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NBP internship report

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					Virtual University of Pakistan




    National Bank of Pakistan




       Internship Report

              Umeed
           MC08040000
           (2008 – 2010)
                    Submitted On: September 27, 2010



          VIRTUAL UNIVERSITY OF PAKISTAN




                    Scanned Copy of Letter of Undertaking


                  Scanned Copy of the Internship Certificate

                                          Pending


                                      Dedication

I am proudly dedicating my Internship report to my Beloved Parents for all their love &
guidance, which grow me in a shape that I make it up to this point. Moreover, I am
dedicating my work to my teachers as well as the Internship Advisors, who filled me with
courage, commitment and the awareness to follow the best possible route, by his
unmatchable style and by best possible training.




                                                                                           2
                                       Pending




                                Acknowledgement

All the praises are for the ALMIGHTY ALLAH, the CREATOR of universe, the most
gracious & merciful, and the source of all knowledge, wisdom within and beyond my
comprehension. ALLAH is the only, WHO can help us in every field of life. I bow my
head before HIM who enabled me to work on this report and helped me to complete this
report successfully.

All praises after ALMIGHTY ALLAH are due to HOLY PROPHET HAZARAT
MUHAMMAD (Peace be upon him), the most perfect exalted among, WHO & us is
forever a torch of guidance and knowledge for humanity as a whole.




                                                                                       3
Afterward, I am greatly indebted to my Parents and FIN619 instructor for providing me
excellent guidance to successfully complete my Internship report of National Bank of
Pakistan.

I here by provided a golden opportunity to perform working activities at NBP for a period
of 10 weeks. The aforesaid occupancy bestow me precious moments to make learning
and get experience of the practice life with a successful approach.

Soon after, I am heartily grateful to Mr. Abid Ali, Operations Manager of the National
Bank of Pakistan, who confer me possibility to enhance my understanding and
knowledge about the working systems of NBP, which would ultimately useful for my
future career and whose cooperation enables me to compile this comprehensive report.




                                 Executive Summary

In order to interpret my knowledge and working skills, I have performed 10 months
internship at National Bank of Pakistan, Hide Market Branch, Gujranwala. The objective
of the internship was to explore the issues related to finance and the implementation of
financial terms, which I learnt from my course books.

In this report, I have given a very brief review of what I have seen and felt during my
internship in customer service, cash clearing account and Loan department. I have
mentioned all of my active and passive learning in my Internship report.



                                                                                            4
During my internship, I conclude the strengths of the organization as good dynamic
environment, large deposit, automatic operation, online banking and Islamic banking.

Moreover, I have also performed the Financial Analysis of 3 preceding years and
commented on the entire picture of the organization.

Furthermore, I have discussed about my learning skills and capabilities in the whole
tenure that is all about the Banking Terminologies, Operation activities and working
activities of Finance Department. I have made it possible to write each and every thing
that I have learnt over there. I have all my practical efforts in the form of this manuscript
that’s the asset for my future career.




                                   Table of Contents

   Index                                 Description                               Page
      1        Letter of Undertaking                                                 2
      2        Scanned copy of internship certificate                                3
      3        Dedication                                                            4
      4        Acknowledgment                                                        5
      5        Executive Summary                                                     6
      6        Table of Content                                                     7-8
      7        Brief introduction of the business sector of organization             9
      8        Overview of the organization                                          10

                                                                                                5
           History                                                 10
           Nature of organization                                  11
           Business volume                                         11
           Services and Offerings                                  12
           Competitors List                                        15
9    Organization structure                                        17
           Organizational Hierarchy Chart                          17
           Number of employees                                     17
           Main offices                                            18
           Introduction of all the departments                     18
           Comments on the organizational structure                21
10   Plan of your internship program                               22
            A brief introduction of the branch/head office where
                                                                   22
            you did your internship
            Starting and ending dates of your internship           22
            The departments in which you got training and
                                                                   22
            duration of your training
11   Training program                                              23
            Detailed description of the department you
                                                                   23
           worked in.
           Detailed description of the tasks assigned to me        31
12   Structure of finance department                               33
           Department hierarchy
                                                                   33
           Number of employees working in the finance
                                                                   33
           department
           Finance & Accounts Operations                           33
13   Functions of the Finance Department                           34
           Accounting system of the organization                   34
           Finance system of the organization                      34
           Use of electronic data in decision making               34
           Sources of funds                                        35
           Allocation of funds                                     36
14   Critical analysis                                             37

                                                                        6
                  Financial Ratios                                                37
                     Liquidity Ratios                                             37
                     Leverage Ratios                                              39
                     Profitability Ratios                                         42
                     Activity Ratios                                              46
                     Cash Flow Ratios                                             47
                     Bank’s Special Ratios                                        48
                     Horizontal Analysis                                        50-52
                     Vertical Analysis                                          52-54
                     Industry Analysis                                            54
                     Trend Analysis                                               55
                  Future Prospectus of NBP                                        56
     15       SWOT Analysis of organization                                       57
     16       Conclusion                                                          61
     17       Recommendations for improvement                                     62
     18       References and Resources Used                                       63
     19       Annexure                                                            64




                  Brief Introduction of NBP’s Business Sector

The business sector of National Bank of Pakistan (NBP) is “Banking Sector”. Banks play
very important role in the economy of a country and Pakistan is no exemption. Banks in
Pakistan account for 95% of the financial sector. Pakistan has a well-developed banking
system, which consists of a wide variety of institutions ranging from a central bank to
commercial banks and to specialized agencies to cater for special requirements of specific
sectors.

The country started without any worthwhile banking network in 1947 but witnessed
phenomenal growth in the first two decades. By 1970, it had acquired a flourishing
banking sector.


                                                                                             7
   The era of 90s was the climax of privatization, deregulation and restructuring in the
   domestic banking industry and financial institutions. The Government only owns the
   National Bank but 80% of bank assets are in private sector. Banking assets rose three-
   folds over the last five years and the industry size are reaching Rs. 4 trillion.

   The contribution of banking sector to GDP ratio is 55.6%. Pakistan has been ranked 2nd
   in performance and efficiency indicators among the South Asian countries by the World
   Bank. There are 68 scheduled banks of which the top five have 50% of the market share.
   Banking industry, in Pakistan, is currently under a wave of Mergers and Acquisitions (M
   & As).

   The Governor State Bank of Pakistan, Syed Salim Raza has recently said that “Pakistan’s
   banking industry has tremendous potential for further investment in the financial sector of
   the country.”




                        Overview of National Bank of Pakistan

1. Brief History of NBP

   The National Bank of Pakistan is one of the largest commercial bank of Pakistan .It was
   incorporated in 1949 under the National Bank of Pakistan Ordinance 1949. Initially, it
   was owned by Govt. of Pakistan and later on moved to modern commercial banking.

   NBP works as an agent to ‘State Bank of Pakistan’ and has its Head Office at Karachi,
   along with more than 1250 branches in all over the Pakistan. NBP advances have reached
   to rupees 554.40 million in 1950, which was one third of the total scheduled bank’s
   credit. NBP has been declared as the best bank for 2001- 2002 by United Kingdom and is
   the bank of the year for 2003-2004 of Pakistan.



                                                                                                 8
   Moreover, NBP has been awarded with AAA and AAA+1 rating by JCR-VIS Credit co.
   Ltd and affiliated of Japan Credit Rating Agency for 2001 and 2002 respectively.

                                        Vision Statement

   The vision statement of NBP is;

   “To be recognized as a leader and a brand synonymous with trust, highest standards of
   service quality, international best practices and social responsibility.”

                                       Mission Statement

   The mission statement of NBP is that “NBP will aspire to the values that make NBP truly
   the Nation’s Bank”, through:

         Institutionalizing a merit and performance culture;

         Creating a distinctive brand identity by providing the highest standards of services;

         Adopting the best international management practices;

         Maximizing Stake holder’s value;

         Discharging their responsibility as a good corporate citizen of Pakistan and other
          countries.

2. Nature of the Organization

   National Bank of Pakistan provides both commercial as well as pubic sector services.
   NBP is serving as a lead player in the debt equity market. NBP has extended its area of
   services beyond the country. The branches of NBP is spread all over the world, which
   includes USA, Canada, Germany, France, Bahrain, Egypt, Bangladesh, Hong Kong,
   Japan, South Korea, China, Afghanistan, Turkmenistan, Kyrgyz Republic, Kazakhstan,
   Uzbekistan and Azerbaijan.

   The bank is engaged in providing commercial banking and related services in Pakistan
   and overseas. NBP is the main business partner for the Government of Pakistan, with
   special emphasis on fostering Pakistan's economic growth, through aggressive and
   balanced lending policies and technologically oriented products & services. NBP further


                                                                                                  9
   consolidated its position as one of the top players in corporate and investment banking of
   the country in 2007 and has built a strong customer relationship with the premier
   corporate clients.

   Additionally, NBP have recently set up the Financial Institution Wing, which is placed
   under the Risk Management Group. The role of the Financial Institution Wing is;

         To effectively manage NBP's exposure to foreign and domestic correspondence

         Manage the monetary aspect of NBP's relationship with the correspondents to
          support trade, treasury and other key business areas, thereby contributing to the
          bank's profitability

         Generation of incremental trade-finance business and revenues.

3. Business Volume

   The Issued, subscribed & paid up capital of National Bank of Pakistan is as follows;

                                           No. of
      Categories Of Shareholders                            Shares Held          %age
                                        Shareholders

      Government Of Pakistan                   3                  4,338,409        0.4031
      State bank Of Pakistan                   1                809,408,116       75.1979
      Directors CEO & Children                 1                      22,347       0.0021
      Associated Companies                     2                       5,808       0.0005
      Executives                               22                     69,838       0.0065
      NIT & ICP                                3                 10,089,752        0.9374
      Bank DF And NBPF                         40                14,818,881        1.3767
      Insurance Companies                      24                10,639,396        0.9885
      Modaraba & Mutual Funds                  41                54,300,194        5.0448
      General Public Local                   16,237              60,604,356        5.6304
      General public Foreign                   17                   204,856        0.0190
      Others                                  335                38,012,089        3.5315
      Foreign Companies                        34                50,069,644        4.6517
      NIT & ICP                                3                 10,089,752        0.9374




                                                                                                10
   Moreover, NBP has a highly skilled team with years of banking services experience. Its
   goal is to “To enhance profitability and maximization of NBP share through increasing
   leverage of existing customer base and diversified range of products.”

