NIB Internship Report 2003

8/12/2019 NIB Internship Report 2003

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Table of Contents

Table of Contents........................................................................................................................1

Executive summary:................................................................................................................. 2

Introduction:.............................................................................................................................3

Central background information:...........................................................................................3

Company background...........................................................................................................

Company analysis:...................................................................................................................!

"peration analysis:............................................................................................................... !

#inancial $nalysis................................................................................................................. %

&uman 'esource $nalysis:.................................................................................................2(

)arketing analysis.............................................................................................................. 2

Environmental analysis:..........................................................................................................2*

Industry and market analysis:.............................................................................................2*

)a+or product lines:............................................................................................................2,

-rot/ rate of entire industry:.............................................................................................31

Competitor analysis............................................................................................................ 33

Tec/nology analysis...........................................................................................................3*

0rief on t/e department orked during interns/ip and specificleading contributions made:. .(

Identification of main problem.................................................................................................3

Conclusion.............................................................................................................................

'ecommendations.................................................................................................................


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Executive summary:NIB Bank is operating in Pakistan. Its major shares are held by Temasek Holdings

which is a foreign investor group NIB Bank has seen a lot of investment and a series of

amalgamations and mergers. Its merger with PII at the end of year !""# resulted in

a very large e$pansion in its si%e and worth. Today it&s the seventh largest bank in terms

of branch network. It also has a very high paid up capital as compared to other banks.

The net worth of its assets has also increased manifolds since its ac'uisition of the

PII asset management company. The bank has allowed itself to start operations in

different market segments like consumer and ()* segments but its costs are soaring.

The advances of the bank are getting higher but the deposits costs are also getting

high. It is also lending from other financial institutions the reliance which signals a little

weakness. If it is able to improve the return on assets ratio+ the bank will be able to

generate high profits and would deliver a marginal growth trajectory. urrently the NIB

team has provided its client with numerous innovative financing and deposit

opportunities. ,lso the bank speciali%es in insurance related products which give it an

added advantage. However+ the higher rates of interest and other stricter regulations+instructions of the central bank are proving to be detrimental to the progress of the

bank. In order to keep its growing trend the bank needs to be prepared to face the

s'uee%ing policies of the central bank in the wake of rising inflation and rapidly

e$panding current deficit and balance of payments accounts. The bank will need to

reduce its cost and channel its funds to the corporate as well as ()* and consumer

sector to reap the benefits of growing demand for finances.

NIB Bank -imited provides various financial products and services in Pakistan. Its

orporate Banking segment engages in underwriting and initial public offer related

activities. The company&s Trading and (ales segment provides fi$ed income+ e'uity+

foreign e$changes+ commodities+ credit+ funding+ securities+ brokerage debt+ and prime


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brokerage services. NIB Bank&s etail and onsumer Banking segment offers lending

and deposits+ banking services+ private lending and deposits+ and banking services to

retail customers+ and small and medium enterprises. The company/s ommercial

Banking segment provides finance+ e$port finance+ trade finance+ leasing+ lending+

guarantees etc.

I have done 0 weeks internship starting from 12 th3uly to 4"th ,ugust !"1" from NIB

Bank I5 marka% branch Islamabad. In NIB Bank I worked in Human esource

department. The detai l of my work in each department is described in this

part wi th al l possible detai ls. 6uring the course of internship I learned aboutdifferent functions about H practices that include training 7 development+ employee

relations+ performance appraisal. I found that most of the employees were notade'uately trained.

Introduction:

Central background information:

ncorporated in 12#8+ Temasek Holdings is an ,sia investment company

head'uartered in (ingapore. (upported by 1! affiliates and offices in ,sia and -atin

,merica+ Temasek owns a diversified (9150 billion portfolio as at 41 )arch !"1"+

concentrated principally in (ingapore+ ,sia and the emerging economies.

Temasek/s investment themes centre on Transforming *conomies+ :rowing )iddle

Income Populations+ 6eepening omparative ,dvantages and *merging

hampions. Its portfolio covers a broad spectrum of industries; financial services,aa by rating

agencies (tandard 7 Poor/s and )oody/s respectively.


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,s a long?term investor+ we have a stake in the lives and well?being of our fellow

men. @e recognise that social+ environmental and governance factors can impact

the larger community as well as the long?term sustainability of companies and

businesses.

@e actualise our commitment as a responsible corporate citi%en by supporting efforts

that build people and communities through education+ healthcare and research< build

bridges between peoples through deeper understanding and friendship< build better

governance through a culture of integrity and e$cellence< and rebuild lives and

livelihoods devastated by major natural disasters.

(ince inception+ we have committed almost (91 billion over the last decade to fund

research institutions+ scholarships and other public good beneficiaries+ of which

(9A"" million was endowed to the Temasek Trust in )ay !""#. Temasek Trust

independently oversees the management of endowments and gifts.

Company background

NIB Bank -imited started as N6-?II Bank -td. which was incorporated in )arch

!""4 as a public limited company. It started operations in Cctober !""4 when all assets+

liabilities+ rights and obligations of the former National 6evelopment -easing

orporation DN6-E and Pakistan operations of II Bank were amalgamated with and

into the Bank with a paid up capital of s.1.!bn. In ,pril !""8 the Pakistan operations of

redit ,gricole Indosue% were also amalgamated with and into NIB. In )arch !""A

Temasek Holdings of (ingapore ac'uired !A= shareholding in NIB Bank+ through Bugis

Investments. This shareholding was further enhanced to over #"= in 3une /"A following

an increase in NIB/s paid up capital to s 4.8 bn. NIB Bank has since grown rapidly

from a base of ! branches in !""4 to 8A in the 8th 'uarter of !""#+ with a

corresponding increase in its assets and deposits base.

NIB Bank/s vision is to rank amongst the top A banks in the country. Therefore towards


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the end of 3une !""# it ac'uired majority shares of PII with the aim of merging PII

and its commercial banking subsidiary PII ommercial Bank -imited DPB-E into

NIB. The ac'uisition was financed through the country/s largest private sector rights

issue+ with resultant increase in NIB/s paid up capital to s.!!." bn. The PII

ac'uisition bought with it another subsidiary FPII ,)F and an affiliate FPII

InsuranceF.

