Bahauddin Zakariya University, Multan

Department of Political Science

Internship Report
On
“The Bank of Punjab”

Submitted By Saqlain Ghafoor

Roll no BS-BPA-E-15-03
Program BS Public Administration
Session 2015-2019

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Acknowledgement
I am very thankful to “Almighty Allah” the most beneficent, the most mercy full who has
given the strength to complete this task. We are also thankful to branch manager and
operational manager respectively of the bank of the Punjab. Without whose guidance and
support it would not have been possible for us to accomplish this Project.
The last but not the last I convey my credit and thankfulness to the virtual
universities Authorities specially respected sir “Farhan”. Without whose well in time support
and guidance it would be much difficult for me to achieve this task successfully.

Executive Summary:
The bank of Punjab (BOP) established in 1989 and got the status of scheduled bank in
1994. The bank of Punjab offer number of products in their customer. There are 537 branches
of BOP in the whole country. Functionally the bank of Punjab is divided in the division and the
each division is headed by the general managers. The government of the Punjab holds the
majority of the shares in BOP. It is doing business in commercial banking and the retail
banking. Corporate banking treasury and investment and trade finance. The shares of BOP are
traded in all three stock Exchanges of the Pakistan
The Bank of Punjab (Bank of Punjab) is a banking and financial services provider. It offers a
range of banking products and services to its customers. The bank's product portfolio includes
savings accounts, current accounts, commercial loans, consumer loans, agriculture loans, debit
cards and deposit products. It also provides services such as cash management, trade services,
home remittance, financing, leasing, e-banking and ATM services. Through these products and
services, the bank serves to its retail and corporate clientele. The bank operates through a
network of its branches in various cities of Pakistan. Bank of Punjab is headquartered at
Lahore, Pakistan.
As for as the different ratios of the Bank Of the Punjab, they all give the healthy sign regarding
financial position of the Bank as well as the operation results of the different financial years.
All ratios are fully in accordance with the banking industry’s standard and norm which is a
yard stick to measure the performance of any bank. These ratio depict and indicate that the
financial strength of the on a higher side and further prospect of the Bank is brighter. The
report utilizes a wide range of primary and secondary sources, which are analyzed and
presented in a consistent and easily accessible format. Timetric strictly follows a standardized
research methodology to ensure high levels of data quality and these characteristics guarantee a
unique report.Examines and identifies key information and issues about "The Bank of Punjab"
for business intelligence requirements.
At the end the conclusion and the recommendations are the part of the report. which
contain all the references from we, obtained data to prepare this project.

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Table of Content

1 Introduction.................................................................................. 6
Brief Introduction of the Industry...............................................................................6

2 Industry Analysis............................................................................7
3 Overview of the organization…....................................................8
a) Brief History.............................................................................................................8

b) Nationalization Banks................................................................................................9

c) Mission & Vision Statement…................................................................................11

d) Competitors….........................................................................................................12
e) Business Volume......................................................................................................12
f) Product Line.............................................................................................................12

4 Organizational Structure..........................................................................13
a) Organizational Hierarchy chart…...........................................................................13
b) Number of Employees.............................................................................................13
c) Main Offices............................................................................................................13
d) Brief introduction of all departments......................................................................14

5 Marketing Functions..................................................................................20
a) Discuss about the 4P’s of the organization…..........................................................20

6 Human Resource Management…............................................................21

a) Employees recruitment…........................................................................................21
b) Selection Criteria.....................................................................................................23

c) Training & Development…....................................................................................23

d) Performance Appraisal and Management…..........................................................25

e) Compensation Policy and Benefits…...................................................................26

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7 Critical Analysis................................................................................29
a) For Marketing................................................................................................29

b) For Human Resource Management...............................................................32

c) For Finance..................................................................................................43

(d) Future prospects of organization.................................................................62

8 SWOT Analysis.................................................................................63
a) Strengths…......................................................................................................63

b) Weaknesses......................................................................................................63

c) Opportunities…................................................................................................64

d) Threats….........................................................................................................64

9 Conclusion…....................................................................................65
10 Recommendation................................................................................ 66
11 References & Sources......................................................................66

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  Introduction to the industry
Pakistan came into being on 14th August, 1947; sufficient banking services were
available in the areas forming Pakistan. Out of the total branches of the nearly 3,500 in the
undivided India, as many as about 1,500 branches were existing in these areas.
It was agreed between the two countries that reserve bank of India shall continue to
function in the Pakistan territory until 30th September 1948 and that Indian notes would
continue to be legal tender at Pakistan until 30th September 1948. Unfortunately, relationship
between the two countries became most strained immediately after independence; banking was
mostly in the lands of Hindus who immediately started transferring their offices and assets into
India. As a result most of the banks in Pakistan were closed down and even those which were
open were not doing any effective business.
The number of banking office in Pakistan came down to about 200 on 30th June 1948.
Branches of some European banks were also functioning in a limited manner, financing in
export of crops, and their number was limited to about 20.
It was only the Habib bank, which transferred its office from Bombay to Karachi
Austral Asia bank was another bank, which was in existence in the Pakistan territory at the
time of independence. Despite 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 Pakistan’s share of Rs.75 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 30th June 1948.
The Bank of Punjab 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 273 branches at all over major locations in the Punjab. The Bank provides all types
of banking services such as Deposits in Local Currency and client foreign currency,
remittances, and advances to business, trade, industry and agriculture. The Bank of Punjab has
indeed entered a new era of science to the nation under experience and professional hands of
its management. The Bank of Punjab plays a vital role in the national economy through
mobilization of hitherto untapped 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 and
remittances, financing, trade and industry for working capital requirements and money market

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operations. The lending policy of bank is not only cautious and constructive but also based on
principles of prudent lending with maximum emphasis on security.
The Bank provides all types of banking services such as Deposit in Local Currency,
Client Deposit in Foreign Currency, Remittances, Advances to Business, Trade, Industry and
Agriculture A wholly owned subsidiary of BOP First Punjab Modaraba (FPM) was established
in 1992 and is being managed by Punjab Modaraba Services (Pvt) Ltd , a wholly owned
subsidiary of The Bank of Punjab.
Lending under Islamic mode of finance, main vehicles are Morabaha, Ijarah &
Musharika to encompass requirements of corporate, commercial and individual customers.
Liability generation through COM’s (Certificate of Musharika) offers attractive
returns to individuals and institutional depositors for fixed tenure instruments. FPM is working
to introduce new and innovative products to enhance its range of service.

Industry Analysis:
The brief overview on the bank industry and the major players involved on it. The combined
values of all major players are collected from their financial statements of 2017

 As graphical shows NBP (National Bank of Pakistan) is the key player and the leader in
the industry with total assets and liabilities of PKR1.8 trillion. While BOP is RS.
6,495,47.
 Major Player Includes NBP, HBL, UBL, BAF, ABL, SCB and BOP.
 Total Assets of the major players in the industry are RS. 3,561,195 (M).
 BOP is considered as one of the major banks in Pakistan by assets.
 Like major Player NBP has the largest Profit before and after Tax i.e., 28,452(M) and
19,405 (M) respectively. While BOP has PBT RS. 4,856 (M) and PAT RS. 4,454 (M)
only
 The total Profit before and after tax of the major players are RS. 99,835 (M) and RS.
70,045 (M) respectively.
 Major Players in the Medium category of the Banking industry are AB, NIB, ABN, Cit,
SB BAH, FB.
 Total Assets and liabilities of this level comprised on RS. 1,091,083(M)
 Net Income of this level is RS. 9,567 (M)
 This level is giving a tough competition to the major players and trying to grab there
share.

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  Few mergers are taking place and in future it is expected to be more because to
maintain SB Standard reserve ratio.
 Major Players in the Small category of the Banking industry are ATLAS KASB, JS etc.
 Total Assets and liabilities of this level comprised on RS. 411,077 (M)
 Net Income of this level is RS. (2,176) (M)
 These Banks are going in loss overall in 2007. Since they are new players in Pakistani
Market. It is expected that they will give return in future.

2-Overview of the Organization:

HISTORY
The Bank of Punjab 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 273 branches at all over major locations in the Punjab. The Bank provides
all types of banking services such as Deposits in Local Currency and client foreign currency,
remittances, and advances to business, trade, industry and agriculture. The Bank of Punjab has
indeed entered a new era of science to the nation under experience and professional hands of
its management. The Bank of Punjab plays a vital role in the national economy through
mobilization of hitherto untapped 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 and
remittances, financing, trade and industry for working capital requirements and money market
operations. The lending policy of bank is not only cautious and constructive but also based on
principles of prudent lending with maximum emphasis on security.
The Bank provides all types of banking services such as Deposit in Local Currency,
Client Deposit in Foreign Currency, Remittances, Advances to Business, Trade, Industry and
Agriculture A wholly owned subsidiary of BOP First Punjab Modaraba (FPM) was established
in 1992 and is being managed by Punjab Modaraba Services (Pvt) Ltd , a wholly owned
subsidiary of The Bank of Punjab.
Lending under Islamic mode of finance, main vehicles are Morabaha, Ijarah &
Musharika to encompass requirements of corporate, commercial and individual customers.
Liability generation through COM’s (Certificate of Musharika) offers attractive
returns to individuals and institutional depositors for fixed tenure instruments. FPM is working
to introduce new and innovative products to enhance its range of services.

