 hours facility to the customers to withdraw money from any one-link ATM machines. ATM of SCB is available at every city of Pakistan.

7.

Online Bank

The bank has established the EBBS system, which stands for electronic basic banking system. It has made all the branches of the SCB online, which means that they are interconnected with each other and in full

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coordination. Since it is a foreign bank, it gets benefit of being in touch with the latest technologies.

8.

Security

The data is highly secured in the bank as no one can send mails outside the banks as the system is centrally locked. Even USB cannot be connected to the computer thus; the data stored is highly secured. Security cameras are also attached and linked to the central head office Karachi and the regional head of the bank has facility to connect anytime to the cameras to check what is going on in the branch.

9.

Cash Deposit Machine

SCB is the first bank in Pakistan to introduce the technology of CDM i.e. Cash deposit machine. From this machine, customers can deposit 30 notes of any denomination at a time. They simple need to enter their account number and insert their money. It will be automatically added to the account.

10.

Handsome Stipend

Interns at SCB are paid a handsome stipend per week. They normally are provided with support and encouragement, which has its effect on their performance. It motivates the interns to work efficiently because they

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know that they would be appreciated and paid for their efforts. The stipend is given to the interns at the end of internship program.

11.

Location Of Bank

Location of any organization is very important. SCB main branch is located at hub of Peshawar sadder region. This provides a competitive edge to the bank.

12.

Priority Banking

The priority banking centers of the bank offer an unmatched where the customer receives highly privileged services in a highly elegant environment. It gives the chance of experiencing new standards in banking. Designed especially for those who appreciate only the finest things in life, Priority Banking offers the very highest levels of personalized banking to match customer’s unique status.

13.

24 Hours Banking

Banking through phone, SMS, internet, ATM, email etc has been made easy by SCB and this ease of connection with one account is biggest strength of the SCB. 6.3.2. WEAKNESS

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“A skill or capability that does not enable an organization to grow” Weaknesses, like strengths are a part of almost every organization. These weaknesses points out the potential areas of improvements and make the organizational behavior intelligent. A cumulative effort to overcome these flaws makes success possible. During internship program the weakness I witnessed and are visible were following 1. Old Building

The poor condition of building poses a great threat to the bank’s outlook. The Peshawar main branch is an old building, though the bank has tried to give a new look to it but still the employees are at risk. Even during internship program, a mishap occurred when the ceiling of the bank fell down but fortunately with no injuries. The building is centrally heated and air-conditioned but during summers, there was a lot of suffocation in branch due to nonworking condition of the generators.

2.

No Parking Area

The Peshawar main branch has no particular parking area. It is a great problem for employees as well as for the customers as the vicinity of bank is very congested. In peak hours there is a lot of rush outside the branch. This cause many problems to the customers. 3. Few Cash Counters

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There are only three cash counters in the main branch among which one counter is for foreign currency, because of which the customers have to stand in long queues waiting for their turn. However, the bank has CDM for deposits and drop box facility for cheques but mostly customers are not content by them.

4.

Under Staffed Branch

The main Peshawar branch is understaffed because of which customers have to wait for long time. Presence of only one CRO who is responsible to listen to all customers, solve their queries, fill deposit slips, provide account statements and balance enquiry etc are all the work done by one CRO which most of the time result in irritation for both CRO and customers. Similarly, operations department, which deals with cash, is also understaffed resulting in overtime by employees until 9 pm. The burden of work escalates the tension of the staff members. This also gives rise to bad mood and irrational behavior amongst the employees with each other. Thus, several departments are over loaded with extra work. This overburdens the employees, which leads to frustration and anger, provoking several other problems. This problem is explained in detail in the later part of the report.

5.

Low Salaries

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For a multi-national bank with such a posh and expensive image in Pakistan, the compensation package offered to employees is very disappointing. Salaries at the Peshawar branch are low and so are the fringe benefits offered, which are not satisfactory. 6. Nepotism

Nepotism was observed on part of the manger as well as the top management towards some staff members and even the interns.

7.

Employee Teams

However, the environment of branch is professional but still there are some groups of employees giving favors to each other and backbiting is normal practice in branch among these groups.

8.

