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The Bank of Punjab

An internship report
On

Bank of punjab

Student Name: abdusammad Student ID: 46(ss)

SESSION: 2010-2014
university of sargodha

Internship Report

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The Bank of Punjab

Dedication

I dedicate this report to my loving mother and sister and friends without whose help and encouragement it would not have been possible. For me accomplish this task within the specific time limit. I was provided with every facility by my mother who was necessary in order to complete this challenge assignment.

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The Bank of Punjab

Acknowledge ent
I am very thankful to !Al ight" Allah# the most beneficent, the most mercy full who has given the strength to complete this task. I am also thankful to branch manager and operational manager respectively of the bank of the Punjab circular Road near Fawara Chowk ujrat. !ithout whose guidance and support it would not have been possible for me to accomplish this assignment. Furthermore, I am indebted to the staff of the staff of the "ank of the Punjab. Circular Road #ear Fawara Chowk, ujrat. From whom I have gained much e$perience regarding operational work of bank is concerned. %he last but not the last I convey my credit and thankfulness to the virtual universities &uthorities. !ithout whose well in time support and guidance it would be much difficult for me to achieve this task successfully.

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The Bank of Punjab

%&ecuti'e (u

ar"

%he bank of Punjab '"(P) established in *+,+ and got the status of scheduled bank in *++-. %he bank of Punjab offer number of products in their customer. %here are .+/ braches of "(P in the whole country. Functionally the bank of Punjab is divided in the division and the each division is headed bye the general managers. %he government of the Punjab holds the majority of the shares in "(P. It is doing business in commercial banking and the retail banking. Corporate banking treasury and investment and trade finance. %he shares of "(P are traded in all three stock 0$changes of the Pakistan. 1y internship program period is ./rd &pril .2** to 3th 4une .2**. 5uring internship, I worked in &ccounts opening 5epartment, &ccounts 5epartment, Clearing 5epartment, Remittance 5epartment, &dvance and Credit 5epartment and "ill for Collection 5epartment. &s for as the different ratios of the "ank (f the Punjab, they all give the healthy sign regarding financial position of the "ank as well as the operation results of the different financial years. &ll ratios are fully in accordance with the banking industry6s standard and norm which is a yard stick to measure the performance of any bank. %hese ratio depict and indicate that the financial strength of the on a higher side and further prospect of the "ank is brighter. &t the end the conclusion and the recommendations are the part of the report. "ibliography is the part, which contain all the references from I, obtained data to prepare this report.

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The Bank of Punjab

Table of *ontents
Title Page7777777777777....................................................2* *hapter +1 Introduction of Banking777777777777777777...... 2, *hapter +2 ,'er'iew of the Bank of Punjab 2.1..........HISTORY......09 2.2. VISION AND MISSION STATEMENTS 10 ../ ....; ..3 ..= .., ..+ *hapter +$ Internship Progra /.* /.. /./ *hapter +) Training Progra -.* *hapter +Ratio Anal"sis ;.* Financial >tatements of "(P 7777777777..= *hapter +. /uture Prospects of B,P77777777777777777777.;3 *hapter +0 *onclusion777777.7777777777777777777...;= *hapter +1 Reco endations777777777777777777777........;, Internship Report --Introduction (f circular Road 1ain "ranch 7777.* >tarting and ending dates of internship 7777.77.* #ame of training departments and duration7777....* %raining Program77777777777.777.... (rgani8ations 9ierarchical Chart777.....................** "usiness :olume77777777777777..*. Product <ines 7...........................................................*/ Competitors777777777777777......*3 Introduction of &ll departments77777777...*3 Functional 9ierarchy of "(P7777777777*+ Comments on >tructure777777777777...2

The Bank of Punjab *hapter +2 Bibliograph" 777777777777777777777777.7;+

3I(T,R4 ,/ BA56I57 I5 PA6I(TA5


Pakistan came into being on *-th &ugust, *+-=? sufficient banking services were available in the areas forming Pakistan. (ut of the total branches of the nearly /,;22 in the undivided India, as many as about *,;22 branches were e$isting in these areas. It was agreed between the two countries that reserve bank of India shall continue to function in the Pakistan territory until /2th >eptember *+-, and that Indian notes would continue to be legal tender at Pakistan until /2th >eptember *+-,. @nfortunately, relationship between the two countries became most strained immediately after independence? banking was mostly in the lands of 9indus who immediately started transferring their offices and assets into India. &s a result most of the banks in Pakistan were closed down and even those which were open were not doing any effective business. %he number of banking office in Pakistan came down to about .22 on /2th 4une *+-,. "ranches of some 0uropean banks were also functioning in a limited manner, financing in e$port of crops, and their number was limited to about .2. It was only the 9abib bank, which transferred its office from "ombay to Aarachi &ustral &sia bank was another bank, which was in e$istence in the Pakistan territory at the time of independence. 5espite of best efforts on the part of government of Pakistan, no heady way could be made on this behalf and reserve bank of India was in no mood to help the new country. Imperial bank of India, agent of the reserve bank of India also started closing down its branches in Pakistan. Reserve bank also refused to advance money to Pakistan to make essential payments such as salaries etc, also Pakistan6s share of Rs.=; billion in cash balance was with held by bank, causing hardships to the newly born state. In view of these hopeless state affairs it was agreed between the two countries that reserve bank would serve as monetary authority in Pakistan only up to /2th 4une *+-,. Internship Report -.-

The Bank of Punjab

5ATI,5A8I9ATI,5 ,/ BA56(
%he principle of nationali8ation of banks is to stream line the operation of commercial banks in such a way that it may be conductive to the development activities in process in the country. >ince the commercial banks were owned controlled by big business groups of the country it was feared that these banks would not maintain uniformity in their operational and would be instrumental to inflationary pressure. 9owever, the considerations behind nationali8ation are %o form uniformity in the policy of the commercial banks so they may serve the best national interest. %o make the operation of commercial banks highly sensitive and responsive to the policy of the government relation to financial matters. %o make the credit policy of the commercial banks more purpose full and effective especially in the development of economic sectors of the country. It acts as an agent of the >tate "ank of Pakistan %o make the best use of the funds available at the disposal of these banks for the economic development of the country. %o eliminate unhealthy and uneconomic competition among commercial banks. %o development strong money banks market in the country so that the value of currency may be maintained at stable level both in national facilities to e$porter and agriculturists which have not been satisfactory in the past years. Public (ector *o ercial Banks

#ational "ank #"P Internship Report -0-

The Bank of Punjab

First !omen "ank <imited %he "ank of Ahyber %he "ank of Punjab

F!" A" "(P

8ocal Pri'ate Banks

&skari Commercial "ank <imited "ank &lBFalah <imited "ank &l 9abib <imited 1ee8an "ank <imited Faysal "ank <imited >ilk "ank <imited >oneri "ank <imited @nion "ank <imited 1uslim Commercial "ank <imited &llied "ank of Pakistan @nion "ank <imited

/oreign Banks &"# &mro "ank CI%I "ank 9abib "ank &. . Curich 1ashreD "ank P4>C Internship Report -1-

The Bank of Punjab (man "ank "arclays "ank >tandard Chartered "ank

(peciali:ed Banks

Cari %arDiati "ank <td. Industrial 5evelopment "ank of Pakistan Punjab Provincial Cooperative "ank <imited

It has not so far been decided as to how the word E"ank6 originated. >ome author6s opinion is that, this word is derived from the word E"ancus6 or E"anDue6, which means a bench. (thers authors hold the opinion that the word E"ank6 is derived from the erman word E"ack6, which means joint stock fund. It is therefore so much "anking in fact is primitive as human society, forever since man came to reali8e the importance of money as a medium of e$change, the necessity of a controlling or regulating agency or institution was naturally felt. Perhaps it was the "abylonians who developed banking system as early as .222bc. It is evident that the temples of the "abylon were used as E"anks6 because of the prevalent respect and confidence at the clergy. &t the time of independence there were 3/* offices of the scheduled banks in Pakistan, of which -,= were located in !est Pakistan alone. &s a new country with resources it was very difficult for Pakistan to run its own banking system immediately. %herefore the e$pert committee recommended that the Reserve "ank of India should continue to function in Pakistan until /2, >eptember *+-,, so that problems of time and demand liability, coinage currencies, e$change etc, could be settled between India and Internship Report -2difficult to decide as to which opinion is correct.

The Bank of Punjab Pakistan. %he non 1uslims started transferring their funds and accounts to India. "y the end of 4une *+-,, the number of officers of scheduled banks in Pakistan declined from 3/* to .;;. %here were *+ foreign banks with the status of small branch offices that were engaged solely in e$port crop from Pakistan, while there were only two Pakistani institutions, 9abib "ank, and &ustralasia "ank, the customers of the banks are not satisfied with the uncertain condition of banking. >imilarly the Reserve "ank of India was not in the favor of ovt. of Pakistan. %he ovt. of Pakistan decided to overnor eneral of Pakistan establish a fullBfledge central bank. ConseDuently the

FuaidBeB&8am inaugurated the >tate "ank of Pakistan on 4uly *,*+-, %hus a landmark was made in the history of banking when the >tate "ank of Pakistan assumed full control of banking and currency in Pakistan.

T3% BA56 ,/ P;5<AB


=I(I,5 (TAT%>%5T G%o be a customer focused bank with service e$cellence.H >I((I,5 (TAT%>%5T %o e$ceed the e$pectations of our stakeholders by leveraging our relationship with the overnment of Punjab and delivering a complete range of professional solutions with a focus on programmed driven products I services in the &griculture and 1iddle %ier 1arkets through a motivated team. *,R% =A8;%( ,ur *usto er &s our first priority. Internship Report - 1+ -

The Bank of Punjab Profitabilit" For the prosperity of our stakeholders that allows us to constantly invest, improve and succeed. *orporate (ocial Responsibilit" %o 0nrich the <ives of community where we operate Recognition and Reward For the talented and high performing employees %&cellence In every thing we do. Integrit" In all our dealings. Respect For our customers and each other.

3I(T,R4 ,/ B,P
%he "ank of Punjab was established in *+,+ and was given the status of scheduled bank in *++-. %he "ank of Punjab is working as a scheduled commercial bank with a network of almost .=/ branches at all over major locations in the Punjab. %he "ank provides all types of banking services such as 5eposits in <ocal Currency and client foreign currency, remittances, and advances to business, trade, industry and agriculture. %he "ank of Punjab has indeed entered a new era of science to the nation under e$perience and professional hands of its management. %he "ank of Punjab plays a vital role in the national economy through mobili8ation of hitherto untapped local resources, promoting savings and providing funds for investments. %he Internship Report - 11 -

The Bank of Punjab bank offers attractive rates of profit on all deposits, opening of foreign currency accounts and handling of foreign e$change business for e$ample imports, e$ports and remittances, financing, trade and industry for working capital reDuirements and money market operations. %he lending policy of bank is not only cautious and constructive but also based on principles of prudent lending with ma$imum emphasis on security. %he "ank provides alltypes of banking services such as 5eposit in <ocal Currency, Client 5eposit in Foreign Currency, Remittances, &dvances to "usiness, %rade, Industry and &griculture & wholly owned subsidiary of "(P First Punjab 1odaraba 'FP1) was established in *++. and is being managed by Punjab 1odaraba >ervices 'Pvt) <td , a wholly owed subsidiary of %he "ank of Punjab. <ending under Islamic mode of finance, main vehicles are 1orabaha, Ijarah I 1usharika to encompass reDuirements of corporate, commercial and individual customers. <iability generation through C(16s 'Certificate of 1usharika ) offers attractive returns to individuals and institutional depositors for fi$ed tenure instruments. FP1 is working to introduce new and innovative products to enhance its range of services.

