FAYSAL BANK LIMITED

PREFACE

Internship training program provide a chance to students to make them familiar with the actual business environment. It also provides an opportunity to study the theories of books in practice. This is the reason why the student of University of Central Punjab (FOC) required to complete the internship program at any reputable institution/organization. After completing internship it is required to write an internship report, covering all the aspects of that organization. This is report written on Faysal Bank Ltd, which is divided in to seven parts covering all the aspect, working and behavior of organization.

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FAYSAL BANK LIMITED

ACKNOWLEDGMENT
By the grace of ALLAH almighty, who has enabled me to do this entailing hard work. It is a matter of pleasure and privilege for me to complete the internship and also to complete this internship report on Faysal Bank, Bedian Road Branch, Lahore Cantt. I would like to thank Prof. Azhar Ikram for giving us the opportunity for doing this internship. This work helped us to apply the theoretical concepts and learn the practical aspects of a bank. I would also like to thank Ms Nosheen Talat for her valuable guidance and help throughout this period. I would like to thank Mr. Muhammad Malik Parvaz Awan Manager of Faysal Bank Bedian Road Branch who allowed me to work with their team. I am most humbly thankful to all the employees of Faysal Bank Beadian Road Branch and especially to these personalities Mr. Rao Zahid Khalil (OM) Mr. Muhammad Shahbaz Ms. Zahida Javaid Ms. Natasha Yasmin Mr. Raja Aftab Iqbal for their continuous support and precious time with me.

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FAYSAL BANK LIMITED

TABLE OF CONTENTS
1 Executive Summary 2 Introduction To FBL 2.1 History 2.2 Group Information 2.3 Board of Directors 2.4 Management Information 3 Values 3.1 Threshhold Values 3.2 Differentiator Values 4 Products 4.1 Accounts 4.2 Customer Loans 4.3 Corporate Finance & Investment 5 Services 6 Branch Inner View 7 Financial Analysis 7.1 Current performance 7.2 External Envoirment 7.2.1 Social Envoirment 7.2.2 Task Envoirment 7.3 Three Years Financial Summery 7.4 SWOT Analysis 7.5 Performance 7.5.1 Financial Objectives 7.5.2 Other Objectives 8 Major Activities 8.1 Deparments of FBL 8.1.1 Account Opening Dep 8.1.2 Cash Deparment 8.1.3 Remittance Dep 8.1.4 Clearing Dep 8.1.5 Agri Dep 9 Conclusion 10 Recommendations 11 Boblography 26 31 32 33 34 36 37 38 10 14 15 17 18 19 19 20 22 23 24 24 8 9 Page # 4 5 5 6 7

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mainly because of the consistent policies implemented by the Government of Pakistan. including the privatization of banks in Pakistan. the banking industry of Pakistan has been growing over the past few years. housing finance companies. There are a number of different banks established in Pakistan.C an investment bank listed in Bahrain. micro finance banks and Islamic banks. another group entity in Pakistan. delivery creative and high-quality solutions which fit best its clients’ needs.e. Al Faysal Investment Bank Limited. On January 1. monetary policy has been very friendly toward the banking industry. ~4~ . It maintains a high ethical standards and unconditional compliance with regulations and laws. investment banks. The company is committed to its clients' best interests as well as preserving a good relationship by defining realistic objectives. like the nationalization of banks in the 1970’s.FAYSAL BANK LIMITED 1. including local incorporated commercial banks. merged into Faysal Bank Limited which resulted in a larger institution. Also the State Bank of Pakistan’s.S. However today. Faysal Bank is continuously innovating.) Limited (FMSL). The majority share holding of Faysal Bank Limited is held by Ihtmaar Bank B. Executive Summary Pakistan after getting its independence. Hiring and retaining the best people while respecting diversity. encouraging self improvement. It values its integrity and actively promotes the “know your customer” policy amongst Faysal employees to ensure that the company is not involved in any money laundry operation. Faysal Management Services (Pvt. Faysal Bank Limited (FBL) started its operations in 1995 as a local bank of Pakistan. did not inherit a strong banking industry and since then saw a number of events in the industry. 2002. development financial institutions. while it has one subsidiary i. foreign incorporated commercial banks. recognizing and rewarding merit are the key values of Faysal Bank.

the main activities of the Bank include underwriting (equity and other financings). as well as South Asia. Vision Excellence in all that we do. 2002.S. is licensed by the Central Bank of Bahrain and listed on the Bahrain Stock Exchange (ITHMR).C. total equity of US$1.1 billion and is a full investment bank with its direct business covering the Middle East and North Africa (MENA) region. The Bank's widespread and growing network of branches in the four provinces of the country and Azad Kashmir.1 History Faysal Bank started operations in Pakistan in 1987. investments. On January 1. The majority share holding of Faysal Bank Limited is held by Ithmaar Bank B. 2. financial services and real estate sectors in different markets. provides efficient services in an effective manner. The strength and stability of Faysal Bank Limited is evident through the Credit Rating assigned by JCR-VIS Credit Rating Company Limited of "AA" (Double A) for long to medium term and "A-1+" (A One Plus) for short term. It has a paid-up capital of US$360 million. Faysal Bank Limited is a full service banking institution offering consumer. together with its corporate offices in major cities. INTRODUCTION TO FAYSAL BANK Faysal Bank is a public limited company listed with Karachi Stock Exchange. Asia-Pacific and Europe. Al Faysal Investment Bank Limited.FAYSAL BANK LIMITED 2. corporate and investment banking facilities to its customers. and advisory services covering project financing. another group entity in Pakistan.2 Group Information Ithmaar Bank B. private equity (structuring. 2. Islamic financing. Faysal bank Limited is subsidiary of Ithmaar Bank of Bahrain.C an investment bank listed in Bahrain. first as a branch set-up of Faysal Islamic Bank of Bahrain and then in 1995 as a locally incorporated Pakistani bank under the present name of Faysal Bank Limited. merged into Faysal Bank Limited which resulted in a larger. participation and portfolio management). Besides holding significant investments in the banking. Mission ~5~ . private banking. capital markets and mergers & acquisitions.S. stronger and much more versatile institution.

