REPOT ON NBP

8/3/2019 REPOT ON NBP

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CHAPTER - 1

INTRODUCTION OF STUDY

Background of study

As part of the academic requirement for completing BBA (Hons) (Finance)

Bachelor of Business Administration. The students are required to under go two

months of internship with an organization. The internship is to serve the purpose

of acquainting the students with the practice of knowledge of the discipline of

banking administration.

This report is about National Bank of Pakistan. NBP was established in 1949 and

since then, it has expanded its network, becoming the largest commercial Bank of

the country. It offers different products of services to its customers.

Purpose of the study

The main purpose of the study in hand is together relevant information to compile

internship report on National Bank of Pakistan.

To observe, analyze and interpret data completely and in a useful manner.

1. To work practically in an organization.

2. To develop interpersonal communication.

Scope of Study

As an internee in National Bank of Pakistan the main focus of my study research

was on general banking procedure in one of the branches of NBP. These

operations include remittances, deposits, advances, foreign exchange, account

opening, ATM, dispatch and clearing departments.

Similarly different aspects of the overall of NBP are also covered in this report.

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Methodology of Study

The report is based on my two months internship program in National Bank of

Pakistan. The methodology reported for collection of data is primary as well as

secondary data. The biggest source of information is my personal observation

while working with staff and having discussion with them. Formally arrange

interviews and discussion also helped me in this regards.

1. Primary Data:

Personal observation

Interviews of staff

2. Secondary Data :

Manuals

Annual reports

Internet

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CHAPTER - 2

INTRODUCTION OF NATIONAL BANK OF PAKISTAN

Golden History of National Bank Pakistan

In 1949 (September) U.K (United Kingdom). Devalued its currency, India

followed suit but Pakistan did not. India said we had contravened the agreement of

keeping both currencies at par. We said we had not done that, India had done it

arbitrarily without consulting us. On October 3, 1949 the two central banks were

to announce the new par value of both currencies but India denied a day earlier.

India also froze our trade - balance surplus that is still an unsettled dispute.

India also withdraws the Marwari merchants who were employed annually for

movement of jute crop by financing it. There being no jute industry, prices fell

sharply, foreign banks and foreign merchants stood aside and an agrarian unrest

was threatening.

Two Ordinances were, therefore, issued

1. Jute Board Establishment Ordinance &

2. NBP Ordinance dated 08.11.1949

National Bank of Pakistan was established on November 9, 1949 under the

National Bank of Pakistan Ordinance 1949 in order to cope with the crisis

conditions which were developed after trade deadlock with India and devaluation

of Indian Rupee in 1949. Initially the Bank was established with the objective to

extend credit to the agriculture sector. The normal procedure of establishing a

banking company under the Companies

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Law was set aside and the Bank was established through the promulgation of an

Ordinance due to the crisis situation that had developed with regard to financing of

JUTE TRADE.

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. The Banks Karachi and Lahore offices were subsequently opened in

December 1949. The nature of responsibilities of the Bank is different and unique

from other banks/financial institutions. The Bank act as an agent of the State Bank

of Pakistan for handling Provincial / Federal and Government Receipts and

Payments on its behalf. Mr. Ghulam Farooq was chairman Jute Board and Mr.

Mumtaz Hassan was chairman NBP. Until June 1950, NBP remained exclusively

in jute operations, thereafter-other commodities were also taken-up. After that Mr.

Zahid Hussain, Governor SBP assumed additional charge also as chairman NBP's

Board of Directors, and Mr. M.A. Muhajir became its first M.D.

In 1952 NBP replaced Imperial Bank of India. Mr. Mumtaz Hassan as Acting

Governor of SBP negotiated this arrangement. In 1962 when Mr. Mumtaz Hassan

became MD (He had already served NBP for 10 years as its Chairman of government Director), the number of branches had increased from 6 to 239 and

deposits from Rs.5 crore (50 million) to 106 crore (one bn & 60 mln), profit from

3 million (3 Lac) to 21 million (2.1. crore) and the staff increased from 380 to

7091, as compared to 1949-50. In Dec. 1966 its 600th branch was opened raising

the deposits to 2.31 bn. and staff to 14, 963. Up to 1965, the shareholders had

received 225% of their original investment.

The Bank has also played an important role in financing the countrys growing

trade, which has expended through the years as diversification took place. Today

the Bank finances import/export business to the tune of more than Rs.70 Billion,

whereas in 1960 financing under this head was only Rs. 2 Billion.

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The field is being de-layered to improve customer services and enable faster

decision-making. As a result of this de-layering zones have been eliminated and

the numbers of

Regions have been increased. Organizational hierarchy at the regional level has

been restructured and operational and business activities have been completely

separated. This separation will improve communication, decision-making and

promote teamwork.

For the fourth consecutive year, the Bank is recognized as the best Bank in

Pakistan for the year 2004 by the prestigious periodical. The Banker UK (a

subsidiary of Financial Times Group). Were expanding horizons, reaching out, being there and bringing something for everyone. After all, we are The Nations

Bank

PRESIDENT MESSAGE

It gives me great pleasure to announce that National Bank of Pakistan is gearing

up to the challenges faced by the domestic banking industry due to innovations

and advances in the international banking world, which is the consequence of

globalization.

The bank wishes to effectively utilize the financial assistance being extended by

the Government of Pakistan for banking sector reforms aimed at reducing

operating costs and improving profitability.

National Bank of Pakistan is distinct from other banks in that it has a non profit

and service oriented motive, which has manifested itself in the area of salary

deposits of government employees and payment of utility bills. The bank renders

both of these services across the country reaching as far as the remotest regions;

from our northern borders to the Arabian Sea. These services do not contribute

towards the earnings of the bank; rather they put pressure on our resources.

Nevertheless, we are committed to serving small savers and the general public of

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the country. National Bank is everyones and does not only serve corporate

customers. By extending and targeting our research to improve bank earnings,

through customer focus of our commercial and corporate branches, and by

enhanced efforts towards the development of human capital, we shall very soontransform the bank from a bureaucratic organization to a fast paced, modern, and

competitive bank.

In conclusion, I firmly believe that we have the vision, which will enable us to

achieve even better results, safeguard the interest of our customers and to assist us

in our march towards progress and prosperity in future.

QAMAR HUSSAIN

Chairman & President.VISION STATEMENT: To be recognized as a leader and a brand synonymous

with trust, highest standards of service quality, international best practices and

social responsibility.

MISSION STATEMENT: NBP will aspire to the values that make NBP truly

the Nations Bank, by:

Institutionalizing a merit & performance culture.

Creating a distinctive brand identity by providing

the highest standard of services.

Adopting the best International Management

practices.

Making Shareholders values.

Discharging our responsibility as a good

corporate citizen of Pakistan & in countries where we operate.

CORE VALUES:

Highest standard of integrity.

Institutionalizing teamwork & performance

culture.

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Excellence in service.

Advancement of skills for tomorrow challenges.

Awareness of social & community response.

Value creation for all shareholders.

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GOALS:

To enhance profitability & maximization of NBP share through increasing

leverage of existing customer base & diversified range of products.

Board Of Directors

The board of directors is the supreme governing body of National Bank of

Pakistan. It comprises of a government representative, Pakistan Banking Council

Nominee, Nominee of corporate sector and three directors from National Bank of

Pakistan.

QAMAR HUSSAIN(CHAIR PERSON AND PRESIDENT)

TARIQ KARAMI Mrs HANIYA SHAHID NASEEM Ms NAZRATBASHIR

(DIRECTOR) (DIRECTOR) (DIRECTOR)

EKHLAQUE AHMED IBRAR A. MUMTAZ KOUSER HAMEED(DIRECTOR) (DIRECTOR) (DIRECTOR)

M..AYUB KHAN SIKANDAR HAYAT M.ARSHAD(DIRECTOR) (DIRECTOR) (DIRECTOR)

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Senior Management:

Masood Karim Sheikh SEVP & Group Chief, Corporate & Investment BankingGroupShahid Anwar Khan SEVP & Group Chief, Credit Management Group

Dr. Asif A. Brohi SEVP & Group Chief, Operations GroupImam Bakhsh Baloch SEVP & Group Chief, Audit & Inspection GroupZiaullah Khan SEVP & Group Chief, Compliance Group

Dr. Mirza Abrar Baig SEVP & Group Chief, Human Resources Management &Administration GroupAmer Siddiqui SEVP & Group Chief, Commercial & Retail Banking GroupMuhammad NusratVohra SEVP & Group Chief, Treasury Management Group

Amim Akhtar EVP & PSO to the President

Ekhlaq Ahmed EVP & Secretary Board of DirectorsTajammal HussainBokharee EVP/Divisional Head, Special Assets Management Group

Mrs. Khurshid MaqsoodAli

EVP & Divisional Head Employee Benefits, Disbursements& Trustee Division

Tahir Yaqoob EVP & Group Chief, Overseas Coordination & ManagementGroupAnwar Ahmed Meenai EVP & Divisional Head, Islamic Banking

Naeem Syed EVP & Head, Core Banking Application, PMO

Aamir Sattar Financial Controller & Divisional Head, Financial ControlDivisionAtif Hassan Khan Group Chief (A), Information Technology Group

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ORGANIZATIONAL HIERARCHY

PRESIDENT

SENIOR VICE EXECUTIVE PRESIDENT (SVEP)

EXECUTIVE VICE PRESIDENT (EVP)

SENIOR VICE PRESIDENT (SVP)

VICE PRESIDENT (VP)

ASSISTANT VICE PRESIDENT (AVP)

OFFICER GRADE III

OFFICER GRADE II

OFFICER GRADE I

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Objectives of NBP

Objectives are ends towards which an enterprise activity is aimed. The purpose of

business is production and marketing of economic goods and services but to

accomplish these objectives to a number of enterprise objectives may benecessary.