A?ARD( A5D A*3I%=%>%5T(


%&cellence Award b" the *entral Board of Re'enue %he Central "oard of Revenue presented J0$cellence &wardJ to the "ank of Punjab in recognition of the contribution made by the bank towards overnment e$cheDuer. $rd 6issan Ti e Awards In recognition of "ankKs contribution in development and growth of agricultural sector, the "ank honoured with J%op "ank for &griculture <oansJ and J"est "ank Crop InsuranceJ under /rd Aissan %ime &wards year .223. Internship Report - 12 -

The Bank of Punjab Best *orporate Report Award &nnual Report of the "ank for the year .22; won ;th position for J%he "est Corporate Report &wardJ for the Financial sector, adjudicated jointly by the Institute of Chartered &ccountants of Pakistan and the Institute of Cost and 1anagement &ccountants of Pakistan. 1.th Bolan %&cellence Award %he "ank was awarded "est "ank &ward under *;th "olan 0$cellence &wards distributed in .223. Achie'e ent Award %he <ahore Chamber of Commerce I Industry '<CCI) awarded the "ank J<CCI &chievement &wardJ .223.

>A<,R *;(T,>%R( ,/ B,P

>ome of the major customers of "ank of Punjab areL 0ducational Institutes &griculturists Pakistan %elecommunication Private <imited !&P5& Pharmaceutical Companies !&>& - 1$ -

Internship Report

The Bank of Punjab 15&

P;5<AB 7,=%R5>%5T (3,?( /AIT3 I5 B,P


Punjab overnment wishes to state that being the major stake holder in the

"ank of Punjab it has full faith in the new management and operations of the "ank. %he government further pledges its uneDuivocal support to the "ank and firmly believes that the affairs of the "ank are sound and its financial health robust. Finance 5epartment overnment of the Punjab.

BRA5*3 5%T?,R6

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The Bank of Punjab

<ahore Region Faisialabad Region ujranwala Region Rawalpindi Region AarachiMFueta Region 1ultan Region ujrat Region

3%IRAR3I*A8 /8,?

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The Bank of Punjab

B,ARD ,/ DIR%*T,R(

#ame 1r. >afdar 4avaid >yed Internship Report

5esignation Chairman - 1. -

The Bank of Punjab

1r. #aeemuddin Ahan 1r. &8har 9ameed 1r. 9aroon Ahawaja 1r. FarooD &hmed &wan 1r. #aveed 1asud 1r. 1ujtaba 4amal Chaudhry 1r. >hafDat 0llahi 1r. >hafDat 1ahmood 1r. %ariD 1ahmood Pasha 1r. :iDar &hmed Ahan 1r. Ra8a >aeed

President 5irector 5irector 5irector 5irector 5irector 5irector 5irector 5irector 5irector >ecretary %o %he "oard

7%5%RA8 BA56I57 ,/ T3% BA56 ,/ P;5<AB D%P,(IT D%PART>%5T


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The Bank of Punjab

In modern times very few business enterprises are carried out solely with the capital of the owners. "orrowing funds from different sources has becomes an essential feature of today business enterprise. "ut in the case of a entire banking system is based on it. %he borrowed capital of the bank is much greater then their own capital. "anks borrowing is mostly in the form of deposits. %hese deposits are lent out to different parties. %he larger the difference between the rate at which the deposits are borrowed and the rate at which they is lent out the greater of the profit margin of the bank. Furthermore, the larger the deposit the larger will be the funds available for employment? larger the funds lent out the greater will be the profit of the bank. %o receive the deposit is the basic function of all commercial banks. %he bank does not receive these deposits for save keeping purpose only, but they accept deposits as debts. !hen banks receive deposit from a customer, the relationship of a debtor and creditor is established where by the customer become the creditor and the bank a debtor. !hen the bank receives amount of deposit as a debtor, it becomes the owner of it. It may, therefore use it as deems appropriate. "ut there is an implicit agreement that the amount owned would be paid back by the bank to the depositor after a specified period.

5AT;R% ,/ D%P,(IT Current or demand 5eposits >aving 5eposit >hort #otice %erm 5eposit Call 5eposits Fi$ed or %erm 5eposits

*;RR%5T D%P,(IT

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The Bank of Punjab Current deposit are those which are payable to bank whenever demand by the customer. "ank doesn6t pay any profit on current deposits. %here are of different scheme of saving deposits, which are classified under different duration purpose and rate of interest. Fi$ed deposits are those which are by the bank under the conditions that will not be payable on demand but will be payable under fi$ed or determinate future time date. (A=I57 D%P,(IT %his type of accounts is one step towards the Islami8ation of banking system in Pakistan. %here are two types of P<> &ccounts. P<> >aving &ccount P<>B%5R 'Profit I <oss >haring %erm 5eposit Receipts). P<> saving accounts can be opened with the minimum sum of Rs. *22 and P<>B%5R account can be opened for a sum of Rs. *222 or above. Profit is paid on both types of the P<> account on half yearly basis. @nder P<> saving account the depositor undertakes to share profit or loss on the deposits earned or sustained by the bank. >econdly the bank is at the liberty to invest the funds of the deposits in any avenue, it deems fit. %he P<> deposits are invested in nonBinterested channels. (3,RT 5,TI*% T%R> D%P,(IT( %his kind of deposit is for a short period. %he depositor may withdraw his deposit at any time by giving seven days notice to the bank. %his type of deposit facilitates the depositor to withdrawn his amount with interest of the deposited period.

*A88 D%P,(IT

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The Bank of Punjab Call deposits are the sorts of deposits, which are deposited with the banker against any tender. %his is without interest deposit. %his may be with interest provided the depositor has agreed to keep this amount with the bank for some fi$ed period.

T%R> D%P,(IT R%*%IPT(


This type of deposit is same as the SNTD. The difference is that SNTD is for short period (7- 30 days) while TDR is for long period ( month !p to " years).

A**,;5T ,P%5I57 &ccount opening is the first step towards establishing a relationship between the customer and the bank. %he "ank of Punjab is offering basically two types of accountL Current 5eposit &ccount Profit and <oss >haring &ccount

%he necessary condition for a customer, who wants to open an account with the bank, is introduction, which is preferably by the bank officers or any account holder of the bank. %he different categories of accounts that are available are as under. Individual &ccount 4oint &ccount Partnership &ccount <imited Company &ccount Clubs, >ociety, &ssociation, or %rust &ccount >#%5 %5R Foreign Currency 5eposit

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The Bank of Punjab A**,;5T ,P%5I57 PR,*%D;R% %he general banking department performs various functions among them the first and most important function is &ccount (pening. %he bank reserves the right to open any account, which in its opinion is suitable as a customer. %he process of opening an account is very simple and any body that would like to open his account could do it easily without any difficulty. %he person would like to open his account is reDuired to meet with the manager or second officer, who will give him an &pplication form specifically used for account opening. &long with the form a card for specimen signature is also supplied to the customer. 1anager has every right not to accept this contract if he is not satisfied with the details provided by the customer. "ut in case the contract is acceptable to both, the ne$t step is official account opening. %his begins with the &ccount (pening Register which can be thought as a customer6s master file. %he manager records the necessary details into this register; and allots an G&ccount #umberH from this account opening register. %his register is maintained for each type of accounts and the account numbers are allotted serially. &fter opening the account every applicant6s date is entered in the computer to maintain the safe record and application form is also safely put off, so that it can be available whenever it is needed. Checking officer is responsible to tally the manual data with computeri8ed account opening file. For fi$ deposit only the application form is needed, which is prepared manually, because most of the procedures of fi$ deposit is done manually. >ignature specimen card contains three signatures of the applicant, applicant account number, account type, branch code, and title of account. It will be attached with the account opening form. "anker uses this card when he receives the cheDue, he compares signature on the cheDue with the >pecimen card, for avoiding the frauds.

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The Bank of Punjab

*8%ARI57 D%PART>%5T
%his department receives the cheDue and other negotiable instruments drawn on local branches of other banks. >tate bank of Pakistan has clearing house, in which cheDue, and other negotiable instruments are brought by each local bank representatives and the mutual claims of each bank on other and offset and a settlement is made by the payment of difference. Clearing system is help full for both the customer and saving currency, time and labor. Investments which are collected CheDues 5emand 5rafts %elegraphic transfers 1ail %ransfers Pay (rder 5ividend !arrants

*8%ARI57 &ny instruments which drawn on "(P branches and other banks in same city that6s instruments are called clearing. & clearing and date stamp is a fi$ed on these instruments these are two types of clearingN (utward Clearing Inward Clearing

Inward clearing means the cheDue drawn on "(P and outward clearing means the CheDues drawn on others

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The Bank of Punjab

,;T?ARD *8%ARI57 %he instrument collected or stored bank wise and a schedules is prepared separately for each bank mentioning the total number of instruments and the amount of the instruments. %hen these are recorded in a register called G(@%!&R5 C<0&RI# R0 I>%0RH then a main schedule is prepared showing the total number of cheDue and their aggregate amount being presented in the clearing. %he cheDueMinstruments are handed over the clearing branch. Central clearing branch issue CR05I% &5:IC0 to the branch for passing credit to its customer immediately. %he branch on receiving credit advice debits the clearing account and credit the respective customer accounts. I5?ARD *8%ARI57 (n receiving cheDueMinstruments from central clearing branch, the in charge checks the number and amount of cheDue received in clearing must tally with the main schedule received from central clearing branch. %hese cheDueMinstrument are entered in GI#!&R5 C<0&RI# R0 I>%0RH for the cheDueMinstrument passed in clearing is a credit advice for the aggregate amount of cheDue passed in clearing is prepared, drawn on central clearing branch. R%(%R=%( AT (TAT% BA56 5eposit held by bank at >"P serves as check clearing and collection balances. Rather than physically transferring funds between banks, check clearing and collection can be done by simply debiting or crediting a bank6s account at >"P.

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The Bank of Punjab

R%>ITTA5*% D%PART>%5T
Remittance is a major function of the bank. It is the transfer of money from one place to another place. %he need for remittance is commonly felt in commercial life particularly and in everyday life generally. "y proving this service to the customers the "ank of Punjab earns a lot of income in the form of service charges. T4P%( ,/ R%>ITTA5*% %he "ank of Punjab deals with the following type of remittances 5emand 5raft '55) 1ail %ransfer '1%) %elegraphic %ransfer '%%) Pay (rder #ow we discuss all these in detailL

D%>A5D DRA/T @DDAB 5emand draft is a written order given by the one branch of a bank on behalf of customer to another branch of the same bank to a certain amount to the certain person.