NIB already has a shareholding in N,,+ an ,sset )anagement ompany D,)E

whose shareholders also include National Bank of Pakistan and ullerton und

)anagement ompany< thus NIB :roup&s asset management business has also

increased+ while it has diversified into the insurance business as well.

The legal merger of PII 7 PB- into NIB took place on 6ecember 41+ !""#+ once all

regulatory approvals were in place. NIB Bank continues to be led by Ghawaja I'bal

Hassan+ supported by four business heads and ten business enabling function heads.

The merger resulted in a vastly e$panded network of !8" branches and total assets of

s 1#0.0 bn on merger date. NIB has the second highest paid up capital of s. !5.8 bn

amongst banks and ranks number # in terms of distribution network. )erger synergies

include lower cost deposits+ enhanced customer service delivery channels and overall

improved efficiencies. These help provide a competitive edge in the face of increasing

competition in the banking sector. Temasek Holdings continues to be the largest single

investor in NIB Bank with appro$imately 04= shareholding.

The powerful franchise of the three merged entities has been brought together to form a

much larger and stronger bank to complete in the market place. :oing forward

management is confident that the combined bank will be a top performer delivering a

wide range of financial services through an e$tensive branch network. The asset


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management arms and insurance affiliate are also e$pected to perform well and provide

an attractive dividend stream for NIB.

Company analysis:

Operation analysis:

6irect pay

NIB 6irect Pay is a convenient bill payment and funds transfer facility whereby you can

instruct instant payment of your bills and transfer funds from your NIB bank account at

your own convenience and lu$ury.

Payments are made 'uickly and conveniently+ and you no longer have to track payment

due dates+ wait in long 'ueues or suffer late payment charges. ou can easily pay yourbills or transfer your funds through ,T)s and>or Phone Banking !8 hours a day+ # days

a week. ou can also ensure automatic payment of your bills and transfer of funds from

your NIB bank account by setting up direct debit instructions and specifying your

payment schedule.

etail Banking

,t NIB we believe that people who live and work in pro$imity with you understand your

needs better. Being embedded within your local community+ we are aware of your daily

challenges and are prepared to provide you financial solutions. (o come bank at NIBetail Banking because we know that nobody understands you better than your etail

Banker.

((T*) 7 CP*,TICN( 6II(ICN

,ll the procedural working of bankers is under the administration of this division special

condition is given to activities selected to head office whether reconciliation of ,J6IT 7

*6IT have been done properly a not.

EECT'"4IC TEC&4""-5 6I7I8I"4

, ):T accrual division as the name indicates+ all of the functions+ products and

services related to electronic technology provided by ,skari bank in the function of this

division. including internet banking facilities+ internet banking which with ,BN?,)C


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banks connecting the ,utomated Tilts )achines (ystem D,T)(E on?line banking

system. the automated telephone banking facility called ,skari link.

*lectronic technology division is handling working of all there systems and all of

their payments. now this division is working as project on a e?banking services.

BUSINESS I!ISION

6evelopment of new products+ new policies for the enhancement of profits+ and

elimination of those products+ not attractive to customers+ as well as bringing to light+

those reasons which results in declining sales are the duties of this division.

CO"#$"$%E #&$NIN' I!ISION

orporate banking division is established in 1222+ which plays a significant role ine$panding the banks credit+ portfolio by booking 'uality assets. It allows generating non

funded business which make a useful contribution toward the fee?based income of

bank.

Consumer Banking Sales ( Services

This department provides all sorts of products and services discussed in the Product 7

(ervice.

Collection

This department is located in Garachi Head office for the collection of outstation

che'ues.

!erification

The main work vested into this department is to conduct physical verification of the

loans+ specially the clean loans against which there is no security>collateral received by

the bank. (ince special care is re'uired in disbursing clean facility+ this department has

been designed to deal with this sole responsibility.

The main functions performed by this department are as follow;

K onducts all the correspondence with the potential borrower

K :et their addresses+ telephone numbers and checks their genuineness.


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K eceives information about the client from outside sources.

K inally+ make recommendation whether the loan facility should be sanctioned or not.

)inancial $nalysis

IN!ES%*EN%S

Investments are made by the banks in order to secure themselves and earn some profit

from it. :enerally these investments are done in government securities and shares. NIB

bank invested its money in the following types of securitiesuity

eturn on *'uity measures the amount of Net Income earned by utili%ing each dollar of

Total common e'uity. It is the most important of the LBottom lineM ratio. By this+ we can

find out how much the shareholders are going to get for their shares. This ratio indicates

how profitable a company is by comparing its net income to its average shareholders/

e'uity. The return on e'uity ratio DC*E measures how much the shareholders earned

for their investment in the company. The higher the ratio percentage+ the more efficient

management is in utili%ing its e'uity base and the better return is to investors.


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Interpretation

eturn Cn *'uity ratio is declining from !""8 to !""5 because the bank was e$panding

and progressing and was purchasing more and more assets and establishing more and

more branches over the country so the customers were also increasing. ,s we can see

that the ratio has a great fluctuation in !""5 that is because of merging of PII with

NIB so that the e'uity of PII commercial bank came under the NIB so that&s why in

this year the ratio is the lowest as compared to the other years.

"U#EES IN +++ ,,, +++

=ear -,,. -,,/ -,,0 -,,1 -,,2

Net income 1!!+0"2 1"4+##1 1!A+24# ?852+#02 ?#+8#8+0#2

%otal e>uity 1+404+585 8+!1!+5#A 8+441+5#A 40+8A!+5!! 42+025+A"5

"OE ratio 5.25224= !.80412= !.2"#!!= ?1.484A#= ?".1554=


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Retrn On Deposits

This ratio shows how much return is earned in relation to the total deposits. The formula

is;

"U#EES IN +++ ,,, +++

=E$" -,,. -,,/ -,,0 -,,1 -,,2

#rofit

after

%axation

1!!+0"2 1"4+##1 1!A+24# ?852+#02 ?#+8#8+0#2

eposits 1"+085+A#" !!+AA8+!#8 4"+A00+A8" 110+0#1+!12 1"8+A50+10#

"atio ".0A= ".04= ".88= ?".A5= ?1".14=

Interpretation

,s we can see from the above calculations that the trend of the ratio is decreasing from

the year !""8 to !""5. The return on deposits in !""8 is 0A percent while it&s 04 percent

in !""A and ".88 percent in !""0 while it has gone down to ?".A5 percent in !""# which

shows total loss in this year while there in !""5 we can see that NIB bank suffered huge

losses and the ratio is ?1".14 percent.

