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CHAPTER – 01 Introduction to the Report

The purpose of the six week internship at Allied Bank Limited Bara Tower Branch is to get insight into the general practices being done in the banking sector. The purpose to formulate the internship report is to help the students in performing specific tasks in a professional environment which will sharpen their professional aspect in their respective fields. The report on internship is also a requirement for awarding the degree as well.

1.1Background of the Study As far as the background of the study is concerned following aspects should be considered; To survive in today’s cut throat competition of growing economy sound banking system is the need of the day, which must meet the financial needs of every sector prevailing in the country. Allied Bank Limited since 1942 has played a pivotal role in the development of Pakistan. Like other multinational banks, Allied Bank Limited has adopted a customer-oriented approach, in order to provide quality products according to customer needs and stands as a role model for the other banks. 1.2 Purpose of the Internship The primary purpose of the internship is to fulfil the academic requirements of the study. The secondary purpose of the internship is to evaluate the general banking practices, in corporate world and to compare these practices with the contemporary banking practices. The purpose of the study also is to have practical approach in the respective field and apply the theoretical knowledge to the real life situations, which thus enables a student to be a future banking practitioner. Besides this, some other purposes are associated, which includes; • • To give a comprehensive review of Allied Bank Limited. To evaluate the organization on the basis of the financial and other aspects.


• • •

To identify the areas of the bank where there is some room for improvement. To present some feasible solutions for the problems prevailing in the organization. To apply the theoretical knowledge that is gained; in the practical field.

1.3Merits of the study • • • • • Working in intense professional reputed organization ultimately boosts up the confidence of the internee. While performing in professional environment one can get a clear cut idea regarding the general banking practices. It has also helped in the practical application of the knowledge that is gained during the study. It also helped in gathering of financial data and then analyzing of data which is a very important aspect of a professional business administrator. This report also comprehensively encompasses most of the aspects of banking, followed by SWOT analysis, conclusion and recommendations that both benefit the organizations and the students as well.

1.4Scope of Work/Report It is a compulsory requirement for the award of Bachelor’s Degree in Business Administration. It will help the present and prospective students of the department in making assignments and writing reports on the Allied Bank Limited, evolution of baking, importance of banking and different operation that are prevailing in the dynamic organization. It can also provide help to Allied Bank Limited’s management in identifying their Strengths, Weaknesses, Opportunities and Threats. It can also provide assistance to students seeking financial data for analysis.


1.5 Methodology of the Study The methodology adopted for the report was based on collection of data of both the types i.e. primary data and secondary data. 1.5.1 Primary data The primary data was collected through: • • • Personal information gathering from the employees of the bank. First hand information was also gathered by observing the practices of the employees. Questions were also asked to the employees of different departments of the bank which also helped in gathering the primary data. 1.5.2 Secondary data The secondary data was collected through; • • • • • • Study of bank’s annual reports of year 2009. By studying different brochures of the bank. From the office memos within the bank. From advertisements of the bank that it offers. From customer guide vouchers. From the Bank’s website.

1.6 Limitations of the Report Allied bank has strict policies regarding the secrecy of the customer’s information. Due to this privacy policy of the bank it was very difficult to acquire all the data which was needed for the report. The second constrain was the time factor. However efforts were to acquire enough data from different sources in order to get a clear idea of the practical doings of the bank.


1.7 Scheme of the Report This internship report is divided into five chapters as: Chapter one includes background, purpose, scope, limitations, methodology, and scheme of the report. Chapter two includes background and history of banking in Pakistan, background of Allied Bank Limited, its roles, functions and branches. Chapter three includes organizational structure of ABL, organizational charts and departments of Allied Bank Limited. Chapter four includes financial, SWOT analysis and findings based on work in chapter three. Chapter five includes recommendations of the study based on the analysis in the previous chapter.


CHAPTER 2 Introduction to Allied Bank Limited
2.1 Historical Background of Allied Bank Limited Established in December 1942 as the Australasia Bank at Lahore with a paid-up share capital of PKR 0.12 million under the Chairmanship of Khawaja Bashir Bux, and his business associates, including Abdul Rahman Malik who was amongst the original Board of Directors, the bank had attracted deposits, equivalent to PKR 0.431 million in its first eighteen months of business. Total assets then amounted to PKR 0.572 million. Today Allied Bank's paid up Capital & Reserves amount to Rs. 10.5 billion, deposit exceeded Rs. 143 billion and total assets equal Rs. 170 billion. The Allied Bank's story is one of dedication, commitment to professionalism, adaptation to changing environmental challenges resulting into all round growth and stability, envied and aspired by many. Pre Independence In the early 1940s the Muslim community was beginning to realize the need for the active participation in the field of trade and industry. The Hindus had since the late 1880s established a commanding presence in these areas and industry, trade and commerce in the undivided Sub-continent was completely dominated by them. Banking, in particular, was an exclusive enclave of the Hindus and it was widely believed, and wrongly so, that Muslims were temperamentally unsuited for this profession. It was particularly galling for Khawaja Bashir Bux and Abdul Rahman Malik to hear the gibe that Muslims could not be successful bankers. They decided to respond to the challenge and took lead in establishing this first Muslim bank on the soil of Punjab that was to become Pakistan in December 1942; by the name of Australasia Bank Limited. The initial equity of the Bank amounted to Rs 0.12 million, which was raised to Rs 0.5 million by the end of first full year of operation, and by the end of 30 June 1947 capital increased to Rs. 0.673 million and deposits raised to Rs 7.728 million.


116 new branches were opened during 1974 and the Bank started participation in the spot procurement agriculture program of the Government. At the time of independence all the branches in India. In 1993 the First Allied Bank Modaraba (FABM) was floated. Deposits rose from Rs 1. Australasia Bank made a profit of Rs 50. Jhang. Peshawar. the Board of Directors of Australasia Bank was dissolved and the bank was renamed as Allied Bank. The bank was identified with the Pakistan Movement. Allied Bank entered in a new phase of its history.46 billion. It also opened three branches in the UK.000 during 1947-48. Investments rose by 72 percent and advances exceeded Rs 1080 million for the first time in bank history. Sialkot. Privatization (1991 to 2004) As a result of privatization in September 1991. 6 . 1947. Delhi and Angra were closed down.• Australasia Bank (1947 to 1974) Australasia Bank was the only fully functional Muslim Bank on Pakistan territory on August the 14th. Rawalpindi. Gujranwala and Kasur. Batala. Unfortunately it lost 51 branches in the separation of East Pakistan which became Bengladesh. The first year was highly successful one: profit exceeded the Rs 10 million mark. The bank did well in despite losing lot of its assets. and Advances and investments from Rs 1. Ludhaina. Branches increased from 353 in 1974 to 748 in 1991.34 billion to Rs 22 billion during this period. (Amritsar. By the end of 1973 the bank had 186 branches in West Pakistan. Jalandhar. Sargodha. Those seventeen years of the Bank saw a rapid growth. as the world’s first bank to be owned and managed by its employees. New Branches were opened in Karachi. By the end of 1970 it had 101 branches. It had been severely hit by the riots in East Punjab. deposits rose by over 50 percent and approached Rs 1460 million. Despite the difficult conditions prevailing and the substantial set back in the Bank’s business in India. • Allied Bank (1974 to 1991) In 1974. Later it network spread to Multan & Quetta. The Bank financed trade in cloth and food grains and thus played an important role in maintaining consumer supplies during riot affected early months of 1948.