PR,*%D;R% 1A & draft voucher is filled which contains the following information #ame of the parties involved 5ate &mount to be sent - 2) -

Internship Report

The Bank of Punjab &ccount number 'if 55 is crossed)

2A & credit voucher is filled in order to get the e$cise duty and e$change commission. $A %he sender deposits the total amount of the two vouchers i.e. the debit and credit vouchers. )A %hen the cashier sends the cash receipt voucher to the accounts department and the account records the amount paid in his cash scroll. -A &ccountant gives the 55 leaf along with the 55 voucher to his assistant who records the sender6s name, amount and receiver6s name. &fter writing all the information in the 55 register he gives it to the officer along with the 55 for authentication. .A &fter authentication the 55 is handed over to the sender and bank sends the advice to the concerned branch. >o when the party presents the 55 in the concerned branch its payment could be made. PARTI%( I5=,8=%D %he following parties are involved in demand draft? 1A Purchaser or >ender %he purchaser is the person who sends the money to a particular person payable at a certain branch. 2A Issuing or 5rawing "ranch %he branch from where the demand draft is issued to another branch of the same bank. $A 5rawer "ranch "ranch in which the draft has drawn and called upon to pay the amount. )A Payee Internship Report - 2- -

The Bank of Punjab %he person who is entitled to receive the amount after presenting the demand draft in the drawer branch.

>AI8 TRA5(/%R It is the transfer of money from one branch to another branch of the same bank through mail service. In mail transfer there is no need of advice as the amount is directly credited to the receiver6s account. PR,*%D;R% 1A First a voucher is filled in whish the sender writes the amount to be sent, name, account number of the receiving person with the branch name and date. 2A & credit voucher is filled in order to deduct e$change, postage charges according to the amount of the mail transfer. $A %he sender deposits the total amount in the cash department. )A %he cash officer gives the vouchers to the officer after affi$ing received cash stamp and writing the amount in red ink. -A %hen the officer writes the amount paid in the cash scroll and gives the 1% to his assistant. .A 1% leaf is filled according to the information provided in credit voucher. 9e also writes the same information in the 1% register. %hen he gives the 1% leaf and 1% register to the officer for authentication. T%8%7RAP3I* TRA5(/%R

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The Bank of Punjab %his is the most urgent method of remitting the money from one place to another place. %his method is used when the sender desires to send urgently, in this case the sender reDuest the manager of the branch to issue %%. PR,*%D;R% For sending the %% the manager and officer apply a test. In the test the manager and officer uses a coding techniDue. %hey write their own code numbers, which is allotted, to them as the bank branch code. &fter making all the conformation the concerned branch makes the payment to the receiver. If the sender wants to convey the same message through telephone then he has to pay the charges of telephone along with the %% charges. First the person deposit the %% amount along with the charges through the credit voucher then his %% sent to the relevant branch. PA4 ,RD%R & pay order is a written order issued by the bank on its own branch, drawn upon and payable by itself to pay a specified sum of money to the person. %he purpose of a pay order is to transfer the fund from one place to another. It is usually not issued in favor of the parties of other cities. @sually the pay order is issued for the local transfer of money from one person to another or from the person to any other department. It is used for different purposes. %he purpose may be the repairs of the branch or renovation of the branch. PR,*%D;R% %he procedure of a pay order varies with the nature of the purpose. If the work is of huge amount then first the manager writes a letter to the Conal Chief in order to get sanction of the work. %hen the advertisement of the work is given in the newspaper in order to invite the contractors. "ut if the work is small then the branch manager has discretionary power to select the party whose rate is lowest. &fter finishing the work the contractor submits the bill of work on his stamp pad. %hen the Internship Report - 20 -

The Bank of Punjab bank issues a pay order, against the pay order the contactor gets the amount from the issuing branch.

.A**,;5T D%PART>%5T &ccount department is the backbone of a bank. It plays a vital in performing different functions of a bank. %he account department of is computeri8ed as well as manual. &ccounting books of different departments are maintained under this department and with the help of these, accountant prepare the monthly Duarterly, semiannually and yearly financial statement and order statement of the whole bank. &ll the transaction taking place is recorded daily in the books of accounts and in computeri8ed ledgers. For every transaction there is :oucher prepared and through these vouchers contra entries are passed under different head. ood working of accounts mainly depends on the voucher system. &ccounts department is responsible for proper handling and maintenance of vouchers of different department .

>A5;A8 /;5*TI,5( ,/ A**,;5T( D%PART>%5T


&ccountant prepares vouchers for all daily activities of different departments. Checking officer checks and tallies these vouchers with their daily transactions and posts their entries under proper heads. Internship Report - 21 -

The Bank of Punjab

T4P%( ,/ =,;*3%R( 5ebit :oucher Credit :oucher %hese two types of vouchers are again classified under following typesL B Cash voucher %ransfer voucher Clearing voucher &ll the daily transaction in cash, transfer and clearing is done through these vouchers. & sheet is prepared on which all the vouchers passed during one day are consolidated and summari8ed. %his sheet is called supplementary sheet. %here are two types of supplementary sheet. 5aily paid voucher sheet 5aily receipt voucher sheet

Paid sheet is used for all debit vouchers and receipt sheet is used for all credit vouchers. *A(3 B,,6 Cash book is prepared daily to keep the record of daily paid vouchers. Cash book contains the opening balance and the closing balance of a working day. "efore writing and balance the cash book firstly there is needed to properly arrange all the vouchers of that day. >AI5TAI5I57 C ;PDATI57 8%D7%R( (ne of the functions of accounts department is to maintain and update the term deposit ledgers and books manually. %erm deposit receipt or %5R ledger is updated after every month for estimating profit on customer6s accounts. &ccountant prepares Internship Report - 22 -

The Bank of Punjab different ledger for all schemes of term deposit. !ith the help of %5R ledger accountant prepares Gprovisional ledgerH. From this ledger accountant calculate the monthly product of each account and estimate the profit for a halfByear. %he semiannual profit on each account will be the e$penses of branch.

*,>P;T%RI9%D /;5*TI,5( ,/ A**,;5T( D%PART>%5T


1ost of the daily working is done through ledgers. In "(P all the daily transaction in deposit, cash, clearing, transfer, remittance and advance are performed these daily ledgers? accounts department receives the following output of general ledger. 5aily general ledger e$pense 5aily general ledger income

5aily general ledger assets 5aily general ledger liability 5aily general ledger circle e$pense 5aily general ledger audit e$pense %he formats of all these ledgers are same. %hey contain the following head

account no. description, previous balance. Codes are assigned to all these items. Income will be credited in the branch account and e$penses will be debited I the branch at the month end. &ll the e$penses of circle, regional, audit, inspection office is debited in the head office account, because it is the responsibility of the head office to bear the e$penses of its offices. For all the heads of general ledger there is closing balance and opening balance. %hese ledgers are helpful in preparing the daily, monthly, semiannually and yearly statements. >ome of these statements are prepare for the purpose of record keeping of branches and some are prepared to send to the circle office, head office and state bank of Pakistan. >ome of these statements are Internship Report - $+ -

The Bank of Punjab

>tatement of provisional income >tatement of provisional e$pense >tatement of head office account >ummary of income and e$pense >tatement of profit and loss on P<> account >tatement of profit and loss P<> /3; account "alance confirmation report >tatement of affairs

BI88( D%PART>%5T
%his department deals in bills for collection for all kinks such as cheDue, draft, and pay orders, call deposits etc. with outstation branches of "(P or with other banks. It provides service to their customer to get payment from the nearer bank at nominal charges. %he four main heads of bill department is. (utward "ill for Collection '("C) Inward "ills For Collection 'I"C) (utward 5ocumentary "ills For Collection Inward 5ocumentary "ills For Collection '(5"FC) 'I5"FC)

,;T?ARD BI88( /,R *,88%*TI,5

Internship Report

- $1 -

The Bank of Punjab "ills department receive cheDue or other of bills from its kinks client whose account must be opened in that branch. %he branch forwards the check with schedule or covering letter to that branch on which bills is drawn. %he checking officer of bills department will cross the cheDue with special bank stamp before forwarding the cheDue. ("C register is also maintained for proper record keeping of outward bills. %his register is updated two times once at the time of receiving bill from clients and the other when the confirmation advice of this cheDue is received from the payable branch. "ank gets a commission Rs. .;MB and courier charges Rs. -2MB on the service. I5?ARD BI88( /,R *,88%*TI,5 %he branches which receive bill have to verify these bills for payment. %he party account must be opened in that branch. %he responsibility of this branch is to verify the bills for collection with in three days and send the advice to the originating branch. In case of verification of bills is approved, banks debit the account of the respective account holder and send a debit advice to the originating branch and at the same time credit the head office account for inward bills I"C register is maintaining for keeping the proper record of the bills. ,;T?ARD D,*;>%5TAR4 BI88( /,R *,88%*TI,5 (riginating branch receives the documentary bills from their clients and sent them to out station branches of the same bank or other bank. Customer account must be opened in that branch. %he documentary bills are i.e. trust receipt, railway receipt, sales invoice, receipts of courier service etc. bank gets as commission 2./;O plus postage charges plus courier service charges of this service. >eller and producer both can avail the facility of bank in case of selling and purchasing their product or goods. I5?ARD D,*;>%5TAR4 BI88( /,R *,88%*TI,5 Internship Report - $2 -

The Bank of Punjab "ank receives the documentary bills from the other outstation branches of the same banks or other banks for collection the amount from purchaser. In this case back acts as a buyer6s bank, when bank receives the documentary bills they send intimation to buyer about his arrival of goods. If the buyer is the account holder then bank will debit his account otherwise purchaser deposits the amount of the bills. "ank hand over these documents to purchase, on behalf of which buyer receives the goods. "ank also charges commission

AD=A5*%(D*R%DIT D%PART>%5T
It is the loan function, which produces the major person of bank6s income, and as such it is the major areas of professional banker6s concern and attention. PRI5*IP8%( ?3I8% AD=A5*I57 "asically there are five principles that must be duly observed while advancing money to borrowers. >afety <iDuidity

5isposal - $$ -

Internship Report

The Bank of Punjab Remuneration >uitability

/,R>( ,/ 8%5DI57 1any there are two types of advancesL >hortBterm 'maturity within one year) <ong term 'maturity with the period of more than one year)

9owever they are further classified asL Running Finance 5emand Finance Cash Finance <etter of uarantee

R;55I57 /I5A5*% %his form of finance was previously known as GoverdraftH. !hen a customer reDuires the temporary accommodation, his bank allows withdrawal his account in e$cess of credit balance, which the customer has in its account, a running finance occurs. %he accommodation is thus allowed collateral security. !hen it is against collateral securities, it is called a G>ecured Running FinanceH and when the customer cannot offer any collateral security e$cept his personal security, accommodation is called a GClean Running Finance.H %he customer is in advantageous position in running finance because he has to pay the markBup only the balance outstanding against him on daily product basis. D%>A5D /I5A5*% %his is common form of financing to commercial and industrial concerns and is mad available either against pledge or hypothecation of goods produce or merchandise. In 5emand Finance the party is financed up to a certain limit either at Internship Report - $) -

The Bank of Punjab

once or as and when reDuired. %he party due to facility of paying markBup only on the amount it actually utili8es prefers this form of financing . (rdinary >hares Preferred >hares It can be Fuoted or @nDuoted Registered "earer Inscribed

AD=A5*%( A7AI5(T I>>,=AB8% PR,P%RT4 & mortgage is the transfer of and interest in specific immovable property for the purpose of securing the payment of the money, advanced or to be advanced. "y way of loan, and e$isting debts or the performances of the engagement this may rise the pecuniary liability.