.

Earnin% Per S&are' EPS:


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The portion of a company/s profit allocated to each outstanding share of common

stock. *arnings per share serve as an indicator of a company/s profitability. *arnings

per share are generally considered to be the single most important variable in

determining a share/s price. It is also a major component used to calculate the price?to?

?uman "esource $nalysis:

Training Programs for *mployees

Talent 6evelopment and Training by Human apital

Cptimi%ation :roup DHC:E

The Talent 6evelopment unction was formulated at the beginning of 8th 'uarter !""#

within HC: to develop the potential of our workforce through skill > technical trainings

aimed at enhancing the workforce performance in relevant areas. This would enable

NIB to deliver on its business proposition of providing 'uality banking e$perience to our

valued customers. (ince its inception the Talent 6evelopment function has arranged+

organi%ed and delivered the following major training initiatives:

Cycles of Change

The ycle of hange DCE training program rollout was conducted by I'bal ,li+ ,li

Noman+ Bushra Ghilji and (yed Naveed?ul?afar from )arch to 3une !""5 for around

11"" participants. Participants comprised of countrywide )) branch employees. This

8>A day program is geared towards inculcating a deeper understanding of )) banking

functions+ adding intrinsic value to all the individual communities that the NIB branch

network serves within the )) segment. It also introduces a relationship oriented

banking proposition while at the same time imparting basic product and front?end

operational knowledge.

Performance Management

The Performance )anagement training program was conducted countrywide by 3awed

,usaf and Ivan 3ohns during )arch !""5 for around 4A0 participants. This training


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program aimed at getting members of all the three merged entities together on one

platform in order to institute a unified system of performance management for NIB+

based on the same measuring tools and standards to be followed for assessing+

evaluating and managing staff.

Professional Grooming

The program on Professional :rooming was conducted by Bushra Ghilji from 3uly to

Cctober!""5 for around 22 participants. The objective of this training program is to

enable employee&s to identify and practice preferred grooming skills and business

eti'uette in the workplace enhancing self?confidence and encouraging positive thinking

to help with image building of NIB.

General Banking Training Program

:eneral Banking Training Program rollout was conducted by the Institute of Bankers

Pakistan DIBPEfor 4A0 employees from November to 6ecember !""#.This two day

training program was based on fresh concepts in various general banking areas such as

bankers& obligation to customer+ duty confidentiality+ different aspects of account

opening and operations+ details of inward>outward clearing process etc.

Cther than the above+ various training programs have been conducted by both in?

house trainers as well as e$ternal trainers.

In !""5 NIB has trained A45" employees in various disciplines resulting in 1!!"" plus

man days of training. *mployee development will continue to be priority in NIB and staff

is encouraged to attend programs as and when they are announced.

Fraud awareness training

)raud #revention Initiatives

Jpgraded version of Lraud Prevention PolicyM has been uploaded at NIB after

approval from BC6.

):&s surprise branch visits to counter any misconduct > discrepancies.


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(pecial emphasis on the high risk areas of branches.

Transaction monitoring practice in places prevention against account

takeover cases.

uture Investments on *arly @arning systems for raud 6etection.

)onthly vigilance of the (mall 7 )edium *nterprises and ommercial.

Employee Involvement programs

, participative process that uses the entire capacity of employees and is designed to

encourage increase commitment to the organi%ation success. *mployee involvement

programs include the following.

Participative management

epresentative Participation

Ouality circles

*mployee (tock Cwnership Plans.

@e asked the 'uestion from the employees to what e$tant you and your colleagues feel

that you can make decisions and solve problems without checking with your managers

Basically this 'uestion is related to participative management that is one of the types of

employee&s involvement program to increase the involvement of employee in decision

making process Participative program are also very helpful to increase the moral high

and productive of the employee. In participative management employees are the trusted

by the management and also increase the management confidence on their employees.

Participation increases commitment to decision. *mployees are less likely to undermine

a decision at the time of implementation if they share in making that decision and

participative management makes employees job more interesting and meaningful to

them and participative management increased productivity+ improved 'uality and

reduced costs.

)onthly>uality circlesare conducted where all the 'uality issues are addressed


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ensuring 'uality in all aspects.

Employee@s *otivation

The process that accounts for an individual+ intensity+ direction and

persistent efforts towards attaining a goal.

"eAard systems:

The only way employees will fulfill your dream is to share in the dream. eward systems

are the mechanisms that make this happen. FHowever+ reward systems are much more

than just bonus plans and stock options. @hile they often include both of these

incentives+ they can also include awards and other recognition+ promotions+

reassignment+ non?monetary bonuses De.g.+ vacationsE+ or a simple thank?you.

@e asked the 'uestion related to rewards that how rewards motivate employees in NIB

Bank and we found that there are different kinds of rewards NIB Bank gives to their

employees which are as follows:

ash Bonuses

Promotions

)ake team leader

Increment in salaries

$lloAances like 9)uel alloAance4 mobile alloAance

@e found one very different kind of reward in NIB Bank that they motivate their

employees whose performance is not up to the mark by giving them the salaries

e'uivalent to the market value of the any other employee of same rank so as to

motivate their employee.

Employees Satisfaction &evel


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SO% $nalysis

Strengts:

Being the emerging bank in Pakistan it is highly recogni%ed all over Pakistan and

it is very well known among its customers.

NIB Bank has a huge amount of Branches all over Pakistan where other banks

still can not be able to provide their services and that is a huge bonus point for the bank

The bank has huge amount of assets.

The bank is involved in different investing activities where there is a huge amount

of output available for the bank that bank can use for its growth.

NIB Bank has a very senior and dedicated work force as well as young and

creative staff which is a very big asset for the bank.

NIB Bank has an edge over other local banks+ as it was the first privati%ed bank.

The (tate Bank of Pakistan has restricted the number of branches that can be opened

by foreign banks+ an advantage that NIB Bank capitali%es because of its e$tensive

branch network.

*ight years after starting+ NIB Bank is now in a consolidation stage designed to

lock in the gains made in recent years and prepare the groundwork for future growth.