4. NBP’s Services and Offerings

   National Bank of Pakistan mainly offers;

              The lowest rates on exports and other international banking products

              Access to different local commercial banks in international banking

   An overview of services provided by NBP is as follows;

          A.      Demand Drafts

   NBP provides a safe, speedy and reliable way to transfer money through NBP's Demand
   Drafts at very reasonable rates. Any person whether an account holder of the bank or not,
   can purchase a Demand Draft from any of the branch of NBP.

          B.      Letter of Credit

   NBP is committed to offering its business customers the widest range of options in the
   area of money transfer. NBP provides the service of Letter of Credit with competitive
   rates, security, and ease of transaction to commercial enterprises.



          C.      Mail Transfers

   NBP mail Transfer service helps to move money safely and quickly with competitive
   rates in the market.

          D.      Pay Order

   NBP provides another reason to transfer the money using Pay Orders, a secure and easy
   way to move your money from one place to another.

          E.      Traveler’s Cheques

       Negotiability:         Pak Rupees Traveler's Cheques are a negotiable instrument


                                                                                               11
    Validity:              There is no restriction on the period of validity

    Availability:          At 700 branches of NBP all over the country

    Encashment:            At all 400 branches of NBP

    Limitation:            No limit on purchase

    Safety:                NBP Traveler's Cheques are the safest way to carry our money


       F.      Commercial Finance

NBP’s dedicated team of professionals truly understands the needs of professionals,
agriculturists, large & small business and other segments of the economy. They are the
customer's best resource in making NBP's products and services work for them.

       G.      Foreign Remittance

To facilitate its customers in the area of Home Remittances, National Bank of Pakistan
has taken a number of measures to:

Increase home remittances through the banking system

           Meet the SBP directives/instructions for timely and prompt delivery of
            remittances to the beneficiaries

In order to include new features, the existing system of home remittances has been
revised significantly to provide efficient and reliable home remittance services to
nonresident Pakistanis at 15 overseas branches of the Bank, besides United National
Bank (the joint venture between NBP and UBL in UK)., Bank Al-Jazira and Saudi
Arabia.

           Zero Tariffs: NBP is providing home remittance services without any charges.

           Strict monitoring of the system is done to ensure the highest possible security.

Special courier services are hired for expeditious delivery of home remittances to the
beneficiaries.

       H.      SWIFT System


                                                                                               12
The SWIFT system (Society for Worldwide Inter bank Financial Telecommunication)
has been introduced for speedy services in the area of home remittances. The system has
built-in features of computerized test keys, which eliminates the manual application of
tests that often cause delay in the payment of home remittances.

The SWIFT Center is operational at National Bank of Pakistan with a universal access
number NBP-PKKA. All NBP overseas branches and overseas correspondents (over
450) are drawing remittances through SWIFT.

Using the NBP network of branches, customers can safely and speedily transfer money
for our business and personal needs.

       I.      Equity Investments

NBP has accelerated its activities in the stock market to improve its economic base and
restore investor confidence. The bank is now regarded as the most active and dominant
player in the development of the stock market. NBP is involved in the following:

           Investment into the capital market

           Introduction of capital market accounts (under process)

NBP's involvement in capital markets is expected to increase its earnings, which would
result in better returns offered to account holders.



       J.      Short Term Investments

NBP now offers excellent rates of profit on all its short term investment accounts.
Whether customers invest for 3 months or 1 year, NBP's rates of profit are extremely
attractive, along with the security and services, only NBP can provide.

       K.      National Income Daily Account (N.I.D.A)

The scheme of National Income Daily Account was launched in December 1995 to
attract corporate customers. It is a current account scheme and is part of the profit and
loss system of accounts in operation throughout the country.

       L.      Trade Finance & Other Business Loans

                                                                                            13
Agriculture Finance

NBP provides Agricultural Finance to solidify faith, commitment and pride of farmers
who produce some of the best agricultural products in the world. Following are the types
of Agriculture finance;

      Agricultural Finance Services

      Agricultural Credit

      Farm Credit

      Production Loans

Corporate Finance

Following are the types of Corporate Financing by NBP;

      Working Capital and Short Term Loans

      Medium term loans and Capital Expenditure Financing

      Loan Structuring and Syndication

      Cash Management Services

5. Competitors of National Bank of Pakistan

      Allied Bank Limited

      Bank Al-Falah Limited.

      Bank of Punjab Limited

      Habib Bank Limited

      United Bank Limited

      Muslim Commercial Bank Limited

      Standard Chartered Bank Limited

      Askari Commercial Bank Limited

      Bank Al-Habib Limited

                                                                                           14
                             Organizational Structure

a) Organizational Hierarchy Chart




                                                        15
b) Number of Employees

  In 2009, there are 16,248 numbers of employees working in National Bank of Pakistan,
  all over Pakistan.

  The Board of Directors of NBP is as follows;

        Syed Ali Raza (Chairman & President)

        Mr. Tariq Kirmani (Director)


                                                                                         16
         Mrs. Haniya Shahid Naseem (Director)

         Ms. Nazrat Bashir (Director)

         Mr. Ekhlaq Ahmed (Secretary Board of Directors)



c) Main office

  National Bank of Pakistan
  NBP Building, I.I. Chundrigar Road,
  Karachi, Pakistan.

  Phone: +92 (21) 9921 2100 (50 lines)

  Website: www.nbp.com.pk



d) Introduction of all the departments

  The Directors and Management of National Bank of Pakistan recognized the worth of
  specialization and division of work, therefore, a number of departments have been
  established to cope with changing and competitive environment. These departments are
  discussed here under one by one;

      1. Deposit Accounts

  Deposits are those accounts in which customers keep their savings, and there are numbers
  of those accounts, like PLS Saving Accounts, Current Accounts, Special saving accounts
  i.e. Premium Saving Accounts and NBP Premium Amdani Certificates. Usually bank
  gives semi-annually profits on PLS Saving Accounts as well provides there customer
  with certain more facilities. Whereas in Current A/c Profit is not given semi-annually,
  this A/c is specially for businessmen, so that’s why special waivers are given to them
  according to nature of the account, Like providing certain free of cost services etc. Where
  else in Special A/c’s profit is given on certain rules, like monthly basis profit system on
  fixed percentage of ratio of amount.


                                                                                                17
   2. Loan Facility (Advances):

Advances are one of the types of loans. It may be long term as well short term. NBP
gives loan to borrowers for their personal or business usage. Advances for personal
usage are low as compared to business use. At the same time bank is giving advances for
various sectors for various tenure. Some of the forms of advances, which are given for
various sectors for various tenures, are here as under… Small Finance, Cash Finance,
Agriculture Finance, Cash & Gold Loan, Personal Loans, Demand Finance, Running
Finance, Corporate Finance, Export Import Financing, House Building Finance (Saiban)
and NBP Karobar Scheme etc.

In advances, loans are given to the party under some guarantee, like pledging of land,
mortgage loans etc.

   3. Government Payer:

As National Bank of Pakistan is the main Government bank, so because of this reason it
is functioning as an agent of SBP. All types of Government Payments like pension,
salaries of almost every Govt. dept, Zakat, Benevolent Fund, Treasury Refund and Taxes
Refund proceed through the bank. .

   4. Receipts for Government:

National Bank of Pakistan is also acting as an agent of Government in the act of receiving
of government receipts. In this department all types of Government receipts i.e.
Revenues, Taxes, Abyana, Agriculture Tax, Government Fees, EOBI Funds and Utility
Bills are deposited. This way NBP is serving great job of revenue collection from public.

   5. Remittance Facilities:

This department deals in transfer of money from one place to another or country by:

      Demand drafts

      Mail transfer

      Telegraphic transfer



                                                                                             18
People send their money to the other persons and organizations through various way i.e.
Bank draft, Telegraphic Transfer, Mail Transfer, Coupons, Govt. Draft and Western
Union Money Transfer etc. It works both inward and outward. It is centrally controlled
by the main head office, means all the transactions are further treated by the head office.

    6. Bills / Traveler Cheques

Customers collect their money/amount through bills. They present their cheque, drafts
and other bills for collection within the city and out of the city through mail. Now a day’s
Online Banking is becoming more popular for this purpose but the branch where I got
training is still not have this facility.

    7. Cash Department:

National bank deals Government treasury on behalf of State Bank of Pakistan. There are
Chest, Sub-chest and Non-chest branches in the bank. SBP supplies currency notes to the
bank and monitors its cash flow, as well the main function of this department is to
controlling of the spoiled currency noted in the market and it possible that everybody
should get good quality of currency notes (sorted notes).

    8. FBR Collection Department

Federal board of revenue’s collection is one of the very important sources of
government’s income, for this purpose NBP is playing great role for collection of FBR
(CBR) taxes/revenue. A separate counter is established at branch level to facilitate the
taxpayers.

    9. Islamic Banking

Islamic banking operation came into existence from year 2007. During the year under
review, in addition to active participation in various Sukuk transactions, two more
Islamic banking branches at Lahore and Peshawar started operations.

NBP’s plans for the year 2010 include opening of Faisalabad and Rawalpindi branches
with the focus on growing organically by opening more standalone Islamic banking
branches, utilizing NBP’s existing branch network of 1,200 plus conventional branches
and looking into strategic acquisitions for expansion in this field.

                                                                                               19
      10. Online Banking

  The functioning of this department is the online linkage of other branches with each
  others; this department facilitates its customers to feel at home, because with the help of
  online.

e) Comments on the Structure of National Bank of Pakistan

  The structure of National Bank of Pakistan is tremendously competitive. It is purely
  because of the interrelated working efficiency among its departments. In order to achieve
  the goals of NBP, each of its department deals with its own responsibilities and
  contributes in the strategic, tactical, and operational planning of the business.

  Now days, the rapid appearance of technology played a vital role in the efficiency and
  effectiveness of the business. The ‘Technology’ replaced the manual power and probably
  plays a major role to enhance and expand the business. Moreover, in this era of
  technology, the “Information” is the key to success in the business. This means that the
  successful businessman will be who will have the right information at the right time. In
  order to achieve the levels of technology and keep itself in the race of progress, National
  Bank of Pakistan uses the most reliable versions of financial software, including Oracle E
  Business Suite Financials.