%he transfer is called the Emortgager6 and the transferee the Emortgagee6 the principal money and interest of which payment is secured for the time being and instrument by which the transfer is effected, is called the letter of the mortgage deed. Availability of adeDuate flows of credit for industry and agriculture are a sine Dua non for the growth and development of an economy. %his acDuires added importance when agriculture is the mainstay of the economy as also the sector where the bulk of the poor are concentrated. rowth and productivity in PakistanKs agriculture has slowed down in recent years and is, therefore, of serious concern given its importance for the economic prosperity of the country. &part from various other weaknesses in Internship Report - $- -

The Bank of Punjab the infrastructural support of the agricultural sector, inadeDuacy and lack of efficacy of credit, flows to support agriculture related activities has been a major constraining factor. Agriculture is the largest sector of the economy. It contributes .; percent to of the population. %his is a sector that has the shortest gestation period for investments and, therefore, a remarkable capacity to bring about a turn around in the economy. %his important sector in Pakistan is suffering from a number of maladies and is conseDuently witnessing stagnation in productivity. Due to policy and administrative e$igencies, the savings in the agriculture sector remain low and, therefore, the sector has perpetually remained capital starved. %he pricing of input and output in agriculture over the years has forced the majority of farmers in Pakistan to plough back their incomes into agriculture and nonBinstitutional credit, and has more often than not served to sap their potential earnings. #eedless to say, that shortage of savings and lack of availability of capital is one of the major reasons for poverty in the country. %he agricultural and rural sectors in Pakistan in general and in Punjab in particular are, therefore, suffering from severe underB development. @nder a desirable development model, Punjab canL Increase agricultural production to meet the countryKs reDuirement of essential foods items and industrial raw materials. 5evelop agroBbased industry in the rural sector for economic value addition? enerate additional employment opportunities in rural as well as adjacent small townsMcities Control massive migration to the urban centers that in turn is causing a number of social, administrative 'i.e. law and order) and economic problems for the urban areas 0levate poverty and improve the income generating capacity of the agriBbased population. A7RI*;8T;R% (*3%>% Internship Report - $. 5P, provides raw materials to ,2 percent of industry and employment to over ;2 percent

The Bank of Punjab

%here are many agriculture promotion schemes provided by "(P. reen %ractor <ease Finance >cheme &gri Finance "ranches &gricultural Finance >cheme Aissan 5ost %ractor >cheme >econd 9and %ractor <ease Finance >cheme Aissan 5ost &abiari >cheme Aissan 5ost 1echani8ation >upport >cheme Aissan 5ost Farm %ransport >cheme Aissan 5ost 0slahB0B&ra8i >cheme Aissan 5ost <ive >tock 5evelopment >cheme <ivestock "reed Improvement %rough ::! Aissan 5ost Commercial &gro >ervices Aissan 5ost &gri 1all Finance >cheme Corporate Farming Finance >cheme Commercial <ease Finance %ractor >cheme 5emand FinanceB>heds Construction and Civil !orks <ease Finance Facility for 1ilch &nimals Running FinanceB<ivestockMPoultry and Fish Farms Aissan 5ost 1odel 5airy Farms 'P55C) Aissan 5ost 1odel 1ilk Collection Center 'P55C) Aissan 5ost reen 9ouse Finance Facility Aissan 5ost Cold >torage Finance Facility >cheme for Controlled >heds <ease Finance Facility for Installation of "iogas Plant roup Financing to >mall Farmers Clean Credit Facility through >yngenta Franchisees - $0 -

Internship Report

The Bank of Punjab Carkaashat 5rip Irrigation >ystem 1arkup of >chemes

B;(I5%(( PR,>,TI,5 (*3%>% "(P Fuick Cash "(P Car <oan "(P 9ouse <oan "(P >10 <oan "(P &ssaish <oan "(P 9ouse <oan For Federal ovt

(%R=I*%(

*o

ercial Banking

*orporate C In'est ent *ash >anage ent (er'ices ;tilit" Bills 8ockers *,>>%R*IA8 BA56I57

%he Commercial "anking

roup has been formed to cater the needs of small I

medium si8e customers for increasing "ank6s business significantly with clear focus, repositioning of resources and active marketing to improve "ank6s profitability. Commercial "anking will deal with customers having sales turnover and aggregate credit e$posure as per benchmarks prescribed in the >"P6s Prudential Regulations.

Internship Report

- $1 -

The Bank of Punjab %his roup6s emphasis will be to meet necessary business needs of customers which

are numerous as compared to CI" clients but their individual credit reDuirements are relatively much smaller. In view of this peculiar nature of this business segment that involves a higher turn over a much wider network is needed. %he >10 will concentrate on rebuilding its set up which suits to its peculiar needs on all locations. *,RP,RAT% C I5=%(T>%5T BA56I57 *orporate Banking %he "(P Corporate "anking endeavors to market new clients and retain the e$isting relationships and build market share by offering superior services, competitive pricing and wide product range to valued corporate clients including Public >ector 0ntities and 1ulti #ational Companies. "(P facilitates its customers for all sorts of their banking needs including working capital, trade finance, "1R and project financing etc. "(P has worked on some of the local markets6 largest and most comple$ transactions and infrastructure projects. %he "(P Corporate "anking roup comprises of seasoned relationship management

team to meet the demanding service standards of large corporations. %he group delivers a full range of high Duality advisory, financing and operational service solutions tailored according to customers6 needs. In'est ent Banking %he investment "anking roup is entrusted with the prime responsibility of speciali8es in providing innovative

developing and e$ecuting investment banking strategy to enhance and ma$imi8e shareholder value and customer confidence. I" and uniDue advice to its clients to assist them in meeting challenges in an everB changing market. %he team of Dualified professionals operates under a strict risk management framework, following best practices within their fields and continuously striving for e$cellence. Investment "anking @nit offers full spectrum of services, which include %FCs, >yndicated Finances, >tructured Finances, <everaged "uyouts, Project Finance, Internship Report - $2 -

The Bank of Punjab

FuasiB0Duity Products, Independent &dvice, 0Duity Placements, IP(s, 0Duity @nderwriting, 1ergers, Corporate Restructuring, &cDuisitions and other products. I"@ also works on and come up with providing Fund 1anagement Facilities *A(3 >A5A7%>%5T (%R=I*% Cash 1anagement is a process of collections I payments on behalf of the Customers using the "ank #etwork.%he objective is to faciliate organi8ations with multiple collection points in gathering Cash M Funds and making them available in the customer operating &ccount. >imilarly it facilitates disbursement of freDuent and or "ulk payment to multiple locations. %his should be accomplished with minimal supervision by the customer, supported by an automated system to provide timely and reDuisite 1I> M Reconciliation under agreed >ervice <evels ;TI8IT4 (%R=I*% Customers can pay their utility bills e.g. electricity, water gas, telephone, mobile, at any of our .=. branches across Pakistan. For your convenience bills are collected on all working days from +L22 am to ;L22 pm '1onday to Friday) e$cept lunch I prayer breaks and from +L22 am to *L/2 pm on >aturday. Pou can also pay your bills by availing our drop bo$ facility. 4ust drop your CheDue along with bill at your branch and collect the receipt in the evening, avoid the hastle of standing in Dueues and save your precious time B,P 8,*6%R 5iscover peace of mind, enjoy personali8ed service and operate your locker in a friendly and pleasant environment at %he "ank of Punjab.

Internship Report

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The Bank of Punjab

8ocker (i:e

Annual /ee

>mall 1edium <arge 0$tra <arge

Rs.*,.22 Rs.*,,22 Rs./,222 Rs.3,;22

%hese are the other services provided by the "(P. &%1 Facility (nB<ine "anking <ockers Facility 5emand 5rafts <etter of Credit Pay (rder 1ail %ransfer 5ebit Card Collection of @tility

A;T,>AT%D T%88%R >A*3I53% %hrough the &%16s Customers have access to the various services such as withdrawal, balance enDuiry and mini statementQ Complete security is ensured because access to the account is only possible by entering a four digit personal identification number 'PI#) known only to the account holder. Cash withdrawal limit is up to Rs..2, 222 per day. &nnual charges of &%1 is Rs..;2MB per card.

Internship Report

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The Bank of Punjab

,58I5% BA56I57 "(P is currently offering windowBbased online banking to its customers, which gives access to information on their accounts and the liability to act on the latest information received over the net. 8,*6%R( It is one of the utility services that "(P provides to their customers for keeping jewellery, important documents and other valuables.

D%>A5D DRA/T "(P provides safe, speedy and reliable way to transfer money at vary reasonable rates. &ny person whether an account holder of the bank or not, can purchase a 5emand 5raft from a bank branch.

8%TT%R ,/ *R%DIT "(P is offering its business customers the widest range of option in the area of money transfer. "(P6s letter of credit service is with competitive rates, security, and ease of transaction, "(P <etter of credit is the best way to do the business transactions. PA4 ,RD%R

Internship Report

- )2 -

The Bank of Punjab "(P provides transfer of money using different facilities. Its pay orders are a secure and easy way to move the money from one place to another. %he charges for this service are e$tremely competitive.

>AI8 TRA5(/%R 1oves money safely and Duickly from "(P 1ail %ransfer service. %he rates for this service is Duiet impressive as compare to the market. D%BIT *ARD "(P &pna Cash Card is an &%1 plus 5ebit Card. *. %he front of the card will have the following matter on itL Card 9older6s #ame International "in #umber '3 5igits B RRRRRR) 1agnetic >trip >ignature Panel Conditions of @sage 1B#et and 1B#et logo

8I>ITATI,5( &ny nonBpersonal account i.e. Companies, (rgani8ations, %rust &ccount, overnment account and Collection account etc. 5ormant, inoperative, blocked or restricted accounts. &ccounts with G#I<H balance. %erm 5eposit &ccounts. #I5F &ccounts. '#on Interest 5emand Finance &ccounts)

Internship Report

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The Bank of Punjab &ccounts reDuiring thumb M photo for operation 'illiterate accounts) S &%1M5ebit cards can only be issued on local currency accounts.