NIB Bank looks with confidence at year !""4 and beyond+ making strides

towards fulfillment of its mission+ Fto become the preferred provider of 'uality financial

services in the country with profitability and responsibility and to be the best place to

workF.

(ea)nesses

@ith the strengths the Bank has also some weaknesses which are as under


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Though NIB Bank installed computer yet the system has not totally shifted on

computer. )anual procedure is still there hence computer facility is not fully availed. It

should be fully availed and system should be fully computeri%ed.

, lot of productive time is wasted by the staff in unproductive pursuits and tea

and lunch breaks are got voluntarily e$tended and the time spent in corridors+

courtyards+ depends on the staff will. This tendency of late must be eliminated which

reflect adversely on the image of the institution and has posed a serious problem.

It should not be like that a person who may be a very good worker but

possessing lack of managerial capabilities should be posted as manager. But as second

place in command or some heavy working department wished persons together with

managerial 'ualities and manners in the same fashion should be posted and placed as

manager.

People have to wait for re?cashing their che'ues for about 1" to 1! minutes+

which is not good for the reputation of bank.

It is human nature one goes behind reward and incentives while and try to avoid

from punishment. -ikewise in commercial institution like bank this system be introduced

with full force means active smart+ educated skilled+ self spoken and well versed staff

personal+ should be reward and appreciates+ while on the other hand la%y+ lethargic+

heard+ rough dealers and ill mannered must be warned penali%ed and punishes

Opportnities

The bank has a lot of opportunities which includes

(ince the Bank has an e$tensive networks of branches so if the bank can be able

to computeri%e all of its branches then it can be able to capture the market more

efficiently

The bank has already a huge amount of customers by providing better and better

services to their e$isting customers+ but word of mouth can also be helpful in increasing

the number of customers to have a competitive advantage over its growing number of

competitors.


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(ince the Bank is earning a lot of profit per annum so by increasing the

employee&s salaries and providing incentives the Bank can produce more loyal

employees that can increase the productivity.

T&reats

@ith opportunities the Bank has also some threats which includes

6ue to increasing number of foreign banks in Pakistan which offer a very

attractive package for their employees the very key employees of the bank are more

likely to resign which is a very major threat.

Not all branches are computeri%ed neither providing ,T) services and no online

banking and the customers demand for these services is increasing day by day so Bank

should computeri%e all its branches.

,t some places+ the NIB Bank -imited is over?employed. which is causing over

e$penditure

Environmental analysis:

Industry and market analysis:inancial (ector in Pakistan possesses a wide spectrum of financial institutions

?ommercial banks+ speciali%ed banks+ national savings schemes+ insurance

companies+ development finance institutions+ investment banks+ stock e$changes+

corporate brokerage houses+ leasing companies+ discount houses+ micro?finance

institutions and Islamic banks. They offer a whole range of products and services both

on the assets and liabilities side. inancial deepening has intensified during the last

several years but the commercial banks are by far the predominant players accounting

for 2" percent of the total financial assets of the system.

,mong the commercial banks+ 1! foreign and !" domestic banks together hold 5"

Percent of the banking system assets ? a feat that is unparalleled among developing

countries. oreign banks enjoy the same facilities and same access as the domestic

banks and there is no preferential treatment for domestic institutions. Jnlike many

countries+ foreign banks can have 1"" percent ownership+ can open their branches or

establish local subsidiary with full ownership. oreign companies are also provided level


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playing fields as they can raise finances of all types and tenures from the domestic

banking system

Banks

Banks are financial intermediaries. The role of a financial intermediary is to sell its ownobligations and to buy the obligations of others. By endowing its obligations with

attractive features+ an intermediary can sell its obligations at a higher price than it haste

pay for the obligations it buys. Cr to say the same thing in a different fashion+ it can

market its obligations at a lower interest rate than it can command the obligations it

buys. The spread between the interest rate it pays on its own obligations and the one it

receives on the obligations of other e$penses of doing business must then be deducted.

The net profit after these other deductions represents the return to the shareholders for

their participation in the activity of a financial intermediary

/Bank is an institution transacting the business of accepting+ for the purpose of lendingor investment+ of deposits of money from the public+ repayable on demand or otherwise+

and withdraw able by cheea'ues draft order or otherwise and includes any post office

saving bank./

There are different kinds of banks+ i.e. central bank+ commercial banks+ e$change

banks+ industrial banks+ etc. but for our purpose it will suffice to consider only central

and commercial banks.

#rofitability of Banking Sector

Profitability of the banking system continues to be impressive+ largely emanating fromthe persistent growth in high?yield earning assets and e$panded business volumes.

Banking sector turned profitable in !""!. Their profits continued to rise for the ne$t five

years and peaked to s 58.1 D91.1 billionE billion in !""0. ,part from !""4 when profits

were mainly generated through capital gains+ the banks& net earnings growth in rest of

the years after !""4+ were primarily driven by core business activities.

Net interest income of the !! listed banks increased by 12 percent to s !"0.0 billion+

attributable to stable spreads observed during the years along with a 1# percent growth

in advances that was spurred by banks& lending for circular debt and commodity

operations.

Jnfortunately in !""5+ Profitability of Pakistan&s banking sector declined sharply+ owing

to multiple reasons+ reflecting the deteriorating economic conditions of the country.

Profits of !! listed banks+ which have so far announced their results+ declined by !1

percent to s A" billion in !""5 from s 08 billion in !""#. The !! banks represent 20


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percent of the sector&s market capitali%ation and constitute 5! percent of the overall

industry&s total assets.

*aDor product lines:

C"EI% C$"8

Cne of the credit facility arranged by the ,skari for the benefits of the customers is

called credit card. it has no concern with operation of accounts but facilities the small

financial needs of clients like shopping of goods and or any short term financing. *ven

with %ero balance in account credit card must be used.

)inimum payment of A= is to be submitted otherwise after 8A days of utili%ation of

credit per month != interest is charged.

There are two types of credit card issued.

1E (ilver.

!E :old.

$ certain amount is to be paid before issuance8

(I-* range from sQ!A""" ? 15"+""".

:C-6 range from sQ!"""+ """ ? above

,nnual fee of rs !""" charged from silver and rs 4A"" charged from gold card.Cne of

the re'uirement holder of credit card is that he should be account holder. :ovt officers+

private organi%ation officers+ ,rmy officers+ and entrepreneurs can avail this opportunity.