  In tenure of my 10 weeks, I came to know that the company’s progress has mainly
  attained through dedication of employees. The effectiveness of its management, their
  willingness to take advantage of opportunities and face challenges of changing economic
  picture is really appreciable, for the devotion and hard work of all the employees of the
  company.




                           Plan of my Internship Program

a. A brief introduction of the branch where I did my internship

  I have performed my internship in National Bank of Pakistan at:

                                                                                                20
   Name of Branch                       National Bank of Pakistan, Gujranwala

   Branch Code                          0850

   Region                               Gujranwala

   Region Code                          13

   Address                              Hide Market, Feroz Wala Road, Gujranwala

   Phone #                              0554-9230038-9230028

   Name of Manager                      Miss Afaira Amir

   Name of My Supervisor                Nisar Ahmed

   Name of Operation Manager            Abid Ali

b. Starting and Ending dates of my Internship

   Time duration of my internship at National Bank of Pakistan is 10 weeks.

             Starting date is May 01, 2010, and

             Ending date is July 15, 2010.

c. Names of the departments in which I got training and the duration of training

   During my internship period at NBP, I got training in various departments of the branch.
   A brief introduction of these departments is as under;

      1. Deposit of Current and PLS Saving Accounts (2 Week)

      2. Account Opening (2 Weeks)

      3. Remittances and Bills (2 Weeks)

      4. Utility Bills Collection (2 Weeks)

      5. Govt. Payments and Receipts (2 Weeks)

                                    Training Program

a. Detailed description of the operations / activities performed by the department(s) I
   worked in.


                                                                                              21
   National Bank of Pakistan uses dissimilar departments to execute its tasks and functions
   with the harmonization of work force with the help of available resources and
   technology.   All    theses      interrelated   departments   performing   their   particular
   responsibilities and make their required contribution in achievement of its goals.

   Here; detail description of the operations and activities of the departments where I have
   conduct my internship report.

1. Account Opening Department:

   In this department, I have acquired the knowledge regarding the dealings of this
   department with opening current and saving account for its corporate customers and deals
   with all other matters. National Bank of Pakistan has subsequent kinds of customers
   under this department.

                      Trust

                      Staff

                      Firm

                      Company

                      Individual

   In order to opening of an account following general practice have been followed by the
   NBP;

      A.    Confirmation from NADRA

   At first, the person gets himself verified through NADRA in order to opening of an
   account. Moreover, the customers have to bring some reference of those, who already
   have an account in NBP. Some important information regarding customer e.g. the name
   and account number is written on the space provided on the sample signature card.

      B.    Form of Opening an Account

   On confirmation, such person has been provided with an application form, to fill, known
   as Account Opening Form. NBP has PLS Term account, Premium Saver account,


                                                                                                   22
Premium Adman account, Call Deposit account, Current Account, PLS SNTDR account,
PLS Saving and NIDA account.

The account opening form has following particulars;

            Title of Account

            Address

            CNIC Number

            NTN Number (if available)

            Profession

            Telephone number may be of office, mobile or residential

National Bank if Pakistan has accessible services to following types of individuals;

       Accounts of special customers – it includes Proprietorship Account, Govt.
        Institutions, Account of clubs, Societies and Associations, Corporate Bodies,
        Trust Accounts, Partnership Account and Limited Company Accounts.

       Accounts of general customers – it includes Joint Account, Minor account and
        Illiterate Person’s Account.

   C.    Zakat Deduction

Accept current account, the aforesaid department deducts the Zakat on each type of
account, on 1st day of the Ramzan at the rate of 2.5%. In order to avoid Zakat deduction
the customers have to submit affidavit/declaration as per zakat rules.

   D.    Signatures of the applicant

Signature of the applicant has been saved for future verification.



   E.    Deduction of Bank Service Charges




                                                                                           23
This department of NBP also makes deductions of bank service charges as per bank's
tariff. Following are the persons, who are relaxed from the deduction of bank service
charges;

              Employees of the Government

              Pensioner

              Student

              Widows

State Bank of Pakistan now authorize all the banks to deduct service charges on all types
of accounts when the balance of the customer become less from 5000/-. Rs. 55/- per
month is deducted from the customer's account. 5000/- is the minimum amount which
should be kept by the customer in his account.

   F.      Specimen Signature Card (SS card)

After getting relevant thing there comes the turn of SS card, this is a card on which
specimen of signature will be obtained from depositor at the time of opening of account
(once). A specially designed card is used for this purpose, this card is always counter
signed by an official of bank having IBS number, officials below rank or not having IBS
number are not eligible to counter sign it.

For illiterate person a recent picture of the newly account holder is taken and attached
with SS Card, as they cannot sign so for that purpose except sign there thumb impression
is taken along with picture.

To reduce the risk of frauds and misuse of the cheques of an illiterate person the
specimen signature card and account opening form both are stamped by the Personal
Visit stamp. Persons who are using thumb impression, it is very important for them to
visit personally for every transaction done from their account.




   G.      Account Opening Register

                                                                                            24
  After taking signature / thumb impression, it is necessary to write the name, NIC
  number in account opening register.

   H.     Issuance of Letter of thanks

Once, the account has been opened, a ‘Letter of Thanks’ has been generated by the
system and delivered to such customer. Following are the key reasons for the issuance of
‘letter of thanks’;

        To say thanks, to the customer for opening the account in their bank.

        To confirm the address, provided by the customer while opening the account.

    I.    Issuance of Cheque Book

 The cheque book is issued to all customers having account in bank or to those who want
 to avail the facility of cheque book. First cheque book is issued to customers who get the
 letter of thanks and requests for the issuance of cheque book, and first cheque book after
 opening of new account is issued free of cost.

A Cheque book consists of:

        PLS 25 leaves or pages per order

        CD 50 leaves or pages per order

A special cheque book register is maintained by the bank to enter the name of person
having cheque book. It is also signed by the customer when cheque book is handed over
to the customer.

    J.    Pass Book

Pass book is be known as the record book which is handed over to the customer at the
time of opening of account by bank. In this book all types of transaction are recorded like
withdrawal and deposit in a proper date wise manner.




   K.     Documents Enclosed by Customer at opening of account

                                                                                              25
All the customers on opening of account will have to submit the required documents as
per the status of Individual Account, Companies Account, Partnership Account, Trust
Account, Agent Account and account for Club, Society or Association.

Following is the detail of documents generally required to be attached by the customers;

            Application form

            Copy of CNIC/NICOP/POC

            Copy of driving license in case CNIC is without photograph

            Applicant photograph and VNIC copy

            Copy of service card/ evidence of employment in case of salaried person

            Photographs in case of illiterate person

            Zakat exemption declaration

            Evidence for exemption of account from levy of service charges

            Proof of age in case opening of account with minor

            Copy of any utility bill.

            Copy of company’s memorandum and articles of association

            List of directors

            Copy of board resolution

            Certificate of incorporation

            Their signature cards

            Certificate to commence business

            Power of Attorney, etc.




   L.   Stamping and Scrutinizing

                                                                                           26
   After the fulfillment of all the necessary terms and conditions and checking of the form
   the relevant officer of Account Opening affixes the required stamps on the Account
   Opening Form and comply all the formal rules and regulations.

     M.     Closing of Accounts

   In order to closing of account, the customer is required to submit an application for
   closing of account. On satisfaction of application, the account is closed and his balance
   is paid to him after deduction of account closing charges i.e., Rs. 200 and the application
   is filed in Account Closing File. Moreover, the remaining leaves of cheques will also be
   collected from the customer.

2. Deposit of Current and PLS Saving Accounts

      A.    Deposits

   The procedure undertaken upon receiving deposits from the customers is as follows:

          Examining the deposit slip to ensure that the name and the account numbers are
           clearly indicated.

          Reconciles the amount on cheques or in cash with the amounts on deposit slips.

          Where the deposit slip is proves validate, the cash transaction, balance
           transferring or clearing transfer has been made and appropriate counterfoil is
           handed over to the customer.

      B.    Withdrawals

   The withdrawals can be made only at the branch, where the account is maintained. The
   officer under his full signature authorizes all cash withdrawals.          No third party
   withdrawal is permitted. In current account, the bank does not offer any interest.

      C.    Issuance of Cheque Book

   The accountholders request for the new cheque books by presenting the requisition slips
   along with the authority letter to the concerned office. His signatures are verified before
   giving him a new cheque book. The presence of the accountholders is compulsory to get



                                                                                                 27
   a new cheque book. But if he sends a third person to get his cheque book then the
   procedure is as follows;

          An authority letter is given to the third party by the accountholder.

          The accountholders verify the signature of the third person on that authority
           letter.

          The bank officer gets the signature of that third person to confirm whether he is
           the same to whom the accountholder has sent.

          The bank issues the new cheques book and authority letter is kept buy the bank.

      D.    Clearing Department:

   I also have performed working for two weeks in this department. The main branch
   receives the cheques from all of its branches and makes the lots of these cheques again.
   Main branch sends these cheques to the state bank of Pakistan, where a clearinghouse
   exits. In this clearinghouse, the representatives receive their cheques and go back to their
   bank's main branch.

   Later on, the main branch sends these cheques to their relevant branches where the
   validity of these cheques is verified and the accounts of the relevant clients are affected.

   The statement of clearing is submitted before 1.00 P.M. daily. The whole procedure of
   clearing takes about 2 days to be completed.

3. Remittances Department

   This department deals in transfer of money from one place to another or country by:

          Demand drafts

          Mail transfer

          Telegraphic transfer

   In this department internees are advised to observe the working of transfer of money from
   one place to another place of the country by the above modes of transferring money.



                                                                                                  28
   During my stay in this department, I observed that how demands draft be issued. The
   procedure is as follows.

   First the bank receives a written request from the customer to issue a bank draft. The
   written request is either in banks standard form or separate paper signed by the applicant
   enclosed with cash or cheques covering the amount of the draft and other charges of the
   bank.

   While issuing a bank draft, it is compulsory that the draft should be free from
   alternations. All the details must be written clearly in ink. After issuance of demand
   draft, it is handed over to the applicant. The bank advice containing the particulars of the
   draft is sent to drawer branch with its necessary information and on its presentation the
   payment of the draft is made.

