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Internship Report on NBP

Internship Report

NATIONAL BANK OF PAKISTAN


District Branch Rajanpur: Code (0392) Rajanpur, Punjab

Submitted To:

Sir, Zahid Ali


(Internship Supervisor)

Submitted By: Roll No: Session: Submitted Date: Contact No:

Rahib Hussain M. Sc Accounting & Finance-B-74 2010-2012 28-11-2012 0334-6681566

Internship Report on NBP

Acknowledgment
I have taken efforts in this project. However, it would not have been possible without the kind support and help of many individuals and organizations. I would like to extend my sincere thanks to all of them.

I would like to express my gratitude towards my parents, my internship supervisor Mr. Zahid Ali & member of National Bank of Pakistan for their kind co-operation and encouragement which help me in completion of this Internship Report.

I would like to express my special gratitude and thanks to Bank persons for giving me such attention and time.

My thanks and appreciations also go to my department in developing the Report and people who have willingly helped me out with their abilities.

Internship Report on NBP

Dedication:

This internship report is dedicated to my Parents and all staff of NATIONAL BANK OF PAKISTAN Rajanpur branch from whom I got training without whose efforts, supervision and also prayers I would have been nothing. My parents who ever wished to see me as a successful man in every field of my life praying for their long and prosper life.

Internship Report on NBP

Table of Content
Topics Page No Executive Summary05 Brief introduction of the organizations business sector.07 Brief history.08 Vision.13 Mission...13 Organizational Hierarchy Chart...14 NBP Rajanpur Branch Hierarchy Chart.15 Business Volume 2011.....16 Product & Services..16 Product lines...16 Treasury products..28 Derivatives products..28 Services..28 Trade services.28 Competitor...29 Public sector...29 Private sector..29 Brief introduction of all the departments.30 Cash department30 Clearance department.30 Advances department.........30 Remittance department...30 Deposit department30 Foreign exchange department.30 Credit & risk management..30 Human resource management.30 Comments on the organizational structure...31 A brief introduction of branch where I did my internship..32 Starting and ending dates of my internship..32 Names of department in which I got training...32 Detailed description of the tasks assigned during the internship program32 Deposits.......32 Account opening..33 Advances department..33 Collections.......35 Trade finance...35 Foreign exchange.35 Ratio Analysis....36 Future prospects of the organization..53 Conclusions....53 Recommendations.....54

Internship Report on NBP

EXECUTIVE SUMMARY
This report is about my internship program with National Bank of Pakistan. In this comprehensive report, I have discussed about every major aspect of the bank, which I observed and perceived during my internship program. In this report you will be able to find the detail about the bank, right from its incorporation to the current position. Along with it, the processes, policies and procedures of the bank are also discussed in detail. As the main purpose of internship is to learn by working in practical environment and to apply the knowledge acquired during the studies in a real world scenario in order to tackle the problems using the knowledge and skill learned during the academic process. National Bank of Pakistan maintains its positions as Pakistans premier bank determined to set higher standards of achievements. It is the major business partner for the Government of Pakistan with special emphasis on fostering Pakistans economic growth through aggressive and balanced lending policies. I have completed my Internship at National Bank of Pakistan District Rajanpur Branch Code (0392). I have started my six week internship on 23-07-2012 and got training regularly in various departments of the bank up to 15-09-2012 I have explained the working process of the departments that I have worked in as well as the departments functioning there. I worked in the following departments; Deposit, Advances, Accounts Opening, Bills & Remittances, Clearing Section, Government Section. After my Internship at National Bank of Pakistan, I am of the view that, the bank has historically been the financial arm of the government and has enjoyed the blessings of state support in the form of huge public-sector funds and deposits.

The bank has to ensure that, quality of human resource is needed to register marked measurable improvement both in terms of skills and productivity. NBP, being the only 5

Internship Report on NBP lending arm to the government for public sector development, should design, develop and deliver products and services for economic growth. NBP should provide sustainable financing for growth of industries of critical national importance such as energy, education, healthcare, transport, shipping, Research and Development. NBP should identify new venues for financing for economic growth- curbing poverty and unemployment

Internship Report on NBP Brief introduction of the organizations business sector:

National bank of Pakistan incorporated under the national bank of Pakistan ordinance 1949 and listed on the all stock exchanges in Pakistan its head office is situated at chundrigar road Karachi. The national bank is engaged in providing the commercial banking and related services in the Pakistan and overseas. Bank also handles the treasury transactions for the government of Pakistan as agent to the state bank of Pakistans. National bank of Pakistan (NBP) is one of the leading and first government recognized bank in Pakistan. NBP was established in November 9, 1949. And it started functioning from November 20, 1949. There are certain characteristics, which sets NBP apart from other nationalized commercial banks. The most important characteristics of NBP is that it works as an agent of the State Bank, where State Bank does not have a branch of its own, The NBP also acts as a trusty to the National investment trust (NIT), which is one of the premier financial institution of the country. It is charged with the responsibility to mobilize of the mobilizing small savings. The establishment of the NBP thus signaled the achievement of another milestone in the development of banking industry in Pakistan. National Bank of Pakistan is one of the pioneer financial institutions of the country, which is working actively in all the field of financings

National bank of Pakistan is the largest commercial bank operating in Pakistan. It has redefined its role and has moved from a public sector organization in to a modern commercial bank. NBP headquarters in Karachi and has over 1200 branches country wide. National bank provide both public commercial sector banking services. NBP consolidated its position as one of the top players in corporate and investment banking of the country in 2010 and has built a strong customers relationship with the premier corporate clients NBP work to; Meet expectations through Market-based solutions and products. Reward entrepreneurial efforts. Create value for all stakeholders. 7

Internship Report on NBP NBP aim to be people who; Care about relationships. Lead through the strength of commitment and willingness to excel. Practice integrity, honesty and hard work. Believe that these are measures of true success. Bank has confidence that tomorrow it will be Leaders in the industry. An organization maintaining the trust of stakeholders. An innovative, creative and dynamic institution responding to the changing needs of the internal and external environment

Brief history:

National bank of Pakistan was established on November 8, 1949 through passing of a special ordinance in the national assembly. The establishment is came due to the reason when newly born country was facing economic crises. To get rid of the intervention of from the reserve bank of India a self owned and operated central bank by the name of state bank of Pakistan was formed in July 1948 to carry on the responsibilities of issuing the currency and most importantly controlling the flow of money in side the country.