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Nationalization of Banks:

The principle of nationalization 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.
Since 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. However, the considerations behind
nationalization are
1. To form uniformity in the policy of the commercial banks so they may serve the best
national interest.
2. To make the operation of commercial banks highly sensitive and responsive to the
policy of the government relation to financial matters.
3. To 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 State Bank of Pakistan
4. To make the best use of the funds available at the disposal of these banks for the
economic development of the country.
5. To eliminate unhealthy and uneconomic competition among commercial banks.
1: Public Sector Commercial Banks

Askari Bank ASKARI

BANK
First Women Bank Limited FWB
The Bank of Khyber KB
The Bank of Punjab BOP

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2: Local Private Banks

Askari Commercial Bank Limited

Bank Al-Falah Limited

Bank Al Habib Limited

Bolan Bank Limited

Faysal Bank Limited
Saudi Pak Commercial Bank Ltd
Soneri Bank Limited

Union Bank Limited

Muslim Commercial Bank Limited

Allied Bank of Pakistan

Union Bank Limited

3: Foreign Banks

ABN Amro Bank

CITI Bank

Habib Bank A. G. Zurich

Mashreq Bank PJSC

Oman Bank

Rupali Bank

Standard Chartered Bank

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3: Specialized Banks

Zarai Tarqiati Bank Ltd.

Industrial Development Bank of

Pakistan

Punjab Provincial Cooperative Bank

Limited

History & Nature of BOP

The Bank of Punjab 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 280 branches at all over major locations in the
Punjab. The Bank provides all types of banking services such as Deposits in Local
Currency and client foreign currency, remittances, and advances to business, trade, industry
and agriculture. The Bank of Punjab has indeed entered a new era of science to the nation
under experience and professional hands of its management. The Bank of Punjab plays a
vital role in the national economy through mobilization of hitherto untapped 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 and remittances, financing,
trade and industry for working capital requirements and money market operations. The
lending policy of bank is not only cautious and constructive but also based on principles of
prudent lending with maximum emphasis on security.

Mission Statement
“To exceed the expectations of our stakeholders by leveraging our relationship
with the government of Punjab and delivering a complete range of professional solutions with
a focus on program driven products and services in the agriculture and middle tire markets
through a motivated team.”

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 Vision Statement
“To be a customer focused bank with service excellence.”

Competitors:
The competitors of the Bank of Punjab are the other commercial banks in Pakistan
such as:

 Muslim Commercial Bank Limited

 Soneri Bank Limited
 United Bank Limited
 Allied Bank Limited
 Askari Bank Limited
 Faisal Bank Limited
 Standard Chartered Bank Limited
 Habib Bank Limited
 Habib Metropolitan Bank Limited
 Bank Al-Habib Limited

Business Volume
These are the quick facts of the business in October 2017. At that instant BOP’s business
volume is as under.

Assets(Current +
Fixed) PKR 649,547,051
Loans PKR 295,751,721
Deposits PKR 556,281,156

Product Line

Deposits Products
• Current Account
• Basic Banking Account
• Tijarat Account (LCY)

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• Supreme Current Account (FCY)
• Young Loin Saving Account ( New Product 2010 )

Organizational Structure
Organizational Hierarchy Chart

Number of Employees

Total Number of employees

6092

Main Offices
Head Office and the main branch of BOP is in Gulberg 3, Lahore & Egerton, Lahore
Respectively. The Bank has been divided into seven regions

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Each consisting a number of branches.

 Lahore Region
 Faisalabad Region
 Gujranwala Region
 Rawalpindi Region
 Karachi/Quetta Region
 Multan Region
 Peshawar Region
Rests are the branches working under these regions. Which are almost 537 in all over Pakistan.

Introduction to All Departments

The departments and divisions of Bank of Punjab are as follows:

• Retail Banking Division

• Special Assets Management Division
• Credit Administration Division
• Human Resource Division
• Finance division
• Information Technology Division
• Operations Division
• Credit Risk Management Division
• Corporate Banking Division
• Control and Compliance Division
• Training, Research, Communication and Public Division
• Consumer banking Division
• Audit and Inspection Division
• Law Division

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Retail Banking Division
Retail banking division of the bank deals with the customers and executes their
transaction directly. It provides the services of saving account, mortgage loans, personal loans,
debit cards, accounts checking, credit cards, ATM cards.

Special Assets Management Division

The Bank will invest on behalf of its clients and give them access to a wide range of
traditional and alternative product offerings that would not be to the average investor. It includes the
automatic sweep of cash balances into a money market fund, as well as brokerage services.

Credit Administration Division

In this division, banks deals with the credit, banks give loans to individuals and to the
corporations.

Human Resource Division

This division performs the duty of hiring the employees, training the employees as
well as retaining the employees and if necessary, firing the employees.

Finance Division
This division controls the overall activities relating to finance i.e. monitoring the
investment activities, financing activities, Debit and Credit of funds and reasons thereof with
proofs.

Information Technology Division

This department controls and record the data related with the bank. The backup of
all branches is sent to IT department on daily basis.

Operations Division
This division controls the whole operation of all the branches and controls the cash activities,
cheques, account opening and other things about operations.

Training, Research, Communication & Public Division

This division conducts research on new products, trains newly hired employees, train old
employees on new and innovative circulars in banking sector. It also provides training on customer
relation management.

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Audit and Inspection Division
This department of bank includes the Audit of all the branches; they do audit of the
branches and give some opinions to execute their transactions.

Law Division
In this division of BOP, lawyers are employee to solve the cases of the bank.

OPERATIONS DEPARTMENT:
Operations department manages all departments of bank except credit department.
Operations Manager is responsible for all operations of cash department, remittance
department and clearing department. Opening of new accounts, closing of zero balance
accounts, updating all operational records etc. is done in operations department.

REMITTANCE DEPARTMENT:
Remittance department transfers funds from one branch of bank to another branch of
same bank. This is an important service which bank provides to its customers.

PROCESS OF CLEARING

OUT WARD CLEARING

Other branch

NIFT NIFT

BOP Branch

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 BOP Branch

CASH DEPARTMENT

Cash department deals with

 Cash Receipts
 Cash Payments
 Utility Bills Collection
Cash department is the backbone of the bank. As all banking business is based on cash. Cash
receipts include customer deposits, payments include cash withdrawals and utility bills include
telephone, gas, electricity and other bills collection.

LOCKER’S DEPARTMENT:

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It deals to safe the proceedings of customers. Locker is also called Safe Deposit Vault.
Currently BOP is providing Extra Insurance cover to customers. Customer is fully responsible
for his/her locker’s proceeds. Bank is only custodian for these proceedings.

CREDIT DEPARTMENT:

It deals with

 Commercial loan
 Consumer loan
 SME loan

OPERATIONS DEPARTMENT:

Operations department manages all departments of bank except credit

department. Operations Manager is responsible for all operations of cash department,
remittance department and clearing department. Opening of new accounts, closing of zero
balance accounts, updating all operational records etc. is done in operations department.

Beside these foreign payments to customers via online transactions is also the function of
deposit department. For this purpose NIC of the customer is verified on NADRA web site
www.verisys.com to make sure that payment is being made to the right person. The branch
credits the Head Office account when makes online payment to customer. They people working
abroad send money to their home viva express money which is deposited in bank of Punjab
head office so HO account debited while making payment HO account credited. In closing HO
credits all the branch accounts online with respective amount of payments.

Issuing the cheque books and making entries on computers for the authentication of cheque
books, filling deposit slips and cheques all are the functions of operation department.

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 Staff Strength
The total number of employees in the organization is 6092. Which is increasing? Regular
hiring’s taking place.

