INTERNSHIP REPORT ON NATIONAL BANK OF PAKISTAN

Brief introduction of organizationBrief introduction of organization

National Bank of Pakistan was established on November 9, 1949 under National Bank of Pakistan was established on November 9, 1949 under the national bank ordinance of 1949.the national bank ordinance of 1949.

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

It occupies a unique position in the financial sector of Pakistan both It occupies a unique position in the financial sector of Pakistan both by offering treasury services on behalf of State Bank of Pakistan and by offering treasury services on behalf of State Bank of Pakistan and undertaking the function of government receipts and payments.undertaking the function of government receipts and payments.

National Bank of Pakistan extensive domestic branch network of National Bank of Pakistan extensive domestic branch network of about 1287 branches all over the country and global presence through about 1287 branches all over the country and global presence through 22 overseas offices. And now online banking facility is available in 30 22 overseas offices. And now online banking facility is available in 30 braches of NBPbraches of NBP

OVERVIEW OF THE ORGNIZATIONOVERVIEW OF THE ORGNIZATION

BRIEF HISTORYBRIEF HISTORY It was incorporated in 1949 under the National 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 Ordinance 1949. Initially, it was owned by Govt. of Pakistan and later on moved to modern commercial banking.moved to modern commercial banking.

The Bank commenced its operations from November 20, 1949 at six important jute The Bank commenced its operations from November 20, 1949 at six important jute centers in the East Pakistan and directed its resources in financing of jute crop.centers in the East Pakistan and directed its resources in financing of jute crop.

The Bank’s Karachi and vu solutions Lahore offices were subsequently The Bank’s Karachi and vu solutions Lahore offices were subsequently opened in December 1949. The National Bank of Pakistan was also opened in December 1949. The National Bank of Pakistan was also nationalized, along with other banks, in January 1974. The Bank of nationalized, along with other banks, in January 1974. The Bank of Bahawalpur was also merged into this Bank.Bahawalpur was also merged into this Bank.

The Bank of the Year 2001, 2002, 2004 and 2005 Award by The Banker The Bank of the Year 2001, 2002, 2004 and 2005 Award by The Banker Magazine, the Best Foreign Exchange Bank –– Pakistan for 2004, 2005, Magazine, the Best Foreign Exchange Bank –– Pakistan for 2004, 2005, 2006 and 20072006 and 2007

NATURE OF THE ORGNIZATIONNATURE OF THE ORGNIZATION

National Bank of Pakistan provides both commercial as well as pubic 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. sector services. NBP is serving as a lead player in the debt equity market. NBP has extended its area of services beyond the country.NBP has extended its area of services beyond the country.

The bank is engaged in providing commercial banking and related The bank is engaged in providing commercial banking and related services in Pakistan and overseas. NBP is the main business partner for the services in Pakistan and overseas. NBP is the main business partner for the Government of Pakistan, with special emphasis on fostering Pakistan's Government of Pakistan, with special emphasis on fostering Pakistan's economic growth.economic growth.

Corporate Banking NBP further consolidated its position as one of the top playersCorporate Banking NBP further consolidated its position as one of the top playersin corporate and investment banking of the country in 2007 and has built a strong in corporate and investment banking of the country in 2007 and has built a strong customer relationship with the premier corporate client.customer relationship with the premier corporate client.

NATURE OF THE ORGNIZATIONNATURE OF THE ORGNIZATION

VISION VISION To be recognized as a leader and a brand synonymous with trust, highest To be recognized as a leader and a brand synonymous with trust, highest

standards of service quality, international best practices and social standards of service quality, international best practices and social responsibility.responsibility.

MISSIONMISSIONNBP will aspire to the values that make NBP truly the Nation’s Bank, by:NBP will aspire to the values that make NBP truly the Nation’s Bank, by:

Institutionalizing a merit and performance culture.Institutionalizing a merit and performance culture. Creating a distinctive brand identity by providing the highest standards of Creating a distinctive brand identity by providing the highest standards of

services. services. Adopting the best international vu solutions copy right data management Adopting the best international vu solutions copy right data management

practicespractices Maximizing stake holder's value.Maximizing stake holder's value. Discharging our responsibility as a good corporate citizen of Pakistan and Discharging our responsibility as a good corporate citizen of Pakistan and

in countries Where we operate.in countries Where we operate.

