INTERNSHIP REPORT ON

NATIONAL BANK OF PAKISTAN

Submitted By

Muhammad Shoaib

(BBA Session: 2016-2020)

Department of Management Sciences University

of Azad Jammu & Kashmir, Muzaffarabad

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 INTERNSHIP REPORT ON
THE NATIONAL BANK OF PAKISTAN

Submitted by
Muhammad Shoaib
(BBA Session 2016-2020)

This internship report is submitted in partial fulfilment of the requirements for the degree of
Bachelor of Business Administration awarded by the University of Azad Jammu & Kashmir,
Muzaffarabad.

Department of Management Sciences

University of Azad Jammu & Kashmir,

Muzaffarabad

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 Department of Business Administration
University of Azad Jammu & Kashmir, Muzaffarabad

Approval Sheet

1. Evaluator

Mr. Khurram Ijaz Signature

2. Chairman

Ma’am Saliha Gul. Signature

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Student’s Declaration
I declare that this material, which I now submit for assessment, is entirely my own work and has
not been taken from the work of others, save and to the extent that such work has been cited and
acknowledged within the text of my work. I understand that plagiarism, collusion, and copying are
grave and serious offences in the university and accept the penalties that would be imposed should
I engage in plagiarism, collusion or copying. I have read and understood the Assignment
Regulations set out in the module documentation. I have identified and included the source of all
facts, ideas, opinions, and viewpoints of others in the assignment references. Direct quotations
from books, journal articles, internet sources, module text, or any other source whatsoever are
acknowledged and the source cited are identified in the assignment references. This assignment, or
any part of it, has not been previously submitted by me or any other person for assessment on this
or any other course of study.
I have read and understood the referencing guidelines as recommended in the report guidelines.

Signature:
Name: Muhammad Shoaib
Roll # 16
BBA (Session 2016-2020)

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Scanned Copy of Internship Certificate

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Dedication
I dedicate this report to my Parents who have constantly given me moral support and
encouraged me throughout my studies. They gave me mental strength to fight and deal with
the hurdles of daily routine which I faced during my studies. At this stage I can say that today
what I am and where I stand is just because of them. Secondly I would like to dedicate this
report to my teachers who guided me to overcome my flaws and enhanced my abilities to
bring up the best in me.

I am thankful to Mr Muhammad Saleem Ashraf (Branch Manager) who helped me guided

me to complete this tough task. I am also indebted to Mr. Muhammad Hanif Lone,
(Manager Operations), Mr. Zahid Saddique (Credit Officer Gold) and other personnel who
provide information and permitted to go through publications for use in the completion of this
report. May ALLAH ALMIGHTY shower blessings on those associate me in any way during
completion of this report. (Ameen)

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Table of Content
Student’s Declaration.......................................................................................................................4

Scanned Copy of Internship Certificate...........................................................................................5

Dedication........................................................................................................................................6

ACKNOWLEDGMENTS.............................................................................................................11

List of abbreviations......................................................................................................................12

1 Introduction of Report............................................................................................................13

1.1 Executive summary.........................................................................................................13

1.2 Why to carry out this internship:.....................................................................................13

1.3 Purpose and objective of report:.....................................................................................14

1.3.1 Purpose of report......................................................................................................14

1.3.2 Aim and Objective of report....................................................................................14

2 Introduction to the organization.............................................................................................15

2.1 History and background of National Bank of Pakistan:.................................................15

2.2 National Bank of Pakistan Profile...................................................................................15

2.3 Branches of National Bank of Pakistan..........................................................................16

2.4 Overseas Branches..........................................................................................................16

2.5 Hierarchy of National bank Of Pakistan (Organogram).................................................16

2.6 Mission and Vision Statement of National Bank of Pakistan.........................................17

2.6.1 Mission Statement...................................................................................................17

2.6.2 Vision Statement......................................................................................................17

2.7 Board of Director............................................................................................................17

2.8 Business Model...............................................................................................................18

2.9 Business Strategies..........................................................................................................18

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 2.9.1 Short-Term:..............................................................................................................18

2.9.2 Medium-Term:.........................................................................................................18

2.9.3 Long-Term:..............................................................................................................19

2.9.4 Strategic Priorities...................................................................................................19

2.10 Sources of Income...........................................................................................................19

2.11 Products and Services.....................................................................................................20

2.11.1 Products...................................................................................................................20

2.11.2 Services....................................................................................................................20

2.12 Products and Services Comparison of National bank of Pakistan with its Competitors 21

2.13 Financial Statement Analysis of NBP.............................................................................22

2.13.1 Horizontal Analysis.................................................................................................22

2.13.2 Horizontal Analysis of Financial Position...............................................................23

2.14 Ratio Analysis.................................................................................................................24

2.14.1 Debt to Assets Ratio................................................................................................25

2.14.2 Interest Coverage Ratio...........................................................................................25

2.14.3 Operating Profit Margin..........................................................................................26

2.14.4 Net Profit Margin.....................................................................................................27

2.14.5 Return on Assets......................................................................................................27

2.15 SWOT Analysis..............................................................................................................28

2.15.1 Strengths..................................................................................................................28

2.15.2 Weakness.................................................................................................................29

2.15.3 Opportunities...........................................................................................................30

2.15.4 Threats.....................................................................................................................31

2.16 Financial Statement Comparison of NBP with three main rivals...................................33

3 JOB DESCRIPTION AND ITS ANALYSIS........................................................................34

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3.1 Introduction to respective branch....................................................................................34

3.1.1 Branch information..................................................................................................34

3.1.2 HR Information........................................................................................................35

3.1.3 Hierarchy in Branch.................................................................................................36

3.1.4 Departments of the Branch......................................................................................37

3.1.5 Number of transaction performed............................................................................37

3.1.6 Services....................................................................................................................37

3.2 Personnel Experience......................................................................................................37

3.2.1 Account Opening:....................................................................................................38

3.2.2 WHAT I LEARNT..................................................................................................39

3.3 My Role in Achieving Organizational Goals..................................................................40

4 Findings and Recommendations............................................................................................41