If a person is in a ,rmy + he should attach the copy of salary certificate I6 card+account statement and three photographs and in case of non payment his salary

is blocked.

rom :ovt officers+ grade 1# or above+ fill information of dept+ recommendation

letter by department+ or NC as well as copy of (. I6 card+ account statement

and photographs are to be attached with application form.


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If a person is in a private sector+ then he should be getting a salary of 1A""" dr

above+ and alt the above documents are also attached with credit card

application.

or a business man+ it is re'uired that he should maintain healthy for about si$

months in his account and provide the photo copy of balance sheet showing

good turn over+ recommendation letter form other bank+ if running his account

there also+ I6 card copy+ account statement and three photographs his reputation

is also confirmed from market.

ON+&INE B$NIN'8

NIB bank limited believe that information technology will play a decision role in

competitive edge in the market the bank ensures to become the symbol of e$cellence

by providing better customer services+ through the use of state of art of technology 8

It is the consistent policy of bank to make ma$imum use of technology so is fully

e'uipped to provide innovative and highly sophisticated technology based products and

services.

In 1225 the bank further improved its online communication by installing the fault

tolerant life keeper to ensure real time communication< ink and inter branch on?line

banking system for the benefit and greater convenience of their customers.

NIB bank has a largest communication network in banking industry in Pakistan which

helped in boarding the customer base.

,s customers find it easy to proceed their transactions sitting at one corner of country to

the other corner. The clients can shift their amount from one branch of ,skari to other+

their che'ue can be cashed+ they can make deposit+ can draw the money also through

on?line banking availing 'uick and speedy service for his urgent re'uirement.


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IN%E"NE% SE"!ICES:

In pursuance of ,skari+s 'uest to provide the most modern services to its customers+ it

has started internet through its website

Initially non?financial banking services such as balance in'uiry+ statement of account+

even photocopy of statement can also be drawn. ,B- is the first bank in the Pakistan

to provide the means of remotely accessing certain banking services through Internet.

@hich have otherwise been made available by the banks to its customers by traditional

means.

$%* C$"

This facility of automatic teller machine was firstly developed in *urope and ,merica in

120"&s now it has been introduced in Pakistan also within different international banks.

,skari commercial bank is the first in private sector which< started providing this facility.

Bahawalpur branch of ,skari issues ,T) cards. But automatic teller machine is not still

installed however hopes to be there in future.

Cn the basis of cash in ,>+ ,T) card issued. There is no re'uirement of minimum

balance. It is a debit card+ and cash with its use. Cn the basis of ,T) no credit facility is

given. The amount up to which you are eligible+ can only be withdrawn+ ,T) card can

bee used through ,BN ,)C and national bank of Pakistan+ as these banks have

agency arrangement with ,skari . or the issuance of ,T) car+ an application is to able

submitted to remittance dept incharge officer+ he forward it to head office which after

making+ sends ,T) cards to respective branch within 1"?1A days. Then operational

manager with the help of which this can be utili%ed gives pin code.

'roAt rate of entire industry:

The growth rate of the banking sector achieved during last few years is not sustainable.

The era+ in which low rate of returns to depositors+ high banking spread and huge loan R

loss provisions+ will not last long. The bonan%a of large remittances from abroad may

also not continue for an indefinite period. In any case+ the present rate of domestic


32/48

savings is just not enough for sustaining the :6P growth rate of even si$ per cent. To

increase the rate of savings+ the policies of banking sector will have to be restructured

which would significantly reduce its profitability.

In case of a major e$ternal shock+ the remittances from e$patriates may slow down+ the

rupee will depreciate at a faster pace+ flight of capital will re?emerge and foreigne$change reserves may evaporate in no time. In such an eventuality+ the inflation rate

would go up which would enhance the cost of production. The industries would become

un?competitive and many industries will close down. , larger number of banks&

advances would therefore+ become stuck?up. ,ll this could pose serious risks for the

banking sector. This needs immediately attention of the banks and (BP.

Pakistan&s banking sector has shown resilience to the weak macroeconomic

environment even though it e$perienced a drop down in deposit

Pakistan has been ranked 48 out of A! countries in the @orld *conomic orum&s first

inancial 6evelopment eport+ which was released in Pakistan through the

ompetitiveness (upport und D(E in 6ecember+ !""5.

The report is a comprehensive analysis of financial systems and capital markets in A!

countries that e$plores key drivers of financial system development and economic

growth in developing and developed countries and serves as a tool by which countries

can benchmark themselves and establish priorities for financial system improvement.

Pakistan&s Banking sector turned profitable in !""!. Their profits continued to rise for

the ne$t five years and peaked to s 58.1 D91.1 billionE billion in !""0.

,rthur Bayhan+ hief *$ecutive of the ompetitiveness (upport+ told the media; LI am

very happy to see that financial system in Pakistan is well reformed and competitive vis?

S?vis ,sia and *urope. Pakistan is ranked ahead of the ussian ederation D4AE+

Indonesia D45E+ Turkey D42E+ Poland D81E+ Bra%il D8"E+ Philippines D85E and Ga%akhstan

D8AE.M

The Jnited (tates narrowly edged the Jnited Gingdom to take the top position in the

inancial 6evelopment Inde$. The Jnited Gingdom was second while hina ranked !8

and India 41.

The inancial 6evelopment Inde$ is based on three main pillars R actors+ Policies and

Institutions+ inancial Intermediation and apital ,vailability and ,ccess. These are

further divided into sub R pillars.

Jnder actors+ Policies and Institutions pillar+ Pakistan ranks 82th in institutional

environment+ A"th in business environment and 4#th in inancial (tability. In the


33/48

inancial Intermediation Pillar Pakistan ranks !Ath in banks+ 8!nd in non banks and

1#th in inancial )arkets. Jnder apital ,vailability and ,ccess+ Pakistan ranks 44rd.

Indicators showed that in business environment Pakistan had development advantage

in ost to *$port+ ranking 0th+ ost of closing business Ath.

In inancial (tability hange in eal *ffective *$change rate ranked !"th+ *$ternal debt

to :6P 1"th+ re'uency of banking crises 1st+ stability inde$ 1Ath.

