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1 History of the Bank of Punjab
The Bank of Punjab (BOP) was established in 1989 and was given the status of scheduled bank in 1994. The Bank of Punjab is working as a scheduled commercial bank with a network of almost 272 branches at all over major locations in the Pakistan.
1.1.1Nature of the Organization
The Bank of Punjab is a banking organization, which provides all types of banking services such as Deposits in Local Currency and Foreign Currency, Remittances, Advances to business, Trade, Industry and Agriculture. The Bank of Punjab has definitely entered in a new era of science to the nation under experience and professional hands of its management. The BOP plays a vital role in the national economy through mobilization of till now available local resources, promoting savings and providing funds for investments. The bank offers attractive rates of profit on all deposits, opening of foreign currency accounts and handling of foreign exchange business for example imports, exports, remittances, financing, trade and industry for working capital requirements and money market operations.
The BOP today has 272 well furnished branches in all over the Pakistan. The branches of BOP are divided according to the following regions: Classification of Regions & Number of Branches Sr. # 1 2 3 4 5 6 7 8 9 Corporate Region Lahore Region –South Lahore Region – North Rawalpindi Region Faisalabad Region Gujranwala Region Multan Region Peshawar Region Karachi Region 1 34 33 38 43 45 64 7 7 Region Name No. of Branches
1.2 Business Volume
Business Volume in terms of Investment, Current & Fixed Assets, Share Capital, Revenues, Deposits, Advances, Income, and EPS for the last 5 years is as under:
1.2.1Bank’s Growth, Profit & Loss (Rupee)
Income Expenses Profit Growth
2,869,338,029.73 -1,676,959,562.82 1,192,378,466.91
7,840,303,996.67 -4,462,674,531.28 3,377,629,465.39
17,835,532,927.95 -11,951,293,782.43 5,884,239,145.52
28,518,593,936.67 -21,769,277,662.42 6,749,316,274.25
35,041,452,374.16 -29,691,225,055.73 5,350,227,318.43
40 35 30 25 20 15 10 5 0
Income Income Income Income Income Profit Expenses Profit Profit
5 4 3 2 1 0 -1 -2 -3 -4 -5
-5 -10 -15 -20 -25 -30 -35
Expenses Expenses Expenses Expenses
Growth 1.83 1.23 2004 0.74 2005 2006 0.15 2007 2008 -0.21
1.2.2Bank’s Assets, Investment, Deposit & Advances
Particulars Total assets Shareholder's Equity Investment Deposits Advances (net) 2004 66,320 4,420 16,198 54,724 39,439 2005 111,154 6,777 18,026 88,465 63,624 2006 164,855 10,659 28,233 137,728 101,320 2007 235,001 18,996 73,462 191,968 133,899 2008 185,909 3,743 22,690 164,072 131,724
2,000 1,900 1,800 1,700 1,600 1,500 1,400 1,300 1,200 1,100 1,000 900 800 700 600 500 400 300 200 100 0 2004 2005
1.2.3Earning Per Share
42 2008 -19.14 2007 8.3 BOP’s Management and Employees 5 Yea rs Rate .19. 2005 and 2006 but it decrease in 2007 but remain positive. The BOP show better progress up to 2006 – the major reason is the favorable market condition and boom in banking sectors and over all good political situations.07 EPS 20 18 16 14 12 10 8 6 4 2 0 -2 -4 -6 -8 -10 -12 -14 -16 -18 -20 2004 2005 2006 2007 2008 Comments: The Bank’s total advances.08 2005 10. In 2008 the earning per share decreases and reaches at negative (Rs. 1.Particulars EPS (Rs/share) 2004 9. 2008 & reaches at negative in 2008. As global environment get changes then the Pakistan’ banking sector also effected. The earning per share increase in 2004.01 2006 13.07/share). deposit & investment are increasing from 2004 to 2007 and banks also show a reasonable progress in these four years but the growth rate decreased in 2006.
1. PRESIDE NT SEVP EVP EOC SVP VP AVP OOC OG-I OG-II RM OG-III ACO CO JO C/NC TOTAL 1 1 1 5 10 28 125 31 340 245 90 420 134 350 425 1600 3806 STAFF STRENGTH 5600 4900 4200 3500 2800 2100 1400 700 0 Years 2004 2005 2006 2007 2008 3806 3923 4120 4555 4918 # OF Employees Sr. 1 3 7 11 15 50 259 56 408 296 160 504 208 640 512 1788 4918 2007 GRADE No. PRESIDEN T SEVP EVP EOC SVP VP AVP OOC OG-I OG-II RM OG-III ACO CO JO C/NC TOTAL 1 1 4 8 14 40 200 47 380 280 140 490 150 600 500 1700 4555 2006 GRADE No.1 Staff Strength At present. PRESIDEN T SEVP EVP EOC SVP VP AVP OOC OG-I OG-II RM OG-III ACO CO JO C/NC TOTAL 1 1 3 6 13 35 170 40 350 270 120 430 146 425 430 1680 4120 2005 GRADE No.3.2 Board of Directors (BOP) Name Mr. 2008 GRADE PRESIDENT SEVP EVP EOC SVP VP AVP OOC OG-I OG-II RM OG-III ACO CO JO C/NC TOTAL No. # 01 1. Safdar Javaid Syed Status Chairman 6 .3. the total number of employees in the organization is 4918. PRESIDE NT SEVP EVP EOC SVP VP AVP OOC OG-I OG-II RM OG-III ACO CO JO C/NC TOTAL 1 1 2 7 12 30 150 35 330 255 110 450 140 400 400 1600 3923 2004 GRADE No.
Amir Hameed Mr. Liaquat Ali Mr. Hafeez ud Din Mr. Main Muhammad Sharif Mr.3 BOP Top Level Management Sr. Sajjad Hussain Mr.02 03 04 05 06 07 08 Mr. Nadeem Amir Mr. Azhar Hamid Mr. Ahmed Tariq Azam Designation Deputy Chief Executive Officer Head of Special Project Head Retail Banking Chief Financial Officer General Manager Operations & IT General Manager Broad Base Liability Head Consumer Banking Division (CBD) Head IT Head Treasury Head of Audit & RAR Head CAD Head Credit Policy Head Agriculture Credit Department Head TPC Head Establishment Head C&CD Head Human Resource Chief Risk Officer Head SAM Country Commercial Head Advisor Islamic Banking Head Corporate 7 . Khawar S. Khalid Siddiq Trimizey Mr. S. Moazzam M Maneka Mr. Ijaz ur Rehman Qureshi Mr. Atif Mr. Zalmai Azam Durrani Mr. Shahid Waqar Mahmood Mr.3. Irfanuddin Mr. Momin Hyat Mr. # 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Name Mr. Naeem-Ud-Din Khan Mr. Azhar Hussain Dilawari Mr. Abdul Razzaq Mr. Waqar Ahmed Khan Mr. Tariq Mehmood Pasha Mr. Raza Saeed President Director Director Director Director Director Secretary 1. Shafqat Ellahi Mr. M. Shafqat Mahmood Mr. Moghis Bokari Mr. Sharjeal Masud Mr. Sajid Arif Nomani Mr.Ansari Mr. Salman Saeed Mr.
Lahore.1. trade and treasury products and services. Khurram Iftikhar Chairman Member Member 1.bop. Ph: 042-5839182 1. Goals and strategies define the scope of operations and the relationship with employees. clients and competitors. 1-k (Commercial) Model Town. BOP constantly review its comprehensive cash. With over 140 years of experience in trade finance and an extensive international branch network.4 AUDIT COMMITTEE Mr. To keep pace with changing needs.3. Charter Accountants 1. Salman Siddique Mr.pk UAN: 111-200-100 REGISTRAR: M/s corplink (Pvt) Ltd Wings Arcade. The Bank of Punjab is committed to help the customer succeed in every competitive environment.Egerton Road. Goals are often written down as an enduring statement of company intent. ensuring that a full range of flexible and innovative services is always available for the customer wherever they trade. 8 .3.3.4 CORPORATE GOAL Organizational goal and strategy define the purpose and competitive techniques that set it apart from others organizations.5 AUDITORS Ford Rhodes Sidat Hydar & Co.com.6 REGISTERD OFFICE 7. Lahore – Pakistan PBX + 92 (42) 9200421 – 432 WEBSITE: www. Kasir Zulifqar Khan Mr. A strategy is the plan of action that describes the resource allocation and activities for dealing with the environment and for reaching the organizational goal..
move swiftly. respond faster. Creating values for the customers. Its tough out there. markets and environment throws light on the corporate mission. services. Like leopard. so one of the business executives at the bank. focused. helpful and responsive-manner” The objectives of The Bank of Punjab carving way towards the mission are: To be fast. philosophy.6 MISSION STATEMENT As it is said that an organization’s culture. products. shareholders and employees.” 1. and determined. and work smarter.7 OBJECTIVES: The main objective is “To offer outstanding value to the customers by providing a knowledgeable.be more agile. efficient and reliable service in a personal.5 VISION STATEMENT “To be a customer focused bank with service excellence. 9 . carved the following mission of The Bank of Punjab as “To exceed the expectations of our Stakeholders by leveraging our relationship with the Government of Punjab and delivering the complete range of professional solutions with the focused on program driven products and Services in the agriculture and middle tier markets through a motivated team.” 1. their attitude. Customer satisfaction and delight is given the top priority as we are for the customers and not the customers for us. self-concept. based on his personal observation and judgment.we face brutal challenge from both global competitors and local banks.1. employees.
1.8 CORE VALUES Our Customer Profitability as our first priority for the prosperity of our stakeholders that allows us to constantly invest. improve and succeed Corporate Social Responsibility to Enrich the Lives of community where we operate Recognition and Reward Excellence Integrity Respect for the talented and high performing employees in every thing we do in all our dealings for our customers and each other 10 .
Chapter No. 2 Product Line 11 .
Account holder will be allowed maximum of two deposit transactions and two withdrawals.2. Customers can withdraw and deposit money with out any notice to the bank.1. No fee (service charges) for maintaining such accounts will be charged. firms. There will be no limit for maintain minimum balance. there balance in BBA does remain "NIL" for a continuous 6 month period. limited companies.1000 for BOP Basic Banking Account. Business people who may be individuals. A current deposit account is a running account which is continuously in operation by customer through all working days of the bank. In the cases. 2. No profit will be Payable. the Charges of these Banks shall be applicable for such 12 .2 BOP Basic Banking Account: The minimum initial deposit will be Rs.1. such accounts will be closed. The BOP does not pay interest on these deposits. Service Charges: The Bank may claim Service Charges if minimum balance is not maintained. free of charge either through cash/through clearing per month otherwise service charges of a regular banking account shall be applicable for that month as per Bank's Schedule of Charges. In case of withdrawals from BBA though the ATM Machine of other Banks. Unlimited free of charge ATM withdrawals from Bank's own ATM's will be allowed. The BBA’s has the following features. It is suitable for the people who have to make frequent receipts and payments through cheques.1 Deposit Products: 2. public body and clubs can open this account. The amount of service charges is deducted from debit voucher. Interest: Interest is not paid on current account balance.1 Current Account: The Bank of Punjab offered Current Account to its value customers.