Board of Directors (BOP)

01 Mr. Safdar Javaid Syed Chairman

02 Mr. Naeemuddin Khan President
03 Mr. Azhar Hameed Director
04 Mr. Haroon Khawaja Director
05 Mr. Farooq Ahmed Awan Director
06 Mr. Naveed Masud Director
07 Mr. Mujtaba Jamal Chaudhry Director
08 Mr. Shafqat Ellahi Director
09 Mr. Shafqat Mahmood Director
10 Mr. Tariq Mahmood Pasha Director
11 Mr. Viqar Ahmed Khan Director

SECRETARY
01 Mr. Raza Saeed
TO THE BOARD

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 BOP Top Level Management
 Mr. Naveed  Acting General Manager
Hafeez Shaikh HR
 Mr. Nadeem
 General Manager Finance
Amir
 Mr. Sharjeal  General Manager
Masud Operations
 Mr. Muhammad
 General Manager Treasury
Salim Mirza
 Mr. Shaheen N.  General Manager Special
Qureshi Assets
 General Manager T.R.C. &
 Dr. Shahid A. Zia
P Division
 Mr. Feisal Azmat
 General Manager IT
Khan
 Mr. Muhammad
 Head Audit & Inspection
Hanif
 Mr. Salman Saeed  Head Credit Policy
 Mr. Moazzam M  Head Agriculture Credit
Maneka Department

4-Marketing Functions

Product:

Convenient and secure online access via the banking institution’s websites (and mobile
applications) to services and transactions normally available only at physical locations or via
mail or over the phone.

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Examples:

 New account applications

 Account information
 Access to bank statements and account activity
 Credit card activations
 Loan and bill payments
 Fund transfers
 Check orders
 Direct deposit setup
 Personal information updates
 Help with questions

Price:
Free; online banking is an additional service available to bank customers. Any visitor
to the site can apply to become a customer, and any existing customer can sign up for online
access to his/her bank account at no additional cost.

Promotion:

Online services are presumably communicated to new customers at signup. Online

banking is also the main focus of banks’ homepages:

As seen by the first item on immediately below their logo, is a sign-in section to access
online personal internet banking. The page is also set to default the text cursor’s location to the
“Username” field. Redirects auto a page that concentrates on the customer’s online access to
his/her bank account.

Place:

Potentially, anywhere: any location where consumers can access the bank’s website, or
access their accounts over a properly equipped mobile device with an internet connection.

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Human Resource Management
Employees recruitment
 Internal Recruitment
Yes BOP has the policies of internal recruitment when they are looking
to fill the vacancies.

 Promotions
So far as existing employees are concerned, they are given the opportunity to work
on higher post that is lying vacant rather than hiring a new employee

 External recruitment

 At Intermediate Level

At the intermediate level Triple As are hired by banks, these are additional
administrative assistants.
 University Fresh Graduates and Masters
University graduates and masters are source of applicants for BOP. But it is to be
considered that Banks do not personally contact these Universities through sources but
applicants have to apply themselves for internships and jobs.
 Unemployed Masters and Graduates
Despite of this unemployed masters and graduates are also a source of applicants for
BOP. Unemployed masters and graduates are recruited through recruitment advertisements.
 Military Personnel
So far as military personnel are concerned then these are usually army gun mans
and just related to security these solicited.
 Competitive incentives
Also mostly at the executive level, the competitive employees are welcomed from
other Banks. But this may take place at lower tier as it has been part of practice in bank.
Methods of Recruitment used in BOP.

So far as methods of recruitment is concerned,

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  Advertisements

Advertisements are most common method of recruitment by the bank. These include
websites and news papers.
IBP Package in this concern provides its services such as to draft, design and then process
the job advertisements that are then published in newspapers. It is also released on website of
IBP.

 Internships
Students are given the internship opportunities in the banks.

 Selection criteria

In BOP selection criteria varies depending upon the type of job. Such as when it is
for Cash officer post, then his education, competency, skills and abilities are more important,
But when it is for security guard, his experience, and personal characteristics take more
importance. But when is for executive level, then experience, qualification, skills and abilities,
competencies all of them assume the importance. So selection criteria vary depending upon
what is actually required for job.
“Right person for right job” is the selection criteria for BOP. But the complete selection
process is discussed below and its main selection criteria is merit that involves passing and
clearing all the stages of selection such as pre employment tests, group discussion and
benchmarks of concerned bank and BOP fully avails services of IBP in this concern. Final
selection list is issued by BOP itself.

 Training and development

Training Need Analysis

BOP through their training need analysis, assess the training needs. Currently
various TNA practices observed by current staff are as follows that they replied to me in
answer to my question.
In BOP TNA analysis include

 Self Assessment

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 The training needs are assessed on the basis of self assessment such employees
usually themselves assess in which area usually they require training and they are provided
when training session comes accordingly.

 Observation
Also Observation is also a good tool infect in past a team came where they got
hidden cameras. That time a Female Cash officer was offering the duty. Customer came and
asked her that he wanted her to make demand draft for him and she pointed him without seeing
to go to operations manager. This scene was recorded in their cameras and he was strictly
daunted and such behaviors were corrected on training session through role playing.

 New Technology
Also when new technology is introduced then training need is assessed such as
when computers became necessity of bank then every employee was given computer training
as now their was no room for status quo.

 Customer Complaints

“ECCC reviews service and operational related complaints/queries/ feedback

from the customers directly as well as through State Bank of Pakistan, Banking Maltase
Pakistan, Government bodies/ Departments etc.”
These external customers’ complaints also become source of assessing the training
needs.

 Bank Records
Similarly according to them they also used bank records for this purpose.

 Employee’s grievances
Employees grievances also indicate them need for training.

Training Mode

 On the Job training

Yes here on the job training is also provided with in these branches.

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  Onsite training
Some banks and financial institutions demand that training programs should
be held at their own sites. In such a case IBP has to design the training programs after
consulting with concerned banks and objectives are also determined after mutual consultation.
But BOP also facilities its employees to attend the training workshops and seminars of IBP.
OTI (Officer Training Institute) is the Academy where training is provided to the
employees in BOP.

OTI (Officers Training Institute)

 BOP set up its training institute in 1989.

 OTI is located at 296-Upper mall, Lahore.
 This is spread over 4 Canals.
 It has 2 lecture Invites has halls each having sitting capacity of 24.
 It has offices for Principle and Directing staff members.
 OTI is equipped with state of art multimedia facilities
 Here mess services for 20 resident trainees are also provided
 Its faculty includes 4 experienced and dedicated permanent members to provide quality
training.

OTI has conducted 30 coursers on various subjects these include

 Branch banking
 Agriculture
 Finance
 IT
 Operations
 KYC credit
 E.t.c

Major focus remains on

 Soft skills development
 Technical skills development

 Performance Appraisal and Management

The performance appraisal of the staff is usually done through following three
parties

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  Branch Manager
 Area Manager
 Regional chief
As such points are distributed in appraisal of above three. Final appraisal result is
declared by head Office.
But there is exception for Credit officers
Their appraisal is done by
 Unit Manager
 Then goes to General Manager.

Their Final result is also declared by Head Office.

A
B
C
These are grades given to them.

 Employee Compensation and Benefits

 Compensation to employees.

So far as direct financial compensation is considered these include following in their pay
package
 Basic pay
 House allowances
 Medical allowances
 Utility allowances
 Conveyance allowances
 Bonuses
 Telephone Reimbursements

From their compensation package following deductions are made.

 Provident Fund
 G.P Fund

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  B. Fund
 Group term insurance
 Income tax
 Installments of loans (where applicable)

 Compensation of Directors and executives

 Fees
 Managerial Remuneration
 Bonuses
 Contribution to defined contribution Plan
 Rent and House maintenance
 Utilities
 Medical
 Other allowances.

 Bonuses

The bonuses are also given to employees on completion of targets in form of cash
prizes.

 Commissions

BOP has just introduced the business development officers that will be paid
commissions along with other pay package items.

Benefits
They also introduced some schemes for the benefit of employees in past such as
employees plot scheme in past through this a lot of employees purchased the plots.

 Staff Retirement Benefits

 Employee compensated Absences

“The value of provision for employee compensated absences is determined
using actuarial valuation. This valuation includes making assumptions about discount rates,
mortality, expected rate of salary increases, retirement rates and average leave utilization per
year. Such estimates are subject to significant uncertainness because of the degree of
subjectivity involved and long term nature of these plans

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Discount rate 15%
Expected rate of eligible salary increases in future 14%
Average number of leaves utilized during the year 7 days
Average number of leaves accumulated per annum by employees 23days”

 Gratuity Schemes

“BOP makes provision in its financial statements for its liabilities towards
gratuity scheme based on the of last drawn basic salary of employees who have completed five
year of their basic salary. This scheme is intended for those permanent employees who have
completed five year of their services from their date of joining or contractual employees who
have become permanent.”

 Defined contribution Plan

(Provident Fund)
The bank has also provided the provident fund scheme, include all permanent
employees and the contributions are made by bank and employees at the rate of 8.33 % of the
basic salary. Contribution charged by bank is charged to income.

 Life Insurance Schemes and Medical Insurance Schemes

The bank has also provided attractive group life insurance Schemes and
Medical Insurance for its staff.