National bank of Pakistan has certain objectives. These objectives are

(1) Advancing loans:

One of the main objectives of NBP is advancing loans to industrialists and traders

against security of stock, debentures or other securities

(2) Accept deposits:

Bank provides deposit facility to its customers. The types of deposits areProfit and loss saving accounts

Fixed account

Current account

Basic banking account (bba account)

PLS Term deposit account

(3) Remitting of funds:

The bank provides the facility to its customers remitting large amounts of

money in the form of bank Drafts, Telegraphic Transfer, Mail Transfer to where

ever the customers want.

(4) Sale of promissory notes:

To sell and realize the proceeds of sale of any promissory notes, debentures, stock

receipts, bonds, shares etc.

(5) Selling and realizing property of bank claims:To manage sell and realize all property whether moveable or immoveable which

may come in any way of the bank in satisfaction of its claim.

(6) Investment or underwriting of stocks:

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To invest the funds of the bank in or the underwriting of any of stocks, funds,

shares securities, debentures, bonds or scripts or other securities for money issued

by any public limited companies and to convert them into money when required.

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Branches & Centers

Branches:

Currently more than 1500 branches are working in over all Pakistan in different

cities and regions including all major and minor cities of Pakistan.Online Branches:

Following are the online branches that are currently working in Pakistan.

Karachi

Islamabad

Rawalpindi

Gujar Khan

Sialkot

Gujranwala

Sheikhupura

Hyderabad

Quetta

LahoreBurewala

Multan

Muzaffarabad

Faisalabad

Peshawar

Kohat

Mirpur

Gujrat

Abootabad

Bhawalpur

DG Khan

DI Khan

Jhang

Ladkana

Mardan

Sahiwal

Sargodha

Sucker

Jhelum

Wah Cantt

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Swift Centers

SWIFT is a main center that is interconnecting all branches with each other.

SWIFT channels mainly do the international transactions of NBP. These

transactions include Foreign Exchange Dealings, Foreign Telegraphic Transfer and Letter of Credit.

NBP SWIFT Local CentersCity

FAISALABAD

GUJRANWALA

HYDERABAD

ISLAMABAD

LAHORE

MULTAN

PESHAWAR

QUETTA

RAWALPINDI

SIALKOTMIRPUR

MUZAFFARABAD

KARACHI

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NBP SWIFT International Centers

City Branch name

K.S.ARABIA Regional Office Saudi Arabia

KYRGYZ Rep National Bank Of Pakistan, Bishkek

ASHKHABAD National Bank Of Pakistan

CHAINA Regional Office, Beijing

SOUTH KOREA National bank of Pakistan ,Seoul Branch

BANGLA DESH National Bank of Pakistan, Chitta gong Branch

BISHKEK National Bank Of Pakistan, Bishkek Branch

FRANKFURT National Bank Of Pakistan, Frankfurt

HONG KONG National Bank Of Pakistan, Hong Kong

KABUL National Bank Of Pakistan, Kabul

MANAMA National Bank Of Pakistan, Bahrain

NEW YORK National Bank Of Pakistan, USA

PARIS National Bank Of Pakistan, France

SEOUL National Bank Of Pakistan, Seoul Branch Korea

TOKYO National Bank Of Pakistan, Tokyo Japan

KAZAKHASTAN Regional Office KHAZAKHSTAN

Through these channels NBP Super Market is sending messages for Letter of

Credit, foreign trade etc. because in every branch SWIFT system is not available

because of IT problems.

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Hajj Mubarak Scheme

For the convenience of a person with a limited income who desires to perform

Hajj, Hajj Mubarak Scheme is introduced. Moreover, National Bank of Pakistan

processes the Hajj applications of thousands of people successfully more than any

other bank in Pakistan.

NBP Advance Salary Scheme

Do you need urgent funds? If yes then head to National Bank of Pakistan and avail

NBP Advance Salary Scheme, which allow you to draw twenty months salary in

one go. This facility is available to permanent employees of the:

Federal and Provincial governments

Semi-governments, autonomous, semi-

autonomous, local bodies, and government corporations

Other corporations approved by NBP

No guarantee, collaterals, or insurance is required to avail this scheme. NBP gives

the facility to repay the excessive amount within 1 to 60 months. The procedure isvery easy, just fill the application form and choice between 1 to 60 months and

take your NBP. NBP received 20% markup on this loan. It advances twenty

salaries at once.

Fund Management Scheme

This scheme is offered to corporate under customer and is aimed at providing

better rate of return up to 15% per annum. One of the objectives of the scheme isto develop the secondary market for government securities.

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Functions of NBP

The National Bank of Pakistan performs two types of function. It acts as an

ordinary commercial bank, and at places where there are no branches of State

Bank of Pakistan it represents Pakistan, that is why it cannot be privatized. As a

commercial bank it performs the following functions.

Accepting of deposits of money on current

account, saving, term deposit and other profit and loss sharing accounts.

Borrowing money and arranging finance from

other banks.

Advancing and lending money to its clients.Financing of projects including technical

assistance, project appraisal through long term/short term loans.

Buying, selling, dealing and discounting of bills

of exchange, promissory notes, drafts, bill of lading, other instruments of

securities etc.

Foreign exchange business.

Financing of seasonal crops like cotton, wheat,

rice.

Receiving of bonds, scripts, valuable etc. for safe

custody.

Carrying on agency business of any description

other than managing agent on behalf of clients, including government and

local authorities.Generating, undertaking, promoting etc. of issue

of shares, bonds.

Transacting guarantees and indemnity business.

Undertaking and executing trusts.

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Making investments in other banking companies.

Joint venturing with foreign dealers, agents and

companies for its representation abroad.

Participating World Bank and AsianDevelopment bank's lines of credit.

Utility services.

Providing Hajj services to intending Hajjis.

Agent to State Bank of Pakistan for collecting.

Payment of pension on behalf of provincial and

central governments.

Treasury business.

Gold finances.

Functions of NBP as A Representative of State Bank of Pakistan

Collection of cheques and bill of exchange for its

customers.

Paying insurance premium, rent or other

obligations of the customers.

Collecting interests due, dividend pensions and

other sums due to customers.

Transferring of money from place to place.

Acting as an executor, trustees for the customers.

Providing safe custody and jewelry documents or securities.

Issuing of travelers cheques and letter of credit

to give credit facilities for travel.

Purchasing shares for the customers.

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Accepting bills of exchange on behalf of

customers.

Undertaking foreign exchange business.

Furnishing trade information and tenderingadvice to customers.

Formulating operation policy guidelines for the

banks.

Laying down performance criteria for banks and

taking steps for ensuring their observance.

Evaluating the performance of the banks in the

context of operational guidelines issued to the banks.

Determining the areas of coordination of the

banks.

Formulating schemes under section of the act.

Making recommendations to the federal

government for the appointment of the president and members of the

executive board.

Analyzing and appraising financial statement

including balance sheets and profit and loss accounts of banks and

appointment of auditors of the bank.

Conducting such surveys, inquiries and appraisals

as may be necessary for the purpose of this act.

Exercising and performing such powers and

functions of the federal government under the act and such other functionsas the federal government may assign to it.

Establishing a research department or conduct

banking research and in particular study overseas banking operation and

problems of the agricultural financing.

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Establishing a central training institution for

improving bank services.