Service Charges: Service Charges can be claimed by the bank if minimum balance is not maintained. The BOP PLS Account has also some following features.transaction. Average balance during a calendar month will be taken to determine the deposit slabs and applicable profit rate for that month. The facility for conversion into BBA will be provided free of charge 2.1. Amount can be withdrawn 8 times in a calendar month. Companies. for Provident Funds and other funds of benevolent nature by Local Bodies. The rates of profit may vary period to period.3 PLS Account: In Pakistan this account was introduced in July 1. Bank declares profit rate for this account half yearly on the basis of its networking results. The deposits are invested in non-interest areas of business. 1985. Societies. Autonomous Corporations. PLS Savings Accounts may also be opened by charitable institutions. People who do not need money in near future invest money in this account. calculation of Profit or Loss is made for each calendar month. Further. Zakat: Zakat is deducted at 1st of Ramadan. Withholding Tax: Withholding Tax at the rate notified by the Government of Pakistan from time to time will be deducted out of profit payable to the Account Holders. Associations. In case of profit or loss it is distributed among all PLS account holder. Educational 13 . Note: If any existing customer desire to get his regular banking account converted into Basic Banking Account. he / she may kindly contact the branch where his / her account is being maintained. This is an operating account.
A notice before 7 days is required for withdrawal of a lump sum amount or more than the specified limit. Account holder is allowed to withdraw a limited amount of money at a time. Account holder is paid interest at the end of June and December at fixed rate on minimum monthly balance.1. There is a guarantee of reasonable rates of return on saving bank account. where customer is allowed to borrow money from a Banker up to a certain limit either at once or when it is required.2 Loan Products: 2. cost of feed. medicines and other running expenses of the Farm. Semen Production Unit. Running financing is Against Pledge of Shares Against Government Securities Against Hypothecation of Stocks Purpose: Running Finance Facility is for purchase of animals. Fish Farming.2.1 Commercial Finance: i. and Firms etc. 2.Institutions. Running Finance Facility will be provided for following type of Live stock Farming: Calves Fattening Farms Broilers Farming. 14 . Layer Farming. Customer can withdraw money through cheque. 2. Running Finance: Running Finance Facility is the form of lending. They can earn income on their present saving.4 saving plus Account: People who want to save their income open the saving bank account.
30% of un-impaired equity of Bank for fund based and non fund based subject to condition that the maximum outstanding against fund based exposure doest not exceed 20% of Bank’s equity) and supported by positive CIB/DFIs confidential reports. which quite often they fail to make. Loans exceeding Rs. Take exposure against sponsor director’s shares (issued in their own name or in the name of their family members) of banks/DFIs. Take exposure against the shares of listed companies that are not members of the Central Depository System.a. banks are required to cease from extending loans to the market players who are engaged in speculations for short term “Gains”. Such financing is supportive to secondary Capital Market concept. consequently rendering the facility to non-performing ultimately. as disclosed in their balance sheets. Advances approved shall be within “Per Party Limit” (i. Given that Stock Market in Pakistan is volatile. Provide unsecured credit to finance subscription towards floatation of share capital. POLICY: Advances against shares shall not be allowed to take exposure against the security of share issued by them.e. 000/. The facility is required to be adjusted periodically or within the period as specified in the Sanction Advice.500. Against Pledge of Shares: The running finance provides by the BOP to it customers are generally extended to companies or individuals on selective basis against pledge of tangible securities such as Shares.e. 15 . Take exposure on any one person (whether singly or together with other family members or companies owned and controlled by him or his family members) against shares of any commercial bank/DFI in excess of 5% of paid up capital of the share issuing bank/DFI. Capital and Reserves minus losses and 04 times in case of fund based facility.(Total Accommodation) shall not be more than 10 times of Borrowers’ Equity i.
Joint Holders Public Bodies. Against Government Securities: Government Securities include Defense Saving Certificates (DSCs). Benevolent Fund collections are invested in the Government Securities. US Dollar Bonds & NIT Units etc. however in case the shares tendered for pledge are registered in the name of a “Third Party”. Documents complete in all respect duly vetted by Bank’s legal counsel signature verified shall be obtained ensuring their validity in a “Court of Law”. POLICY: All Credit Financing against pledge of Securities require Credit Limit approved by Credit Committee. The BOP also extends credit facilities against pledge of “Deposit Certificates” or other instruments of value issued in the name of Individuals.Financing shall be allowed against shares registered in the name of “Borrower”. Large amount of funds representing “Provident Fund”. The Head RACD conducts a monthly review of financing against shares and exercise vigilance over: Market Rates of pledged shares. issued by National Saving Centre Government of Pakistan / National Investment Trust. Signatures shall be verified in pencil on each document. even if 100% covered by cash or collateral. which are yielding better return compared to placements with Commercial Banks. the letter of lien shall be signed by the Third Party and not by the Borrowers. b. Regular Income Certificates (RICs). 16 . Special Saving Certificates (SSCs). Their marketability Dividend /Bonus declarations etc.
A formal charge on the property is established and recorded with the Registrar Land and Property termed as registered mortgage. duly signed by borrowers. This is appropriate to create liquidity limitation in the Financial Balance Sheet of the customer. The BOP in such cases although do not have a physical custody of the goods. Demand Finance: The BOP provides Credit facilities extended against registered mortgage of property (i. in the event the borrowers default to repay the loan or fail to meet their obligations. providing a legal recourse to the Bank to take custody of the stocks. market value less margin) and the outstanding advance shall be reported to the relationship/Risk Manger. as agreed. Against Hypothecation of Stocks: Industrial organizations have to invest a large sum of money to build stocks of raw material to up keep their manufacturing line. Drawing Power worked out each time a stock reports is received and value of stocks reassessed by applying latest Pricing Index.e. Advances are also made against equitable mortgage of property. Negative Variance between the net value of stocks (i. are received Limits are adjusted by CAD in the system in accordance with the periodically at a frequency as spelled out in the DAC/Credit Proposal etc. land/buildings constructed or to be constructed) is by nature classified as a Secured Advance. who shall advise the borrowers to cover the shortfall by additional stocks or adjust the facility accordingly. however have a legal Charge/Lien established. ii. POLICY: Advances against hypothecation of goods is subject to the policies as applicable to other loans. In order to manage such financial shortfall in their cash flow they usually resort to borrowings from Banks against Hypothecation of raw material/semi or finished goods held by them in their stocks. 17 .c. and as spelled out in the Credit Policy Manual of BOP with the exceptions given below:Stock Reports. thereon.e.
the customer would be required to adjust the facility before the season ends. shall clearly highlight Facilities are disbursed or allowed to be availed by the customers only on receipt of a formal DAC issued by RCAD & duly signed by CAD deferment. It shall be ensured that Goods tendered for pledge are: •Free from credit restrictions imposed by State Bank of Pakistan as follows: 18 .whereby the original title Deeds are deposited with the Bank as Security and the charge is registered with the Registrar SECP. iii. CAD shall issue DAC only when charge Documents & Securities as spelled out in the Sanction Advice have been received and lodged in the safe vault. however in rare cases DAC shall be issued where some of the secondary nature documents are not received for acceptable reasons and that the deferment is approved for a specified period by the level of the authority. POLICY: Head. Rollover shall not be allowed. if required further shall Credit Committee shall be necessary. Under this type of financial accommodation the facility amount is disbursed in specially opened account for the purpose. Formal approval for deferment of specified documents from DAC issued where receipt of some of the documents is deferred the deferment approval and the period of period. Extension in the deferment require appropriate level of credit approval. Cash Finance: This facility is being provided by the Bank of Punjab to generally against pledge of goods. in terms of Credit Policy. POLICY: Basic criteria to qualify for advances against pledge of goods are Facility is disbursed in specially opened CF A/C for the purpose. The pledged goods are released to the borrower against cash payment only. In case the goods pledged are seasonal in nature.
2.2 Consumer Finance: i. Easily marketable and their price is not highly fluctuating. Quick Cash Loan makes the dreams come true. power. If so Where variation in pricing is observed during periodic evaluation. 2. repayable on easy monthly installments.•Not perishable. higher margins shall have to be approved & retained. 18. FEATURES: ii. 500000/Tenure 12.P. 0% Mark up for 12 months 0% down payment Free Home Delivery Quick Processing No Product Insurance No Hidden Cost No Prepayment penalty Financing Amount up to RS.24 & 36 months Quick cash: The loan can be taken for higher education of your children abroad or for daughter's wedding. do not require special Storing arrangements/conditions and have short expiry period. 19 . The borrowers hold an absolute un-encumbered title to the goods the customer shall be advised to make good the shortfall in the drawing the customer shall be advised to make good the shortfall in the D. Where variation in pricing is observed during periodic evaluation. BOP Aasaish Loan: BOP Aasaish Loan is Personal Loan Facility to purchase Consumer Durable Goods of selected companies on bank's panel for personal use.
iv. 000/. Mark up and insurance policy is same as for other loan. Insurance will be mandatory and mark up rate will be based on floating rate.loan.to Rs. 50000/. Maximum limit for this loan is Rs. House Loan: House Loan facility is provided to Government employee/ Pvt.based on its income. Tenure is one year.to 500000/. Salaried person of same criteria can apply for the loan. Mark up rate will be based on floating rate. Life insurance of borrowers will be mandatory.500. 000/-. Customers can get RS. vi. Smart Cash Personal Loan: BOP smart cash personal loan scheme is personal DF facility for bank's target market for meeting their personal needs. v.FEATURES: accounts. repayable through monthly installment. account. Maximum tenure for the loan is 5 years.and for purchasing a house with minimum Rs. removal subject to satisfactory conductor This facility is provided to salaried individuals through their bank iii.200000/. Furniture and Crockery Loan: BOP Furniture and Crockery Financing Scheme is a financing scheme for the 20 . The tenure of loan is 01 year to 05 years. Employee / Businessmen / Professionals to renovate a house with minimum Rs. Life insurance of borrowers will be mandatory.25000/. The Car Loan facility ranges from Rs. Employee / Businessmen / Professionals for purchase of brand new locally manufactured / assembled cars for personal use & light commercial vehicles.5000000/-. Salaried person whose age is "between" 25 to 59 can apply for this loan. Minimum take home salary is 10000.100. Car Loan: The Car Loan facility is available to a Government employee/ Pvt.