Today the Bank stands on a solid foundation of over 63 years of its existence having a strong equity. ILL shareholders were issued ABL shares in lieu of the ILL shares held by them. Allied Bank’s capital and reserves were Rs.8 August 2005 Lahore Stock Exchange . Application for the listing of ABL shares in all the Stock Exchange Companies of Pakistan was made. Sherwani has served as President Allied Bank from 20002007. 76. 2.525 (Billion) and assets amounted to Rs. Allied Bank enjoyed an enviable position in the financial sector of Pakistan and was recognized as one of the best amongst the major banks of the country. 1. it is reliably learnt. His successor Mohammad Aftab Manzoor's term as President comes to an end in August. The bank has the largest network of on-line branches in Pakistan and offers various technology based products and services to its diversified clientele through its network of more than 700 branches. Islamabad Stock Exchange .After privatization.e. In August 2004 as a result of capital reconstruction. • Present situation In May 2005 Ibrahim Leasing Limited was amalgamated by transfer to and vested in with and into Allied Bank Limited. Allied Bank registered an unprecedented growth to become one of the premier financial institutions of Pakistan.f. 2010).17 2005 August Faisalabad Stock Exchange. the Bank’s ownership was transferred to a consortium comprising Ibrahim Leasing Limited and Ibrahim Group.26 August 2008 The Board of Directors of Allied Bank has decided to appoint Khalid Sherwani as bank's President.038 (Billion). KARACHI (May 27. ABL was formally listed and trading of the shares of the Bank commenced w.2 Operational Headquaters There are Four Provincial Headquarters of Allied Bank Limited situated at Lahore 7 . 87.10 August 2005 Karachi Stock Exchange .536 (Billion) and deposits were Rs. assets and deposits base offering universal banking services with higher focus on retail banking. the following dates.

The capacity for timely payment of financial commitments.4 Mission statement of Allied Bank Limited • • To provide value-added services to our customers.3 Vision statement of Allied Bank Limited To become a dynamic and efficient bank providing integrated solutions and the first choice of bank for all customers. Peshawar (NWFP & Azad Kashmir) and Quetta (Baluchistan). • • To provide a challenging work environment. 2. 2. The standard rating scales definitions being used by PACRA and their applicable meaning are given below: Medium to long term rating ‘AA’ very high credit quality rating denotes a very low expectation of credit risk. To provide high-tech innovative solutions to meet customer requirements • To create sustainable value through growth. To play a proactive role in contributing towards the society. 2.6 Awards and Achievements Corporate Finance House of the Year Allied Bank awarded “Corporate Finance House of the Year 2008 (Banks)” for the third consecutive year by CFA Association of Pakistan. Karachi (Sind). 2. Short term rating ‘A1+’ means obligations supposed by the highest capacity for timely repayment. and reward dedicated team members. 5 Credit Ratings PACRA Credit Rating Company has maintained the rating of ABL as AA for the medium to long term and ‘A1+’ (report June 2010). efficiency and diversity for all stakeholders.(Punjab). This capacity is not significantly vulnerable to foreseen events. The Bank was presented this 8 . Corporate Excellence Award Allied Bank received the “26th Corporate Excellence Award” in Financial Institutions category by Management Association of Pakistan (MAP).

The Asset Triple A Country Awards are Asia’s defining recognition for excellence in banking and finance. factual and reader friendly annual report. securing 2nd position for excellence in its publication of timely. Best Equity House Pakistan Allied Bank recognized as the “Best Equity House Pakistan (2008)” in The Asset Asian Awards by The Asset Magazine. Hong Kong. 2. informative. Chartered Accountants Chartered Accountants 2.8 Functions of Allied Bank Limited Allied Bank offers the following services to its customers: • • • • • Home Remittances Remittances Hajj Services Utility Bills Lockers 9 . The awards recognize institutions that have made a significant contribution to the development of the finance industry in Asia. Hong Kong. Yousuf Adil Saleem & Co. KPMG Taseer Hadi & Co. Corporate Report Award Allied Bank won the “Best Corporate Report Award 2008”. Corporate Report Award The Annual Report for the year 2008 of Allied Bank was awarded “Certificate of Merit” by the South Asian Federation Accountants (SAFA). an apex body of the SAARC countries.award in recognition of its Corporate Governance and Overall Management Best Practices.7 Auditors • • M. Best Domestic Investment Bank Allied Bank awarded “Best Domestic Investment Bank of the Year Pakistan” in The Asset Asian Awards 2009 by The Asset Magazine.

10 Organizational structure The functional hierarchy represents the reporting order in the hierarchy of ABL. Any person in the hierarchy above the branch manager can be appointed as RGM and controller operations The orizational structure of the Allied Bank Limited is better explained as the diagram given below. II and Grade III at the lower level management of ABL. 10 . Over200 branches for Foreign Currency Accounts.9 Branch Network • • • • • • There are 800 domestic branches of Allied Bank Limited. Large number of branches for Inland Remittances. These positions are not fixed. The middle level management consists of regional general Manager and Regional Controller of Operations. The hierarchy has president and directors at top management level and officers Grade I. Arrangements with large number of Correspondent Banks/Exchange Companies. Large number of branches for Rupee Travelers Cheques 2.• Commodity Operation 2. Over70 branches for trade finance.

abl.1 Organizational structure of ABL. President and CEO Board of directors Head of Department Regional General Manager Controllers of operation Branch manager Office G-I. II & Other Lower Staff Source: 11 .Chart # 2.

• To provide services to their communities.2. • • To maximize the profit that is earned by the dynamic organization.13 Corporate Profile Board of Directors Mohammad Naeem Mukhtar Sheikh Mukhtar Ahmad Mohammad Waseem Mukhtar Abdul Aziz Khan Sheikh Jalees Ahmed Farrakh Qayyum Mubashir A. 2. Akhtar Pervaiz Iqbal Butt Mohammad Aftab Manzoor Chairman / Non Executive Director Non Executive Director Non Executive Director Independent Director Executive Director Government Nominee / Non Executive Director Independent Director Independent Director Chief Executive Officer 12 . • • • • Integrity. 2. High Performance.11 Ethical Values Following are considered as the core ethical values of the bank. To provide services to their customers and assistance in the development of commerce and trade.12 Objectives of Allied Bank Limited Allied Bank Limited has following objectives. Excellence in Service. Innovation and Growth.

