National Bank report. detailed report

 

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Chapter -1 INTRODUCTION

 

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CHAPTER 1 INTRODUCTION 1.1 BACKGROUND OF STUDY Financial institutions operating in country are the strength of the economic growth of  the country. The Banking sector is one of the exampled of financial institution, which can play a very vital role in the development of the over all economy of a country. Banking sector has now become a very challenging field with the advent of modern technology of in creased competition.

The Th e ro role le of ba bank nkin ing g se sect ctor or is ve very ry im impo port rtan antt for for the the de deve velo lopm pmen entt of the the country but as for as Peshawar is concerned, the Banking sector has been very advantageous to it, because of the huge amount of remittances from abroad and other parts of the country. This Th is re repo port rt atte attemp mpts ts to pr pres esen entt the the st stud udy y of Na Nati tion onal al Ba Bank nk focu focusi sing ng its Peshawar city Branch. It is based my 06-weeks internship.

1.2 PURPOSE OF STUDY The purpose of the study is to work in real life situation and learn banking practice by doing. In this context its objectives are: 1. To an anal alyz yze e ba bank nkin ing g op oper erat atio ions ns i.e i.e.. op oper erat atio iona nall an anal alys ysis is,, fi fina nanc ncia iall analysis. 2. To develop concrete and feasible recommendations.

1.3 SCOPE OF WORK The scope of this particular report confined to the National Bank NLI Market Peshaw Pes hawar ar city city Bra Branch nch.Th .This is rep report ort may hel help p stu studen dents ts to un under dersta stand nd the banking activities 2 of NBP in our country and to evaluate the overall performance of NBP through detail analysis of daily activities.

 

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I worked in different departments of NBP but my main focus was on Cash department. This department deals with the acceptance of utility bills, paymen pay mentt of cas cash, h, acc accept eptanc ance e of tre treasu asury ry rec receip eipts ts and rec receip eipts ts of cas cash h deposits etc.

1.4 METHODOLOGY Duri Du ring ng in inte tern rnsh ship ip on one e ne need eds s to co collllec ectt qu qual alit ity y in info form rmat atio ion n ab abou outt the the organization as much as possible. Following are the main sources from where I collected the data.

1.4.1 Primary Data: Data Da ta that that ha have ve be been en or orig igin inal ally ly co colle llect cted ed an and d ha have ve no nott un unde derg rgon one e an any y statistical analysis I collected primary data for the report 1. Through personal observation 2. Through discussion with managers of different departments of Bank.

1.4.2 Secondary Data:  Data that have been undergone any statistical analysis and collected from some previous data 1. Manual 2. Annual report 3. Internet 4. Documents published by the bank

1.5 SCHEME OF THE REPORT I have divided my report into relevant chapters. Chapter No 1: It includes background of study, purpose, scope of work, which methodology is used for the collection of the data Chapter No 2: It includes overview of the organization

 

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Chapter No 3: It’s about the organizational structure Chapter No 4: it includes critical analysis Chapter No 5: consist of SWOT Analysis. Chapter No 6: consist of the conclusion and recommendations based on findings from the study.

 

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Chapter -2

HISTORY OF NATIONAL BANK OF PAKISTAN

 

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CHAPTER 2 HISTORY OF NATIONAL BANK OF PAKISTAN 2.1 Brief History National Bank of Pakistan (the bank) was established under the National Bank of Pakistan Ordinance 1949 and is listed on all the stock exchanges in Pakistan. It’s registered and head office is situated at I.I.Chundrigar road, Karachi. The bank is engaged in providing commercial banking and related services in Pakistan (GOP) as agent to State Bank of Pakistan (SBP). The bank operates 1,219 branches in Pakistan and 19 overseas branches. Under  a Trust Deed, the bank also provides services as trustee to National Bank of  Pakistan investment Trust (NIT) including safe custody of securities on behalf  of NIT. At the time of independence in 1947, Government of Pakistan decided that Reserve Bank of India would act as the common monetary authority of  both countries countries up to Septemb September er 1948. But this arran arrangeme gement nt did not worked due to certain reasons. In October 1947, there was fighting in Kashmir and India refused to pay the share of Pakistan amounting Rs.550 million. Due to Indian government attitude and role of Reserve Bank of India in creating problems to cater to the banking needs of Pakistan. Government of Pakistan established its own central bank “SBP” on 1st July 1948. Soon after independence of Pakistan, most of our foreign trade was with India and Britain. Britain and other countries of Commonwealth devaluated their  currencies. India also also followed Britain and devalued her currency. They were also compelling Pakistan to do so. Stocks of jute in East Pakistan and that of cotton in West Pakistan were accu ac cumu mula lati ting ng..