2. owner/self cultivator of computerized balloting. The tenure for the loan is minimum 36 months and maximum 60 months. The applicant should not be a defaulter of any Financial Institution.per tractor will be provided to the farmers declared successful through computerized balloting. Price of Tractor: The price of Green Tractor would be less by Rs.The mark up rate shall be based on KIBOR. The scheme has been titled as "Green Tractor Scheme 2008-09".5000000/. 000/. Existing BOP borrowers having land under.200. The BOP’s Management has approved a special product titled as "LEASE FINANCE FACILITY FOR PURCHASE OF TRACTOR UNDER GREEN TRACTOR SCHEME 2008-09" with following terms & conditions: Eligibility: All Farmers who have been declared successful through The applicant should be a resident.200. Punjab's agenda for promotion of Agriculture Sector. In the wake of Chief Minister. Bank's charges are also eligible under this scheme. Green Tractor Lease Finance Scheme (New): Lease Finance Facility for Purchase of Tractor under Green Tractor Scheme 2008-2009. Maximum limit of the loan which can be drawn is Rs. Loan shall be repaid through easy monthly installments. minimum 05 Acres of agriculture land free from all encumbrances. Government of Punjab has decided to provide 10.from market price of 21 .purchase of Furniture and Fixture Crockery. A subsidy of Rs.3 Agriculture Credit: i. 000/. In order to facilitate farmers and to grasp maximum business.000 Tractors to small farmers on subsidized rates. 2.
000/. Eligibility Criteria are Resident Self Cultivator having maximum 50 acres. Two the name of The Bank of Punjab).factory price of tractor.) Ltd. and AlGhazi Tractors Limited as Local Manufacturers of tractors for the scheme. pesticides. Subsidy of Rs. fungicides e. 000/.c). Amount of Finance: The amount of finance will be equal to the price of locally manufactured tractor less subsidy amount of Rs. However.tractor. Insurance: Asset Insurance and Life assurance of the Borrower (assigned to BOP) as per Bank's policy (Insurance. 000/. Charge on Agriculture Land through Agri.200.will be provided by Govt. Pass Book.200. fertilizers. of Punjab directly to Tractor Manufacturers. Registration and evaluation charges (if any) etc shall be borne by the farmer. Manufacturers of Tractor: Government of Punjab has approved M/s Millat Tractors (Pvt. Kisan Dost Agree Finance Schemes: written satisfactory market checking reports Purpose of this scheme is Provision of financial facility to farmers for purchase of inputs (Seed.to be provided by the Government of Punjab. Validity: 05 Years from the date of disbursement. MARK-UP 15% Per Annum.500. Pass Book or Registered / Equitable mortgage of urban property assessed by 22 . Security: Leased Asset (Tractor) itself (Tractor will be registered solely in Charge on Agriculture Land through Agri.according to per acre limit of the crop. For Security. Amount for loan is Maximum Rs.t. maximum amount of facility will not exceed the ex . Repayment: 10 Equal Half Yearly Installments (Principal + Mark up) ii. the applicant should not be defaulter of any other Bank and property should be free from any encumbrances.
For Security Lease Assets i.500. The Lessee will arrange comprehensive insurance of implements/assets and Life assurance of lessee under the Bank’s charge.500. Pass Book and One personal guarantee of reputable person. iii. Amount for loan is Maximum Rs. An eligibility criterion is Resident Self Cultivator having maximum 50 acres. One personal guarantee of reputable person acceptable to Bank. thresher. Farm Transport Scheme: 23 . Repayment should be done within five year. Amount of loan is Maximum Rs. for purchase of Tractor on Lease Finance Basis. Kisan Dost Aabrari Scheme: Purpose for this scheme is Provision of financial facility to the farmers for installation of Tube well. Charge on Agriculture Land through Agri.e. And two written satisfactory market checking reports are necessary.000/-For Security Lease Tractor (to be registered in the name of Bank). Markup rate is 15% per annum. An Eligibility Criteria is Resident Self Cultivator. Pass Book.g. Resident Self Cultivator having acres. 750.PBA’s approved surveyor and cleared by Bank’s legal counsel. Mechanization Support Scheme: Provision financial facility to the farmers for purchase of Agricultural Implements e. v. etc. Mark-up rate is 15% per annum. vi. Charges on Agriculture Land through Agri. plough. Eligibility criteria is. The Lessee will arrange comprehensive insurance of tractor and Life assurance of lessee under the Bank’s charge. iv. Two written satisfactory Market checking reports are necessary. Repayment should be done within four to five years. is necessary. Trolley. 000/-. Amount for loan is Maximum Rs. Tube well and other related implements (The vendor will issue receipt in the name of Bank). Engine. Kisan Dost Tractor Finance Scheme: Purpose of this scheme is Provision of financial facility to the farmers and non farmers (those who provide tractors to farmers on rental basis for various tractor related operations). turbines etc. 000/-.
Loan would be provided up to Maximum Rs. Vans and small chillers.The purpose of the scheme is Provision of financial facility to the farmers for purchase of Farm Transport Vehicles e. 24 . Small Pickups. 000/-.g. Eligibility Criteria is Resident Self Cultivator having acres.500.
Provision of financial facility to the farmers for development of their non productive lands into productive ones by conductive on farm works of Land leveling, laser leveling, and land improvement, clearance of jungle and land reclamation. An eligibility criterion is Resident Self Cultivator having acres. Amount of loan will be Maximum Rs.500, 000/-. viii. Live Stock Development Scheme:
Provision of financial facility for purchase of animals (Milk & meat production, cattle farming, Poultry Farming and Fish farming) to the farmers and non farmers (those who have their own live stock farm/fish farm for commercial purposes) ix. Live Stock Scheme:
(Finance for live stock breed improvement through village veterinary) Provision of financial facility to the Village Veterinary Workers (trained by Live Stock and Dairy Development Department) for purchase of Artificial Insemination kits on lease finance basis Village Veterinary Workers having diploma certificate and recommendations from Live Stock and Dairy Development Department, Gove of Punjab are eligible for this. Loan amount is maximum Rs.45, 000/- or 90% of purchase price of kit and bicycle. x. Commercial Agro Services Finance Scheme:
Provision of financial facility to the commercially viable entities with immaculate track record for acquisition of Agri implements and equipments i.e. tractor trolleys, harvesters etc. for providing agri services to farmers. Commercially viable entities with immaculate track record with the Bank/Other financial institutions will be eligible. On case to case basis but not to exceed 80% of the value of equipments / implements
Security: Leased Assets (Vehicles/Tractors will be registered in the name of Bank or Receipt of equipments will be issued in the name of Bank). Bank charge on or Bank’s Charge on urban property through registered and equitable mortgage. One personal guarantee of reputable person. Two written satisfactory market checking. There are also some others agriculture based products in The Bank of Punjab, which are offering by the bank to its customer but may not be discussing in the report because of time limits.
These are the services provided by the BOP. ATM Facility Letter of Credit Pay Order On-Line Banking E-Banking Debit Card Consumer Financing Agriculture Financing Corporate Financing Commission free Remittance Demand Drafts Lockers Facility
2.3.1 Automated Teller Machine (ATM): Through the ATM’s Customers have access to the various services such as withdrawal, balance enquiry and mini statements. Complete security is ensured because access to the account is only possible by entering a four digit personal identification number (PIN) known only to the account holder. Cash withdrawal limit is up to Rs.20, 000 per day. Annual charges of ATM is Rs.250/- per card. 2.3.2 Letters of Credit: BOP is offering its business customers the widest range of option in the area of money transfer. BOP’s letter of credit service is with competitive rates, security, and ease of transaction, BOP Letter of credit is the best way to do the business transactions. 2.3.3 Pay Order: BOP 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. The charges for this service are extremely competitive. 2.3.4 Online Banking: BOP is currently offering window-based 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. 2.3.5 E – Banking: BOP is currently offering window-based 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. 2.3.6 Demand Drafts: BOP provides safe, speedy and reliable way to transfer money at vary reasonable rates. Any person whether an account holder of the bank or not, can purchase a Demand Draft from a bank branch. 2.3.7 Lockers: It is one of the utility services that BOP provides to their customers for keeping jewellery, important documents and other valuables.
Chapter No. 3 Organizational Hierarchy 29 .
3. Organizational Hierarchy I have completed my internship duration at Samanabad Branch. Head Office Regional CAD Regional Offices Area Offices Branches 30 . Faisalabad partially.
Lahore BOARD OF DIRECTOR Company Sec.1 Organogram of Head Office.3. President Board Audit Committee Board HR Committee Board Risk Management Committee CEO Secretariat Head of HR Head of Audit& RAR Business Manager Head of Compliance & Internal Control DCEO Head of Risk &Credit Policy Chief Financial Officer Head of Operations & IT Head of Treasury & Equity Capital market Head of Corporate & Investmen t Banking Head of Retail Banking Head of Commerci al Banking Agri-Head Head of Strategic Developme nt Special Assets Manageme nt Head of Islamic Banking & Management 31 .
3.2 Organogram of Faisalabad Region REGIONAL OFFICE & BRANCH NETWORK Head Retail Banking REGIONAL CHIEF (FSD) AREA MANAGE R AREA OPERATIONS MANAGFER BRANCH MANAGER LIABILITY DEVELOPMENT OPERATIONS MANAGER REMITTANC E/ CLEARING GENERAL BANKING TELLER CASH RECEIPTS CASH PAYMENTS 32 .
FAISAL MASOOD OPERATIONS OFFICER MR. The flow of responsibilities and designations are shown in management’s hierarchy. ABDUL MALIK BRANCH MANAGER MR.3 Hierarchical View of Management Samanabad Branch In samanabad Branch. Abdul Malik.3. total numbers of employees are seven. TEHSEEN AHMED OG__III GAURD GAURD 33 . MR. MUHAMMAD JAMIL OPERATIONAL MANAGER MR. ALI EHSAN UL HAQ BILLING OFFICER MR. M. SHEHZAD ILYAS CASH OFFICER MR. RANA AATIF ZAHEER JUNIOR OFFICER MR. The branch was headed by Branch Manager Mr. ANSAR BUTT CASH OFFICER MR.
SAM (Special Assets Management) Division Corporate & Investment Banking Group Commercial Banking Group Credit Risk Management Division Operations Division Law Department Liability Development Division Consumer & SME Division Financial Institutions Division. Human Resource Division creating and monitoring an expanded range of HR policies and providing comprehensive personnel services in support of management to achieve their objectives. Control & Compliance Division.4 Review of various Departments of the Bank of Punjab: The major departments/divisions in the Bank of Punjab are mentioned below:Human Resource Division. a direct responsibility to become a strong supporter of change and development in the Bank. Finance Division Agriculture Credit Department. Audit & RAR Division.1Human Resource Division: The Human Resource Division (HRD) of the Bank of Punjab is situated at Head Office. Credit Administration Department.3. 34 .4. in addition to its administrative function. Retail Banking Division Liability Development Division Treasury Division 3. Moghis Bokhari). Lahore and headed by the Head of Human Resource (Mr. The HRD has.