Careless Attitude

Most of the time the organizations work under the logo of customer is always right but in SCB main branch customers are ignored, because of laid-back attitude of some of the employees, their work is delayed, and due to too much work burden, the phone of the bank is kept engaged to avoid customers call for balance enquiry. Some employees also provide account information to customers without proper confirming the customer’s identification. This may pose serious security problems. Secondly, the bank applies the status policies intensely. Clientele with small deposits are not given proper attention and consideration. The upper class clients with large deposits are shown opposite behavior and

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courteousness. This discriminatory behavior of employees is surely objectionable. Last but not the least the bank employees show irresponsible behavior while making use of bank resources at times. Stationary, for example is wasted in abundance.

9.

Poor Internet Links

Sometimes due to technical error the links are down of whole bank which result in problems for the customer because it is an online bank and cannot do anything unless and until the links are working which result in wastage of whole day.

10.

Employee Selection Process

However, SCB claims to have an organization structure which is very strong but still there are some drawbacks in it. It claims to offer jobs and internship on purely merit basis but this is not the true case. Proper tests and interviews are conducted but still preference and special attention is given to the people who have strong references or who have a large account in the bank. This policy does not suit the reputation of the bank.

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11.

No Female Staff

The first thing one notice on walking into the bank is the lack of female employees. At present, the bank employs two female personnel, all the rest being male. This does not fit well with the international image of the bank, giving out the negative impression that the bank policy might be discriminatory, when it comes to human resource utilization.

12.

Lack Of Advertisements

SCB lacks behind in advertisements, they only use direct selling as their strategy and are missing verity of ways of marketing. 13. Lack of Customer Seating Due to lack of customer, seating most of the customers have to stand and wait for their turn. On busy days especially on Monday, mostly the bank is crowded and some customers have to stand or leave come later. 14. Absence of Prayer Room In Cantt branch there is not a single prayer room. Officers are seen in different places offering their prayers and there is no proper arrangement for female staff.

6.3.3. OPPORTUNITIES “An area in the organization that, if exploited, may generate high performance”

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Opportunities, when exploited properly reap profits and earn success. They are usually a matter of time. They are to be sought, picked, and made use of, before anybody else gets up and do so. It is just about being smart and accurate. SCB also have some opportunities it can utilize and obtain good market position. Some of the opportunities SCB can make use of are hinted below.

1.

Attract Customers

The group from its survey and analysis of it companies has found out that there are many companies that are not satisfied with its current bank, so SCB with its superior service quality and long working hours can capture those customers.

2.

Investment In Agriculture Sector

To invest in those sectors which are given less importance i.e. agriculture, small and medium enterprises and of the entire range of retail products

3.

New Market

The greatest opportunity for the business sector that has manifested itself in present times is of course, the development of the Afghan nation. A peaceful and developed Afghanistan will present tremendous opportunities for all types of businesses. Peshawar, due to its strategic geographic position will no doubt play a crucial role in this economic development, making it an ideal spot for banks to invest in. NWFP is the place where the majority of purchases for the Afghan reconstruction are made,

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meaning that a lot of capital is being circulated in the region. A bank like SCB has the experience and resources to take full advantage of an opportunity of this magnitude. In addition, SCB can venture out to be one of the first banks to be established in the post war Afghanistan.

4.

New Products for Travelling Customers

With the globalization of the world, large numbers of Asian students are going abroad to study or to work. This is also true in Pakistan where every year hundreds of students leave for foreign countries to study. To take advantage of this development, SCB should concentrate on developing products and services, which will be especially beneficial to traveling students, taking advantage of this relatively new market segment. A lending program can also be developed for students going abroad for higher studies. 5. Conversion Facility Bank can also implement the conversion facility for example if the ATM receives the request for payment of amount in dollars then it should pay the customer in Dollars.

6.3.4. THREATS Threats are the unseen, futuristic, probable events that can occur and prove dangerous in consequences. Every organization is faced by some category of threats in its operations and functions. The prevailing condition indicates the following as the possible threats.

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1.

War Situation In The Province

The growing tension in Pakistan and especially in NWFP since the start of war on terror, has reached an unstable point now. The increase in bomb blasts has leaded the business activities to a gradual cease. The so-called war on terror would prove hazardous to the economy of the country. Especially in north and south of the province, the conditions are worse. Swat branch is closed due to these war situations.

2.

No New Investments

Due to current war like situation, investors will be blocked. Several countries have already asked their citizens to leave the territory of Pakistan. In such circumstances, new investors and customers will not be coming anymore to Pakistan for investment. This is one dangerous threat that is showing very much its presence on the atmosphere of Pakistan.