But Allied Bank is considered to be the best pioneer in this regard that the bank has employed from very first day skilful and professional management which has ability to take quick and corrective decision and has flexibility to cope up with changing business and economic challenging conditions. Instant Funds Transfer between any 2 online branches.Audit Committee Sheikh Mukhtar Ahmad Farrakh Qayyum Sheikh Jalees Ahmed Waheed-Ur-Rehman. Advocates and Solicitors Chairman Member Member Company Secretary 2. • • • • Cash Deposit for immediate credit to remote branch.15 Secure transfer of money One of the major requirements of today’s world is the safe transfer of their money from one city to another for this Allied Bank is efficiently taking part to ensure the safe transfer of the money thereby meeting the requirements of its customers. 2. Remote Cheque Encashment from any online branch.14 Online system of Allied Bank Limited Online Banking facilities are available to customers maintaining accounts at all online branches across the country. The following facilities are available. FCA Legal Adviser Haidermota and Company. 13 . 2. Remote Balance Enquiry and Statement of Account.16 Enhanced Managerial Activities In Pakistan the concept of professional management had not yet developed.

devotion and enthusiasm. efficiently and with due courtesy 2.18 Branch Expansion Strategy The management decided to broaden the geographical coverage. It consists of a wide and increasing range of services which were provided speedy.19 Keeping Pace with 21st Century ABL has stepped into 21st century with confidence. The competition involved in by ABL was not only legitimize but also vital for industry. 2. ABL stood firm to provide the services. which the customers in the modern day expect from a bank. Therefore besides the cities. Clients are attracted towards those banks which used to provide better and quicker banking services. ABL has high aims and sense of direction in order to serve the country with zeal.2. Keeping in view this approach ABL made a lot of changes and adopted a modern strategy to provide attractive services to the customers. 14 . the bank spread out the branches into small towns and the far-flung less developed areas to full its social responsibility. ABL is equipped with the latest technologies and has professional experience to face the future with determination and confidence. a new era of banking began and this era was the phase of competition.17 Indulging In Healthy Competition When Allied Bank entered in the banking field.

Abbottabad.1: Organizational Structure of Bank Branch MANAGER CUSTOMER SERVICE MANAGER (1) OFFICER (2) MG 11 TELLER (5) MESSENGER (1) Source: www.abl.CHAPTER 3 Products & Services Provided At Allied Bank Limited Bara Towers Brach Abbottabad 3.1 Organization Structure of Bank Branch The organizational structure of bank branch is as follows: Figure 3.1 Location This branch of ABL is located at Bara Tower Jinnahabad Mandian. 15 .com 3.1.

retail banking. CBG has strategically placed its presence in all major corporate hubs of the country namely Karachi.3. CBG has expertise in providing exemplary customized and personalized service to its Corporate Customers under the Relationship Management concept.3. which is basically catering to all the customer needs through ‘One Window’ operations. 3. Out of which there is one branch manager. Multan and Faisalabad.3. The Bank operates through more than 750 branches in Pakistan. long term. treasury. one customer services manager. corporate and merchant banking. short term.1. Islamabad. electronic banking. marketing and customer service. five tellers and one messenger. credit cards.2 Business Overview Allied Bank Limited’s principal activities are to provide lending.1 Corporate Banking ABL .CBG offers a wide range of financial services to medium and large sized public and private sector entities.2 Investment Banking ABL . It presently enjoys a leading position in corporate lending in the country and has played a key role in economic development of the country by providing large facilities. two officers.3 Corporate and Investment Banking 3. 3. foreign trade. depository and related Financial services which include credit risk management. Lahore.IBG was established in 2005 and focuses on the Investment Banking market. 3. It has the highest number of Successful Arrangement and Participation in Key Privatization 16 .2 Number of Employees There are 10 employees at ABL Bara Tower branch. working capital etc in all the key sectors of the economy.

CRBG is consistent in lifting the Bank’s brand image by emphasizing on good customer services and developing commercial assets and a cost effective deposit base. The Group’s main focus has been on introducing various financing and investment products for its valuable clientele.4 Commercial and Retail Banking The Commercial and Retail Banking Group (CRBG) offers a variety of asset and liability-based retail products to its customers.IBG team consists of dedicated and young professionals with extensive experience. A dedicated team of Relationship Managers first identifies the specific needs of each customer segment. 3. CRBG consists of 4 geographic groups and is further divided across 27 regions in Pakistan. ABL .5 SME Finance CRBG caters to the needs of commercial entities and small and medium enterprises. It has already penetrated the investment banking market by taking the lead in a number of major transactions and arranging funding of more than US$ 6 billion to date. which is in conjunction 17 . In recent years. and is regarded as one of the most active Investment Banking entities in the country today. and has installed more ATMs to its already strong and largest ATM network.& Acquisition Financing Transactions achieved by any Investment Banking Group in Pakistan. It is also well known for having successfully completed mandates in a timely manner. who provide various Advisory & Arrangement Services to Corporate Clients. Each region is responsible for providing a quality service to its own customerbase. ABL . and contributing to the steady growth of the financial industry. the Group has been working to find alternate ways to bank for customers.IBG has played an active role in Debt Origination and Distribution through innovative and tailor made solutions for its target customer base. then designs and delivers a facility package. 3.

6 billion led by earning assets growth coupled with the re-pricing of assets at higher interest rates. The bank registered a deposit growth of 13% to reach at Rs.8.9. Expense to revenue ratio increased to 46.8 billion. together with its largest network of online branches. The credit facilities offered by the bank to SME include running finance. call centers and service quality departments.1%.1%. and provides customers the full support and opportunity to take advantage of the various business prospects available in the market.6 Consumer Finance Substantial ground work has been done by ABL to establish a strong consumer banking business. FIM. sales.4. comprising the debit card. which is up by 10% over Rs. foreign bill purchase/ bill discounting.16. credit policy.6 billion depicting a rise of 64.7 Overall Financial Position Allied Bank has performed well despite various challenges faced by the country on domestic front and led by the global recessionary trend as the bank has posted an operating profit of Rs. 3. export refinancing. letter of credit.4. Furthermore professionals from across the industry have been recruited into areas of product development.3% as compared to 2008 to reach Rs. a big customer base and the Consumer Personal Banking Group (CPBG).13. research.297. The consumer portfolio. the bank was not only able to maintain its Current & Saving 18 .with those needs. will take the Bank’s profitability to new heights.12 billion and Rs.5 billion mark in 2009.8 billion registered during 2009. Interest income of the Bank grew by 44% to reach Rs. credit cards.16 billion respectively compared to Rs. Profit before and after tax stood at Rs.8 billion. ABL is confident that its strengths.4 billion or 36% as compared to 2008. NPLs rose by 21. 3. Interest expense rose to Rs.5.95 billion and Rs. personal loans and mortgages will be established phase by phase.2% up from 2007’s 41. demand finance. a superior technology platform.30. The bank’s operating expenses rose to Rs. However. consumer analytics. Despite the tough market conditions.08 billion in 2008.8.6.