Coordinating the planning of the operations of

nationalized commercial banks, and exercising general overall checks onthe cost of their operations.

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CHAPTER - 3

SERVICES OF NATIONAL BANK OF PAKISTAN

Service is an identifiable, intangible activity that is the main object of a transactiondesigned to provide want satisfaction to customers.

International Banking

National Bank of Pakistan is at the forefront of international banking in Pakistan,

which is proven by the fact that NBP has its branches in all of the major financial

capitals of the world. Additionally, we have recently set up the Financial

Institution Wing, which is placed under the Risk Management Group. The role of the Financial Institution Wing is:

To effectively manage NBPs exposure to foreign

and domestic correspondence

Manage the monetary aspect of NBPs

relationship with the correspondents to support trade, treasury and other

key business areas, thereby contributing to the banks profitabilityGeneration of incremental trade-finance business

and revenues

NBP offers:

The lowest rates on exports and other

international banking productsAccess to different local commercial banks in

international banking

DEMAND DRAFTS

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If you are looking for a safe, speedy and reliable way to transfer money, you can

now purchase NBPs Demand Drafts at very reasonable rates. Any person whether

an account holder of the bank or not, can purchase a Demand Draft from a bank

branch

Mail Transfers

Move your money safely and quickly using NBP Mail Transfer service. And we

also offer the most competitive rates in the market.

Pay Order

NBP provides another reason to transfer your money using our facilities. Our payorders are a secure and easy way to move your money from one place to another.

And, as usual, our charges for this service are extremely competitive.

Traveler's Cheques

Negotiability: Pak Rupees Travelers Cheques are a negotiable instrumentValidity: There is no restriction on the period of validityAvailability: At 700 branches of NBP all over the countryEncashment: At all 400 branches of NBPLimitation: No limit on purchaseSafety: NBP Travelers Cheques are the safest way to carry out money

Letter Of Credit

NBP is committed to offering its business customers the widest range of options in

the area of money transfer. If you are a commercial enterprise then our Letter of Credit service is just what you are looking for. With competitive rates, security,

and ease of transaction, NBP Letters of Credit are the best way to do your business

transactions.

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Commercial Finance

Us help make your dreams become a reality

Our dedicated team of professionals truly understands the needs of professionals,

agriculturists, large and small business and other segments of the economy. They

are the customers best resource in making NBPs products and services work for

them.

Foreign Remittances

To facilitate its customers in the area of Home Remittances, National Bank of

Pakistan has taken a number of measures to:

Increase home remittances through the banking

system.

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

to the beneficiaries.

New Features :

The existing system of home remittances has been revised/significantly improved

and well-trained field functionaries are posted to provide efficient and reliable

home remittance services to nonresident Pakistanis at 15 overseas branches of the

Bank besides United National Bank (the joint venture between NBP and UBL in

UK)., and Bank Al-Jazira, Saudi Arabia.

Zero Tariffs: NBP is providing home remittance

services without any charges.Strict monitoring of the system is done to ensure

the highest possible security.

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

the beneficiaries.

Swift System

The SWIFT system (Society for World-wide Inter- bank Financial

Telecommunications) has been introduced for speedy services in the area of home

remittances. The system has built-in features of computerized test keys, which

eliminates the manual application of tests that often cause delay in the payment of

home remittances.

The SWIFT Center is operational at National Bank of Pakistan with a universal

access number NBP-PKKA. All NBP overseas branches and overseas

correspondents (over 450) are drawing remittances through SWIFT.

Using the NBP network of branches, you can safely and speedily transfer money

for our business and personal needs.

Short Term Investments

NBP now offers excellent rates of profit on all its short-term investment accounts.Whether you are looking to invest for 3 months or 1 year, NBPs rates of profit are

extremely attractive, along with the security and service only NBP can provide.

Equity Investments

NBP has accelerated its activities in the stock market to improve its economic base

and restore investor confidence. The bank is now regarded as the most active and

dominant player in the development of the stock market. NBP is involved in thefollowing:

Investment into the capital market

Introduction of capital market accounts (under

process)

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Provide farmers an integrated package of credit

with supplies of essential inputs, technical knowledge, and supervision of

farming.

Agricultural Credit (Medium Term):

Production and development.

Watercourse improvement.

Wells.

Farm power.

Development loans for tea plantation.

Fencing.

Solar energy.

Equipment for sprinklers.

Farm Credit:

NBP also provides the following subsidized with ranges of 3 months to 1 year on a

renewal basis.

Operating loans.

Land improvement loans.

Equipment loans for purchase of tractors, farm

implements or any other equipment.

Livestock loans for the purchase, care, and

feeding of livestock.

Production Loans:

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Production loans are meant for basic inputs of the farm and are short term in

nature. Seeds, fertilizers, sprayers, etc are all covered under this scheme.

Corporate Finance:

Working Capital and Short Term Loans:

NBP specializes in providing Project Finance Export Refinance to exporters

Pre-shipment and Post-shipment financing to exporters Running finance Cash

Finance Small Finance Discounting & Bills Purchased Export Bills

Purchased / Pre-shipment / Post Shipment Agricultural Production Loans.

Medium term loans and Capital Expenditure Financing:

NBP provides financing for its clients capital expenditure and other long-term

investment needs. By sharing the risk associated with such long-term investments,

NBP expedites clients attempt to upgrade and expand their operation thereby

making possible the fulfillment of our clients vision. This type of long term

financing proves the banks belief in its client's capabilities, and its commitment to

the country.

Loan Structuring and Syndication:

National Banks leadership in loan syndicating stems from ability to forge strong

relationships not only with borrowers but also with bank investors. Because we

understand our syndicate partners asset criteria, we help borrowers meet

substantial financing needs by enabling them to reach the banks most interested in

lending to their particular industry, geographic location and structure through

syndicated debt offerings. Our syndication capabilities are complemented by our

own capital strength and by industry teams, who bring specialized knowledge to

the structure of a transaction.

Cash Management Services:

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With National Banks Cash Management Services (in process of being set up), the

customers sales collection will be channeled through vast network of NBP

branched spread across the country. This will enable the customer to manage their

companys total financial position right from your desktop computer. They willalso be able to take advantage of our outstanding range of payment, ejection,

liquidity and investment services. In fact, with NBP, youll be provided

everything, which takes to manage your cash flow more accurately.

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Lockers service:

National bank of Pakistan also provides lockers facility in the country. The lockers

issued only to the depositors. No lockers are issued to any unknown person.

The dual control system is used for lockers. The officer has master key to apply on

the locker but he cannot open the locker of any person. The locker holder provides

the bank has specimen signature. Whenever the locker holders come to open the

locker, his signatures are verified by the officer and then will be able to open his

locker. If the key of the locker is lost company providing these lockers breaks the

locker and new lock is fitted in its locker and lock is destroyed in the presence of

the locker holder and bank charges RS 1200 for that. In case the locker holder dies, the court opens his locker in the presence of his heir as mentioned in his will

or and his belongings are given to them and the locker is closed.

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CHAPTER - 4

ORGANIZATIONAL REVIEW

Work Done By Me:During my stay in National Bank of Pakistan, saddar road branch Peshawar. I

found it as among one of the best bank in Pakistan. As an internee, I enjoy

working their, .NBP has a very cooperative staff .I worked there in very congenial

and supportive environment. The staff over there is always being ready to guide

about bank and its systems.

According to its financial statements it is on a way to progress.

I joined National Bank of Pakistan, saddar road branch Peshawar on 17 th June,

2011.On my first day Mr. Waqar Ahmed Awan introduced me about the

functioning of the branch and the staff. He told me that all departments are very

important for banking functions. During the Two Months of my internship, I

worked in different sections of the branch and did the maximum practice of

banking system details of which is as under:

Departments In NBP

1. Foreign Exchange department2. Credit & Advance department

3. Bills section/department

4. Remittance section/ department

5. Deposit section/ department

6. Govt. section/ department

7. Cash section/ department

8. Establishment /administration section/ department

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ORGANOGRAM OF NBP

32

NATIONAL BANK OF PAKISTAN

Compliance Officer Manager Operations Manager

CREDITSECTION/DEPARTMEN

T

LOANOFFICER

Foreign Exchange Deptt

Credit (CAD Officer)

Bills Section/Deptt

Remittance Section/Deptt

Deposit Section/Deptt

Govt Section/Deptt

Cash Section/Deptt

Estab/Admn Section/Deptt

Each Department is headed by Departmental Head with a number of staff reporting to them as per volume of the work


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ORGANOGRAM OF FOREX DEPTT

33

INCHARGE

DEPOSIT SECTIONREMMITANCE

S IMPORT

1. Foreign CurrencySaving/Current A/C Punchingand Maintenance.

2. Deduction of Service Charges.

3. Opening/Closing of F.CAccounts and issuance of chequeBooks.

4. Foreign Exchange relevantReturns.

5. Western Union Payment.

6. up-date Record of ForeignExchange Rates.