At that that tim time e to resc rescue ue the ec econ onom omy y of the the co coun untr try, y, the

Government of Pakistan established National Bank of Pakistan under National Bank of Pakistan Ordinance 1949. NBP acted prom promptly ptly and advan advanced ced loans to the farmers. National Bank of Pakistan was set up with authorized and paid-up share capital of Rs.30 (M).

 

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The government held 75% of shareholding and remaining 25% of the share capital was held by the private sector. In 1952 NBP replaced replaced Imperial B Bank ank of India. Mr. Mumtaz Hass Hassan an as Acting Governor Gover nor of SBP nego negotiate tiated d this arrang arrangement ement.. In 1962 whe when n Mr. Mumtaz Hass Ha ssan an be beca came me MD (H (He e ha had d alre alread ady y se serv rved ed NB NBP P for for 10 ye year ars s as it its s Chairm Chai rman an or Go Gove vern rnme ment nt Di Dire rect ctor or), ), at that that ti time me NB NBP’ P’s s bran branch ches es we were re increased from 6 to 239 and deposits from Rs.5 core (50million) to 106 core (1 billion & 60 million), profit from 0.3 million (3 lack) to 21 million (2.1 core) and the staff increased increased fro from m 380 to 7091 as compar compared ed to year 19491949-50. 50. In December, 1966 its 600 th branches was opened raising the Deposits to 2.31 billion and staff to 14, 963. Up to 1965, the shareholders had received 225% of their original investment. In 1974 during the era of nationalization, different small banks including Bank of Bahavelpure were merged in National Bank of Pakistan. In addition to this Bank of Mehran and NDFC were merged in it. National Bank of Pakistan maintains its position as Pakistan's premier bank determined to set higher  stan standa dard rds s of ac achi hiev evem emen ents ts.. It is the the ma majo jorr bu busi sine ness ss pa part rtne nerr for for the the Govern Gov ernme ment nt of Pak Pakist istan an wit with h spe specia ciall emp emphas hasis is on fos foster tering ing Pak Pakist istan an's 's econ ec onom omic ic gr grow owth th thro throug ugh h ag aggr gres essi sive ve an and d ba bala lanc nced ed lend lendin ing g po polilici cies es,, techno tec hnolog logica ically lly ori orient ented ed pro produc ducts ts an and d ser servic vices es off offere ered d thr throu ough gh its larg large e network of branches locally, internationally and representative offices.

2.2 NATURE OF ORGANIZATION NBP is a financial sector of economy. It provides credit lines for project financing like LMM and ISDA etc. it invest in government securities and bonds. It keeps the deposits of the people and provides lockers and agency serv se rvic ices es.. It ac acts ts as an ag agen entt of the the SB SBP. P. NB NBP P pe perfo rform rms s so some me ge gene nera rall functions on behalf of the Government of Pakistan like distribution of salaries to the the go gove vern rnme ment nt se serv rvan ants ts an and d pa paym ymen entt of pe pens nsio ions ns to hu hund ndre reds ds of  thousand of pensioners across the country.

 

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2.3. BUSINESS VOLUME

Assets

Amount

Bank Ba nk pai paid d up cap capit ital al

Rs89 Rs8969 69 mil milli lion ons s

Net assets

Rs102459218

Share capital

Rs8154319

Reserves

Rs15772124

Earni arning ng per per s sha hare re is

Rs23 Rs23.3 .3

2.4 Products Line

2.4.1 Domestic Remittance Products 2.4.1.1 Demand Drafts NBP offers safe, speedy and reliable way to transfer money through Demand Drafts at very reasonable reasonable rates. Any person wh whether ether an accoun accountt holder of the bank or not, Can purchase purchase a Demand Dra Draft ft from a bank branch branch.. Amoun Amountt is credited by bank ban k in the acc accoun ountt only whe when n the Deman Demand d Draft is cros crosse sed. d.