 Benefits to Executives
The Chief executives and other executive officers are provided with bank
maintained cars.
These employees can also avail following leaves

 Sick leaves
 Casual leaves
 Privilege leaves

27
  Mandatory leaves

Mandatory leaves among these are those leaves that employees are favored to avail on
mandatory basis these leaves are reserved for them

 Critical Analysis

 For Marketing
External Environment

It is very important that an organization consider its environment before beginning the
marketing process.

These are known as PEST factors.

Political Factor:

 Terrorist Activities
 Law For Investors
 Political Harassment And Interference
 Uncertainty For Investors

Economical Factor:

 Increase In Interest Rate

 Rapid Inflation
 GDP Rate
 BAD Debts

Social Factor:

 Decreasing In Saving Trend

 Increase Trend Of Islamic Banking

28
  Religious Beliefes

Technological Factor:

 Inadequate In Training
 Inadequet Communication Infrastructure
 Traditional Apporach
 Inadequate Computer Facilities

Economical Factor:

Increase In Interest Rate

As interest rates would rise bank of Punjab would issue fewer loans and thereby reduce the
banks profits.

Rapid Inflation

Inflation tends to discourage investment and long term economic growth. This is because of the
uncertainty and confusion that is more likely to occur during periods of high inflation.

GDP Rate:

Investors look at the growth rate to see if the economy is changing rapidly so they can adjust
their asset allocation. Most investors like to purchase shares of companies that are in rapidly
growing companies.

BAD Debts:

Nonperforming loans remain a critical issue for the banking sector. The ratio of nonperforming
loans to total loans increased very rapidly.

Technological Factor:

Inadequate In Training

29
Lack of training and awareness program, BOP is not conducting extensive training to their
employees, that’s why employee are not well trained in their job.

Inadequet Communication Infrastructure

Employee could not coordinate each other if any worker face any dispute during the work, so
there is need coordination in decision making, problem solving, in any issues if raise during
working hours.

Traditional Apporach

BOP is still using old method for working and for documentation

Inadequate Computer Facilities

The main branches of BOP should be fully computerized in order to expedite the dealing
process among bankers and their customers. It will not only reduce transaction time, will
increase accuracy but will also be efficient as well.

Internal Envoirnment :

Organizational Analysis in Comparison with the Industry/Competitors

Recently the bank of Punjab’s performance is not satisfactory in main areas such current assets,
debt etc. However the Bop is famous in promoting agricultural areas and increasing the
deposits with its customers. I have made the following comparison for the BOP with its
competitors or industry.
30
Items Bop Range Industry Range

Income Statement Industry Analysis

Total Revenue -13.9 Billion 78.2 Trillion

Gross Profit -14 Billion 78.2 Trillion

Operation Income -16.9 Billion 19.9 Trillion

Net Income -10.1 Billion 9.8 Trillion

Balance sheet Industry Analysis

Total Debt (per share) 20.0 670K

40.1T
Tangible book value 3.7B

Receivables 10.1M -10.1

Good will - 1.7K

For Human Resource Management

 Internal Recruitment

Yes BOP has the policies of internal recruitment when they are looking to fill
the vacancies.

 Promotions
So far as existing employees are concerned, they are given the opportunity to work on higher post that
is lying vacant rather than hiring a new employee

31
  External recruitment

At Intermediate Level

At the intermediate level Triple As are hired by banks, these are additional
administrative assistants.
University Fresh Graduates and Masters
University graduates and masters are source of applicants for BOP. But it is to be
considered that Banks do not personally contact these Universities through sources but
applicants have to apply themselves for internships and jobs.
Unemployed Masters and Graduates
Despite of this unemployed masters and graduates are also a source of applicants
for BOP. Unemployed masters and graduates are recruited through recruitment advertisements.
 Military Personnel
So far as military personnel are concerned then these are usually army gun mans
and just related to security these solicited.
Competitive incentives
Also mostly at the executive level, the competitive employees are welcomed from
other Banks. But this may take place at lower tier as it has been part of practice in bank.

 Methods of Recruitment used in BOP.

So far as methods of recruitment is concerned,

 Advertisements

Advertisements are most common method of recruitment by the bank. These include websites
and news papers.
IBP Package in this concern provides its services such as to draft, design and then process the
job advertisements that are then published in newspapers. It is also released on website of IBP.
 Internships
Students are given the internship opportunities in the banks.

 Selection criteria

In BOP selection criteria varies depending upon the type of job. Such as when it is
for Cash officer post, then his education, competency, skills and abilities are more important

32
But when it is for security guard, his experience, and personal characteristics take more
importance. But when is for executive level, then experience, qualification, skills and abilities,
competencies all of them assume the importance. So selection criteria vary depending upon
what is actually required for job.
“Right person for right job” is the selection criteria for BOP. But the complete selection
process is discussed below and its main selection criteria is merit that involves passing and
clearing all the stages of selection such as pre employment tests, group discussion and
benchmarks of concerned bank and BOP fully avails services of IBP in this concern. Final
selection list is issued by BOP itself.

Screening
In BOP, The selection process starts with initial screening where those applicants
that do not meet the job’s specification and description are screened.
IBP Package includes as follows.
Receive, Organize, Process CVs/ Job applications
Replying to Questions.
Making the list of eligible candidates
Releasing the admit card
Short listing of candidates

HRG group of BOP also in order to verify the information provided, they are asked for two
reputed people so that they may contact.
Even Universities are also contacted for degree confirmation.
a) Pre employment testing

The key points of IBP Package are observed in the bank which is as
follows.

 On request of client, IBP makes the examinations papers, and sample tests. It also
specifies the weight age for each session.
 It contacts the respective bank so that they may give their authorization.
 After getting the approval, it designates the examination centers and also appoints the
superintendents, invigilators and examiners.
 The admit cards are printed and dispatched to candidates.
 A list of eligible candidates is released on the website.
 IBP then receives requests of change of centers.
 It also receives the complaints such as if some candidate on the website list has not
received the admit card.
 Such test papers carry following contents
 English writing and compression
33
  Maths, logical inference.
 General knowledge
 Knowledge about banking.
 Each part has weight varying between 30 to 40%.
 Part 2 and 3 are solved on computer sheets and it grading is done through OCR.
 If Bank requires a computer literacy tests then such tests are also conducted and after
compiling them these are supplied to bank.
 IBP usually conduct such test on 8 to 10 centers within the country and 4 to 5 centers
outside the country.
 The efficient supervision and control is ensured in very clean and friendly atmosphere.
 Admit cards, CNIC and identification slips are checked to confirm the identity of
candidate.
 At the end of the test copies are collected, counted and verified with attendance record,
packed and send to IBP Head office.
 When IBP Head office receives these copies, then they codify, separate name identity
slips from copies and then send to examiner.
 Ultimately when results are received then finally these are tabulated, counter checked
and computerized.
 When decoding process is completed, the merit list is prepared and finally provided to
clients.
 Bank then finally does the further short listing as per their discretion.
 Then information is released in IBP website.

b) Group discussion

 A topic for discussion is prepared and placed in envelops.

 A group consisting of 8 to 10 members is invited to attend a session.
 A team of experts then attend each session.
 Now this group is asked to pick up 1 envelop and this exciting group discussion process
starts.
 IBP sends call letters for group discussion to candidates sending it directly through courier
service.
 A panel consisting of 3 members, 1 from IBP and 2 from concerned bank observe and
evaluate each group and then finally they are graded.
 When result of group discussion comes, respective bank does further short listing.

c) Interview

Type and Method of interviewing

The next phase is to call for interview those applicants that have passed the test. The
interviews involve both structured and unstructured pattern where not only job related

34
questions are asked but also few general knowledge and other kind of questions are asked from
applicants.
Board Interview
The type of interview that is in tradition of BOP is board interview in which
representatives of the bank and associated serving institutes usually take the interview.
“A senior level panel 2 from bank and 1 senior expert from IBP conducts the interview and grades the
participant”

d) Background Investigation

In BOP the background investigation is done that is done by verification of

educational back ground from the universities. Also from the record of police, their criminal
record is also checked. And also previous employers are also contacted for the verification
purposes. Personal reference may be utilized for this purpose such as the contact number of
two noble persons of your area is asked for.
e) Appointment letters to candidates

 Final results are the send to respective bank where further short listing is done by the
bank as per their discretion.

 BOP then sends appointment letter directly to the addresses of the successful
candidates.

Note: Recently appointments are being made on contract basis with suitable salary
packages.

f) Probation Period

This is usually done in BOP where the employees are sent to position on the
probation period and on satisfactory work they are made permanent.
g) Post induction Training

BOP Follows IBP packages as under:

When the candidates are finally selected, they are asked to enter into post induction training
varying between 2 weeks to 10 weeks. Post induction training program are designed after
consultation with the concerned bank by IBP.
The main purpose of this training is to bring following development.
35
  Technical development
 Personnel development

Major objective of these training are

e. To teach basic knowledge on
 Banking laws
 Products
 Processes
 Risks
e. To teach them how academic knowledge is practically applied in Banks.