In corporate governance Pakistan ranked at the very top in shareholder rights inde$+

18th in strength of investor protection.

In the Non banks pillar+ Pakistan ranked 2th in the eal growth of direct insurance

premiums. In e'uity market movement Pakistan ranked at the top again in e'uity market

turnover.

Competitor analysis

&ist of maDor competitor:K ,tlas Bank+ Garachi

K Bank ,lfalah+ Garachi

K Bank ,- Habib+ Garachi

K Barclays Bank+Garachi

K aysal Bank+ Garachi

K Habib Bank+ Garachi

K Habib )etropolitan Bank

K H(B Bank -td

K 3( Bank

K G,(B Bank

K )B Bank -imited

K ,skari commercial bank

*arket sare


34/48

This piece will focus on the performance of commercial banks listed on Garachi (tock

*$change DG(*E. The data relates to (eptember 11+ !""5 and have been taken from

6aily Ouotations (heet of the Garachi (tock *$change D:uaranteeE -td.

E))ICIENC=%ES%*OE&

The following nine points have been used to test the performance of listed ommercial

Banks in Pakistan;

1. )arket (hare

!. Paid up apital

4. Par alue

8. Historical :rowth

A. Turnover

0. )arket apitali%ation

#. (hare in :6P of Pakistan

5. )arket Price ompared to Par alue

2. 6istribution as eturn

*$"E%S?$"E

Total number of companies listed on G(* was 0A# against !A number of commercial

banks listed on G(*. This represents only 8=. If commercial banks are to be

populari%ed as one of important Instrument of inance+ it is advisable to increase its

share through strategic move by stakeholders.

#$IU#C$#I%$&

-isted paid up capital of G(* was s. #12 billion. Cut of this+ a sum of s. !11 billion

related to listed commercial banks. Based on this+ its share in the G(* total paid upcapital was !2=. oncerted efforts are needed to increase paid up capital by

establishing more and more listed commercial banks in Pakistan.

#$"!$&UE


35/48

Par value of each listed ommercial Bank was s. 1". This+ in today&s time+ is too

small. In future+ par value may be raised to at least s. 1"" per share.

?IS%O"IC$&'"O%?

The following bo$ captures the position relating to historical growth of listed commercial

banks in Pakistan;

Box No8 3Historical :rowth of -isted ommercial Banks on G(*

=ear Number F1221?122A 11 881220?!""" "1 "8Total 3- .2

!""1?!""5 14 A!Total -/ 3,,

rom the above bo$+ it would appear that the development of listed commercial bank

has been very slow?around 1.8#= ommercial Bank per annum.

%U"NO!E"

6uring 3anuary?,ugust+ !""5 D5 monthsE G(* had a total turnover of s. 41 billion.

,gainst this+ share of listed commercial banks was only s. #.5 billion. This represents

!A.!=. This shows high level of activity.

*$"E%C$#I%$&IG$%ION

G(* market capitali%ation was s. !+528 billion. ,gainst this+ total market capitali%ation

of commercial banks was s. #00 billion?representing a share of !#=. This represents a

good number.

S?$"EIN'#


36/48

Total :6P of Pakistan was J( 9 10" billion. (hare of G(* listed companies was 9 45

billion and the share of listed commercial banks was 0.4= only.

*$"E%#"ICECO*#$"E%O#$"!$&UE

Cne of the ,cid Test for checking the financial health of a company is to compare the

par value with the ruling market price. Based on this+ 24= listed commercial banks were

above their par value. ,ccordingly+ this represents healthy position which needs to be

developed on sustainable basis in future also. Cnly 5= commercial banks were 'uoted

below par.

IS%"IBU%ION$S"E%U"N

6istribution to shareholders is another important indicator. Based on our analysis+ Bo$

No. ! presents the position;

Box No8 -,nalysis of 6istribution as eturn

#articulars -,,2 FNo 6istribution as 6ividend !1 216istribution as 6ividend "! "2Total -5 3,,

our listed commercial banks declared bonus shares. ive announced right shares to

e$isting shareholders.

,ll commercial banks were not in a position for full distribution as 21= of these did not

announce any dividend to the shareholders.


37/48

'oals and Strategies

They are committed to the development of the markets in which we operate and to

making a positive contribution to the societies where we live and work 8

@ith more than three billion people currently estimated to lack access to the banking

services re'uired to support economic activity we are working to provide access to

finance that will help overcome the barriers to development.

Cne of the ways that we are contributing to greater financial inclusion is to stimulate

grassroots economic development in the markets within our geographic footprint.

(tandard hartered encourages the growth of the microfinance industry by working

with microfinance institutions D)IsE and providing them with support and technical

assistance to build capacity and become financially sustainable+ commercial

businesses.

@e are in a strong position to meet our !""0 linton :lobal Initiative target of

providing 9A"" million of credit to )Is within five years+ with more than half the

commitment achieved by the end of !""5.

omplementing this effort+ we continue to lead the growth of the Islamic finance

industry in many of our markets. Cur Islamic finance products and services+ in both

onsumer and @holesale Banking+ are (hariah?compliant. In !""5+ we established

our first fully?owned Islamic finance subsidiary+

In 6ecember !""5+ at the inaugural linton :lobal Initiative+ ,sia+ (tandard

hartered committed to a women&s empowerment programme to enhance financial

literacy+ financial planning+ investment and capacity building for women owners of

small businesses. @e aim to reach A+""" women in the region by !"11.

%ecnology analysis

To meet the challenges of 1!1st century+ we are paying particular attention to thedevelopment of information technology.

In this regard+ the bank continued its semphasis on employing the latest technologicaltools to improve our operating and customer services. ,B- is the Ist bank to have


38/48

established countrywide communication network based on ast and radio modernstechnology. This communication network has enabled the bank to provide on line+ real?time banking facilities to its customers+ presently at 11 different cites for the country+which is being e$panded to cover other cities also.

The online communication system allows the nearest convenient branch irrespective ofwhere their account placed. This on line banking facility has also been made mostsophisticated due to high?speed electronic transfer of signatures+ for verificationpurposes throughout the country.

$dvanced tecnological products and services

,utomatic Teller )achines D,T)E and ,T) cards have been the biggest innovations

that have simply changed the way people today are now making their personaltransaction. @ith ,T) cards+ people can take out money from their accounts at any

time+ from any bank that they want to+ at their convenience.