4.1 Suggestion and recommendation for improvement:.......................................................41

4.2 Recommendations...........................................................................................................41

4.2.1 Trainings..................................................................................................................41

4.2.2 Performance Appraisal............................................................................................41

4.2.3 Changes in Policies..................................................................................................42

4.2.4 Need of Qualified Staff............................................................................................42

4.2.5 Clean Loans.............................................................................................................42

4.2.6 Needs to be flexible in credit Policy........................................................................42

4.2.7 Improper Distribution of Work................................................................................42

4.2.8 Inter Departmental Transfer....................................................................................42

4.2.9 Complaints of Customer..........................................................................................43

4.2.10 Analysis of the Business..........................................................................................43

4.2.11 Organizational Commitment...................................................................................43

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 4.2.12 Managerial Leadership............................................................................................43

4.2.13 Limited Staff............................................................................................................43

4.3 Conclusion......................................................................................................................44

5 Bibliography...........................................................................................................................46

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ACKNOWLEDGMENTS
First and foremost, I am greatly thankful to Almighty ALLAH, who gave me strength to
complete this report. I would like to deeply thank National bank of Pakistan, Main Branch,
Muzaffarabad for giving me the great opportunity to be the part of its internship program. It gave
me lots of precious and valuable knowledge regarding all the banking functions.
This report has been made possible through the assistance of my supervisor Mr. Khurram Ijaz
Whom I wish to recognize with great appreciation. Finally to all those who have helped I
expressed my deepest gratitude

List of abbreviations
A/C Account
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AK Azad Kashmir
ATM Automated Teller Machine
BBA Bachelor’s in Business Administration
CD Current Deposit
CNIC Computerized National Identity Card
CRP Customer Relation Program
EVP Executive Vice President
FPCCI the Federation of Pakistan Chamber of Commerce &
Industries
HBL Habib Bank Ltd.
HR Human resource
IPO Initial Public Offering
LTD Limited
NBP National bank of Pakistan
NIFT National Institutional Facilitation Technology
PLS A/C Profit and Loss Sharing Account
P/S Product & Service
ROA Return on Assets
ROE Return on Equity
SBP State bank of Pakistan
SEVP Senior Executive Vice President
SWIFT Society for Worldwide Interbank financial
Telecommunication
SWOT Strength, Weakness, Opportunities and Threads

Chapter No 01

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1 Introduction of Report

1.1 Executive summary

As we all know that the knowledge cannot give the best output if it lacks the practical
experience. The Purpose of internship is to give a industrial and practical exposure to the student
outside of the classroom. In our degree program, we got an opportunity that can we implement
our theoretical knowledge practically in the field. I did my internship at the NBP Main Branch,
Muzaffarabad having duration of six weeks. It allowed me the great practical knowledge of the
banking operations.
Every major aspect of the bank, which I observed during my internship have been discussed in
this report. Along with it, the processes, policies and procedures practiced by the bank have also
been discussed in detail. This report includes the introduction to organization, operations of the
organization and after that there is financial analysis in this report in which financial statements
of different years are compared by ratio analysis. All the results of analysis are compiled in
tabular form.
SWOT analysis is also given in which different strengths are explained which the central bank
owns. Different problematic areas are also discovered which hinder the work smoothness.
Different opportunities that can improve the performance and system of the bank. Different
threats that can be faced by the NBP, Muzaffarabad are also discussed in this report.
My internship period in NBP, Muzaffarabad is period of extreme learning for me. I visited
different departments of NBP to watch routine operations of the organization. During my stay at
NBP, Muzaffarabad, I met with great experts, professionals and experienced employees of NBP
who illuminated me with beneficial knowledge.

1.2 Why to carry out this internship:

This internship is carried out as per requirement of the degree. Also it is an opportunity provided
to students for learning the future objective of the organization, how organization operate its
functions and how organizations work and meet the objective of the organization. For the
understanding of banking system of Pakistan I carried out internship in NBP.

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1.3 Purpose and objective of report:

1.3.1 Purpose of report

 The purpose of internship program is to facilitate student learning opportunities outside

the classroom.
 During this practical course, we have been provided with an opportunity to learn that how
the theoretical knowledge can be implemented in practical grounds.
 Providing them an opportunity to observe the practices and procedures being adopted at
Head office & field offices to perform operational tasks related to central banking.
 Encouraging students to take responsibility and develop self-reliance.
 The program also strives to inculcate the core values of the organization among the
Interns.

1.3.2 Aim and Objective of report

The Aim and objective of report are as follow:

 To improvise interpersonal and communication skills by working in a diverse environment
 To gain experience of banking system.
 To build additional skills such as collaborative / team work, discipline and time management.
 Demonstration of proficiency in working among professionals
 To deploy the knowledge learnt in courses attended at University.
 To build confidence by working with a range of professionals in the banking industry.

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Chapter No 2
2 Introduction to the organization

2.1 History and background of National Bank of Pakistan:

One year before independence there are 14 scheduled bank with their head offices in Pakistani
areas then banks were incorporated in West Pakistan with a total of 472 branches other for banks
for incorporated in East Pakistan with 137 branches two days before independence 13 Hindu
banks all the fourteen locally incorporated banks except Australian Bank were destined to move
out.
So that was the need to create and national banking system in Pakistan is per recommended by
State Bank of Pakistan.
National Bank of Pakistan was established in November 1949 under the National Bank of
Pakistan ordinance 1949 it issued 15 million Pakistani currency rupees from which the
government having 25% of its shared capital and to the general public the reminders. In 1974 the
National Bank of Pakistan with other banks in Pakistan were nationalized.
Between the time frame of 1995 and 2001 asset liabilities and operation of former National
Development Finance Corporation and Mehra Bank limited amalgamated with national Bank of
Pakistan as per decision of government of Pakistan.
The Government of Pakistan owned the National Bank of Pakistan until 2001 when 10% of
shares was sold to the general public through an initial public offering. And the bank was listed
on Karachi stock exchange letter in 2002 government decided to solve a further 10% of stack in
the national Bank of Pakistan to the general public and according to the report of 2017
government of Pakistan directly and indirectly on a 75.6 percent stake in the bank.