7. FE inward remittance

8. FDDP

Overall Incharge of ForeignExchange Department andresponsible for all affairs of Foreign exchange.1. Checking and ensuringeffectiveness of controls.2. Ensure satisfactoryservices to Customers.3. Review of daily activityand daily transaction.4. Import L/C opening

lodgment and retirement.5. Opening of ForeignCurrency Account approval.6...Rectification of AuditIrregularities.7. Checking of all relevantdaybooks8. Daily activity report of FCDeposits.9. Sale purchase of F.C

Notes10. T.Cs Encashment/USD

bonds and their profit payment..11. Issuance /Authentication

of Form E.12.NOSTRO a/cReconciliation.13.Monthly mismatch of FE25 Deposit.14.Relevant returns.

1. Outward Remittances.

2. Daily FET Preparation andReporting to TMG H.O by Fax.

3. Foreign Bills Collection of Cheques/Instruments.

4. Local US$ Clearing &Settlement.

5. Maintenanace of AssignmentA/cs and their balancing with NBP New York andSBP.

6. Export and maintenance of relevant books/other records.

7. Processing /Payment of Freight subsidiary claims.

8. Reconciliation of Assignment A/cs.

9.SBP Summary Statement.


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Foreign Exchange Department

In this department I work for one week with Mr. Waqar ahmed Awan. I also deal

the Western Union Money Transfer activities in this department. It has specific

software which link with the Head office of NBP. For receiving money the ten

digits code number is require, the name of receiver & sender is also require, along

with this the NIC No of the receiver is necessary. The amount transfer is also

entering & it provides the complete information. The detail of the process is print

out. It has three parts on for the customer, other for the in charge of department &

the 3 rd is for the purpose of sending to the head office of NBP.

All the activities perform in this department are mention in the above chart of department.

Credit and Advances Department:

It may be defined as:

The sale of goods and services and money claims in the present in exchange for a

promise to pay in future .

The most important activity of the bank is the granting of credit to the customers.

NBP provides short term long terms financing for domestic and international

trade. The policies made by central office of the cash can be amended on the basis

of the rules and regulation, economic risk of each country board of directors and

committee of the NBP made this type of decisions and informed about these

decisions to the branch managers.

The in charge of this department is Mr. Naveed . They are working under the

control of manager only & free of the control of operational manager.

In this department I work two weeks I only perform the duty of President Rozgar

Scheme and Gold loan. The requirements & procedure of Gold loan is following.

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Gold Loan Service

First of all the person who need the money from bank as in the form of credit the

NBP provide this facility under the Gold loan for this he need to get the ECIB

(Electronic Customer Investigation Bureau) through it checked that the customer

may or may not borrow money from any other bank of Pakistan. It is software that

is providing to all banks by SBP. After this step the NADRA verification of the

borrower NIC is made. And it is also the necessary step of Gold loan requirements

that the current account will be open in the account opening department, for the

purpose of deposit of insurance and installments to the bank. When it is clear than

the approval is made. The borrower is send to the ANDARSHER for the purpose

of weighting of Gold. The bank made a contract with the Goldsmith that he

performed the duty on behalf of NBP. He weight and valued the Gold and write a

receipt for bank. The bank receives the documents and Gold. The payment is made

to he borrower and the gold is kept in the locker of bank. Under the authority of

Chief Cashier.

The Gold loan is the demand finance. The form is containing of the following

requirements.

Proposal of Rs-------------.Terms & conditions.

NameLimitPurposeSecurityDate of expiryDate of final adjustments

Date of markupMode of repaymentDocuments

President's Rozgar Scheme

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If you are aged between 18 and 45 years, you could be eligible for easy

financing for self employment in the categories below:

NBP Karobar Utility Store .

NBP Karobar Mobile Utility Store.

NBP Karobar Mobile General Store.

NBP Karobar Transport.

NBP Karobar PCO.

NBP Karobar Tele-Centre.

In this department only provide the transport facility as Rickshaw. The

requirements & procedures for the product is the following.

ECIB, NADRA verification of NIC, current account. Application form, legal

documents, Authority letter, Sanction letter, Delivery order, purchase order,

registration, insurance. Repayment schedule, To Whom It May Concern, credit

approval memo, internal verification of applicant& witnesses.

Other services of this department:

This department also provides the service of House Building Finance, Car finance,

computer finance to the employees of NBP only. And Advance salary

is providing to those departments employees which have account with

NBP.

Account Opening Department:

In this department, I gain the practical knowledge about opening account. This

department deals with opening current and saving account for its customers and all

matters regarding thereof. The customers opening current and saving accounts can

be categorized as following.

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Individual.

Firm.

Company.

Trust.Staff.

Others.

Opening Accounts

In order to open an account, first of all the customers have to a verified NIC from

NADRA. The requirements of the account opening form are type of account,nature of account, currency, Next of kin, personal information, signatures etc.

Types of accounts

Following types of accounts are open in NBP

Saving account

Current or demand account

Fixed account

Saving account (PLS)

This type of account is designed to encourage the saving habit of the customer and

lead to a long-term banking or investment relationship.

Bank saving accounts are in the nature of deposits accounts and are not normally

available for drawings. Rates of interest are typically ahead, by a small margin.

Saving accounts with the banking sector represent a very small proportion of total

deposits.

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Current or demand account

These are those deposits, which can be drawn by the depositor at anytime by

presenting a cheque to the bank. People deposit their money in this account they

gave a ready command on their account in developed and under developed

countries of the world, a very significant part of money is kept under current or

demand account.

Fixed account

Fixed accounts are those, which are deposited for a fixed period of time and arerepayable after the expiry of stipulated time to the customers. Those people who

have surplus funds and want to have save investments deposit the amount in the

fixed account. The rate of interest given to depositor varies with the length of

deposit, i.e. it is higher for longer period and lowers for shorter period.

Issuance of Cheque Book

After opening the account, a cheque book is given to the customer to sign uponwhich the number of cheque book issued and the name of the customer is written.

Bank issues a cheque book against requisition. A cheque book may be of (PLS),

25 & 50 or 100 leave (current A/C).

A cheque book register is maintained by the office. In this register, the cheque

book inventory, cheque books issue is recorded.

Issuance of New Cheque Book to Old Customer

The accountholders request for the new chequebook by presenting the requisition

slips along with the authority letter to the concerned office. His signatures are

verified before giving him a new chequebook. The presence of the accountholders

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is compulsory to get a new chequebook. But if he sends a third person to get his

chequebook then the procedure is as follows;

An authority letter is given to the third party by

the accountholders.

The accountholders verify the signature of the

third person on that authority letter.

The bank officer gets the signature of that third

person to confirm whether he is the same to whom the accountholder has

sent.

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

Clearing Department

In this department, I have worked for two weeks. Main branch receives the

cheques from all of its branches and makes the list of these cheques again. Main

branch sends these cheques to the state bank of Pakistan where a clearinghouse

exits. In this clearinghouse the representatives receive their cheques and go back to their bank's main branch. Then the main branch sends these cheques to their

relevant branches where the validity of these cheques is verified and the accounts

of the relevant clients are affected.

The major function of Clearing Department is to receive the cheques, which are

drawn on some other bank. The customer can get the money in his account

at NBP, from the cheques drawn on another bank. The bank accepts these

cheques and collects the amount from that bank on which cheque is drawn

through the Clearing House. Bank charges some commission for this

function.

Stamping

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Early in the morning the cheques are received and than arrange in different sets.

All cheques are stamped by a number of different stamps, which is use for specific

purpose. The original cheque will be marked with two stamps. Mostly used stamps

are:

National bank of Pakistan

Clearing Stamp

At the end of day, all cheques are counted and then scrutinized in bank-wise and

sent to the Clearing House.

Remittances Department

Remittance is the monitory transfer from one place to another place or from one

country to another country to fulfill the requirements of the customers by the order

of the customer.

I worked in this department for one week. In this department internees are advised

only to observe the working of transfer of money from one place to another place

of the country by the above modes of transferring money.

Issuing a bank draft it is necessary that the draft should be free from alternations.

All the details must be written clearly in ink. After issuance a demand draft it is

handed over to the applicant and its advice containing the particulars of the draft is

sent to drawer branch with its necessary information and payment of the draft is

making on its presentation.