2.3 Board of Directors Syed Naseem Ahmad Naveed A. Khan Nauman Ansari Aarij Ali Salman Ahmed Usmani Ahmed Kamran Mehreen Amin Nasir Islam Bashir A.Khan Graham Roderick Walker Mohammad A. an investment Bank in Bahrain is the ultimate holding company of Faysal Bank.C. The remaining shareholders comprise of general public. Ownership Ithmaar Bank B.4 Management Information Management Team Naved A. R. Hussain Muhammad A Rahman Bucheerei Farooq Rahmatullah Tariq Iqbal Khan Shahid Ahmad Chairman President & CO Director Director Director Director Director Director 2.S.FAYSAL BANK LIMITED Achieve leadership in providing financial services in chosen markets through innovation. Shaikh Syed Majid Ali President & CEO Head of Corporate & Investment Banking and Acting Head of Commercial Banking Head of Retail Banking & Acting Head of Strategic Development Head of Treasury Head of Services Head of Human Resources Head of Compliance Advisor on Special Assets and Acting Chief Risk Officer Chief Financial Officer Senior Management ~6~ . NIT and other Pakistani institutions.

VALUES 3. we aim for excellence and leadership in our chosen markets. Our Team : Our Asset 2: Respect We hold our customers.FAYSAL BANK LIMITED Enamullah Khan Irfan A. Khan Seemin Shafi Zafar Bashir Arif Hasan Khan Syed Kazim Raza Head of Centralized Operations Head of Treausry & Equity Capital Markets Back Office Head of Credit Administration Head of General Services Head of Information Technology Head of Payment Solutions & Product Development Head of Corporate Communications Head of Service Quality Head of Fraud Investigation Unit Head of Branch Distribution (South) 3. ~7~ . We up hold our customer rights to demand effient services. Together. we collaborate.1 Threshold Values Values at the heart of our Brand 1: Team Work We function as a team. we cooperate. Between functions. Within function. Khan Yousuf Hussain Khaqan Khan Naved Inayet Farah Naz Ali Raza Siraj Ali Mithani Anwar Ahmed Meenai Iqbal Ahmed Zuberi Head of Equity & Capital Markets Head of Investment Banking Head of Corporate Banking (North) Head of Corporate Banking (South) Head of Cash Management & Financial Institutions Head of Consumer Finance Head of Agri Finance Head of Commercial (South) Acting Head of Islamic Banking Head of Policies & Procedures Muhammad Abadullah Syed Kausar Nadeem Syed Nadeem Ahmed Awais Maqsood Anwer Umed Ali Samih H. Investors and regulators in high esteem.

We go the extra mile in legitimate. Our Passion : Our Worth 6: Innovation We pioneer novel and more efficient ways to deliver solution. ~8~ . knowledgeably and skillful. We stand for and abide by honesty. in thought in action and in belief. truth and transparency Our Integrity : Our Identity 4: Professionalism We are proficient and efficient in all that we do. time-proven principles of up rightness. We are excited to provide customers with the best or the best suited. Our professionalism : Our Competence 3. We are dedicated to a culture of improvement and modernization. honorable. We stand for originality. We provide banking services. We believe in ethical. acceptable ways.FAYSAL BANK LIMITED We appreciate and respect our profession and above all our bank Our Respect : Our duty 3: Integrity We are recognized by our realibity. credibility and character. We up hold regulalatory obligations.2 Differentiator Values Values that set our brand apart 5: Passion We bring zeal and enthusiasm for banking to work.

000/. Profit is paid on six monthly basis. adjust or prepare for new realities. We are proactive and anticipate our customer’s needs and wants. we are a family. our customers. Our responsiveness : Our Distinguisher 8: Compassion Our concern for our colleagues. Our Compassion : Our Gift 4.1 Accounts 1: Faysal Savings Faysal Savings is specially designed to cater to your hard earned savings. We act quickly to modify. To each other. communities and our country sets us apart. Profit is calculated on monthly minimum balance. Features • • • • • Account can be opened with an initial deposit of Rs.FAYSAL BANK LIMITED Our Innovation : Our strength 7: Responsiveness We are receptine to the need for change and improment. PRODUCTS 4. Easy access through cheque book and Pocketmate Visa Debit card. Pocketmate can be used at more than a million ATMs and 29 million point of sale (POS) terminals around the world 2: Faysal Sahulat ~9~ . Access to account through on-line banking at all Faysal Bank branches across Pakistan. 10. we are a meaningful source of shared humanity. For each other.

000 or more following additional facilities are provided . 4: Rozana Munafa Plus Account Rozana Munafa Plus is a savings account in which profit is calculated on day end balance. Free access to account through online banking at all Faysal Bank branches countrywide. Unlimited transaction facility through ATMs. Free ATM transactions on Faysal Bank ATM machines. 1000/. 500.  Pay orders*  Small Locker* (subject to availability)  Visa ATM/Debit Card*  Statement of account* • Easy access through cheque book and Pocketmate Visa Debit card. It provides customer with the option of a high value. Free of charge statement of account for customers once a year.000.30. No requirement for maintaining a minimum balance Maximum of two free deposits and withdrawals through counters/clearing are allowed in a month. 3: Basic Banking Account As per SBP prudential communicated via BPD circular No.  Cheque Book*. and is disbursed on a monthly basis. Pocketmate can be used at more than a million ATMs and 29 million point of sale (POS) terminals around the world. Unlimited transaction facilities. 5. Faysal Bank has introduced the Basic Banking Account (BBA) to cater the needs of low income groups having the following features.FAYSAL BANK LIMITED Faysal Sahulat is a transactional account specially designed for individuals and business customers who seek instant access to their funds at any Faysal Bank branch in Pakistan. monthly profit account. On maintaining a monthly average balance of Rs. However charges would apply on non Faysal Bank ATM machines as per SOC. Features • • • • • • Account can be opened with Rs. In case more statements are required than standard charges would be applicable. Features ~ 10 ~ . Features • • • • Account can be opened with an initial deposit of Rs. free of cost.