3.

Poor Law And Order Situations

The government must maintain the law and order situation in order to attract foreign investor. The suicide bomb blasts in all over Pakistan and daily blasts in Peshawar created an atmosphere of being unsafe amongst the customers residing. Incidents like these enormously affect the economies of countries. If the foreign investor will not feel safe in Pakistan, then why is it possible that he will invest money here? SCB seems to lose a number of possible foreign clients because of the uncertain law and order situation prevailing inside the country.

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4.

Competition In The Market

New banks are entering the banking industry, which are providing same services at lower rates thus posing a threat to the customers of the bank. They are also giving salaries, which are more as compared to the SCB, hence the bank has to face completion to keep their employees and attract new ones as well. SCB also faces competitors in the market. Citibank and Abn Amro bank are already online. These two banks also enjoy sound financial backing and come from a rich background. Also working are other foreign banks like bank Alfalah, emirates bank and Faysal bank. Bank Alfalah proposes serious threats to SCB in its auto loans market. Various domestic banks like MCB and others have also shown improvements. To survive amongst all these competitors, SCB needs to keep in touch with modern technology, keeping flexible and customer oriented policies, and adopting the latest trends of banking.

5.

Global Recession

Economy is one of the major external factors influencing the existence and functioning of a business entity. The economic situation in the year 2008 was dark. With global recession, and War on Terrorism, the business sector scenario was bleak. There was uncertainty in global markets and consumer confidence was badly hurt. Due to such calamities, business at banks also slowed down and the rate of bad debts went up, as many businesspersons went bankrupt. Even today, in the year 2010, the world is still not out of the danger zone as far as the economic recession is

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concerned and the business sector might take a long time in getting back on its feet. 6. Threats Of Substitutions

The threat of substitution is always there as any business, which can attract the money of the bank customer, is a threat, especially the government bonds.

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SECTION 4 FINDINGS AND RECOMMENDATIONS CHAPTER 7 RECOMMENDATIONS
“Advice is seldom welcome; and those who want it the most always like it the least.” Recommendations suggest improvements in areas, which have room for polishing and progress. Criticizing several factors at SCB Peshawar branch does not mean that these aspects are permanent flaws of the branch. Instead, it is intended that these mistakes be removed. For the confiscation of these errors, certain recommendations are forwarded. 7.1. Extension of Branches in NWFP There are only four cities in NWFP in which SCB is present, which is not enough so I recommend that branches should also be opened in cities like Nowshera and northern regions to accommodate the large number of its customers. 7.2. Check on Employees Activities

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During my internship I observed that employees miss-use the bank’s resources (e.g. telephone calls were made by the officers frequently for hours for personal use) so I recommend to have a strict check on them. 7.3. Advertisements The first thing that SCB needs to do is to prepare for the tough competition impending, especially the arrival of a formidable competitor such as Citibank. SCB at Peshawar needs to increase its advertising budget and be creative and diligent in promoting its brand. It should start putting up billboard signs; advertise in electronic and print media. The bottom line is that SCB should no longer take its superior position and image in the market for granted because soon new and better will be appearing in NWFP. It must vigorously market itself and introduce new products to stay at top. 7.4. Appointment of More Female Staff There are only two female employees in the bank, which needs to be increased because the female customers would feel more at ease talking to a female than a male. 7.5. Proper Guidance of the Less Educated Customers When the customers enter so they cannot read the different boards in the bank so they stand in the wrong queue due to which a lot of time is wasted so I recommend an officer to be on duty to guide these people properly, to fill up slips for them etc. 7.6. Increase Number of Cash Counters The bank should increase the number of cash counter, as this is main branch and centrally located which is the reason it is approached by all

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customers whether they are customers of the branch or not, this results in long queues. To avoid it the bank should calculate the time consumed by the customers in the bank along with the cost of making a new cash counter. The new cash counter is cost must balance the waiting time of the customer and the over burden on the employees. 7.7. Employee’s Behavior with the Customers The bank staff should be properly educated about the customer’s value. The bank should use the marketing approach and customer satisfaction should be taken into account. There should be no status discrimination between customers. The bank staff should be courteous to all customers. A customer is fascinated and brings other customers to the bank if the service is efficient and courteous. 7.8. Enough Space for the Customers Customers, waiting for their turns, should be provided with proper seating arrangements. Often it was visible that during peak banking hours many customers use to stand anywhere they wanted to. This created stress for the employees as well as other customers waiting for their job being done. A specific place should be reserved for the customers by placing chairs there. The staff should politely tell the customers to be seated until their work is ready. This would ease the job of the employees as well as clients will not bear the pain of being standing still and waiting. 7.9. Training and Development Those employees who are not aware of the banking practices they should be sent for on the job trainings instead of those employees who are well