Financial statements
5 years At a Glance 2++1 2++2 2+1+ 2+11 2+12

Total Assets Deposits Ad'ances In'est ents (hareholderEs %Fuit" Pre-Ta& profit After Ta& Profit
Internship Report

577,718,806

635,132,711

762,193,593

817,758,326

944,232,762

463,426,602

501,872,243

591,917,435

624,939,016

726,464,825

268,838,779

316,110,406

340,318,930

412,986,865

475,243,431

156,985,378

139,946,995

211,146,038

170,822,491

217,642,822

37,635,706

53,044,649

69,270,631

81,367,002

94,791,919

19,056,028

26,310,577

28,060,501

23,000,998

22,300,173

12,709,444

17,022,346

19,033,773

15,458,590

18,211,846

- )) -

The Bank of Punjab

%P(@RsA 5u ber of Branches 5o of % plo"ees

23,941,056

27,113,698

30,994,965

44,550,347

59,316,438

1242

1250

1261

1276

1287

13824

14019

14079

15441

16248

5 years Balance Sheet :


A((%T( 2++1 2++2 2+1+ 2+11 2+12

*ash and balances

7 # $%#$"%

7&#%'"#''7

$(#&73#'($

0%#"03#7"%

"#&'7#&%&

Balances with other banks 8endingEs institutionsnet In'est ents-net

3 #0 $#330

(0#%( #%7$

37#(7'#&3'

3&#3((#%0&

'&#(0"#"%(

%#'&'#$('

'3#0 '#73'

' #(%(#%00

7# '&#03'

$#"&7# 7%

"%#$&"#37&

3$#$(%#$$"

'

# (%#03&

70#&''#($

' 7#%('#&''

Ad'ances-net

'%&#&3&#77$

3 %#

0#(0%

3(0#3 &#$30

( '#$&%#&%"

(7"#'(3#(3

,perating fi&ed assets

$#("(#3%"

$#%& #$7(

'"#$''#$7$

'(#' 7#%""

'"# (7# $'

Deferred ta& asset-net

3#'0(#"7'

3#0%'#'7

Internship Report

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The Bank of Punjab ,ther Assets


'3#$( #0"% '7# 3#%$& 30#$$(#$%" ((#""0#3(7 "$#3 %#(3&

Total Assets

"77#7 &#&0%

%3"# 3'#7

7%'# $3#"$3

& 7#7"&#3'%

$((#'3'#7%'

Internship Report

- ). -

The Bank of Punjab

8IABI8ITI%(
Bills pa"able Borrowings Deposits and other accounts (ubordinated loans 8iabilities against assets Deferred ta& liabilities ,ther liabilities Total liabilities C owners eFuit" R%PR%(%5T%D B4B (hare *apital Reser'es ;n appropriated Profit (urplus Total

2++1
1G0)1G1-. 1G0-.G1)0 ).$G)2.G.+ 2 1.G.22 )G).2G011 2$G)2.G21+ -+1G2++G1. 2

2++2
1+G.+-G..$ 11G0+)G+02 -+1G102G2) $ 1$G2$2G$10G+0$ 2.G-2.G$++ --$G101G-2 $

2+1+
0G+.1G2+2 1+G11-G10. -21G210G)$ $$G--) -G+20G1$1 $+G2)+G+)1 .)-G1.-G2$ 2

2+11
1+G212G+.1 )+G)-1G22. .2)G2$2G+1 . 2-G20) $2G.-.G1$1 01-G222G1+ 1

2+12
1+G.21G1.2 )-G201G1$1 02.G).)G12)2G.22 )2G2.2G.2$ 12)G.0.G$1)

-G2+1G220 12G$-)G2-. 12G$02G-2$ $1G112G2$1 $0G.$-G0+.

0G+2+G012 1$G102G2.+ $2G+0)G.00 21G2+2G).2 -$G+))G.)2

1G1-)G$12 1-G002G12) )-G$))G111 )0G+.0G+2$ .2G20+G.$1

1G2.2G0-1 12G2)1G+)0 -2G)-.G2+) 21G+22G21. 11G$.0G++2

1+G0.$G0+2 22G.11G0+0 .1G$).G-1+ 2)G0.)G)-2 2)G021G212

Internship Report

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The Bank of Punjab

Horizontal Analysis:
A((%T(
*ash C balances with treasur" bank Balances with other banks 8endingEs to financial institutionsnet In'est ents-net Ad'ances-net ,perating fi&ed assets Deferred ta& asset-net ,ther Assets Total Assets
2+1+ 2)G10$G2)2 $0G)02G1$2 21G).)G.++ 211G1).G+$1 $)+G$11G2$+ 2-G222G202 $+G22)G2.0.2G12$G-2$ *.+ */. *// *.* */. */; *.= .=-

2++1 =*,*+3,+;3 /*,2*+,//2 *3,.,.,+-. *;3,+,;,/=, .3,,,/,,==+ +,-;-,/3; B ./,+-*,2;3 ;==,=*,,,23


2+11

*22 *22 *22 *22 *22 *22 B *22 *22

2++2 =,,3.;,..= -2,3-*,3=+ ./,2*.,=/. */+,+-3,++; /*3,**2,-23 +,3,*,+=B .=,**/,3+, 3/;,*/.,=**


2+12

**2 */* *-* ,+ **, *2. **/ **2

*23,;2/,=;3 /,,/--,32, *=,*.,,2/. *=2,,..,-+* -*.,+,3,,3; .-,.*=,3;; /,.2-,;=. --,;;2,/-= ,*=,=;,,/.3

*;2 *.*2; *2+ *;.;3 *22 *,3 *-.

**;,,.=,,3, .,,-2;,;3*+,;,=,*=3 .*=,3-.,,.. -=;,.-/,-/* .;,*-=,*+. /,23.,.=* ;+,/*3,-/, +--,./.,=3.

*3/ +. *.2 */+ *== .33 +3 .-, *3/

3ori:ontal Anal"sisB
8IABI8ITI%(
Bills pa"able Borrowings Deposits and other accounts (ubordinated loans Internship Report 2++1 *,=-*,*;3 ,,=;3,,-= -3/,-.3,32. B *22 *22 *22 B 2++2 *2,32;,33/ **,=2-,2=+ ;2*,,=.,.-/ B - )1 32+ */*2,

The Bank of Punjab 8iabilities against assets Deferred ta& liabilities ,ther liabilities Total liabilities C owners eFuit" Share a!"#a$ Re%er&e% '( a!!r)!r"a#e* +r),"# S-r!$-% T)#a$ *3,3.+ -,-3.,=*, ./,-+3,+*2 -+1G2++G1.2 -G2+1G220 *.,/;-,.;3 *+,/=.,;./ /,,*,.,./, =;,,*=,+-*22 *22 *22 1++ 1++ *22 *22 *22 *22 */,./; .,/,=,2=/ .3,;+3,/22 --$G101G-2$ 0G+2+G012 */,,=+,.32 /.,2=-,3== .,,+2+,-3+ ,*,+;-,**, ,2 ;/ **/ 11+ 12+ **. *33 =3 *2,

2+1+ 0G+.1G2+2 1+G11-G10. -21G210G)$$$G--) -G+20G1$1 $+G2)+G+)1 .)-G1.-G2$2 1G1-)G$12 1-G002G12) )-G$))G111 )0G+.0G+2$ 11.G$$0G.-) -23 *.*., .2. ***/. 122 */, *., ./*./ *;/

2+11 *2,.*+,23* -2,-;,,+.3 3.-,+/+,2*3 B .;,.=B /+,3;3,,/* 01-G222G1+1 ,,+3+,=;* *+,+-*,2-= ;.,-;3,.2.*,2+.,.*3 *2.,-;+,.*, ;,= -3. */; *;. B *3+ 1)$ *;. *3* .=* ;; */;

2+12 *2,3.*,*3+ -;,.=,,*/, =.3,-3-,,.; B -.,3.+ B -.,.3+,3./ 12)G.0.G$1) *2,=3/,=2. ..,3,*,=2= 3*,/-3,;*2 .-,=3-,-;+ **+,;;3,/=, 3*2 ;*= *;= .;3 B *,2 *3*,. *,/*= 3; *;,

Interpretation:

From the analysis above we have seen that total assets of BOP has been increased from 2008-2012. The main reason for this increase is that bank investment increase in 2011 with a lar e amo!nt i100 to 1"# $nother reason for increase in assets of bank is the lar e amo!nt of balances of other banks. Internship Report - )2 -

The Bank of Punjab %hen we make a look on liabilities section of bank we have analy&ed that the banks liabilities have been increased in 2012 as com'ared to 200# and 2010.which means that a lar e amo!nt of debts have been taken by a bank in this year. (ow move to e)!ity section from the analysis of bank*s ca'ital we came to know that the total ca'ital of bank has been increased in 2012 than in 'revio!s years which is a favorable 'oint for bank. +ence the overall trend of the bank*s financial 'osition that we have analy&ed from hori&ontal analysis is that.

The total liabilities of bank also decreased which is not a favorable 'oint b!t it may be d!e to chan e in other factors. overnmental 'olicies or overnment re !lations, co!ntry*s economic 'osition and many

Bank*s total assets have been increased with a minim!m amo!nt from

2008-2012 Bank*s investment shows a lar e amo!nt of increase the main reason for this chan e is its less lendin to financial instit!tions and lar e amo!nt of balances of other banks The ca'ital of bank also shows a 'osition. ood 'oint of bank*s financial

Vertical Analysis: Example BH


Internship Report - -+ -

The Bank of Punjab

)n *alance sheet all acco!nts of assets section will *e di+ided *y total assets while in lia*ilities and owner,s e-!ity sectional acco!nts will *e di+ided *y total lia*ilities and e-!ity. )n income statement the hori.ontal analysis will *e done *y di+iding all acco!nts *y mar/ !p interest0ret!rn earned.
A((%T( *ash and balances with treasur" bank Balances with other banks 8endingEs to financial institutions-net In'est ents-net Ad'ances-net ,perating fi&ed assets Deferred ta& asset-net ,ther Assets Total Assets 2++1 =*,*+3,+;3 /*,2*+,//2 *3,.,.,+-. *;3,+,;,/=, .3,,,/,,==+ +,-;-,/3; B ./,+-*,2;3 ;==,=*,,,23 *.O ;O /O .=O -=O .O B -O *22O 2++2 =,,3.;,..= -2,3-*,3=+ ./,2*.,=/. */+,+-3,++; /*3,**2,-23 +,3,*,+=B .=,**/,3+, 3/;,*/.,=** *.O 3O -O ..O ;2O .O B -O *22O

2+1+ 2)G10$G2)2 $0G)02G1$2 21G).)G.++ 211G1).G+$1 $)+G$11G2$+ 2-G222G202 $+G22)G2.*.O ;O /O .,O -;O /O B -O

2+11 *23,;2/,=;3 /,,/--,32, *=,*.,,2/. *=2,,..,-+* -*.,+,3,,3; .-,.*=,3;; /,.2-,;=. --,;;2,/-= */O ;O .O .*O ;*O /O 2O ;O

2G+1+ **;,,.=,,3, .,,-2;,;3*+,;,=,*=3 .*=,3-.,,.. -=;,.-/,-/* .;,*-=,*+. /,23.,.=* ;+,/*3,-/, *.O /O .O ./O ;2O /O 2O 3O

Internship Report

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The Bank of Punjab 0.2G12$G-2$ *22O ,*=,=;,,/.3 *22O +--,./.,=3. *22O