Profit is disbursed on monthly basis. Profit is paid on monthly basis. Access to account through on-line banking at all Faysal Bank branches across the country.000 for individual customers and Rs.000/ No restriction on the number of transactions. Easy access through cheque book and Pocketmate Visa Debit card. Easy access through cheque book and Pocketmate Visa Debit card. 500. Features • • • • • Account can be opened with an initial deposit of Rs. 6: Faysal Premium Faysal Premium is a savings account specially designed for high value deposits with attractive profit rates having the following features. Profit is paid on monthly basis. 7: Faysal Izafa ~ 11 ~ . Profit is calculated on daily balance basis. Pocketmate can be used at more than a million ATMs and 29 million point of sale (POS) terminals around the world. Faysal Moavin offers the perfect combination of savings account matched with the flexibility of a current account. Access to account through online banking at all Faysal Bank branches countrywide. 100. 5: Faysal Muavin Faysal Moavin is a Savings account made for genuine individual savers like you. Access to account through on-line banking at all Faysal Bank branches across Pakistan.FAYSAL BANK LIMITED • • • • • Account opening and minimum balance requirement of Rs. Pocketmate can be used at more than a million ATMs and 29 million point of sale (POS) terminals around the world.000 for corporate customers. Profit is calculated on daily balance basis. 20. Pocketmate can be used at more than a million ATMs and 29 million point of sale (POS) terminals around the world. Features • • • • • • • Account can be opened with an initial deposit of Rs. 5 million Profit is calculated on daily balance basis. Tiered profit structure providing an incentive to save more. Easy access through cheque book and Pocketmate Visa Debit card.

Faysal Bank's Mahfooz Sarmaya foreign currency account offers attractive features: Features • • • Account can be opened in three major international currencies: US Dollars. Financing facility of up to 90% of the invested amount. First cheque book is provided free on investment of Rs. To provide convenience and value to customers with foreign currency related needs. Features • • • Account can be opened in US Dollars. Access to profit through online banking at all Faysal Bank branches and more than 3. ~ 12 ~ . Minimum balance for opening FCY Saving Plus is 500 units of the currency in which the account is opened. Pound Sterling and Euro currency. 25. With Mahfooz Sarmaya Account. 300. 8: Mahfoz Sarmaya Faysal Bank endeavors to build and strengthen customer relationships by providing innovative banking products and services. As a result. Pound Sterling and Euro. Profit is calculated on monthly average balance. you become eligible for Pak Rupee financing facility of up to 75 percent of the deposit in your account at very competitive financing rate.FAYSAL BANK LIMITED At Faysal Bank we realize that every customer's financial needs are different. you automatically qualify for special rates for car and home financing. six monthly and monthly profit payment option available. Minimum balance for opening Mahfooz Sarmaya is 1000 units of the currency in which the account is opened. Tenure from one year to five years. Annual. 9: FCY Saving Plus FCY Saving Plus is a new foreign currency savings account with attractive profit rates where customers get their profit on a monthly basis.000/. the Faysal Izafa Term Deposit is designed to provide individuals and corporate customers an opportunity to grow their money securely and earn attractive profits. Features • • • • • • Minimum required investment as low as Rs. Account can be opened in any of the following types: ○ Savings Account ○ Term Deposit Account ○ Current Account • • With Mahfooz Sarmaya Account.000/ or more.000 ATMs countrywide.

Annually revised) Minimum 20% ~ 13 ~ .or maximum 70% of the property value (50% in renovation) 1 year to 20 years Variable (12Mths Kibor+5% .500.2 CUSTOMER LOANS 1: Faysal Car Finance Features Vehicle Type: Lease Term: Markup Rate: Equity: 2: Faysal Housing Finance Features • • • • Buying a new Home 1 Building a new Home 2 Buy a Land plus construction 3 Remodeling or Renovation of Existing home 4 Minimum Financing: Repayment Period: Markup Rate: Repayment: Disbursement: Rs.Annually revised) Equal monthly installment In single tranche 1 In tranches against approved amount 2 Locally manufactured up to 5 Years Variable (12Mths Kibor+5% .000/. No FCY cash deposit charges* On maintaining the monthly average balance equivalent to USD 50k or above. ○ Free online banking* ○ Priority Banking* ○ Borrowing in PKR upto 90% of FCY* ○ Preferential rates on consumer finance* 4. the following additional facilities are provided. Tiered profit structure providing an incentive to save more.FAYSAL BANK LIMITED • • • • Profit is disbursed on monthly basis.

000/.(up to Rs.3 CORPORATE FINANCE AND INVESTMENT Corporate Financing Faysal Bank Limited is fully geared to meet the changing economic challenges present in Pakistan. Treasury & Capital Market ~ 14 ~ .1M in secured cases – residential property) Equal monthly installment 3 Months to 60 Months Fixed (Variable in secured cases) Pakistani / NRPs Liquid / Residential Property 90% & 70% (for Liquid / Residential Property) Facility of clubbing of spouse income is available 4. All the branches of Faysal Bank are equipped to speedily attend incoming financing requests from SMEs. Our Corporate Finance Group extends both short and long term financing facilities designed to fulfill the individual need of each corporate customer.500. We are ever striving to build meaningful relationships with our customers and become partners in their growth and progress by acting as financial advisors and consultants as well as financiers. We help our customers grow from strength to strength by acting as their bankers and financial advisors. Trade Financing Faysal Bank has established a strong presence globally in Trade Financing through its network. affiliates and correspondents. export and guarantee products.FAYSAL BANK LIMITED In tranches against approved amount. The Bank has conveniently maintained relationships with major banks in the international financial market and continues to develop new ones wherever needed. thus offering tailor-made solution to fit the individual need of each customer. Our Trade Finance services include a full range of import. SME Finance Small and Medium Enterprise (SME) unit of the Bank is geared towards catering to the banking requirements of small to medium businesses in a timely and therefore cost effective manner. first tranche will not be more than 50% of the sanctioned facility limit or 50% of land value whichever is lower 3 In pre-agreed installment against approved amount 4 3: Faysal Finance Features Maximum Financing: Repayment: Repayment Period: Markup Rate: Residency: Collateral: Financing Margin: Income Clubbing: Rs.

