NATIONAL COLLEGE OF BUSINESS

ADMINISTRATION & ECONOMICS

Sub-Campus, Multan

Final Year Project Report

On
Analysis Of Financial Strategies Of The National
Bank Of Pakistan
Submitted by: Muhammad Asad (121931053)
Supervised by: Ms. Komal Ashfaq

BS (HONS)
ACCOUNTING & FINANCE

Sep-2023
 NATIONAL COLLEGE OF BUSINESS
ADMINISTRATION & ECONOMICS
MULTAN

Analysis Of Financial Strategies Of National Bank

Of Pakistan
BY
Muhammad Asad
__________________________________________________________________________

A Project Report Submitted to Department of Business Administration,

in partial fulfillment of the Requirements for the Degree of
BS (HONS)
ACCOUNTING & FINANCE

Project Defense Committee:

___________________________
Chairman

____________________________
Member

____________________________
Member

_______________________
Pro-Rector
National College of Business
Administration & Economics,
Multan Sub campus
i
 AUTHOR’S DECLARATION
I Muhammad Asad do hereby certify that this work entitled “Analysis Of Financial Strategies
Of National Bank Of Pakistan” submitted in the partial fulfillments of the degree of Internship
Report at NCBA&E Sub-campus Multan is my own and the data, results, ideas, analysis,
software and deductions are my own effort and if adapted then the source has been
acknowledged.
I also certify that this project work has not been submitted for obtaining similar degree
from any other university/college.

__________________
Muhammad Asad

ii
 National College of Business Administration & Economics
Multan Sub Campus
Northern Bypass Near WAPDA Town Phase-II Multan

COURSE COMPLETION CERTIFICATE

Ref. No. R&D/Multan/PD-174-2023/07 Dated: 06-07-2023

It is certified that courses requirement of Mr. Muhammad Asad Registration No.

121931053 for the program BS (HONS) Accounting & Finance has been completed and his
current CGPA is 3.50.

M. Asim Rajwana Prof. Dr. Tariq Mahmood Ansari

FRSC Deputy Director Research Pro-Rector

Copy to:

1. The Rector, NCBA&E Lahore

2. The Director, NCBA&E Multan Campus.

3. Notification file.

iii
 PROJECT COMPLEITION CERTIFICATE

It is certified that the project work contained in this thesis entitled “Analysis of Financial
Strategies of National Bank of Pakistan” has been carried out and completed by Muhammad
Asad under my supervision during his Bs (Hons) Accounting and Finance Degree program.

Ms. Komal Ashfaq

(Supervisor)

iv
 ACKNOWLEDGEMENT
I am thankful to Almighty Allah and SWT Who gave me strength to complete my work
and blessed me in whole life. I dedicate this humble effort to my Prophet Muhammad (PBUH)
who is a torch of knowledge and wisdom for the whole mankind. I would like to express my
gratitude to my worthy Supervisor Ms Komal Ashfaq, for sharing her ideas and interests with
me about my project. Her contribution boosted my confidence and helped me in finishing my
study in time.
I am thankful to my parents and all family members for their love, support and
encouragement to seek knowledge.
I am much obliged by the nice cooperation of Mr. Muhammad Asim Rajwana. His
support and encouragement helped me all the way through this work. I would also like to thank
faculty members and administrative officers of NCBA&E Multan sub campus who cooperated
with me in order to make this project successful, I also want to show my gratefulness to all the
participants who spared their precious time in answering my questionnaires.

__________________________
MUHAMMAD ASAD

v
 DEDICATION

To

My Family and Teachers

vi
 Table Of Contents

AUTHOR’S DECLARATION i
COURSE COMPLETION CERTIFICAT ii
PROJECT COMPLEITION CERTIFICATE iii
ACKNOWLEDGEMENT iv
DEDICATION v
ABSTRACT xi
CHAPTER 1 1
INTRODUCTION 1
1.1 History of National Bank 1
1.2 Overview of National Bank of Pakistan 1
1.3 Bank Products and Services 2
1.3.1 Deposits 2
1.3.2 Lockers 2
1.3.3 Letters of credit 2
1.3.4 Collection of Utility Bills 3
1.3.5 Evening Banking 3
1.3.6 Cash 3
1.4 Advances Products of NBP 3
1.4.1 Mission and Vision 3
1.4.1 Mission 4
1.4.2 Vision 4
1.5 Core Value of The Bank 6
1.6 Goal 4
1.6.1 Nature of the organization: 4
1.6.2 Organizational Structure of the Bank
5
1.10 Bank Address 5