2.2 National Bank of Pakistan Profile

NBP is developing its branches due graphically the bank extended its services to a larger market
for Pakistanis all over the country. Currently it has more than 8.5 million accounts. The bank is
currently doing operations not only in Pakistan as well as overseas with 15 branches and five
representative offices. Out of the all presenting offices, three of them have been recently set up in

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“Tashkent” in Uzbekistan “Baku” in Azerbaijan and “Almaty” in Kazakhstan so they can take
advantage of emerging opportunities in Central Asian States.
National Bank of Pakistan acquired leased telecommunication infrastructure for online banking.
It has 12 regional computer centers to cover various online and banking system requirements of
branch controlling.

2.3 Branches of National Bank of Pakistan

National Bank of Pakistan as a wide network of branches in Pakistan operating 1419 branches
right now and 21 branches in overseas countries these countries are United States of America,
United kingdom, France, Germany, Bahrain, Japan, republic of Korea Bangladesh, people's
republic of China, Canada, Egypt, Azerbaijan, Turkey, Turkmenistan and Kazakhstan

2.4 Overseas Branches

The national bank of Pakistan have 21 overseas branches in United States of America, United
kingdom, France, Germany, Bahrain, Japan, republic of Korea ,Bangladesh, people's republic of
China, Canada, Egypt, Azerbaijan, Turkey, Turkmenistan and Kazakhstan. And it have five
overseas representative offices as well.

2.5 Hierarchy of National bank Of Pakistan (Organogram)

President

Senior Executive Vice President

(Grade 22)

Executive Vice President

(Grade 21)

Vice President

(Grade 20)

Assistant Vice President

(Grade 19)

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 Grade I officer

(Grade 18)
Grade II Officer

(Grade 17)
Assistant Vice President
Grade III Officer
(Grade 20)
(Grade 16)

Fig 1: Shows the hierarchy of National Bank Of Pakistan

2.6 Mission and Vision Statement of National Bank of Pakistan

2.6.1 Mission Statement

“To be Leading Bank for Partnering in Financial Growth through Innovation and Service”

2.6.2 Vision Statement

“To Be A Catalyst for Economic Growth, Serving the Nation Through Diversified Product
Offering, Innovation, Superior Service Quality, Universal Banking Capabilities,
Multiple Delivery Channels, Investment in People and Processes and Work Towards
Sustainable Higher Returns for Stake Holders”.

2.7 Board of Director

Mr. Arif Usmani President & Chief Executive Officer

Addul Wahid Sethi Chief Financial Officer

Mr. Muhammad Naeem Director

Mr. Mir Balakh Sher Marri Director

Mr. A. Akbar Sharifzada Director

Mr. Farid Malik, Director

Mr. Muhammad Imran Director

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 Malik
Mr. Asad Munir Director

Mr. S. M. Ali Zamin Secretary Board of Directors

2.8 Business Model

National Bank of Pakistan provides commercial banking services including leasing foreign
currency remittance exchange transaction Modaraba management asset Management and
investment advisory facilities.
National Bank of Pakistan also act as an agent of State Bank of Pakistan which is responsible for
administrative the treasury transaction on behalf of government of Pakistan it also offer the
Islamic banking facilities and trustee services

2.9 Business Strategies

NBP’s strategy is to revolve around our vision to be the Nation’s leading Bank enabling
Sustainable Growth and Inclusive Development. This is what drives us. In pursuance of our
Goals, They are operating in a highly competitive and regulated environment with frequent
developments relating to technology, stakeholder preferences, unorthodox competition, greater
regulations, etc.
These developments solicit strategic responses for achieving our strategic goals. Strategic
responses for emerging challenge areas are identified in our yearly Strategic Business Plan.
Broadly, strategic objectives of the Bank are categorized as follows:

2.9.1 Short-Term:

The Banks’ short-term objectives include improving its service quality, strengthening its control
& compliance functions and achieving operational efficiencies.

2.9.2 Medium-Term:

The Bank endeavors to enhance its market share by prudently expanding its core business and
strengthening infrastructure capital by investing into modern-day alternate delivery channels.

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2.9.3 Long-Term:

NBP is building on short-term and medium-term achievements, the Bank’s long-term objective
is to become a catalyst for economic growth, serving across the Nation through strategic
alliances, information technology, digitation and a talented human capital pool.
Objectives in the short-term, medium-term and long-term are reviewed and aligned every year
under the Strategic Business Plan which is agreed by the management and approved by the
Bank’s Board of Directors. The strategic business plan encapsulates the business strategy and
Action plan of each Group along with desired timelines.

2.9.4 Strategic Priorities

NBP have outlined a multi-year strategy to build on the core strengths of our business model and
recognized client franchise. Our priority areas for the year 2020-2021 as approved under the
Strategic Business Plan includes:
 Inclusive Development - Delivery on NBP Agenda
 Business Development, particularly through Digital Banking
 Service Quality & Image Building
 Operational Efficiencies & IT Systems
 Effective Risk Management & Controls
 Organizational Development & Human Capital Enrichment

2.10 Sources of Income

National Bank of Pakistan generate income by

 Saving current fixed deposit account advance for loans running finance overdraft demand
finance gold
 Payment checks
 Payment of pension
 salary management for governmental institutions and departments
 Collection and sale of price ponds
 Transfer of funds from one place to another
 Collection of challans, bills etc.

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  Collection of negotiable instrument

2.11 Products and Services

2.11.1 Products

2.11.1.1 Current Account:

 Free to Investors
 Individuals, corporations, organizations and government departments can open accounts
under the scheme.
 The Accounts may be opened singly in one name or jointly in two or more names.
 The Accounts shall be opened with an initial/minimum deposit of Rs. 500/-
 There is No withdrawal Limit for customers.
 No Profit will be paid on Current Account.
 No Zakat Will be deducted on Current Account.