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trained and they need a break from their daily activities instead of going to learn something. 7.10. Job Rotation The employees in the bank are only concerned about what their job is. They do not know what their other collogues are doing. So whenever any collogue is absent it creates problems for the employees and customers too. As no one else, know how to perform the activities of their fellow employee. To avoid such a situation it is important to train all employees through job rotation so that the banking activities continue in a normal way. 7.12. Revival of the Charges Most of the potential customers cannot fulfill the high balance requirements and high service charges. Bank should revise its policies on charges for services it provides. This will result in more satisfied and trustworthy relationship between clients and employees. Locker charges are very high, due to which half of the bank’s lockers are unsold. 7.13. ATM Network Problem I have found some problems with ATM network. Many customers have complaints that their requests placed on ATMs do not carry out. ATM cards are usually trapped in the machines and the customers are asked to come the next day to pick them. The ATM cards should be given back to the customers on the spot, as it is not a difficult or a time consuming task. It gives a lot of trouble to the customers. 7.14. Fair Employee and Interns Selection

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Candidates should be considered a merit for selection instead of their references. Bank administration should give proper training to the interns. They should educate them about the purpose of all the functions they perform.

7.15. Encourage Team Work The bank should be more participatory and team oriented. Departments and employees should not be separated from each other. All employees need to feel that they are part of one whole and they need to work as a group. Employees need to understand that their personal goals and those of the organization should match so that when they work to make the organization a success they will know that they are also pushing their own goals forwards. 7.16. Internship Program One expects a bank like SCB to be more professional and better organized than other banks in the region. However, when it comes to interns, the bank is irresponsible as compared to its competitors. There is a lack of a proper internship program and interns are trained in very discouraging manner. They are not taken seriously enough and are often neglected or given boring tasks just to get them out of the way and keep them busy. This is a very wrong of attitude for a professional bank like SCB to adopt. It needs to develop a proper and standard training program for interns and make sure that the trainees get a thorough understanding of the bank and its functions. 7.17. Work Burden

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There is a lot of works load on each employee, specially the junior staff. Usually, the CRO’s job is related with operations and customers relations. However, here in SCB they are also given targets to bring in new accounts. Due to this, they cannot attend the customers properly. In addition, their work is sometime delayed which causes the dissatisfaction among customers. CRO represents the whole organization so if their attitude is not good then whole organization’s impression is inferior. 7.18. Centralization Due to centralization, customers are facing problems. The head office is in Karachi and everything is approved from there. Before centralization, the account would be opened immediately and check books given on the spot. Now it takes at least two days for an account to start functioning and the check takes 5 to 6 days. It is recommended that steps should be taken to overcome this time delay. Some authority must be given to the branches.

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SECTION 5 ACTION PLAN CHAPTER 8 IMPLEMENTATION PLAN
Analyzing the bank’s performance in several departments and evaluating the strengths and weaknesses leads to some proposals. The implications of this suggestion are a more important issue. SCB main branch is generating profits and is targeting the market efficiently with its energetic young sales force. Its location at the centre of business sector in Peshawar is also adding to its easy accessibility by customers. Thus, the outlook requirements of the bank are almost complete. The place for improvement in the bank is inside. The underlying problem of several other problems that was observed during the internship period was that SCB is and “understaffed” bank. It has enough vacant room for new employees. This hitch is the root cause of many other problems. The situation that was taking shape of this inability is as follows: Over Burdened Staff The under staffing directs to unfair work distribution. Several employees, gets load of work, which is beyond their capacity. This leads towards errors and irregularities in their work. They very clearly wanted assistance in their work, so that their burden can be shared. Some of the tasks would