acquisitions and underwriting arrangements amongst many others. companies need expert partners with a keen understanding of business to help achieve profit objectives. Payroll and Fund Management Services. Faysal Bank's role in these segments span the entire spectrum of services including but not limited to Strategic Receivables/Payables Management. Corporate Electronic Banking.FAYSAL BANK LIMITED Faysal Bank's Treasury is one of the leading market makers in quoting competitive prices in all major currencies and provides dynamic corporate and institutional marketing teams with up-to-date market information. We advise and facilitate the arrangement of commercial paper. mergers. Dividend Processing. we can guide them through the markets and tailor a solution to meet their specific needs. At Faysal Bank. Faysal Bank has earned immaculate reputation in the field of Capital Markets. syndications. Cash Management Faysal Bank's Cash Management department has emerged as one of the leading cash management solution providers in strategic markets such as local corporate. which is quite evident from our track record and market share in this area. Whether the customers require financing of a project or managing of investments. Our cutting edge is the in-time advice and execution of deals for our customers. ~ 15 ~ . To increase its outreach into agricultural regions of Pakistan. Faysal Bank's treasury team strives to satisfy the customer's financial needs in a timely and a flawless manner. Agricultural Financing Faysal Bank offer specialized products for the agricultural sector. multi-national companies. Investment Banking With the ever-changing business environment in Pakistan. Faysal Bank has entered into strategic partnership with the specialized entities engaged in the Agro related sup-plies & services. and mid-tier markets. All of our branches located in agricultural areas of Pakistan are equipped to help the local farmers improve their yield and methods of farming by offering timely and affordable modes of financing to suit their needs. and Process Re-engineering. Success of Cash Management services is primarily attributable to its focus on providing streamlined and customized solution that add value to business process of its clients. corporate advisory services and a wide array of tools to help them accomplish their goals. we offer the leaders of businesses and institutions.

to 5 p.m. we offer our customers Safe Deposit Lockers in a pleasant and secure environment. 2: Travelers Cheques You may purchase American Express. 3: Transfer of Funds You can deposit and withdraw cash from any branch of Faysal Bank. to 12. No more searching for the nearest ATM. Lockers are available in three different sizes to suit individual customer needs at reasonable rentals.m. from Monday to Thursday and Saturday. On Friday.m. Branch Inner View Back Room ~ 16 ~ .m. Faysal Bank also offers an added insurance feature with locker. You need only to carry your chequebook! 4: Safe Deposit Lockers At Faysal Bank. All lockers are discretely placed within the Bank’s professionally guarded premises.30 p. regardless of which branch your account is in. 2. SERVICES 1: Pocket Mate Visa Debit Card Combining the wide acceptability of a credit card and the thoughtful prudence of an ATM card.m. Faysal Bank PocketMate is the most convenient way to carry cash.FAYSAL BANK LIMITED 1. US Dollar and Pound Sterling Travelers Cheques at selected branches of Faysal Bank. to 5 p. PocketMate Visa Debit Card provides you with the freedom of worldwide acceptability at over 27 million merchant outlets as an ATM card operative at all ATMs in Pakistan plus at over 1 Million ATMs worldwide bearing VISA logo. and then again from 3 p.m.m. 5: Non Stop Banking All branches of Faysal Bank remain open for business from 9 a. to 5 p. No more fear of overspending. Now you can enjoy our consistent and quality service from 9 a. the bank is open from 9 a.m. To suit your needs. we have extended our banking hours on Saturdays.

as compared to the 2006.34% and 35. Faysal Bank Limited (FBL). while in ~ 17 ~ . Three Years Financial Statement Analysis: 7.48% respectively. Muhammad Shahbaz (OSO) Ms.FAYSAL BANK LIMITED Mr. we found that. By looking in the table. Table in the annexure one shows FBL recent performance. as compared to the past two years. after tax profits and Earning per share (EPS) in year 2007 decreased by 19. performance was not good. Natasha Yasmin (RM) & Zahida Javaid Customer Lounge Raja Aftab Iqbal (Agri Loan Incharge) Malik Pervaiz (BM) 3. Rao Zahid Khalil(OM) Cash counter/Room Muhammad Asif & Azmat Ali Back Room Way Mr.1 Current Performance In last year.

are also affecting FBL as well as the banking sector. etc.2. etc. various mergers took placed in the banking sector. Due to MCR. Further deepening of the culture of diligence and corporate responsibility. and the rising inflation rate in the economy. demographic characteristics. but on the other its initial implementation costs are causing increased administrative cost to FBL. the profitability of FBL has been decreased by 39 % and EPS has been decreased by 53%. SBP regulations. and some people don’t keep their money in the banks. cash reserve ratio.2 Task Environment (Industry) ~ 18 ~ . and different application are increasing productivity of the Faysal Bank as well as the banking industry. and few mergers are also expected in near future. FBL has lost various customers because of this reason due to shift from Islamic Banking to conventional banking. b) Technological Developments like introduction of oracle financial systems.FAYSAL BANK LIMITED first six months of year 2008.1 Societal Environment Following are the forces which are currently affecting Faysal Bank and the Banking Industry: a) Economic The main things affecting Faysal Bank and the banking industry are increase interest rates. which is causing liquidity problems for FBL as well as banking sector. For example. Objectives Faysal Bank Limited. Prudent growth & Cost efficiencies. as compared to the first six months of 2007. c) Socio cultural Socio cultural forces like values. SBP is increasing discount rates. But on the other hand such believes are also helping banks to introduce Islamic products. symbols. 7. Because of these values some professionals don’t want to join banking sector. The objectives set for year 2008 are as under: • • • • Target of opening of 24 branches in year 2008. Karachi. most of the objectives have also not been met. because of religious believes. In addition to profitability. for example. currently KIBOR which is benchmark for industry lending is at highest ever point. Annual Report. Continued investment in technology & infrastructure. d) Political-legal These include the forces like political conditions in country.2. etc are also affecting FBL as well as banking sector. (2007).2 External Environment: Opportunities and Threats 7. Minimum Capital Requirement (MCR). 7.