2.11.1.2 PLS Savings Accounts:

The Accounts shall be opened with an initial/minimum of Rs.100/-.

 The Accounts may be opened singly in one name or jointly in two or more names.
 No withdrawal Limit.
 Profit will be paid on Six Monthly Basis.
 Withholding Tax will be deducted out of profits payable to the Account Holders.
 ZAKAT is liable on deposits if Zakat Exemption Certificate (CZ-50) is not provided

2.11.2 Services

2.11.2.1 Demand Draft:

Clients of the national bank of Pakistan are also facilitated by issuance of Demand Drafts. If the
client intends to transfer funds within the country, the same is done by issuing DD on NBP

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branches where as in case the funds are remitted outside the country, the same is done through it
affiliated banks.

2.11.2.2 Mail Transfer:

Remittances are also carried out through Mail Transfer between different branches.

2.11.2.3 Payment Order:

For payments within the City, Payment Orders are also issued by all the branches.

2.11.2.4 Call Deposit Receipts:

Call Deposit Receipts are also issued to the Customers of the Bank as well as general public.
No charges are recovered on issuance of CDRs

2.11.2.5 Utility Bills:

All the branches of the Bank are authorized to collect Water & Electricity Bills.
As well as collection of Telephone Bills.

2.12 Products and Services Comparison of National bank of Pakistan with its Competitors

NBP UBL MCB HBL

(National Bank of (United (Muslim (Habib
Pakistan) Bank Commerc Bank
Limited) ial Bank) Limited)

Products

Loan, Credit card, Debt card,

savings Deposits. Yes Yes Yes

Customer Banking:
Current deposits, Housing
Yes Yes Yes
finance, Personal Loans &
Agriculture loans

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 Services

Transaction Banking
Cash Management, Trade
Finance & Services,
Yes Yes Yes
Remittance Management
Corporate Finance
Deposits, Structured Corporate
Finance, Capital Advisory,
Yes Yes Yes
Investment Advisory & Trade
Finance
G2P Services
Pension Payments, Tax And Yes Yes Yes
Fee Collection & Other Except Except Except
Payments Pension Pension Pension
ATM Yes Yes Yes
Bank HBL
SWIFT System assurance Express
Treasury UBL Investmen
Forex & Financial Derivatives insurers t Services
Online Branches Yes Yes Yes

Islamic Banking Yes Yes Yes

2.13 Financial Statement Analysis of NBP

2.13.1 Horizontal Analysis

The methodology of horizontal analysis is also known as the comparative analysis. The
comparative analysis is done by setting constructed balance sheet, income statement or statement
of cash flows side-by-side and analyzing the changes in individual categories in year to year or

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 multi-year basis. By comparing the statement over several years tell us that direction speed and
extent of a trend. The comparative financial statement analysis can be done by inserting the
percentage instead of actual value. The value of base year is hundred percent it and rest are
compared with this. The resulting figures are called index number are trend ratios gives us
valuable insight.
Formula
Trend ratios=Current Year amount / Base Year amount * 100.

2.13.2 Horizontal Analysis of Financial Position

Assets 2017 2018 2019

Cash and balances with treasury banks 0% 55% 18%
Balances with other banks 91% -54% 8%
Lending to financial institutions -78% 295% 35%
Investments-net 44% -1% 12%
Advances-net 11% 25% 9%
Operating fixed assets 0% 65% 1%
Deferred tax assets-net 42% -100% 0%
Right of use of asset 0% 0% 100%
Other assets-net 96% -22% -2%

Total 25% 12% 12%

Liabilities
Bills payable 30% -25% 100%
Borrowings 703% 9% 20%
Deposits and other accounts 4% 16% 9%
Liabilities against assets subject to -43% -100% 0%
Finance Lease
Liabilities against assets 0% -% 100%
Deferred tax liabilities-net 0% 6985% 56%
Other liabilities 92% 11% 8%

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 Total 27% 18% 12%

Presented By 2017 2018 2019

Share capital 0% 0% 0%
Reserves 8% 6% -2%
Surplus on revaluation of assets -12% 21% 17%
Inappropriate profit 4% 34% 23%
Total Liabilities and Equity -1 % 18% 12%

Interpretation
Asset side
In banking the most important item in balance sheet is earning assets. There are four earning
assets. The strong earning asset of a bank like advances investments and leading to financial
institution has a huge percentage in of asset side of a bank’s financial statement. There was a
huge increase in 2018 and it decreased and now stabled at 35% 2019. The operating fixed assets
are decreased as compared to the previous year’s shown in the balance sheet although there was
a huge increase in the duration of fiscal year 2018. Consider all the assets with 2018 and 2019 is
almost same with 12% increase.
Liabilities and Equity Side
The bill payable by the national of Pakistan indicate that there is huge fluctuation with hundred
percent increase. However the borrowing is very much decrease as compared to 2017 however it
is increased as compared to 2018. Shared capital is showing a mixed situation over a few
previous years however total liability are decreased in 2019 as compared to 2018 with 6%.

2.14 Ratio Analysis

Financial ratio analysis is the most common form of financial statements analysis. Financial
ratios illustrate relationships between different aspects of a company's operations and provide
relative measures of the firm's conditions and performance. Financial ratios may provide clues
and symptoms of the financial condition and indications of potential problem areas. The
particular financial analysis is based on following ratios to study the financial health of NBP.

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2.14.1 Debt to Assets Ratio

The debt to assets ratio indicates the proportion of a company's assets that are being financed
with debt, rather than equity. The ratio is used to determine the financial risk of a business. The
higher this ratio, the more leveraged the company is, implying greater financial risk.

Debt to Assets Ratio= Total liabilities/Total Assets

2017 2331779/2511452*100 92.8 %

2018 2592825/2803886*100 92.4 %

2019 2893138/3132360*100 92.3 %

Interpretation:

In the FY’17, 92.8 percent of NBP assets were financed with the debt. In FY’18 the debt ratio
diminished to 92.4 percent. The fall in the debt ratio in the FY’19 was seen due to the decrease in
the various types of liabilities of NBP and increased in the overall equity of the bank.