I learn in this department also the basic of the following instruments:

Payment order (p/o)

Demand draft (DD)

Telegraphic transfer (TT)

Mail transfer (MT)

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Pay Order

It is an instrument, which is payable in demand .Pay order is also called the

bankers cheque drawn upon the issuing bank itself. It is not negotiable and

therefore, bankers tend to cross the instrument Payees account only to avoid the

possibility of dealing with instruments with forged endorsement. The pay order is

issued favoring individuals, commercial concerns, and government departments.

On the presentation of pay order, the bank is liable to pay the amount to the

customer.

Demand Draft

If you are looking for a safe, speedy and reliable way to transfer money, you can

now purchase NBPs Demand Drafts at very reasonable rates. Any person whether

an account holder of the bank or not, can purchase a Demand Draft from a bank

branch.

Telegraphic Transfer

It is the message, which is sent from one branch to another on the order of payer to

payee through wire. It is one of the quickest means to transfer fund through the

use of telex/fax/internet or cable. Payment to the beneficiary is affected directly

by the drawee office upon identification or through credit into beneficiarys bank

account. As such remitting office is not required to issue any instrument payment

to the remitter for delivery to the beneficiary.

Mail Transfer

It is the same like TT, but in this type, the message is sent through mail rather than

telex. The procedure is same as TT, but the advice is sent through mail rather than

wired.

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New Features:

The existing system of home remittances has been revised/significantly improved

and well-trained field functionaries are posted to provide efficient and reliable

home remittance services to nonresident Pakistanis at overseas branches of the

Bank besides Pakistan International Bank (UK) Ltd., and Bank Al-Jazira, Saudi

Arabia.

Zero Tariffs: NBP is providing home remittance

services without any charges.

Strict monitoring of the system is done to ensure

the highest possible security.Special courier services are hired for expeditious

delivery of home remittances to the beneficiaries.

Dispatch Department

I worked in this department for six days. Department deals in receiving of all the

posted documents. They receive the posted materials posted by other banks andinstitutions. Also mail their own documents to other organization. After receiving

the documents it is recorded in the registered.

ATM Department

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I work in this department for three days .on the first day I fill the forms for those

customers whose ATM card are expired and issue the reminders to those customers

through their home address. The ATM is the separate department in the main

branch Peshawar Cantt. It is operated by a single person. The NBP due to the fraudin ATM card operation ban the transaction with other banks and the ATM card of

NBP not operative in those banks. They also cannot provide the facility of Credit

Card because the people cannot repay their dues to the bank.

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CHAPTER - 5

ANALYSIS OF FINANCIAL STATEMENTS(FOR THE YEAR 2011 & 2010)

Financial Analysis

Financial analysis is an evaluation of a firms performance. The source of financial

analysis is the financial statements & Director Reports. The main purpose of the

financial analysis is to give a clear picture of the financial position by studying the

relationship & comparison between the items in the statement.

The financial statements are the balance sheet and income statement. The balance

sheet summarizes the assets, liabilities and owner s equity of a business at a point

of time, and the income statement summarizes revenues and expenses of the over a

particular period of time.

Seven Years Performance of NBP at a Glance (Rs. In million)

Year 2010 2009 2008 2007 2006 2005 2004ItemsTotal assets 762,193 635,133 577,719 553,23

1468,972432,80

3415,089

Deposits 591,907 501,872 463,427 465,572

395,492362,866

349,617

Advances 340,677 316,110 268,839 220,794

161,266140,547

170,319

Investments 210,787 139,947 156,985 149,350

166,196143,525

71,759

Shareholders equity 70,907 53,045 37,636 24,900 18,134 14,279 11,959Pre-tax profit 28,060 26,311 19,056 11,978 9,009 6,045 3,016

After-tax profit 19,033 17,022 12,709 6,195 4,198 2,253 1,149Earning per share (EPS) 23.34 20.88 17.92 10.48 8.53 5.49 3.08Return on assets (ROA) 2.49% 4.3% 3.4% 2.4% 2.0% 1.4% 0.8%

No of Branches 1,243 1,250 1,242 1,226 1,199 1,204 1,245 No of employees 14,079 14,019 13,824 13,745 13,272 12,195 15,163

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On the basis of the view of financial experts I also study and explain the financial

performance of the NBP of the last seven years. (2004 to 2010).

The above table shows the performance of NBP in the last seven years. The total

assets in 2004 are 415,089millions and that increase to 553,231millions in 2007and also show increasing trend in 2010 is become 762,193 millions.

Similarly the deposits increase up to 2007 and than slightly decline in2008, and

than start increasing later from 2009 to 2010.

The advances are decrease from 2004 to 2005 and than start increasing up to 2010.

The investment is fluctuating in the seven years period.

The shareholder equity is increasing through the period from 2004 11,959millions

to 2010 70,907millions.

The pre-tax profit and after- tax profit is increasing through the period. The

earning per share is move upward from2004 to 2010. The return on assets is also

increase up to 2009 and than decline in 2010. The number of branches and the

number of employees is decrease from 2004 to 2005 and start increasing up to

2010.

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NATIONAL BANK OF PAKISTANBALANCE SHEET

AS AT 31 STDECEMBER, 2011& 20102011

(Rupees in 000s)2010

(Rupees in 000s)ASSETSCash &Balance with other BanksLending to FinancialInstitutioninvestmentAdvanceOperating Fixed Assets

Deferred tax assetsOther Assets

94,873,249

37,472,83221,464,600210,787,868340,677,10025,922,979-30,994,965

78,625,227

40,641,67923,012,732139,946,995316,110,4069,681,974-27,113,698

TOTAL ASSETS 762,193,593 635,132,711LIABILITIES

Bills Payables

10,605,663BorrowingsDeposits & other accountsSub-ordinated loansLiabilities against assetssubject to finance leaseDeferred tax liabilities-net

Other liabilities

7,061,902

10,886,063591,907,435-

33,5545,097,83130,869,154

10,605,663

11,704,079501,872,243-

13,2352,387,07326,596,300

TOATAL LIAILITIES 645,855,939 553,178,593NET ASSETS 116,337,654 81,954,118

PRESENTED BY

Share capitalReservesUnappropriated profit

8,154.31915,772,12445,344,188

7,090,71213,879,26032,074,677

Surplus on revaluation of assets

69,270,631

47,067,023116,337,654

53,044,649

28,909,66981,954,118

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NATIONAL BANK OF PAKISTANPROFIT AND LOSS ACCOUNT

FOR THE YEAR ENDED 31 st DECENBER 2011& 2010

2011

Rupees in000's

2010

Rupees in000's

Mark-up /return/interest earnedMark-up return/interest expensed

50,569,48116,940,011

44,100,93413,947,218

Net mark-up/interest income 33,629,470 30,153,716

Provision against non-performing loans and advanceReversal of provision for diminution in the value of investmentsBad debts written off directly

4,723,084

(40,084)

39,899

30,075,723

(709,461)

5,284 4,722,735 2,371,546

Net mark-up/ interest income after provision 28,906,735 27,782,170

NON-MARK-UP/INTEREST INCOME

Fee, Commission and brokerage incomeDividend incomeIncome from dealing in foreign currenciesGain on sale and redemption of securitiesUnrealized loss on revaluation of investmentclassified as held-for-tradingOther income

6,781.6833,263,2461,042,8272,341,690

(31,964)

147,363

6,144,6282,891,7551,333,8401,169,515

(4,464)

627,618

Total non-markup/interest income 13,544,845 12,162,892 42,544,845 39,945,062

NON- MARK-UP/INTEREST EXPENSESAdministrative ExpensesOther provision/write offsOther charges

14,205,911168,02717,141

13,443,441(17,283)208,327

Total non mark-up/interest expenses 14,391,079 13,634,485 Extra ordinary items - -

Profit before taxation 28,060,501 26,310,577Taxation-Current

-Prior years-Deferred

8,311,500391,497323,731

8,695,598530,65261,981

9,026,728 9,288,231Profit after taxation 19,033,728 17,022,346Unappropriated profit brought forwardTransfer from surplus on revaluation of fixed assets onaccount of incremental depreciation

32,074,67739,007

19,372,52341,060

Profit available for appropriation 51,147,457 36,435,929Basic earning per share

Diluted earning per share

23.34

23.34

20.88

20.88

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HORIZONTAL ANALYSIS:Profit & Loss AccountBalance Sheet

The horizontal analysis shows the comparison between the current and past year

performance of the organization by comparing the Balance sheet ant profit and

loss statement items. The formula use for horizontal analysis as follow.