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not even complete even still working for 4 hours after the bank working hours had ended. Poor Customer Service Efficient, competent, and proficient customer service specifically at the counters and down the line in an organization shows its benefit and compensation later. The understaffed situation at SCB led the employees to adopt aggressive attitude with clients. Customers would not be listened with concentration and modesty. It was visible that often some customers would roam around with deposits, cash or visa payment slips, they wanted to be filled properly. This basic reason behind this was the extra load of work, which did not allow the employees to indulge in unnecessary talking. Ultimately, it was giving rise to the poor customer service. Action Plan Thus, now when the basic area of problem is identified, the understaffing, several measures can be taken into account to deal with this problem. There are three plans, which are suggested for dealing for this problem. a. Longer Duration Internship Program

(For students) This will be a short-term plan. The short-term plan is devised for students who would be given the chance to serve in the bank for a limited period. The bank normally offers an 8 weeks internship program. During this period the employees of the bank helps the interns to understand various procedures regarding different departments. After the coaching and

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teaching of these 6 or 8 weeks, the interns is able to comprehend most of the functions of the bank and he or she is able to follow the appropriate procedures, which is to be followed for the completion of that function. Therefore, at a time when an intern learns most of the jobs and can prove more beneficial to the bank than before, he is supposed to leave. The bank can set a particular quota for long internship duration. Many graduates after the completion of their degree roam around and wander uselessly. The bank can introduce a long internship program for its own benefit as well as these graduates. To keep the normal interns unaffected, it can reserve a special quota for these kinds of long duration interns. The selection can be made in the local branches. A specific date can be set for interviews and the applicants may be chosen on merit. The bank can offer a six months or a year internship program. The bank can make a promise that at the end of the program it can give a recommendation report about the applicant. To get good recommendation on this kind of a report the applicant will be motivated and will work hard. This will help him in getting experience as well knowledge about the delicacies of practical job. Most of the organization requires earlier experience in the field, thus SCB can be helpful in developing the youth into a positive direction as well. Since the name of SCB already means quality, this will build many people’s career in good organizations. The bank will benefit in the shape of obtaining a motivated and energetic employee and that also at a lesser cost than the normal employees obtain. The cost would be less because since these would be fresh graduates seeking experience and recommendation, hence they can take as interns. They can be paid the interns stipend and the main purpose of these interns would be to achieve experience and recommendation, not salary. Thus, they can prove

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economical workers for the bank. They would prove useful because after the initial 2 months period the applicant will be aware of the banks policies, he can be of great use to the bank. He will also be more devoted towards the customers, to win their recommendations and sympathies. More customer-devoted staff will improve the bank’s image also. If the worker shows extraordinary performance, the bank can also take him as a permanent employee. Since his last one-year’s performance and his attitude towards fellow colleagues and customers will be proofs of his ability or inability, the bank will find it easier to decide about him. b. Contract Staff

(For fresh graduates) The bank can also employ contract workers also. If the bank wants to be careful in choosing a better lot among the pool of candidates for its operations, it can offer contract seats. Contracts seats will be for applicants who will be employed on contract basis. This program will be different from the long internship program, as the above program will be just meant for fresh graduates and new applicants who will get recommendation and will be paid the interns stipend. However, full salary will be paid to contract workers. This program will include other banks personnel as well as experienced people. This can be a sort of brain drain technique that the bank can use. This will bring experienced, energetic, and capable employees to the bank, which can work hard and share the responsibilities of the other workers. As they will be on contract basis, so if the bank, after the completion of the contract period wants them to leave, it can exercise the liberty to ask them to leave. Alternatively, if the bank considers them

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worthy and wants to take use of their expertise, it can reassign them some job as well. c. Training And Development

(For permanent employees) This plan would be designed for the permanent employees of the bank, so that they can prove beneficial to the bank in future. This program would include picking up the most competent employee amongst the employee and sending him for further training and higher studies about the bank policies. Now the question arises that how can he be of any use to solve the problem of understaffing. The answer is that a more efficient, able, experienced and motivated employee can handle the job of several persons. The bank can select amongst the employees based on the performance the employees show and on achieving targets. When a selection about an employee is made, thus he will be sending for a period to get training and education. More emphasis is to be given to the sensitivities and delicacies involved in the operations of different functions. He would be taught specifically the policies about the bank, the broader goal the bank want to achieve and the ways of cumulative efforts that are required. His appointment is to be made rotational, thus he would work in other branches too and would understand the inner environment of the branches, and he will work in. This will help him in dealings in future. This kind of training program would enable the employee to understand the whole banking structure precisely. When returned to the branch, he can be of great use as his expertise on many issues will be authentic and accurate. The bank will bear all the expenses that are to be made during