Training and development

a. Training Need Analysis

BOP through their training need analysis, assess the training needs. Currently
various TNA practices observed by current staff are as follows that they replied to me in
answer to my question.
In BOP TNA analysis include
 Self Assessment
The training needs are assessed on the basis of self assessment such employees
usually themselves assess in which area usually they require training and they are provided
when training session comes accordingly.

 Observation
Also Observation is also a good tool infect in past a team came where they got
hidden cameras. That time a Female Cash officer was offering the duty. Customer came and
asked her that he wanted her to make demand draft for him and she pointed him without seeing
to go to operations manager.
This scene was recorded in their cameras and he was strictly daunted and such behaviors were
corrected on training session through role playing.
 New Technology
Also when new technology is introduced then training need is assessed such as
when computers became necessity of bank then every employee was given computer training
as now there was no room for status quo.
 Customer Complaints

36
 “ECCC reviews service and operational related complaints/queries/ feedback
from the customers directly as well as through State Bank of Pakistan, Banking Maltase
Pakistan, Government bodies/ Departments etc.”
These external customers’ complaints also become source of assessing the training
needs.
 Bank Records
Similarly according to them they also used bank records for this purpose.
 Employee’s grievances
Employees grievances also indicate them need for training.

a. (2) Training Mode

 On the Job training
Yes here on the job training is also provided with in these branches.
 Onsite training
Some banks and financial institutions demand that training programs should be
held at their own sites. In such a case IBP has to design the training programs after consulting
with concerned banks and objectives are also determined after mutual consultation.
But BOP also facilities its employees to attend the training workshops and seminars of IBP.
OTI (Officer Training Institute) is the Academy where training is provided to the employees in
BOP.

OTI (Officers Training Institute)

 BOP set up its training institute in 1989.
 OTI is located at 296-Upper mall, Lahore.
 This is spread over 4 Canals.
 It has 2 lecture Ivities has halls each having sitting capacity of 24.
 It has offices for Principle and Directing staff members.
 OTI is equipped with state of art multimedia facilities
 Here mess services for 20 resident trainees are also provided
 Its faculty includes 4 experienced and dedicated permanent members to provide quality
training.

OTI has conducted 30 coursers on various subjects these include

 Branch banking
 Agriculture
 Finance
 IT

37
  Operations
 KYC credit
 E.t.c

Major focus remains on

 Soft skills development
 Technical skills development

a.(3) Methods used to provide the training

 Multimedia and Lectures

The training is provided through lectures delivering them to employees and
Multimedia and Power point presentations are used to deliver them training lessons. “I also
observed specimen of Power point presentations and Window media player videos used to
deliver the training lessons to employees.” These were much similar to our VU teaching
technique. Multimedia technique is a traditionally used method in BOP to teach the training
lessons.
As per newsletter
“OTI is equipped with the state of art multimedia equipment conductive to better learning
hostel facility.”
 Role Playing
Also role playing is used in the sense that they may model their behavior according
to the situation encountered as how to react in any situation.
 Exercises

Also in training the trainees are provided case and asked to solve this such as they
are given unbalanced balance sheets and asked to balance these.
 Simulation

“Training is provided in simulated environment and it also follows the question and answers
session.”
 Internships

Internships are traditionally used method of on the job training.

 Career development

38
 Not any mentoring is seen and not any tuition is given related to this..
But in case of problems arising they can get coaching from respective superiors through emails
from BOP email service.
In this concern IBP provide banks some advisory functions
IBP is playing a very crucial part in advisory and consulting services buy bringing in
use the advices of retired, highly experienced and senior professionals that are provided to
banks as well as to stakeholders.
These services include
 Developing operational manuals
 Guidelines
 Reports
 Presentations
These cover all bank related subjects including
 Risk management
 Anti Money Laundering
 Corporate Governance
 Lending operations
 SME Finance
 Micro Finance
 All other products and services of financial service sector.

Performance Appraisal and Management

The performance appraisal of the staff is usually done through following three parties
 Branch Manager
 Area Manager
 Regional chief

As such points are distributed in appraisal of above three.

Final appraisal result is declared by head Office. But there is exception for Credit officers
Their appraisal is done by
 Unit Manager
 Then goes to General Manager.

Their Final result is also declared by Head Office.

39
  A
 B
 C
These are grades given to them

Employee Compensation and Benefits

a. Types of compensations:-

 Compensation to employees.

So far as direct financial compensation is considered these include following in

their pay package

 Basic pay
 House allowances
 Medical allowances
 Utility allowances
 Conveyance allowances
 Bonuses
 Telephone Reimbursements

From their compensation package following deductions are made.

 Provident Fund
 G.P Fund
 B. Fund
 Group term insurance
 Income tax
 Installments of loans (where applicable)

Compensation of Directors and executives

 Fees
 Managerial Remuneration
 Bonuses

40
  Contribution to defined contribution Plan
 Rent and House maintenance
 Utilities
 Medical
 Other allowances.

Bonuses

The bonuses are also given to employees on completion of targets in form of cash
prizes.

Commissions

BOP has just introduced the business development officers that will be paid
commissions along with other pay package items.

b. Benefits

They also introduced some schemes for the benefit of employees in past such as
employees plot scheme in past through this a lot of employees purchased the plots.
Staff Retirement Benefits

 Employee compensated Absences

“The value of provision for employee compensated absences is determined
using actuarial valuation. This valuation includes making assumptions about discount rates,
mortality, expected rate of salary increases, retirement rates and average leave utilization per
year. Such estimates are subject to significant uncertainness because of the degree of
subjectivity involved and long term nature of these plans

Discount rate 15%

Expected rate of eligible salary increases in future 14%
Average number of leaves utilized during the year 7 days
Average number of leaves accumulated per annum by employees 23days”

 Gratuity Schemes

41
 “BOP makes provision in its financial statements for its liabilities towards gratuity
scheme based on the of last drawn basic salary of employees who have completed five year of
their basic salary.
This scheme is intended for those permanent employees who have completed five year of their
services from their date of joining or contractual employees who have become permanent.”

 Defined contribution Plan

(Provident Fund).
The bank has also provided the provident fund scheme, include all permanent
employees and the contributions are made by bank and employees at the rate of 8.33 % of the
basic salary. Contribution charged by bank is charged to income.

 Life Insurance Schemes and Medical Insurance Schemes

The bank has also provided attractive group life insurance Schemes and
Medical Insurance for its staff.

 Benefits to Executives
The Chief executives and other executive officers are provided with bank maintained cars.

These employees can also avail following leaves

Sick leaves
Casual leaves
Privilege leaves
Mandatory leaves

Mandatory leaves among these are those leaves that employees are favored to avail on
mandatory basis these leaves are reserved for them.

 For Finance
Ratio Analysis

42
 Ratio analysis is the calculation and comparison of ratios which are derived from
the information in a company's financial statements. Financial ratios are usually
expressed as a percent or as times per period.

(1) Liquidity Ratios

Liquidity ratios measure a firm’s ability to meet its current obligations.

Current Ratio Current Assets
Current Liabilities

DESCRIPTION   

C.R=

CurrentAssets   

Current 
Liabilities

Interpretation:
It is the ratio of current assets and liabilities; it states the liquidity position of the company
means due obligation payable within one year. 2: 1 is show good position of company liquidity,
Sales to Working Capital

Sales / working capital

DESCRIPTION   

Sales to Working

43
 Capital   

Interpretation
A sale to working capital ratio is the relationship of net Sales and working Capital of the
company. This 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.

(B) Leverage Ratios

Leverage ratios measure the degree of protection of suppliers of long term funds.
TIME INTEREST EARNED RATIO:

Net income interest,tax, / interest expense

times interest earned ratio indicates the extent of which earnings are available to meet interest
payments. A 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.

DESCRIPTION   

Net income
interest,tax , /
2.65 Times 1.96 Times 1.56 Times
Interest expense

Interpretation

44
Time interest earned indicates that whether the business has earned sufficient.Profits to pay its
periodical interest liabilities. This indicates the number of times interest is covered by the
profits available to pay interest charges.

Debt Ratio

Total debt / Total assets

DESCRIPTION   

Total debt /   

Total assets

Interpretation
Debt 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 amount?
BOP current ration total debt to equity is satisfactory it is showing company can easily pay the
money if organization go in liquidation.