The bank commenced its operations from November 20, 1949 at 6 important jute centers in the East Pakistan and directed its resources in financing of jute crop. The banks Karachi and Lahore offices were subsequently opened in December 1949.the bank acts as the agent to the state bank of Pakistan for handling provincial/federal government receipts and payments on their behalf. The bank has also played an important role in financing the countrys growing trade, which has expanded through the years as diversification took place. Today the bank finances import/export business to the tune of RS. 52.7 Billion Where as in 1960 financing under this head was only Rs.1.54 billion After the quick growth of 50s NBP branches worked to establish itself as sound & stable Bank in the early 60s. The expansion efforts were put into force during these years and Marketing efforts were made to target specific market. The bank also plays a vital role in 8

Internship Report on NBP financing the countrys growing trade which was extended through the years as diversification took place. National bank has earned recognition and numerous awards internationally .it has been the recipient of the bank of the year 2001,2002,2004 and 2005 award by the banker magazine the best foreign exchange bank Pakistan for 2004,2005,2006 and 2007.it has also been presented a recognition award 2004 for having a gender sensitive management by WEBCOP AASHA besides other awards.

SUMMARY OF ACHIEVEMENTS AND GROWTH OF NBP: The precise summary of National Bank of Pakistan regarding its countrywide and overseas operations is as follows: 1949 National Bank of Pakistan (NBP) was established under the National Bank of Pakistan Ordinance 1949 and was 100% govt.-owned. NBP acted as an agent of the Central Bank wherever the State Bank did not have its own Branch. It also undertook Government Treasury operations. Its first branches were in jute growing areas in East Pakistan. Offices in Karachi and Lahore followed. 1950 NBP established a branch in Jeddah, Saudi Arabia. The Bank in 1950 had one subsidiary The Bank of Bahawalpur on December4, 1947 by the former Bahawalpur State 1955 By this time NBP had branches in London and Calcutta. 1957 NBP established a branch in Baghdad, Iraq. 1962 NBP established a branch in Dar-es-Salaam, Tanganyika. 1964 The Iraqi government nationalized NBP's Baghdad branch. 1965 The Indian government seized the Calcutta branch on the outbreak of hostilities between India and Pakistan. 9

Internship Report on NBP 1967 The Tanzanian government nationalized the Dar-Es-Salaam branch. 1971 NBP acquired Bank of China's two branches, one in Karachi and one at Chittagong. At separation of East Pakistan NBP lost its branches there. NBP merged with Eastern Mercantile Bank and with Eastern Bank Corporation. 1974 The government of Pakistan nationalized NBP. As part of the concomitant consolidation of the banking sector, NBP acquired Bank of Bahawalpur (est. 1947). 1977 NBP opened an offshore brain Cairo. 1994 NBP amalgamated Mehran Bank (est. 1991). 1997 NBP's branch in Ashgabat, Turkmenistan commenced operations. 2000 NBP opened a representative office in Almaty, Kazakhstan. 2001 State Bank of Pakistan and Bank of England agree to allow only 2 Pakistani banks to operate in the UK. NBP and United Bank agreed to merge their operations to form Pakistan International Bank, of which NBP would own 45% and United Bank 55%. 2003 NBP received permission to open a branch in Afghanistan. 2005 NBP closed its offshore branch in Cairo.

Nature of National Bank of Pakistan National Bank of Pakistan was incorporated in Pakistan under the National Bank of Pakistan Ordinance, 1949 and is listed on all the stock exchanges in Pakistan. The bank is engaged in providing commercial banking and related services in Pakistan and overseas. The bank operates 1,249 (2007:1,232) branches in Pakistan and 22 (2007:18) overseas branches (including the Export Processing Zone branch, Karachi). Under a Trust Deed, 10

Internship Report on NBP the bank also provides services as trustee to National investment Trust (NIT) including safe custody of securities on behalf of NIT. The nature of responsibilities of the Bank is different and unique from other banks/financial institutions. The bank also handles treasury transactions for the Government of Pakistan as an agent to the State Bank of Pakistan for handling provincial/Federal Government receipts and payments on their behalf. The National Bank of Pakistan has also played an important role in financing the countrys growing trade, which has expanded through the years as diversification took place. SUMMARY OF DIFFERENT FUNCTIONS: The bank is providing all banking services of mercantile and commercial banking permissible in the country, which include: Accepting of deposits of money on current, fixed, saving, term deposit and profit and loss sharing accounts. Borrowing money and arranging finance from other banks. Advancing and lending money to its clients. Financing of projects, including technical assistance, project appraisal through long term/ short term loans, term finance and musharika certificates, etc. Buying, selling, dealing, including entering into forward contracts of foreign exchange. Financing of seasonal crops like cotton, wheat, rice, sugar cane, tobacco, etc. Receiving of bonds, valuables, etc. for safe custody. Carrying on agency business for any description other than managing agent, on behalf of clients including Government and local authorities.

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Internship Report on NBP Generating, undertaking, promoting, etc. of issue of shares and, bonds etc. Transacting guarantee and indemnity business Joint venturing with foreign dealers, agents and companies for its representation abroad. Participating in World Bank and Asian Development Banks lines of credit. Providing personalized Hajj services to intending Hajjis

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Internship Report on NBP

Vision: To be recognized as a leader and a brand synonymous with trust, highest standards of services quality, international best practices and social responsibility

Mission: Institutionalizing a merit and performance culture Creating a distinctive brand identity by providing the highest standards of services Adopting the best international management practices Maximizing stakeholders value Discharging our responsibility as a good corporate citizen of Pakistan and in countries where we operate

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Internship Report on NBP

Organizational Hierarchy Chart

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Internship Report on NBP

NBP Rajanpur Branch Hierarchy Chart

Manage

Foreign exchange

Remittance

Clear

Pension

Account Opening

Puncing

Cashier

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Internship Report on NBP Business Volume:

YEAR Revenue (Rs. In 000)

2011 95,325

Deposits (Rs. In 000) Advances (Rs. In 000) Total assets Share holder equity Earnings per share No of Employees

927,421 525,045 1,149,577 110,520 10.47 1 4,481

Products & Services: Product lines Current Deposits These are payable to the customer whenever they are demanded. When a banker accepts a demand deposit, he incurs the obligation of paying all cheques etc, drawn against him to the extent of the balance in the account. Because of their nature, these deposits are treated as current liabilities by the banks. Bankers in Pakistan do not allow any profit on these deposits, and customers are required to maintain a minimum balance, failing which incidental charges are deducted from such accounts. This is because Current Deposits may be withdrawn by the depositors at any time, and as such the bank is not entirely free to employ such deposits. Current Accounts/ Basic Banking accounts are opened, on proper introduction and submission of required documents along with initial deposit prescribed from time to time. Basic banking accounts are opened for an individuals (single or joint) only whereas current accounts are opened for individuals (single or joint) Charitable institution, provident and other funds of benevolent nature of local bodies, autonomous corporations, companies, associations, educational institutions, firms etc. 16

Internship Report on NBP and in all other cases where the accounts are too opened under the order of a competent court of law. No profit is paid on the balances of current/basic banking accounts. The bank is authorized to deduct service charges (incidental charges) on current accounts levied through its half yearly schedule of charges, in case the average balance falls below the minimum balance as prescribed by the bank. No balance maintenance condition is applied on basic banking account.