NATURE OF THE ORGNIZATIONNATURE OF THE ORGNIZATION

GOALSGOALS

““To enhance profitability and maximization of To enhance profitability and maximization of NBP NBP share through increasing leverage share through increasing leverage of existing customer base and diversified range of products.”of existing customer base and diversified range of products.”

CORE VALUESCORE VALUES

Highest standards of Integrity.Highest standards of Integrity. Institutionalizing team work and performance culture.Institutionalizing team work and performance culture. Excellence in service.Excellence in service. Advancement of skills for tomorrow’s challenges.Advancement of skills for tomorrow’s challenges. Awareness of social and community responsibility.Awareness of social and community responsibility. Value creation for all stakeholders.Value creation for all stakeholders.

BUSINESS VOULUME NUMBERS OF SHARES ISSUED BY NBP IN 31/12/2009

Categories of share holdersCategories of share holders No of share No of share holdersholders

SHARESHELD SHARESHELD PERCENTAGE PERCENTAGE

GOVERNMENT OF PAKISTAN GOVERNMENT OF PAKISTAN 3 3 4,338,409 4,338,409 0.4031 0.4031

STATE BANK OF PAKISTAN STATE BANK OF PAKISTAN 1 1 809,408,116 809,408,116 75.1979 75.1979

DIRECTORS CEO & DIRECTORS CEO & CHILDEREN CHILDEREN

1 1 22,347 22,347 0.00210.0021

ASSOCIATED COMPANIESASSOCIATED COMPANIES 2 2 5,808 5,808 0.0005 0.0005

EXECUTIEVES EXECUTIEVES 22 22 69,838 69,838 0.0065 0.0065

NIT & ICP NIT & ICP 3 3 10,089,752 10,089,752 0.9374 0.9374

BANK DF AND NBPFBANK DF AND NBPF 40 40 14,818,881 14,818,881 1.3767 1.3767

INSURANCE COMPANIES INSURANCE COMPANIES 24 24 10,639,396 10,639,396 0.9885 0.9885

BUSINESS VOULUME NUMBERS OF SHARES ISSUED BY NBP IN 31/12/2009

Categories of share holdersCategories of share holders No of share No of share holdersholders SHARESHELDSHARESHELD PERCENTAGE PERCENTAGE

MODARBA & MUTUAL FUNDSMODARBA & MUTUAL FUNDS 41 41 54,300,194 54,300,194 5.0448 5.0448

GENERAL PUBLIC LOCAL GENERAL PUBLIC LOCAL 16,23716,237 60,604,35660,604,356 5.63045.6304

GENERAL PUBLIC FOREIGNGENERAL PUBLIC FOREIGN 17 17 204,856 204,856 0.0190 0.0190

OTHERSOTHERS 335 335 38,012,089 38,012,089 3.5315 3.5315

FOREIGN COMPANIESFOREIGN COMPANIES 34 34 50,069,644 50,069,644 4.6517 4.6517

PUBLIC SECTOR COMPANIES PUBLIC SECTOR COMPANIES 4 4 23,786,260 23,786,260 2.2099 2.2099

TOATAL TOATAL 16764 16764 1,076,370,226 1,076,370,226 100.000 100.000

PRODUCT LINESPRODUCT LINES

Competitors of National Bank of Competitors of National Bank of PakistanPakistan

Allied Bank LimitedAllied Bank LimitedBank Al-Falah Limited.Bank Al-Falah Limited.Bank of Punjab LimitedBank of Punjab LimitedHabib Bank LimitedHabib Bank LimitedUnited Bank LimitedUnited Bank LimitedVU solutions LimitedVU solutions LimitedMuslim Commercial Bank LimitedMuslim Commercial Bank LimitedStandard Chartered Bank Limited Standard Chartered Bank Limited Askari Commercial Bank LimitedAskari Commercial Bank LimitedBank Al-Habib LimitedBank Al-Habib Limited