 Debt / Equity Ratio

Total Debt
Total Equity

DESCRIPTION   

Total Debt /   

45
 Total Equity

Interpretation
Debt to Equity ratio indicates the relationship between the external equities or outsiders’ funds
and the internal equities or shareholders funds, the debt to equity ratio is used to measuring
solvency and researching the capital structure of a company. It indicates how much the
company is leveraged

Current Worth / Net worth Ratio

{Net profit (after interest and tax) / Share holder's fund} × 100]

DESCRIPTION   

Net profit (after    

interest and tax) /
Share holder's fund}
× 100

Interpretation:
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. What amount will distribute and what amount will be reinvested.

46
BOP is still earning good profit; it shows the good survival of organization in competition
trend.

Fixed Asset Ratio / Equity Ratio

Owners Equity/Total Assets

DESCRIPTION   

Owners   

Equity/Total 
Assets

Interpretation
This ratio is useful for shareholders because through this ratio shareholder can see what
total amount left if the company goes in liquidation after paying the priority to bondholders,

(C) Profitability Ratios

Profitability ratios measure the earning ability of a firm.

Gross Profit Margin

Gross profit / sales or revenue *100

47
 DESCRIPTION   

Gross profit / sales or   

revenue *100

Interpretations
Gross profit ratio may indicate to what extent 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.

Net Profit Margin

Net Income * 100

Net Sales

DESCRIPTION   

Net profit / Net Sales

* 100
    

48
Interpretation:

This is the ratio of net profit after taxes to net sales. This is used to measure The overall
profitability of the company and is very useful to proprietors. The Profit margin tells you how
much profit a company makes for every Rupee 1 It generates in revenue,

PRETAX MARGIN

Pretax Profit / Net Sales * 100

DESCRIPTION   

Pretax Profit / Net     

Sales * 100

Interpretation:
Pretax margin means how much the BOP is earning after the operating, no operating,
Financial cost. It is a taxable income. BOP is earning 3.11% than its
Operating Assets Turnover

49
 Revenue

Assets

DESCRIPTION   

REVENUE /ASSETS   

Return on Operating Assets

Net Income + Interest Expense

Total Assets

DESCRIPTION   

Net income +   

Interest expense

/ Total assets

Sales to Fixed Assets

Sales / fixed assets

50
 DESCRIPTION   

Sales / fixed assets

  

Interpretation
Sales to fixed assets ratio is used to measure the productivity of goods, means plan and
building which is fixed assets used to produce the goods, through this ratio we can check the
exact capacity of fixed assets.

Return on Total Equity

Net Income *100

Equity

DESCRIPTION   

Return on equity     

Interpretation:

51
This is the measurement of the return which shareholders are obtaining on Their investments.
The ratio is the relationship of net income and total equity of the shareholders. Investors and
lenders measure the strength of the business from this ratio and made their decisions.

Activity Ratios
Activity ratios measure a firm's ability to convert different accounts within their
Balance sheets into cash or sales.

Total Assets Turnover

Net Sales
Average Total Assets

DESCRIPTION   

Net Sales / Average

Total Assets
  


Interpretation:

52
 The ratio depicts that is the company Utilizing 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.

Horizontal Analysis

Profit and Loss Account

201 201 Diff Dif 201 201 Diff Dif 201 201 Diff Dif
5 4 ren f in 6 5 ren f in 7 6 renc f in
ce % ce % e %
Mark-up / return / 31,2 29,5 1,7 5.5 29,6 31,2 - - 34,5 29,6 4,86 14.
interest earned 62,8 17,6 45, 823 71,4 62,8 1,5 5.3 32,0 71,4 0,58 075
80 73 207 62 65 80 91, 634 45 65 0 56
415 5

Mark- 20,1 20,5 - - 17,4 20,1 - - 18,8 17,4 1,44 7.6

up/return/interest 98,7 25,7 326 1.6 30,1 98,7 2,7 15. 77,3 30,1 7,16 661
expensed 98 83 ,98 188 54 98 68, 884 23 54 9 77
5 3 644 2

Net mark-up / 11,0 8,99 2,0 18. 12,2 11,0 1,1 9.6 15,6 12,2 3,41 21.
interest income 64,0 1,89 72, 729 41,3 64,0 77, 168 54,7 41,3 3,41 804
82 0 192 11 82 229 5 22 11 1 4

Provision / (Reversal 3,43 1,11 2,3 67. 922, 3,43 - - 14,1 922, 13,2 93.
of provision) against 1,45 8,60 12, 401 236 1,45 2,5 272 31,4 236 09,2 473
non-performing 1 6 845 37 1 09, .07 78 42 89
loans and advances – 215 9
net
Provision for 97,2 59,4 37, 38. 97,0 97,2 - - 91,6 97,0 - -
diminution in the 02 94 708 793 16 02 186 0.1 45 16 5,37 5.8
value of investments 44 917 1 606
- net 2 6

Bad debts written off 0 0 0 0 0 0 0 0 0 0 0 0

directly
3,52 1,17 2,3 299 1,01 3,52 - 28. 14,2 1,01 13,2 139
8,65 8,10 50, .52 9,25 8,65 2,5 885 23,1 9,25 03,8 5.4
3 0 553 1 2 3 09, 23 2 71 5
401
Net mark-up / 7,53 7,81 - - 1,22 7,53 - - 1,43 1,22 209, 14.

53
interest income after 5,42 3,79 278 3.6 2,05 5,42 6,3 516 1,59 2,05 540 636
provision 9 1 ,36 940 9 9 13, .61 9 9 78
2 4 370 7

NON MARK-
UP/INTEREST
INCOME
Fee, commission and 828, 909, - - 976, 828, 148 15. 1,22 976, 250, 20.
brokerage income 229 596 81, 9.8 419 229 ,19 176 7,03 419 616 424
367 242 0 89 5 52
2
Dividend income 57,5 39,9 17, 30. 68,4 57,5 10, 15. 91,3 68,4 22,9 25.
81 18 663 675 34 81 853 859 61 34 27 094
05 08 95
Income from dealing 109, 183, - - 75,2 109, - - 109, 75,2 33,9 31.
in foreign currencies 280 830 74, 68. 48 280 34, 45. 173 48 25 074
550 219 032 226 53
3 5

Gain on sale and 5,01 667, 4,3 86. 2,52 5,01 - - 1,31 2,52 - -
redemption of 3,54 322 46, 689 5,57 3,54 2,4 98. 6,15 5,57 1,20 91.
securities - net 6 224 62 2 6 87, 511 5 2 9,41 890
974 3 7 2
Unrealized loss on - -654 - 92. - - 7,3 - 80 - 1,25 157
revaluation of 8,52 7,8 325 1,17 8,52 46 624 1,17 6 0
investments 2 68 75 6 2 .66 6
classified as held for
trading
Other income 1,63 1,00 634 38. 1,65 1,63 23, 1.4 1,85 1,65 201, 10.
5,06 0,17 ,89 829 8,28 5,06 220 002 9,91 8,28 628 840
4 3 1 73 4 4 43 2 4 73
Total non- 7,63 2,80 4,8 63. 5,30 7,63 - - 4,60 5,30 - -
markup/interest 5,17 0,18 34, 325 2,78 5,17 2,3 43. 3,71 2,78 699, 15.
income 8 5 993 2 1 8 32, 984 6 1 065 185
397
15,1 10,6 4,5 30. 16,5 15,1 1,3 8.1 6,03 16,5 - -
70,6 13,9 56, 035 24,8 70,6 54, 951 5,31 24,8 10,4 173
07 76 631 92 40 07 233 35 5 40 89,5 .80
25 2
NON MARK-
UP/INTEREST

54
EXPENSES
NON MARK-
UP/INTEREST
EXPENSES
NON MARK-
UP/INTEREST
EXPENSES
NON MARK-
UP/INTEREST
EXPENSES
NON MARK-
UP/INTEREST
EXPENSES
NON MARK-
UP/INTEREST
EXPENSES
NON MARK-
UP/INTEREST
EXPENSES
Administrative 7,39 6,21 1,1 118 8,35 7,39 956 112 10,1 8,35 1,82 121
expenses 4,14 7,34 76, .92 0,52 4,14 ,38 .93 74,9 0,52 4,46 .84
2 4 798 77 9 2 7 44 96 9 7 85
Charge /(Reversal) 224, - 226 - 569, 224, 345 253 513, 569, - 90.
of Provision against 382 2,41 ,79 928 923 382 ,54 .99 461 923 56,4 093
other assets 6 8 7.3 1 68 62 05
3
Provision against off 32,2 17,8 14, 180 - 32,2 - - 0 - 485, 0
balance sheet 74 75 399 .55 485, 74 517 150 485, 668
obligations 38 668 ,94 4.8 668
2 3
Other charges 19,9 19,7 231 101 33,6 19,9 13, 168 43,0 33,6 9,30 127
58 27 .17 99 58 741 .84 03 99 4 .60
1 96 91
Total non- 7,67 6,25 1,4 122 8,46 7,67 797 110 10,7 8,46 2,26 126
markup/interest 0,75 2,53 18, .68 8,48 0,75 ,72 .39 31,4 8,48 2,97 .72
expenses 6 0 226 24 3 6 7 96 60 3 7 23
Extra 0 0 0 0 0 0
ordinary/unusual
item
Profit before 7,49 4,36 3,1 122 8,05 7,49 556 122 - 8,05 - 122
taxation 9,85 1,44 38, .68 6,35 9,85 ,50 .68 4,69 6,35 12,7 .68
1 6 405 24 7 1 6 24 6,14 7 52,5 24