PLS Saving Deposits: In Pakistan a Savings Deposits Account can be opened with a very small amount of money, and the depositor is issued a cheque book for withdrawals. Profit is paid at a flexible rate calculated on six monthly bases under the Interest Free Banking System. There is no restriction on the withdrawals from the deposit accounts but the amount of money withdraw is deleted from the amount to be taken for calculation of products for assessment of profit to be paid to the account holder. It discourages unnecessary withdrawals from the deposits. In order to popularize the scheme the SBP has allowed the Savings Scheme for school and college students and industrial labour also. The purpose of these accounts is to inculcate the habit of savings in the constituents. As such, the initial deposits required for opening these accounts are very nominal. iNBP charge Rs.500 for opening of PLS Savings deposits. The salient features of profit and loss sharing and saving accounts of NBP are as fallows: 1. These accounts can be opened by individuals in their own single or joint name. The PLS savings account can also be opened for provident fund or other benevolent funds of companies, firms, organizations, NGOs and educational institutions. 2. PLS saving account can be opened with a minimum amount of Rs.500/- only 3. To share in the profit a minimum balance of Rs.500/- must be maintained in the account. The minimum balance on sixth and last of month will qualify for the profits. The profits will be calculated on the basis of monthly minimum balance for the periods of six months i.e. from January to June and July to December 4. The head office of NBP determines the profit or loss on PLS saving deposits and advice its branches the rate and time of distribution of these profits. 17

Internship Report on NBP 5. There shall be no restrictions on maintaining the maximum balance in PLS saving account. 6. On the first day of Ramzan each year the Zakat at the rate of 2.5% will be deducted from these deposits on the balance of that day. But if depositors affix an affidavit of Zakat deduction along with account opening form or he is a nonMuslim, no Zakat will be deducted from his account.

Fixed Deposit Account (Time Deposits): The deposits that can be withdrawn after a specified period of time are referred to as Fixed or Term Deposits. The period for which these deposits are kept by the bank ordinarily varies from three months to five years in accordance with the agreement made between the customer and the banker. Profit/Return is paid to the depositors on all fixed or Time deposits, and the rate of profit/Return varies with the duration for which the amount is kept with the banker. By lending out or investing these funds, the bank earns more than the Profit/Return that it has to pay on them to the depositors.ii By giving an advance notice to the bank the deposit can be withdraw from the bank before the expiry of the period. Fixed deposit accounts have higher rate of interest as compare to other accounts. The rate of interest rises with the length of period and the amount of deposit. The bank grants to the depositor a fix deposit (FDR) which is not transferable to any other person. The silent features of fixed deposit account of NBP are as fallows 1. The PLS term deposit are opened for individuals in their own single or joint names, companies firms and other organizations. 2. The PLS term deposit receipt are issued for any amount. There is minimum or maximum limit or deposits in a single term deposit account. 3. PLS term depositors may be allowed some facilities against the security of these receipt credits, after making Lien on the relevant receipt and subject to recovery of service charges. 4. Under term deposit scheme the depositors not cease to earn the profit immediately, after the respective maturity date.

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Internship Report on NBP

Foreign Currency Account: Government of Pakistan has introduced many important reforms in Foreign Exchange Control in the country since February, 1990, for the purpose of strengthening the Foreign Exchange Reserves. One of these reforms relates to foreign currency accounts, which can be opened in United States Dollars, Pound Sterling, Euro and Japanese Yen in any of the authorized branches of commercial banks throughout the country.iii Foreign currency accounts are opened, on proper introduction and submission of required documents along with an initial deposit prescribed from time to time. Rates of return on foreign currency deposits are subject to fluctuation as determined in accordance with State Bank of Pakistan directives and will be paid on six monthly basis whereas the return on term deposit/SNTD will be paid on maturity or as prescribed by SBP. The bank shall have no responsibility for or liability to the account holders for any diminution due to taxes imposed or depreciation in the value of funds credited to the account whether due to devaluation or fluctuation in the exchange rate or otherwise.

Products: NBP Premium Aamdani: NBP Premium aamdani is a retail product of the bank. The amount of investment required for this account is Rs. 20,000/-to Rs. 5,000,000.The investment period is 5 years. Zakat and withholding tax will be deducted as per rules. In NBP premium aamdani, the account holders have benefit of free demand draft, pay order; free cheque book and NBP cash card (ATM+Debit). The Financing facility is available up to 90% of the deposit value. Profit paid every period as follows:

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Internship Report on NBP NBP Premium Saver: NBP Premium saver is a retail product of the bank. The minimum saving balance of Rs. 20,001 and a maximum balance of Rs. 300,000 are required for opening a premium saver account. Two debit withdrawals allowed in a month and no limit on number of deposit transactions. The profit is calculated monthly and Paid on half yearly basis. Free NBP Cash Card (ATM + Debit) facility is available to account holder.

National Income Daily Account (NIDA): The scheme of National income daily account was launched in December 1995 to attract corporate customers. It is a current account scheme and is part of the profit and loss system of accounts in operation throughout the country. Deposits in the NIDA accepted on the condition that the depositor shall always maintain a minimum balance as prescribed by the bank in his account. In the event however, that any depositor wishes to withdraw the amount and the balance in his account is less than the required amount, the account will be converted to the ordinary PLS SB account for the purpose of calculating profit.

Advances: National Bank of Pakistan plays a pivotal role in translating the government's development plans in terms of growth in industrial, commercial and agricultural sectors in Pakistan. Accordingly the Bank has formulated its Credit Policy under the guidelines of SBP-the Central Bank of Pakistan. In normal circumstances the bank has consider following factors in view before framing financing policies. Capital position Risk and profitability of various types of financing Stability of deposits Economic conditions Influence of monetary and fiscal policies Ability and experience of bank personnel Credit needs of the area served. NBP Saibaan 20

Internship Report on NBP The NBP Saibaan is retail product of the bank. It has different product items which are home purchase, home construction, home renovation and purchase of land plus construction. If anyone has a Home Finance Facility outstanding with another bank he can have it transferred to NBP through a hassle-free process. these products is as fallows. TYPE ADVANCE Home Purchase (House OF Financing Amount or Rs. 35 Million Financing Period 3 to 20 years Debt to equity Ratio 85:15 (maximum) Rs. 35 Million 3 to 20 years 85:15 (maximum) Rs. 15 Million 3 to 15 years 80:20 (maximum) of land Plus Rs.35 Million 3 to 20 years 80:20 (maximum)
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A brief description of