while BOC is also planning to acquire 26% stakes in National Bank of Pakistan. all fund suppliers are avoiding to supply credit to Pakistani industry. and due to dearth of deposits with bank e) Rivalry among competing firms Banking sector is facing severe competition. these include. 7. small firms are not in a position to take loan from banks. at very attractive rates. key customers/buyers (corporate customers) of banks have gained substantial power and now they can bargain the spread with the relationship managers due of availability of the large number of the banks. etc. d) Bargaining power of suppliers Currently this is big problem for FBL as well as industry. due to availability of many national and international banks in the industry. while MCB with highest profits and National Bank of Pakistan with largest deposits. b) Bargaining power of buyers Due to increase in interest rates. Sun. Therefore.3 LAST THERE YEARS FINANCIAL STATEMENT SUMMARY ~ 19 ~ . technology i. etc. entry of foreign banks. threat of entering of Bank of China (BOC) by acquiring SME Bank. is limited. c) Threat of Substitute products or Service As such there is no significant threat of substitute products or service. and Security Dealers. Currently HBL bank. unique products. Task environment of FBL can be discussed through following Porter Model: a) Threat of new entrants Opening of braches by Barclays (which in international reputable bank). communication system like Symbols. moreover depositors bargaining power has also been increase due to high mark up rate offered by various banks. Oracle. but these services are limited to big cities.FAYSAL BANK LIMITED Many forces in the industry are causing competition. and Industrial Development Bank of Pakistan (IDBP). National Saving Organization.e. because of liquidity crisis and Pakistan’s poor international financial rating. While. ATM locations. while number of corporations in Pakistan. larger branch network. but few services like investment related services are offered by various Mutual Funds. is leading with 40% market share. on deposits side. is providing substitute products to the depositors of the banks through attractive packages.

FAYSAL BANK LIMITED ~ 20 ~ .

FAYSAL BANK LIMITED ~ 21 ~ .

High employee turnover. Heavy internal financing i.e. which can affect it to large extent because of its big corporate customers which are few in number. etc. Moving of key employees. from heavily growing deposits. Attock Group of Companies. Very attractive salary packages to employees. 7. e. Attracting only upper and middle class customers. Market share is declining from new competition. It can capture agriculture market by offering innovative agri finance products. implementation of Financial Oracle. Merger with Barclays or Bank of China to become part of larger international banking network and to increase the profit. Attracted big corporations like SNGPL. Decreasing trend in Earning per share and stock prices. Zaver Petroleum. Employees’ frustration due to excessive work burden. Better technology like Symbols. Weak branch network across the country. HRMS. Impressive print and electronic media campaign highlighting FBL’s role in the development of rural economy of Pakistan can give it competitive edge over its competitors.5. Based on financial strength and superior performance.4 SWOT Analysis Strengths • • • • • Weaknesses • • • • • • Opportunities • • • • Threats • • • • Declining trend in banking sector.5 Performance 7. Low number of ATMs. Through re-branching.1 Performance evaluation in the light of financial objectives ~ 22 ~ . which means moving of corporate clients to other banks. which can increase the competition in banking sector. Corporate Relationship Managers. Arrival of Barclays and Bank of China in Pakistan. FBL can capture lot of new customers. Faysal Bank Limited has been assigned the highest short term rating of A1+ (A One Plus) and AA (Double A) for the long term by JCR-VIS (credit rating Company).FAYSAL BANK LIMITED 7.g.

i. etc. By looking at the half yearly performance. showing an increase of 201%. increase in share price from Rs. common size balance sheet analysis. entering into niche market like agriculture. it is better to mention objectives (other than financial objectives) set for year 2007.39%. 5) Fifth objective was not achieved. (see annexure) 6) In an interview (B. implementation of Symbols system. and SME finance. 4) Increased cash flow objective was achieved by FBL. personal communication. increase of 12. Findings/Facts 1) Foremost objective of increase in profitability was not achieved. Findings/Facts 1) First objective of branch expansion was achieved as FBL opened 19 more branches in 2007. 4 and 3. (See annexure No. 4) Objective of implementing Symbols was achieved. increase in EPS. 60 at the year end of 2006. (Faysal Bank. 2006). (See annexure 5. with half yearly performance reveals the following facts: ~ 23 ~ . Naila. 3) Third objective of share price was partially achieved.4% of the sale to 24. 2) This objective was partially achieved as FBL entered in consumer and SME finance.5. cost efficiencies. (See annexure 6). as it is evident from decreasing after tax profit and decreasing profitability ratios of year 2007 as compared to year 2006. 5) Objective of cost efficiencies was achieved as administrative expenses increased from 19. 3) Third objective of opening of separate Islamic branch was not achieved.77% cash flows in year 2007 as compared to 2006.29 in year 2007. introduction of new MTO program with new approach of tests.e. decrease from Rs. to Rs.65 in 2006 to Rs.FAYSAL BANK LIMITED The main financial objectives of FBL are: increase in profitability. interviews. and decrease in provisioning of loans and bad debts by improving risk management procedures. while EPS has been decreased by 53. increase in share price. but not in agriculture finance. i. Following facts are found from FBL’s ratio analysis. consumer finance. For example.46%.e. Profit has been decreased by 42. 622332 to 1871969 thousand. 2007). (See annexure 6).1%. 2). one can find that current performance is very bad as compared to last year performance. and income statement analysis. October 29. 2) Second objective of increase in EPS was also un-attained i.4. 7. geographic expansion. increased / better cash flows.2 Performance Evaluation in the light of other Objectives Before evaluating performance. which is normal because of opening of 19 new branches. 2008) it was found that HRM department successfully introduced new methodology for MTO program. Other objectives of FBL includes. 6.e. While comparison of objectives set for year 2008.). 67 at the end to year 2007 (Faysal Bank. opening of separate Islamic Banking branches. It is important to discuss current financial performance of the FBL by comparing its half yearly financials of 2008 with half yearly financials of 2007. as in the year 2007 provisioning for consumer and general advances increased from Rs.