Training ProgramTraining Program

I worked in the following departments of NBP:I worked in the following departments of NBP:

A brief introduction of these departments is as A brief introduction of these departments is as underunder

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

Account Opening Account Opening (2 Weeks)(2 Weeks) Remittances and Bills Remittances and Bills (2 Weeks)(2 Weeks) Utility Bills Collection Utility Bills Collection (2 Weeks)(2 Weeks) Govt. Payments and Receipts Govt. Payments and Receipts (2 Weeks)(2 Weeks)

Training ProgramTraining Program

Account Opening Department:Account Opening Department:

In this department, I have acquired the knowledge regarding In this department, I have acquired the knowledge regarding dealings of this departmentdealings of this department

National Bank of Pakistan has subsequent kinds of customers under this department.

•Trust•Staff•Firm•Company•Individual

Account Opening DepartmentAccount Opening DepartmentFollowing steps are done in this department.Following steps are done in this department.

Opening of an account after verification of customer Opening of an account after verification of customer from NADRA database.from NADRA database.Recording of account number and name of applicant in Recording of account number and name of applicant in account opening register.account opening register.Issuance of letter of thanksIssuance of letter of thanksIssuance of cheque book and pass bookIssuance of cheque book and pass bookRecording of first deposit with the bank by customer in Recording of first deposit with the bank by customer in general ledgergeneral ledgerClosing of account after receiving application from Closing of account after receiving application from customer.customer.

Clearing DepartmentClearing Department

I also have performed working for two weeks in thisI also have performed working for two weeks in this

department. The main branch receives the chequesdepartment. The main branch receives the cheques

from all of its branches and makes the lots of these from all of its branches and makes the lots of these

cheques again. Main branch sends these cheques to cheques again. Main branch sends these cheques to

the state bank of Pakistan, vu solutions copy right data where a the state bank of Pakistan, vu solutions copy right data where a clearinghouse clearinghouse

exits. In this clearinghouse, the representatives exits. In this clearinghouse, the representatives

receive their cheques and go back to their bank's mainreceive their cheques and go back to their bank's main

branch. branch.

Later on, the main branch sends these cheques to theirLater on, the main branch sends these cheques to their

relevant branches where the validity of these chequesrelevant branches where the validity of these cheques

is verified and the accounts of the relevant clients areis verified and the accounts of the relevant clients are

affected.affected.

Remittances DepartmentRemittances Department

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

Demand draftsDemand drafts

Mail transferMail transfer

Telegraphic transferTelegraphic transfer

Govt. Payments and Receipts Govt. Payments and Receipts DepartmentDepartment

National Bank of Pakistan is functioning as an agent of National Bank of Pakistan is functioning as an agent of SBP. All types of Government Payment i.e. Pension, SBP. All types of Government Payment i.e. Pension, Salaries, Grants, Zakat, Benevolent Fund, Treasury Salaries, Grants, Zakat, Benevolent Fund, Treasury Refund and Taxes Refund proceed through National Refund and Taxes Refund proceed through National Bank of Pakistan.Bank of Pakistan.Moreover, in this department all types of Government Moreover, in this department all types of Government receipts i.e. Revenues, Taxes, Abyana, Agriculture receipts i.e. Revenues, Taxes, Abyana, Agriculture Tax, Government Fees, EOBI Funds and Utility Bills Tax, Government Fees, EOBI Funds and Utility Bills are deposited. In this way, the NBP is serving great job are deposited. In this way, the NBP is serving great job of revenue collection.of revenue collection.

During my training program I spent two weeks in billsDuring my training program I spent two weeks in bills

collection department. Here I collected utility bills like gas,collection department. Here I collected utility bills like gas,

electricity, water and telephone etc.electricity, water and telephone etc.