For this purpose market surveys and unemployment in the country is analyzed. Average daily PLS accounts opened. External Recruitment: If there won't be enough inside candidates to fill the anticipated openings the employer may want to forecast the availability of outside candidates. a. Internal Recruitment: Internal Recruitment means collecting the pool of candidates from within the organization. b. The motive of HR is to “hire the right person. For this purpose BAD (Business Activity Data) system is used. For instance in this Activity Data there is a detail of activities such as average daily payment of vouchers in a branch. Functions of Human Resource Division: i. The HR Division performing the following majors functions. 35 . c. right time at right place”. The BAD assist the HR Manager to analysis the human need for future. Bank of Punjab uses the methods of Job Posting / Word of mouth / Referrals. Regional offices send Business Activity Data after each year quarter. average daily lockers operated and other activity detail of average daily branch operations of all the branches of the region. Recruitment & Selection: The most important function of the HR-Division is recruitment & Selection. that it provides job opportunities to all with out any discretion. Further the BOP is an equal opportunity employer so. average daily vouchers of utility bills.The HR Division is playing a vital role in developing good human resource for the bank and supporting overall organization to accomplish the organizational goals through its high-quality human resource policies and talented team of HR professionals. Forecasting Future Workforce Needs: Recruitment phase starts with forecasting the future workforce needs. made up in Ms excel.
Short Listing / Merit List Preparation of proposal for appointment. And accordingly immediate supervisors of each employee assess their training need. Satisfaction 36 . All the Branches have the responsibility to observe their employees and assess the training needs in employees. Afterwards it is approved by competent authorities' i. Conducting of Interviews. Selection Process: Advertisement Scrutinizing of Applications Developing various types of reports for recruitment purpose Designing of written test for fresh positions. Human Resource department of the Bank of Punjab forward the Performa for training need analysis to branches.e. his job duties and performance criteria are defined. HRD committee. In orientation job environment is described such as who will supervise the new employee. At the end the list is sent to Head HR for approval. Offering Appointment Letter After joining. Benefits & Compensation: Different type compensation and benefits are given to the employees of the BOP. Training & Development: Training process in the Bank of Punjab starts with Training need analysis. The training calendar is designed both internally and externally means both the BOP HR department and Training institute plan the training calendar mutually. orientation is conducted. After the TNA (Training Need Analysis) OTI (Officers Training Institute) are advised to plan the training pattern for next six months as per TNA requirement.d. ii. Employees who are totally inexperienced are also provided training for some time. iii. These rewards include intrinsic and extrinsic rewards. Regions report to the head office the nominees for the training maximum 25 at a time.
a feeling of accomplishment. such in one’s work. or benefits. To let the employee know what is expected of him. Step 3 To measure the performance is main soul of Performance appraisal. Step 2 Goals are discussed with employee when ever there is a change in job goals or job activities. Performance appraisal has following steps in The Bank of Punjab are Step 1 Performance standards in Punjab bank are in the form of Duty List. For this purpose one standardized method is used called PA (Performance Appraisal) Form. Performance Appraisal: Performance appraisal Means measuring the performance discussing it with employee and taking corrective actions to remove that deficiency. promotion. usually money. The difference is assessed gradually with time as the subordinated 37 . A residential scheme was also under consideration. iv. General Manager and Chief Manager set these goals. allowances. Performance appraisal is done annually at BOP. Benefits for the executive/ managers posts include • • • • Salary raise Allowances in the shape of money Telephone Fuel facility Benefits which were given to normal jobs include promotion. Job Description and Goals and objectives. This was done on monthly annual and semi annual basis. Step 4 At this level difference between Actual performance and Performance goal is measured. or being apart of a team.derived from the job itself. Compensation and benefits were given according to the performance appraisal. salary raise. Benefits were given according to the nature of the job. Extrinsic rewards include benefits provided by the employer.
Potential assessment is done through supervisor’s remarks. A person having leadership quality. And if he has more years of experience he will get more marks out of ten. 10 marks for experience. It is in the form of A. e. Promotion: Promotion criteria in Punjab Bank are based on the marks achieved out of hundred on different assessment basis. D rankings. attitude and behavior mainly. has a good responsibility level. which are. Supervisor gives an assessment report in which he gives his comments about his subordinate. Employees are counseled and asked to discuss their problems which they are facing. 10 marks for Banking Diploma of IBP. 10 marks for current qualification of the employee. There are 3 stages of Diploma. 20 marks are for potential assessment. C. A person needs minimum 3 years experience to qualify for promotion at next level. If a person gets above average marks for instance 95 marks he is 38 . if a clerical or non clerical staff worker after a few years of job experience has done graduation. v. If an employee has done that he gets ten marks straight. It depends on employee’s personality. 50 marks are for Performance appraisal.g. A person clearing 2 stages will get 6. B. It judges that how much potential a person has to hold a designation. The marks necessary to promote out or cut off marks are usually 60 or above out of 100.perform their duties and report to supervisor. Step 5 To remove the deficiencies in performance corrective actions are taken. has complete control over his tasks means he has the potential to move to next level.7 marks out of ten. Supervisors observe their subordinates that how efficiently they are doing the tasks assigned and what are their peer’s opinions about their behavior this builds up the perception in the appraiser’s mind and he matches it with what was expected from the employee. Immediate Supervisor fills the performance appraisal form. now he deserves to be promoted to officer level like junior officer in the bank.
the Agriculture Credit Department (ACD) is playing its role. recoveries thereof.4. Identify exceptions and follow for the rectification of the same.4. 3. He can be given appreciation letter or a good ranking etc.4 Credit Administration Department: Credit Administration Department (CAD) has seven Regional Credit Administration Departments (RCADs) in all seven regions which assisting the advances segment of the Bank of Punjab. MIS related to Credit & Credit Admin. medium term & long term finances.2 Agriculture Credit Department: In order to facilitate and provide credit facility to agriculture sector. Ensure compliance of SBP regulations/Credit Policy. 39 . perfection of collateral.3 Audit & RAR Division: In the days of complicated banking operations and to safeguard the interest of public and share holder the Audit & RAR division playing a vital role. Credit Maintenance.4. The major functions of CAD are: Disbursement of Credit Facilities including Preparation of Security/Charge documents. Circulars & Issuance of Disbursement Authorization Certificate (DAC). 3. The BOP not only provides credit facility but also provides mechanical instruments to the farmers. Liaison with various outside agencies. The major focus of this department is to facilitate the farmers by providing short term. 3. Regular monitoring of Collateral & Asset based portfolio through Weekly Roosters/Diaries. Further. Monitoring of Mark up accruals.worthy to be promoted but also encouraged and uplifted. Department. The Audit & RAR division covers all over the organization risk and compliance. this division keeps banking operations in line with State Bank of Pakistan’s instructions.
40 . The operations division ensures that all the functions and operations of the bank are fulfill the SBP requirement. it ensures that banking operations are correct and according to the State Bank of Pakistan requirements.4. Telecommunications.4. The bank provides loan facility to the large scale of business-called corporate clients such as Textile Sector. Fisheries. 3.4. Further.4.8Credit Risk Management Division: The difference between the deposit and advances is the income of the bank while providing the credit facility to customer the risk is mitigate by the Credit Risk Management Division.7 Corporate & Investment Banking Group: The BOP provides advances to almost all sector of the economy. 3. The SAM saves the Bank’s interest by managing these assets. The irregularities found by the Auditor are regularized by the Control & Compliance Division. This division major working is to regularize the banking operations matters.6 SAM (Special Assets Management) Division: Mostly bank provides advances against secured collateral but mostly some loans default and the SAM division perform its duties in management of these assets which generate in response of default.5 Control & Compliance Division: Control & Compliance Division (CCD) is situated at Head Office level. 3. 3. and also invests in stock exchange and foreign currency etc. and Industries etc.4. The bank also invests its fund in different types of project initiated by the Govt.9 Operations Division: In order to control all banking operations in all the branches an operations division is functioning.3. The major function or role of the CRMD is to secure the Bank’s interest and minimize the risk.
4 Structure & Functions of the Finance/Account Department 41 .Chapter No.
collection of mails. Chairman’s Secretariat & President Secretariat. The financial analyst related to BOP matters of chairman’s secretariat is Mr. The manager of Chief Manager of finance division is Mr. Muhammad Shahzad. Nadeem Amir is Chief Financial Officer / General Manager of finance division of mentioned secretariat.e. The finance division deals in authenticity of cheques. proper utilization of funds. online banking. 42 . opening & closing account of customers & companies etc. Mr.Structure & Functions of the Finance/Account Division/Department: GENERAL MANAGER / CFO PA to GM/CFO Chief Manager M. Masroor Zaigham. Iqbal Shahzad SBP Reporting Department Five Staff Members Liquidity & Fund Management Department Fours Staff Members HO Reconciliation Department Six Staff Members ATM Reconciliation Department Three Staff Members Expenses Confirmation Department Three Staff Members Fixed Assets Two Staff Members Executive Incharge Mansoor Zaighum Taxation Department Fours Staff Members Accounts Department Three Staff Members Financial Reporting Two Staff Members The management of BOP comprises of two types i. Chairman’s secretariat deals with finance division. preparation of day end statements.
controllers oversee the accounting. and implement of cash management strategies. and deal with mergers and acquisitions. and analyses of future earnings or expenses. cash manager.T and computers in the business for managing record and organize the data the most of the time of the Financial Manger / CFO is spend in developing and implementing the strategies of their organizations. and budget departments. balance sheets. which include controller. formative credit ceilings. supervise cash management activities. Often. and budgets. Treasurers and finance officers direct the organization’s financial goals. Controllers also are in charge of preparing special reports required by regulatory authorities.4. and risk and insurance manager.1 The Role of CFO / Financial Manager: “The person who manages the financial resources of a business is called Financial Manager. direct investment activities. credit manager. Credit managers watch over the firm’s issuance of credit. government agency. treasurer or finance officer. Approximately every firm. and monitoring the collections of past- 43 . At present due to a large usage of I. objectives. such as income statements.” In traditionally. They supervise the investment of funds. execute capital.raising strategies to support a firm’s expansion. manage related risks. establishing creditrating criteria. and other type of organization have one or more financial managers who supervise the preparation of financial reports. Duties of Financial Manager: The duties of financial managers differ with their specific titles. the role of financial manager or CFO is known as account manager but not as a result of dramatically changes in business operations the functions of the account manager or accountant has been enlarged. Controllers direct the preparation of financial reports that summarize and forecast the organization’s financial position. audit.