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1.11 Number of Employees 5
1.12 Competitors 6
CHAPTER 2 8
LEARNING OUTCOMES 8
2.1 First Week in Deposited Section 8
2.1.1 1st Day 8
2.1.2 2nd Day 8
2.1.3 3rd Day 9
2.1.4 4th Day 9
2.1.5 5th Day 9
2.2 2nd Week of Internship in Remittance Department 9
2.2.1 Orientation and Department Overview: 9
2.2.2 Compliance and Regulatory Framework: 10
2.2.3 Transaction Processing and Documentation: 10
2.2.4 Risk Management in Remittance: 10
2.2.5 Customer Interaction and Support: 10
2.2.6 Technology and Remittance Solutions 10
2.3 Third Week in NTB section 10
2.3.1 Introduction to NTB Section: 10
2.3.2 Customer Onboarding Procedures: 11
2.3.3 Customer Due Diligence (CDD) and KYC: 11
2.3.4 Documentation and Regulatory Compliance: 11
2.3.5 Customer Interaction and Assistance: 11
2.4.1 Role in Expanding the Customer Base: 11
2.4 Fourth week in Retail Banking 11
2.4.1 Exploring Retail Products and Services: 11
2.4.2 Customer Relationship Management: 11
2.4.3 Customer Interactions: 12
2.5 5th Week in SME Finance 8

viii
2.5.1 Understanding the Importance of SMEs 8
2.5.2 SME Loan Processes: 8
2.5.3 Risk Assessment and Management: 9
2.5.4 Customer Interaction: 9
2.5.5 SME Banking Products: 9
2.6 6th Week of internship in Government Tax Revenue Training 12
2.6.1 1st Day 12
2.6.2 2nd Day: 12
2.6.3 3rd Day: 12
2.6.4 4th Day: 12
2.6.5 5th Day: 13
2.7 What I learn during internship 13
CHAPTER 3 14
FINANCIAL ANALYSIS 14
3.1 Financial Analysis 14
3.2 Ratio Analysis 24
3.2.1 Net Profit Margin 14
3.2.2 Total Assets Turnover 14
3.2.3 Debt Ratio 16
3.2.4 Liquidity Ratio 17
3.2.5 Investment to Total Assets 18
3.2.6 Return on Deposit 19
3.2.7 Return on Equity 19
CHAPTER 4 21
CONCLUSION AND RECOMMENDATION 21
4.1 Conclusion 21
4.2 Recommendation
21

ix
x
 LIST OF TABLES

Table Title Pg No

Table 3.1 Net Profit Margin

14

Table 3.2 Total Assets Turnover

16

Table 3.3 Debt Ratio 17

Table 3.4 Liquidity Ratio 18

Table 3.5 Investment Total Assets

18

Table 3.6 Return On Deposit

18

Table 3.7 Return On Equity 18

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 LIST OF FIGURES

Figure Title Pg No
No.
Figure 1.1 NBP Saiban
3

Figure 1.2 NBP Advance Salaries

3

Figure 1.3 NBP Cash & Gold 3

Figure 1.4 NBP Kisan Dost 4

Figure 1.5 Mission & Vision

4

Figure 1.6 Organizational Structure 4

Figure 3.1 Net Profit Margin

15

Figure 3.2 Total Assets Turnover

16

Figure 3.3 Debt Ratio 17

Figure 3.4 Liquidity Ratio 18

Figure 3.5 Investment To Total Assets

19

Figure 3.6 Return on Deposits 20

Figure 3.6 Return On Equity 20

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 ABSTRACT

This internship report details internee six-week internship at the National Bank of Pakistan's
Multan Timber Market branch. This internship ran from June 12 through July 24, 2023. Internee
gained practical expertise and insights in major bank departments throughout this time. Internee
started the internship with a week in the bank Section, learning about bank account management.
Internee observed customer interactions, opened accounts, and learnt compliance and paperwork
procedures. In the second week, Internee joined the Remittance Department and learned about
international and domestic remittances. This covered compliance criteria, transaction processing,
and NBP's vital role in secure fund transfers. The NTB (New to Bank) Section taught me about
customer onboarding and due diligence in the third week. This experience illuminated account
setup and regulatory compliance. The fourth week taught me retail products, client relationship
management, and sales methods in retail banking. This week focused on customer relations and
financial demands. In the fifth week, Internee worked in the SME Finance department, learning
about loan processes, risk assessment, and the bank's role in aiding SMEs. The sixth and final
week was Government Tax Revenue Training, where Internee learned about tax collecting,
compliance, and tax software. Internee gained great experience and understanding throughout my
internship at NBP Timber Market branch. It emphasizes banking operations, regulatory
compliance, customer service, and banks' vital role in the economy. These experiences have
improved my understanding of banking and given me a diversified skill set that Internee want to
use in his caree

xiii
 CHAPTER 1

INTRODUCTION

1.1 History of National Bank

On June 3, 1947, the division plan was introduced, and on August 15, 1949, independence was
proclaimed. Since it was difficult to establish and manage a Central Bank in Pakistan
administratively and technologically, the Reserve Bank of India was allowed to continue
operations there until September 30, 1948.
There were 38 banks in Pakistan prior to partition; Habib Bank Limited and Australia Bank of
India were two of the commercial banks. There were deposits totaling Rs.880 million and
advances of Rs.198 million in Pakistani banks. On July 1, 1948, State Bank of Pakistan was
founded by Muhammad Ali Jinnah, then the Governor General of Pakistan. The Pakistan Banking
Council established merger programs in 1974, bringing together the country's five largest banks
with their smaller counterparts. As of January 1, 1974, all Pakistani commercial banks with
overseas operations, including the State Bank of Pakistan, were nationalized under the
Nationalization of Bank Act 1974. All banks in Pakistan were owned, operated, and regulated by
the federal government.