Bills Collection Department

Credit DepartmentCredit Department

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

Structure of Finance DepartmentStructure of Finance Department

Branch ManagerBranch Manager

Operation ManagerOperation Manager

Credit OfficerCredit Officer

Accounting System of the National Accounting System of the National Bank of PakistanBank of Pakistan

The accounting system of national bank of Pakistan is double entryThe accounting system of national bank of Pakistan is double entrywhich is highly recognized in banking sectors of globalization, the mainwhich is highly recognized in banking sectors of globalization, the mainGAP ( generally accepted principles) are like increase in assets isGAP ( generally accepted principles) are like increase in assets isdebit, decrease in assets is credit, increase in liability is credit,debit, decrease in assets is credit, increase in liability is credit,decrease in liability is debit, increase is expense is debit, decrease indecrease in liability is debit, increase is expense is debit, decrease inexpense is credit, increase in capital is credit, decrease in capital isexpense is credit, increase in capital is credit, decrease in capital isdebit, these are the principles of accounting which is also using currentdebit, these are the principles of accounting which is also using currentNational bank of Pakistan by posting cheques, crediting amounts inNational bank of Pakistan by posting cheques, crediting amounts inaccounts, because these are useful for working.accounts, because these are useful for working.

All activities of accounting department are based on authenticity andAll activities of accounting department are based on authenticity anddeficiency. Every transaction all monetary action is verified very strictlydeficiency. Every transaction all monetary action is verified very strictlybefore taking them into account. before taking them into account.

Finance System of the National Bank Finance System of the National Bank of Pakistanof Pakistan

Tracking of your company's financial information is the key to success.Tracking of your company's financial information is the key to success.The fast pace of today's business environment makes it absolutelyThe fast pace of today's business environment makes it absolutelyessential to get your finance and accounting department automatedessential to get your finance and accounting department automatedquickly and easily. Being able to produce comprehensive and tailoredquickly and easily. Being able to produce comprehensive and tailoredfinancial reports and balance sheets will allow you to track yourfinancial reports and balance sheets will allow you to track yourrevenue and expenses and see at a glance where you need to trimrevenue and expenses and see at a glance where you need to trimcosts and increase revenue in order to improve profitability andcosts and increase revenue in order to improve profitability andmeet your financial objectives. meet your financial objectives.

The finance system of National Bank of Pakistan shows, how the bank isThe finance system of National Bank of Pakistan shows, how the bank iscollecting funds, what are the sources of collecting funds and how thecollecting funds, what are the sources of collecting funds and how theallocation of funds, bank is collecting money through shares, bonds, depositsallocation of funds, bank is collecting money through shares, bonds, depositsand different other income schemes. Currently, NBP finance system is veryand different other income schemes. Currently, NBP finance system is verystrong as the NBP net profit rate is very high which shows enough customersstrong as the NBP net profit rate is very high which shows enough customersare making investment in company business.are making investment in company business.

Use of Electronic Data Use of Electronic Data

Information system is the fundamental system of anyInformation system is the fundamental system of anyorganization which consists of connective data of all theorganization which consists of connective data of all thedepartments. These days we are living in technology agedepartments. These days we are living in technology agedespite of Stone Age although the technology affects thedespite of Stone Age although the technology affects theinternal work of organization as well as external work.internal work of organization as well as external work.Rapidly emergence of technology increased the reliabilityRapidly emergence of technology increased the reliabilityof business world on effective Information systems. of business world on effective Information systems.

Information system is used by top management; informInformation system is used by top management; informthem about strength to weakness and opportunity to threatthem about strength to weakness and opportunity to threatof the organization.of the organization.