Apartment) Home Construction Home Renovation Purchase Construction

NBP Advance Salary: The NBP Advance salary has been the flag-ship product for NBP. NBP Advance Salary, the leading personal loan product of the country, is maintaining its inimitability ever since it was launched. This was only possible due to its swift growth and remarkable loan disbursement of over 118 billion.v You can avail up to 20 net take home salaries with easy repayment installments. Its hassle free acquisition with no prior formalities and easy availability in a short turnaround time is attributed as the most distinguishing features of the product. The product is offered countrywide. The terms and conditions of NBP Advance salary is shown on next page:

NBP Cash & Gold: With NBPs Cash & Gold, the customers meet their need for ready cash against their idle gold jewelry. The rate of mark up is 15.5% p.a. This product has following features Facility of Rs. 35,000 against each 10 grams of net contents of gold No maximum limits of cash 21

Internship Report on NBP Repayment after one year Only gold ornaments acceptable Weight and quality of gold to be determined by NBP's appointed schroffs No penalty for early repayment

Students Loan Scheme: Pursuant to the announcement made by the Federal Finance Minister in his 2001-2002 budget speech, a Student Loan Scheme (SLS) for Education was launched by the Government of Pakistan in collaboration with major commercial banks of Pakistan (NBP, HBL, UBL, MCB and ABL). Under the Scheme, financial assistance is provided by way of Interest Free Loans to the meritorious students who have financial constraints for pursuing their studies in Scientific, Technical and Professional education within Pakistan. The Scheme is being administered by a high powered committee comprising Deputy Governor, State Bank of Pakistan, Presidents of the commercial banks and representative of Ministry of Finance, Government of Pakistan. NBP Karobar- Presidents Rozgar Scheme: The solution of Pakistans major socio-economic problems primarily lies in the development and growth of small & micro businesses. These will not only provide employment opportunities to ever-growing population demand but will also become the catalyst for breaking the vicious circle of poverty. In this regard, NBP has developed a full range of Products under the Presidents Rozgar Scheme with a brand name of NBP KAROBAR. The scheme will be offered to eligible young and literate citizens of Pakistan, falling within an age group of 18-40 years having a minimum qualification of Matriculation (except for females in the PCO/Tele-center product). The eligible borrowers will be required to make a down payment of 15%. Asset and Life & Disability insurances will be mandatory under this scheme. The 15% down payment will include 1st years asset insurance premium. However, the cost of life and disability insurance will be borne by GOP. The mark-up rate for the 1st year will be 12% and for the subsequent years it will be 1 year KIBOR + 2%. Fifty percent (50%) of this rate will be paid by the customer i.e. 6% and the balance of 6% will be borne by GOP. Additionally, first 10% of 22

Internship Report on NBP the losses under the scheme will be taken-up by GOP. Initially, under the Presidents Rozgar scheme, NBP will offer following products: a) NBP Karobar Utility Store (under a Franchise with Utility Stores Corporation) b) NBP Karobar Mobile General Store (without USC Franchise) c) NBP Karobar Transport d) NBP Karobar PCO e) NBP Karobar Tele-center

Corporate Advances: Cash Finance: This is a very common form of borrowing by commercial and industrial concerns and is made available either against pledge or hypothecation of goods, produce or merchandise. In cash finance, a borrower is allowed to borrow money from the banker up to a certain limit, either at once or as and when required. The borrower prefers this form of lending due to the facility of paying markup/services charges only on the amount he actually utilizes. If the borrower does not utilize the full limit, the banker has to lose return on the un-utilized amount. In order to offset this loss, the banker may provide for a suitable clause in the cash finance agreement, according to which the borrower has to pay markup/service charges on at least on self or one quarter of the amount of cash finance limit allowed to him even when he does not utilize that amount.

Running Finance/ Overdraft: This is the most common form of bank lending. When a borrower requires temporary accommodation his banker allows withdrawals on his account in excess of the balance which the borrowing customer has in credit, and an overdraft thus occurs. This accommodation is generally allowed against collateral securities. When it is against collateral securities it is called Secured Overdraft and when the borrowing customer cannot offer any collateral security except his personal security, the accommodation is called a Clean Overdraft. The borrowing customer is in an advantageous position in an overdraft, because he has to pay service charges only on the balance outstanding against him. The main difference between a cash finance and overdraft lies in the fact that cash 23

Internship Report on NBP finance is a bank finance used for long term by commercial and industrial concern on regular basis, while an overdraft is a temporary accommodation occasionally resorted to.

Demand Finance: When a customer borrows from a banker a fixed amount repayable either in periodic installments or in lump sum at a fixed future time, it is called a loan. When bankers allow loans to their customers against collateral securities they are called secured loans and when no collateral security is taken they are called clean loans. The amount of loan is placed at the borrowers disposal in lump sum for the period agreed upon, and the borrowing customer has to pay interest on the entire amount. Thus the borrower gets a fixed amount of money for his use, while the banker feels satisfied in lending money in fixed amounts for definite short periods against a satisfactory security.

Remittances: Demand Drafts: The National Bank of Pakistan provides demand drafts at very reasonable rates with safety, speedy and reliable way to transfer money. Any person whether an account holder of the bank or not, can purchase a Demand Draft form a bank.

Travelers Cheques: They are generally issued for the convenience of person travelling abroad, but some Pakistani banks issue them in Pakistan currency also for use within the country as well. Before issuing, the bankers receive an amount equal to the face value of the cheques, and also charge a small commission. The travelers cheques are for fixed amount and are treated as Order cheques payable only to the purchaser whose specimen signature appears on each travelers cheque itself. Foreign currency travelers cheques are issued and encashed in accordance with the provisions of the Exchange Control Regulation Act, 1947. While making payment, the paying banker must insist that the holder signs in his presence.

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Internship Report on NBP Letter Of Credit: Letters of credit are very useful instruments in facilitating commercial relations between businessmen at various places. Letter of credit state the limit of the credit and the time during which it is held at the disposal of the grantee, but they are neither negotiable nor transferable. Letter of credit may be revocable. There are many kinds of letter of credit such as Revolving credit, Back to Back credit, Claused credit etc. NBP is committed to offering its business customers the widest range of options in the area of money transfer. If you are a commercial enterprise then our Letter of Credit service is just what you are looking for. With competitive rates, security, and ease of transaction, NBP Letters of Credit are the best way to do your business transactions.