VERTICAL ANALYSIS:Profit & Loss Account

Balance Sheet

In vertical analysis all the items of balance sheet and profit and loss statement are

divided by the total assets and total equity and liabilities and the revenue or sales

in balance sheet and profit and loss statement respectively.

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National Bank of PakistanHORIZANTAL ANALYSIS

BALANCE SHEETAS AT 31 STDECEMBER, 2011& 2010

ASSETS2011Rupees in 000s 2010Rupees in 000s

Increase/

decreaseRupees in 000s %age

Cash &Balance with other Banks

Balance with other Banks

Lending to Financial Institution

Investment

Advances

Operating Fixed Assets

Deferred tax assets

Other Assets

94,873,249

37,472,832

21,464,600

210,787,868

340,677,100

25,922,979

-

30,994,965

78,625,227

40,641,679

23,012,732

139,946,995

316,110,406

9,681,974

-

27,113,698

16,248,022

(3,168,847)

(1,548,132)

70,840,873

24,566,694

16,241,005

-

3,881,267

20.67

(7.79)

(6.72)

50.62

7.77

167.74

-

14.31

Total Assets 762,193,593 635,132,711 127,060,882 20.00

LIABILITIESBills PayablesBorrowingsDeposits & other accounts

Sub-ordinated loansLiabilities against assets subjectTo finance leaseDeferred tax liabilities-netOther liabilities

7,061,90210,886,063591,907,435

-33,554

5,097,83130,869,154

10,605,66311,704,079501,872,243

-13,235

2,387,07326, 596,300

(3,543,761)(818,016)

90,035,192

-20,319

2,710,7584,272,854

(33.41)(6.98)17.93

-153.52

113.5616.06

Total liabilities 645855939 553178593 92,677,346 16.75NET ASSETS 116,337,654 81, 954,118 34,383,536 41.95Share capital

Reserves

Unappropriated profit

8,154.319

15,772,124

45,344,188

7, 090,712

13,879,260

32, 074, 677

1,063,607

1,892,864

13,269,511

15.00

13.63

41.37

69,270,631 53, 044, 649 16,225,982 30.58

Surplus on revaluation of

Assets-net

47,067,023 28,909,469 18,157,554 62.80

116,337,654 81,954,118 34,383,536 41.95

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NATIONAL BANK OF PAKISTANHORIZONTAL ANALYSIS

PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 31 st DECENBER 2011& 2010

NATIONAL BANK OF PAKISTAN

2011Rupees in 000's

2010Rupees in

000's

Increase/DecreaseRupees in

000s

Changein %age

Mark-up return/interest earnedMark-up return/interest expensed

50,569,48116,940,011

44,100,93413,947,218

6,468,5472992793

14.6621.46

Net mark-up/interest income 33,629,470 30,153,716 3475754 11.52Provision against non-performingLoans and advancesReversal of provision for diminutionin the value of investments

bad debt written off directly

4,723,084

(40,248)

39,899

3,075,723

(709,461)

5,284

1647361

(749709)

34615

53.56

(105.67)

655.09

4,722,735 2,371,546 2,351,189 99.14Net mark-up/ interest income after provision

28,906,735 27,782,170 1124565 4.04

Fee, commission and brokerageIncomeDividend incomeIncome from dealing in foreigncurrenciesGain on sale and redemption of SecuritiesUnrealized loss on revaluation of investments classified as held for trading

other income

6,781,683

3,263,2461,042,827

2,341,690

(31,964)

147,363

6,144,628

2,891,7551,333,840

1,169,515

(4,464)

627,618

637055

371491(291013)

1172175

(36428)

(480255)

10.36

12.84(21.82)

100.22

(816.03)

(76.52)

Total non-mark-up/interestexpenses

13,544,845 12,162,892 1381953 11.36

42,451,580 39,945,062 2506518 6.27NON MARK-UP /INTEREST EXPENCES Administrative expenseOther provisions/writeOther charges

14,205,911168,02717,141

13,443,441(17,283)

208,327

762470150744(191,186)

5.67872.20(91.77)

Extra ordinary items

-- - - -

Profit before taxation 28,060,501 26,310,577 1749924 6.65Taxation-Current

-Prior years-Deferred

8,311,500391,497323,731

8,695,598530,65261,981

(384098)(139155)261750

(4.42)(26.22)422.30

9,026,728 9,288,231 (261503) (2.81)Profit after taxation 19,033,773 17,022,346 2011427 11.81

Unappropriated profit/(loss) broughtforward

Transfer from surplus onrevaluation of fixed assets on accountof incremental depreciation

32,074,677

39,007

19,372,523

41,060

12702154

(2053)

65.56

(5.00)

Profit available for appropriation 51,147,457 36,435,929 14711528 40.37Rupees

Basic earning per share 23.34 20.88 2.46 11.78

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VERTICAL ANALYSISBALANCE SHEET

AS AT 31 STDECEMBER, 2011& 20102011

Rupeesin 000s

%2010

Rupeesin 000s

%

ASSETSCash &Balance with other Banks

Balance with other Banks

Lending to Financial Institution

Investment

Advances

Operating Fixed Assets

Deferred tax assets

Other Assets

94,873,249

37,472,832

21,464,600

210,787,868

340,677,100

25,922,979

-

30,994,965

12.44

4.91

2.81

27.65

44.69

3.40

-

4.06

78,625,227

40,641,679

23,012,732

139,946,995

316,110,406

9,681,974

-

27,113,698

12.37

6.39

3.62

22.03

49.77

1.52

-

4.26

Total assets 762,193,593 100 635,132,711 100LIABILITIES

Bills PayablesBorrowingsDeposits & other accountssub-ordinated loans

Liabilities against assets subjectTo finance leaseDeferred tax liabilities-netOther liabilities

7,061,90210,886,063591,907,435

-33,554

5,097,83130,869,154

0.921.42

77.65-

4.40

0.664.05

10,605,66311,704,079501,872,243

-13,235

2,387,07326,596,300

1.661.8479.01

-2.08

0.374.18

Total liabilities 645855939 84.73 553178593 87.09NET ASSETS 116,337,654 15.26 81,954,118 12.90Share capital

Reserves

Unappropriated profit

53,044,649 8.

8,154.319

15,772,124

45,344,188

1.06

2.06

5.94

7,090,712

13,879,260

32,074,677

1.11

2.18

5.05

69,270,631 9.08 53,044,649 8.35Surplus on revaluation of

Assets-net

47,067,023 6.17 28,909,669 4.55

116,337,654 15.26 81,954,118 12.90

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NATIONAL BANK OF PAKISTANVERTICAL ANALYSIS

ROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 31 st DECENBER 2011& 2010

2011

Rupees in000's % age

2010Rupees in

000's%

ageMark-up/ return/ interest earnedMark-up/ return/ interest expensed

50,569,48116,940,011

10033.49

44,100,93413,947,218

10031.62

Net-mark up/interest income 33,629,470 66.50 30,153,716 68.37

Provision against non-performingloans and advancesReversal of provision for diminutionin the value of investments

bad debt written off directly

4,723,084

(40,248)

39,899

9.33

(0.07)

0.07

3,075,723

(709,461)

5,284

6.97

(1.60)

0.01

4,722,735 9.33 2,371,546 5.37

Net-mark up/interest incomeafter provision28,906,735 57.16 27,782,170 62.99

NON MARK UP /INTERESTINCOMEFee, commission and brokerageIncomeDividend incomeIncome from dealing in foreigncurrenciesGain on sale and redemption of SecuritiesUnrealized loss on revaluation of investments classified as held for tradingother income

6,781,683

3,263,2461,042,827

2,341,690

(31,964)

147,363

13.41

6.452.06

4.63

(0.06)

0.29

6,144,628

2,891,7551,333,840

1,169,515

(4,464)

627,618

13.93

6.553.02

2.65

(0.01)

1.42

Total non mark-up/ interest 13,544,845 26.78 12,162,892 27.5742,451,580 83.94 39,945,062 90.57NON MARK-UP /INTERESTEXPENCESAdministrative expenseOther provisions/write offs/(reversals)Other charges

14,205,911168,027

17,141

28.090.33

0.03

13,443,441(17,283)

208,327

30.48(0.03)

0.47

Total non mark-up / interestexpenses

14,391,079 0.47 13,634,485 30.91

28,060,501 28.45 26,310,577 59.65Extra ordinary / unusual items - - - -PROFIT BEFORE TAXATION 28,060,501 55.48 26,310,577 59.65Taxation- current

-prior years

-deferred

8,311,500391,497

323,731

16.43077

0.64

8,695,598530,652

61,981

19.711.20

0.149,026,728 17.85 9,288,231 21.06PROFIT AFTER TAXATION

17,022,346 38.59

19,033,773 37.63 17,022,346 38.59

Unappropriated profit broughtforward

19,372,523 43.92Transfer from surplus on revaluation

32,074,677

39,007

63.42

0.07

19,372,523

41,060

43.92

0.09

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of fixed assets on account of incremental depreciationProfit available for appropriation

51,147,457 101.14 36,435,929 82.61

Basic earning per share 23.34 20.88

RATIO ANALYSIS

Financial analysis is the process of identifying the financial strengths and

weakness of the firm by properly establishing relationship between the items of

balance sheet and profit and loss statement, in order to make rational decision in

keeping with the objective of the organization, for that purpose the management

use analytical tools. To evaluate the financial condition and performance of the

business entity.