Sources of fundsSources of funds

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

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

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

Allocation of fundsAllocation of funds

Offers and Products of NBP are best example of itsOffers and Products of NBP are best example of itsallocation of funds. NBP is earning reasonable profit, as theallocation of funds. NBP is earning reasonable profit, as theNBP obtains 17.5% interest per annum on advanceNBP obtains 17.5% interest per annum on advancesalaries. NBP cash against loan through bank is takingsalaries. NBP cash against loan through bank is taking15.5% interest per annum. NBP Home Saiban loan is also15.5% interest per annum. NBP Home Saiban loan is alsogiving reasonable installment markup to NBP. Moreover,giving reasonable installment markup to NBP. Moreover,NBP uses different methods of investments and allocatingNBP uses different methods of investments and allocatingits funds, like purchasing shares and bonds of differentits funds, like purchasing shares and bonds of differentcompanies which has good market value and profit.companies which has good market value and profit.

Ratio analysis is the calculation and comparison of ratiosRatio analysis is the calculation and comparison of ratios

which are derived from the information in a company'swhich are derived from the information in a company's

Financial statements. Financial ratios are usually Financial statements. Financial ratios are usually

expressed as a percent or as times per period.expressed as a percent or as times per period.

Ratio AnalysisRatio Analysis

a)      Current RatioParticulars 2007 2008 2009

Total Assets 762,193,593 817,758,326 944,232,762Less Operating Fixed Assets -25,922,979 -24,217,655 -25,147,192Less 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 645,855,939 715,299,108 824,676,384Less liabilities against asset -33,554 -25,274 -42,629

Less deferred tax liabilities net -5,097,831Less 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 Current Liabilities 1.16 1.10385 1.9502

Current RatioCurrent Ratio

Sales to Working CapitalSales to Working Capital

a)      Sales to Working Capital RatioParticulars 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

Working CapitalWorking Capital

a)      Working CapitalParticulars 2007 2008 2009

Current Assets 705,275,649 745,785,752 856,706,861

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

Debt to Equity RatioDebt to Equity Ratio

a)      Debt to Equity ratioParticulars 2007 2008 2009

Total Debt 645,855,939 715,299,108 824,676,384Total Equity 69,270,631 81,367,002 94,791,919

Total Debt / Total Equity 9.324 8.8 8.7

Gross Profit MarginGross Profit Margin

Particulars 2007 2008 2009Gross profit 33,629,470 37,058,030 38,458,048Sales Revenue 50,569,481 60,942,798 77,947,697Gross profit / Sales Revenue *100 66% 61% 49.33%

Net Profit MarginNet Profit Margin

Particulars 2007 2008 2009Net Profit 19,033,773 15,458,590 18,211,846Sales Revenue 50,569,481 60,942,798 77,947,697

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

Pretax MarginPretax Margin

Particulars 2007 2008 2009

Pretax Profit 28,060,501 23,000,998 22,300,173Net Sales 50,569,481 60,942,798 77,947,697

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

Return on Operating AssetsReturn on Operating Assets

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

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

Net income / Operating assets 73.40% 63.80% 72.40%

Sales to Fixed AssetsSales to Fixed Assets

Particulars 2007 2008 2009Sales Revenue 50,569,481 60,942,798 77,947,697Fixed Assets 25,922,979 24,217,655 25,147,192

Sales / Fixed assets 1.95 2.52 3.1

Total Assets TurnoverTotal Assets Turnover

Particulars 2007 2008 2009Net Sales 50,569,481 60,942,798 77,947,697Total Assets 762,193,593 817,758,326 944,232,762

Net Sales / Total Assets 6.63% 7.45% 8.25%

Total Advances / Total DepositsTotal Advances / Total Deposits

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

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

Total Advances / Total Deposits 0.57495 0.66084 0.65418

Particulars 2009 2008 2007

ASSETS (Base Year)Differenc

e %ageDifference %age

Cash and balances with treasury banks 115,827,868 106,503,756 94,873,249 11,630,507 12.26 20,954,619 22.08

Balances with other banks 28,405,564 38,344,608 37,472,832 871,776 2.33 -9,067,268 -24.19

Investments – net 217,642,822 170,822,491 211,146,038 ######### -19.1 6496784 3.07