55
 5 02

Taxation - Current 389, 323, 65, 16. 961, 389, 571 59. 2,27 961, 1,31 57.
year 782 818 964 923 670 782 ,88 468 4,23 670 2,56 714
31 8 22 3 3 53
- Prior year 143, 0 143 100 364, 143, 220 60. 227, 364, - -
953 ,95 259 953 ,30 480 511 259 136, 60.
3 6 59 748 106
1
- Deferred 2,24 1,19 1,0 46. 1,86 2,24 - - - 1,86 - 148
8,31 6,09 52, 800 6,50 8,31 381 20. 3,88 6,50 5,74 .09
7 3 224 52 8 7 ,80 455 0,81 8 7,32 58
9 8 3 1
2,78 151 1,2 45. 3,19 2,78 410 12. 1,37 3,19 - -
2,05 991 62, 367 2,43 2,05 ,38 854 9,06 2,43 1,81 131
2 1 141 27 7 2 5 91 9 7 3,36 .49
8 2
Profit after taxation 4,71 2,84 1,8 39. 4,86 4,71 146 3.0 - 4,86 - 246
7,79 1,53 76, 769 3,92 7,79 ,12 041 3,31 3,92 8,18 .63
9 5 264 9 0 9 1 8 7,07 0 0,99 3
6 6
Accumulated losses - - 2,1 - - - 3,8 - 0 - 5,22 #DI
brought forward 9,08 11,2 91, 24. 5,22 9,08 62, 73. 5,22 0,85 V/0
3,20 75,0 817 130 0,85 3,20 356 979 0,85 3 !
9 26 4 3 9 4 3
Transfer from 57,7 9,85 47, 82. 54,6 57,7 - - 0 54,6 - #D
surplus on 38 8 880 926 39 38 3,0 5.6 39 54,6 IV/
revaluation of fixed 3 99 718 39 0!
assets - net of tax
Transfer from 7,13 -980 8,1 113 0 7,13 - 0 0 0 0 #D
surplus on 3 13 .73 3 7,1 IV/
revaluation of fixed 9 33 0!
assets on disposal

Transfer to statutory - - - 41. - - - 2.2 0 - 971, #D

reserve 949, 557, 392 296 971, 949, 22, 649 971, 672 IV/
664 490 ,17 1 672 664 008 6 672 0!
4
Actuarial gains on 29,3 2,51 26, 91. - 29,3 - 145 0 - 64,6 #D
remeasurement 50 4 836 434 64,6 50 93, .41 64,6 20 IV/
recognized 4 20 970 9 20 0!

56
Right shares issue 0 - 103 #D 0 0 0 0 0 0 0 #D
cost 103, ,62 IV/ IV/
620 0 0! 0!
- - 1,9 - - - 5,7 - 0 - 4,19 #D
9,93 11,9 86, 19. 4,19 9,93 38, 136 4,19 9,99 IV/
8,65 24,7 092 984 9,99 8,65 659 .63 9,99 3 0!
2 44 3 2 3
Accumulated losses - - 3,8 - 663, - 5,8 886 0 663, - #D
carried forward 5,22 9,08 62, 73. 927 5,22 84, .35 927 663, IV/
0,85 3,20 356 979 0,85 780 9 927 0!
3 9 3

Horizontal Analysis Balance Sheet

Balance Sheet
201 201 201 201 201 201
7 6 6 5 5 4
(in (in Dif Diff (in (in Dif Diff (in (in Dif Diff
mil mil fer in mil mil fer in mil mil fer in
lio lio enc % lio lio enc % lion lion enc %
n) n) e n) n) e ) ) e
ASSETS

Cash and Balances 42, 35, 6,7 15.8 35, 26, 9,5 26.7 26, 23, 2,5 9.80
with treasury banks 478 756 22 246 756 190 66 535 190 622 68 526
621 518 918
8 5 7
Balances with other 6,1 3,7 2,3 38.4 3,7 4,5 - - 4,5 2,2 2,2 50.3
Banks 16 65 51 401 65 12 74 19.8 12 39 73 767
569 7 406 730
7 374 5
5

lending to financial 24, 11, 12, 53.4 11, 6,1 5,1 45.7 6,1 32, - -
institutions 171 262 90 069 262 13 49 201 13 749 26, 435.
207 63 727

57
 9 753 6 6 138
9
Investments-Net 242 199 42, 17.6 199 176 23, 11.8 176 154 21, 12.0
,48 ,72 76 350 ,72 ,08 64 387 ,08 ,94 13 036
8 5 3 994 5 0 5 783 0 4 6 347
7 2 1
Operating Fixed 8,5 7,7 83 110. 7,7 6,4 1,2 118. 6,4 5,4 99 118.
Assets 33 03 0 775 03 84 19 800 84 90 4 105
022 123 646
7 4 6
Deferred Tax Assets- 10, 6,5 4,2 165. 6,5 7,9 - 82.6 7,9 9,8 - 80.3
Net 786 34 52 074 34 06 1,3 460 06 45 1,9 047
992 72 915 39 232
3 8 1
Other Assets-Net 19, 18, 78 104. 18, 25, - 72.1 25, 21, 4,4 120.
295 512 3 229 512 641 7,1 968 641 237 04 737
688 29 722 392
9 3
Advances-Net 295 262 33, 11.3 262 219 42, 16.3 219 170 49, 22.3
,84 ,19 65 746 ,19 ,35 83 370 ,35 ,27 08 759
1 0 1 911 0 6 4 075 6 3 3 550
3 1 7
649 545 10 16.0 545 472 73, 13.4 472 420 51, 10.9
,70 ,44 4,2 473 ,44 ,28 16 137 ,28 ,39 88 855
8 7 61 628 7 2 5 688 2 9 3 975
2 9 9

LIABILITIES
Bills Payable 3,3 4,1 - - 4,1 1,8 2,2 54.8 1,8 1,7 15 8.42
65 83 81 24.3 83 87 96 888 87 28 9 607
8 090 357 313
638 6 2
9
Borrowings 38, 39, - - 39, 55, - - 55, 44, 10, 18.9
949 829 88 2.25 829 236 15, 38.6 236 743 49 966
0 936 40 828 3 688
481 7 692 4
7
Deposits and other 556 453 10 18.5 453 374 78, 17.2 374 342 32, 8.71
,19 ,17 3,0 220 ,17 ,96 21 589 ,96 ,29 67 290

58
 accounts 2 4 18 211 4 1 3 336 1 1 0 614
7 5 2
Sub-ordinate loans 4,4 4,5 -1 - 4,5 2,0 2,5 55.5 2,0 2,0 0 0
99 00 0.02 00 00 00 555 00 00
222 555
716 6
2

Liabilities against 0 0 0 0 0 0 0 0 0 1,1 - 0

assets subject to 28 1,1
finance lease 28
Deferred Tax 0 0 0 0 0 0 0 0 0 0 0 0
Liabilities-Net
Other Liabilities 16, 15, 1,0 6.35 15, 15, 27 1.71 15, 10, 5,2 33.7
864 792 72 673 792 521 1 605 521 282 39 542
624 876 684
3 4 1

619 517 10 16.5 517 449 67, 13.1 449 402 47, 10.5
,86 ,47 2,3 181 ,47 ,60 87 161 ,60 ,17 43 499
9 8 91 675 8 5 3 131 5 2 3 271
5 5 6

NET-Assets 201 201 201 201 201 201

7 6 6 5 5 4
(in (in Dif Diff (in (in Dif Diff (in (in Dif Diff
mil mil fer in mil mil fer in mil mil fer in
lio lio enc % lio lio enc % lion lion enc %
ns) ns) e ns) ns) e s) s) e

Share Capital 26, 15, 10, 41.1 15, 15, 0 0 15, 15, 0 0
437 551 88 771 551 551 551 551
6 381
Reserves 3,2 1,1 2,1 66.1 1,1 2,3 - - 2,3 2,0 24 10.6
97 17 80 207 17 29 1,2 108. 29 81 8 483
158 12 504 469
923 3
9
Share Deposit money 0 7,0 - 0 7,0 7,0 0 0 7,0 7,0 0 0
7,0

59
 00 00 00 00 00 00

(Accumulated - 541 - 117. 541 - 5,7 106 - - 3,8 -

Loss)/Unappropriated 3,0 3,5 825 5,2 62 5.06 5,2 9,0 62 73.9
Profit 35 76 370 21 469 21 83 705
7 5 037
3
Non-controlling 254 151 10 40.5 151 0 15 100 0 0 0 0
interest 3 511 1
811
Surplus on revaluation 2,8 3,6 - - 3,6 3,2 32 9.01 3,2 4,0 - -
of Assets-Net of Tax 87 07 72 24.9 07 82 5 025 82 71 78 24.0
0 393 783 9 402
834 2 193
4 8
29, 27, 1,8 6.27 27, 22, 5,0 17.9 22, 19, 3,3 14.4
840 967 73 680 967 941 26 711 941 620 21 762
965 803 652
1 2

Competitive Analysis
Liquidity Ratios

BOP HBL
Current Ratio 1.11 1.14
Liquidity Ratio 0.62 0.75

Interpretation

The above table shows that our competitor can pay its current liabilities with ratio of 1.14 as
compare to our company which is 1.11.