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the training program. The employee in return is to be made bound to stay with the bank for over a period. This practice will create a more motivated, efficient and skillful staff. In addition, it will produce a competitive and healthy environment. A skilful employee would be more efficient and productive. Hence, his expertise would replace any additional employee place. This indirectly will replace the expenses; the bank has endured during the training and development program. The above plan if implemented can produce better results for the bank. The short-term plan would save the bank from unnecessary costs. The long internship program is economical as well as beneficial. Similarly, the contract workers can be experienced workers, whose expertise of invaluable to the bank. The long-term plan would surely cost a little, but the bank can reap its fruitful benefits in the end. Wrapping Up Though 2009, has not been a year of significant progress Still it has achieved a number of strategic goals. In 2009, SCB made a number of acquisitions and alliance complementing organic growth. Most recently, it entered into an agreement to acquire Union Bank Limited.

This will give SCB competitive advantage in its chosen markets. In its unique position as an international bank with strong franchise, Standard Chartered combines an in-depth knowledge of local markets with global product expertise to offer effective financial solutions. The bank

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capitalizes on its onshore presence across Asia, Africa, and the Middle East to offer customers convenient and reliable access to the widest range of currency markets, to date local market information, country-specific global risk management strategies, and customized capital raising and liquidity management solutions. With 150 years of emerging market experience, SCB’s in-depth understanding of the local market is unrivaled by most other financial institutions, especially in the currencies of Asia, the Middle East and Africa. It is able to meet the needs of local corporate, multinational companies, development organizations, investment and financial institutions, and central banks around the world. Understanding that each customer’s needs are unique, Standard Chartered customizes Client Solutions for risk management, yield enhancement, liquidity management, and debt financing. Innovative Client Solutions standard chartered leverage a global perspective to develop creative and effective financial solutions based on its in-depth local market knowledge and understanding of its customers’ needs. One-Stop Range of Products and Services it has a full range of foreign exchange and risk management solutions to meet the needs of clients across the world. It serves both Consumer and Wholesale Banking customers. Consumer Banking provides credit cards, personal loans, mortgages, deposit taking and wealth management services to individuals and small to medium sized enterprises. Wholesale Banking provides corporate and institutional clients with services in trade finance, cash management, lending, securities services, foreign exchange, debt capital markets, and corporate finance.

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Standard Chartered is well established in growth markets and aims to be the right partner for its customers. The Bank combines deep local knowledge with global capability. The Bank is trusted across its network for its standard of governance and corporate responsibility as well as its commitment to making a difference in the communities in which it operates. SCB believes that good governance and good performance reinforces each other. In the past year, there has been an intensified focus on regulation in the financial services industry and it is working even more closely with regulators around the world.

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PERSON INTERVIEWED
Name Of Person Interviewed M. Adil Khan Mr. Akmal Khan Khattak Mr. Mughes Ahmad Mr. Zulfiqar Ahmad Mr. Zeshan Miss. Mehwish Miss. Noor Ul Ain Designation Floor Manager Customer Relation Manager Accounts Manager Banca Financial Consultant Locker In Charge Teller Customer relations officer Department Sales Department Priority Banking Section Sales Department Sales Department Operations Department Operations department Sales department

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BIBLIOGRAPHY
1. Van Horne, James c. In addition, Wachowicz, jr., john m., (1998).

Fundamentals of financial management. Tenth edition. USA: prentice hall, inc

2. Dale Kennedy, Ralph and Yarwood McMullen, Stewart. (1973). 6"'Edition, Financial Statements; Form, analysis, and interpretation. Illinois: Richard D. Irwin Inc.

3. Bateman, Thomas S. and Snell, Scott A., (1996). Management

Building Competitive Advantage. Third Edition. USA: Richard D. Irwin, Times Mirror Higher Education Group, Inc.
4. Standard chartered (2009). Brochures. Peshawar branch.

5. Standard chartered (2008 & 2009). Semiannual reports.

6. Hamid, Sannya, “internship report on standard chartered”,

department of business administration, IMS, session 2008

7. (On-line). Available. Http://www.standardchareted.com. 8. (On-line). Available. Http://www.wikipedia.com

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9.

(On-line). Available. Http:// www.economist.com

10. (On-line). Available. http:// www.standardchartered.com

ANNEXURE

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