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111505ABDUL QAYYUM

MARKETING

“ASSIGNMENTS”

PEST Analyses of Askari Bank

Resource Person

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(Shehla Sohaib)

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EXTERNAL ENVIRONMENT OR PEST ANALYSISAskari Bank

1) History . Askari Bank Ltd (formerly Askari Commercial Bank) was

incorporated in Pakistan on October 9, 1991, as a Public Limited Company.

It started its operations on April 1, 1992. The bank principally deals with

banking, as defined in the Banking Companies Ordinance, 1962. The Bank

is listed on the Karachi, Lahore & Islamabad Stock Exchanges and its shares

are currently the highest quoted from among the new private sector banks

in Pakistan.

2) Political Ethical and Legal Factor’s . Although Pakistan is currently under

democratic rule, still the political condition is quite volatile. The country

has seen various martial laws, coupes, wars with neighboring India, Afghan

war etc. With the increasing turmoil in northern areas and Baluchistan, the

situation is very unpredictable. Pakistan’s relations with its neighboring

countries also see various ups and downs except with China, which also

instills instability. The relations with America also face criticism from both

internal and external stake holders. Thus over all political scenario has

worsened over the period of time and does not depict a good picture. With

such political conditions no business can withstand the challenges and

banks are no exception to it. Also based on Pakistan’s political scenario,

IMF and other global financial institutes are hesitant to provide assistance

to the financial problems to Pakistan. In such circumstances, banks face the

challenges of lower profits, insecurity among the investors to invest in the

banks in Pakistan etc. As Askari bank is working under the umbrella of

AWT, it does not get the same pressure as other banks do; still the political

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conditions equally play havoc to the strategic and financial goals of the

bank. There is nothing negative about ethical behavior of the bank. The

bank approach towards the social welfare is not much significant.

3) Economic and Demographic Factors

a) Economic

i) Pakistan’s economy has been facing unprecedented challenges over

last few years. This has been majorly caused due to

ii) Severe macroeconomic crises that resulted from policy-induced

imbalances from previous years;

iii)A sharp deterioration in Pakistan’s net external terms of trade as a

result of the spike in recent years in world commodity prices of

which Pakistan is a net importer and its adverse impact on our

balance of payments;

iv) The significant supply shocks suffered by the economy in the

provision of energy due to high oil prices and sector management

problems, especially circular debt management;

v) Adverse effect of the turmoil in global financial markets that caused

the sharp decline in the global demand for greater stability and

positive trends in macroeconomic indicators other than inflation.

vi) Askari Bank has expanded into a network of 226 branches, including

31 dedicated Islamic banking branches, and a wholesale bank branch

in Bahrain. A shared network of 4,173 online ATMs covering all

major cities in Pakistan supports the delivery channels for customer

service.

vii) Askari Bank achieved planned growth in business and operations

during 2009. The total assets of the Bank amounted to Rs.254 billion

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as at December 31, 2009, registering an increase of 23 percent over

December 31, 2008.Customer deposits reached Rs.206 billion by

December 31, 2009, an increase of 23 percent over December 31,

2008. Profit after taxation showed an increase of 187% at Rs.1.11

billion, when compared with last year’s Rs.386 million

b) Demographic

i) Bank is providing services to both genders, public, business, small

and big organizations.

ii) They have their branches all over the big cities.

iii)Their main focus of servicing is armed forces.

4) Social, Cultural and Religious Factor’s . In Pakistan, we find a lot of

variety in the social structure. Pakistan is a densely populated country with

high birth rates and bigger families. The population is almost 50-50

balanced among the male and female, however it is male dominated. In

urban parts, male members of the family make the earning majorly. Small

percentage of female population is in earning the livelihood for a family. In

rural areas, although male are dominant, both the genders strive to keep

their family matters running. Literacy ratio is quite low (~ 30%) where

female are less educated among this percentage. High unemployment

prevails in the population. There is a high trend of moving from rural to

urban areas for making the income. Population is strongly bonded to the

religious and regional cultural norms. With such socio-cultural setup,

majority of the population is under served with the banking facilities. Less

branches, limited access to ATMs and online branches, limited options of

investment are the major challenges banks have in the current scenario.

The banks have a very difficult task in getting customers, making them

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understand their policies and making new market segments. The banking

sector has a very limited marketing scope in this regard. Askari bank, being

the major bank for the armed forces, has reach from high officials to the

low ranks in armed forces. With this distinction, it strives to bring in

general public as its customer and to make profits for its business. This

helps Askari bank to keep its market share, even enhance it and gives a

competitive edge. With its diverse products and services for various

sectors like agriculture, textile and industry, the bank thrives to meet the

market requirements. The bank is abiding the banking rules of the country

so they are not facing any religious problem.

5) Technological and Physical factor’s

a) In banking sector, Technology has played a pivotal role in meeting

customer expectations, particularly with respect to speed and quality of

service. Although a third world country, Pakistan is keeping abreast

with the technological advancements in this field.

b) Although the infrastructure may not be that good, but still it’s enough to

meet the requirements in the country. Availability of computers and

high speed internet is improving day by day particularly in the urban

parts of Pakistan. Extensive growth of the cellular industry has also

brought about a new shape in the tech. industry. Mobile and online

banking has been on rise with the improvement of facilities and

education of the customers.

c) Improvement in the infrastructure and technology for connecting whole

of the network with central system has also been remarkable. Newer

options, solutions and products are now available for banks for

connecting their branches and networks in more robust manner.

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Introduction of 1-link systems has joined together all major banks’

networks 81 online. It is among the corporate objectives of Askari bank

to maximize use of technology to ensure cost-effective operations,

efficient management information system, enhanced delivery capability

and high service standards. Askari Bank is proud of its pioneering role

in providing the most modern and technologically advanced services. In

2008, the Electronic Technology Division embarked upon an ambitious

programme of modernizing the IT of Askari Bank. This programme

seeks to introduce cutting edge IT best practices, processes, tools,

applications and more, enabling IT to be closely aligned with business in

terms of growth, efficiency, risk control and compliance, thus creating

an agile and lean technology organization.