2.14.2 Interest Coverage Ratio

Interest coverage ratio is also known as times interest earned ratio, debt service ratio or debt
service coverage ratio. The interest coverage ratio is used to determine how easily a company
can pay interest on outstanding debt. The lower the interest coverage ratio, the higher the
company's debt burden and the greater the possibility of bankruptcy or default.

A higher ratio indicates a better financial health as it means that the company is more capable to
meeting its interest obligations from operating earnings. On the other hand, a high Interest
coverage ratio may suggest a company is "too safe" and is neglecting opportunities to magnify
earnings through leverage.

Interest Coverage ratio = (Operating profit)/(Interest expenses)

2017 36678/68811*100 53.3 %

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 2018 41085/89287*100 46.0 %

2019 42353/167556*100 25.2 %

Interpretation:

The interest coverage ratio in FY 2018 is 46 while in FY 2019 the ratio is 25.2. This ratio states
that NBP is in bad position in 2019 as compare to 2018 to payback its interest.

2.14.3 Operating Profit Margin

The operating profit margin ratio is a key indicator for investors and creditors to see how
businesses are supporting their operations. If companies can make enough money from their
operations to support the business, the company is usually considered more stable.

A higher operating margin is more favorable compared with a lower ratio because this shows
that the company is making enough money from its ongoing operations to pay for its variable
costs as well as its fixed costs.

Operating profit margin = (Operating profit)/(Income)

2016 36678/86720*100 42.2%

2017 41085/98556*100 41.6%

2018 42353/109914*100 38.5%

Interpretation:

The net operating profit Margin of NBP decrease in FY 2019 by 3.1 % due to decrease in the
income of operating activities.

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2.14.4 Net Profit Margin

Net profit margin is the percentage of revenue left after all expenses have been deducted from
sales. The measurement reveals the amount of profit that a business can extract from its total
sales. A higher net profit margin means that a company is more efficient at converting sales into
actual profit.

Net profit margin = (Net Profit)/(Income)

2017 23346/86720*100 26.9%

2018 20035/98566*100 20.3%

2019 16647/109914*100 15.1 %

Interpretation:

In the FY 2019 it was observed that the net profit margin of NBP diminished to 5.2% due to
increase in the profit of the SBP (appreciation & interest earnings) as compared to the Net Profit
Margin of the FY 2018.

2.14.5 Return on Assets

In financial analysis, it is the measure of the return on investment. ROA is used in evaluating
management's efficiency in using assets to generate income. The higher the return, the more
efficient management is in utilizing its asset base.

Return on Asset = (Net profit)/(Total Assets)

2016 23346/2511452*100 0.92 %

2017 20035/2803886*100 0.63%

2018 16647/3132360*100 0.53%

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Interpretation:

In the FY 2019 the ROA ratio of NBP was 0.53% which is 0.10% lower than the FY 2018 ratio
i.e. 0.63% the decrease is observed due to increase in the liabilities of the bank as well as the
bank.

2.15 SWOT Analysis

A SWOT analysis of a bank formally evaluates the financial institution’s strengths, weaknesses,
opportunities and threats. This analysis identifies these four main elements to help upper
management better leverage its strengths to take advantage of future business opportunities while
better understanding its operational weaknesses to combat threats to potential growth. A SWOT
analysis can also address many other scenarios, such as new business initiatives, marketing
budgets or even advertising campaigns. In every organization efficient manager analyze the
workings of their organization through different tools and techniques. One such tool in
management is known as SWOT Analysis.

2.15.1 Strengths

Oldest Institution
NBP is one of the oldest bank of Pakistan and first nationalized bank hence customers have more
confidence in the bank.
Rapidly Increasing Branches
NBP branches number increased every year. Increasing branch network means that there will be
more convenience for the customers and thus it is great strength of NBP.
Employees Benefits
The employees of NBP are offered reasonable monetary benefits. Normally two main bonuses
are given Eid-ul-Fitar & Eid-ul-Azha.
Broad Network
The bank has broad-basses network of branches throughout the country. The customers are
provided services at their nearest possible place to confirm customer satisfied.
Strictly followed Rules & Regulations
The Disciplined Environment at NBP bolsters its image & also enhances the overall output of the
organization.

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Return on Equity
As analysis shows that ROE of NBP is more than its main rivals that is 29%.
Banks are regulated
The banks are regulated and monitored by the State Bank of Pakistan. If the banks are facing
severe liquidity problems then the state bank will come as a lender of the last resort.
Attractive Markup Rates
Different loan scheme with minimum markup rate as compare to the competitors.
Strong Control and Fraud Prevention
The structure of verification, authorization, checking and counter checking of transactions is very
sophisticated, reliable and strong. This is the major reason why fraud and false payment cases are
rare in National bank of Pakistan
Job security and packages to retain talent
Employees of national bank of Pakistan enjoy good salary packages and benefits. For example
interest free loans are given for building house and buying car etc. employees feel secure because
of the permanent nature of job. Therefore young and talented candidates opt for National Bank of
Pakistan posts. Senior employees enjoy more benefits in the form of recognition and other fringe
benefits which work to retain them.