2 Use of electronic data in decision making: Electronic data/information provides exact values and figures as per need to the top level management. region.062.493.917. The electronic data enables the management to know about the business up to date position.91 Amount 44 .219. Faisalabad) Dated: 29-07-2010 MIS 1002 Branch Wise Daily Position Heading Balance with Banks Balance with SBP Bills Purchased & Discount Cash on Hand Cash On Hand FCY Current Deposits FCY Demand Deposits Export Re-Finance Fixed Deposits FCY General Advances PLS Other Accounts 0.070.03 0. The bank use UNIX-BOP 2001 software for generations of various types of reports and for recording all banking operations related transactions. This software assists the lower level management to top level management by providing various reports i.00 14.00 0. Practical Illustration of Daily Position Report (Samanabad.930.e Quarterly Cash Report. assets and liabilities of the bank as well as branch level from where the management can decide what should be kept and not.due accounts.00 0.000. area and overall bank.262.00 0.00 172. daily/weekly/monthly/yearly Statement of Affair as per requirement of branch.27 85. Managers specializing in international finance develop financial and accounting systems for the banking transactions of the organizations. Through this they can measure exact profit and loss accounts. 4.00 20.252.00 100.00 0.
311 and General Public Total 57. Further.00 1.00 6.195.465.773 Deposits from Govt.916 88.00 10. 4.791.824 176.454.714.717.256.989.605 6.915 12.096.555. electronic data make management capable to take decision at any point of time.278.606 191.605.344.00 37.351.00 Through this top level management is able to decide which product should be taken into course for further level or which should stop.659.007 6.842.424 17.PLS Overdue TDR PLS Staff A/Cs Profit Plus/CPA Accounts Saving Deposits FCY Staff Finance TDR Six Months to < 1 Year TDR 1 Year and Above TDR Less than Six Months 0.3 Sources and Generations of Funds: The major sources of funds for the BOP are: Public Source Money Market Corporate Sector and Government Institutions Sources & Generation of Funds Last Five Years Sources of Funds Borrowings from financial institutions 2004 2005 2006 2007 2008 ------Rs. in Million----2.261.709.811. & Corporate Sector 54.727.030 209.051 137.072.34 0.724.831.058 144.55 15.909 164.968.305 45 .174.785.00 133.532 95.164.
Major allocations of funds are on these divisions. (M) 100000000 50000000 0 1 2004 2 2005 3 2006 4 2007 5 2008 Years Comments: The major sources of funds are Govt. sector and general public as shown in the above diagram that the funds of the Bank of Punjab increase from 2004 to 2007.4 Allocation of Funds: BOP’s funds are allocated to the following departments.250000000 200000000 150000000 Sources of Funds Rs. The banks major focus is on short term financing. 4. But in 2008 the deposits of the Bank of Punjab decrease but not as much that it can affect the business of the BOP. Long Term Financing Short Term Financing From the above it is further sub distributed to • Agriculture financing • SME & Consumer financing • Corporate financing Allocation of Funds Last Five Years 46 .
681 18.695 133.438.923 17.080.993 7.158 23.233.846.619.695 633.313 80000000 70000000 60000000 50000000 Allocation of Funds Rs.893.980 131.823 28.034 2.488 16.319.026. In Million 2007 2008 1.211 101.333 22.862 11.731.461.711. (M) 40000000 30000000 20000000 10000000 0 2004 1 2 2005 20063 2007 4 2008 5 Years 47 .181 63.623.Allocation of Funds Lending to financial institutions Investments Advances Total 2004 2005 2006 Rs.019.954 40.585 75.705 25.911.505 39.000 73.345.593.197.450.216.
000 80.000.000.000. commercial & SME sectors and the 2nd large form for allocation of funds is investment.000.000. the Bank of Punjab’s allocations of funds is more in 2006 & 2007 but due to market conditions the allocation of funds in 2008 is lesser than 2007 & 2006.000 140. As mentioned in the above schedule and diagram. (M) 100.000.000 0 2004 2005 2006 2007 2008 Years Comments: The major allocations of the funds are in form of advances to general public & corporate.000 60.000.000.000 Investments Advances Rs.000 20.000 40. 48 .000 120.Lending to financial institutions 160.
5 Financial Analysis 49 .Chapter No.
liabilities. Introduction and Importance of Financial Analysis: Financial analysis involves the use of various financial statements.e. and owner’s equity of a business at a point in time.Financial Analysis: In order to analyze the financial position of the Bank of Punjab. 50 . while the income statement summarizes revenues and expenses of a firm over a particular period of time. First the balance sheet and the second is income statement. while using financial statements i. Balance Sheet and Income Statement of last five years (2004 to 2008). The balance sheet summarizes the assets. Vertical analysis and Horizontal Analysis. A conceptual framework for financial analysis provides the analyst with an interlocking means for structuring the analysis. I have conducted Ratio Analysis.
233.532 30.057 2.093 11.643.705 2.623.137 2007 14.645 143.719 2.001 6.097 3.438.506.668.859 3.564.094 2.306 18.158 6.181 63.776.2 Income Statement (Profit & Loss Statement) of Five Years (2004 to 2008) 2004 Mark-up/return/interest earned Mark-up/return/interest 2.995.448 6.715.695 133.424 137.064 13.000 ----------Rs.939.831.168.457 2.196.614.420. Liab.341 219.954 3.893.054.211 101.399 1.520 (1.795 567.537.305 856.909.230 2.722 13.242 1.007 88.072.839.787.969 16.453 3.241 104.773 164.842.320.000 73.739 7.573.349.367.670.113 2.5.770.488 16.927.230.855.056.120 ----------Rs.465 3.752.963 17.427.328 7.902.481.257 0 182.137 3.455 633.595 7.100 2008 10.210.197.219.395) 180.729.461.039 719.125 5.302 1.731.746 154.505 39.964 58.909 40.277.816.605 54.530 216.711.600 5.486.051 55.716 2.201 689.009.465.219.989.278.319.232 3.686) 5.555.068.178.980 131.838 185.019.923 1.791.232 (7.232 3.377 51 .411 2005 8.125.321 3.685.593.005.646 478.873 6.083 1.842 15.590 4.425 97.387 9.486 66.423 16.109.801 12.805.984 2.759 235.540 8.403 220.658.169 937. In Million ----------6.287.311 81. & Share capital 267.899.681 18.609.566 2.743.452.089 11.490 4.118.968 5.154.823 28.539.647 1.974 7.988 298.418.1 Balance Sheet of Five Years (2004 to 2008) 2004 Assets Cash and balances with treasury banks Balances with other banks Landings to financial institutions Investments Advances Other assets Operating fixed assets Total Assets Liabilities Bills payable Borrowings from financial institutions Deposits and other accounts Liabilities against assets subject to finance lease Other liabilities Deferred tax liability Total Liabilities Net Assets Share capital Reserves Inappropriate profit Surplus on revaluation of assets T.333 22.471.110.885.450.968.658.313.744 164.647 17.246 10.579.484.722.727.379 7.377.995 3.893.114 2.568 1.040.125.474. In Million ----------- 5.026.755 6.632 4.252.940.585 5.662 2.846.177 1.061 111.341 148.178 2006 14.855.074 2005 2006 2007 2008 17.318 61.427.606 40.001.616 2.915 191.724.794 4.205.890.466.
401) (10.875 239.166 38 1.149 753.670.208 228.832.906) 207.749 1.787 4.699 255.033.751.246 37.904 3.229.469.763 income Total Income 2.700 4.878 377.116.461 1.724 expenses Profit before taxation 1.373 4.112 7.515 Non mark-up/interest income Fee.873 income 554.887.817 6.885.804.246 5.387 19.777 292 577.328 733.793 7.330.908.361 Other income Total non mark-up/interest 1.853 Profit after taxation Inappropriate profit brought forward Transfer from surplus on revaluation of fixed assets .735.469 964.896 324.291.623 330.967 (18.096.869 1.948 1.998 52 .804 466.182.954.773.590 3.255 169.669 93.722 169.700 143.059.715 2.699 1.176 3.600 (8.769 1.950 2.996 3.769 1.101 2.456.721 880.866 3.916 .097 Administrative expenses Provision against off balance 364 sheet items Provision against receivable 32.015 811.599.505) 3.667 Non mark-up/interest expenses 1.873 146.172) 2.001) (6.845.580 366.452.435 2.353.090.650.696.626 33.619 3.734 (16.241 340.904 1.289.616.717 1.expensed Net mark-up/return/interest income Provision against nonperforming advances Provision for diminution in the value of investments .741 188.8.131.52.940 121 47.219.772 400.799.980.630 2.218 Dividend income Income from dealing in foreign 41.535 5.957 668.499.768.466 3.804.422.456.731 10.134.311 currencies 328.174 175.368.943 Taxation .421 24.744 11.133 1.net of tax Profit available for appropriation 367.020.174 101.969 18.358 100 373.217 Other charges Total non mark-up/interest 1.971 473.842 5.601.000 3.Current 225.242 143.445.061 1.756 2.835.183 4.274.788.103 4.965 46.997 83.924.354 327.164.458.414 (6.Bad debts written off directly Net mark-up/return/interest income after provisions 1.998) 3.933 114.252 250.046 from NIT 1.775 4. commission and brokerage 172.385.212 1.479 246.991 3.233 2.070.389 6.826 (13.Deferred 141.138.726 3.039.711.091) 101.572 3.149.970 175 653.512 1.863.882.019 4.
27 34.10 9.32 0.42 3.71 49.65 0.00 2.54 2.00 0.80 8.00 2008 6.62 20. per share RS.00 2007 21.50 0. equity adj.29 1.05) 80.07 44.64 25.79 67.00 5.14 3.50 25.49 72.00 39.09 7.89 54.06 7.3 Ratio Analysis: Ratio analysis is used to calculate the profitability.11 49. We can predict future variances with the help of financial ratios.31 97.96 (316.08 4.23 102.25 65.12 (0. per share % % % 2004 72.00 2005 56.00 6.21 25.60) 11.08 0.00 0.97 2.00 26.00 2006 35.00 5.42 54.00 3.03 21.79 0.25 13.07) 0.50 (19.76 74. liquidity/leverage etc.00 0.32 2.97 66. equity (after tax) Return on avg.20 59.65 72.65 36.22 70.07 10.19 46.00 1.03) (1.88) (0.25 0.00 26. (after tax) Return on avg.00 25.29) (189.90 9.16 43.45 10. Ratios 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Gross spread ratio Cost to Total Income Profit before tax to total income Profit after tax to total income Return on avg.16 42.37 53.88 2.20 0.00) (0.00 1.01 5.71 101.00 3. total assets (after tax) Advances (net) to deposits ratio Markup/ Interest cover ratio Total assets turnover Price earning ratio Market value per share EPS (Non dilative) Dividend per share Dividend – Cash Dividend Yield Ratio Dividend Payout Ratio Criteria % % % % % % % % times times times RS per share RS.00 53 . of the firm.08 52.5.00 0.94 0.58 33.