4. Govt. Payments and Receipts Department

   National Bank of Pakistan is functioning as an agent of SBP. All types of Government
   Payment i.e. Pension, Salaries, Grants, Zakat, Benevolent Fund, Treasury Refund and
   Taxes Refund proceed through National Bank of Pakistan.

   Moreover, in this department all types of Government receipts i.e. Revenues, Taxes,
   Abyana, Agriculture Tax, Government Fees, EOBI Funds and Utility Bills are deposited.
   In this way, the NBP is serving great job of revenue collection.

5. Bills Collection Department

   During my training program I spent two weeks in bills collection department. Here I
   collected utility bills like gas, electricity, water and telephone etc.

6. Credit Department

   NBP give loans to the borrowers for different purposes. These loans are given for various
   sectors for different periods. Small Finance, Cash Finance, Agriculture Finance, Cash &
   Gold Loan, Personal Loans, Demand Finance, Running Finance, Corporate Finance,
   Export Import Financing, House Building Finance (Saiban) and NBP Karobar Scheme.




                                                                                                  29
b. Detailed description of the tasks assigned to me.(Details added)

   I have performed following tasks in various Departments of National Bank of Pakistan
   during my Internship;

     i.       Deposit of Current and PLS Saving Account

   In this department, I just observed how they work. Some tasks assigned to me were as
   under:

                    I was assigned responsibility to cross check amount in figures and words
                     written on cheques.

                    I used to confirm the signature of account holder.

                    I used to make scroll also for matching the amounts given in BBO and
                     cheques collected in hand.

   Scroll number provides great relief in case of mistakes committed in recording amounts. For
   example, if I edited the amount of Rs 1000 instead of 10000 then cash scroll of the branch back
   office will not match with cash receipt register of cashier at the end of the day. In order to rectify
   the amount, we will enter the scroll number in REVERSAL column, computer screen will display
   full record of all cheques and we will find our mistake.



          1- Account Opening Department

             Opening of an account after verification of customer from NADRA database.

             Recording of account number and name of applicant in account opening register.

             Issuance of letter of thanks

             Issuance of cheque book and pass book

             Recording of first deposit with the bank by customer in general ledger

             Closing of account after receiving application from customer.

   After getting trained, I was often called for opening account in case of work
   overloaded in this department.


                                                                                                            30
Detailed procedure:

In this department, I have acquired the knowledge regarding the dealings of this
department with opening current and saving account for its corporate customers and deals
with all other matters. National Bank of Pakistan has subsequent kinds of customers
under this department.

                  Trust

                  Staff

                  Firm

                  Company

                  Individual

        A. Confirmation from NADRA

I did confirmation of verification of person by NADRA before opening an account. The
person gets himself verified through NADRA in order to opening of an account.
Moreover, the customers have to bring some reference of those, who already have an
account in NBP. Some important information regarding customer e.g. the name and
account number is written on the space provided on the sample signature card.

         B. Form of Opening an Account

On confirmation, such person has been provided with an application form, to fill, known
as Account Opening Form. NBP has PLS Term account, Premium Saver account,
Premium Adman account, Call Deposit account, Current Account, PLS SNTDR account,
PLS Saving and NIDA account. I used to fill account opening form for illiterate and old
age person, who could not fill their form himself properly.

The account opening form has following particulars;

            Title of Account

            Address

            CNIC Number

                                                                                           31
             NTN Number (if available)

             Profession

             Telephone number may be of office, mobile or residential

       C. Account Opening Register

 After taking signature / thumb impression, I used to write the name, NIC number in
 account opening register.

       D. Issuance of Cheque Book

I have done work in this department. And I used to issue cheque book to customer after
taking the signature of operation manager. I also record it in cheque book register and
took the signature from customer against his/her name. The cheque book is issued to all
customers having account in bank or to those who want to avail the facility of cheque
book. First cheque book is issued to customers who get the letter of thanks and requests
for the issuance of cheque book, and first cheque book after opening of new account is
issued free of cost.

A Cheque book consists of:

       PLS 25 leaves or pages per order

       CD 50 leaves or pages per order

A special cheque book register is maintained by the bank to enter the name of person
having cheque book. It is also signed by the customer when cheque book is handed over
to the customer.

       E. Documents Enclosed by Customer at opening of account

All the customers on opening of account will have to submit the required documents as
per the status of Individual Account, Companies Account, Partnership Account, Trust
Account, Agent Account and account for Club, Society or Association.

I used to confirm, either all required documents have been provided and enclosed by
customer with form or not.


                                                                                           32
Following is the detail of documents generally required to be attached by the customers;

            Application form

            Copy of CNIC/NICOP/POC

            Copy of driving license in case CNIC is without photograph

            Applicant photograph and VNIC copy

            Copy of service card/ evidence of employment in case of salaried person

            Photographs in case of illiterate person

            Zakat exemption declaration

            Evidence for exemption of account from levy of service charges

   2-Remittance department

      Issuance and Transferring of Demand draft

      Mail Transfer

      Telegraphic Transfer

      Pay Orders

During my stay in this department, I often made drafts on behalf of customers under
instructions of my training officer. The procedure is as follows.

First the bank receives a written request from the customer to issue a bank draft. The
written request is either in banks standard form or separate paper signed by the applicant
enclosed with cash or cheques covering the amount of the draft and other charges of the
bank. While issuing a bank draft, it is compulsory that the draft should be free from
alternations. All the details must be written clearly in ink. After issuance of demand
draft, it is handed over to the applicant. The bank advice containing the particulars of the
draft is sent to drawer branch with its necessary information and on its presentation the
payment of the draft is made.

Documents required:


                                                                                               33
1- CNIC

2- In case of MT, account number where to transfer the money is required by bank.

Exchange Rates (Commission)

Pak-Rupees               Exchange Rate (Min)                    FED

1-100,000                       50 - 0.10%              16% of Exchange

100,000-1000,000                100- 0.5%               16% of Exchange

Above 1000,000                  400- 0.4%               16% of Exchange

3-Bills Collection Department:

During my training program I spent two weeks in bills collection department. Here I
collected utility bills like gas, electricity, water and telephone etc.

       Collection of gas, electricity and telephone bills.

       Making scrolls having the customer number and the amount paid

       Marking totals

       Sending in mail

4-Credit or Finance Department

       In credit department, I was assigned many duties, for example. I used to fulfill
        forms prescribed for gold loans. I used to take signatures of applicant and branch
        manager on loan form. I used to calculate amount after including interest charged
        by bank on that loan.

       I used to calculate interest amount charged by bank.

       I used to post in ledger, all the details of applicant, amount of loan, amount of
        interest, amount, weight and number of tools in gold pledged against loan etc.

       I used to record all details of applicant and amount of loan in computer.

       Preparing different kinds of documents required for the completion of procedure.
        e.g credit voucher, debit voucher and insurance voucher etc.

                                                                                             34
   5-Govt. Payments and Receipts

        I worked much in Pension payment dept. I used to record the amount given on the
         receipt provided by the customer into pension register. Then after taking
         signatures of branch manager, affixing the stamp on receipt and signature or
         thumb impression of receipt holder on pension register, customer is asked to
         receive the amount from cashier. At the end of the day, I used to make scroll of
         pension payments also.

        In advance salary payment, I worked little but I learnt a lot while working in this
         department. Some features and detail of advance salary is as under:

Salary Account must be maintained in the branch at least six months ago by govt. and
semi govt. employee only. Following documents are required for getting advance salary:

        Three Salary Slips

        Undertaking of Rs.100/- Stamp paper

        Two reference from work colleagues ( Copy of CNIC)

        DDO ( Drawing and Disbursing Officer) will sign on:

       a) Form

       b) Undertaking

    c) Three undated cheques, blank from borrower

        Rate of interest is 17.50% per annum

        Advance salary is calculated in following way:

  20 x 6000 = 120,000 will be financed @ 17.5% p/annum




                                                                                               35
                        Structure of Finance Department

    a. Finance Department Hierarchy



                                   Branch Manager



                                  Operation Manager



                                     Credit Officer



    b. Number of Employees working in Finance Department

Total numbers of employees working in Finance Department of NBP at my branch is 2
persons

    c. Finance & Accounts Operations

National Bank Finance & Accounts department consists of small but professionals’ team,
which regularly review the company's requirements and converts their personal skills into
efforts to continually improve the financial position & performance.

The team of Financial & Accounts department endeavors to build a working environment
through effective management practices and creative ideas. It enables the management to
make successful use of financial resources and human capabilities to serve customers
better.




                                                                                            36
                         Functions of Finance Department

   a. Accounting System of the National Bank of Pakistan

The accounting system of national bank of Pakistan is double entry which is highly
recognized in banking sectors of globalization, the main GAP ( generally accepted
principles) are like increase in assets is debit, decrease in assets is credit, increase in
liability is credit, decrease in liability is debit, increase is expense is debit, decrease in
expense is credit, increase in capital is credit, decrease in capital is debit, these are the
principles of accounting which is also using current National bank of Pakistan by posting
cheques, crediting amounts in accounts, because these are useful for working.

All activities of accounting department are based on authenticity and deficiency. Every
transaction all monetary action is verified very strictly before taking them into account.

   b. Finance System of the National Bank of Pakistan

Tracking of your company's financial information is the key to success. The fast pace of
today's business environment makes it absolutely essential to get your finance and
accounting department automated quickly and easily. Being able to produce
comprehensive and tailored financial reports and balance sheets will allow you to track
your revenue and expenses and see at a glance where you need to trim costs and increase
revenue in order to improve profitability and meet your financial objectives.

The finance system of National Bank of Pakistan shows, how the bank is collecting
funds, what are the sources of collecting funds and how the allocation of funds, bank is
collecting money through shares, bonds, deposits and different other income schemes.
Currently, NBP finance system is very strong as the NBP net profit rate is very high
which shows enough customers are making investment in company business.

   c. Use of electronic data in decision making

Information system is the fundamental system of any organization which consists of
connective data of all the departments. These days we are living in technology age
despite of Stone Age although the technology affects the internal work of organization as


                                                                                                 37
well as external work. Rapidly emergence of technology increased the reliability of
business world on effective Information systems.