Leverage Ratios

BOP HBL

60
Debt/Equity 3.73 4.73
Debt/Total Asset 0.95 0.90
Debt/T .Capitalization 0.74 0.47

Interpretation

Above table shows that competitor creditors and stockholder contribute 4 times whereas
our company 3 times. And this ratio shows that our company generates more profit than our
competitor. And the financial leverage of competitor is less high than our and competitor is less
risky.

Coverage Ratios

BOP HBL
EBIT/Interest Exp 0.21 0.70

Interpretation

This table shows that our competitor can pay easily our interest expenses as compare to us.

Profitability Ratio

BOP HBL
Return on Investment 0.006 0.17
Return on Equity 0.18 0.21

Interpretation

61
Above the table our competitor has a more profits from its original cost as compare to us. And
also the profit from shareholder investment is more than us.

Future prospects of the Organization

Despite problems and difficulties it is fair to say that a lot of progress has been
made to improve the health and soundness of the bank of Punjab in recent years. Although a
lot more needs to be done and there are few weak and vulnerable institutions the banking
sector in Pakistan is much stronger today compared to five years ago or in comparison to other
countries in the region.
BOP is currently working on the management issue and making strong cooperate governance,
starting regaining the trust of public over the bank. Besides this they are improving and
updating their banking operations by installing more and more ATM machines to facilitate their
customer.
Strong corporate governance is absolutely essential if the banks have to operate in a transparent
manner and protect the depositors’ interests. The SBP has taken several measures in the last
two years to put in place good governance practices to improve internal controls and bring
about a change in the organizational culture. The salient features of this structure are:

 Ownership and management were changed at another commercial bank which had
committed breach through unauthorized transfer of funds from the bank to associated
companies.
 The appointments of Board members and Chief Executive Officers of all banks have
to be screened so that they meet the fit and proper test prescribed by the SBP.
 Family representation on the Board of Directors of the banks where they hold
majority ownership has been limited to 25 percent of the total membership of the
Board.
 To avoid possible conflict of interest and use of insider information the Directors,
executives and traders working in Brokerage companies will no longer serve on the
Boards of Directors of the bank.
 External auditors are evaluated annually and classified in various categories based on
their performance and other prescribed criteria. Two large audit firms were debarred
from auditing the banks and only after showing improvement in their performance
placed in a category lower than they originally belonged to.
 A detailed set of guidelines for the Board of Directors to effectively oversee the
management of the bank and develop policies has been issued.
 In order to improve the current situation of BOP above guidelines of SBP should be
strictly followed by the management of BOP.
In turn to regain the previous position of BOP they have to strengthen the cooperate
governance, transparency in there working environment. They to struggle to regain the

62
confidence of public. It should be the utmost priorities for BOP management to again build
trust on the public. They should start different schemes in order to get back their old and loyal
customers.

Finally, the country’s payment system infrastructure is being strengthened to provide

convenience in transfer of payments to the customers. The Real-Time Gross Settlement
(RTGS) system will process large value and critical transactions on real time while electronic
clearing systems will be established in all cities. These reforms will go a long way in further
strengthening the Banking sector but a vigilant supervisory regime by the State Bank will help
steer the future direction.

7- SWOT Analysis
Introduction
SWOT analysis is an acronym that stands for strengths, weakness, opportunities,
and threats SWOT analysis is careful evaluation of an organization’s internal strengths and
weakness as well as its environment opportunities and threats.

“SWOT analysis is a situational which includes strengths, weaknesses, opportunities and

threats that affect organizational performance.”

“The overall evaluation of a company strengths, weaknesses, opportunities and threats is called
SWOT analysis.”

In SWOT analysis the best strategies accomplish an organization’s mission by:

1. Exploiting an organizations opportunities and strength.

2. Neutralizing it threats.

3. Avoiding or correcting its weakness.

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
and weakness and external opportunities and threats. The goal is to then develop good
strategies and exploit opportunities and strengths neutralize threats and avoid weaknesses.

STRENGTH

 The Bank officers of BOP are considered as one of the most able professionals in
the banking world (some belong to BCCI). However, they have added some local

63
 flavour in accordance with their targeted segmented. In my observation that they
interact with their clients as if they are their personal friends and discuss about their
problems as their own.
 As a result of the compassionate and personalized services of the officers, the
clients’ perception for BOP is very high. They have trust and feel themselves to be
secure while dealing with BOP.
 BOP has opened all its branches at commercial areas so that the customers or clients
face no problems in reaching to the bank. For example, Khanewal Road Branch is
being situated in business and commercial hub of Multan as big volume in trade.
 BOP has got a reliable and easy to use internal computer system. Every information
regarding the transactions in customers’ deposits has been computerized. Data are
properly maintained.
 Good security system
 Not excellent but good facilities are given to employees

WEAKNESSES

 Lack of proper internal controls is one of the major weakness of BOP. It is also
pointed by the auditor in his review.
 BOP has formulized a lot of products and services for its customers, even more than
other commercial banks, but any advertisement on electronic media has not been
seen.
 I observed during my internship that some of the employees were burdened with
over work. So I think that the work should be distributed according to their post and
capabilities.
 Biased selection of employees.

OPPORTUNITIES

 Satisfy dynamic consumer needs, BOP has made significant in roads in its entire
service spectrum. A lot of products have been introduced especially in Retail
Banking (Agriculture side) and people are increasingly becoming loyal to the bank
and because of feasible transactions. Optimum pricing and branding strategies of
the bank are helping to make customer feel secure and convenient.
 All the opportunities of the 21st century are to be availed in the information
technology. Information technology is the future of this dynamic world. Therefore
BOP should emphasize much on IT, especially on E-Banking. Bank can design a
universal account like other foreign banks, to enhance online facilities.
 BOP has introduced a number of financial schemes including special ‘Deposit
Accounts’. These accounts have their unique features. During the last three years,
BOP deposits have been increasing @ 40%, which is a very healthy sign. Therefore,
with the commencement of new schemes there can even be a greater increase in its
deposits.

64
THREATS

 Despite the difficult circumstances that confronted the banking sector in particular
and the country in general, BOP has been still highly profitable. But, the facts can’t
be denied and there might be an adverse impact of such situation.
 BOP is facing a strong competition by its competitors, Business of all these Banks
are growing at very high pace.

Conclusion
According to my practice and analysis of BOP 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 expected from you? How BOP can
give maximum satisfaction to their valuable customers. This concept is totally ignored
by BOP branch, lack of communication style, public dealing and wastage of customer
precious time is popular factors there. No organization can survive without these
important factors, and BOP also start the online work on all over the Pakistan not only
in particular cities, due to it BOP value is decreasing because competitors are taking
benefit edge form BOP.

Recommendation
According to my experience and evaluation BOP of Pakistan can Make more progress
after improving these particular points.
BOP can increase the customer satisfaction and loyalty and make easy the terms and conditions
for loan products to their valuable customers. And provide proper guideline for educated and
UN educated person due to it people will purchase more product, investor will invest more
capital and BOP 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 customers are waiting in row. It is uncivilized, uneducated dealing style
with customers.

References & Sources

http://www.bop.com.pk/

65
https://www.bop.com.pk/Financial/AnnualAccounts.aspx
https://en.wikipedia.org/wiki/Bank_of_Punjab https://www.scribd.com/search?query=bank%20of
%20punjab http://www.scstrade.com/stockscreening/SS_CompanySnapShotYF.aspx?symbol=BOP
https://www.slideshare.net/jamshaid143/presentation-on-the-bank-of-
punjab?from_action=save

66