Foreign Remittances : To facilitate its customers in the area of Home Remittances, National Bank of Pakistan has taken a number of measures to: Increase home remittances through the banking system. Meet the SBP directives/instructions for timely and prompt delivery of remittances to the beneficiaries. The new features of NBP foreign remittances include: The existing system of home remittances has been revised/significantly improved and well-trained field functionaries are posted to provide efficient and reliable home remittance services to nonresident Pakistanis at 15 overseas branches of the Bank besides United National Bank (the joint venture between NBP and UBL in UK)., and Bank Al-Jazira, Saudi Arabia. Zero Tariffs: NBP is providing home remittance services without any charges. Strict monitoring of the system is done to ensure the highest possible security. Special courier services are hired for expeditious delivery of home remittances to the beneficiaries.

Mail Transfer: A Mail Transfer is a form of remittance in which the amount remitted by a customer or a non-customer is directly credited to the account of the beneficiary with another branch. 25

Internship Report on NBP Move your money safely and quickly using NBP Mail Transfer service. And NBP also offer the most competitive rates in the market. They charges Rs 50/- exchange rate and Rs 70/- postage charges on issuing mail transfer. When the money is not required immediately, the remittances can also be made by mail transfer (MT). Here the selling office of the bank sends instructions in writing by mail to the paying bank for the payment of a specified amount of money. Debiting to the buyers account at the selling office and crediting to the recipients account at the paying bank make the payment under this transfer. NBP taxes mail charges from the applicant where no excise duty is charged Rs 16/-. Postage charges on mail transfer are actual minimum Rs. 70/- if sent by registered post locally Rs.70/- if sent by registered post inland on partys request.

Telegraphic Transfer: Telegraphic Transfer is a form of remittance, which is advised by telegram, telex or fax machines. The fundamental principles of such transfer are otherwise identical with the Mail Transfer. It is the message, which is sent from one branch to another on the order of payer to payee through wire. It is one of the quickest means to transfer fund through the use of telex/fax/internet or cable. Payment to the beneficiary is affected directly by the drawee office upon identification or through credit into beneficiarys bank account. As such remitting office is not required to issue any instrument payment to the remitter for delivery to the beneficiary.

Pay Order: NBP provides another reason to transfer your money using our facilities. NBP pay orders are a secure and easy way to move your money from one place to another in same City. And, as usual, NBP charges for this service are extremely competitive. The charges of NBP are very low all over the Pakistan. It charges Rs 80/- for NBP account holders on issuing one payment order, and charges Rs 150/- for NBP non-account holders on issuing one payment order. It charges Rs 25/- for students on payment of fees of educational institutions. If some one want a duplicate of payment order they charges Rs 150/- for NBP account holders and Rs 200/- for non account holders.

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Internship Report on NBP Treasury products Pakistan investment bonds Plain vanilla FX products

Derivatives products Currency options Interest rate swaps and FRAS Cross currency swaps

Services NBP Online Branch Banking Demand drafts Mail transfers Pay order Travelers cheques Commercial finance Letter of credit Foreign remittances Swift system Short term investment Equity investment N.I.D.A Agricultural finance Corporate finance

Trade services Letter of credit Trade collection services Payment services Trade financing Structured trade finance

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Internship Report on NBP Competitors: Public sector: First women bank limited (FWB) The bank of Punjab BOP The bank of Khyber Private sector: United bank limited MCB bank ltd Standard Chartered Bank limited Bank al al-falah limited Bank al habib limited Askari bank Faysal bank limited Metropolitan bank limited Allied bank limited Meezan bank Js bank Kashf bank Atlas bank Habib bank limited 28

Internship Report on NBP Soneri bank limited Union bank limited Saudi pak commercial bank ltd Dawood bank Bank al habib Citibank Royal bank of Scotland Saudi pak bank limited

Brief Introduction of all the departments

Cash department: Cash department deal with the payment and receipt of the money and record should be maintained. Clearance department: A clearinghouse is an association of commercial banks set up in given locality for the Purpose of interchange and settlement of credit claims. The function of clearing house is performed by the central bank of a country by tradition or by law. Advances department: Advances department is one of the most sensitive and important department of the bank. NBP provides advances to different people in different way as demand. Types of advances are Cash finance Overdraft /running finance Demand financing/ loans

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Internship Report on NBP Remittance department: This department deals with the transfer of money from one bank to other bank or from one branch to another branch for their customers. Deposit department: It controls the following activities: Account opening. Issuance of chequebook. Current Account Saving Account Cheque cancellation

Foreign exchange department: This department mainly deals with the foreign business. The main functions of this Department are: Letter of credit dealing. Foreign currency accounts dealing. Foreign Remittance dealing.

Credit & risk management: An executive risk management committee has been established to emphasize on the banks commitment to a robust risk management and risk culture. Human resource management: NBP is striving to become an employer of choice through improved HR Policies and competitive remuneration. HRM department hire and train workers.

Comments on the organizational structure:

The bank has clearly defined organizational structure which supports clear line of communications and reporting relationships. There exist a properly defined financial and administrative power of various committees and key management personnel which supports delegation of authorities and accountability. The organization structure of national bank of Pakistan is centralized because all the decision of the bank is taken by the top management. 30

Internship Report on NBP A brief introduction of the branch:

National bank of Pakistan Rajanpur branch located on Kachehri Chowk Rajanpur established in 1982.
Names of department in which I got training: Deposits Advances Remittances Collections Trade finance Foreign exchange Inland bank guarantees

Detailed descriptions of the tasks assigned: Deposits:

In this department Sheikh Sajjad assigned me different tasks. Customers comes in bank for depositing amount and have no account so firstly they have to open his/her account in bank. For account opening customer must fill account opening form, signature on the SS card, and deposit initial amount for account opening. Henceforth my core responsibility was to help those customers in filling account, opening form, and take their signature on the SS card, after that I attached SS card with account opening form, and fill the initial deposit slip of the customer for opening new account. After all this process I give account opening form and account opening ledger to bank manager for signature. During my internship period I have learnt about KYC stand for know your customer. This is helpful for a bank to identify that customers are going to deposit amounts legal money black. This process protect bank from laundering of money because sometime people deposit their black money into bank and withdraw it after some time and said this is legal money so I have deposited it in bank all of process called laundering. So bank in this way can identify customer source of income.