2.15.2 Weakness

Hassle of Paper Work

In spite of having a computerized system the bank has to handle a lot of paperwork, which is
very unproductive, increases the paper cost of the bank and leads to employee difficulty.
Obsolete Software
NBP at present is using very obsolete software technology. Regarding technology NBP is far
behind its competitors. This internal weakness increases the work burden for the employees and
leads to their dissatisfaction and fatigue.
ATM Problem
In NBP ATM facility available but mostly customers complain the ATM is out of order.
Return On Asset
ROA of NBP is lower than its rivals. Its mean its assets are not effectively utilized.
Equipment Ordering is Time Consuming

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The equipment’s that the branches require such as computer or generators have to be rendered
from the Head Office. The head office then arranges for the equipment and transfers it to the
destination branches. NBP head office consumes a lot of time in making the required equipment
available at the branches and this leads to inefficiency of operations.
Head Office Handle Policy Formulation
It is the responsibility of the Head Office to handle policy formulation and then after decisions
have been reached policies and communicated to branches. Decision making thus centralized.
The branches therefore have authority for changing any policy allegation of power is thus only
made for performing the functions outlined by the head office.
Technological backwardness
Unlike most of the most of the banks, National bank of Pakistan is not updated in technology.
They are using old Pentium processor computers and CRT monitors. The GLOBUS software
used is not updated. Computers and GLOBUS software was introduced in 2003 and they are in
the same form, not updated. This causes system freezes and hang ups and hence time wastage.
Latest procedures and best practices are not adopted
Just like computing technology, the procedures are not updated and best practices of the similar
organizations are not adopted, which is causing stagnation. National Bank of Pakistan has to
work with other institutes and conduct regular research to develop and modify their procedures.
Staff is not well trained in IT
National Bank of Pakistan’s employees in general and imputers should be trained at least for
improving their typing speed. It will speed up the payment process and entry system.

2.15.3 Opportunities

Increasing Branch Network

The bank’s competitors have large branch network and more branch network means accessibility
of the customer is increased and thus NBP should open branches where its branches are very far
distance.
Growth in Real GDP
The GDP of Pakistan has increase and this indicates that the economy of Pakistan is growing so
its opportunity not only for NBP but also for the entire banking industry.
Micro financing

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Because of need for micro financing in the market, there is lot of opportunities in this regard.
NBP must realize it & take on step to cater an ongoing demand.
Increase in Per Capita Income
When per capita income increases the disposable income of the people will be more and thus
they can do more business with the bank.
Internet Banking
NBP should provide this facility to its customer, through introducing the features of internet
banking to its customer on its website bank can increase its revenue.
Global Expansion
NBP can acquire smaller banks in neighboring country of Pakistan or it can itself move outside
the Pakistan if it has capital to do so.
Increasing in Foreign Remittance
The foreign remittances of workers have increased. This can provide good business to the bank
through its remittance department.
Relationship with the Government
If NBP improves its relationship with bank by being a socially responsible firm then Government
encourages the bank which can lead to its growth and prosperity in future.
Investment in IT and latest technology
There is a great opportunity for National Bank of Pakistan to invest in latest technology. By
replacing the present system of physical movement of cheque for clearance with image based
clearance system like Cheque Truncation System (CTS) can enable commercial banks to offer
new products and services. It could be a source of earning for SBP and would also help achieve
its goal of providing a facilitating financial market.

2.15.4 Threats

Competitors have Larger Branch Network

The competitor of NBP like HBL has larger branch network as compared to NBP and this serves
as a threat to the bank.
Larger facility of ATM by other banks
More banks are entered in banking industry and ATM service is available there.
Variety of Products

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NBP does not have such a great variety of products as its competitors and thus it is not satisfying
its customer to the extent that NBP does not offer credit card and the customers wanting these
products may switch to any other bank forgetting those products.
Default by Borrowers
If the bank’s borrowers default then bank will have to liquidate the security of borrowers and
may in some cases seek to help of the court but it is not easy for the profitability of the bank.
Downsizing
The bank is currently acting upon the policy of downsizing which threaten the environment of
bank. Employees feel insecurity in doing their job and work which effecting the overall
performance.
Customer Complaints
There is no regular and proper system for removal of customer complaints. Now a day, a need
for total customer satisfaction & mostly customer’s complaints are ignored.
Political instability and pressure can harm the operations of National Bank of Pakistan
Frequently changing governments and their policies harm the functionality and consistency of
NBP's policies.
Circulation of fake currency
A huge amount of fake currency is floating in the market which is causing inflation in the
economy and is devaluing rupee. Fake money makers have improved the quality of their fake
notes and it is hard for general public to distinguish them from original currency notes.
Public Trust
Change in government policies has affected the banking business. Still banks have to wait to get
permission of state bank. The freezing of foreign currency accounts is a vital example of letting
people not to trust on banks.
Competitive Environment
The Competition has become severe by the entrants of so many banks, So to exist one will have
to prove himself in its services through excellent management and will have to satisfy its
shareholders. Otherwise he will be out the market.
Use of Technology
Introduction and adoption of information technology as well as promotion of the computer
culture with other banks will definitely affect the services and business of the NBP.

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2.16 Financial Statement Comparison of NBP with three main rivals

NBP HBL UBL MCB

Total assets 2,369,885 2507182 1900651 1716630

deposits 1727102 1885959 1351235 1018091

profit 23,028 34206 25727 25551

Return on 1.64% 1.4% 2% 2.62%

assets
Return on 29% 18.1% 25.75% 23.25%
equity
No. of 1519 1700 1330 1257
branches
No. of 15,616 15060 14623 10602
employees
No. of ATMs 1300+ 2000 1200 1073

Credit rating AAA AAA AAA AAA

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Chapter # 03
3 JOB DESCRIPTION AND ITS ANALYSIS

Organization is defined as a system in which individuals and groups operating at different levels
perform the task assigned to them within the framework of delegated authority and responsibility
which are rationally coordinated to achieve the desired organizational goals.
Organization makes management easier, effective and result oriented. An organization designed
and structured on planned lines promotes collaboration and negotiation among individuals in a
group and thus improves the effectiveness and efficiency of communication within the
organization. This function creates clear cut lines of authority and responsibility in the
organization.
In fact organization establishes relationships among the people so that they collectively
contribute to the attainment of organizational goals effectively. Thus organization is a means to
an end. It is also an important part of management.
Similarly, organizational structure or hierarchy of a firm provides boundaries for authority of
persons which further clarifies responsibility and the scope of authority. Basically, it shows who
is responsible to whom and who has the authority to give orders to someone. Actually these are
the tools by which a manger is able to exercise discretion and create an environment for
individual performance.