1.2 Overview of National Bank of Pakistan

Constantly setting higher targets can maintain momentum.”
The political situation of Pakistan was negatively affected by its freedom, and banks were not
working as expected to cope with the crisis caused by trade impasse with India and devaluation of
the Indian rupee. Established on November 9, 1949, National Bank of Pakistan is a semi-public
commercial bank under the same name. At its founding, the National Bank of Pakistan provided
credit to agriculture.
National Bank of Pakistan's top priority during this time of crisis was fixing the ailing jute trade
finance sector. The National Bank opened for business on November 20th, 1949, in eight
significant jute cities in East Pakistan. Ghulam Farooq was named the first head of the Jute Board,
while Mumtaz Hassan was named the first chairman of the National Bank of Pakistan. Until 1950,
jute operations were handled by the National Bank of Pakistan. The first managing director of the

1
National Bank of Pakistan was M.A. Muhajir. In 1952, National Bank of Pakistan took over for
Imperial Bank of India after its governor moved to Pakistan.Due in large part to Mr. Mumtaz
Hassan's efforts, NBP now has many more branches, depositors, and employees. The company's
600th location opened in December 1966, bringing the total number of branches to 1, and the
number of employees to 14,963. In 1965, investors had already seen a return of 225% on their
money. There are more than 16457 workers, 1289 locations, and Rs.208283,000,000 in customer
deposits.

Pakistan's National Bank is a world-class financial institution. It stands in for a branch of the State
Bank of Pakistan. All banking in Pakistan is handled by the National Bank, the country's largest
commercial bank. The main branch of the bank can be found on Chandradhar Road in Karachi.

1.3 Bank Products and Services

National Bank of Pakistan can provide following products and services:
1.3.1 Services
Bank is a type of institute which facilitates the public through its services. Bank provides a large
number of services which are explained in detail and these are as under:

1.3.2 Deposits:
The NBP can accept the deposits from the public according to their equipments. The lending
power of the bank depends upon it. NBP can open various types of accounts such as:
 Demand Deposits
 Time Deposits
 PLS Special Saving Deposit (PLS-SSD)
 PLS Term Deposit
 PLS Special Notice Time Deposit (PLS-SNTD)

1.3.3 Lockers:
NBP offers these inexpensive safeguarding services for valuables and papers. These come in
three sizes at designated branches. These are small, medium, and giant. Gold, currency,
paperwork, etc. are commonly stored in these. Clients have 42561 lockers at NBP Blue Area.

2
1.3.4 Letters of credit:
NBP provides its corporate customers with the most money transfer possibilities. A commercial
enterprise customer needs a letter of credit service. NBP letter of credit are great for commercial
transactions due to their competitive prices, security, and convenience.

1.3.5 Collection of Utility Bills:

NBP has been supplying this facility for a long time, but it just gave it a new energy and
expanded its utility collections. Therefore, National Bank nominated all 148 branches across
Pakistan to collect utility bills until 9:pm instead of 5:pm. It also changed the utility bill
collecting hours from 9 am to 1 pm to 5 pm at all branches. This represents the NBP's unmatched
and exclusive services. Its utility collection ratio exceeds 34% of market, proving its exclusive
offerings.

1.3.6 Evening Banking:

National Bank started nighttime banking to compete with competitors. This boosts their public
and business image. This facility is now at the selected centers, but management plans to extend
it soon.

1.3.7 Cash:
In the absence of SBP branches, it provides this service to other commercial banks as its agent. It
sends and receives cash from other banks and the SBP. It takes soiled notes from the public and
banks and submits them to the SBP for change and replacement, which is then distributed to the
public and banks during Eid and other festivals.

1.4 Advances Products of NBP

1.4.1 NBP Saiban

3
 Figure: 1.1

 Home purchase, construction, and renovation loans are all covered.

 The time frame for paying it back ranges from three to ten years.
 You can get a loan for up to RS 10,000,000.
 Available annotation tools. Interest rates range from 9.0 to 12.85%. fluctuating prices.
 The shortest possible period between application and funding.
 To protect their investment, banks will only lend in places that don't require special
paperwork, fees, or worry about foreclosure or resale.

1.4.2 NBP Advance Salary:

Figure: 1.2

 A salary bump of up to 15 months (with caveats).

 Write as little as possible.
 Repayment terms of 5 years.

4
  No documentation or handling charges, collateral, guarantees, or insurance needed.
 Annual percentage rate (APR) of 13% based on decreasing balance technique

1.4.3 NBP Cash n Gold:

Figure: 1.3

 Rs.5,000 in exchange for 10 grams of gold.