3.912 13.1: Balance Sheet Rupees in Billion Dec 31.093 71.134 84. up by 2% from last year’s Rs. This shows bank’s focus on balance sheet strengthening while also ensuring regulatory compliance. 2008 Assets Operating Fixed Assets Investments Other Assets Liabilities Current Deposits Saving Deposits Fixed Deposits Other Liabilities Equity 11.1%.31 per share.255 72.399 110. 2009 Annual Report of Allied Bank for the year 2009 19 . Loan portfolio (gross) of the Bank grew by 25. The bank’s Capital Adequacy Ratio (CAR) under Basel II Accord was registered at 10.636 20.448 105.8% growth witnessed in non-remunerative Current Accounts.90% compared to 10.6.3% to Rs.6.955 115.5 billion in 2008. featured primarily by 14.602 18.447 96.58 72.93 11061 25.805 12.26% in 2008.975 17.43 per share. The Earnings per Share of the Bank for the year ended 2009 is Rs.223.891 Dec 31.8 Balance Sheet of the Bank Table 3.6 billion compared to Rs.178.Accounts (CASA) but also grew these by 8. Loan portfolio is expected to further diversify among different products and business segments in the year 2009.

and institutions.2: Profit and Loss Accounts Rupees in Billion Interest income Interest expenses Interest income after provision Non interest income Non interest expense Profit before tax Profit after tax Dec 31.958 8.298 17. Investment: Upto Rs. 20 .122 Annual Report of Allied Bank for the year 2009 3.121 4.885 10.700 10. SME and consumer categories.000 & above. Free internet banking facility.536 7. 000.273 8.157 Dec 31.360 6. the product and services includes: 3. 24-hour phone banking service.10 Products and Services Offered by Allied Bank Limited Allied Bank Limited offers a comprehensive range of banking products and services.1 Products 3. Eligibility: Individuals. SMS transaction alerts.393 4.3. Highest Profit: Upto 10. to suit and serve customers in commercial. Profit: Payable on monthly basis.854 5. corporate. 2009 18.a.5.50% p.1. 2008 13.9 Profit and Loss Accounts Table 3.897 6.1 Behtar Munafa Account • • • • • • • • Account type: Chequing account.

10.000 (additional investment in multiples of Rs. 3. Minimum deposit: Rs.1. Highest Profit: Upto 11% p.. Expected profit rate: Up to 13. Free internet banking facility.5 years. schools. • • Individuals.33% p.10.3 Allied Munafa Account • The applicable profit rate will be based on the amount maintained in the account on an average monthly basis and the return will also be credited to the account on a monthly basis.10.• Allied Cash + Shop Visa Debit Card. and institutions.4 Allied Bachat Scheme • • • • • Maturity period: 7.5 Allied e-Savers Accounts 21 . 3. Eligibility: Individuals. etc. Levies and changes are welcome to open their account in this scheme. companies. hospitals.10.a.2 Behtar Munafa Term Deposit • • • • • Account type: Fixed term deposit. Profit: Payable on maturity.1. 3. firms.1.1.5. charitable organizations.000). Investment: Upto Rs. 3. 50.000 & above. in the Bank’s policy from time to time. All profits payable are subject to applicable zakat and Govt. 10.a. 000. Eligibility: All individuals and institutions.

25. Expected profit rate: Up to 7.1. 3.6 Allied Business Account • • • • • Non-profit current account. Eligibility: Individuals. Allied Cash+Shop Visa Debit Card for cash withdrawals through any ATM and debit transactions at various retail outlets. 000.7 Rewarding Term Deposit • • • • • Account type: Term deposit. Investment: Rs.• • • • Investment: Rs.500.1.10.10. Free internet banking facility.10.50% p.8 Monthly Profit Plus • • • • • Account type: Term deposit.25. Eligibility: Individuals & institutions (other than financial institutions). Term period: 1-12 months. 3. 3.a. SMS transaction alerts. Eligibility: Individuals & institutions. 24 hours helpline service.10. Profit: Payable on maturity.10. Profit: payable on half yearly basis. 000 to Rs. Profit: Payable on monthly basis.1. Term period: 1 year. Minimum deposit amount: Rs. 3.2 Services 22 . 000 & above. 000.

23 .10.1 Running Finance These are short term credit facilities (maturity of up to one year) lent to customers to meet their day-to-day business/working capital requirements and finance their inventories. but as per the Terms and Conditions set by SBP.10. backed by collaterals. Foreign Bill Purchase/Bill Discounting Facility This loan/facility is provided to exporters against their export bills under LC and a contract to facilitate their cash flow. 3.10.6 Demand Finance Facility This is a medium/long term credit facility available to establish new projects for BMR and capacity expansion with a repayment term of more than one year. while they are waiting receipt of their payments. 3.4 LC (Sight /Usance) This facility allows importers to import goods and machinery. is meant exclusively for exporters.2.7 Inland LC (Sight/Usance) This facility allows customers to purchase commodities within the country.2. 3. 3.2. etc. receivables.2.2.2 Export Refinance Facility This is mainly the same as RF.10.5 FIM These facilities allow customers to finance imported goods against pledge & trust receipts. This facility meets clients’ long term needs such as. 3. which can be paid back in installments. financing factory constructions or machinery expenses. 3.

9 Import Export Allied Bank provides highly efficient trade finance services for import/export businesses through a large number of authorized branches where trained and motivated staff is available to handle the business on the customer’s behalf.10.11 Financial Position of Branch 3.340.427 129. 210 million Table 3.11.177 million.1 Total Advances ABL Bara Tower Branch has total advances of about Rs. within a particular time. the Bank issues a guarantee in favour of the beneficiary.510 128.3: Total Deposits Deposits Current Saving Fixed Total deposits June 6. against the performance of a particular job/contract.11.2 Total Deposits ABL Bara Tower Branch has total deposits of about Rs.273 340.2.10. The branch does not offer non fund base facilities. 2009 Rupees in ‘000 82.210 CHAPTER 4 Analysis of Allied Bank Limited 4.2. which are fund base.4. 3. 3.3.8 Letter of Guarantee On behalf of the customers. 3.1 Financial Analysis The analysis of financial data employs various techniques to emphasize the 24 .

1.68 3 1280591 28122932 94673100 23738252 2 2008-2007 % Change 2007 12% -39% 78% 15% 11% 12% 0% 3% 14% 7% 43% 11% 120% 0% 25 23653754 2097611 15793183 82449475 21302010 8 11150129 1031049 17388612 36658392 1 2952490 27778151 29747454 3 2498000 - -20.8027% -14.71067% 55.1 Common Size Analysis % 14.797303% 26.comparative and relative importance of the data presented and to evaluate the position of the firm.1 Horizontal Analysis Table 4.518209 % -15.491033 % 47.25715% -1.50757% 21.646248 % 62.69154% -0. 4.1: Horizontal Analysis of Balance Sheet Formula used :( current year value-base year value)*100/ base year value 20092008 % Change 2008 2009 Assets Cash and balances with the treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating assets fixed 12459586 17986438 41834085 2 3162429 39818532 32887255 9 5497000 26.040016% 0% 29739857 668449 18419241 83958463 168407280 7548628 662431 10705374 320109723 3494384 22933656 263972382 2499000 0 Deferred tax assets Other Assets Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance .435.46447% 213.123954 % 12.