,T) cardholders can take money out of their accounts+ from any U1 link& network

,T)+the largest ,T) network of the country. Cther ,T) networks include U)net& and&

irrus&. Today all banks are members of U1 link&+ while most of them are members of

)net and irus.

Internet Banking is another major technological product introduced by different banks of

Pakistan. @ith the help of internet banking+ customers with the convenience of their own

personal computers can transfer money from their accounts+ view their balances and a

lot more.

()( and Phone Banking is another major advancement in the products and services

introduced by banks. Telephone banking can be done !8>#+ with the help of banking

assistants+ while ()( banking can be done at the customer&s convenience

$utomation of operational tasks

Technical advancements have also impacted the daily operations of banks in Pakistan.

Cnline transfer of money between branches has increased the efficiency of e$change of

money between different account holders of the same bank.

(imple tasks such as balance in'uiry and bank statements have become as easy as a

click Cf a button with highly sophisticated information systems. ,ll banks today have


39/48

their own information systems that they can use in almost all 6epartments like clearing+

account opening+ car leasing and remittances.

In today&s contemporary business+ critical and timely decision making is a must and

important too. Today&s bank use sophisticated software&s that not only help in

operations but also improves decision making by providing different reports+ which canproduced at different periods of time+ that can help employees at every level of the

banks administration.

Innovation

ON+&INE B$NIN'

,skari commercial bank limited believe that information technology will play a decision

role in competitive edge in the market the bank ensures to become the symbol of

e$cellence by providing better customer services+ through the use of state of art of

technology.

It is the consistent policy of bank to make ma$imum use of technology so is fully

e'uipped to provide innovative and highly sophisticated technology based products and

services.

In 1225 the bank further improved its online communication by installing the faulttolerant life keeper to ensure real time communication


40/48

balance in'uiry+ statement of account+ even photocopy of statement can also be drawn.

NIB is the first bank in the Pakistan to provide the means of remotely accessing certain

banking services through Internet. @hich have otherwise been made available by the

banks to its customers by traditional means.

Brief on te department Aorked during internsip and specificcustomers in different

countries

-ist of work and assignments I was assigned during my internship are listed and

e$plained below

,ccount opening of a new recruit

).I.( of (B

-. and guarantees

How to catch a fake degree

,rranging Lkids at work placeM

Interviews and some of important 'uestion to ask in an interview

*$it interviews

$ccount opening of a neA recruit:

)y internship started in the days in which H? department was recruiting 6(s for

different branches in the north region. (o 1sttask my supervisor gave me was to help

new recruits to fill the account opening form and to give them a pamphlet about

(tandard chartered bank.


41/48

The guidelines and pre?re'uisites of account opening were instructed to me. (ome

guidelines are listed below;

Photocopy of NI

4 passport si%e pictures

No cutting

The permanent address should match the address written on NI

rossing the void portion

*8I8S of SCB:

The management information system H people were using was made on )icrosoft

e$cel

.when I asked them they told me that the head'uarters uses the speciali%ed software

but in Islamabad we use only *$cel sheets+ which was pretty surprising for me because

there were controlling a big region with simple e$cel software.

I worked on these e$cel sheets for the data entry for new recruit. ,fter that a printout

was taken and was attached with the other documents+ which were then sent to the

head'uarters for the offer letter.

&8C ( 'uarantee:

I mostly spent my 5 weeks in H?r department but I was given an opportunity to sit with

finance personnel for a day. He told me many things related to advances and (B

policies regarding it.

-etter of credit

:uarantee

&etter of credit:

, binding document that a buyer can re'uest from his bank in order to guarantee that

the payment for goods will be transferred to the seller basically+ a letter of credit gives

the seller reassurance that he will receive the payment for the goods. In order for the

payment to occur+ the seller has to present the bank with the necessary shipping

documents confirming the shipment of goods within a given timeframe. It is often used


42/48

in international to eliminate risks such as unfamiliarity with the foreign country customs+

or political instability.

Bank 'uarantee:

, guarantee from a lending institution ensuring that the liabilities of a debtor will be met+in other words+ if the debtor fails to settle a debt+ the bank will cover it.

%ips for verifying a egree:

6uring my internship+ my supervisor gave me some good tips for checking a degree and

he showed me some degrees and their validity.

(ome of the tips for verifying the a degree are given below

ont style check

There are some hidden signatures behind and on the front side of the degree

Paper 'uality

,bove these tips+ a person can be judged on the basis of interviews and some

'uestions related to his area of study.

This is scb H? policy now that they send degrees back to the universities and get them

verified directly.

ids at Aork place:

6uring summer days+ (B arranges a small festivity for employee&s kids to come and

enjoy the work place for a day+ so for that they needed some ideas and arrangements

for the kids.

This work was fun because we had to arrange some good meals+ magician+ and

different activities for kids to enjoy at work place

There was also a limited budget to stay in. it was around rs.10+ """

IntervieAs and >uestions:

I actually myself never conducted any interviews but I was there at the time of the

interviews .my supervisor use to tell me the reasons of asking some 'uestions and what

are the interpretations for those answers would be


43/48

(ome were very basic 'uestions like name+ address+ and previous work e$perience+

'uestions about family and what cousins+ uncles and other relatives do.

Exit intervieAs:

The biggest assignment I got was to conduct the e$it interviews of people who alreadyleft and due to some reason their e$it interviews was not taken+ so there was pressure

from higher authorities to give them e$it interviews report.

6uring this assignment I had to get around 4A $?personnel of (B+ first of all I got my

hands on the directory of branches of (B and contacted their respective branch and

got the numbers.

(econdly+ my job was to contact them and conduct an interview+ 'uestions were given

to me for the sake of interviews.

It was time taking assignment but at the end I actually completed it before my internshipended.

This report of $?personnel never have been made in the past record+ I feel proud in

contributing some of my skills for NIB

Identification of main problemindings

They should hire and place new staff as soon as possible to overcome theirworkload.

They should open branches at least in each district in Pakistan.

They should open foreign branches to compete multinational banks which are

becoming a threat for them

,skari commercial bank should try to arrange more lockers for which increased

demand.

Vtelegraphic transfer system should be computeri%ed

They must have 'uick arrangement to overcome technical faults in computer by

hiring a professionalism.