Lending to financial institutions 19,587,176 17,128,032 21,464,600 -4,336,568 -20.2 -1877424 -8.75

Advances - net 475,243,431 412,986,865 340,318,930 72,667,935 21.35 134924501 39.65

Operating fixed assets 25,147,192 24,217,655 25,922,979 -1,705,324 -6.58 -775787 -2.99

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

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

LIABILITIESBills payable 10,621,169 10,219,061 7,061,902 3,157,159 44.71 3559267 50.4

Borrowings 45,278,138 40,458,926 10,815,176 29,643,750 274.09 34462962 318.65

Deposits and other accounts 726,464,825 624,939,016 591,907,435 33,031,581 5.58 134557390 22.73

Liabilities against assets subject to finance lease 42,629 25,274 33,554 -8,280 -24.68 9075 27.04

Deferred tax liabilities - net - - 5,097,831 - - - -

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 2609383 32

Reserves 22,681,707 19,941,047 15,772,124 4,168,923 26.43 6909583 43.81

Un-appropriated profit 61,346,510 52,456,204 45,344,188 7,112,016 15.68 16002322 35.29

[2008-2007] [2009-2007]

Horizontal AnalysisHorizontal Analysis

Vertical AnalysisVertical AnalysisParticulars 2009 2008 2007 2009 2008 2007

ASSETS (Base Year) % % %

Cash and balances with treasury banks 115,827,868 106,503,756 94,873,249 12.27 13.02 12.45

Balances with other banks 28,405,564 38,344,608 37,472,832 3.01 4.69 4.92

Investments – net 217,642,822 170,822,491 211,146,038 23.05 20.89 27.7

Lending to financial institutions 19,587,176 17,128,032 21,464,600 2.07 2.09 2.82

Advances – net 475,243,431 412,986,865 340,318,930 50.33 50.5 44.65

Operating fixed assets 25,147,192 24,217,655 25,922,979 2.66 2.96 3.4

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 944,232,762 817,758,326 762,193,593 100 100 100

LIABILITIESBills 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 4.8 4.95 1.42

Deposits and other accounts 726,464,825 624,939,016 591,907,435 76.94 76.42 77.66

Liabilities against assets subject to finance lease 42,629 25,274 33,554 0.005 0.003 0.004

Industry AnalysisIndustry Analysis

Current Ratio

Working Capital

2009 49.33% 1.95 74,342,729 8.7 0.872008 61% 1.1 70,168,749 8.8 0.872007 66% 1.16 95,491,136 9.32 0.852009 57% 1.09 47,639,330 10.68 0.92008 54% 1.07 34,890,046 13.3 0.932007 58% 1.08 35,282,454 14.34 0.922009 33.80% 1.11 47,700,847 7.19 0.862008 35% 1.12 43,144,763 7.37 0.872007 40% 1.1 34,608,678 7.82 0.87

Askari 2009 56.75% 1.04 11,431,457 18.21 0.94Commercial 2008 53.50% 1.04 7,713,992 16.05 0.94