The ba bank nk

charges for Demand Draft are given in the NBP Tariff circulated bi-annually.

 

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2.4.1.2 Traveler’s Cheques Nego Ne goti tiab abililit ity y:

Pa Pak k Ru Rup pee ees s Tra rave vele lerr’s Che heq que ues s are are a ne neg goti tia able Instrument.

Validity:

There is no restriction on the period of validity.

 Availability:

At 700 branches of NBP al alll over the country.

Encashment:

At all 400 branches of NBP

Limitation:

No limit on purchase

Safety:

NBP Traveler’s Cheques are the safest way to Carry our money.

2.4.1.2 Pay Order For transferring money within the City, NBP provides another product “Pay Order” which is a secure and easy easy way to move money money.. And, as usual, NBP’s charges for this service are extremely competitive.

2.4.1.3 Mail Transfers Move your money safely and quickly quickly using NBP Mail Mail Transfer service. And we also offer the most competiti competitive ve rates in the market. market. One of the requirements requirements to affect remittance remit tance through Mail Transfer is that the customer customer should be an Account Holder. WAPDA is only one company in Pakistan which is exempted from any bank charges on Mail Transfe Transferr of money. money. Otherw Otherwise ise,, Bank charges charges a certai certain n amount on for  effecting remittance through Mail Transfer. Bank Charges are announced through a circular bi-annually.

2.4.1.4 Foreign Remittances To facilitate its customers in the area of Home Remittances, National Bank of  Pakistan has taken a number of measures to: 1. Incre Increase ase h home ome re remittan mittances ces tthroug hrough h the b bankin anking g sys system tem

 

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2. Mee Meett the SBP direc directiv tives/ es/ins instru tructi ctions ons for timel timely y and prom prompt pt deliv delivery ery of  remittances to the beneficiaries.

2.4.1.4.1 New Features: The exi existi sting ng sys system tem of hom home e rem remitt ittanc ances es has bee been n rev revise ised/s d/sign ignific ificant antly ly improved and well-trained field functionaries are posted to provide efficient and an d re reliliab able le ho home me re remit mitta tanc nce e se serv rvic ices es to no nonr nres esid iden entt Pa Paki kist stan anis is at 15 overseas branches of the Bank besides Pakistan International Bank (UK) Ltd., and Bank Al-Jazira, Saudi Arabia. 1. Zero Tar Tariffs: iffs: NBP is p provid roviding ing home re remittan mittances ces se service rvices s withou withoutt any charges. 2. Str Strict ict mon monito itorin ring g of the sys system tem is done to ensu ensure re the high highest est pos possib sible le security. 3. Sp Spec ecia iall co cour urie ierr se serv rvic ices es ar are e hire hired d for for ex expe pedi ditio tious us de deliv liver ery y of ho home me remittances to the beneficiaries.

2.4.2 RETAIL BANKING PRODUCTS

2.4.2.1 NBP SAIBAAN: HOUSING FINANCE In line with vision of President NBP, the Commercial & Retail Banking Group at NBP has recently launched a housing finance scheme under the brand name of “NBP – SAIBAN” This scheme covers all sections of the society with monthly income starting from as low as Rs.5000/- per month *(Conditions apply) This retail/consumer financing product is branded as ‘NBP Saibaan’ (Housing for all), the scheme offers a maximum loan of Rs.10 million in accordance with the debt burden criterion. Loans are available 1. Ho Home me Co Cons nstru truct ctio ion, n,

 

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2. Ho Home me Pu Purc rcha hase se 3. And H Home ome impro improveme vement. nt. For H Home ome impro improvemen vementt Lo Loans ans the maxim maximum um amount is Rs.2.00 Million. Home Construction and Home Purchase loans can be repaid over a period of  20 years, whereas the repayment period for Home Improvement loan is 15 years.