 The annual markup is 12%.
 There is no monetary ceiling.
 Repayable in 12 months.
 Ability to flip over easily.
 There is no fee for prepayment.
1.4.4 NBP Kisan Dost:

5
 Figure: 1.4

 Farmers can apply for loans for a variety of purposes, including production and
development, the purchase of tractors and other farm equipment, the installation of tube
wells, the purchase of agricultural implements, microloans, the construction of gold
mines and fish ponds, the formation of livestock, the processing of milk, the installation
of cold storage and biogas plants, and so on.
 Markup 9% per annum.
 Loans available at the farmer’s doorsteps.
 Agricultural experts to guide farmers.
 Loans available against agricultural passbooks, gold ornaments and paper security

1.5 Mission and Vision

Figure: 1.5

1.5.1 Mission

6
  Establishing a merit and performance culture

 Establishing a unique brand identity through high-quality services

 Adopt advanced international management principles

 Maximize stakeholder value

1.5.2 Vision

 Prioritize connections, lead with devotion and excellence, and work with integrity,
honesty, and hard effort. We think these are success indicators.

1.6 Core Value of the Bank

 The highest possible standards of integrity

 The establishment of a culture that values teamwork and performance
 Outstanding levels of customer service
 Skill development in preparation for the challenges of the future
 Confidence that we will be in a position to...
 Leaders in our industry
 An organization that earns and keeps the confidence of stakeholders
 An institution that is inventive, creative, and dynamic in its response to the shifting
requirements of both the internal and external environment

1.7 Goal

 To increase profits and expand market share within NBP by capitalizing on our current
clientele and expanding our product offerings.

7
1.8 Nature of the organization
 The National Bank of Pakistan (NBP) was created in 1949 and is currently traded on all
of Pakistan's stock exchanges. It was given its name in accordance with the National
Bank of Pakistan Ordinance. Karachi serves as the location of the company's official
headquarters. Commercial banking and other financial services are provided by the bank
in Pakistan and other countries across the world. As a commercial bank, it is able to
provide services such as the following: NBP is able to operate as an SBP in cities where
there is no branch of SBP
 It is able to carry out all of the operations and responsibilities that are typical of
commercial banks in Pakistan, such as the acceptance of money, the advancement of
loans, the transfer of money, the issuance of medium of exchange, the collection of
checks, the collection of income, and so on.

1.9 Organizational Structure of the Bank

 The National Bank of Pakistan (NBP) was established in Pakistan following the passage
of the National Bank of Pakistan Ordinance in 1949. The government of the Philippines
appoints the President of the National Bank of the Philippines to serve as the bank's Chief
Executive Officer, along with five other directors. The bank's President oversees daily
operations and is in charge of calling board of director's meetings. The other bank
directors are responsible for operational oversight and guidance, while the CEO is in
charge of the bank's long-term strategic direction. The Bank's policy and lending
decisions are made by the Board members who are experts in specific industries, such as
agriculture, manufacturing, real estate, and international trade.

8
 Figure: 1.6

There are four senior executive vice presidents assigned to each province to oversee the banking
matters in that region. They are also referred to as the chiefs of the province. These Provincial
Chiefs are accountable for all aspects of banking within their respective provinces, including
revenues and expenditures, as well as deposits and advances. Once more, each of these provinces
is subdivided into regions. These regions are regulated and managed by regional heads, who are
accountable for the supervision in their circles and work to resolve any issues that arise within
their authority regarding Branches and Staff. In order to make NBP's operations more
manageable, the country has been divided into nineteen distinct regions. In addition, zones are
used to further separate these territories. The individual in command of a zone is referred to as the
Zonal Chief. They are in charge of managing the operations and activities of the zonal offices.
There is a vice president, as well as an assistant vice president, beneath the zonal chiefs. They are
currently serving in leadership roles throughout various departments in circle offices. Also
reporting to AVP are officers of G-I, G-II, and G-III, as well as clerical and non-clerical staff
members who are accountable for the work at the branch level.

1.10 Bank Address

Branch Address is National Bank of Pakistan located at Timber Market Multan.

1.11 Number of Employees

Approximately 7800 dedicated professionals contribute to the success of National bank of
Pakistan. But in this branch, there are 31 employees working, which includes the senior level,
executive and internee worker in the branch.

1.12 Competitors
Some main competitor of National Bank is list below.

 Habib Bank (Overseas)

9
  Al-Habib Bank Limited
 United Bank Limited
 Standard Bank Limited
 Bank of Khaybar Limited
 Meezan Bank Limited
 Pak Bank Limited
 United Bank Limited
 Muslim Commercial Bank Limited

CHAPTER 2
LEARNING OUTCOMES

During my six-week internship at the National Bank of Pakistan, I embarked on a dynamic

journey through various departments, each offering a unique insight into the intricate workings of
one of Pakistan's leading financial institutions. The internship commenced on June 12, 2023, and
concluded on July 24, 2023.

2.1 First Week in Deposited section

2.1.1 1st Day

On the first day of my internship in the Deposit Section, I was introduced to the team and
provided with an overview of the department's responsibilities. I spent the morning attending
orientation sessions, getting acquainted with the bank's policies, and understanding the
importance of maintaining confidentiality in banking operations. In the afternoon, I shadowed
senior employees as they interacted with customers, helping them with various deposit-related
inquiries. My day concluded with a briefing on the different types of deposit accounts offered by
the bank, including savings accounts, fixed deposits, and current accounts.