3.1 Introduction to respective branch

3.1.1 Branch information

Branch Name National bank of Pakistan, Main Branch.

Branch Code 0377

Address Bank Road, Muzaffarabad

Azad Kashmir
Phone (05822) 920478 and 920504

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 District Muzaffarabad

State Azad Kashmir

Service Banking

Official Website URL www.nbp.com.pk

3.1.2 HR Information

The National Bank of Pakistan, main branch consist of 18 employees who are serving in various
department in the branch. They are eight armed security guards (by a private security services
provider company called Eagles. However the contract changes time to time.) And two police
constables as well as 2 office boys.
Muhammad Saleem Ashraf Branch Manager
Muhammad Hanif Lone Manager Operations
Mr. Faizan Incharge Foreign Exchange
Nauman khateeb Credit Officer
Zahid Saddique Credit Officer (Gold)
Muhammad Ashraf Mir Clearing
Muhammad Imran AC Opening Officer
Muhammad Altaf Sheikh Deposit Incharge
Muhammad Alam Head Cashier
Afaq kazmi & Mian M. Ishaq Cashier

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3.1.3 Hierarchy in Branch

Branch Manager

Credit Officer Operations Manager In-charge Remittances

Officers

In-charge Accounts Head Cashier

Deposit Officer Cashier

3.1.4Guards Messenger

3.1.5 Departments of the Branch

Cash Department Receipts, Payments, Cheques and their

36
 payment, Collection of utility bills, Payment
of pension.
Clearance Department Out-Word Clearing book
In-Word Clearing book
Accounts Departments Account opening, account closing, issuance of
cheque book, cheque book cancellation.

Advance Departments Making proposals about loans.

Remittance Departments Demand Draft, Pay Order, Mail Transfer.

3.1.6 Number of transaction performed

In daily routine the numbers of transactions performed in branch were almost 300 to 400. In
starting days of the month these transactions exceed to 1000+.

3.1.7 Services

The NBP’s Branch provides following services

 Cash Management.
 Payment of pension
 Gold Loan
 Government Treasury
 Collection of bills and challan
 ATM Service

3.2 Personnel Experience

I have accomplished my internship program of six weeks at NBP Main Branch. During
internship I learned things regarding my personal experience. Really it was a useful experience
to deal with different types of Customers.
The Branch Manager introduces me with all staff of the Branch. Under the supervision of
Operational Manager of branch I worked in following departments as an Internee.

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3.2.1 Account Opening:

Account opening is a very sensitive procedure. It contains the basic information regarding
An account opening from is given to the customer if he wants to open an account. It also services
as the purpose of giving complete record of account holder. After completing all the
requirements mentioned in account opening from an account number is given to the customer.
However account need to get approved first from head office first so, the account holder can use
account. Then the customer becomes the holder of account and can deposit or with draw money
when and where required. Account opening register is maintenance so that every customer has a
unique account number. While in ledger, the entry is posted along with the address and personal
information of the account holder and the mode of transaction he wants to make with the bank.
According to the type of account relation customer has with the bank, the summary of closing
balance of all the accountholders is then shifted to another book known as “statement of affairs”
under their particular heads, on a particular date.
Issuance of Cheque Book:
Amount from the account could only be withdrawn through cheque. There is a slip called CBR
(Cheque book Regulation) given to the customer on his request for issuance of cheque book,
after the account has been opened. The basic information on CBR is title of account holder,
account number, leaves the cheque book contains, signature of applicant, signature of officer and
the signature of operational manager. After verification of all the information mentioned above
cheque book is issued.
A cheque book issuance register is maintained on which complete record regarding the cheque
number of the whole cheque book is kept.
Bank charges specific amount for this cheque book which is directly deducted from the
customer’s account.
Vouchers Preparation:
Voucher is an authorized piece of paper containing record of specific transacting.
Different vouchers are prepared as needed.
There is different type of voucher such as.
Debit voucher e.g. cheque, expenses voucher, pay order, DD
Debit and Credit Supplementary:

38
After preparation of all the vouchers and making relevant entries in their relevant books, the last
step in closing daily working is making debit and credit supplementary. Details of all the debit
vouchers are written on debt supplement while the details of credit vouchers are written on credit
supplement.
It is cross check of grand total of cash payment, daily cash receipts and transfer book’s balance.
Remittance Department:
Remittance department was also part of my internship program. The most popular way of
remittance is Demand Draft. During the six weeks training, I have worked on every aspect of DD
from issuance to payment. DD is prepared and handed over to customer and he sends it to or
handed over the party at his own expense. I also prepared pay order (PO). The procedure of PO
is same as above for Demand Draft. Another type of remittance instrument is the Rupee
Travelers Cheque.
Clearing Department:
This department receives the cheques and other negotiable instruments drawn on local branches
of other banks. State bank of Pakistan has a clearing house , in which cheques and other
negotiable instruments are brought by each local bank representative and the claim of each bank
on other are offset and settlement is made by the payment. There are two types of Clearing i.e.,
inward clearing& Outward Clearing.

3.2.2 WHAT I LEARNT

During my internship period I learnt so many things, especially the exposure to professional
world was great. First of all I came to know that how banks work and where our banking
industry is moving. The National bank of Pakistan gave me the opportunity to learn many things
as follows:
I learnt how to check and arrange bank statement branch and in case of error find wrong entry
and make correction.
I learnt how to prepare vouchers.
I learnt to receive fund transfer email print them and making vouchers of fund transfer with one
copy remain in bank.
I learnt to arrange advices and putting their values in software with branch code and Amount
I learnt about general banking including all products and services of bank.

39
I have the background of and BBA. These two studies helped me a lot in my work at NBP. For
maintaining the accounts, I used the knowledge of BBA where we were taught debit and credit
entries, conversion skills and how to communicate effectively which helped me to deal with
customers and my colleagues and officers. Managing many things at time is the skill which I
learnt during BBA program.