2.4.2.2 What Is NBP Saibaan? NBP Saibaan is the most affordable House Financing Scheme. You can avail now and repay over a 3 to 20 years period.   Home purchase loans up to 10 million 1. Home recon reconstruc struction tion loans up tto o 10 millio million n 2. Home iimprov mprovemen ementt loan loans s up to 2.0 mi million llion 3 to 15 y years) ears)

2.4.2.3 Why NBP Saibaan Affordable? 1. Ea Easy sy iins nsta tallllme ment nt 2. No s su urp rpri rise ses s

2.4.2.4 Flexible 1. Ma Mark rk-u -up p ch choi oice ces s 2. Gr Grac ace ep per erio iod do opt ptio ion n 3. Co Conv nven eniien entt 4. Str Struct ucture ured da and nd pro progra gramme mmed d 5. Minimu Minimum m appr approval oval and Disburse Disbursement ment timin timing g

2.4.2.5 Required Documents  Applications Form along with 1. Two attes attested ted pass passport port size Photo Photograph graphs s 2. Two a attest ttested ed co copies pies o off you yourr Nati National onal Iden Identity tity Ca Card rd 3. Che Cheque que ffor or th the e pro proces cessin sing g cha charge rges s

 

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2.4.2.6 Property Documents  Any title document available (other documents may be required) and for  Salaried Persons, Whose Salaries Are Disbursed Through NBP Branch 2.4.2.6.1 Emp Employ loyer er Und Undert ertaki aking ng for rem remitt ittanc ance e of sa salar lary y at rele relevan vantt NBP

branch for credit to customer’s account ( to be provided at a later  stage, format available at relevant branch) 1. Emplo Employee yee ID C Copy opy att attested ested by NBP Br Branch anch (w (where here a applic pplicable) able) 2. Attes Attested ted co copies pies o off last tthree hree ((3) 3) mon months ths s salary alary s slips lips 3. Attes Attested ted co copies pies o off last tthree hree ((3) 3) mon months ths b bank ank st stateme atements. nts.

2.4.2.6.2 For Salaried Persons of MNCs and NBP Approved Companies 1. Empl Employer oyer Un Underta dertaking king du duly ly attes attested ted by rel relevan evantt NBP Bran Branch, ch, whe where re appl ap plic icab able le (t (to o be pr prov ovid ided ed at a late laterr stag stage, e, form format at av avai aila labl ble e at relevant Branch) 2. Attes Attested ted co copies pies o off last tthree hree ((3) 3) mon months ths S Salary alary S Slips lips 3. Lette Letterr of V Verific erification ation of Em Employm ployment ent o on n Com Company pany 4. Lette Letterhea rhead d me mention ntioning ing the date of jjoinin oining. g. 5. Attes Attested ted co copies pies o off last tthree hree ((3) 3) mon months ths ba bank nk sta statemen tements. ts.

2.4.2.6.3 For Other Salaried Persons

1. Le Lett tter er of Ve Veri rifi fica cati tion on of Em Empl ploy oyme ment nt on Co Comp mpan any y Le Lett tter erhe head ad mentioning the date of joining 2. Attes Attested ted co copies pies o off last tthree hree ((3) 3) mon months ths S Salary alary S Slips lips 3. Attes Attested ted cop copies ies of la last st twel twelve ve (12) m months onths b bank ank st stateme atement. nt.

4. Att Attest ested ed copi copies es of last three (3) mon months ths pai paid d bills for elec electric tricity ity and telephone. 5. OR Cop Copies ies of las lastt (12) Twe Twelve lve mon months ths cre credit dit card b bills ills (wh (which ich eve everr is available)

 

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2.4.2.6.4 For Business Persons 1. Bank Ce Certifica rtificate te statin stating g applic applicant ant main maintaini taining ng Busin Business ess Acc Account ount an and d the date of account opening. 2. Att Attest ested ed cop copy y of lates latestt Form 29 in case of Pri Privat vate e or Publi Public c Limit Limited ed Company. 3.  Attested copy of Partnership Partnership Deed (where applicab applicable le )