Information system is used by top management; inform them about strength to weakness
and opportunity to threat of the organization.

The Information system of National Bank provides the answers of following management
questions;

What is the overall position of National Bank of Pakistan?

What is the financial performance for a period of time?

What is the recruiting and staffing rate in organization?

What is technical competency of staff?

At what place we stand in the market?

How do we consider our technicality and competency among our competitors?

What can be our future planning?

What strategies our company will adopt in future?

Information system totally facilitates the top level management as well as middle level
management. It provides capital working structure, revenue and financial capability of
previous and current years, worth, good will and operating activities of the organization.
Each and every recorded is on information system and provide help the management to
take quick but effective decision making.

   d. Sources of funds

Finance is the backbone of any organization, used in different means for the allocation of
funds to run the business as well as to avoid deficit. There are conservative method which
are used for the generation of financial resource are given below;

      NBP is collecting money through shares which is giving dividend money to share
       holds. Moreover, the NBP is collecting money through bonds which is giving
       fixed payment and also the principle payment back as compare to shares.


                                                                                             38
      NBP is collecting money through different income schemes to investment in
       business.

      NBP is collecting money for financing through deposits like profit and loss
       account, current account and premium saver account.

   e. Allocation of funds

Offers and Products of NBP are best example of its allocation of funds. NBP is earning
reasonable profit, as the NBP obtains 17.5% interest per annum on advance salaries. NBP
cash against loan through bank is taking 15.5% interest per annum. NBP Home Saiban
loan is also giving reasonable installment markup to NBP. Moreover, NBP uses different
methods of investments and allocating its funds, like purchasing shares and bonds of
different companies which has good market value and profit.




                                                                                          39
                                            Critical Analysis

   1. Financial Analysis (All the amounts are in thousands)

         i.    Ratio Analysis

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

A. Liquidity Ratios

   It shows the ability of NBP to cover its current liabilities with its current assets.

       a) Current Ratio

                     Particulars                     2007             2008            2009

        Total Assets                               762,193,593      817,758,326     944,232,762
        Less Operating Fixed Assets               (25,922,979)     (24,217,655)    (25,147,192)
        Less Deferred tax assets                             -       (3.204.572)     (3,062,271)
        Less other Assets                         (30,994,965)     (44,550,347)    (59,316,438)

        Current Assets                            705,275,649      745,785,752     856,706,861
        Total liability                           645,855,939      715,299,108     824,676,384
        Less liabilities against asset               (33,554)         (25,274)        (42,629)

        Less deferred tax liabilities net           (5,097,831)
        Less other liabilities                    (30,940,041)     (39,656,831)    (42,269,623)
        Current Liability                          609,784,513      675,617,003     782,364,132
        C.R = Current Assets
                                                            1.16       1.10385           1.9502
              Current Liabilities

   Interpretation

   Current ratio determines the short term liquidity position of an entity. The ratio 1.16 in
   2007 indicates that in 2007 the bank had a high ability to meet its current liabilities out of
   its assets as compare to other under consideration years. The current ratio is decreasing



                                                                                                    40
with the every year 1.10385 and 1.09502 respectively which means NBP is decreasing its
ability to meet its current obligations

    b) Sales to Working Capital Ratio

               Particulars                 2007              2008             2009
   REVENUE / SALES (NET)                 50,569,481        60,942,798        77,947,697

   Working Capital                        95,491,136        70,168,749        74,342,729

   Sales to Working Capital                       0.53              0.87              1.05

Interpretation

This ratio shows the amount of cash required to maintain a certain level of sales. This
high ratio indicates inadequate working capital, which reflects negativity on liquidity.
This ratio is increasing with the passage of time. It means that NBP is able to generate
enough sales to meet its obligations. This on one end is a positive sign also that assets are
properly utilized. But at the same time it shows that working capital is not invested in
assets till this period.

    c) Working Capital

               Particulars                 2007               2008             2009
     Current Assets                       705,275,649       745,785,752     856,706,861

     Current Liabilities                  609,784,513       675,617,003     782,364,132
     W.C= Current Assets –
                                           95,491,136        70,168,749      74,342,729
     Current Liabilities

Interpretation

Working capital is the difference of current assets minus current liabilities. This measures
the short term solvency position of the company. The Positive Working Capital means
firm has more Assets against Liabilities while the Negative Working Capital shows that
company is not in a position to pay its current liabilities when they occur. NBP have
continuous positive working capital since last 3 years revealing that it has strong ability
to meet its short term current liabilities. In 2008 company working capital has decreased
than 2007 to finance its operations but increased in 2009 as compare to 2008.
                                                                                                41
B. Leverage Ratios

     A ratio used to measure a company's mix of operating costs, giving an idea of how
     changes in output will affect operating income. Fixed and variable costs are the two types
     of operating costs; depending on the company and the industry, the mix will differ.

         a) Time Interest Earned Ratio

        Particulars                     2007                     2008                      2009
Earning Before Interest &       28,060,501+14,391,079    23,000,998+19,502,080     22,300,173+23,513,897
Taxes                                     = 42,451,580             = 42,503,078             = 45,814,070
Interest expense                           14,391,079               19,502,080                  23,513,897
Earning before tax, /interest             42,451,580 /             42,503,078 /
                                                                                  45,814,070 / 23,513,897
exp.                                       14,391,079               19,502,080
                                                 2.95                     2.18                        1.95

     Note: Interest expenses of 2009 are correct.

     Interpretation

     Time interest earned indicates whether the business has earned sufficient profits to pay its
     periodical interest liabilities or not. This indicates the number of times interest is covered
     by the profits available to pay interest charges.

     Here the Time interest earned ratio of NBP indicates that the company earned profit 2.95,
     2.18 and 1.95 times more than its interest expenses dur2ing last 3 years. This shows that
     the Company has average strong ability to meet its financial cost.




         b) Debt Ratio

                       Particulars               2007             2008              2009
             Total Debt                        645,855,939      715,299,108       824,676,384

             Total Assets                      762,193,593      817,758,326       944,232,762


                                                                                                             42
       Total Debt / Total Assets              85 %              87 %                 87 %

Interpretation

A metric used to measure a company's financial risk by determining how much of the
company's assets have been financed by debt. It indicates that 85% of the company’s total
assets are financed through the debts of the company in 2007. This ratio has been
increased in 2008 and 2009, as compared to 2007, which is not good.

   c) Debt to Equity ratio

                 Particulars                 2007             2008             2009
       Total Debt                          645,855,939     715,299,108      824,676,384

       Total Equity                         69,270,631      81,367,002        94,791,919

       Total Debt / Total Equity                   9.324             8.80             8.70

Interpretation

Debt to Equity ratio indicates the relationship between the external equities or outsider’s
funds and the internal equities or shareholders funds. This ratio measures solvency and
determine the capital structure of a company. It indicates how much the company is
leveraged. It shows that company debts are 9.324, 8.80 and 8.70 times of company’s own
equity respectively. NBP have high debt to equity ratio indicating that NBP is highly
financed with internal funds. It means it have low financial risk.

   d) Total Capitalization Ratio

                    Particulars             2007            2008              2009
         Long term Debts                  36,071,426       39,682,105       42,312,252

         Owner Equity                     69,270,631       81,367,002       94,791,919
         Long Term Debts / (Long term
         debts + Owner Equity)                     0.34            0.33           0.31


Interpretation



                                                                                              43
Total Capitalization ratio shows the financial leverage of the bank. This ratio computes
the proportion of a company's long-term debt compared to its available capital. By using
this ratio, investors can identify the amount of leverage utilized by NBP and compare it to
others, to analyze the risk exposure. It is concluded that long term debts of NBP are
slightly decreasing year by year as compared to its total available capital.



Long term debt VS long term asset

               Particulars                  2007              2008               2009
                                               33,554+          25,274+            42,629+
                                            30,940,041       39,656,831         42,269,623
    Long term Debts
                                          =30,973,595       =39,682,105        =42,312,252

                                          25,922,979 +     25,922,979 +        25,147,192+
                                            30,994,965       30,994,965         59,316,438
    Long term Assets
                                          =56,917,944       =56,917,944
                                                                               =84,463,630
    Long term debt/total asset                     1.84              1.73               2.00




   e) Current Worth / Net worth Ratio corrected

               Particulars                  2007              2008               2009
    Current worth (CA-CL)                   95,491,136       70,168,749         74,342,729

    Share holder fund                     102,459,218       116,337,654        119,556,378
    Current worth (C.A – C.L) /
                                              93.19 %           60.31 %           62.18 %
    Owner’s equity

Interpretation

This Ratio determines how much company is earning against its investment. Share
holders consider this ratio while in a company.




                                                                                               44
NBP is earning against its Investments are greater in 2007 but rapidly fall in 2008. Where
as, in 2009 the earning against investment have been slightly increased as compared to
2008.

    f) Fixed Asset ratio / Equity ratio (corrected)

        Particulars                      2007              2008                 2009
Net Fixed Assets                25905823          24205805             25112132

Long term Funds(long term
                                255914060         332388997            381705171
liabilities and net worth)

Owners Equity                   69270631          81367002             94791919

Total assets                    762193593         817758326            944232762

(Net Fixed Assets/Long
term Funds/Owners               1.114                            
Equity/Total assets)

Working of Fixed Assets:

        Particulars                      2007              2008                 2009
Capital work in progress        459487            1016513              1472451

Property & equipment            25454914          23195217             23657211

Intangible assets               8578              5925                 17530

Operating Assets/ total
                                25905823          24205805             25112132
fixed assets/net fixed assets




Interpretation

Fixed Assets ratio to equity ratio is better in 2007 than coming year’s equity investment.
It is decreasing with every passing year from 1.114 to 0732 in 2008 and 0.655 in 2009.




                                                                                             45
C. Profitability Ratios

   Profitability ratios measure the earning ability of a firm. Profitability ratios are of two
   types- those showing profitability in relation to sales and those showing profitability in
   relation to investment. Together, these ratios indicate the firm’s overall effectiveness of
   operation.

       a) Gross Profit Margin

                      Particulars              2007             2008             2009
       Gross profit                           33,629,470       37,058,030       38,458,048

       Sales Revenue                          50,569,481       60,942,798       77,947,697

       Gross profit / Sales Revenue *100            66 %             61 %         49.33 %

   Interpretation

   Gross profit ratio may indicate to what extent the selling prices of goods per unit is
   reduced without increasing losses on operations. It reflects the efficiency with which a
   firm produces its products.