Bank 2007 55% 1.06 10,606,378 16.27 0.93

MCB

Debt to Equity Ratio

Debt Ratio

NBP

UBL

Name of Companies Years

Gross Profit Ratio

Liquidity RatiosLiquidity Ratios

i. Trend Analysis

Liquidity Ratios

0

0.5

1

1.5

2

2007 2008 2009

Current ratio

Sales to Working Capital

Profitability RatioProfitability Ratio

Profitability Ratios

0

10

20

30

40

50

60

70

80

2007 2008 2009

Net Profit Margin

Return on assets

Pretax Margin

Return on Operating Assets

Sales to Fixed Assets

Return on Total Equity

Gross Profit Margin

Activity ratiosActivity ratios

Activity Ratio

0

1

2

3

4

5

6

7

8

9

2007 2008 2009

Total Asset Turnover

Fixed assets Turnover

Leverage RatiosLeverage Ratios

Leverage Ratios

0123456789

10

2007 2008 2009

Debt/Equity ratio

Total Capitalization ratio

Time Interest Earned ratio

Fixed Asset ratio / Equity ratio

Future Prospectus of NBPFuture Prospectus of NBP

The future prospectus of the NBP is so much successfulThe future prospectus of the NBP is so much successfuland bright. If we see the growth rate of the entity isand bright. If we see the growth rate of the entity isincreasing day by day. The turnover of the entity asincreasing day by day. The turnover of the entity ascompared to the base year is high and its orders are morecompared to the base year is high and its orders are morethan their capacity. There three types of ratios to check thethan their capacity. There three types of ratios to check theFuture prospectus of the entity current asset ratio, GrossFuture prospectus of the entity current asset ratio, GrossProfit Ratio, Working capital. All these represent an Profit Ratio, Working capital. All these represent an increasing trend. The ability of the company to pay off itsincreasing trend. The ability of the company to pay off itsdebts is also good. All calculated ratios are favorable whichdebts is also good. All calculated ratios are favorable whichshows the strength of the entity and confirms its goingshows the strength of the entity and confirms its goingconcern.concern.

SWOT ANALYSISSWOT ANALYSIS

StrengthsStrengths

NBP is founder of ATMNBP is founder of ATM National Bank of Pakistan is founder of ATMNational Bank of Pakistan is founder of ATMfacility in Pakistan. In this particular vu solutions facility, moneyfacility in Pakistan. In this particular vu solutions facility, moneycan be withdrawal from account at any time.can be withdrawal from account at any time.

Government’s bankGovernment’s bankNational bank of Pakistan is Government’s bank.National bank of Pakistan is Government’s bank.NBP makes its policies according to TheNBP makes its policies according to Thegovernment’s rules and regulations. government’s rules and regulations.

Western union founderWestern union founderNational Bank of Pakistan is first bank who started the facility ofNational Bank of Pakistan is first bank who started the facility ofWestern Union in Pakistan. In this particular scheme money isWestern Union in Pakistan. In this particular scheme money istransferred in Pakistan from abroad in a fastest way. You can receivetransferred in Pakistan from abroad in a fastest way. You can receivethe money from bank by providing the name, CNIC number and password of the money from bank by providing the name, CNIC number and password of recipient client.recipient client.

WeaknessWeakness

Communication GapCommunication Gap During the internship in NBP, I found the problem of lack of communication During the internship in NBP, I found the problem of lack of communication

Between the employees and management. They have not very much Between the employees and management. They have not very much

understanding with each other which adversely affects the performance of understanding with each other which adversely affects the performance of

Employees.Employees.

Lack Of Modern EquipmentLack Of Modern EquipmentNBP is lacking upgraded and modern equipment. Most of the machines andNBP is lacking upgraded and modern equipment. Most of the machines and

computers are back dated.computers are back dated.

Few number of EmployeesFew number of EmployeesThere is shortage of staff in NBP. Staff is not as per requirement. Due to whichThere is shortage of staff in NBP. Staff is not as per requirement. Due to which

, NBP is not efficient in its performance and services., NBP is not efficient in its performance and services.

OpportunitiesOpportunitiesMicro FinancingMicro Financing

Today, there is need of micro financing in banking sector , other commercialToday, there is need of micro financing in banking sector , other commercialbanks have already initiated this regard. NBP should also avail this opportunitybanks have already initiated this regard. NBP should also avail this opportunityand take initiative in micro financing.and take initiative in micro financing.

Globally Progress of Banking systemGlobally Progress of Banking systemNow-a-days banking system is growing quickly so NBP have opportunities toNow-a-days banking system is growing quickly so NBP have opportunities toimprove the standard and get the more share in the market. improve the standard and get the more share in the market.

Electronic BankingElectronic BankingDue to fast development of technology, world has become globalDue to fast development of technology, world has become globalvillage especially communication sector. NBP can avail the opportunityvillage especially communication sector. NBP can avail the opportunityof developed technology and online banking system in order to provideof developed technology and online banking system in order to provide24 hours services to customers.24 hours services to customers.