00 10. and increase in the deposits of the bank. 54 .00 30. Gross spread ratio defines the total spread of interest between borrowing and lending. The higher the spread the higher will be the profit margin.00 60. Gross spread ratio carry the same trend as explained in above paragraph of net profit after tax ratio.00 % 50.Graphical Representation of above-mentioned Ratios 90.00 80.00 70.00 0.00 2004 2005 2006 Years 2007 2008 Gross Spread Ratio Cost To Total Income Ratio Advances to Deposit Ratio Comments: BOP’s income statement for the last three years represents a high growth in it but in 2008 the rate of growth is decreased. Rise in the Markup Interest earning income results rise up in the profit of bank represents increase in lending by the bank.00 20. Here the GSR is decreasing from 2004 to 2008. Spread: Difference between funded revenue as a percentage of average earning assets and the cost of funds as a percentage of average paying funds.00 40. It’s all due to the decrease in equity. • GSR= Rev/CGS • GSR= (Mark-up earned – Mark-up Expense)/Mark-up earned • GSR is 2nd highest all over the globe in Pakistan. Gross Spread ratio measure profit after deducting cost of goods sold.
07 10.09 7.60) Mark-up /Interest Coverage Ratio (%) Markup/ Interest coverage ratio 2008 10% 2007 13% 2004 40% 2006 15% 2005 22% Comments: This ratio tells what percent of interest is covered from the total income of a bank. Interest coverage ratio= EBIT/interest expense Total assets turnover= sales/total assets Price earning ratio= market price per share/earning per share 55 .65 0.25 2.12 (0. a SBP rise up the interest rates on the deposits.• GSR of the bank is decreasing because of the decrease in margin.06 7.31 1.94 0.32 0.23 1. Subsequently in 2008 it was decreasing & becoming difficult for the management due to present banking crises and BOP’s internal affairs. MP/Interest cover ratio= EBIT/Mark-up.79 0. It tells the ability of a bank to pay its mark-up to the depositors.71 1. The Markup Interest Cover Ratio of the Bank of Punjab was greater in 2004. 2005 but it decrease in 2006 & 2007. Ratios Markup/ Interest coverage ratio Total assets turnover Price earning ratio Criteria 2004 2005 2006 2007 2008 times times times 5.08 0.10 9.
06 2005 0. This ratio is increased during last few years which represent increase in the turnover by assets.02 0.10 0.09 2007 0.00 Total assets turnover 2004 0.10 2008 0.07 2006 0. The total assets of the Bank of Punjab is increasing from 2004 to 2008 because of this reason the assets strengthen the Bank.08 0.12 0. of the entity how much sale is generated. This ratio shows the usage of total assets and it should be maximum. 56 . Total asset turnover shows that by investment of Rupee One in average total assets.04 0.Total Assets Turnover Ratio (%) Total assets turnover 0.12 Years Comments: This ratio tells the turnover of the asset to generate income.06 0.
The price earning ratio in 2004 was 7.00 EPS= net income--preferred dividends/common stock outstanding 57 .90 9.25 97.00) 2004 7.25 2005 10.the major reasons of this was expansion in the business banking sector.01 5.25 %.20 101.71 2007 9.50 (19. it increase in 2005 up to 10.08 4. per share Rs.00 (2.31 2008 (0. per share 65.50 11.00 10.45 10.80 10.00 6. What percent earned from a share equivalent to the worth of 1 RS MPS by the bank.25 13.60) Price earning ratio Comments: Years From this ratio it is analyzed what % of EPS is the part of MPS.14 3.02) 0.00 4.00 2. 2007 and it become negative in 2008 as major reason of this the changing scenario of the world economy and financial crises of the country.23 2006 7.51 3.00 0.23% . Ratios Criteria 2004 2005 2006 2007 2008 Market value per share EPS (Non dilative) Dividend per share Rs per share Rs.00 8. The Price Earning Ratio decreased in 2006.Price Earning Ratio (%) Price earning ratio 12.00 102.
25 2007 97.00 Market value per share 2004 65.80 2008 11.) EPS 20 18 16 14 12 10 8 6 4 2 0 -2 -4 -6 -8 -10 -12 -14 -16 -18 -20 Rate 2004 2005 2006 2007 2008 Years Comments: Through this ratio it can be analyzed what percent of 1Rs.00 80.90 2005 102.Earning per Share (Rs.00 60.00 0.00 40.50 58 .) Market value per share 120.00 20.45 2006 101. Market Value per Share (Rs.00 100. share is earnedThe EPS from 2004 to 2006 increased and show good value of the share it decreased in 2008 because of stained reputation of the BOP.
00 0.00 1.00 2005 5.50 2008 0.00 3.00 4.00 2.00 3.00 Dividend Per share Comments: The Bank pay dividend per share up to 2007 but in 2008 due to loss the bank could not pay any dividend. Ratios Dividend .00 2008 0.00 0.The Market Ratio tell the business position in the market.00 Dividend yield ratio= dividends per share/market price per share Dividend payout ratio= dividends per share/EPS 59 .00 0.00 5.20 2006 3.58 33.21 25.00 2007 0.Comments: The Market value per share increases in the year of 2005 & 2006.) Dividend per Share 6.08 52.00 6.00 3. Dividend per Share (Rs. The Market values per share dramatically decreased in 2008 due to economics scenario.00 2006 0.00 5.00 2005 0.25 2007 3.00 2004 4. The reasons for not paying dividend in 2008 as a large amount of provision were present against NPL.Cash Dividend Yield Ratio Dividend Payout Ratio Criteria % % % 2004 0.07 44.
6% 146.9)% 40.8% 13.5% 2.8% 148. This analysis is used to comment on the growth of specific line item in the industry or the firm.6% 199.0% 100.0)% 140.3)% 251.5% 342.8% (50.3% 251.0% 100.3% 101.2% Graphical Representation of Balance Sheet (Horizontal Analysis) 60 .9% 182.42)% 192.4% 154.0% 100.5% 100.8% (37.9% 75.1% 59.66% 68.3% 269.7% 241.0% 6.7)% 14.7% (32.0% 100.6% 2007 154.00% 100.0% 100.0% 100.0)% 211.9% 168.0% 100.0% 530.7% (9.7% 63.7% (49.0% 2005 57.3% 403.8% 151.1% 250.6% 2006 151.4% (138.3% 180.5% 180.7% 1062.5.3% 66.3% 59.5% 371.4% 356.0% 378.93% 149.0% 100.5% 239.66% 255.8% 61.0% 100.0% 141.1% 935.2% (52.4 Horizontal Analysis of Five Years Balance Sheet This type of analysis represents the percent change in specific line item of the balance sheet from the last year.2% 644.0% 100.1% (5433.6% 200.8% (62.8% 254.3)% (61.0% 100.1% 168.4)% 31318.0% 79.0% 74.3% 353.7% 92.6% 105.3% 156.2% (100.6)% 704.3% 2008 91.3% Net Assets Share capital Reserves Inappropriate profit Surplus on revaluation of assets Total Liabilities & Share Capital 100.2% 234.7% 220.5% 354.7% 333.0% 100.4% 56.1% 2304.3% 61. 2004 Assets Cash and balances with treasury banks Balances with other banks Lending's to financial institutions Investments Advances Other assets Operating fixed assets Total Assets Liabilities Bills payable Borrowings from financial institutions Deposits and other accounts Liabilities against assets subject to finance lease Other liabilities Deferred tax liability Total Liabilities 100.9)% (47.2)% 16348.4% 24504.0% 100.0% 148.0% 100.0% 100.0% 139.7% 67.0% 74.7)% 430.0% 100.9% 11.0% 100.8% 2142.0% 100.1% 142.4% 53.
This increase is due to increase in bills payable.0% -50.4% respectively. But in 2008 there is decrease in total assets. advances & total liabilities due to stoppage of advances. 61 . This increase is due to increase in both foreign & local currency cash and balances with the treasury banks in hand.3% & 269. 154. 2006 & 2007 total liabilities have increased by 66. As compared to 2004 in Year 2005 there is an increase of 67. But in 2008 the liabilities are decreased as decrease in deposit of the Bank.0% Total Assets Total Liabilities Net Assets 2004 2005 2006 2007 2008 Comments: Total assets were increased in last few years. The other major reason of increasing liabilities is deposits accounts. borrowings from SBP & other financial institution.0% 50.0% 250.3% in the form of loans.0% 150.300.0% -100.7%.0% 100. As compare to 2004 in 2005.BOP is grabbing the confidence of their customers results increase in the deposits during the year of 2007. 22% increase in the assets from the 2nd last year represents growth in the Bank but in last years the growth is declining.0% 200.6% in total assets of the bank. cash credits and running finances. But in 2008 due to financial crises and uncertainty the customer of the BOP decrease. As bank increase their paid up capital because of which SOE increase at the end of 2006. Advances also increased by 61.0% 0.
5% 57.4% 130.8)% (835.0% 100.5% -38.1% 179.3% 196.7% 290.1% 480.5% 96.4% 14.0% (41.8% (1111.9% 31411.0% (100.6% 40761.0% 225.4% 2894.5.7% 12.0)% 150.1% 264.7% 72.8% 2210.9% 3300.0% 100.0% 100.0% 100.Deferred Profit after taxation Inappropriate profit brought forward Transfer from surplus on revaluation of fixed assets .6% 2007 586.6% 36.0% 100.0% 100.7% 953.7% 2006 355.1% 3343.7% 150.0% 100.3% 54.3% (4.0% 41.3% 70.0% 173.4)% 694.0% 100.4% (1069.0% 100.8% 8.1% 394.8% 120.5% 42.0)% 3018.0% 100.9)% 63.4% (582.3% 121.8% 224.1)% 47.0% 100.0% 100.8% 3071.3% 74.8)% (100.2)% 841.1)% (5762.1% 73.1)% 76.5 Horizontal Analysis of Five Years Profit & Loss Statement: 2004 Mark-up/return/interest earned Mark-up/return/interest expensed Net mark-up/return/interest income Provision against non-performing advances Provision for diminution in the value of investments .1% 123.0% 100.1% (25.3% 99.3)% 62 .0)% (85.0% 100.Bad debts written off directly Net mark-up/return/interest income after provisions Non mark-up/interest income Fee.0% 100.0% 3911.9% 3065.0% 100.2% 101.net of tax Profit available for appropriation 100.1% 106.0% 44.7% 625.7% (19.0% 100.3% 597.0% 100.0% 100.2)% 162.0% 154.1% 88.2% 421.9)% 278.0% (51.7% (17.2% 100.2% 603.5% 234.9)% (1941.0% 100.0% 2005 139.7% 271.6% (549.1% 67.2% 178.0% 100.0% 100. commission and brokerage income Dividend income Income from dealing in foreign currencies Other income Total non mark-up/interest income Total Income Non mark-up/interest expenses Administrative expenses Provision against off balance sheet items Provision against receivable from NIT Other charges Total non mark-up/interest expenses Profit before taxation Taxation .7% 174.0% 100.3% 82.5% 281.6% 203924.Current .7)% (8.3)% 3295.2% (96.2% (100.6% 685.0% 40086.0% 125.4% 147.2% 521.5% 1838.3)% 2008 594.0% 100.3)% 21.0)% 730.0% 100.0% 169.0% 0.0% 100.7% 813.1% 170.6% (30.