   Gross profit margin indicates how well the company can generate a return at the gross
   profit level. Gross profit ratio of NBP in 2007 is good but decreasing with every next
   year which a bad signal from NBP.

       b) Net Profit Margin

                          Particulars              2007          2008          2009
          Net Profit                            19,033,773    15,458,590    18,211,846

          Sales Revenue                         50,569,481    60,942,798    77,947,697

          Net profit / Net Sales * 100             37.64 %       25.36 %       23.36 %

   Interpretation

   This is the ratio of net profit after taxes to net sales. This ratio measures the overall
   profitability of the company. The profit margin indicates how much profit a company
   produces against every one Rupee. NBP have sufficient profitability ratio (37.64%,


                                                                                                 46
25.36%, 23.36% respectively) but decreasing with every passing year. The net profit ratio
has fallen than previous years due to heavy cost of sales.

   c) Assets Turnover:

                  Particulars                2007             2008            2009
       Sales Revenue                       50,569,481        60,942,798      77,947,697

       Total Assets                       762,193,593      817,758,326      944,232,762

       Sales Revenue / Total Asset                  0.07             0.07            0.08

Interpretation

This ratio indicates that how well the NBP has used its total assets in generating sales.
This ratio measures the activity of assets and the ability of the firm to generate sales
through the use of assets. If both of these have been well managed then the sales would
go up or vice versa. Higher ratio is better for business. But due to increased amount of
assets and less increase in sales as compared to increase in assets the NBP total asset
turnover ratio has decreased in 2009.

   d) Pretax Margin

                      Particulars               2007             2008           2009
      Pretax Profit                           28,060,501      23,000,998     22,300,173

      Net Sales                               50,569,481      60,942,798     77,947,697

      Pretax Profit / Net Sales * 100            55.48%               38%            29%

Interpretation

Pretax margin means how much the NBP is earning after the operating, and before tax
other financial costs. It is a taxable income. NBP is earning 3.11% than its

sales of amount Rs.76, 642,399. Now company will determine its tax rates and

procedure to be followed.




                                                                                            47
   e) Return on Operating Assets

                Particulars               2007              2008               2009
     Net Income                             19,033,773     15,458,590         18,211,846

     Operating Assets                       25,922,979     24,217,655         25,147,192
     Net income / Operating
                                               73.4 %         63.8 %             72.4 %
     assets

Interpretation

This ratio helps in determining the ability of the management in the running business. It
measures efficiency and evaluates that how effectively company utilizes its assets to
generate return on them. Higher ratio is better for bank. National Bank was doing stable
and generating handsome operating margin. The efficiency of utilization of NBP’s assets
has been fallen in 2008 than 2007 but it is again raised in 2009 than 2008.

   f) Sales to Fixed Assets

         Particulars                 2007                  2008                  2009
 Sales Revenue                         50,569,481           60,942,798           77,947,697

 Fixed Assets                          25,922,979           24,217,655           25,147,192

 Sales / Fixed assets                          1.95                2.52                 3.10

Interpretation

This shows how efficiently the company has utilized its fixed assets to generate sales.
NBP has more efficiently utilized its fixed assets to generate sales year by year (from
2007 to 2009).

   g) Return on Assets

                    Particulars               2007         2008             2009
       Net Profit                           19,033,773    15,458,590       18,211,846

       Total Assets                      762,193,593     817,758,326      944,232,762

       Net Profit / Total Assets               2.50 %        1.89 %            1.93 %



                                                                                               48
Interpretation

This ratio indicates the proper and effective utilization of NBP’s resources. It is observed
that return on total assets has been fall in 2008 with respect to 2007. Where as, in 2009 it
is slightly increased than 2008.

    h) Dupont Return on Assets

        Particulars                  2007                  2008                    2009
(Net Profit / Sales Revenue)                0.376                  0.253                  0.233

(Sales / Total Assets)                        0.07                  0.07                   0.08
(Net Profit / Sales Revenue) /
(Sales / Total Assets
                                              5.37                  3.61                   2.91

Interpretation

This ratio measures how many dollars were generated in sales for each single dollar
invested in assets. It is observed that the Dupont ratio ha been decreasing year by year
(from 2007 to 2009).

    i) Return on Total Equity

                     Particulars             2007           2008            2009
        Net Profit                          19,033,773     15,458,590      18,211,846

        Owner’s Equity                      69,270,631     81,367,002      94,791,919

        Net Profit / Total equity             27.47 %        18.99 %         19.21 %

Interpretation

It determines the rate of return on the invested capital. It is used to compare investment in
the company against other investment opportunities. It is observed that the ROE has
decreased in year 2008 with respect to 2007, whereas it is slightly increase in 2009 with
compare to 2008.




                                                                                                  49
D. Activity Ratios

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

       a) Total Assets Turnover (corrected)

    Net Sales / Average Total Assets

                    Particulars                 2007             2008              2009
       Net Sales                              50,569,481         60,942,798       77,947,697

       Total Assets                          762,193,593        817,758,326      944,232,762

       Net Sales / Total Assets                   6.63 %              7.45 %         8.25 %




   Note: My ratio figures, formula and working are absolutely correct. But I wrote the name
   of ratio incorrect by mistake. In fact, return on operating asset ratio I already have done
   under profitability ratios head. This ratio was “Total asset turnover”, which I named as
   “Operating asset turnover” by mistake. I have rectified it now.

   Interpretation

   The ratio depicts whether the company is utilizing its assets efficiently or not. Higher
   ratio indicates that firm is obtaining the optimum level of production and the lower ratio
   shows that firm is not managing the assets in an efficient manner. NBP has increasing
   figures in this ratio with every passing year, which shows efficient utilization of assets by
   NBP.

       j) Fixed Assets Turnover

             Particulars                 2007                  2008                 2009
     Sales Revenue                         50,569,481           60,942,798          77,947,697

     Fixed Assets                          25,922,979           24,217,655          25,147,192

     Sales / Fixed assets                         1.95                  2.52               3.10

   Interpretation

                                                                                                   50
   This shows how efficiently the company has utilized its fixed assets to generate sales.
   NBP has more efficiently utilized its fixed assets to generate sales year by year (from
   2007 to 2009).




E. Cash Flow Ratios

      a) Operating Cash Flow / Total Debt

                    Particulars                2007                2008             2009
       Operating cash flow                    78,804,419           2,532,681       45,451,673

       Total Debts                           645,855,939       715,299,108        824,676,384
       Operating Cash Flow/Total
                                                      0.12             0.004               0.06
       Debt

   Interpretation

   This ratio provides an indication of a company's ability to cover total debt with its yearly
   cash flow from operations. It is observed that the ratio has decreased in year 2008 with
   respect to 2007, whereas it is slightly increase in 2009 with compare to 2008.

      b) Operating Cash Flow per Share

                 Particulars                  2007              2008                2009
       Operating cash flow               78,804,419,000      2,532,681,000 45,451,673,000

       Total Shares                         815,431,989       896,975,100        1,076,370,200
       Operating Cash Flow/Total
                                                   96.64                  2.82          42.22
       Shares

   Interpretation

   This ratio is a useful measure for the strength of NBP and the sustainability of its
   business model. Operating Cash flows has been severely decreased in 2008 with respect
   to 2007, where as, these are significantly increases in 2009.




                                                                                                  51
      c) Operating Cash Flow / Cash Dividends

                  Particulars                   2007             2008             2009
       Operating cash flow                     78,804,419         2,532,681     45,451,673

       Cash Dividends Paid                      2,831,895         6,104,898       5,820,338
       Operating Cash Flow / Cash
                                                      27.82            0.415             7.80
       Dividends



   Interpretation

   This ratio identifies the percentage of earnings (net income) per common share allocated
   to paying cash dividends to shareholders. Operating Cash flows has been severely
   decreased in 2008 with respect to 2007, where as, these are significantly increases in
   2009.

F. Bank’s Special Ratios

      a) Total Advances / Total Deposits

                  Particulars                  2007             2008             2009
        Total Advances                       340,318,930      412,986,865      475,243,431

        Total Deposits                       591,907,435      624,939,016      726,464,825
        Total Advances / Total
                                                 0.57495           0.66084        0.65418
        Deposits

   Interpretation

   Business of NBP mostly runs due to deposit of customers in different accounts. It is the
   ratio which indicates what the total deposit of customers and what the advances amount
   means issued loan By NBP.

   NBP is advancing more than from their deposits, which is showing as a good financial
   position in market. And it is earning sufficient return to meet its need.

      b) Cash to Deposit Ratio

                  Particulars                 2007             2008             2009


                                                                                                52
      Cash                                 94,873,249       106,503,756      105,827,868

      Deposits                            591,907,435       624,939,016      726,464,825

      Cash / Deposit                          0.16028          0.170422          0.15944

Interpretation

With the help of cash to deposit ratio analyst determine the liability of business like
deposits and also determine the cash available o meet the customer’s demands. NBP still
has good and stable cash /deposit ratio it can easily complete the customers deposit
demand.

    c) Equity to Deposits:

                    Particulars           2007              2008              2009
           Equity                        69,270,631        81,367,002        94,791,919

           Deposits                     591,907,435       624,939,016      726,464,825

           Equity / Deposits                     0.10              0.13              0.16

Interpretation

Equity to deposit ratio determines the liability of an organization against its stock of
capital. NBP has increased equity to deposit ratio with every passing year. This upward
trend shows that bank’s stock of capital is increasing at greater rate than its liabilities,
which is a good sign for the solvency of NBP.

     ii.      Horizontal Analysis
Horizontal analysis is also known as comparative analysis. With the help of horizontal
analysis, we judge whether the financial position of an entity is improving or worsening.
It is conducted by dividing base year values on base year values. Previous year is taken
base year. Formula for horizontal analysis is as under:

Formula = Current year value / Base year value *100




                                                                                               53
                      Balance Sheet as on December 31, 2007, 2008 & 2009 (corrected)

   Particulars           2009         2008           2007             [2008-2007]                 [2009-2007]