Branch premises must be e$panded


44/48

Though ,skari has been very successful in its foreign trade business but still the

inland business in small and it must adopt strategies to project itself in the circle

of foreign banks.

There must be a separate marketing department for devising marketing

strategies. ,s this is the era of marketing.

Conclusion

The NIB bank in the year !""8+ !""A and !""0 is showing positive ratios while the bank

profitability decreased and even it suffered huge losses due to the ac'uisition of PII

and PB- during the years !""# and !""5. This is because of huge provisions against

the obligations of PII and PB-. These provisions were made by the proper notice

from the (tate Bank of Pakistan as this was mandatory for the NIB bank.

The NIB bank although made a profit of ! billion during the years !""# and !""5 but it

was veiled by the huge provision. NIB bank made for about 2 billion of provisions in

!""5. *$penses were also increased during these two years and the earnings were not

enough to cover these e$penses. (imilarly the total assets also increased as NIB bank

ac'uired the prescribed banks so there was a huge problem of managing these assets.

(econd reason but an indirect reason for the losses in !""# and !""5 is the recession+

which affected almost all the world&s economic systems. Thus all the banks in Pakistan

as well as NIB bank were affected by this economic crisis.

NIB bank&s managers should properly manage assets by understanding the basic

principals of management and by implementing them properly. They should use the

resources optimally. They should also rythemate such a marketing campaign that

promotes the bank and create value of the bank in the minds of its customers.


45/48

6uring my internship t raining I gathered in formation regarding how a

successful bank operational aspects decorticated with the practical.

I found my internship training a very rewarding e$perience. The training

was benef ic ia l because i t hel pf ul me to aware a rea l l if e wo rk ingenvironment.

(o far my learning is concerned< al l the employees at branch were 'uite

cooperat ive. They helped me to understand the act iv i t ies of a bank to

possible e$tent . Their good at t i tude gave me more conf idence to learn

more and to ask if I have any 'uery in my mind. Besides their ever going

act ivi ties they never get i rr i tant by my 'uest ioning. I had made an honest

efferent to present the working 7 operation of Bank in simplest way.

I feel p leasure that I have real ly gained a lot dur ing 0 weeks 7 enjoyed

working with e$perienced cooperative 7 intell igent staff.

Is a good Crgani%at ion in the way that anybody can jo in i t for his> her

lon g? ter m ca ree r. Cve ra ll wo rkin g en viro nme nt is c om fo rta ble .

)anagement of branch cares a lot of i ts employees and considers them as

the ,sset of bank. Behavior of senior e$ecut ive of bank is very pol i te and

they are caring about the individual&s career and their growth.

However management is very demanding about the targets but good

reward at the achievement of assigned targets is awarded.

NlB Bank managers should properly manage assets by understanding the basic

principals of management and by implementing them properly. They should use the

resources optimally. They should also erythematic such a marketing campaign that

promotes the bank and create value of the bank in the minds of its customers.

"ecommendations

S&orta%e of Staff:


46/48

,lmost in all branches of NIB Bank the problem of(hortage Cf (taff is very common.

There are only few employees who are the be all and end all of the whole branch

resulting in burden of work. Basically the main idea behind it is that whenever there is

shortage of staff in any organi%ation it always result in lot of work and also boots up the

destructiveness as well because people working over there feel like that they can do

whatever they feel like so are least bothered about the rules and regulations as

implemented by the head office and mostly it results in corruption.

Staff Is Not A*e!ate+" Traine*:

(taff in almost all branches of NIB Bank is not ade'uately trained with the

contemporary era. Basically NIB Bank is from the very beginning+ is pioneer of new

products including ,T)s+ )obile Banking and Cnline banking as well but as they

developed the new systems and products in order to satisfy the customers want they

didn&t get their staff trained in relation with those innovations.

Others

, lot of productive time is wasted by the staff in unproductive pursuits and tea and

launch breaks are got voluntarily e$tended and the time spent in corridors+ depends on

the staff will. This tendency of late must be eliminated which reflect adversely on the

image of the institution and has posed a serious problem.

No periodic increase on salaries of employees.

O,era++ S%%estions For I-pro,e-ent

rom the 'uantum of the profit and its financial data it can easily judged that after

privati%ation is performing well. Its NIB Bank deposits are growing day?by?day and so is


47/48

profitability. The controlling body is responsible for the productive performance of the

bank.

)olloAing are my observation and suggestion to improve te efficiency for te

development of te economy8

Intro*.e Varios Profita/+e In,est-ent S.&e-es

, big portion of the home remittance is sent by Pakistan working capital through

NIB Bank. ,s we know a big portion of this amount is wasted purchasing of lu$uries.

The people motivated to save money by offering the deposit through various investment

schemes. The rate of profit should increase 1= or != than the other banks and it would

be profitable step for bank.

Trainin% Staff

(taff turnover particularly of trained staff result in financial and other losses. The

amount spent by the bank on employment+ induction and training of an outgoing officer

constitutes to beat till another officer should ready prove his work. The e$odus of bank

officer in the past has worsened the situation.

Cange %e Nature Of ork

)ost of the bank employees are sticking to one seat only with the result that theybecome master of one particular job and loose their grip on other banking operation. In

my opinion all the employees should have regular job e$perience all out?look towards

banking. The promotion policy should be adjusted.

Refres&er Corses


48/48

efresher courses for the staff are most important in any international organi%ation. ,ll

the employees should have these courses according to their re'uirement. oreign

e$perts can also be called for this purpose.

Spe.ia+ Trainin% In A/roa*

*very year some of the employees should be sent for training to other countries and

employees from other branches should be brought here. (ome more reading material

should be provided the purpose should be to educate the employees with the advance

studies in their field. The employees should be provided the opportunities to attend and

participate in seminars and lectures on banking.

Incentive %o Employees

Bank should give some more incentive to its employees in order to remove the conflict

between lower and higher officers and should try to improve the working condition of the

bank.

Co-pter S"ste-

Though installed computer yet the NIB Bank system has not totally shifted on computer.

)anual procedure is still there hence computer facility is not fully availed. It should be

fully availed and system should be fully computeri%ed.

NIB Internship Report 2003

Documents

Transcript of NIB Internship Report 2003