2.4.2.6.5 For Self- Employed Persons 1. Attested copy of current membership/practicing certificate.

professional

association

2. Adeq Adequate uate pro proof of of profe profession ssional al enga engageme gement nt like ban bank k certifi certificate cates s 3. Attes Attested ted co copy py of P Partne artnership rship Deed (wher (where e appl applicab icable le 4. Any ot other her do docum cument ent ma may y be requ require ired d on case to cas case e basi basis s by the bank. 2.4.2.7 Mark Up Rates

2.4.2.7.1 Fixed Rate Option 1. Price Priced d at 10 yea years rs PIB ra rates tes plu plus s 3.5% wi with th re-p re-pricing ricing after 10 y years ears 2. (Su (Subje bject ct to a min minimu imum m fl floor oor))

2.4.2.7.2 Variable Rate Option:1. SBP Di Discoun scountt Rate wit with h 12 mon months ths re-p re-pricin ricing g (subj (subject ect to a min minimum imum floor)

2.4.2.7.3 Processing Fee 1. For gov governme ernment nt emplo employees yees inc including luding N NBP BP emplo employees yees ir irrespe respective ctive of  the finance amount Rs.500/ 2. For Others 3. Finan Financing cing belo below wR Rs.1 s.1 millio million: n: Rs.10 Rs.1000/00/4. Finan Financing cing betw between een R Rs. s. 1 tto o4m million illion:: Rs.3 Rs.3000/000/5. Finan Financing cing abov above eR Rs. s. 4 millio million: n: R Rs.600 s.6000/0/-

 

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2.4.2.8 Who Can Apply 1. You a are re a Res Reside ident nt Pak Pakist istani ani na natio tional nal 2. You are aged between 21 and 62 years at the time of  application/disbursement application/disbursem ent of loan 3. You are a sa salari laried ed perso person, n, self-e self-empl mploye oyed d pro profes fessio sional nal or bus busine iness ss person. 4. Yo You u ha have ve a Ne Nett Ta Take ke Hom Home e inco income me not les less s than than Rs. Rs.50 5000 00//- per  month (Govt. and related organization employees) and Rs.10,000/perr mo pe mont nth h (fo (forr othe otherr sa sala lari ried ed cl clas ass) s) Rs Rs.1 .15, 5,00 000/ 0/-- pe perr mo mont nth h (for  (for  business persons and self employed) 5. Your p proper roperty ty is lo located cated in NBP appro approved ved llocali ocalities ties 6. Your du duration ration o off servi service ce is: Tw Two o years ffor or salar salaried ied and tthree hree ye years ars for  Self-Employed/Business Self-Employed/Busine ss Persons.

2.4.3 NBP ADVNANCE SALARY

National Bank of Pakistan is offering another Retail Banking product under the brand name of “NBP Advance Advance Salary”. NBP posted an e exceptional xceptional growth in NBP Advance Salary. Presently there are Over 500,000 customers of this product. NBP is maintaining approximately 1.7 million salary accounts of government/semi-government employees. To tap these potential borrowers, NBP introduced this product.

2.4.3.1 Eligibility This product is for NBP account holders who are permanent employees of the Federa Fed eral, l, Pro Provin vincia ciall go gover vernm nment ent,, sem semi-g i-gove overnm rnment ent,, aut autono onomou mous, s, sem semiiautonomous, local bodies and other government corporations including NBP whose salaries are disbursed through NBP.

 

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The documentation is minimal and documentation formalities can be easily fulfilled.

The

prospective

customer

has

to

submit

following

documents/information before sanction/approval of loan:1. Lo Loan an A App pplilica cati tion on F For orm m

2. Atte Attest sted ed co copy py of NIC NIC 3. Two R Refere eferences nces (prefe (preferably rably acco account unt ho holder lder of the ba bank) nk)

2.4.3.2 Maximum Amount of Advance The maximum limit under NBP Advance Salary Scheme is 15 net take home salaries or Rs 490,000/- whichever is lower  l ower .

2.4.3.3 Repayment Repayment period is up to 5 years. Repayment under this scheme is only by debit of the salary account (through direct debit system) i.e. the facility will be repaid from the employee’s salary each month.