     ASSETS                                       (Base Year)   Difference       %age        Difference       %age
Cash and balances
with treasury         115,827,868   106,503,756    94,873,249     11,630,507       12.26        20,954,619    22.08
banks
Balances with
                       28,405,564    38,344,608    37,472,832       871,776         2.33       (9,067,268)    (24.19)
other banks
Investments – net     217,642,822   170,822,491   211,146,038   (40,323,547)       (19.10)        6496784      3.07
Lending to
financial              19,587,176    17,128,032    21,464,600    (4,336,568)       (20.20)      (1877424)     (8.75)
institutions
Advances - net        475,243,431   412,986,865   340,318,930     72,667,935       21.35        134924501     39.65
Operating fixed
                       25,147,192    24,217,655    25,922,979    (1,705,324)       (6.58)        (775787)     (2.99)
assets
Deferred tax assets
                        3,062,271     3,204,572             -                -          -                 -      -
- net
Other assets – net     59,316,438    44,550,347    30,994,965     13,555,382       43.73         28321473     91.37

Total Assets          944,232,762   817,758,326   762,193,593     55,564,733        7.29        182039169     23.88

LIABILITIES
Bills payable          10,621,169    10,219,061     7,061,902      3,157,159       44.71          3559267     50.40

Borrowings             45,278,138    40,458,926    10,815,176     29,643,750       274.09        34462962     318.65
Deposits and other
                      726,464,825   624,939,016   591,907,435     33,031,581        5.58        134557390     22.73
accounts
Liabilities against
assets subject to         42,629        25,274         33,554        (8,280)       (24.68)           9075     27.04
finance lease
Deferred tax
                                -             -     5,097,831                -          -                 -      -
liabilities - net
Other liabilities      42,269,623    39,656,831    30,940,041      8,716,790       28.17         11329582     36.62

Total Liabilities     824,676,368   715,299,108   645,855,939     69,443,169       10.75        178820429     27.68

Share capital          10,763,702     8,969,751     8,154,319       815,432        10.00          2609383     32.00

Reserves               22,681,707    19,941,047    15,772,124      4,168,923       26.43          6909583     43.81
Un-appropriated
                       61,346,510    52,456,204    45,344,188      7,112,016       15.68         16002322     35.29
profit
Surplus on
revaluation of         24,764,549    21,092,216    47,067,023   (25,974,807)       (55.19)     (22302474)     (47.38)
assets - net of tax


                                                                                                                      54
Interpretation
     Cash and balances with treasury banks by NBP is moving upward from
      12.26 to 22.08. This increasing trend is good sign from NBP.

     Balances with other banks are moved downward from positive 2.33 to minus
      24.19.

     Investment –net have upward trend. It is risen from minus 19.10 to positive
      3.07. It means bank have sufficient funds for investment in 2009 as compare
      to 2008.

     Lending to financial institutions ratio is falling from minus 20.20 to minus
      8.75. Which means entity is lending more to other financial institutions in
      2009 as compare to 2008.

     Advances-net ratio is improved in 2009 as compare to 2008, which means
      NBP has extended its advances in 2009.

     NBP is breaking negative trend in operating fixed asset ratio by reducing
      from minus 6.58 to minus 2.99. It is moving towards positive edge, which is
      an appreciable sign.

     Bills payable ratios is increased from 44.5 to 50.40 which shows a worst
      condition, it means bank has not paid its bills in 2009 which caused increased
      liability.

     Borrowing rate is decreased amazingly which means bank has repaid huge
      amount of loans in current year.

     Share capital of bank is improved amazingly up to 32% in current year as
      compare to 2008 when it was 10%%.

     Un-appropriated profits have terrifically improved in current year as
      compare to 2008. (15.68 - 35.29).

     Reserves also showing upward trend in current year which is good sign from
      NBP. It is increased from 13.74 to 43.81 in current.

     Other liabilities are moving in upward fashion in 2009 as compare to 2008.
      (28.17 – 36.62) which shows poor condition of NBP on part of liabilities.


                                                                                       55
          Overall position of balance sheet in current year is positive. Most of the items
           have improved in percentage.



       iii.     Vertical Analysis


  In vertical analysis, each item of balance sheet is compared vertically by dividing it on
  total assets o respective year. It judges the annual change in the business of the
  organization.

                       Balance Sheet as on December 31, 2007, 2008 & 2009

       Particulars              2009          2008          2007        2009     2008     2007
                                                            (Base
          ASSETS                                                         %        %           %
                                                            Year)
Cash and balances with
                              115,827,868   106,503,756    94,873,249   12.27    13.02    12.45
treasury banks
Balances with other
                               28,405,564    38,344,608    37,472,832    3.01     4.69     4.92
banks
Investments – net             217,642,822   170,822,491   211,146,038   23.05    20.89    27.70
Lending to financial
                               19,587,176    17,128,032    21,464,600    2.07     2.09     2.82
institutions
Advances – net                475,243,431   412,986,865   340,318,930   50.33    50.50    44.65

Operating fixed assets         25,147,192    24,217,655    25,922,979    2.66     2.96     3.40

Deferred tax assets - net       3,062,271     3,204,572             -    0.32     0.39        -

Other assets – net             59,316,438    44,550,347    30,994,965    6.28     5.45     4.07

Total Assets                  944,232,762   817,758,326   762,193,593   100.00   100.00   100.00

     LIABILITIES
Bills payable                  10,621,169    10,219,061     7,061,902    1.12     1.25     0.93

Borrowings                     45,278,138    40,458,926    10,815,176    4.80     4.95     1.42
Deposits and other
                              726,464,825   624,939,016   591,907,435   76.94    76.42    77.66
accounts
Liabilities against assets
                                  42,629        25,274        33,554    0.005    0.003    0.004
subject to finance lease
Deferred tax liabilities -
                                        -             -     5,097,831     -        -       0.67
net



                                                                                                   56
Other liabilities             42,269,623    39,656,831    30,940,041     4.48      4.85     4.06



Share capital                 10,763,702     8,969,751     8,154,319     1.14      1.10     1.07

Reserves                      22,681,707    19,941,047    15,772,124     2.40      2.44     2.07

Un-appropriated profit        61,346,510    52,456,204    45,344,188     6.50      6.41     5.95
Surplus on revaluation of
                              24,764,549    21,092,216    47,067,023     2.62      2.58     6.18
assets - net of tax
Total Equity + Liabilities   944,232,762   817,758,326   762,193,593   100.00     100.00   100.00



  Interpretation:


      1- Cash and balances with treasury banks have stable ratio in 2007, 2008 and
          2009.
      2- Balances with other banks ratio is improving with every passing year in
          NBP.
      3- Net investment by NBP is slight down in 2008 as compare to 2007 when it
          was 23.08 and in 2008 its 20.89 but it again improved this ratio in 200 by
          27.70, which is good sign from NBP.
      4- Operating fixed assets have upward trend during all years.
      5- Borrowing rate is decreased in 2009 after consistent values in 2007 and 2008.
      6- Bills payable ratios have mixed trend during all the years. Upward trend in
          2008 and downward trend in 2009.
      7- Deposits and other accounts have consistent trend during all the years which
          is 76.94, 7.42 and 77.66 respectively in 2007, 2008 and 2009.
      8- Share capital is showing fluctuating trend during all the years by NBP.
      9- Reserves also showing mix trend during 2007, 2008 and 2009.
      10- Surplus, un-appropriated profits and other liabilities.
      11- Overall NBP has shown positive and upward trend in balance sheet against
          total assets during 2007, 2008 and 2009, which is a good sign.


        iv.     Industrial Analysis (Competitors):

                              Gross
    Name of                                                                 Debt to
                    Years     Profit       Current         Working                         Debt Ratio
   Companies                                                              Equity Ratio
                              Ratio         Ratio          Capital
       NBP           2009     49.33%          1.95          74,342,729          8.70          0.87


                                                                                                        57
             2008    61%     1.10   70,168,749   8.80    0.87

             2007    66%     1.16   95,491,136   9.32    0.85

             2009    57%     1.09   47,639,330   10.68   0.90

   UBL       2008    54%     1.07   34,890,046   13.30   0.93

             2007    58%     1.08   35,282,454   14.34   0.92

             2009   33.80%   1.11   47,700,847   7.19    0.86

  MCB        2008    35%     1.12   43,144,763   7.37    0.87

             2007    40%     1.10   34,608,678   7.82    0.87

             2009   56.75%   1.04   11,431,457   18.21   0.94
  Askari
Commercial   2008   53.50%   1.04    7,713,992   16.05   0.94
  Bank
             2007    55%     1.06   10,606,378   16.27   0.93




                                                                58
     v.     Trend Analysis

Liquidity Ratios


            2                                 Current ratio
                                              Sales to Working Capital

           1.5


            1


           0.5


            0
                    2007     2008     2009




Leverage Ratios

                                             Debt/Equity ratio
      10                                     Total Capitalization ratio
       9                                     Time Interest Earned ratio
       8
                                             Fixed Asset ratio / Equity ratio
       7
       6
       5
       4
       3
       2
       1
       0
                 2007      2008     2009


Profitability Ratios




                                                                                59
                                                                           Net Profit Margin
      80                                                                   Return on assets
      70                                                                   Pretax Margin
      60                                                                   Return on Operating Assets
                                                                           Sales to Fixed Assets
      50
                                                                           Return on Total Equity
      40                                                                   Gross Profit Margin
      30
      20
      10
       0
                 2007              2008                2009




Activity Ratio


           9                                                        Total Asset Turnover

           8
                                                                    Fixed assets Turnover
           7
           6
           5
           4
           3
           2
           1
           0
                 2007           2008            2009




2. Future Prospectus of NBP

The future prospectus of the NBP is so much successful and bright. If we see the growth
rate of the entity is increasing day by day. The turnover of the entity as compared to the
base year is high and its orders are more than their capacity. There three types of ratios to
check the future prospectus of the entity current asset ratio, Gross Profit Ratio, Working
capital. All these represent an increasing trend. The ability of the company to pay off its
debts is also good. All calculated ratios are favorable which shows the strength of the
entity and confirms its going concern.