The financial ratio is a number that expresses the value of one financial variable

relative to another. Put more simply, a financial ratio is the result you get when

you divide one financial number by another. Calculating an individual ratio is

simple, but each ratio must be analyzed carefully to effectively measure a firms

performance.

It is important way to state meaningful relationship between two components of a

financial statement. Ratios are guides or shortcuts that are useful in evaluating acompany s financial position and operations and making comparisons with results

in previous years or with other companies. The primary purpose of ratios is to

point out areas needing further investigation.

Therefore in my report I include some of the ratio to show the financial position of

the NBP.

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Shareholders Equity

2011 2010

19,033,773,000

________________x 100

69,270,631,000

= 27.47%

17,022,346,000

______________x 100

53,044,649,000

= 32.09%COMMENTS:

The ROE (return on equity) is also not show the satisfactory result because the net profit

is increased but on the other hand the holder equity is also increase and that is way the

result cannot show favorable sign.

Advances To Total Deposits = __ Advances ____ x 100 Total Deposit

2011 2010

340,677,100,000

________________ x 100

591,907,435,000

=57.55%

316,110,406,000

______________x 100

501,872,243,000

= 62.98%

COMMENTS:

The advance to total deposit is increase but by small amounts that are way the result is

not favorable show by ratio result.

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Advances To Total Assets Ratio = Advances____ x 100Total Assets

2011 2010

340,677,100,000

________________ x 100

762,193,593

=44.69%

316,110,406,000

______________x 100

635,132,711

= 49.77%

COMMENTS:

The advances is increased but by less amount as compare to the increased in total assets

therefore the ratio result is not good.

Debt To Equity Ratio = Total Debt __________ x 100Shareholders Equity

2011 2010

645,855,939,000

________________ x 100

69,270,631,000

=932.36%

553,178,593,000

______________x 100

53,044,649,000

=1042.85%

COMMENTS:

The total debt is increased and on the other side the share holder equity is also increased

also that is the ratio is decrease show favorable trend for share holders.

Long Term Debt To Fixed Assets Ratio = Long Term Debt x 100Fixed Assets

2011 2010

10,886,063,000

________________ x 100

25,922,979,000

=41.99%

11,704,079,000

________________ x 100

9,681,974,000

= 120.88%COMMENTS:

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The long term debt is decreasing from 2010 & fixed assets are increased more than debts

that are good symbol.

Debt Ratio : = Total Liabilities x 100Total Assets

2011 2010

645,855,939,000

__________________x 100

762,193,593,000

=84.73%

553,178,593,000

______________ x 100

635,132,711,000

= 87.09%

COMMENTS:

The debt ratio is show that the liabilities are increased at the slow rate than total assets

and that is favorable for NBP.

STOCK HOLDER EQUITY TO TOTAL LIABILITIES: =

STOCK HOLDERS EQYITY X 100TOTAL LIABILITIES

2011 2010

69,270,631,000

_________________ x 100

645,855,939,000

= 10.72%

53,044,649,000

_______________ x 100

553,178,593,000

= 9.58%

COMMENTS: The stock holder equity is show favorable trend from 2010.

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INVESTMENT TO TOTAL ASSETS = INVESTMENT X 100TOTAL ASSETS

2011 2010

210,787,868,000

_________________ x 100

762,193,593,000

= 27.65 %

139,946,995,000

_______________ x 100

635,132,711,000

= 22.03% COMMENTS: The investment ratio also increase that show the growth of NBP.

DEPOSITS TO TOTAL ASSETS RATIO = DEPOSITS X 100TOTAL ASSETS

2011 2010

591,907,435,000

_________________ x 100

762,193,593,000

=77.65%

501,872,243,000

_______________ x 100

635,132,711,000

= 79.01 %COMMENTS:

The deposit ratio as compare to total assets is decreasing that show that the total assets

figure is increased more than the previous year.

PROPRIETARY RATIO = STOCK HOLDERS EQYITY X 100TOTAL ASSETS

2011 2010

69,270,631,000

_______________ x 100

762,193,593,000

= 9.08%

53,044,649,000

_______________ x 100

635,132,711,000

= 8.35 %

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COMMENTS:

The proprietary ratio is increasing from 2007to 2008that is good news for shareholders.

That show the contribution of shareholders is increased.

EARNING PER SHARE: = ______NET PROFIT_____NUMBER OF SHARES

2011 2010

19,033,773,000

________________

815,432

= 23.34

17,022,346,000

_________________

709,071

= 24.00

COMMENTS:The earning per share is decreasing from 2010 to 2011 that show unfavorable news for

share holders.

AVERAGE PROFIT PER BRANCH =

NET PROFIT ____________________________

AVERAGE NUMBER OF BRANCHES

2011 2010

19,033,773,000

_______________

1243

= 15,312.76

17,022,346,000

__________________

1250

= 13,617.87 COMMENTS:

The average profit of NBP is increasing that show the efficiency of NBP. The number of

branches is decrease and net profit is increased.

CHAPTER - 6

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SWOT ANALYSIS

INTRODUCTION

SWOT analysis is an acronym that stands for strengths, weaknesses, opportunities,

and threats. SWOT analysis is careful evaluation of an organizations internal

strengths and weakness as well as its environmental opportunities and threats.

SWOT analysis is a situational which includes strengths, weaknesses,

opportunities and threats that affect organizational performance.

The overall evaluation of a company strengths, weaknesses, opportunities and

threats is called SWOT analysis.

In SWOT analysis the best strategies accomplish an organizations mission by:

1. Exploiting an organizations opportunities and strength.

2. Neutralizing it threats.

3. Avoiding or correcting its weakness.

SWOT analysis is one of the most important steps in formulating strategy using

the organization mission as a context; managers assess internal strengths

distinctive competencies and weakness and external opportunities and threats. The

goal is to then develop good strategies and exploit opportunities and strengths

neutralize threats and avoid weaknesses.

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STRENGTHS

Oldest Institution

NBP is one of the oldest bank of Pakistan and first nationalized bank Hence itscustomer base is strength from this plus point as customers have more confidence

in the bank. The additional value services as the privilege for the bank.

Alternate Duties in SBP Absence

The NBP performs additional services for its customers as well as the other bank

customer in the absence of SBP.

More Deposits than Other Banks

NBP has the relative competence in having more deposits than the other bank.

This is because of the confidence the customer have in the bank. The bank being

the privileged and oldest bank in banking sector of Pakistan enjoys this edge over

all others, lacking it.

Employee Benefits

The employers at NBP are offered reasonable monetary benefit. Normally two

bonuses are given Eid-Ul-Fitar & Eid-Ul-Azha. This serves as an additional

benefit and competency for the bank and a source of motivation for the employees.

Broad Network

The bank has another competency i.e. it has broad-basses network of branches

throughout the country also more than one branch in high productive cities. Thecustomers are provided services at their nearest possible place to confirm customer

satisfied.

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Strictly followed rules & regulation :

The employees at NBP are strict followers of rule & regulation imposed by bank.

The disciplined environment at NBP bolsters its image and also enhances the over

all out put of the organization.

Professional Competence

The employees at NBP here have a good hold on their descriptions, as they are

highly skilled Professionals with background in business administration, banking,

economics etc. These professional competencies enable the employees to

understand and perform the function and operation in better way.

Healthy Environment

The working condition in the NBP branch here is very conductive and favorable

for better output. The informal environment affects the performance of the

employees in a positive way.

Relation between Staff And Other Employees.

The bank enjoys a good plus point when it comes to the employee manager

relationship,the hearing as removing of discrepancies if any, between the

employees, and between the manager and employees.

WEAKNESSES

Lack of marketing effort:

The bank does not promote its corporate image, services, etc on a competitiveway. Hence lacks far behind in marketing effort. A need for aggressive marketing

is there in this ERA marketing is now becoming a part of every organization.