688887 % 1.1 Interpretation Horizontal analysis of ABL’s balance sheet shows that: Cash and balances with treasury banks are increased by 12% in 2009 as compared to base year 2008.86049% 20% -4. Deposits and other accounts are increased by 11% in 2009 as compared to base year 2008.581072 % 12.86049% 0 7332059 300231481 19878242 5386370 6050713 6971308 18408391 1469851 19878242 Unappropriated profit surplus on revaluation of assetsnet of tax 4062279 Total equity 29919794 4.064595% 21. Operating fixed assets are increased by 12% in 2009 as compared to base year 2008.1. Share capital is decreased by 89% in 2009 as compared to base year 2008. Surplus on revaluation of assets . Advances are increased by 11% in 2009 as compared to base year 2008.4856608 % 11. Borrowings are increased by 43% in 2009 as compared to base year 2008. Total liabilities are increased by 13% in 2009 as compared to base year 2008. Other assets are increased by 3% in 2009 as compared to base year 2008. Reserves are increased by 13% in 2009 as compared to base year 2008.1. Other liabilities are decreased by 19% in 2009 as compared to base year 2008. Balances with other banks are decreased by 39% in 2009 as compared to base year 2008. Bills payable are increased by 7% in 2009 as compared to base year 2008. Total assets are increased by of tax is increased by 26 .694176 % 11. Lending to FI is increased by 78% in 2009 as compared to base year.55% in 2009 as compared to base year 2008.098312 % 14. Investments are increased by 15% in 2009 as compared to base year. Unappropriated profit is increased by 44% in 2009 as compared to base year 2008.Deferred liabilities Other liabilities Net Assets Represented by Share Capital Reserves tax 3374 11067164 38842105 8 29919794 711008 6582845 12164662 25857515 0% -19% 13% 35% -89% 13% 44% 25% 172% 35% 13644838 34434802 2 22235899 6463644 5804776 8475791 20744211 1491688 22235899 0% 86.1.

2009 as compared to base year 2008.8% 7.3% 0.7% 94% 6.3% 22% 58% 3% 0.2 Vertical Analysis Table 4.3% 0% 0% 2.7% 0% 0% 3.6% 93% 7.5% 0.3% 100% 1.1.4% 0.2: Vertical Analysis of Balance Sheet Formula used: Each item*100/Base item in same year 2009 Assets Cash and balances with the treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating fixed assets Deferred tax assets Other Assets Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance Deferred tax liabilities Other liabilities Net Assets Represented by % 2008 % 2007 % 26.435.1.5% 79% 1. 4.1% 7.2% 3.2% 2952490 27778151 29747454 3 2498000 13644838 34434802 2 22235899 7548628 662431 10705374 32010972 100% 3 0.8% 9.6% 4. Total equity is increased by 35% in 2009 as compared to base year 2008.683 1280591 28122932 94673100 237382522 12459586 17986438 418340852 3162429 39818532 328872559 5497000 3374 11067164 388421058 29919794 6% 0% 7% 23% 57% 3% 0% 4% 23653754 2097611 15793183 82449475 21302010 8 6.3% 94% 6.8% 0% 0% 2.3% 4.6% 81% 0.2% 82% 0.2% 5.7% 29739857 668449 18419241 83958463 16840728 0 9.2% 11150129 1031049 17388612 36658392 100% 1 0.1% 3494384 22933656 26397238 2 2499000 0 0 7332059 30023148 1 19878242 27 .8% 26% 53% 2.

which has been increased to 23 % of the total assets.e.2% of total assets which have been increased to 0. In 2007 share capital was 1.6% in 2008.2% of total assets which have been decreased to 0.3% of total assets which have been increased to 3.e.3% 5.9.7% in 2008. showing 4% decrease regarding the total assets.8% 0.3% of total assets which have been increased to 4. which has been decreased to 57% of the total assets.3% in 2009.4% 6.7% 1. 0. which has been reduce to 0% in 2009. In 2007 bills payable was 1. 2. showing decrease in 2009 i. showing constant trend in 2009 i. showing increasing trend in 2009 i. In 2007 deposits and other accounts were 82% of total assets which have been reduced to 81% in 2008.2% 1.Share Capital Reserves Unappropriated profit 711008 6582845 12164662 25857515 0.3% in 2008. In 2007 investments were 26% of total assets which have been decreased to 22% in 2008. In 2007 sub-ordinated loans were 0. shows increase to 7%in 2009.1% which has been reduced to 0.5% in 2008 and 6% in 2009.1 Interpretation The vertical analysis of ABL’s balance sheet shows that in 2007 the cash and balances with treasury banks were 9.5% of the total assets.76% of total assets which 28 .7% in 2008.5% 6.8%. In 2007 borrowings were 7.2% 1% 7.3% in 2008. which has been increased to1.8% of total assets which have been decreased to 0. showing 0% decrease in 2009.9% 2.8% 1. which has been decreased to 79% of the total assets.2% surplus on revaluation of assetsnet of tax 4062279 Total equity 29919794 4.8% in 2008.7% in 2008.2% of total assets which have been increased to 7.2% 5. In 2007 other liabilities were 2.2.3% of total assets which have been reduced to 6.1.7% 0.6%of the total assets.6% 2. In 2007 other assets were 3. In 2007 advances were 53% of total assets which have been increased to 58% of the assets in 2008.6% 2.e.6% in 2008.1.9% 6.1% 5386370 6050713 6971308 18408391 1469851 19878242 1. In 2007 lending to FI was 5.2% 6463644 5804776 8475791 20744211 1491688 22235899 1. In 2007 total liabilities were 94% of total assets which have been constant in 2008 but are reduced to93% of the total assets in 2009. In 2007 balances with other banks were 0.8% of total assets which has been decreased to 4. In 2007 deferred tax assets were 0.

The higher the proportion of average earnings assets.81% 2008 1. In 2007 surplus on revaluation of assets . showing decrease in 2009 as 0.2% of the total assets.e.9% of total assets which have been decreased to 1.9% increase in 2009.1% in 2008.2 Profitability Ratios 1. 7. the better would be the resulting returns on total of tax was 0.1 29 .2% of the total assets. In 2007 total equity was 6.3 Serial No 1 Profitability Ratios Return on Assets (ROA) 2009 1.has been decreased to 1.4% in 2008. In 2007 unappropriated profit was 2. 4.2% of total assets which has been increased to 2.5% of total assets which has been increased to 0.3% in 2008. Return on Assets (ROA): ROA measures the firm’s ability to utilize its assets to create profits by comparing profits with the assets that generate the profits. shows increasing trend in 2009 i. showing 2. It is computed as: ROA = Net profit/ Average total assets Table: 4.6% in 2008 and remain constant in 2009.42% Figure 4.2% of total assets which has been decreased to 6.1. showing increase to 1% of the total assets in 2009. Returns on asset ratio is the net income (profits) generated by the bank on its total assets (including fixed assets).21% 2007 1.8% in 2008. In 2007 reserves were 1.