2.4.3.4 Sanction Power  Branch Managers can approve, sanction and disburse strictly in compliance with the parameter of the scheme. Approval of higher amounts will be strictly in compliance with business discretionary powers.

2.4.3.5 Enhancement Whenev Whe never er cus custom tomer er req reques uests ts for enh enhanc anceme ement nt in the lim limit it the then n a fre fresh sh application form and new documentation are required. 2.4.3.6 Other Features

1. Ra Rate te of ma mark rk-u -up p iis s1 13% 3% 2. Minimu Minimum m net tak take e home s salary alary of R Rs s 5,000 p per er mont month h is requ required ired 3. Deb Debtt bu burde rden n re requi quirem rement ent is 3 33% 3% 4. No proc processin essing g charge charges, s, no coll collateral aterals, s, no gua guarantee rantees, s, no insu insurance rance

 

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2.4.4 AGRICULTURAL FINANCE NBP provides Agricultural Finance to solidify faith commitment and pride of  farmers who produce some of the best agricultural products in the World .

2.4.4.1 Agricultural Finance Services I Feed the World” program, a new product, is introduced by NBP with the aim to help farmers maximize the per acre production with minimum of required input.. Selec input Selectt farms will be made ro role le models fo forr other farms an and d farmers to follow, thus helping farmers across Pakistan to increase production.

2.4.4.2 Agricultural Credit The agricultural financing strategy of NBP is aimed at three main objectives:1. Provi Providing ding re reliable liable iinfras nfrastructu tructure re for agr agricult icultural ural cu custom stomers. ers. 2. Help fa farmers rmers ut utilize ilize fu funds nds eff efficien iciently tly to furt further her dev develop elop a and nd ach achieve ieve better production. 3. Pro Provid vide e farmer farmers s an int integ egrat rated ed pack package age of cred credit it with supp supplie lies s of  essential inputs, technical knowledge, and supervision of farming.

2.4.5 NBP KISAN DOST

The salient features of NBP Kisan Dost are as follows:1. Loan av availabl ailable e for the farme farmers rs for prod productio uction, n, deve developme lopment nt purpo purposes ses 2. Lo Loan ans s ar are e also also av avai aila labl ble e for for pu purc rcha hase se of trac tracto tors rs,, for for inst instal alla lati tion on of  tube wells, for purchase of agricultural implements, micro loans, for  godo go down wn co cons nstr truc ucti tion on,, for for co cons nstr truc uctio tion n of fish fish po pond nd,, for for lilive vest stoc ock k farming, for milk processing, for cold storage, bio-gas plants etc 3. Mar Mark-u k-up p ra rate te iis s1 11 1 % per an annum num 4. Loan Loans sa availa vailable ble at tthe he farmer farmer’s ’s d doorst oorsteps eps

 

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5. Agr Agricu icultu lture re ex exper perts ts to gu guide ide fa farme rmers rs

2.4.6 Foreign Trade and Foreign Exchange

2.4.6.1 Letters of Credit NBP is committed to offering its business customers the widest range of  options in the area of money money transfer. If you are a commercia commerciall 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.

2.4.6.2 Foreign Currency Accounts NBP is facilitating its customers who are either sending remittances from abroad or their near ones send money in foreign currency by opening foreign currency accounts in US$, Pound Sterling etc.

2.4.7 General Banking 2.4.7.1 Short Term Investments Investments

NBP now offers excellent rates of profit on all its short term investment accounts. Whether you are looking to inv invest est for 3 months o orr 1 year, NBP’s rates of profit are extremely attractive, along with the security and service only NBP can provide.

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

 

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2.4.8 Corporate/Commercial Finance

2.4.8.1 WORKING CAPITAL AND SHORT TERM LOAN S NBP specializes in providing 1. Pr Proj ojec ectt Fi Fina nanc nce e– 2. Exp Export ort Ref Refina inance nce to e expo xporte rters rs 3. Pre-sh Pre-shipmen ipmentt and P Post-s ost-shipme hipment nt fina financing ncing to exp exporters orters 4. Ru Runn nnin ing g fi fina nanc nce e 5. Ca Cas sh F Fin ina anc nce e 6. Sm Smal alll Fi Fina nanc nce e 7. Dis Disco count unting ing & Bi Bills lls P Purc urchas hased ed 8. Ex Expo port rt

Bi Bills lls

Pu Purc rcha hase sed/ d/Pr Pree-sh ship ipme ment nt/P /Pos ostt

Sh Ship ipme ment nt

Ag Agric ricul ultu tura rall

Production Loans.