8IABI8ITI%(
Bills pa"able Borrowings Deposits and other accounts (ubordinated loans 8iabilities against assets Deferred ta& liabilities ,ther liabilities Total liabilities C owners eFuit" (hare *apital Reser'es ;n appropriated Profit (urplus Total

2++1 *,=-*,*;3 ,,=;3,,-= -3/,-.3,32. B *3,3.+ -,-3.,=*, ./,-+3,+*2 ;2*,+22,,3. ;,+2,,+.= *.,/;-,.;3 *+,/=.,;./ /,,*,.,./, =;,,*=,+-2./-3+O .O +.O B 2.22//O *O ;O *22O ,O *3O .3O ;2O *22O

2++2 *2,32;,33/ **,=2-,2=+ ;2*,,=.,.-/ B */,./; .,/,=,2=/ .3,;+3,/22 ;;/,*=,,;+/ =,2+2,=*. */,,=+,.32 /.,2=-,3== .,,+2+,-3+ ,*,+;-,**, .O .O +*O B 2.22.-O 2.-/*;O ;O *22O +O *=O /+O /;O *22O

Internship Report

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The Bank of Punjab 2+1+ 0G+.1G2+2 1+G11-G10. -21G210G)$$$G--) -G+20G1$1 $+G2)+G+)1 .)-G1.-G2$2 1G1-)G$12 1-G002G12) )-G$))G111 )0G+.0G+2$ 11.G$$0G.-) 2+11 *2,.*+,23* -2,-;,,+.3 3.-,+/+,2*3 B .;,.=B /+,3;3,,/* 01-G222G1+1 1G2.2G0-1 12G2)1G+)0 -2G)-.G2+) 21G+22G21. 1+2G)-2G211 2+12 *2,3.*,*3+ -;,.=,,*/, =.3,-3-,,.; B -.,3.+ B -.,.3+,3./ 12)G.0.G$1) 1+G0.$G0+2 22G.11G0+0 .1G$).G-1+ 2)G0.)G)-2 112G--.G$01

*O .O +.O B 2.22;.O *O ;O *22O =O *-O /+O -2O *22O

*O 3O ,=O B 2.22/;O B 3O *22O +O *+O ;*O .*O *22O

*O ;O ,,O B 2.22;.O B ;O *22O +O *+O ;*O .*O *22O

Interpretation:

From the analysis of balance sheet, we have concl!ded that the total assets rew by "-. contrib!ted by "-. increase in cash balances, /2./. increase in investments and 10.1. in advances. The investments in 1held for tradin 1 rose by -8.-. which was added to the investments rowth while nominal increases were observed in investments in 1held to mat!rity1 and 1available for sale1.

5 years Profit & Loss:

Internship Report

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The Bank of Punjab

2++1
Mar.-!/Re#-r(/I(#ere%# Ear(e* Mar.-!/Re#-r(/I(#ere%# E0!e(%e* Ne# Mar.-!/I(#ere%# I(1)2e +r)&"%")(% 3 4r"#e ),,

2++2
-/,=,,,3., */,3/-,+*. /2,*;/,=*3 .,/=*,;-3 .=,=,.,*=2 *.,*3.,,+.

2+1+
;2,;3+,-,* *3,+-2,2** //,3.+,-=2 -,=..,=/; .,,+23,=/; */,;--,,-;

2+11
32,+-.,=+, ./,,,-,=3, /=,2;,,2/2 *2,+=2,,*.3,2,=,.*3 *3,-*;,,3.

2+12
==,+-=,3+= /+,-,+,3-+ /,,-;,,2-, **,33+,//; .3,=,,,=*/ *+,2.;,/;=

//,3+.,33; *2,/.*,=3, ./,/=2,,+= .,../,+.= .*,*-3,+=2 +,/+.,/;*

Ne# 2ar.-!/I(#ere%# I(1)2e T)#a$ N)( 2ar.-!/I(#ere%# I(1)2e T)#a$ N)( 2ar.-!/I(#ere%# E0!e(%e% +r),"# 5e,)re Ta0a#")(

**,-,/,.+/

*/,3/-,-,;

*-,/+*,2=+

*+,;2.,2,2

./,;*/,,+=

*+,2;3,2., 3,/-3,;,12G0+2G)))

.3,/*2,;== +,.,,,./* 10G+22G$).

.,,232,;2* +,2.3,=., 12G+$$G00$

./,222,++, =,;-.,-2, 1-G)-1G-2+

..,/22,*=/ -,2,,,/.= 11G211G1).

Ta0a#")(

+r),"# A,#er Ta0a#")(

Horizontal Analysis:
>arkupDReturnDInterest %arned >arkupDRetirnDInterest %&pensed 5et >arkupDInterest Inco e Pro'isions C ?rite off 5et arkupDInterest Inco e Total 5on arkupDInterest Inco e Internship Report 2++1 //,3+.,33; *2,/.*,=3, ./,/=2,,+= .,../,+.= .*,*-3,+=2 +,/+.,/;* *22 *22 *22 *22 *22 *22 2++2 -/,=,,,3., */,3/-,+*. /2,*;/,=*3 .,/=*,;-3 .=,=,.,*=2 *.,*3.,,+. - -) */2 */. *.+ *2= */* *.+

The Bank of Punjab Total 5on arkupDInterest %&penses Profit Before Ta&ation Ta&ation Profit After Ta&ation **,-,/,.+/ *+,2;3,2., 3,/-3,;,*.,=2+,--*22 *22 *22 *22 */,3/-,-,; .3,/*2,;== +,.,,,./* *=,2..,/-3 **+ */, *-3 */-

2+1+ -+G-.2G)11 1.G2)+G+11 $$G.22G)0+ )G022G0$21G2+.G0$1$G-))G1)1)G$21G+02 21G+.+G-+1 2G+2.G021 12G+$$G00$

*;2 *3*-.*. */= *-*.; *-= *-. *;2

2+11 32,+-.,=+, ./,,,-,=3, /=,2;,,2/2 *2,+=2,,*.3,2,=,.*3 *3,-*;,,3. *+,;2.,2,2 ./,222,++, =,;-.,-2, *;,-;,,;+2

*,* ./* *;+ -+/ *./ *=; *=2 *.* **+ *..

2+12 ==,+-=,3+= /+,-,+,3-+ /,,-;,,2-, **,33+,//; .3,=,,,=*/ *+,2.;,/;= ./,;*/,,+= ..,/22,*=/ -,2,,,/.= *,,.**,,-3

./* /,/ *3; ;.; *.= .2/ .2; **= 3*-/

Interpretation:
(et income of BOP has been increased with a lar e amo!nt in 2012 as com'ared to 2008, 200#, 2010 and 2011.The main reason for this increase is2 (et mark !' interest income is increased in 2012 beca!se of loans and advances taken by a bank in 2012 decreases with lar e amo!nt. $nother reason for this increase is increases in net mark !' interest earned by a bank.

Internship Report

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The Bank of Punjab

Total non mark !' interest income has been decreases in 2012.3t were a lar e amo!nt in 2008-2011 which was not a favorable 'oint. +ence the hori&ontal analysis of BOP shows that com'any*s financial 'osition was m!ch better in 2012 as com'ared to 'revio!s years.

VERTICAL ANALYSIS
%his is vertical analysis of the profit and loss account. %his is showing that how bank worked throughout the previous five year. %his ratio shows the relationship between the interested earned by the bank and other items of profit and loss account of bank. %his is also showing that how much bank financial health is going on. %he vertical analysis of the bank I following7..

Internship Report

- -. -

profit and loss accounts

The Bank of Punjab 1arkBup M return M interest earned 1arkBup M return M interest e$pense Provision against nonBperforming loans and advances Provision for diminution in the value of investment "ad debts written off directly #et markBup MreturnMinterest income after provision 5,5 >AR6-;PD I5T%R%(T I5*,>% Fee, commission and brokerage income 5ividend income M gain on sale of investments Income from dealing in foreign currencies gain on sale and redemption of securities unreali8ed gain on revaluation of investment share of profit from joint venture B net ta$ share of profit from associates B net of ta$ (ther income

2012
100 51.14659 48.85341 7.924581 3.339671 0.004482 11.26873 37.58468 0 10.88657 1.242756 2.499249 2.839722 0.007607 0 0 2.45426 19.93016 57.51484

2011
100 51.94464 48.05536 14.16779 0.776968 0.025962 14.97072 33.08464 0 #VALU ! 2.463621 3.884868 5.890994 0.003021 0 0 0.708444 24.40785 57.49249 0 28.9572 0.796406 0.412645 30.16625 27.32624 0 27.32624 11.38137 -5.30264 -1.28279 4.795943 22.53029

2010
100 39.04676 60.95324 17.39011 0.607879 0.006541 18.00453 42.94871 0 13.05856 4.721551 6.575543 0.649397 0.002791 0.210187 0.010286 2.053746 27.28206 0 0 30.02911 1.22875 0.953955 32.21181 -32.2118 0 38.01896 19.29267 -0.00296 -6.91848 12.37123 25.64773

2009
100 33.4897 5 66.5102 5 9.28968 7 0.07916 0.07847 6 9.28900 1 57.2212 5 0 13.5264 6 6.4492 2.10053 3 4.63077 6 0.06287 0.41391 8 0.06094 9 0.30114 7 27.4201 1 84.6413 6 0 28.3005 1 0.34619 6 0.34251 3 28.9892 2 55.6521 4 0 55.9609 4 16.3918 0.76645 - -0 - 7 0.63527 1 17.7935 3 38.1674 2

2008
100 31.1380 2 68.8619 8 7.02402 2 -1.62019 0.01206 7 5.41589 5 63.4460 8 0 14.0324 7 6.60389 5 3.04608 8 2.67081 9 -0.01019 0 0 1.43329 27.7763 7 #"#V$0! 0 30.7007 6 -0.03947 0.47575 6 31.1370 5 #"#V$0! 0 60.0854 1 19.8581 2 1.21184 9 0.14154 6 21.2115 1 38.8739

5,5 >AR6-;P D I5T%R%(T %IP%5(%( &dministrative e$penses (ther provision M write offs M 'reversals) (ther charges %otal non markBup M interest e$penses 0$traordinary items B B B PR,/IT B%/,R% TAIATI,5 %a$ation T Current Internship Report B Prior year's) B 5eferred

0 29.61676 0.167314 0.134378 29.91845 27.59639 0 27.59639 11.11655 #VALU ! #VALU ! 7.744704

PR,/IT A/T%R TAIATI,5

19.85169

The Bank of Punjab

CRITICAL ANALYSIS FINANCIAL ANALYSIS


(a) RATIO ANALYSIS Ratio Anal"sis Ratio analysis is the calculation and comparison of ratios which are derived from the information in a companyKs financial statements. Financial ratios are usually e$pressed as a percent or as times per period. @1A 8iFuidit" Ratios <iDuidity ratios measure a firm6s ability to meet its current obligations.