0%.3% in 2008.0% -400.0% -900.0% 100.Graphical Representation of Income Statement (Horizontal Analysis) 300.0% -700. But the major reason of decreasing profit is promising against NPL.0% -800.0% 200. Administrative expenses are increased with a great pace in last few years because of high rate of inflation.0% -600. & 224. 63 . As compared to 2004 in years 2005. 2006 & 2007 profit increased by 72.0% 2004 2005 2006 2007 2008 Total Income Total non mark-up/interest expenses Profit after taxation Comments: Total earnings mark-up & non mark-up was rising 33% in 2007 year.0% -300.1%. As deposits and the lending of the banks are rise up but in 2008 the total earning is increasing but at decreasing return.0% 0.9% respectively.0% -200. it is due to: Markup / interest earned are increased by 3% as compare to 2004 but the profit decrease by 835.0% -500. 178.0% -100. At present the Profit of the BOP is affected badly and decreases 835% in 2008 because of global economic recession.
4% 6.71)% 97.2% 1.0% 2008 5.3% 12.9% 0.6% 88.9% 0.3% 2.8% 4.4% 1.3% 64 .4% 7.2% 1.8% 2.20% 93.5% 4.3% 0.9% 91.2% 0.9% 1.3% 12.1% 0.8% 16.7% 6.0% 2006 8.3% 87.7% 90.8% 1.7% 5.9% 100.15% 93.0% (4.2% 1.3% 4.7% (0.4% 59.0% 0.1% 61.0% 1.5% 0.5% 3.8% 1.5% 8.9% 3.2% 6.1% 2.5% 1.8% 2.5% 0.0% 2005 7.0% 0.3% 7.0% 8.5% 2.8% 1.2% 1.5.5% 24.2% 1.1% 1.0% 6.1% 6.3% 57.4% 3.65% 93.5% 6.4% 6.4% 100.3% 1.2% 1.0% 2007 6.7% 0.0% 88.2% 0.0% 2.8% 3.7% 0.32% 93.2% 17.5% 1.2% 83.9% 8.0% 98.0% 2.3% 0.6% 1.0% 2.9% 9.6% 81.2% 0.2% 57.0% Net Assets Share capital Reserves Inappropriate profit Surplus on revaluation of assets Total Liabilities & share Capital 11.0% 100.3% 82.3% 100.2% 0.2% 70.7% 1.1% 79.1)% 2.5% 0.0% 31.4% 4.3% 6.8% 2.6 Vertical Analysis of Five Years Balance Sheet 2004 Assets Cash and balances with treasury banks Balances with other banks Lending to financial institutions Investments Advances Other assets Operating fixed assets Total Assets Liabilities Bills payable Borrowings from financial institutions Deposits and other accounts Liabilities against assets subject to finance lease Other liabilities Deferred tax liability Total Liabilities 0.0% 0.5% 2.6% 2.6% 0.5% 100.
0% 94. property and equipment. This decrease in current assets is due to decrease in: local and foreign currency cash and balances with the treasury banks. loans. cash credits and running finances. In 2007 and 2008 bank need the current assets more to fund their day-to-day operations. Where Current Assets contain: All assets excluding Fixed Assets and Other Assets.0% 90. 65 .0% 98.0% 82. Fixed assets are the long-term base of the bank’s operation strategy. advances. Fixed operating assets increased in 2008 as compare to 2004.0% 88.0% 2004 2005 2006 2007 2008 Total Assets Total Liabilities Total Liabilities & Share Capital Comments: Comparing figure from 2004 to 2008: Here Total Assets includes: Current Assets + Fixed Assets + Other Assets.0% 84.0% 92. Deposits with State Bank of Pakistan are maintained to comply with the statutory requirements issued from time to time. Current assets of the bank have increasing trend in 2006 (8.0% 100.0% 80. balances with other banks. This increase is due to increase in: cash and balances with treasury banks.0% 96.0% 86.5%). This increase is due to increase in capital work-in-progress.Graphical Representation of Balance Sheet (Vertical Analysis) 102. balances with other banks in current and deposit accounts form.
66 . facilities. Increase in liabilities is due to: Borrowings. Total liabilities have increased from 2004 to 2008 but there is a slight decrease in 2006 and 2007. other liabilities and deposits and other accounts. subordinated loans.represented by all the equipment. Total liabilities of the Bank of Punjab have the increasing trend over all.
7 Vertical Analysis of Five Years Income Statement Mark-up/return/interest earned Mark-up/return/interest expensed Net mark-up/return/interest income Provision against non-performing advances Provision for diminution in the value of investments .Current .5.Bad debts written off directly Net mark-up/return/interest income after provisions Non mark-up/interest income Fee.net of tax 6% 19% 1% 11% 38% 100% 39% 0% 1% 0% 40% 60% 8% 5% 13% 47% 4% 0% 4% Profit available for appropriation 51% 6% 17% 2% 5% 30% 100% 29% 0% 0% 0% 29% 71% 15% 3% 18% 53% 3% 0% 3% 56% 7% 21% 4% 7% 44% 100% 26% 0% 0% 0% 28% 72% 13% 1% 15% 57% 3% 0% 3% 60% 9% 25% 5% 29% 76% 100% 32% 0% 0% 1% 32% 68% 2% 4% 6% 62% 45% 0% 45% 108% -4% -15% -2% -5% -30% 100% -20% -1% 0% 0% -21% 121% -1% 58% 49% 72% -25% 0% -25% 47% 2004 89% 25% 64% 2% 0% 0% 2% 62% 2005 137% 60% 78% 7% 0% 0% 7% 70% 2006 175% 114% 61% 5% 0% 0% 6% 56% 2007 246% 195% 50% 23% 0% 3% 26% 24% 2008 -128% -119% -8% -136% -3% 0% -138% 130% 67 .Deferred Profit after taxation Inappropriate profit brought forward Transfer from surplus on revaluation of fixed assets . commission and brokerage income Dividend income Income from dealing in foreign currencies Other income Total non mark-up/interest income Total Income Non mark-up/interest expenses Administrative expenses Provision against off balance sheet items Provision against receivable from NIT Other charges Total non mark-up/interest expenses Profit before taxation Taxation .
This decrease in administrative expenses due to decrease in personnel cost. 57%. Markup / return / interest expensed have increased in four years from 2004 to 2007 increase but markup interest expensed decrease in 2008 till negative. commission and brokerage income. Administrative expenses have decreased from 2004 to 2008. dividend income and other income. premises cost and other operating cost. gradually increase by 53%. In 2004 profit is after taxation 47% of total income which. This decrease is due to major decrease in fee. 62% & 72 %.Comments: Comparing figures from 2004 to 2008: Profit available for appropriation has the increasing trend from 2004 to 2007 but in 2008 it show decrease. 68 .
971. In Million ------ALLIED BANK Markup/return/interest earned Mark-up/ return/ interest expensed Net markup/return /interest income after provisions Total non markup/interest income Total Income Total non mark-up/ interest expenses Profit before taxation Profit after taxation Profit available for appropriation Total Assets Total Liabilities Net Assets Share capital Reserves Inappropriate profit Surplus on revaluation of assets Total Liabilities & share Capital 17.058.707.969 16.304 7.277.665.794.601.694.622.990.059.743.739 7.739 (4.265 11.8 Organizational Analysis with reference to the Banks listed on the Stock Exchange: FINANCIAL ANALYSIS FOR THE YEAR OF 2008 WITH REFERENCE TO COMPETITORS The Bank of Punjab Askari Bank BANK BANK ALALFALAH HABIB ----.974 7.832.313 10.191.245.374.166.975.393.664 4.664 983.686) (1.247 492.044.623 177.232 (7.313.138 193.906) (10.366.056 3.667.367 111.168.784 216.720 1.467 2.417.965 5.301.205 11.363 4.000 (18.141 308.363 10.908.991 1.884) 6.Rs.203 1.468 12.533.909.382 386.915.002.791) 5.775 12.785.997 2.435.275.678.094.427 12.361.345 1.078 2.395) 180.301 6.351.738 602.177.172) 18.275.600 5.623 2.091) 185.531.715.366.044.219.752.5.459 14.997 31.995 3.739 1.650.436.389 5.826 (13.000 6.447.505) (6.687 2.376.079.387 2.388 3.426) 3.287.837 5.237 (8.125 5.427.678.844 18.416.710 89.734 (16.764 331.592 2.995.615 461.329.651.980 936.855.090.998) 4.719 3.658.225 54.837 69 .596 1.924.744 (508.000 3.614.047.182.025 17.583 20.851.194 10.331.774 7.120 182.216 17.225 2.971.604.669.802 16.727 348.929 165.046.040 71.946.035 206.
70 .331.393.998) 3.000 10.000 5.687 602.000) (10.000) (15.715.000.752. The Interest income of BOP has negative slop due to a large provision against NPLs.000.000 15. If we compare the Bank of Punjab with Allied Bank we see that the business of the Allied Bank is low as BOP.237 1.BANK HABIB PUNJAB BANK 17. in Million (5.000 0 Mark-up/return/interest earned 16.194 Mark-up/return/interest expensed Net mark-up/return/interest (18.000 20.000.719 20.969 18. As concern with BOP the – the BOP has political influence of Govt.997 10. therefore. This is the major reason of low income as compare to successive competitors.650.583 14.000. of Punjab and it has major funds of Govt.090.738 6.435.000.046.000) ALLIED ASKARI BANK BANK OF ALFALAH BANK AL.389 income after provisions Rs.313 31.000 25. the managers have loose grip on private business.884) 1.002.000) (25.000) (20.000.000.000.247 Comments: In the above diagram The Bank of Punjab show growth in mark-up interest earned as compare to Bank Al Habib & Allied Bank but it is less as compare to Askari Bank & bank Alfalah.000. The decreasing the interest earned income of the BOP is due to the marketing conditions and as the Bank Alfalah & Askari Bank has gain the major market share through their up to dated & innovative product of customer support.614.000 30.Comparison of Markup Interest Earned & Expensed for the years 2008 35.203 (8. Interest expensed of Bank Al-Habib is in negative as compare to the BOP further it has low market share.000.000.361.975.000.669.604.000 10.