This shows that the bank’s ability to utilize its assets to create profits by comparing profits with the assets that generate the profits reduces in 2009 as compared to 2008.4 Serial No 2 Profitability Ratios Return on Equity (ROE) 2009 30.ROE is expressed as a percentage and calculated as: Return on Equity = Net Income/Shareholder's Equity Table: 4.81%.00% 1 2 years 3 percentages Return on Assets (ROA) ROA of ABL was 1.50% 0.54% Figure: 4.50% 1.00% 1. which is a good sign for the bank. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.50% 2008 21.42% in 2007 which has been decreased to 1. 2. Return on Equity (ROE) The amount of net income returned as a percentage of shareholders equity.21 in 2008 which was increased in 2009 as represented as 1.00% 0.2 30 .20% 2007 23.Return on Assets (ROA) 2.

50%. CD ratio = Credit/ Deposits Table: 4.00% 1 2 ye ars 3 percentages Return on Equity (ROE) ROE of ABL was 23.5 Serial No 3 Profitability Ratios Credit to Deposit Ratio (CD) 2009 71.60% 2007 63. 3.00% 30. ROE changes due to interest rate declines reduced expenses faster than revenues.00% 0. The point to note here is that loans given by bank would also include its investments in debentures.00% 10.3 31 .00% 20. Credit to Deposit Ratio (CD ratio) The ratio is indicative of the percentage of funds lent by the bank out of the total amount raised through deposits.20% in 2008 which was increased in 2009 as represented as 30.60% 2008 71.54 % in 2007 which has been decreased to 21. Higher ratio reflects ability of the bank to make optimal use of the available resources. which caused ROE to increase.80% Figure: 4. bonds and commercial papers of the companies (these are generally included as part of investments in the balance sheet).Return on Equity (ROE) 40.

80% in 2007 which has been remained to 71.60% in 2008 and 2009. which is good sign for the bank. 4. Banks are expected to raise their minimum Capital Adequacy Ratio (CAR) of 9% to 10% by December 31.00% 60. The SBP has set the minimum capital adequacy ratio at 9% on standalone as well as on consolidated basis latest by December 31. The ratio ensures that the bank do not expand their business without having adequate capital. A ratio below the minimum indicates that the bank is not adequately capitalized to expand its operations.00% 65. CAR = Tier I capital + Tier II capital/ Risk weighted assets Table: 4.00% 1 2 years 3 percentages Credit to Deposit Ratio (CD) CD ratio of ABL was 63.00% Figure: 4.00% 2008 72.Credit to Deposit Ratio (CD) 75.00% 70. 2009.6 Serial No 4 Profitability Ratios Capital Adequecy Ratio (CAR) 2009 72. This shows that the bank has the ability to make optimal use of the available resources. 2008. Capital Adequacy Ratio (CAR) A bank's capital ratio is the ratio of qualifying capital to risk adjusted (or weighted) assets.4 32 .00% 55.00% 2007 64.

5 33 .00% 1 2 years 3 Capital Adequecy Ratio (CAR) CAR of ABL was 64 % in 2007 which has been increased to 72% in 2008 and 2009. NPA ratio = Net non-performing assets/ Loans given Table: 4.36% 2009 2008 2007 5 Figure: 4.00% 65. Higher ratio reflects rising bad quality of loans.00% 70. Net NPAs are calculated by reducing cumulative balance of provisions outstanding at a period end from gross NPAs.7 Serial No Profitability Ratios Non-performing (NPA) Assets Ratio 6. This shows that the bank is adequately capitalized to expand its operations and this is good sign for the bank. 5. Non Performing Assets Ratio The net non-performing asset to loans (advances) ratio is used as a measure of the overall quality of the bank’s loan book.52% 6.16% 6.00% 60.Capital Adequecy Ratio (CAR) percentages 75.

otherwise any increase in borrowing will reduce shareholders' earnings. 6. Return On Capital Employed (ROCE) A ratio that indicates the efficiency and profitability of a company's capital investments.8 Serial No Profitability Ratios 6 2009 2008 2007 Return on capital employed (ROCE) 26.60% 6.40% 6.52% 2009.20% 6. Calculated as: EBIT/Total Assets – Current Liabilities Table: 4.00% 21.00% Figure: 4.16% in 2008 and 6.00% 19.80% 1 2 years 3 percentages Non-performing Assets Ratio (NPA) Non performing asset ratio of ABL was 6.36% in 2007 which has been reduced to 6.00% 5.6 34 .Non-performing Assets Ratio (NPA) 6. ROCE should always be higher than the rate at which the company borrows. Higher ratio reflects rising bad quality of loans.

7 35 . investments. These assets comprises of advances. balance with the SBP and money at call.60% 2007 3.08% Figure: 4. It is computed as follows: NIM = Serial No 7 Interest income – Interest expenses/ Average earning assets Table: 4. It is the income.00% 20.00% 10.00% 0. Net Interest Margin (NIM) The difference between interest income and expense is known as net interest income. Net interest margin is the net interest income earned by the bank on its average earning assets.9 Profitability Ratios Net Interest Margin (NIM) 2009 2. which the bank earns from its core business of lending. 7.90% 2008 3.00% 1 2 years 3 Return on capital employed (ROCE) ROCE of ABL was 21% in 2007 which has been reduced to 19% in 2008 and 26% 2009.Return on capital employed (ROCE) percentages 30.

00% 2. which mainly include salary cost and network expansion cost.00% 1 2 years 3 percentages Net Interest Margin (NIM) NIM of ABL was 3.60% in 2008 and decreased to 2.00% 0. It is computed as: OPM = Net interest income (NII) – operating expenses/ Total interest income Table: 4. This shows that the net interest income earned by the bank on its average earning assets is more in 2008 as compared to 2009. For some private sector banks the ratio is negative on account of their large IT and network expansion spending.10 Serial No 8 Profitability Ratios Operating Profit margin (OPM) 2009 48.40% 36 . Operating Profit Margins (OPM) Banks operating profit is calculated after deducting administrative expenses.00% 1.60% 2008 36.Net Interest Margin (NIM) 4.00% 3. Operating margins are profits earned by the bank on its total interest income.08% in 2007 which has been increased to 3.90%. 8.59% 2007 44.

00% 2008 46.Figure: 4. Cost to income ratio = Serial No 9 Operating expenses/ NII + non interest income Table: 4.60% in 2009. 9. in long term they help the bank in improving its return on equity. Even though. This shows that the profits earned by the bank on its total interest income are increased in 2009 as compared to 2008 which is a positive trend.40% in 2007 which has been reduced to 36. The ratio is calculated as a proportion of operating profit including non-interest income (fee based income). Branch rationalization and technology up gradation account for a major part of operating expenses for new generation banks.11 Profitability Ratios Cost to Income Ratio 2009 39.00% 0. these expenses result in higher cost to income ratio.8 Operating Profit margin (OPM) percentages 60.00% 1 2 years 3 Operating Profit margin (OPM) OPM of ABL was 44.10% 37 .20% 2007 41.00% 40.00% 20.59% in 2008 and increased 48. Cost to Income Ratio Controlling overheads are critical for enhancing the bank’s return on equity.