*urrent Ratio 2008

50>CRIP%I(#

Current &ssets Current <iabilities 2009 2010

2011

2012

Internship Report

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The Bank of Punjab

%otal &ssets <ess (perating Fi$ed &ssets <ess 5eferred ta$ assets <ess other &ssets *;RR%5T A((%T(

635,132,711 (96,81,974)

762,193,593 (25,922,979 )

817,758,326 (24,217,655 ) (3,204,572) (44,550,347 ) 745,785,75 2

944,232,762 (25,147,192 ) (3,062,271) (59,316,438 ) 856,706,86 1

1,035,024,680 (26,888,226) (6,952,666) (53,496,240) 947,687,548

(27,113,698) 598,337,03 (30,994,965 9 ) 705,275,64 9

%otal liability <ess liabilities against asset >ubject to finance lease <ess deferred ta$ liabilities net <ess other liabilities *urrent 8iabilit" *HRJ *urrentAssets *urrent 8iabilities

553,178,593

645,855,939

715,299,108 (25,274) (39,656,831 )

824,676,384 (42,629) (42,269,623 )

906,528,852 (106,704) 46,160,038

(13,235) (33,554) (2,387,073) (5,097,831) (26,596,300) (30,940,041 )

524,181,98 5

609,784,51 3

675,617,00 3

782,364,13 2

860,262,110

1.08

1.16

1.10385

1.09502

1.10

Internship Report

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The Bank of Punjab

I#%0PR0&%I&%I(#L It is the ratio of current assets and liabilities? it states the liDuidity position of the company means due obligation payable within one year. .L * is show good position of company liDuidity, #ow "(P ratio is not e$cellent but satisfactory, "(P ratio is decreasing from previous years which are not good sign for organi8ation. "ut its enough to meet the obligation which is payable within one month.

(ales to ?orking *apital

Sales 0 wor/ing capital


2008 2009 2010 2011 2012

50>CRIP%I(# R0:0#@0 M U>&<0> '#0%)

44,100,93 4

50,569,48 1

60,942,79 8

77,947,69 7

88,472,134

1or/ing capital

74,155,05 4

95,491,13 6

70,168,74 9

74,342,72 9

87,425,438

Internship Report

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The Bank of Punjab

(ales to ?orking *apital

0.59

0.53

0.87

1.04849

1.011

I#%0PR0&%I&%I(# & sale to working capital ratio is the relationship of net >ales and working Capital of the company. %his ratio also helps the management to meet the sales target and to set the prices of the products and to manage the debtors and inventories of the business. "(P is generating2.;+, 2.;/,.2.,=,*.2-,-+,*.2** times sales as compare to its working capital amounts.

?orking capital Current &ssets B Current <iability

Internship Report

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The Bank of Punjab 2008 2009 2010 2011 2012

50>CRIP%I(# *;RR%5T A((%T(

598,337,039

705,275,649

745,785,752

856,706,861

947,687,548

*urrent 8iabilit"

524,181,985

609,784,513

675,617,003

782,364,132

860,262,110

?H*J*urrent Assets *urrent 8iabilit"

74,155,054

95,491,136

70,168,749

74,342,729

87,425,438

I#%0RPR0%&%I(#> !orking capital is the relationship of current assets minus current liabilities. %his measures the short term solvency position of the company. %he Positive Working Capital gives detail that the firm has more &ssets against <iabilities while the Negative Working Capital shows that company is not in a Position to pay its current liabilities as and when they occur. "(P working capital position is very strong? it is showing strong asset position as compare to their liabilities. "(P can easily pay its short term libilites.

Internship Report

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The Bank of Punjab

@BA 8e'erage Ratios <everage ratios measure the degree of protection of suppliers of long term funds.

TI>% I5T%R%(T %AR5%D RATI,B

#et income interest,ta$, M interest e$pense times interest earned ratio indicates the e$tent of which earnings are available to meet interest payments. & lower times interest earned ratio means less earnings are available to meet interest payments and that the business is more vulnerable to increases in interest rates.
50>CRIP%I(# #et income interest,ta$ 2008 2009 2010 2011 2012

.+/===+ 3

/++-;-,+

-;222;*.

-3,,;=33

3*=,+,..

Interest e$pense

*2/.*=3 , ..,%imes

*3+-22**

*3+-22**

./,,-=3,

/+-,+3-+

#et income interest,ta$ G D Interest e$pense

..+. %imes

..3; %imes

*.+3 %imes

*.;3 %imes

RPR0%&%I(# %ime interest earned indicates that whether the business has earned sufficient
Internship Report - .$ -

The Bank of Punjab

Profits to pay its periodical interest liabilities. %his indicates the number of times Interest is covered by the profits available to pay interest charges. In Pear .2*. lower time interest armed ratio will create a difficulty for the bank to pay its interest e$pense on outstanding debt.

Debt Ratio

%otal debt M %otal assets

50>CRIP%I(# %otal 5ebt

2008

2009

2010

2011

2012

553,178,59 3

645,855,93 9

715,299,10 8

824,676,38 4

906,528,852

%otal &ssets

635,132,71 1

762,193,59 3

817,758,32 6

944,232,76 2

1,035,024,680

Internship Report

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The Bank of Punjab

Total debt D Total assets

0.870

0.85

0.87

0.87

0.875

RPR0%&%I(# 5ebt ratio indicates of financial position of company according to bond holder point of view because bondholder interested to see if company will show loss then assets are enough to recover their investment amountQ "(P current ration total debt to eDuity is satisfactory it is showing company can easily pay the money if organi8ation go in liDuidation.

Debt D %Fuit" Ratio %otal 5ebt %otal 0Duity

50>CRIP%I(# %otal 5ebt

2008

2009

2010

2011

2012

553,178,59 3

645,855,93 9

715,299,10 8

824,676,38 4

906,528,852

Internship Report

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The Bank of Punjab

%otal 0Duity 53,044,649 69,270,631 81,367,002 94,791,919 103,762,310

UTotal Debt D Total %Fuit"

10.42

9.32366

8.79102

8.70

8.73

I#%0RPR0&%&%I(# 5ebt to 0Duity ratio indicates the relationship between the e$ternal eDuities or (utsiders6 funds and the internal eDuities or shareholders funds, the debt to eDuity ratio is used to measuring solvency and researching the capital structure of a company. It indicates how much the company is leveraged But in case of BOP, its very high, showing that company is financing itself Through debts1 !"#$ %!&#$ '!(%$ '!( $'!(& times more than its financing through e)uity! *ts really a bad +ituation where B,P is relying on its e-ternal sources more than its internals!
*urrent ?orth D 5et worth Ratio

Internship Report

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The Bank of Punjab


2Net profit (after interest and ta3) 0 Share holder4s f!nd5 6 007

50>CRIP%I(# #et profit after interest and ta$

2008

2009

2010

2011

2012

17,022,34 6

19,033,773 15,458,59 0

18,211,846 17,563,214

>hare holder fund

53,044,64 9

69,270,631 81,367,00 2

94,791,919 103,762,310

Ne# !r),"# 6a,#er "(#ere%# a(* #a07 / Share h)$*er8% ,-(*9 : 100

32.0905%

27.47740 %

19 %

19.21244 %

16.9263%

#%0RPR0&%&%I(#L It is very important according to share holder point of view because dividend is distributed through net income? shareholders want to know how much profit is earning by the company as compare to their investment. !hat amount will distribute and what amount will be reinvested. "(P is still earning good profit? it shows the good survival of organi8ation in competition trend.

Internship Report

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The Bank of Punjab

"(P current worth ratio is good/..2+2;, .=.-=,*+,*+ percent respectively, little decrease from previous years, but it shows people still invest their money sufficiently in "(P business. 5ue to its strong earning position.
/i&ed Asset Ratio D %Fuit" Ratio

(wners 0DuityM%otal &ssets

50>CRIP%I(# (wners 0Duity

2008

2009

2010

2011

2012

53,044,649

69,270,631

81,367,002

94,791,919

103,762,310

%otal &ssets 635,132,71 1 762,193,59 3 817,758,32 6 944,232,76 2 1,035,024,680

,wners %Fuit"DTotal Assets

0.083

0.09088

0.10

0.10039

0.10025

RPR0%&I%(# %his ratio is useful for shareholders because through this ratio shareholder can see what total amount left if the company go in liDuidation after paying the priority to bondholders, "(P financial owner eDuity position is good it showing currently enough investors are making investment in "(P.
Internship Report - .1 -

The Bank of Punjab

@*A Profitabilit" Ratios Profitability ratios measure the earning ability of a firm.

ross Profit 1argin ross profit M sales or revenue V*22

50>CRIP%I(# ross profit

2008

2009

2010

2011

2012

30,153,71 6

33,629,47 0

37,058,03 0

38,458,048 43,221,658

sales or revenue 44,100,93 4 50,569,48 1 60,942,79 8 77,947,697 88,472,134

7ross profit D sales or re'enue K1++

68.37%

. 66%

61%

49.33827 %

48.8534%

I5T%RPR%TATI,5( ross profit ratio may indicate to what e$tent the selling prices of goods per unit may be reduced without increases losses on operations. It reflects the efficiency with which a firm produces its products.
Internship Report - .2 -

The Bank of Punjab

*n case of B,P the gross profit margin shows that companys earned gross Profits in.'/$ ../$ .1/$ "%/$ respectively of the net sales of the company! *t shows the strong position of the company! *t is producing very good 0!P to maintain the reserves to invest in business!

5et Profit >argin

#et Income V *22 #et >ales

50>CRIP%I(# 2008 #0% U PR(FI% 17,02,346

2009 19,033,77 3

2010 15,458,59 0

2011 18,211,84 6

2012 17,563,214

1ark @pMInterest RateM ReturnM >ales

44,100,934 4

50,569,48 1

60,942,79 8

77,947,69 7

88,472,134

5et profit D 5et (ales K 1++

38.59%

37.64 %

25.36 %

23.36 %

19.85%

I#%0RPR0%&%I(#L
Internship Report - 0+ -

The Bank of Punjab

%his is the ratio of net profit after ta$es to net sales. %his is used to measure %he overall profitability of the company and is very useful to proprietors. %he Profit margin tells you how much profit a company makes for every Rupee * It generates in revenue, *n case of the B,P the ratio indicates the &'!1%/$&(!." /$ #1!&./$ #&!&./1%!'1/$ net profit of the organi2ation as compared to its sales! Company is having available profit on sale of 3very unit! Now company is able to determine the amount of dividends$ 4eserves to be set or how much to retain for it

PR%TAI >AR7I5 Preta$ Profit M #et >ales V *22 2008 2009 2010 2011 2012

50>CRIP%I(# Preta$ Profit

26,310,57 7

28,060,50 1

23,000,99 8

22,300,17 3

24,415,119

1ark @pMInterest RateM ReturnM >ales

44,100,93 4

50,569,48 1

60,942,79 8

77,947,69 7

88,472,134

Internship Report

- 01 -

The Bank of Punjab

Preta& Profit D 5et (ales K 1++

59.65%

55.48 %

38 %

29 %

27.59%

I#%0RPR0%&%I(#L Preta- margin means how much the B,P is earning after the operating$ no operating$ 5inancial cost! *t is a ta-able income! B,P is earning &!11/ than its +ales of amount 4s!(.$ ."#$&%%! Now company will determine its ta- rates and Procedures to be followed!