10
2.1.2 2nd Day
The second day was primarily focused on gaining hands-on experience in handling customer
transactions. Under the guidance of my mentor, I assisted customers in opening new savings
accounts, which involved verifying their identification documents, explaining account features,
and ensuring all necessary paperwork was completed accurately. Additionally, I observed the
process of depositing and withdrawing funds, learning about the security measures in place to
protect customers' financial assets.

2.1.3 3rd Day

On the third day, I participated in a training session on fraud prevention and risk management in
deposit operations. This session covered the various types of fraud that banks face and the
strategies employed to mitigate these risks. In the afternoon, I had the opportunity to review and
update account records, ensuring that customer information was accurate and up-to-date, which is
crucial for compliance and regulatory purposes.

2.1.4 4th Day

The fourth day was dedicated to understanding the bank's compliance procedures regarding large
transactions and suspicious activity reporting. I learned about the bank's obligations to report
unusual transactions to regulatory authorities and the steps involved in conducting due diligence
on high-value deposits. In the afternoon, I was given the task of assisting in the reconciliation of
daily transaction records, a critical process for maintaining the accuracy of financial data.

2.1.5 5th Day

On the final day of my first week in the Deposit Section, I was given a comprehensive overview
of the bank's digital banking services, including online account management and mobile banking
apps. I learned how customers could access their accounts and conduct transactions electronically.
In the afternoon, I had the opportunity to interact with customers who were interested in digital
banking, helping them set up online accounts and providing guidance on using the bank's digital
services. This day marked the culmination of my first week, where I had gained valuable insights
into the deposit operations of the National Bank of Pakistan.

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2.2 2nd Week of Internship in Remittance department

2.2.1 Orientation and Department Overview:

The second week of my internship commenced with an in-depth orientation session, where I
gained a comprehensive understanding of the role and significance of the Remittance Department
within NBP. This session included an overview of both international and domestic remittance
processes and the critical role played by NBP in facilitating secure and efficient fund transfers.

2.2.2 Compliance and Regulatory Framework:

A significant portion of the week was dedicated to learning about the intricate compliance
requirements and regulatory framework governing remittance operations. This encompassed
understanding the Anti-Money Laundering (AML) and Know Your Customer (KYC) procedures
that are essential in the remittance sector.

2.2.3 Transaction Processing and Documentation:

In this phase, I had the opportunity to delve into the nitty-gritty of transaction processing. I was
exposed to the various forms and documentation involved in remittance transactions, including
the verification of sender and receiver details, understanding the purpose of transactions, and
ensuring adherence to all necessary legal and regulatory requirements.

2.2.4 Risk Management in Remittance:

This part of the week was dedicated to understanding risk management strategies in remittance
operations. I learned about identifying potential fraud risks and implementing measures to
safeguard the interests of both the bank and customers.

2.2.5 Customer Interaction and Support:

Throughout the week, I had the privilege of assisting customers with their remittance inquiries
and transactions. This hands-on experience allowed me to gain insights into the specific needs and
concerns of customers when it comes to sending and receiving funds, enhancing my customer
service skills.

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2.2.6 Technology and Remittance Solutions:
Towards the end of the week, I explored the technological aspects of remittance services offered
by NBP. I learned about the bank's digital remittance platforms, mobile apps, and online portals,
which play a crucial role in making the remittance process more accessible and convenient for
customers.

2.3 Third week in NTB section

During my time of 3rd week in NTB department, I gained a deeper understanding of financial
statements such as income statements, balance sheets, and cash flow statements. I learned how to
interpret these statements to assess the Bank's financial health.

2.3.1 Introduction to NTB Section:

The third week of my internship introduced me to the NTB (New to Bank) Section of NBP,
which is responsible for onboarding new customers. This section plays a pivotal role in expanding
the bank's customer base and ensuring that the onboarding process is seamless and compliant with
regulatory requirements.

2.3.2 Customer Onboarding Procedures:

During this week, I had the opportunity to gain insights into the customer onboarding procedures
employed by NBP. I observed the meticulous steps involved in welcoming new customers, from
initial inquiries and document verification to account setup and issuance of necessary banking
instruments.

2.3.3 Customer Due Diligence (CDD) and KYC:

A significant focus of the week was on understanding the importance of Customer Due Diligence
(CDD) and Know Your Customer (KYC) processes in banking. I learned about the critical role
these procedures play in mitigating risks associated with potential fraud, money laundering, and
financial crimes. Compliance with regulatory standards was emphasized throughout the training.

2.3.4 Documentation and Regulatory Compliance:

In this section, I became acquainted with the documentation requirements essential for opening
different types of accounts, such as savings, current, and fixed deposit accounts. I gained hands-

13
on experience in verifying customer identification documents and ensuring that all regulatory
compliance standards were met.