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NBP under Political Pressure.

The strong political hold of some parties and government and their dominance is

affecting the bank in a negative way. They sometime have to provide loan under

the pressure, which leads to uneven and adjusted feeling in the bank employees.

Favoritism and Nepotism.

The promotions and bonuses etc in the bank are often powered by seniors

favoritism or depends upon their wills and decision. This adds to the negative

factors, which denominate the employees thus resulting in affecting their

performance negatively.

Lack of Financial Product

The bank falls far behind when the innovative and new schemes are considered. It

has not been involved in the tug of war between the competitors to the accounts

and strengthens the existing customer base. This stands out to be the major

incompetence and weakness of the banks.

Inefficient Counter Services In The Rush Hours

During the rush hours, the bank is founded out to be a total flop to handle the mob

of people peaking from windows and doors. The bank has deficiency to operate in

the stages of rush hours where the people find them services entangled in a

situation of nowhere because they are not well served.

Lack Of Computerized Network

The bank lack the strength of being powered by the network of computers, which

have saved time, energy and would have lessened the mental stress, the employees

have currently. This would add to the strength if it were powered by network of

computers.

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Lack Of Modern Equipment

The bank lacks the modern Equipment that is note counting machine computers.

Even if there is any equipment they lack to fall in the criteria of being rearmed as

update and upgraded

Uneven Work Distribution

The workload in NBP is not evenly distributed and the workload tends to be more

on some employees while others abscond away from their responsibilities, which

server as a de-motivation factor for employees performing above average work.

OPPORTUNITIES

Electronic Banking

The world today has become a global village because of advancement in the

technologies, especially in communication sector. More emphasis is now given to

avail the modern technologies to better the performances. NBP can utilize the

electronic banking opportunity to ensure on line banking 24 hours a day. This

would give a competitive edge over others.

Micro Financing

Because of the need for micro financing in the market, there are lot of

opportunities in this regard. Other banks have already initiated, now the time has

arrived when the NBP must realize it and take on step to cater an ongoing demand.

THREATS

Emergence of New Competitors

The bank is facing threats with the emergence of new competitors especially in

terms of foreign banks. These foreign banks are equipped with heavy financial

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power with excellent and innovative ways of promoting and performing their

services. The bank has to take initiative in this regard or will find itself far back in

competition.

Political Pressure by Elected Government

The ongoing shift in power in political arena in the country effects the

performance of the bank has to forward loans to politically powerful persons

which create a sense of insecurity and demoralization in the customer as well as

employees.

Downsizing

The bank is currently acting upon the policy of downsizing which threaten the

environment of the bank Employees feel insecurity in doing their jobs and work,

hence affecting the over all performance of employees negatively.

Customers Complaints

There exists no regular and specific system of the removal of customer

complaints. Now a day a need for total customer satisfaction is emerging and intheir demanding consequences customer's complaints are ignored.

COMPETITIVE ANALYSIS

Porters five forces model:

This approach is widely used for competitive analysis. It is because of the high

intensity of competition among companies there five main competitive forces.

Rivalry among competitive firms:

It is a very powerful force among the competitive forces the strategies pursued by

one firm can be successful only to extent that they provide competitive advantages

over the competitor. These competitive strategies may be lowering prices, best

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quality series. The NBP offering very low charges and demand draft, telegraphy

transfer, mail transfer and give other additional services to the customers and to

the Nation. Because NBP is a Nations Bank.

Potential entry of new competitors:

Whenever new firms can easily enters a particular industry, the competition

increases. The gout restriction, tariffs, patents etc can stop new firm to enter into

the business as per Banking industry is concerned this market is already very

situated in Pakistan and there are banks with quality services and low charges. So

there is no threat to NBP from potential entry and NBP is also a public sector bank

because of that no other new bank not takes over it.

Potential Development of substitute products:

This is the third factor affecting the competitions. There may be some other

product can be substitute the product of that industry. For example banks offering

saving schemes in Pakistan and these schemes are also offered by GPOs in

Pakistan so they must compete them in this field. If they offer low rates than GPOs

so people will go to deposit in GPOs. People concentration high rates so thatswhy saving PLS accounts are more then current accounts. The next examples will

ATM, which substitute presenting cheques at counter and encash it. The NBP is

lacking in this field. It must improve in this field to compete the competitors.

Bargaining Power of Suppliers:

The bargaining power of supplier affects the intensity of competition, especially

when there are a large number of suppliers. In case of banks the suppliers arecustomers they supply the money to banks. Now they must offer good services,

quality, and safety. Low charges etc to customers. In this field NBP is very good.

Because it offers good quality services to customers. They charge low charges on

remittances. So that it has a competition to other banks.

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Bargaining Power of Consumers:

When customers are concentrated or large, or buy in volume, their bargaining

power represents a major force affecting intensity of competition. Now the number

of customers in Pakistan for banks are very high. Banks offering variety of

products and services to their customers. NBP have a large number of customers.

Now it must offer good services and products to their customers to attract them to

come to NBP.

Summation

The summary of is SWOT Analysis of NBP. To know how NBP can compete well

and how to maintain its position in the market as a best services organization.

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CHAPTER - 7

CONCLUSION & RECOMMENDATIONS

From the above discussion I come to the conclusion that the NBP is prove to a

Nation s Bank because it provides the large number of services to their

customers. On the basis of financial analysis I point out that the trend is positive,

which indicates that profitability; solvency and liquidity position of bank is sound.

It means that the organization (NBP) is working progressively and the

management is performing its role in a very good manner.

The global economic environment has changed, creating challenges and

opportunities for the worlds policy makers. The privatization drive has emerged

as a strong tool of transformation, which is being recognized as an essential

ingredient for the economic well-Being of the countries themselves and for the rest

of the world. Now there is a greater awareness that in an interdependent world all

countries gain individually if these countries become positive contributor to world

economic growth as whole. Banks are playing very important role in the economic

growth of the countries. NBP no doubts a positive contributor in this respect but I

think there are certain points by adopting which can serve more effectively and

efficiently. These points are as under:

1. Uses of computers: This is a computer era. With the use of computer we

can increase our efficiency. NBP should computerize all its branches. By

the use of computer properly these branches can increase there working

efficiency.

2. Services provider: NBP as public service oriented institution has to create

business opportunities for themselves. Now a day there is a competition

between the banks.

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3. Growth oriented: Central Asian Republics (CARs) have great

opportunities of new business so N.B.P should open new branches in these

Republic.

4. Use of electronic media: Model Banks like City Bank, Muslim

Commercial Bank (MCB) is using media very effectively to increase the

business of banks. So NBP should use electronic media for its business

developments.

5. Employees unions: The interference of union in banking business should

be minimized as it decreases the working efficiency of the employee as

well as the bank.

6. Need of improvement: The working of the Peshawar Cantt. Branch

Peshawar is satisfactory but still these working efficiencies are far from the

standard of modern banking system.

7. Self decision making: The bank should finance its loans in those projects

that are meeting the required standard and should avoid the political

pressure.

8. Encourage young employment: The bank should bring forward the new

talent as fresh knowledge and education is considered very important to

increase the efficiency and production.

9. Efficient branches networking: There is needed to make the outlook

situations of branches in those manners that can compete the other modern

banks in the banking market.

10. Performance appraisal: Keeping in view the hard work by the staff

members at all levels of management, staff should be given bonus and

increment every year.

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11. Installing ATM: Credit Cards are issued by the different banks like MCB

and City Bank etc. but NBP dont issued this type of finance scheme, there

is a place for this type of scheme in this bank.

12. Best customers relationship: Separate desk or counter should be

established in every branch to provide the information as required by the

clients.

13. Facilities in bank: The environment of the offices should be comfortable

so that the client and staff must feel comfort during business in bank.

14. Credit monitoring: Unsecured loan are not to be provided in case of banks

directions, their families, companies or firms.

15. Create friendly relation with customers: There are some clients having

sound and successful plan but without financially sound and providing

securities bank should forms such policies that may solve this problem.

16. Reduction in number of employees: I observed that many branches of

NBP are over crowded. Less people can work which extra people perform.

Number of employees should decrease or new branches should opens for

the adjustment of these extra employees.

17. Professional training: There are some employees untrained which

decreases the efficiency of the bank branch. All the employees should well

train.

18. Job rotation: Most of the bank employees are sticking to one seat only,

with the result that they become master of one particular job and loose their

grip on other banking operation. In my opinion each employee should have

regular job change.

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REPOT ON NBP

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