20% in 2008 and decreased to 39% in 2009.12 serial No 10 Ratios Profit employee Formulae per Net Income/ No of employees 2.00% 35.00% 1 2 years 3 Cost to Income Ratio Cost to income ratio of ABL was 41.837 2009 2008 2007 Figure: 4. 38 . 2.1.00% 40. Rs.00% 45.83 2.18 1.4: Efficiency Ratios Table: 4.83 B in 2009.18 B in 2008 which have been increased to Rs.10 Profit per employee Net Income/ No of employees 3 2 1 0 1 2 Years 3 Ratios Profit per employee Net Income/ No of employees Profits per employee of ABL were Rs 1.3 Efficiency Ratios Table 4. 4.9 Cost to Income Ratio percentages 50.Figure: 4.10% in 2007 which has been increased to 46.87 B in 2007.2.

5 2 Percentages 1.3 39 .48 1.13 serial No Ratios Formulae 2009 2008 2007 11 Interest income per Interest Income employee employees Figure: 4. Table: 4.35 In te re s t Inc om e / N o o f e m lo y e e s Interest income per employee of ABL was showing a positive trend with the years 2007 to 2009 with an increasing figures as given above.Table: 4.5 1 0.59 1.5 0 1 2 ye a rs 3 / No of 2.5 84 64.11 Int e re s t In c o m e / N o o f e m loy ee s 3 2.14 serial No 12 Ratios Formulae 2009 2008 2007 Business per Deposits+Advances+Investment employee No of employees / 77.

Figure: 4.77.790 B in terms of advances and in terms of deposits in 2008 with an increasing trend in 2009. Table: 4.64 B in terms of advances and in terms of deposits which have been increased in 2008 with a decrease figure of Rs. 7 695.15 serial No Ratios Formulae 2009 2008 2007 13 Business branch per Deposits+Advances+Investment 867. 40 .7 10 00 900 800 700 600 500 400 300 200 100 0 1 2 y e a rs 3 Rupess In billions D e p o s its + A dva n c e s + In ve s t m e n t / N o o f b ra n c h es Business per branch of ABL was Rs. / No of branches 4 Figure: 4.5 B in 2009.695 B in terms of advances and in terms of deposits in 2007 which has been increased to Rs.13 D e p o s its + A d va n c e s + In ves tm e n t / N o o f b ra n c h e s 790.12 D e p o s its + A dva n c e s + In ves t m e n t / N o o f e m ploy e es 90 80 70 60 50 40 30 20 10 0 1 2 ye a rs 3 percentages D ep os it s + A d va nc es + Inve s t m e nt / N o o f e m p lo y e es Business per employee of ABL was Rs.

In ‘000) 41 .3 11 .No.18 employees in 2009.16 serial No Ratios Formulae 2009 2008 2007 14 Employees per Total No of Employees / Total No 11.86 in 2008 which has been increased to 11.031. Total deposits branch Employees per branch 270.2 11 . 4. Ratios Overall ABL Dec 31.348. 2009 (Rs.Table: 4.9 10 . 210 10.10.98 11.34 / 388.1 No of employees 11 10 .1 branch of branches 8 Figure: 4.8 10 . which means that each branch should have 10 to 11 employees.14 Tot al N o o f E m p loy ee s / To ta l N o of b ran c h es 11 . In ‘000) 1. Business per branch Total advances / branch • 2.18 4.2 Comparison of Branch Performance with Overall Performance: Table 4.177 340.8 Employee per branch of ABL was 10.6 1 2 Ye a rs 3 To ta l N o of E m ploy ee s / To ta l N o of b ran c h e s 10.86 Branch Dec 31. 2008 (Rs.8 6 10.8 in 2007.17: Comparison Sr.7 10 .

A Economics (3) Graduates Manager (CSM) Officers (2) Tellers (5) • (1) F.A (1) MBA (1) M. 4.1 Management Qualification Table 4.3.The performance of branch is good when compared with overall performance of ABL in terms of deposits but the branch performance is not satisfactory when compared the overall bank’s average in terms of advances. 2 Staff Qualification Table 4. The branch advances are very much less than the average.18: Management Qualification Management Branch Manager Qualification • • B Com Institute of Pakistan Banking (IBP) Part 1.A Matric 4.A • • • • Messenger (1) B.3 Non-Financial Analysis of Branch 4.3 Powers and Independence of Manager in Terms of 42 .19: Staff qualification Staff Customer Services qualification B.

quarterly. half yearly and yearly basis. Locker room. Operational department which includes two staff members. Abbottabad.3.4. 4.5 Infrastructure • • • • • The infrastructure of ABL Bara Tower Branch consists of: Cash department which includes five staff members.3.3.3. 4.3.1 Credit Limit The branch manager has negligible of no power and independence in terms of credit limit.3. IT department which includes one staff member.7 Internal Audit and Control 43 . 4. He can not even approve a loan of amount Rs.2 Interest Rates for Deposits and Advances The branch manager has negligible of no power and independence in terms of interest rates for deposits and advances. The computerized IS is automatically updated on daily basis where as manual IS is updated on weekly. 000. The interest rates for deposits and advances are set by SBP. 4.100.3. Mandian. monthly.4 Branch Location This branch of ABL is located at Bara Tower Jinnahabad.6 MIS The MIS of ABL Bara Tower Branch is partially manual and partially computerized. This power is vested with the regional manager.3. 4.

The customers are treated as very special persons in the bank.4. There is Compliance and Control Unit (CCU) which conduct audit after every There is another internal control unit which conduct audit annually. so that it covers a lot portion High motivation is the strength of Allied bank. • • • ABL has wide area network in all over the Pakistan. it also develops a sense of loyalty towards the bank.1 Overall SWOT Analysis: Strengths: • • • Allied bank is a bank which is owned by its own employees.4 SWOT Analysis 4. three months 4. the good he is delivering is not for bank only but is for him/her also. this A feeling of ownership increases the productivity of every employee The bank has very strict rules and regulations about the customer’s complaints.• The staff work of ABL Bara Tower Branch is distributed in such a way that they supervise each other. since every employee feels that The job descriptions are clear that help the employees to perform their duties of cash transactions and make customer satisfied. • • • There is Internal Control Unit (ICU) that conduct monthly audit. Staff members are dependent on each other in order to complete their work. very well without any confusion Weaknesses: 44 . and develops a sense of sincerity towards the bank. provokes a sense of responsibility in every single employee.