ThreatsThreats

Emergence Of New CompetitorsEmergence Of New CompetitorsNBP is facing the threat of emergence of new competitors in from of foreignNBP is facing the threat of emergence of new competitors in from of foreignbanks. These foreign banks are equipped with modern and computerizedbanks. These foreign banks are equipped with modern and computerizedsystem and heavy financial power and innovative way of promotions.system and heavy financial power and innovative way of promotions.

Political instabilityPolitical instabilityThe frequent and ongoing shifting in political arena affects the performance ofThe frequent and ongoing shifting in political arena affects the performance ofNBP adversely.NBP adversely.

Increased number of banksIncreased number of banksIncrease in no. of banks is a threat for National Bank of Pakistan.Increase in no. of banks is a threat for National Bank of Pakistan.Numbers of private banks (commercial and private) are operating theirNumbers of private banks (commercial and private) are operating theirbusiness more efficiently and provide the same facilities with more business more efficiently and provide the same facilities with more

speed and quality.speed and quality.

ConclusionConclusion

During my stay of 10 weeks at National bank of Pakistan, I came During my stay of 10 weeks at National bank of Pakistan, I came across the number of tasks and felt a credible and professional across the number of tasks and felt a credible and professional change in my attitude. I conclude that NBP is one of the leading change in my attitude. I conclude that NBP is one of the leading banks in Pakistan.banks in Pakistan.As analysis shows that NBP is a most growing organization with As analysis shows that NBP is a most growing organization with highest return on capital, largest market share amongst all Pakistani highest return on capital, largest market share amongst all Pakistani banks. NBP carries highest cost to income ratio as compare to all banks. NBP carries highest cost to income ratio as compare to all other commercial banks. But still there is need for improvement to other commercial banks. But still there is need for improvement to overcome weaknesses in order to maintain its position as an “Asian overcome weaknesses in order to maintain its position as an “Asian Tiger” in banking field.Tiger” in banking field.As far as my training and experience is concerned, I have learnt a As far as my training and experience is concerned, I have learnt a lot during my internship because I got practical knowledge before lot during my internship because I got practical knowledge before entering in the practical life after completion of my MBA degree. entering in the practical life after completion of my MBA degree. I learn a lot about banking practice in Pakistan, rules and I learn a lot about banking practice in Pakistan, rules and regulations and different procedures followed by banks, the regulations and different procedures followed by banks, the organizational culture and structure of the bank, National Bank of organizational culture and structure of the bank, National Bank of Pakistan.Pakistan.

RecommendationsRecommendationsAccording my evaluation and observation during my internship at NBP, bank According my evaluation and observation during my internship at NBP, bank can make more progress by implementing following points:can make more progress by implementing following points:Number of professional and well qualified employees should be enhanced.Number of professional and well qualified employees should be enhanced.Staff should be trained properly and should be familiar with modern Staff should be trained properly and should be familiar with modern technology in order vu solutions to enhance the over all performance of technology in order vu solutions to enhance the over all performance of NBP.NBP.In order to achieve job satisfaction from employees, their promotion should In order to achieve job satisfaction from employees, their promotion should be on merit and on time according to their respective performance instead be on merit and on time according to their respective performance instead of senior’s own will.of senior’s own will.There is need of more investment in area of innovation and organizational There is need of more investment in area of innovation and organizational cultural improvements in order to improve the environment and corporate cultural improvements in order to improve the environment and corporate culture of bank.culture of bank.It is recommended that there should be specific desk for customer’s It is recommended that there should be specific desk for customer’s complaints and for their information.complaints and for their information.Bank needs to improve its sitting arrangement, air conditioning in order to Bank needs to improve its sitting arrangement, air conditioning in order to attract new clients and to make their customers feel happy and comfortable.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 Heavy work load can be coping nicely with the help of modern computers software and better control can be achieved.software and better control can be achieved.Online facilities should be enhanced up to 24 hours.Online facilities should be enhanced up to 24 hours.