2.3.5 Customer Interaction and Assistance:

Throughout the week, I actively engaged with customers who were new to the bank. This
included providing them with information about account options, explaining the terms and
conditions, and assisting them in completing the necessary paperwork. These interactions allowed
me to develop my customer service skills and gain a deeper understanding of customer
expectations.

2.3.6 Role in Expanding the Customer Base:

The week concluded with a discussion on the pivotal role the NTB Section plays in expanding the
bank's customer base and contributing to its growth. I learned about the strategies employed by
NBP to attract new customers and retain their loyalty.

2.4 Fourth week in Retail Banking

The fourth week of my internship immersed me in the Retail Banking division of NBP, where I
gained a comprehensive understanding of the bank's offerings tailored to individual customers.
Retail Banking plays a pivotal role in serving the banking needs of the general public.

2.4.1 Exploring Retail Products and Services:

This week was dedicated to exploring the wide array of retail banking products and services
offered by NBP. I learned about savings accounts, current accounts, personal loans, credit cards,
and other financial products available to individual customers. Understanding the features,
benefits, and application processes for each product was a key focus.

2.4.2 Customer Relationship Management:

A significant part of the week was dedicated to understanding the importance of customer
relationship management in Retail Banking. I observed how the bank fosters long-term
relationships with its retail customers, ensuring their financial needs are met and addressing any
inquiries or concerns promptly.

14
2.4.3 Customer Interactions:
Throughout the week, I had the opportunity to interact with retail customers who visited the bank
for various purposes. These interactions allowed me to apply my customer service skills, answer
inquiries related to retail products, and assist customers with their financial transactions.

2.5 Fifth week in SME Finance

The fifth week of my internship was dedicated to the SME Finance department, where I delved
into the critical role played by NBP in supporting the growth and development of small and
medium-sized enterprises.

2.5.1 Understanding the Importance of SMEs:

The week began with an introduction to the significance of SMEs in the economy and the pivotal
role they play in generating employment and fostering economic growth. I gained insights into
how banks like NBP contribute to the success of these enterprises.

2.5.2 SME Loan Processes:

A substantial portion of the week was dedicated to understanding the processes involved in
granting loans to SMEs. This included learning about the loan application, evaluation, and
approval processes, as well as the importance of assessing the creditworthiness of SME clients.

2.5.3 Risk Assessment and Management:

In this section, I learned about the risk assessment and management strategies employed in SME
finance. Understanding how the bank evaluates the potential risks associated with lending to
SMEs and implementing measures to mitigate those risks was a key focus.

2.5.4 Customer Interaction:

Throughout the week, I had the privilege of interacting with SME clients who were seeking
financing for their businesses. These interactions allowed me to understand their specific financial
needs, provide information about loan products, and assist them in completing loan applications.

15
2.5.5 SME Banking Products:
I also learned about the various SME banking products offered by NBP, including working capital
loans, term loans, and trade finance solutions. Understanding the features, benefits, and
application procedures for each product was crucial.

2.6 Sixth week in Government Tax Revenue Training

The sixth week of my internship was dedicated to the SME Finance department, where I delved
into the critical role played by NBP in supporting the growth and development of small and
medium-sized enterprises.
2.6.1 1st Day
On the first day of my six-week internship, which was dedicated to the Tax Revenue Department
at the National Bank of Pakistan, I was introduced to the crucial role this department plays in
government revenue management. The morning session, spanning from 9:00 AM to 12:00 PM,
was designed to provide interns like me with a comprehensive understanding of the Tax Revenue
Department's operations within the bank.
The day commenced with an overview of the National Bank of Pakistan's significance in
supporting the government's tax revenue collection efforts. We delved into the historical context
and the mission of the department, highlighting its pivotal position in the country's financial
landscape.
2.6.2 2nd Day
On the second day of my Government Tax Revenue Training at the National Bank of Pakistan,
the focus was on the intricate tax revenue collection processes within the Tax Revenue
Department. This day's training aimed to provide interns with a deeper insight into the practical
aspects of revenue collection and management.
2.6.3 3rd day
On the third day of my Government Tax Revenue Training at the National Bank of Pakistan, the
focus shifted to taxpayer services and compliance within the Tax Revenue Department. This day's
training was designed to provide insights into how the department interacts with taxpayers and
ensures adherence to tax regulations. Throughout the day, I had the opportunity to observe and
participate in interactions with taxpayers who visited the bank to fulfill their tax obligations. This
hands-on experience allowed me to witness the department's dedication to delivering high-quality