,perating Assets Turno'er

Revenue &ssets

50>CRIP%I(# Revenue

2008

2009

2010

2011

2012

44,100,934

50,569,481

60,942,798

77,947,697

88,472,134

Internship Report

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The Bank of Punjab

&ssets 635,132,71 1 762,193,59 3 817,758,32 6 944,232,76 2 1,035,024,680

R%=%5;% DA((%T(

0.069

0.06634

0.07452

0.08255

0.085

Return on ,perating Assets


Net )ncome 8 )nterest 93pense Total :ssets

50>CRIP%I(#
Net )ncome

2008 17,022,346

2009

2010

2011

2012

*+,2//,==/

*;,-;,,;+2

*,,.**,,-3 17,563,214

Internship Report

- 0$ -

The Bank of Punjab

)nterest 93pense

13,634,485

14,391,079

19,502,080

23,513,897

26,469,490

Total :ssets

635,132,71 1

762,193,59 3

817,758,32 6

944,232,76 2

1,035,024,680

5et inco e L Interest e&pense D Total assets

0.0482

0.043853

0.042751

0.044190

0.0425

(ales to /i&ed Assets >ales M fi$ed assets

50>CRIP%I(# /i&ed Assets %otal &ssets <ess current assets Fi$ed &ssets

2006

2008

2009

2010

2012

635,132,711 (598,337,039 ) 36,795,672

762,193,593 (705,275,649 ) 56,917,944

817,758,326 (745,785,752 ) 71,972,574

944,232,762 (856,706,861 ) 87,525,901

1,035,024,680 (947,687,548) 87,337,132

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The Bank of Punjab

(ales D fi&ed assets

1.19

0.89

0.85

0.89335

1.01

I#%0RPR0%&%I(# >ales to fi$ed assets ratio is used to measure the productivity of goods, means plan and building which is fi$ed assets used to produce the goods, through this ratio we can check the e$act capacity of fi$ed assets. "(P ratio is good*.*+, 2.,+,2.,;,2.,+//; ,*.2*,respecitvely, which shows the strong financial position of company assets.

Return on Total %Fuit" #et Income V*22 0Duity

50>CRIP%I(# #et Income M Profit

2008

2009

2010

2011

2012

17,022,346

19,033,773

15,458,59 0

18,211,846

17,563,214

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The Bank of Punjab

%otal 0Duity 53,044,649 69,270,631 81,367,00 2 94,791,919 103,762,310

Return on eFuit"

32.09

27.48 %

19 %

19.21 %

16.92%

InterpretationL %his is the measurement of the return which shareholders are obtaining on %heir investments. %he ratio is the relationship of net income and total eDuity of the shareholders. Investors and lenders measure the strength of the business from this ratio and made their decisions. *n case of B,P$ it is earning &#! %$#(!"'$ 1%$ 1%!#1$1.!%# / respectively returns over its e)uity! *t is indicating a good sign for their shareholders!

Acti'it" Ratios &ctivity ratios measure a firmKs ability to convert different accounts within their "alance sheets into cash or sales.
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The Bank of Punjab

Total Assets Turno'er #et >ales &verage %otal &ssets 2008 2009 2010 2011 2012

50>CRIP%I(# Revenue M >ales #et)

44,100,934

50,569,481

60,942,798

77,947,697

88,472,134

&verage %otal &ssets

635,132,71 1

762,193,59 3

817,758,32 6

944,232,76 2

1,035,024,680

5et (ales D A'erage Total Assets

0.069

0.06634

0.07452

0.08255

0.085

InterpretationL %he ratio depicts that is the company @tili8ing its assets efficiently or not higher the ratio means that the firm is obtaining the optimum level of production the lower the ratio means that firm is not managing the assets in an efficient manner.

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The Bank of Punjab

*n case of B,P$ it is earning ! .%$ ! ..$ ! ("1#$ and ! '#11$ returns after utili2ing its resources or assets efficiently! BA56 MRATI,(
I#:0>%10#% %( %(%&< &>>0%> I#:0>%10#% M%(%&< &>>%>

50>CRIP%I(#

2008

2009

2010

2011

2012

I#:0>%10#%

23,012,732

21,464,600

17,128,032

19,587,17 6

23,158,656

%(%&< &>>0%>

635132,711 ,

762,193,59 3

817,758,32 6

944,23,76 2

1,035,024,680

I5=%(T>%5T 0.03623 DT,TA8 A((T(

0.028161

0.02094

0.020743

0.022

&5:&#C0> %( 50P(>I% R&%I( Internship Report

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The Bank of Punjab %(%&< &5:&#C0> M %(%&< 50P(>I%>

50>CRIP%I(# %otal &dvances

2008

2009

2010

2011

2012

316,110,40 6

340,318,93 0

412,986,86 5

475,243,43 1

477,506,564

%otal 5eposits 501,872,24 3 ;+*,+2=,-/ ; 3.-,+/+,2* 3 =.3,-3-,,. 832,151,888 ;

Total Ad'ances D Total Deposits

0.62

0.57495

0.66084

0.65418

0.573

I#%0RPR0%&%I(#L "usiness of "(P mostly runs due to deposit of customers in different accounts. It is the ratio which indicates what the total deposit of customers and what the advances amount means issue loan "y "(P. "(P is advancing more than from their deposits, which is showing as a good financial position in market. &nd it is earning sufficient return to meet its need.
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The Bank of Punjab

C&>9 %( 50P(>I% R&%I( C&>9 M 50P(>I% 2008 2009 2010 2011 2012

50>CRIP%I(# C&>9

78,625,227

+-,,=/,.-+ *23,;2/,=;3

**;,,.=,,3, 115,442,360

50P(>I% C&>9M 50P(>I%

501,872,243

;+*,+2=,-/;

3.-,+/+,2*3

=.3,-3-,,.;

832,151,888

0.156

0.16

0.17

0.15

0.13

I#%0RPR0%&%I(#L Cash to deposit ratio is important for bank because in this ration bank analyst know what is liability of business 'means payable to customers) like deposits, and what are the cash available to meet the customers demand. "(P still has good position it can easily complete the customers deposit demand.

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The Bank of Punjab

SWOT ANALYSIS OF THE ORNIZATION

STRENGTH &ll the employees of government like wapda, ptcl, police, teachers or instructors salaries withdraw through "(P. >o mostly employees have their account in "(P due to it, its deposit is greater than any other bank. "(P is working as a agent of >"P particularly in those cities where >"P braches are not available. 5ue to it people feel more secure about their money and "(P services. "(P of Pakistan is largest bank of country which is working with *.,= branches and *3.-, employees? it is working also in renowned cities of foreign countries. WEAKNESS Poor working conditions, there is no proper guideline for valuable customers, culture of organi8ation is not up to grade as compare to globali8ation standards. 1ostly recruitment in past not at merit, so people are working in organi8ation lack of public dealing, not know the communication style. <engthy procedures of loan issuing like "(P advance salary and "(P cash against loan. 9uge number of documents reDuired so people feel difficulty to avail of the opportunity. <ack of staff, like in our bank and mostly braches in our district not have 0CIP report system and operator, cash department is
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The Bank of Punjab

also working with less employees due to it customer services so much affected. <acks of responsibility, employees are not interested to give customers satisfaction. %hey are not providing services an prior biases

OPPORTUNITY "(P can enjoy handsome return after investing their funds of capital market of foreign countries. Investors take more interested to invest or deposit their money in "(P due to high profit rate. "(P should start to (nline banking in all over the country not in only main cities, like online opening accounts, online balance checking facility, &%1 machine, due to it customers <oyalty will increase. "(P can increase its capital through issue complete range of bonds and shares, because it is working @nder the >"P so people will feel secure to purchase bonds and shares, due to it "(P can earn more profit and become successful business organi8ation. THREAT "(P is not providing services according to Duality standards, poor working conditions is also one of the negative aspects of "(P, due to its competitors like 9"< is taking competitive edge on it. %here is no proper guideline for customers, they are lack of information deliverance method, and customers do not know how to invest. It is providing more opportunity for others banks
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The Bank of Punjab

to come in market and increase their market share as compare to "(P. In our country there is lot of difficulties for "(P like political instability, foreign investors avoid investing money, and increasing inflations level and unemployment level, the saving of customers are decreasing day by day. %hese problems are creating obstacles in "(P earning profit way.

On BOP Govt. policies have strong impact. A slight change in Govt. policies may affect the performance of the bank. Like If SBP increase its interest rate to issuing loan people avoide to take loan From BOP. So its product will badly affected due to it.

CONCLUSION &ccording to my practice and analysis of "(P "ranch I will suggest some more improvement on lower level, because in modern recent period it is not important what you want to give to customer, it is important what is customer e$pected from youQ 9ow "(P can give ma$imum satisfaction to their valuable customers. %his concept is totally ignored by "(P branch, lack of communication style, public dealing and wastage of customer precious time is popular factors there. #o organi8ation can survive without these important factors, and "(P also start the online work on all over the Pakistan not only in particular cities, due to it "(P value is decreasing because competitors are taking benefit edge form "(P.

RECOMMEDATIONS
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The Bank of Punjab

&ccording to my e$perience and evaluation "(P of Pakistan can 1ake more progress after improving these particular points. "y giving training to their employees, about customer relationship management, communication style. "(P can increase the customer satisfaction and loyalty. &nd make easy the terms and conditions for loan products to their valuable customers. &nd provide proper guideline for educated and @# educated person due to it people will purchase more product, investor will invest more capital and "(P profit and market shares will increase.

All departments should be careful about their performance. Branch should be inspected by inspecting parties. They should especially examine the public dealings of the employees at periodic base not at annual base.

Customers should equally treat when they come in bank, prosper people work have done at prior base and other custoemrs are waiting in row. It is uncivilized, uneducated dealing style with customers.

There is no proper distribution of work, like if a customer wants to purcahse a product of BOP then he should require some reports and in one distict 5. 6 branches only one ECIB computer system is avialble, and it is also courrpted daily or weekly, and no person is avialble to printout ECIB reports, it shows the poor distribution of work by BOP management.

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The Bank of Punjab

Bibliograph"
For the analysis and the brief history of the "ank of Punjab, his financial >tatements, I attain data by using internet from different websites, in which, 9istory of %he "ank of Punjab Retrieved *2 #ov .2*/ from "ank of Punjab web site httpsLMMwww.bop.com.pkM&bout@s.asp$ Product 5etail. Retrieved *2 #ov .2*/ from "ank of Punjab web site httpsLMMwww.bop.com.pkMProducts.asp$ &nnual Report, Retrieved *2 #ov .2*/ from "ank of Punjab web site httpsLMMwww.bop.com.pkMFinancialM&nnual&ccounts.asp$

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