                                                                                                        60
                         SWOT Analysis of Organization

SWOT analysis is strategic planning method which identifies the strength, weaknesses,
opportunities and threats of an organization. SWOT analysis is conducted by analysts in
order to determine internal and external situations of the organization. It identifies the
internal and external factors which help in achieving objectives of an organization.

NBP also conducts this comprehensive analysis annually for the betterment of
organizational growth and market share.

According to my point of view, the SWOT analysis of NBP is as follows;

Strengths

       a) NBP is founder of ATM

National Bank of Pakistan is founder of ATM facility in Pakistan. In this particular
facility, money can be withdrawal from account at any time.

       b) Government’s bank

National bank of Pakistan is Government’s bank. NBP makes its policies according to the
government’s rules and regulations.

       c) Area of services

National bank of Pakistan has wide area of services as compare to other commercial
banks in Pakistan. NBP is offering services including pension to retired government

                                                                                             61
employees, traffic challans, withholding tax, property tax, fees receiving of AIOU, farms
of AIOU, utilities bills, deposits, sales tax , and various loan schemes.

        d) Western union founder

National Bank of Pakistan is first bank who started the facility of Western Union in
Pakistan. In this particular scheme money is transferred in Pakistan from abroad in a
fastest way. You can receive the money from bank by providing the name, CNIC
number and password of recipient client.



        e) Online banking

NBP has 130 online branches. Online banking reduces time and faster the services and
helps in checking the balances and daily transactions by just one key press.

        f) Broad Network

National bank of Pakistan has broad-basses network of branches throughout the country.
The customers are provided services at their nearest possible place to confirm customer
satisfied.

        g) Lack of employee’s loyalty

Employee’s turnover is very low in NBP as compare to other commercial banks.

Weakness

    a) Lack of Quality Public Dealing

Public dealing is not very effective in NBP. Employees are not taking care of the
customers, especially in pension and bills department.

    b) Communication Gap

During the internship in NBP, I found the problem of lack of communication between the
employees and management. They have not very much understanding with each other
which adversely affects the performance of employees.

    c) Poor marketing efforts

                                                                                            62
National bank of Pakistan is not promoting its corporate image and services to the
customers in a competitive and effective way.

   d) Few number of Employees

There is shortage of staff in NBP. Staff is not as per requirement. Due to which , NBP is
not efficient in its performance and services.

   e) Favoritism and Nepotism

There is favoritism and nepotism of senior employees in regard of promotions and
bonuses. Promotions and bonuses etc depend on senior’s will and decisions.

   f) Lack Of Modern Equipment

NBP is lacking upgraded and modern equipment. Most of the machines and computers
are back dated.

Opportunities

   a) Micro Financing

Today, there is need of micro financing in banking sector , other commercial banks have
already initiated this regard. NBP should also avail this opportunity and take initiative in
micro financing.

   b) Globally Progress of Banking system

Now-a-days banking system is growing quickly so NBP have opportunities to improve
the standard and get the more share in the market.

   c) Electronic Banking

Due to fast development of technology, world has become global village especially
communication sector. NBP can avail the opportunity of developed technology and
online banking system in order to provide 24 hours services to customers.

Threats

   a) Advanced Online Banking



                                                                                               63
Advanced computerized banking is a threat for NBP, which has traditional banking
system with back dated equipments and incompetent employees.

   b) Emergence Of New Competitors

NBP is facing the threat of emergence of new competitors in from of foreign banks.
These foreign banks are equipped with modern and computerized system and heavy
financial power and innovative way of promotions.

   c) Political instability

The frequent and ongoing shifting in political arena affects the performance of NBP
adversely.

   d) Customer Complaints

NBP has no specific and regular system in order to remove customer complaints. Today,
customer satisfaction is highly demanded.

   e) Increased number of banks

Increase in no. of banks is a threat for National Bank of Pakistan. Numbers of private
banks (commercial and private) are operating their business more efficiently and provide
the same facilities with more speed and quality.




                                                                                           64
                                        Conclusion

During my stay of 10 weeks at National bank of Pakistan, I came across the number of
tasks and felt a credible and professional change in my attitude. I conclude that NBP is
one of the leading banks in Pakistan.

As analysis shows that NBP is a most growing organization with highest return on
capital, largest market share amongst all Pakistani banks. NBP carries highest cost to
income ratio as compare to all other commercial banks. But still there is need for
improvement to overcome weaknesses in order to maintain its position as an “Asian
Tiger” in banking field.

Acting as Agent of Government or State Bank of Pakistan, providing Agency
Arrangements for different government organizations including WAPDA and PIA, are
the main strengths of NBP. Plus NBP is offering wide and comprehensive range of
products in market.

It also has been included that Employees’ Unions in National Bank of Pakistan are
spending their much time in organizational politics instead of doing productive work that
leads to wastage of time.

As far as my training and experience is concerned, I have learnt a lot during my
internship because I got practical knowledge before entering in the practical life after
completion of my MBA degree.

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I learn a lot about banking practice in Pakistan, rules and regulations and different
procedures followed by banks, the organizational culture and structure of the bank,
National Bank of Pakistan.




                     Recommendations for Improvements

According my evaluation and observation during my internship at NBP, bank can make
more progress by implementing following points:

      Number of professional and well qualified employees should be enhanced.

      Staff should be trained properly and should be familiar with modern technology in
       order to enhance the over all performance of NBP.

      In order to achieve job satisfaction from employees, their promotion should be on
       merit and on time according to their respective performance instead of senior’s
       own will.

      There is need of more investment in area of innovation and organizational cultural
       improvements in order to improve the environment and corporate culture of bank.

      It is recommended that there should be specific desk for customer’s complaints
       and for their information.

      Bank needs to improve its sitting arrangement, air conditioning in order to attract
       new clients and to make their customers feel happy and comfortable.

      Heavy work load can be coping nicely with the help of modern computers
       software and better control can be achieved.

      Online facilities should be enhanced up to 24 hours.


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   Separate departments should be established for all services in every branch.

   New markets needed to be located for enhancing the area of services and wide
    range of networking.

   Interest rate on deposits should be set according to the competitors and should
    always be as per customer’s satisfaction and demand.

   Promotional efforts need to expand by aggressive marketing. NBP should launch
    effective marketing plan in order to attract new customers and creating awareness
    among customers about NBP products.

                       References And Sources Used

   Mr. Nisar Ahmed (My Internship Supervisor)

   Mr. Abid Ali (Operations manager)

   Managers, Asst. Managers and Officers of other relevant Departments.

   Operating Procedures and System Files of each department.

   Auditor’s Reports and Financial Statements of National Bank of Pakistan.

   Website of NBP: www.nbp.com.pk




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                                    Annexure
Scanned Copies of “Financial Statements for the Year ended 2009-2008”




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69
70
71
72
73
Scanned Copies of “Financial Statements for the Year ended 2008-2007”




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75
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77
TRADE FINANCE OTHER BUSINESS LOANS

  AGRICULTURAL FINANCE                                             CORPORATE FINANCE

  NBP provides Agricultural Finance to solidify faith,             Working Capital and Short Term Loans:
  commitment and pride of farmers who produce some of the
  best agricultural products in the World.
                                                                   NBP specializes in providing Project Finance – Export
                                                                   Refinance to exporters – Pre-shipment and Post-shipment
  Agricultural Finance Services:                                   financing to exporters – Running finance – Cash Finance –
                                                                   Small Finance – Discounting & Bills Purchased – Export Bills
                                                                   Purchased / Pre-shipment / Post Shipment Agricultural
  “I Feed the World” program, a new product, is introduced by
                                                                   Production Loans
  NBP with the aim to help farmers maximize the per acre
  production with minimum of required input. Select farms will
  be made role models for other farms and farmers to follow,       Medium term loans and Capital Expenditure Financing:
  thus helping farmers across Pakistan to increase production.
                                                                   NBP provides financing for its clients' capital expenditure and
  Agricultural Credit:                                             other long-term investment needs. By sharing the risk
                                                                   associated with such long-term investments, NBP expedites
                                                                   clients' attempt to upgrade and expand their operation thereby
  The agricultural financing strategy of NBP is aimed at three
                                                                   making possible the fulfillment of our clients' vision. This type
  main objectives:-
                                                                   of long term financing proves the bank's belief in its client's
                                                                   capabilities, and its commitment to the country.
            Providing reliable infrastructure for agricultural
             customers
                                                                   Loan Structuring and Syndication:
            Help farmers utilize funds efficiently to further
             develop and achieve better production
                                                                   National Bank's leadership in loan syndicating stems from
            Provide farmers an integrated package of credit
             with supplies of essential inputs, technical          ability to forge strong relationships not only with borrowers but
             knowledge, and supervision of farming.                also with bank investors. Because we understand our syndicate
                                                                   partners' asset criteria, we help borrowers meet substantial
                                                                   financing needs by enabling them to reach the banks most
  Agricultural Credit (Medium Term):
                                                                   interested in lending to their particular industry, geographic
                                                                   location and structure through syndicated debt offerings. Our
            Production and development                            syndication capabilities are complemented by our own capital
            Watercourse improvement                               strength and by industry teams, who bring specialized
                                                                   knowledge to the structure of a transaction.
            Wells
            Farm power
            Development loans for tea plantation
                                                                   Cash Management Services:

            Fencing
                                                                   With National Bank's Cash Management Services (in process
            Solar energy
                                                                   of being set up), the customer's sales collection will be
            Equipment for sprinklers
                                                                   channeled through vast network of NBP branched spread
                                                                   across the country. This will enable the customer to manage
  Farm Credit:                                                     their company's total financial position right from your desktop
                                                                   computer. They will also be able to take advantage of our
  NBP also provides the following subsidized with ranges of 3      outstanding range of payment, ejection, liquidity and
  months to 1 year on a renewal basis.                             investment services. In fact, with NBP, you'll be provided
                                                                   everything, which takes to manage your cash flow more
                                                                   accurately.
            Operating loans
            Land improvement loans
            Equipment loans for purchase of tractors, farm
             implements or any other equipment
            Livestock loans for the purchase, care, and feeding
             of                                        livestock


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Production Loans:


 Production loans are meant for basic inputs of the farm and are
short term in nature. Seeds, fertilizers, sprayers, etc are all
covered under this scheme.


 If you require any further information, please do not hesitate to
e-mail us.

 




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