• New private banks coped with new technology of IT. No entertainment facilities are available for customers like news papers and The salary packages of first line managers are not much attractive. ABL does not offer house loans. Threats: • • Major threat is the political influence. So. The bank’s three board of directors are of Another major threat in the banking sector is the continuous downfall of the government. ABL has an opportunity to attract the customers by giving them attractive schemes. it can cover the major market of Pakistan. small borrowers are attracted to get the financing and start small businesses. The ATMs of ABL are not working properly round the clock most of the time. 4.4. so that they can influence on the decisions of the ABL. country economy since the last few years.2 Branch SWOT Analysis 45 .• • • • • Advertisement of ABL is not such good as of other banks. Opportunities: • As a result of different steps taken by the Government regarding the betterment of the economy. magazines. • ABL has wide area network all over the Pakistan. car loans as compared to other banks. if the bank can make it possible the fast delivery of fund from abroad through online banking. If this downfall remains for more few years it may be the great barrier in achieving the bank’s objectives. as sometimes customers have to wait for a long period of time.

role in attracting small borrowers like small industries. customers have to face problem. Apart from this the branch is near by the posh areas like Jinnahabad and Habibullah. The branch manager has very limited powers. Weaknesses: • • • • • • • The MIS of ABL Bara Tower Branch is not fully computerized. • The branch staff is dependent on one and other and also has unity which increases their motivation and productivity. 46 . The branch is not authorized to deal in foreign currency deposits.Strengths: • The main strength of ABL Bara Tower Branch is its location. The branch is in locality of CIIT Abbotabad. Opportunities: • • • Due to attractive lending schemes of the bank the branch can also play a major Good financial schemes can also attract major account holders from the posd Round the clock online banking and ATMs can also help in attracting customers. ATM of this branch is not working properly round the clock due to which No entertainment facilities for the customers like news papers and magazines. areas due to easy access to the branch. No automatic generators or lack of proper generators. Inadequate space for customers.

Threats: • • UBL branch located at main college road is a major threat for this branch. 47 . The Mezan and Al Habib bank branch located near Usmania are also threat for ABL Bara Tower Branch.

They just know how to use their part of software if any problem comes in the computer they can’t fix it.05 Conclusion and Recommendations 5. The mobilization of deposits is mainly considered as the responsibility of the branch manager but the rest of the staff is usually least interested • The bank has been applying the modern concepts of management and marketing at both micro levels. The promotional policy of the bank was observed as without any specific direction. The interior and exteriors of the branch have been changed but the staff of the branch has been found less motivated towards the organizational objectives. 48 .CHAPTER . There is a lack of use of modern technology and most of the important tasks are performed manually.1 Conclusion: • • The branch manager is usually given very little regarding sanction of advances and over draft whereas the responsibilities are numerous. • • • • Employees of the branch are fed up with their work they feel bore from their daily work especially the manager. The marketing efforts at the branch level are less disciplined and there are no integrated efforts from all the staff members. • Most of the employees working in this branch are not much familiar with computer. Though the bank has defined its mission and vision but no specific plan has been designed so far. The decision making is still centralized as the middle and low level management is not taken into confidence.

Working environment. are sticking to one seat only with the aim that they become master of one particular job and are loosing their grip on other banking operation. So that as the customer enters in he can clearly see someone who would help him. • Management information system is operated only at the regional level. • Miss utilization of office utilities.• The relationship between the employees of the branch is not that good because of which the whole environment of the branch becomes less favorable for work. • • The branch should try to enter into the market of Islamic banking it would increase its competitive edge over the other banks. • • There must be a separate information counter in this branch of ABL. For this ABL should opt for heavy advertisement both electronically and on print media to create public awareness. This will give an impression to client for personal Banking.2 Recommendations • The branch manager should arrange a training program for its existing employees to help them perform their duties more effectively because training is one of the important factors that affect the performance of employees therefore process of continuous training should be put in place. 5. In my opinion all the employees should have regular job experience all out-look towards banking. Bank should start its computerized system at the branch level as well to increase its accuracy and processing and to keep its own data up to the mark. This will help in improving the image of the bank and hence will attract more clients. equipment. furniture and staff dressing should be according to the modern banking style. especially the telephone. The market standing is not as strong as their competitors. Most of the bank employees. The bank should appoint customers relation officer where the volume of work is too high. 49 . • • • Recruitments should be strictly on merit basis and induction should be after proper and extensive training.

• Financing facilities in the bank are favorably given to those having huge bank balances whereas others having small accounts. waiting for their turns. customers.• The bank must ensure the participation of the staff in all promotional activities of the bank to this end the bank must adhere to the policy of fringe benefits rapid promotion of capable management and official. • As the business is expected to grow in the future so the bank needs to expand its space to accommodate additional customers. The old age benefit of the bank employee must be increased to motivate fee staff. These expenses should be minimized and managed efficiently to generate more profits for the bank. should be provided with proper seating arrangements and proper parking facility for staff and customers should be provided. • Consumer banking is the area bank is not dealing with and having a lot of opportunities for the bank. swift operations can be performed in lesser time. • The manager of the branch should delegated with some powers regarding the credit extending facilities to save the time of customers and to entertain more customers at the same time. Further. 50 . • It should be ensured that the ATMs are working round the clock with proper cash so that the problem of out of cash ATMs should be avoided and the customers can enjoy transactions round the clock. • The net interest income of the bank is low because of increased expenses and as a result profit is also low. It should be at least maintained so that the bank will be able to generate profit in short period of time. • • The bank should try to get all the branches online so that faster data transfer and The bank should try to get all the branches online so that faster data transfer and swift operations can be performed in lesser time. So it will be beneficial for the bank if it start dealing in auto loans. • Short term lending of the bank has decreased in 2009 because the balance of the bank with other banks has increased to a great extent. who are in a real need are ignored. So financial facilities should be provided to those having small bank balances as well. housing finance or any other consumer requirement.

cars) yet according to ROA it is implied that these assets are not used to their full capacity. So. 51 . 2010]. And the replacement of cycle of cars should be lengthened.• As operating fixed assets have increased (offices. • The bank should increase its investments and lending proportionately to each other as both carry different risk portfolio. So. that earning assets will be brought to their full earning capacity References • ABL Annual Report (2009). Annual Report of Allied Bank Limited 2009 available on website [accessed on June 06. the offices that are below capacity level should be sold to release money and they should be rented.abl. [accessed June 06. 2010] [accessed June 15. Tower Tower. Annexure A 52 . tenth [accessed June [accessed June 05.Mubashir. 2010] available on website www.accountancy. [accessed on June 08. Csutomer Service Manger at Allied Bank Limited Bara www.branch Manager at Allied Bank Limited Bara Interview with Mr. 2010] www. USA: Interview with Mr.• • • • • • • • • ABL Quarterly Report (2009).com. 2010] www.Mohammad Arif . 2010].com. Quarterly Report of Allied Bank Limited 2009 Gibson. Charles (2000).pk [accessed June 13.historyworld.qualisteam.abl.. Financial Reporting & Analysis.sbp. 2010] www.

53 .

Annexure B 54 .