16
customer service. I also learned about the importance of effective communication in addressing
taxpayers' concerns and resolving issues promptly.
2.6.4 4th Day
The fourth day of my Government Tax Revenue Training at the National Bank of Pakistan was
dedicated to a deeper exploration of tax records and financial reporting within the Tax Revenue
Department. This training day focused on the critical aspects of maintaining accurate records and
producing comprehensive financial reports. Throughout the day, I had the opportunity to work
closely with department staff responsible for recordkeeping. I observed how records were
organized, stored, and retrieved efficiently. Additionally, I gained practical experience in data
entry and verification, ensuring that tax-related information was correctly documented in
compliance with regulatory requirements.
2.6.5 5th Day
On the fifth day of my Government Tax Revenue Training at the National Bank of Pakistan, the
focus shifted towards tax compliance auditing and regulatory compliance within the Tax Revenue
Department. This day's training aimed to provide insights into how the department ensures that
taxpayers and financial institutions adhere to tax regulations. Throughout the day, I had the
opportunity to observe and participate in compliance auditing activities under the guidance of
experienced auditors. I witnessed how audits were conducted on both individual taxpayers and
businesses to verify their compliance with tax regulations. This hands-on experience allowed me
to understand the importance of impartiality, objectivity, and attention to detail in the auditing
process

2.7 What I learn during internship

I have learning during my internship a lot of things which includes that;

 I gained a comprehensive understanding of various banking operations, including deposit

handling, remittance processing, retail banking, and SME finance.
 I learned the critical importance of compliance with banking regulations and acquired
knowledge of Anti-Money Laundering (AML) and Know Your Customer (KYC)
procedures.
 My internship honed my customer service skills as I interacted with customers, addressed
inquiries, and assisted with various banking transactions.

17
 I grasped the significance of risk assessment and risk management in banking operations,
particularly in the context of loans and financial products.
 I acquired in-depth knowledge of a wide range of banking products, including deposit
accounts, loans, credit cards, and digital banking services.
 I learned the intricacies of customer onboarding processes, including documentation
verification and account setup, in the NTB (New to Bank) section.
 My experience in the SME Finance department provided insights into lending to small and
medium-sized enterprises, including the evaluation of creditworthiness.

18
 CHAPTER 3

FINANCIAL ANALYSIS

3.1 Financial Analysis

Financial Analysis refers to the assessment of a business to deal with the planning, budgeting,
monitoring, forecasting, and improving of all financial details within an organization.
Three most common methods used for financial analysis are.

3.2 Ratio Analysis

3.2.1 Net Profit Margin:

Net Profit Margin = Net Profit ×100

Sales
Table 3.1: Net Profit Margin
Years 2018 2019 2020 2021 2022
Net profit Margin 34.5% 4.9% 7.5% -38% 6.5%

Net profit Margin

40.00%

30.00%

20.00%

10.00%

0.00%
2018 2019 2020 2021 2022
-10.00%

-20.00%

-30.00%

-40.00%

-50.00%

19
 Figure: 3.1
Interpretation: Financial results might be misleading. While higher profits are certainly
welcome, they don't necessarily indicate improving profitability. Net Profit Margin is
determined by dividing net income or net profits by revenues or sales. The Profit Margin is an
important metric for comparing businesses operating in the same market, as it indicates the
percentage of revenue that is retained as profit. A higher profit margin is indicative of a more
successful business with tighter cost controls than its rivals. If a company has a 20% profit
margin, then it makes $0.20 for every $1.00 in sales. While the bank's branch network
development plan led to a sharp decline in the net profit margin from 2019 to 2018, the
margin increased from 2018 to 2019.

3.2.2 Total Assets Turnover

Total Assets Turnover = Annual Sales

Total Assets
TABLE 3.2: Total Assets Turnover
Years 2018 2019 2020 2021 2022
Total Asset 0.091 0.088 0.096 0.067 1.679
Turnover

Total Asset Turnover

1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
2018 2019 2020 2021 2022

Figure: 3.2

20
Intrepretation: Asset prices as measured in Rupees. Rupee sales are used to calculate the
asset turnover rate. The asset turnover ratio measures the productiveness of a company's assets
in terms of revenue generation. In this case, the higher the better. Companies with a low profit
margin in their pricing strategy have a high asset turnover, while those with a large profit
margin have a low asset turnover. Total Assets Turnover 2019 vs. 2018 is decreasing while
growing. The ratio decreased once again this year. Here's what happens when customers'
hopes aren't met by the bank's branch network: Although annual revenues increased, average
total assets expanded at a quicker rate, resulting in a lower rate of asset turnover.

3.2.3 Debt Ratio:

Debt Ratio = Total Assets

Total Liabilities
TABLE 3.3: Debt Ratio
Years 2018 2019 2020 2021 2022
Debt Ratio 1.07 1.06 1.05 1.05 1.67

Debt Ratio
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
2018 2019 2020 2021 2022

Figure: 3.3
Intrepretation: Calculated by dividing total debt by total asset value. This metric illustrates the
leverage and debt-load dangers faced by the company. If the debt ratio of a company is greater

21
than 1, then it has more debt than assets, but if it is less than 1, then the opposite is true. The debt
ratio, in conjunction with other financial indicators, can help investors evaluate the potential risk
of a business. A falling Debt Equity ratio is not indicative of a healthy bank, but National Bank's
is better than most.