2008) it was found that . which is causing low productivity. in order to effectively manage HR issues. In an interview (A. After evaluating the performance of FBL. e. EPS. Heavy decline in profits. whose results are being seen in year 2006. Bills And Remittances ~ 24 ~ . 41%. 758% increase in the provisioning for NPLs.e. like profitability related objectives. i. Provisioning was increasing at disastrous rate of 201% in 2006-08. Delay in branch expansion decision. • • 1. especially FBL. Major Activities Perform During Internship 8. share prices.e. which doubled its provisioning. because its main focus is on corporate lending. October 23. HRM department of FBL is going to implement HRMS. Reasons for Poor Performance • • • • • The main reason behind low profitability is provisioning for non performing loans (NPLs). liquidity problems due to increasing interest rates. i. October 14. High employee turnover rate i. and provisioning.e. but the main objectives were not achieved. Nasir. In an interview (Z. when other banks were also expanding branch networks. and 758% in 2007-08 (as per half yearly results. 2008) it was found that. Change in provisioning guidelines by SBP in December 2006. it was found that FBL performed poor as compared to the targets it set. thus discouraging expansion. in 2006 instead of taking in 2003/04. because of very tough criteria. as shown in the table at previous page. till June 2008). and profitability. thus competitors gained edge. while. personal communication. It is necessary to find out why FBL is not performing well. electricity problems. which as a result is hurting banking industry.e. it also achieved many objectives. 47%. however. 5) While only obvious objective achieved is continuous investment in technology. i. no single event of corporate social responsibility arranged or no other example of any form of Corporate Social Responsibility.g. increase in KIBOR to approximately 17%. inter-bank rate touched highest ever level in Pakistan history i. Increase in overall cost of production of industries. Liberal credit policy in year 2005. personal communication. and 2008. 2007.FAYSAL BANK LIMITED 1) 2) 3) 4) Up till June. or why it is not performing according to the expectations.e.1 DEPARTMENTS OF FBL Following are the Departments of FBL 1) General BankingAccount Opening a. in the form of bad debts. only 6 new branches have been opened as compare to the target of 24. (See annexure 7). Abbasi. NPLs.

the bank officer must assure that customer has the following characteristics: • • • The customer must have the age of majority.1. Cash Department 2) Credits and Advances Department 3) Agri. Now customer becomes creditor of bank. It is most important department of bank and bank officers must take special care before opening the account. it means he must be the age of 18 according to law. agri laon department etc. ~ 25 ~ . it is assigned to other responsible officers. 8. Account opening procedure The general procedure of all account's opening is same but the document required to open the account is different according to type of account. The branch manager is responsible to handle job of account opening but in some cases. Deposit Department c. Department 4) Western Union & Locker Service Department 5) Housing Department 6) Auto Department 7) Card Department The Faysal Bank Bedian Road branch is not a wide branch there are only few main departments like general banking.FAYSAL BANK LIMITED b. Information at the time of opening of account.1 Account Opening Department Account opening is the first step in business of banking to create the relation of public with bank as a customer. Societies /Association Accounts Trusts Local Bodies Etc. Account Of General Customers • Illiterate person account • Joint Account Accounts Of Special Customer • Proprietor Ship Account • • • • Partnership Accounts Limited Company’s Account Agent’s Account Clubs. The customer must not be insolvent and bankrupt. The customer must be of sound mind. .

After filling this application by customer this application is forward to head office. It is preferred that the customer in the presence of introducer fills account opening form. Indemnity Form If the customers signature are shaky than he will also sign the indemnity form in which he mentioned that Bank is not responsible for any obligation about his signature. title of account. The bank officer consider following precaution in this respect. business detail etc. If the introducer does not come then bank officer must take extreme care about his signature verification.g. Specimen Signature Card (SS Card) The bank officer takes signature of customer on AOF and specimen signature card. the new account cannot be opened. The specific information about the business or occupation of the customer is recorded in the form. Account number. ~ 26 ~ . KYC (Know Your Customer) Form In this form bank write all information about customer e. The staff member can become introducer if they personally known to the prospective customer. Without the proper introduction. Account Opening Form (AOF) The bank officer must assure that the customer fills each and every column of account opening form correctly with all necessary details. line and place of business. NADRA also provide there software to FBL that they personally take verification in Bank. so there will be no doubt about the identity of customer. Introduction of Accounts It is a most important column of AOF. National Identity Card The bank officer check that number of national identity card is correctly recorded in the AOF and a copy of national identity card is kept in record by the bank. than head office sends the ATM card. • • • The introducer should come with the prospective customer to the bank.FAYSAL BANK LIMITED Also the bank officer must take proper information from the customer about his Means. Visa Debit Card Application Form If customer also wants to gain facility of Debit Card or ATM card than this application form is also filled by customer. NADRA Verification Verification of customer ID card is also necessary from NADRA.

If the cheque is presented through clearing then it will also only pay to the customer. three photographs are required. Individual Accounts Individual accounts are classified as: i. Copy of NIC Accounts of illiterate ladies and gentlemen In case of illiterate ladies and gentlemen. these customers are advised to attend bank personally and put their thumb impression on the Cheque. Joint Accounts • The bank will fulfill the stop payment instruction of any cheque lodged by any member of joint account but removal of these instruction must be signed by all the member • • If any member dies then there will be no transaction in the account and balance in the account will be paid according to instruction recorded at the account opening form. Account Opening form (AOF) b. if the signature are in English or Urdu than photographs are not required. Two is pasted on AOF and other is pasted n SS card.Joint Accounts Documents required to open individual account are a. The member of joint account can delegate authority to any third party to operate the account. Accounts of illiterate ladies and gentlemen ii. If the address is not sending his address than bank quickly take action and can close the account. At the encashment of Cheque. All the members Sign such mandate but it will be cancelled if any of the member dies or insolvent. Specimen Signature Card c. Instead of signature. left-hand thumb impressions are obtained on specimen signature card from gents and right hand thumb impression from ladies. Letter of Thanks A letter of thanks is sent to customer through mail to verify his address. Account of Special Customers Partnership Firm Account The documents required for these accounts are: • • • Account Opening Form SS Card Copy of NIC of all Partners ~ 27 ~ .FAYSAL BANK LIMITED Two Photographs of customer: With form two photographs of customer is also attach with form if the customer is illiterate and use thumb impression instead of signature.