000) (12.000. The major advances providing by the management to various industries on political basis are the major cause of the decreasing trend in the total income of the Bank of Punjab. The total income of Bank Alfalah is greater out of five competitive organizations.Comparison of Total Income for the Year 2008 Total Income (2008) 15.500.000) (17.500.000.500.000 7. Million BANK OF PUNJAB ASKARI BANK BANK ALFALAH BANK AL-HABIB ALLIED BANK BANK OF PUNJAB Comments: The total income of the BOP is decreased in the year of 2008 as compare to its competitors – as the BOP has to face problems & pressure from Govt.000) (7.000) (5.000.000 2.500.000.000.000 0 (2.500.000 5.000. 71 . and political parties ultimately resultant of negative progress.500.000) (10.000 10.000) BANK ALFALAH ASKARI BANK BANK AL-HABIB ALLIED BANK Rs.500.000 12.000) (15.
000 100.000. Askari Bank and Allied Bank but greater than Bank Al-Habib.Comparison of Assets & Liabilities for the Year 2008 Assets & Liabilities 400.000 200.000 150.ALLIED ALFALAH HABIB BANK Net Assets Total Liabilities Comments: The total assets of the Bank of Punjab are lower than Bank Alfalah.000 50.000.000 300. The total assets of BOP shows that the bank has its worthiness and can grow in the market if these assets are properly utilized.000. in Million BANK OF ASKARI PUNJAB BANK Total Assets BANK BANK AL.000 250. The Net Assets of the BOP as compare to the above-mentioned competitors is lower but close to Allied Bank. 72 .000 350.000 0 Rs.000.000.000.000.000. The total Assets are close to the Askari Bank & Allied Bank.
000) PUNJAB (6. The loss which has to bear BOP is due to some Non Performing Loans and minor administrative cost and due to these the bank has 73 .ALLIED ALFALAH HABIB BANK Profit available for appropriation Comments: The BOP has no profit in the year of 2008 as compare to its competitors mentioned above diagram.Comparison of Profit available for Appropriation for the Year2008 8.000) BANK OF (4.000) ASKARI BANK BANK BANK AL.000 4.000.000.000. The Bank Alfalah is gaining major profit in 2008 compare to its competitors.000 6.000) (8. in Million loss.000.000.000 0 Rs.000. (2.000.000.000 2.
00 40. The BOP’s management has been changed at present as a result of changes in Govt of Punjab.11.9 Future Prospects of the Bank of Punjab: BOP’s share is currently trading at PKR 21 (approx) in 2009 but in before December 2008 the BOP share was up to Rs.00 50. the bank has planned to hire the services of Business Development Officers along with Relationship Managers.00 30.00 20. 74 Years Rs.130 in the stock exchange market.00 102.90 50.00 10.25 97.00 60.00 80. Recently.45 101.80 65. But it decreased at the end of 2008 up to Rs. It will hopefully control the position of the BOP up to end of December 2009 and the Bank once again will show profit in its statements and profit graph will arise in coming months. The new management of the BOP has entered in with the new style and new competitive strategies with strong vision of implementation.00 100.00 70. It show highest market price in its history. in Million 11.00 Market value per share Further.50/share. Through different estimations and by viewing remarks of analysts it is expected that it would grow up to PKR 50 by December 2009.50 2004 2005 2006 2007 2008 E-2009 . BOP going to launch many products and services to support the customer and to raise the profit of the Bank.00 0. In light of the growth track of BOP it can be analyzed that it will minor grow in the end of 2009.00 90. 110.5.
6 SWOT Analysis of the Organization 75 .Chapter No.
1 Strength: Bank is in its growing stages so there is good financial position. of branches in the country Successfully launching new products lines Well experienced & qualified staff Efficient internal communication system Each department in the bank is fully allowed to take adequate decisions of its own. 6. SWOT analysis is one of the most important steps in formulating strategy using the organization mission as a context. managers assess internal strengths distinctive competencies. weakness. Avoiding or correcting its weakness. weaknesses.6. The goal is to then develop good strategies and exploit opportunities and strengths neutralize threats and avoid weaknesses. opportunities and threats is called SWOT analysis. Professional & committed workforce Low cost than other major banks Increase the no.2 Weaknesses: Although the BOP has many strength but it also has some following weaknesses: 76 . external opportunities and threats. In SWOT analysis the best strategies accomplish an organization’s mission by: Exploiting an organizations opportunities and strength. Neutralizing it threats. SWOT Analysis of the Organization: The overall assessment of an organization’s strengths. saving the time & help in achieving the objectives 6.
Any change in the Govt. can badly affect the Bank of Punjab.3 Opportunities: Extension of international network of the branches Introduction of innovative products Growing market ATM facility for all customers More incentives should be given to skilled staff Use of new technology used to increase the staff efficiency of work Adoption of new methods of training and recruitment Introduction of new schemes of deposits Profit can be increased through effective and efficient marketing 77 . The BOP is maintaining large deposit of Govt. The BOP has recruited much fresh blood in the Bank who has not sufficient skills and experience to run the business of the bank. Lack of proper internal controls due to lack of strong system is one of the major weakness of BOP. This is the sensitive weakness of the bank. The profitability of the BOP is declining which is alarming for the BOP and creating worst image in the market 6. Some of the employees were burdened with over work. BOP has formulized a lot of products and services for its customers. departments and low deposit of private sector. It is also pointed by the auditors in their review. The employees’ turnover of BOP is greater the major reason is due to not market commensurate salary and benefits. So I think that the work should be distributed according to their post and capabilities. even more than other commercial banks. but there is only little advertisement on electronic media which creates hindrance for the promotion of the products and services.
6.4 Treats: Uncertain economic conditions on BOP Changing in the government policies and instability of the More investment in agriculture sector Risk of online banking government Action taken by competitors Strong competition in the market Deposit growth can be slowdown due to the lack of customer trust 78 .
Chapter No. 7 Conclusion and Recommendations 79 .
178.1% & 229. But the total income decrease in the end of 2008 due to a heavy provisioning against non performing advance.3% & 269. respectively as compare to 2004 and the profit after tax decreased by (835. The total assets of the BOP increased by 67. the new management of the BOP is performing and taking the present position of the BOP as challenge although they are performing well and beating the market with excellence services and strategies but they have to face many problems. As concerned the reputation of the Bank of Punjab in the banking sector its reputation is destroying. 2006 & 2007 but total liabilities of the BOP also decreased by 211. The total liabilities as compare to total assets shows increasing trend by 66.3%.6% & 254. 2006 & 2007. The BOP providing excellence services to customer as customer focus bank with a personnel of tremendous skills and hardworking. 80 .Conclusion: The Bank of Punjab is one of the largest Banks with a network of 272 online branches in the country.6% in the year of 2005 and further it also increased in 2006 by 148.7%. The mark up interest earned income is showing increasing trend since 2004 to 2008 and non mark up income is also increasing since 2004.4% in 2005.5% in 2008. Now. The Bank’ financial statements shown progress in last four years (2004-2007) but the condition in 2008 is much alarming for the bank. 154.3%) in 2008. In the previous years from 2004 to 2007 it generates more deposit and provides a large amount of advances to various sectors in the country wide.6% in the year of 2007. The bank’s assets show increasing trend from 2005 to 2007 but in 2008 the BOP’s assets decreased by 180.9% in 2005. The profit after tax increased by 72%.
And bring all the recruitment activities at a single platform. The service can attract more skilful workforce. The training of staff regarding new changes in the banking sector and surrounding should be conducted by the BOP. These cards are very helpful for the ordinary customer in general and the business people in particular. the management is required to keep proper security against the card. It can make recruitment processes time efficient and cost effective. BOP should utilize professional recruitment services. present condition of the BOP & market scenario the BOP can overcomes these difficulties and meets the current challenges by addition of the following suggestion/recommendations: All the opportunities of the 21st century should be availed by the BOP in the information technology. Bank can design a universal account like other foreign banks. Although BOP has Management Information System (MIS) but it should be more supportive and user friendly. I analyze that in spit of the weaknesses. BOP should adopt new compensation trends which include: Compensation should also be based on the relative worth of the job for the 81 . especially on E-Banking. The Management Information System should be there especially to coordinate the working among Branches. To make it mores secure and to eliminate the misuse of it. Small and Medium Enterprises (SME) should be targeted by launching more products.Recommendations: On the basis of the financial analysis and SWOT analysis of the BOP with context to market condition and competitors. Region and head office divisions. to enhance online facilities. BOP should start its operation in credit card. Information technology is the future of this dynamic world. Therefore BOP should emphasize much on IT. This service can be a great source of publicity for Bank also.
the BOP doesn’t have staff at lower level for getting more deposit in CASA & other terms deposit. Although bank has its Quality Assurance Department (QAD) but it should be further strengthen up to branch level. Bank should hire the services of Business Development Officers particularly for this assignment. Else than tangible rewards intangible rewards such Work life balance (Providing good leave structure. Great care should be taken while extending the advances. Therefore. Job based salary surveys and Industry surveys should be conducted to decide Compensations. The services charges should be minimized to compete with the competitors by excellence customer services. Advances should be awarded against reasonable collaterals.organization. their market value should be greater to the loan granted. At present there is no complaint box available in the branches and not any person appointed to hear the complaints. The Bank should avoid Bad Debts. 82 . should be provided. Inspiration and career opportunities for all employees. in order to enhance the deposit of the Bank. Compensations should be based on government policies and regulation and according to inflation level in the country. Presently. There should be an information desk to provide the information and to receive the complaints of the customer in the bank. Flexible times for lunch break and Baby day care centers etc).
Chapter No. 8 References 83 .
II. Allied Bank (Annual Report 2008) IV. annual reports of different Banks & magazine of BOP. Bank Al – Habib (Annual Report 2008) 84 . Five years Annual Reports of The Bank of Punjab from 2004 to 2008. Bank Alfalah Ltd. (Annual Report 2008) V. Managerial Finance (Syllabus Book) Magazine and Newsletter Quarterly Newsletters of The Bank of Punjab Annual Reports I. The Analysis of Financial Statements (Syllabus Book) II. official web site of the Bank. etc. syllabus books.10. References: Reference material used for compiling this report is gathered from personal discussion. internet. Books I. Askari Bank Ltd (Annual Report 2008) III. Personal Conversation: The various type of information was gathered by personal discussion with the following officials:Branch Manager Samanabad Branch Faisalabad.
9 Glossary 85 .Chapter No.
DAC: DFI: TFC: CIB: CAD: PBA: BOP: RCAD: RAR: DF: QAD: CASA: SME: MIS: NPLs: SAM: ACD: CCD: CRMD: EPS: disbursement authorisation certificate department of financial institutions term finance certificate credit information bureau credit administration department profit and loss banking account bank of Punjab regional credit administration department risk assessment return demand finance quality assurance department civil aviation safety authority small and medium enterprises management information system non performing loans Special Assets Management Agriculture Credit Department Control & Compliance Division credit and risk management division earning per share 86 .