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Internship Report on NBP Account Opening: I have spent my 1st week in account opening section and I learnt about what are the prerequisites of opening an account of individuals, minors, shaky hand signature persons, and different companys account opening procedure and essentials. Brief discussion is given below. How to Open an Account The applicant is provided with a copy of rules and an application form to open an account. This form is filled by the applicant in a manner prescribed and duly singed by the applicant. An existing account holder of the bank must introduce the application. A copy of ID card is attached with the specimen signature card. The application is presented at the branch with the initial amount of deposit for credit of his account. The amount is entered in the passbook and is singed by the responsible officer of the bank; finally a Checkbook is issued to the account holder, for withdrawal purpose. Classification of Deposits The deposits can be classified under three main heads. Current Account Saving Account Fixed Deposit

Advances Department:

In advances I have cleared my concepts about the basic terms used in financing and the brief introduction about the products offered by the bank to its customers. Basic terms are as follows: NBP advance salary: The NBP Advance salary has been the flag-ship product for NBP. NBP Advance Salary, the leading personal loan product of the country, is maintaining its inimitability ever since it was launched. This was only possible due to its swift growth and remarkable loan disbursement of over 118 billion. You can avail up to 20 net take home salaries with easy repayment installments. Its hassle free acquisition with no prior formalities and easy 32

Internship Report on NBP availability in a short turnaround time is attributed as the most distinguishing features of the product. The product is offered countrywide. Terms & Conditions Eligibility Permanent Employees of Govt., Semi-Govt., Autonomous, Semi Autonomous, Local & other bodies who are maintaining their Salary A/Cs at NBP. Direct deduction from Salary A/C Rs. 490,000/Employer will provide undertaking that borrowers Salary and end of service benefits will route through his/her Salary A/C maintained at NBP during the tenure of the loan and his/her end of service benefits are at least equal to the amount of Advance Salary required. Hypothecation of Consumer durables owned by the borrower. Three (3) Undated Cheques 5 years (60 months) Up to 20 net take home salaries

Repayment Maximum Loan Amount Security

Max. Repayment Period Advance in terms of # of net take home salaries Markup Rate Processing Fee Verification Charges Life Insurance Documentation Charges Contact Remaining Service Age Debt Burden Minimum net take home salary

15 % (Based on diminishing balance method) 1% of Loan Amount Rs 500/No Insurance of any kind. at actual Your Salary disbursing NBP Branch. At the time of approval and disbursement the applicants remaining service age should be 6 months after maturity of the loan 50% no minimum take home requirement

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Internship Report on NBP Collections: This department deals with collection of utility bills, board fee, and deposit of customer. Prerequisite tasks in this department were making of scrolls of utility bills, electricity bills, Sui Gas bills and telephone bills. Trade finance: My role being an intern in this department was to assist management in facilitating importers and exporters by ensuring payables to exporters and receivables to importers. NBP open letter of credit on behalf of exporter on importer that is helpful for payment on due date as mention in documents. Foreign exchange: I spent few days in this department and learnt how to open foreign currency account and what guidelines before opening any such account. This department deals with foreign exchange. This department is made for the convenience of customers having foreign dealing. It makes easy for them to pay and receive in foreign currencies.

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Internship Report on NBP Ratio Analysis

Net profit margin: Net profit margin =net profit / net sales *100

No Net profit Net sales Total

2009 18,211,846

2010 17,563,214

2011 17,604,722

77,947,697 18,211,846/ 77,947,697 =23.36%

88,472,134 17,563,214/ 88,472,134 =19.85%

95,325,179 17,604,722/95,325,179

=18.46%

3000.00% 2000.00% 1000.00% 0.00% 2009 2010 2011 2009 2009 2010 2011

Interpretation Interest income has been contributed in the total bank profit is decreasing and net profit margin is low in 2011 as compare to other years. Ratio show downward trend. Net profit margin is decreasing in 2009, 2010 and in 2011 while the net sale of the bank in increasing in these years due to which net profit margin is decreasing. Net profit margin of bank is decreasing due to increasing in expenses of bank.

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Internship Report on NBP Gross spread ratio Gross Spread Ratio = Net interest margin mark-up/return/ interest earned. *100 Net Interest Margin= interest earned interest expensed. Both the items of the net interest margin are available in the Profit and Loss statement of the bank. Net Interest Margin= interest earned interest expensed Interest earned = mark-up/return/ interest earned. Interest expense = mark-up/return/ interest expense

No
Net margin

2009
interest 77,947,697-40,489,649 = 37458048

2010
88,472,134 -45,250,476 = 43221658

2011
95,325,179 -48,515,618= 46809561

Markup/return/ interest earned.

77,947,697

88,472,134

95,325,179

Gross spread ratio

37458048/77,947,697 43221658/88,472,134*10 *100 0 =48.05% =48.85%

46809561/95,325,179* 100 =49.10%

4950.00% 4900.00% 4850.00% 4800.00% 4750.00% 2009 2010 2011 2009 2009 2010 2011

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Internship Report on NBP Interpretation Ratio shows that gross spread ratio is increasing which mean higher the profit margin for bank. GSR of bank is increasing because of the increase in margin. Ratios show upward trend. Net interest margin is increasing while interest earned is decreasing year to year due to which higher the gross spread ratio.

Non Interest Income to Total Income = Non Interest Income / Total Income Non-interest income = Non mark-up/interest income (profit and loss) Total Income = Mark-up/return/Interest Earned + Non Mark-up/ interest income. (p & L ) Net interest income and total income are also available in the Profit and Loss statement of the bank.

No
Noninterest income Total Income

2009
25,788,713

2010
33,251,969

2011
19,337,04

77,947,697+25,788,713

88,472,134+33,251,969

95,325,179+ 19,337,04 = 114,662,22

=103736410

=121724103

25,788,713/103736410

33,251,969/121724103

19,337,04 /114,662,22

=0.24 times

=0.27 times

= 0.168TIMES

30.00% 20.00% 10.00% 0.00% 2009 2010 2011 2009 2009 2010 2011

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Internship Report on NBP Interpretation Ratio shows that non-interest income of NBP bank is 0.24 times of total income in 2009, 0.27 in 2010 and 0.16 time in 2011, which is low in 2011 as compare to other two years. Ratio shows increase in 2010 because of increase in non-interest income of the bank. And the decrease in ratio in 2011 due to decrease in non-interest income of the bank.

Spread ratio= Interest Earned /Interest Expense

Interest Earned = Markup/ Return/Interest earned (P & L) Interest Expense= Markup/ Return/Interest Expense (P & L)

No
Interest Earned Interest Expense

2009
77,947,697

2010
88,472,134

2011
95,325,179

40,489,649

45,250,476

48,515,618

=77,947,697 /40,489,649 =1.93 times

=88,472,134/ 45,250,476 =1.96 times

95,325,179/48,515,618 =1.96times

196.00% 194.00% 192.00% 190.00% 2009 2010 2011 2009 2009 2010 2011

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Internship Report on NBP Interpretation Larger the interest earn more bank earns. Interest earned is 1.93 time of total income in 2009, 1.96 in 2010 and 2011. NBP spread ratio is increasing which show that NBP worth is increasing. Ratio show upward trend. NBP interest earning is increasing while the interest paid by the NBP is decreasing due to which spread ratio of NBP is increasing.