In case of insolvency. the personal accounts of partner will also become inoperative. In The specific conditions to open the account of Joint Stock Company are: • ~ 28 ~ . death. These companies are listed in stock exchange and their shares are transferable and brought and soled freely in stock exchange. Certificate to commence business. Account is opened with the name of Company When the changes are taking place in the firm structure or if the firm is declared as insolvent then transaction in the account will be stopped. retirement or dismissal of any director does not affect operation on the account. NIC Passport of all the directors authorized signatures. However.FAYSAL BANK LIMITED • • • • • • Copy of registration certificate Copy of partnership Deed Partnership firms can open only current account due to business concern. List of directors authorized signature Introduction is not required for these accounts because companies are legal entities Death. Public Limited Companies Promoters and general public contribute the share capital of these companies. retirement or dismissal of the directors authorized to operate upon the accounts temporarily put embargo on operations of the account. The partnership accounts are opened under the following conditions: Joint Stock Company Account Joint Stock companies include: Private Limited Companies The companies whose share capital is not offered to the general public instead the offer is restricted to particular class of society or within the family members called private limited. All partners must sign the account opening form. The document required for these accounts are: • • • • • • • • • • Account Opening Form SS Card Up to date Memorandum Article of Association Certificate of incorporation. Resolution of board passed under company seal to open account. These companies are not listed in stock exchange and are not transferable.

When cheque book issue than bank take signature on cheque book register and also on requisition form. recreation activities and charitable purpose etc. Now the account will be active only by crediting some amount. Account opening procedure is same as mentioned before. 100 leaves cheque books. fresh resolution authorizing another person to operate upon the account is to be called for from the company. Accounts of Clubs & Societies These are non-trading/non-profit organizations and are formed for the promotion of culture. Per month will be deduct as a maintenance charges Inactive Account If there is no transaction in any account within 6 months then account will become inactive. The bank will pay remaining balance to account holder. education. Western Union Department ~ 29 ~ . Title of the Account Account must be opened in the name of the organization . Basically account is deactivating for the verification of customer. The requisition slip is duly signed then bank officer enters cheque book series on it. • • The Cheques signed by the directors before their death retirement or dismissal will be considered as valid instrument. The officers enter the series of cheque book in register in a sequence . The operation on the account will be stopped when company terminates its career. Closing of Account If the customer wants to close the account then he will fill the closing application form along with unused cheque book in the bank. 50. The document required for these accounts are: • • • • Copy of Bye-laws/regulations List of members of managing/Executive committee Copy of certificate of registration (if registered) Copies of NICs of the members of executive committee Issuance of Cheque Book The customer fills the Requisition slip for issuance of cheque books along with the AOF.FAYSAL BANK LIMITED such cases.The Bank issue 25. Maintenance of Account: If amount in account is less than 10000 than 50 Rs.

♦ Making payment to the customers against their Cheques or other payment instruments. Cash department has two counters. Functions of Cash Department It includes: ♦ Receiving cash from the customer. Dollar Euro and in Pond.The main advantage of western union is that it is not necessary that the person who is going to receiving money has account in bank . Through western union you can only receive money but cannot send the money to other country . When he transfers the money in FBL then that person came with its ID card and after verification he can receive money. the amount in figures & words.FAYSAL BANK LIMITED Basically Western union department provide service for receiving of money from different countries. account no. So the staff of cash department is well equipped and trained not only in technical handing of cash but also in the art of customer. In deposit slip. ♦ Cash Receipt Counter ♦ Cash Payment Counter Cash Receipt Counter If the customer wants to deposit in his account then he fills the deposits slip. 8. Mostly the amounts are in the form of PKR. the customer writes his account title. ♦ Ensuring proper storage safety and security of the cash in cash. The FBL provides efficient and personalized services to their customer. ♦ Transfer of Cheques from one account to another. ♦ Maintaining daily cash position in SYMBOL system. ~ 30 ~ .1. ♦ Ensuring proper cash management and sorting out of issue able cash. ♦ Handling cash withdrawal and deposit into the bank account with state bank of Pakistan and with other branches of bank. Documents required for western union ♦ Western union form ♦ CNIC copy Process of western union The person who is going to transfer money he had swift code which is issued by the foreign bank from where he is going to transfer money.The customer directly receive the money from bank. This department creates the impression of bank commitment of professionalism in its system and procedure.2 Cash Department Cash department is the most important because it is point of contact between the bank and the customer. The person already mentions the name to whom he transfers the money.

The following different instruments are used to remit the funds in FBL. When there is no branch of FBL than in that city there will be another bank which provides agency services to that bank. sale and purchase of prize bond. Different instruments are use to remit the money. ~ 31 ~ . Then cashier makes the payment to the customer and writes the detail of notes at the back of cheque to maintain daily cash position. Habib bank provides agency service to FBL e. The officer passes the cheque and debits the customer account with the same amount and posts the stamp of transfer on it.e. amount in figure.g. If amount is available then he verifies his signature from SS card already feed in computer. as well as general clients.RYK branch or any other branch or it is of RYK branch of other bank. In starting of Faysal Bank pay order is only payable in that branch from where it is issued but now a day it is pay able in any branch of FBL in Pakistan. i. If it is of FBL. ♦ Demand Draft ♦ Pay Order ♦ Call Deposit Receipt Demand Draft: Demand draft is used to transfer amount from one city to other city where there is no branch of FBL than demand draft is used. in khanpur there is no branch of FBL than DD will pay to Habib bank. The customer makes the payment to cashier along with the deposit slip. RYK branch with right date then cashier enter into cash payment book and transfer to the officer. Per pay order. Cash Payment Counter When the customer present the cheque to withdraw the money the cashier check its date.1. relating to cash A/C. cash receipt. 8. Difference between Pay order & DD The main difference between DD and Pay order is that pay order is payable with in city and DD is payable outside the city. But now a day FBL not issue demand draft. Pay Order Pay order is issued for payment in the same city because it is issued form one branch can only be payable from the same branch. FBL charge no 80 Rs. signature and either it is f FBL . Pay order is payable in only that branch from where it is issued while DD is payable in any branch of FBL.FAYSAL BANK LIMITED particulars mention the mode of deposit either cash or cheque and sign it. cash deposit.. Through pay order customer can transfer money from one branch to another branch. The officer feed the account number to check that demanded amount is available in his account. Faysal bank provides this service to their customer.3 Remittance Department Remittance department plays an important role in transfer of funds from one place to another. This department of bank deals in operation.