3.3 My Role in Achieving Organizational Goals

The main thing in achieving organizational goals is to participate in activities. During internship
I tried my best to participate, but every organization have some rules and regulations. NBP staff
could give me some work but they didn’t had authority to involve outsiders.
 During peak hours of working I helped in managing activities.
 Helped in completion of pending work.
 Practically the work I did helped the officers in the cash department and accounts in
which work load was at peak.

Chapter # 04
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4 Findings and Recommendations

This chapter is important because in this chapter the deficiencies which I have seen, as a modern
organization during my stay at NBP is discussed and suitable recommendations are made to cope
with problems.

4.1 Suggestion and recommendation for improvement:

 I suggest that internal capacity of branch in term of place should be increased it will
increase the efficiency and effectiveness of the branch.
 Employees should be trained in order to make them efficient and effective because
efficient people can adjust in any environment of the bank. New training programs should
be launched by bank.
 NBP has a large number of account holders, the bank remains over populated in first
week of the month. During rush hours customers have to wait for long time for their turn.
It’s quite hard for new or potential customers to get the required information.
 Every customer should be treated on equality bases whether he is poor or rich.
 The filing system of the branch is not good. When certain record is needed the staff has to
face difficulties to find out and a lot of time is wasted.
 NBP should increase online banking program. Though it has started online banking but it
is not sufficient to compete other banks and getting competitive advantages from others.

4.2 Recommendations

4.2.1 Trainings

BOAJK staff lacks professionalism. The lack of the necessary training to do the job efficiently
and properly although the other banks have their own staff colleges for the training of their
employees.

4.2.2 Performance Appraisal

The manager should strictly monitor the performance of every staff member. All of them should
be awarded according to their performance and result in the shape of bonuses to motivated and
incite them to work more efficiently.
41
4.2.3 Changes in Policies

There should not be abrupt policies change by the upper management, as this practice hurts the
customer confidences in the bank. Government should make long-term policies.

4.2.4 Need of Qualified Staff

Required, qualified staff should be provided to branch in order to improve the functioning of the
branch. Especially a telephone operator should be appointed.

4.2.5 Clean Loans

Clean loan or clean overdraft is the credit facility extended to the customers without any security.
These types of small term loans should not be extended to anybody, because sometimes these
loans are provided to blue-eyed people of the management and they become a part of bad debts.

4.2.6 Needs to be flexible in credit Policy

NBP is very conservative in advances and loans policy. It reduces the investment opportunities.
Also loans should be given to the small businessmen and the agriculture sector at the low mark-
up rate. It should adopt the flexible credit policy while giving credit to the agriculture sector.

4.2.7 Improper Distribution of Work

Proper distribution of work leads to success in every organization. Proper distribution of work
prevents the employee from over and under work situation. So for a smooth running of an
organization proper distribution of work is the hint to be followed.
During my internship I observed that there was no proper distribution of work in the bank. I saw
that some of the employee worked like another sat idle starting here and there. So this created a
lot of over work situation for while relaxation for other.

4.2.8 Inter Departmental Transfer

I watched during my internship that, there is number of employee who have worked on one seat
for many a year. It can have negative effects motivation of employee who is hard working and
intelligent. Take the example of advances section. In advance section if the employee is transfer
aster sixth month or seven month, how can he be able to show his performances and how can he
be able to know the bank customer in a short period of time.
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4.2.9 Complaints of Customer

There should be an information desk to provide the information and to receive the complaints of
the customer in the bank. There is no complaint box availing in the branch and not any person
appointed to hear the complaints.
Every person cannot to the manager for the complaint because most of the people are hesitant.
So I suggest management to install a complaint box in the branch and recruit a special person for
that guidance of the customer when they are unable to manage some difficulties in banking
matters.

4.2.10 Analysis of the Business

Proper analysis of the business reports should be conducted before extending and type of loan.
For this purpose professional training of the staff member is required.

4.2.11 Organizational Commitment

It is suggested that employees working on daily wages basis should be given some benefits,
which the other employees are getting. Their salaries must increase according to efficiency,
performance and service

4.2.12 Managerial Leadership

In the analysis, we have discussed the difficulties of the assistant in taking any initiatives;
therefore it is recommended that the assistants should be given special training to make them
ready for the leadership.

4.2.13 Limited Staff

Staff of NBP in village branches is limited; they face much difficulty to perform their task
efficiently. So I recommended that staff should increase in those branches for better development
of resources. On other hand, I observed that many branches of BOAJK are overcrowded. Less
people can work which extra people perform. Number of employees should decrease of new
branches should open for the adjustment of these extra employees. So there should be effective
distribution of human resource achieve goals effectively and efficiently.

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4.3 Conclusion

As this was not an easy task to execute successfully this study. But with the grace of Almighty
ALLAH it become not so difficult for me and I successfully executed the task. NBP is one of the
most important name in the banking sector of Pakistan. It is mission and vision policies and
procedures, objectives and strategies, performances and it is current market position obviously
denotes its strength and soundness. It is playing a universal and vital role in the economic growth
of the country.
During my internship period at NBP, I got the opportunity to learn the complex banking system.
During this period, after analyzing the working of the branch, some short comings are also
focused which are discussed as recommendations. In order to build on image, public relation
department should also be well established and well organized. In short after through study and
analysis of NBP the overall situation, it is market position, it is internal soundness and it is
capable management can be a green signal for NBP’s management.

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45
5 Bibliography
Anon., 2020. Home. [Online]
Available at: https://www.mcb.com.pk/

habb bank Ltd., 2020. Home. [Online]

Available at: https://www.hbl.com/

National Bank of Pakistan, 2019. NBP Report Dec 2019, Pakistan: National Bank of Pakistan.

National bank of Pakistan, n.d. Bank Profile. [Online]

Available at: https://www.nbp.com.pk/BankProfile/index.aspx
[Accessed 30 October 2020].

NBP, n.d. About Us. [Online]

Available at: https://www.nbp.com.pk/
[Accessed 30 October 2020].

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