Return on assets: Return on assets = net profit after tax/ total assets*100

No
Net profit after tax Total assets Total

2009
18,211,846

2010
17,563,214

2011
17,604,722

944,232,762

1,035,024,680

1,149,577,736

18,211,846/944,232,762 *100 =1.93%

17,563,214/1,035,024,680* 100

17,604,722/1,149,577,736 *100

=1.70%

=1.53%

200.00% 150.00% 100.00% 50.00% 0.00% 2009 2010 2011 2009 2009 2010 2011

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Internship Report on NBP Interpretation NBP have 1.93% return on its assets in 2009, 1.70 in 2010, 1.53 in 2011.NBP earnings before interest and tax is decreasing year to year. Graph show decreasing trend of return on assets, NBP net profit is decreasing may be due to increase in taxes. NBP return on assets is declining. Falling return on asset contribute negatively to decrease in ROE. Banks has decreasing return on assets which show that company is using its assets not very efficiently to get favorable return on its assets, but return on asset of bank is overall good.

DuPont Return on Assets (Net income/sales)*(sales/total assets)*100

No
(Net income/sales)*(sal es/total assets)*100

2009
17,561,846/77,947, 697*77,947,697/94 4,582,762*100 =1.85%

2010
17,563,214/88,472,134*88, 472,134/1,035,024,680 *100

2011
17,604,722/95,325,179*95 ,325,179/1,149,577,736*1 00 =

=1.6%

1.53%

200.00% 150.00% 100.00% 50.00% 0.00% 2009 2010 2011 2009 2009 2010 2011

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Internship Report on NBP Interpretation Higher the net income for a given amount of assets, the better is the return. The diagram depicts that ratios are decreasing in 2010 and 2011 respectively as compared to that in 2009. In the year of 2009 the DuPont return on assets ratio is at 1.85 times on which maximum level during the time period as relative to 2010 and 2011.

Return on total equity: Net income/ total equity *100

No
Net income Total equity Total

2009
17,561,846

2010
17,563,214

2011
17,604,722

94,141,919

103,762,310

110520012

17,561,846/94,141,919*100 =18.6%

17,563,214/103,762,310*100 =16.9%

17,604,722/110520012*1 00 =15.9%

1900.00% 1800.00% 1700.00% 1600.00% 1500.00% 1400.00% 2009 2010 2011

2009 2010 2011 2009

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Internship Report on NBP Interpretation 18.6% is return that Bank is earning on shareholder equity in 2009, 16.9 % is return that Bank is earning on shareholder equity in 2010. 15.9 % is return that Bank is earning on shareholder equity in 2011. Graph show downward trend. Net income of the NBP is decreasing trend due to which return on total equity is decreasing.

DEBT RATIOS Debt ratio= total liabilities / total assets

No
total liabilities total assets Total

2009
825,676,384

2010
906,528,852

2011
1,016,926,288

944,582,762

1,035,024,680

1,149,577,736

825,676,384/944,582,762 =0.87times

906,528,852/1,035,024,680 =0.87 times

1,016,926,288/1,149,577, 736 =0.88times

88.00% 87.50% 87.00% 86.50% 2009 2010 2011 2009 2009 2010 2011

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Internship Report on NBP Interpretation Ratio show that company have debt 0.87 of total assets in 2009 and in 2010 while in 2011 NBP have debt of 0.88 of its total assets. There is an increase in ratio in 2011 which show that the deposits of the bank in increase in 2011 as compare to other two years.

DEBT/EQUITY RATIO

Debt/equity ratio = total liabilities/ shareholders equity

No
total liabilities shareholders equity Total

2009
825,676,384

2010
906,528,852

2011
1,016,926,288

94,141,919

103,762,310

110,520,012

825,676,384/94,14 1,919 =8.7 times

906,528,852/103,762,310 =8.7 times

1,016,926,288/110520012 =9.2times

950.00% 900.00% 850.00% 800.00% 2009 2010 2011 2009 2009 2010 2011

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Internship Report on NBP Interpretation Ratio show that 8.7 of the NBP Capital structure is debt while the remainder is by investor capital in 2009 and 2010.while in 2011, 9.2 times of the NBP Capital structure is debt and remainder is investor capital. Deposit and other liabilities are low as in 2009 and 2010 as compare to 2011. There is increase in ratio in 2011 because deposits of the bank is increase in 2011. NBP is using more debt in 2011 as compare to other two year which mean that the deposits of the NBP is increase in 2011.

Time interest earned: Earnings before income tax (EBIT) /interest expense EBIT =profit before tax+ interest expense Profit before tax = from profit and loss statement (before profit taxation) Interest expense = from profit and loss statement (Mark-up / return / interest expensed)

No
Earning before income tax (EBIT) /interest expense

2009
61,789,822/40,489, 649 =1.53 times

2010
69,665,595/45,250,476 =1.54times

2011
74526791/48,515,618 = 1.53times

Working 2009 EBIT= profit before tax+ Interest expense EBIT=21,300,173+40, 48964 EBIT=61,789,822/40489649 EBIT=1.53

Working 2010 EBIT= profit before tax+ interest expense EBIT=24,415,119+45,250,476 EBIT=69,665,595/45250476

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Internship Report on NBP EBIT=1.54

Working 2011 EBIT= profit before tax+ interest expense EBIT= 26,011,173+ 48,515,618=74526791 EBIT=74526791 /48,515,618 EBIT= 1.53

155.00% 150.00% 145.00% 140.00% 135.00% 130.00% 125.00% 2009 2010 2011

2009 2010 2011 2009

Interpretation Ratio show that the NBP can meet its interest expenses 1.53 times in 2009 and in 2011 while NBP can meet its interest expenses 1.54 in 2010. Earning of NBP is slightly increased in 2010 as compare to other two year due to which ratio has slightly increase as compare to other years.

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Internship Report on NBP Advances/Deposits Ratio Formula = (Advances / Deposits & Other accounts) Advances = assets balance sheet Deposits & Other accounts = lab balance sheet

No
Advances Deposits &

2009
475,243,431 727,464,825

2010
477,506,564 832,151,888

2011
525,045,764 927,421,438

475,243.431/727,4 64,825 =0.65 times

477,506,564/832,151,888 =0.57 times

525,045,764/927,421,438 = 0.56TIMES

70.00% 65.00% 60.00% 55.00% 50.00% 2009 2010 2011 2009 2009 2010 2011

Interpretation NBP is paying advance and loan 0.65 time of its deposit in 2009 while NBP is paying advance and loan 0.57 time of its deposit in 2010. NBP is paying advance and loan 0.56 time of its deposit in 2011. Ratio Show downward trend. NBP have potential to pay advance and additional loans. Downward trend of ratio show that NBP deposit is increasing while advances of NBP is falling.