If any person makes contract with Govt. and shading and for buying animals.e. For a bank. Faysal Bank provide two types of Agri. ~ 32 ~ . for a specific purpose e.FAYSAL BANK LIMITED Call Deposit Receipt (CDR) It is also called pay slip and it is used for security purpose. fishing. it is registered ♦ It must have account with State Bank of Pakistan ♦ Sufficient balance should be in his account Normally clearing is carried out in SBP. But if road is not damage till contract than bank refund the money. poultry form. While Non-form loan is for dairy.5 Agri . Its branches located in agricultural areas of Pakistan are all equipped to help the local farmers improve their yield and methods of farming by offering timely and affordable modes of financing to suit their needs. Developing loan further classified into • • Form Loan Non. which are drawn or received from other bank.1. Types of Clearing: There are two types of clearing ♦ Inward Clearing ♦ Outward Clearing In inward clearing the Cheques of other banks comes in Faysal Bank while in outward clearing the Cheques of Faysal Bank goes to other banks. Bank Dr the account of client and Cr the CDR if road is damage before time. for example loan for tractors.g. following are the requirements of being a member of clearing house: ♦ It must be scheduled bank i. 8. treasures and machinery use in land for the purpose of development of land. 8.Form loan Form loan is for forms for example tractor and machines use in fields. are processed and subsequently settle by the clearing department. for construction of roads than he makes CDR.Department Faysal Bank offers specialized products for the agricultural sector.1. Loan • • Developing loan Production loan Developing loan Developing loan is for long term for the purpose of development of land. but in the city where there is no branch of SBP than National Bank work as subsidiary of SBP.4 Clearing Department All the cheque and negotiable instrument.

The 4% markup can be changed by FBL according to its requirements but KIBER markup remains same for all banks. fertilizers and labors etc. It also has two types • Form Loan • Non.While Non-form loan is used for the feed of animals for example Oil cakes . Title Deed In title deed ownership is mentioned that who is the owner of this land.FAYSAL BANK LIMITED Production Loan Production loan is issued for the inputs of fields. Security As a security bank accept the land. In it customer write that from which Company he want to purchase tractor and which model etc. Feasibility Report If the customer want to open a peltry form than in it mentioned all detail of expanses. Base book In this book all detail of land is mentioned and also all detail of cultivated area.5% is charged by KIBER and remaining 4% is charged by FBL.5%. gold.Form Loan Form loan is used from the inputs used in fields for example seeds. fertilizers etc is no down payment Documents required from customer Agri. For example for seeds. 14. Documents Charged from Bank: Credit proposal ~ 33 ~ .green food etc Mark-up Mark-up is 18. fertilizers. water expenses etc . Mutation In it mentioned that land is either buy by customer or it is transfered from forefathers Jama Bandi In this document there is mentioned the area of actual land Quotation It is in that situation when loan is for tractors etc. heavy and valuable machinery and tractor etc Down payment • • • The down payment of tube well is 10% For Dairy and Poultry form is 20% For seeds.

The banking industry is also reaping the fruits of this economic boom by growing rapidly over the past few years. Also the products that Faysal Bank provides cater to sector of the economy. Since the establishment of Faysal Bank. There are a number of mergers happening in the economy with foreign investments coming into the banking sector. the role of banks in today’s economy have become an important one. the bank mentioned all details of proposal that either customer is applied first time for loan or not.FAYSAL BANK LIMITED In credit proposal three things are consider by bank • • • Recommendations from bank Processing from higher officer Approval In recommendations from bank. Integrity. The company is committed to its clients' best interests as well as preserving a good relationship by defining realistic objectives. it has aimed to become the leading bank of Pakistan by that provides outstanding services to its customers. Faysal Bank culture is built on a set of core values: Respect. teamwork. The top management of the bank is always developing strategies that cope with unexpected challenges to deliver products and services more efficiently ~ 34 ~ . Repayment Schedule Production loan is for short term and the customer pay after one year. 1. The services that Faysal Bank provides have a great market penetration not only because of their features but also the profit and markup rates that they charge. while development loan is from 1 year to 5 year. Markup is paid after six months. Professionalism. CONCLUSION The economy of the country is booming and with the investment favorable policies and their smooth implementation.

The management should try to create more understanding between different departments to increase their productivity. The Bank should offer Credit Card to its customers. New staff should hire for Agri. Department. RECOMENDATIONS • • • • • • • • • • • • • • The bank should improve and increase its branch network in Pakistan as well as in foreign countries. Special awards should be given to hardworking employees to perform extra. 2. The Bank should focus on long term debt paying ability. Training of the staff should be carried on regular basis in the field of banking and operating computers. Bank should establish a separate marketing department in each branch. I would like to give some recommendations and is hoped that if they are implemented will bring benefits to Faysal Bank. The top management should create those policies through which they can protect the Bank if the Barclays takeover it. The manger should recruits right person for right job. Although bank has agency relations with the foreign banks but it should open its foreign branches to compete with the competitors. There should decentralization decision making. The manager should hire multi skilled workers to get economy of scale. while introducing new ones to the industry.FAYSAL BANK LIMITED Lastly. to become the leading bank of Pakistan. In the last section. Faysal Bank has to benchmark its services to its major competitors in the industry or the market leader in the industry and provide a continuous mean of improvement in its existing products and services. Time period of the loan procedure should be reduced. ~ 35 ~ .

Bibliography www.scribd.com Annual reports of 2008.com www. 2007.google.FAYSAL BANK LIMITED 1.wikipedia.com www.com www.faysalbank. 2006 Brushers Branch team ~ 36 ~ .

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