3.2.4 Liquidity Ratio:

Liquid Ratio = Current Assets – (Inventory + Prepaid expenses)

Current Liabilities
TABLE 3.4: Liquidity Ratio
Years 2018 2019 20184 2021 2022
Liquid Ratio 0.8 0.5 0.5 0.99 0.68

Liqudity Ratio
25000

20000

15000

10000

5000

0
1 2 3 4 5

Years Liquid Ratio

Figure: 3.4
Interpretation:This ratio reflects the bank's liquidity. This indicates that the bank has the
ability to immediately repay its current debts. The Liquid Ratio is steadily going down. The
bank's assets are decreasing while its current liabilities are increasing. It's an awful situation.

22
This means the bank currently has more obligations than it has assets. Up until 2019, the ratio
was satisfactory; after that year, the bank will need to increase the ratio to at least 1.

3.2.5 Investment to Total Assets:

Investment to Total Assets = Investments

Total Assets
TABLE 3.5: Investment to Total Assets
Years 2018 2019 2020 2021 2022
Investment to Total Assets 47.7% 65.5% 64.5% 34.5% 13.4%

Investment to Total Assets

70.00%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%
2018 2019 2020 2021 2022

Figure: 3.5

Interpretation: Capital Expenditure Ratio A company's ability to manage its resources

profitably is measured by a variety of ratios. The proportion of investments to total assets has
been rising steadily since 2018. In 2018, the ratio decreased slightly, but in 2019, with
investments increasing and assets increasing at a faster rate, the ratio will decrease even more.

23
3.2.6 Return on Deposit:

Return on Deposit = Net Income

Total Deposit
TABLE 3.6: Return On Deposit
Year 2018 2019 2020 2021 2022
Return on Deposit -4.0% 0.83% 0.54% -2.5% 1.5%

Return on Deposit
2.00%

1.00%

0.00%
2018 2019 2020 2021 2022
-1.00%

-2.00%

-3.00%

-4.00%

-5.00%

Figure: 3.6

Interpretation: How much of a contribution deposits, which represent the bank's efforts to
mobilize funds, make to the bank's bottom line is revealed by this ratio. There is a downward
tendency from 2019 to 2020 in this ratio at AIB. Again, this is because to the proliferation of
new banks across Pakistan. The bank's goal of expanding its branch network has led to a
significant decrease in the return on deposits. This resulted in significant costs for the bank.
With the deposit having nearly doubled in the past year, the massive increase in net loss has
led to an equally large decrease in return on deposit. When compared to other large, reputable

24
banks, it fares even better. In the coming years, these ratios are projected to significantly
improve for the bank.

3.2.7 Return on Equity:

Return on Equity = Net income × 100

Equity
TABLE 3.7: Return On Equity
Years 2018 2019 2020 2021 2022
Return to Equity -53.4% 10.7% 9.4% -93.4% 18.8%

Return to Equity
40.00%

20.00%

0.00%
2018 2019 2020 2021 2022
-20.00%

-40.00%

-60.00%

-80.00%

-100.00%

Figure: 3.7

Interpretation: Profitability metrics are often measured by return on equity. Dividends paid
out as a percentage of stockholder equity. The ratio of a company's earnings to its
shareholders' equity as shown on its balance sheet serves as a measure of its return on equity.
After deducting all operating expenses and liabilities, the return on equity ratio shows what's
left for the company's owners. A high return on equity indicates that cash is being generated
within the company. A superior company is one that has a higher return on equity than its

25
competitors. From 2019 to 2018, the ratio went up, however 2018 saw a significant increase.
The bank's massive reserves for new branch openings were a contributing factor.

26
 CHAPTER 4
CONCLUSIONSAND RECOMMENDATION

5.1 Conclusion
It was interesting interning at National Bank. The staff was helpful and taught me a lot about
modern banking. I recommend a highly integrative internship program for business students to
teach them practical skills. It would help me choose a job or career field. My internship
experience at the National Bank of Pakistan has been immensely valuable and insightful.
Throughout my time at the Timber Market branch in Multan, I had the opportunity to work in
various departments, gaining practical knowledge of banking operations, customer service,
compliance, and more. The support and cooperation of the bank's staff were instrumental in
enhancing my learning experience. I now have a deeper understanding of the banking industry
and its role in the economy, and I believe this experience will greatly contribute to my future
career decisions and endeavors.

5.2 Recommendation
 The National Bank should consider expanding its branch network, particularly in rural
areas and foreign countries. This expansion would help the bank reach underserved
populations and tap into new markets.
 To stay competitive, the bank should diversify its range of products and services.
Offering unique facilities and a broader product portfolio can attract customers from
competitors and meet evolving customer needs.
 Given Pakistan's agrarian nature, the bank could introduce special financing schemes
for farmers in agrarian cities. This would not only support the agriculture sector but
also strengthen the bank's customer base.
 To effectively compete in the market, the bank should enhance its promotional offers
and communication strategies. Engaging and attractive offers can help retain existing
customers and attract new ones.

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 Having specialists in key areas such as Marketing, Human Resources, and Information
Technology within all branches can optimize branch operations and provide
specialized support where needed.
 The bank should consider organizing annual functions to recognize and reward
hardworking employees. This practice motivates the workforce to excel and fosters a
culture of high performance and achievement. The presence of senior management at
these events can further inspire and encourage employees.

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