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Internship Report on NBP Operating cash flow ratio = cash flow from operating /current liabilities Cash flow from operating= net cash flow from operating activities Current liabilities = maturity table /

Working of current liabilities Current liabilities 2011: Current liabilities=9,104,710+236867755+911298458 Current liabilities =1,157,270,923 2010 Bills payable Borrowings (current portion) Deposit and other accounts (current portion) Other liabilities (current portion) Liabilities against assets subject to finance lease (current portion) Current liabilities total=Rs. 867,626,368 2009 Bills payable Borrowings (current portion) Deposit and other accounts (current portion) Other liabilities (current portion) Liabilities against assets subject to finance lease (current portion) Current liabilities=Rs.725, 293,720 No
cash flow from operating current liabilities 725,293,720 867,626,368 1,157,270,923

=8,006,631 =17,154,131 =816,172,863 = 26,248,782 =43,963

=10,621,169 =37,057,189 =655,031,896 =22,563,058 =20,408

2009
41,576,364

2010
93,163,784

2011
41,345,222

=41,576,364/ 725,293,720 =0.058 times

=93,163,784 / 867,626,368 =0.108 times

41,345,222/1,157,270,923 == 0.035TIMES

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Internship Report on NBP

15.00% 10.00% 5.00% 0.00% 2009 2010 2011 2009 2009 2010 2011

Interpretation Cash generated from operating activities of NBP is 0.058 time of total cash flow in 2009. Cash generated from operating activities of NBP is 0.108 time of total cash flow in 2010 .Cash generated from operating activities of NBP is 0.035 time of total cash flow in 2011. Ratio is increase in 2010 because of increase in cash flow generated from operating activities and decrease is current liabilities. Ratio is decrease in 2011 because of decrease in cash flow generated from operating activities and increase in current liabilities.

Dividend per share: Dividend per share= dividend amount / number of equity shares

No
Dividend amount Number of equity shares Total

2009
5,830,338 1,076,370.2

2010
8,072,777 1,345,462.8

2011
10,090,971 16, 818,285

5,830,338/1,076,37 0.2 RS=5.42RS

8,072,777/1,345,462.8 RS=6.00RS

10,090,971 /16, 818,285 Rs =0.6 RS

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Internship Report on NBP

600.00% 400.00% 200.00% 0.00% 2009 2010 2011 2009 2009 2010 2011

Interpretation Result of ratio show that bank is performing well financially. Number of outstanding share increase in 2009 and 2011. There is increase in company market value and dividend per share goes up in 2010 as compare to other two years. In 2011 dividend per share is very low which show that the market price of per share of NBP is decrease or very low.

Earnings per share: Earning per share= net profit after tax/ number of shares issued

No
Net profit after tax No issued Total of shares

2009
18,211,846,000

2010
17,563,214,000

2011
17,604,722

1,076,370,200

1,345,462,800

16, 818,28.5

18,211,846,000 /1,076,370,200 RS=16.92RS

17,563,214,000/ 1,345,462,800 RS=13.05RS

17,604,722 /16, 818,285 RS=10.4RS

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Internship Report on NBP

2000.00% 1500.00% 1000.00% 500.00% 0.00% 2009 2010 2011 2009 2009 2010 2011

Interpretation Ratio indicates that bank earns too high in the year of 2009 .while other years as 2010and 2011 the earning per share are low. The year in which bank earning on shares very high and in annual reports showing better financial position as compared to other banks .The earning per share of 2010 are slow at small level as compare to 2009. The year of 2011 the earning per share are too low as relative to 2009 and 2010

Price / earnings ratio:

Price/earnings ratio= market price per share/ earnings per share

No
Market price per share Earning per share

2009
74.37

2010
76.82

2011
41.05

16.92

13.05

10.47

Total

74.37/16.92 =4.40

76.82/13.05 =5.89

41.05/10.47 RS=3.92

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Internship Report on NBP

600.00% 400.00% 200.00% 0.00% 2009 2010 2011 2009 2009 2010 2011

Interpretation This ratio point out that in the year of 2010 price earnings ratio is 5.89 which is positive sign for bank because in that period banks share prices are becoming too high . But in other years as 2009 and 2011 is low as relative to 2010. The year of 2009 at slightly less as compare to compare to 2010.while in 2011 is very low because in this year banks share prices too much low.

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Internship Report on NBP Future Prospects of the Organization:

Going forward the bank shall continue to focus on the increasing its deposits with stress on increasing current and saving deposit ratio. Increase in non mark up income with particular focus on to fee income shall be a high priority. Improvement in customer services and strengthening of internal systems and controls shall be remaining a key area of the work. Capacity building in terms of human resources shall continue. Technology up gradation in the form of ongoing implementation of core banking, online connectivity and allied projects will be performed with commitment to complete the jobs on time. Remain committed to vision, mission and core values. Bank is geared up to meet the challenges of tomorrow and leveraging on strengths will continue to capitalize on new opportunities. Add value and esteem for stakeholders.

Conclusions: NBP have largest branch network of branches in urban as well as in rural areas. NBP is providing valuable services to its customers like online banking system, ATM card etc NBP trying to improve its customers services to facilitate the customers. During my internship I observed that branch doing a great business and the management and the staff of the branch is efficient and the professional. Bank has clearly defined organizational structure which supports clear line of communications and reporting relationships. During my internship I observe that behavior of NBP staff is not very good, there is not help desk in branch for helping customers, NBP staff cannot handle the customer is rush hour and customer is waiting in lines for taking their own money. Most of the customers in NBP are from government sector, if it is not necessary for government employee of having account in NBP then they switch to other banks due to not providing quick services to its customers. Net profit margin of bank is decreasing due to increasing in expenses of bank. GSR of bank is increasing because of the increase in margin Non-interest income of the bank is decrease in 2011 NBP has decreasing return on assets. Return on total equity is decreasing of NBP 52

Internship Report on NBP Recommendation for improvement Help desk in branch for helping customers Provide training to NBP staff to enhance their skills and capabilities New talent should be hired to provide customer better services NBP should up-grading their services timely to provide the maximum satisfaction to their customers. NBP should pay attention on its marketing efforts to promote its products and services. Net profit margin of NBP is decreasing year to year company need to improve its net profit margin by controlling its expenses. NBP should use its assets efficiently to get favorable return on its assets. NBP should expand its operations to increase in net income to improve its return on equity. NBP Should offer advance and loans to its customer to improve its advance to deposit ratio. NBP should expand its operation and reduce its current liabilities by pay off current liabilities to improve its operating cash flow ratio. NBP need to improve its market value per share to improve its dividend per share.

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Internship Report on NBP References and source: Website http://www.nbp.com.pk/ http://www.nbp.com.pk/Publications/index.aspx http://www.nbp.com.pk/Publications/AnReport2010.aspx http://www.nbp.com.pk/Publications/AnReport2011.aspx

Personal experience Experience during my internship Information from staff of NBP

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