2.4.9 MEDIUM TERM LOANS AND CAPITAL EXPENDITURE FINANCING NBP provides financing for its clients’ capital expenditure and other long-term invest inv estmen mentt nee needs. ds.

By shar sharing ing the risk asso associa ciated ted with such lon long-t g-term erm

investments, NBP expedites clients’ attempt to upgrade and expand their  operation thereby making possible the fulfillment of our clients’ vision.

2.4.9.1 International Banking Nati Na tion onal al Ba Bank nk of Pa Paki kist stan an is at the the fore forefr fron ontt of inte intern rnat atio iona nall ba bank nkin ing g in Pakistan which is proven by the fact that NBP has its branches in all of the major financial capitals of of the world. Additionally, we have recently set up th the e financial institution Wing, which is placed under the Risk Management Group. The role of the Financial Institution Wing is:To

effectively

manage

NBP’s

exposure

to

foreign

and

domestic

correspondence manage the monetary aspect of NBP’s relationship with the corres cor respon ponde dents nts to sup suppo port rt tra trade, de, tre treasu asury ry and oth other er ke key y bu busin siness ess are areas, as, thereby contributing to the bank’s profitability .

 

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Generation of incremental trade-finance tr ade-finance business and revenues

2.4.9.2 NBP offers: 1. The low lowest est rates o on n expo exports rts and oth other er intern internationa ationall banki banking ng prod products ucts 2. Acces Access s to differ different ent loca locall comme commercial rcial ba banks nks in int internat ernational ional ba banking nking

2.4.10 Student Loan Scheme NBP is offering student loan which is interest free for financial assistance of  need ne edy y st stud uden ents ts wh who o ha have ve go good od ed educ ucat atio iona nall reco record rd..

Th The e sche scheme me wa was s

launched in pursuance of announcement made by the Federal Finance Minister in his budget speech for 2001-2002 in collaboration with Government of Pakistan and major commercial banks including NBP. Under the scheme, financial assistance is provided by way of interest free loans to meritorious students who have financial constraints for pursuing their studies in scientific, technical and professional education within Pakistan. The scheme is being administered by a high powered committee comprising Deputy Governor, State Bank of Pakistan, Presidents of Commercial banks and Deputy Secretary, Ministry of Finance, Government of Pakistan.

2.4.10.1 Eligibility Under the scheme the students are eligible to apply for loans provided:1. He/She

has

obtained

admission

on

merit

in

the

approved

Universities/colleges of the public sector. 2. He/Sh He/She e falls at the time o off admis admission sion w with ith th the e age b brack racket et of  3. For Gradu Graduation ation (Not exc exceedin eeding g2 20 0y years) ears) 4. For P Post-Gr ost-Gradua aduation tion (Not exce exceeding eding 30 y years) ears) 5. For P Ph. h. D (N (Not ot ex excee ceedin ding g 35 y year ears) s) 6. He/Sh He/She e has s secure ecured d 70% ma marks rks in th the e last pu public blic ex examina amination tion 7. He/Sh He/She e has un undertak dertaken en the s study tudy of tthe he app approve roved d subje subject. ct. 8. He/She is unable to pursue studies due to financial constraints.

 

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2.4.10.2 Types of Loan The loan facility will be available for the entire duration of the study for:1. Sched Schedule ule Fe Fee e (Pai (Paid d direc directly tly to tthe he un univers iversity/co ity/college llege). ). 2. Board Boarding ing Exp Expense enses s exclu excluding ding me meal al charg charges es (paid d directly irectly tto o the university/college). 3. Procurement of textbooks-disbursed directly to the student .

2.4.10.3 Repayment The maximum period of repayment of loan is 10-years from the date of  disbursement of first installment. The borrower shall repay the loan in monthly installment after six months from the date of first employment or one year  from the date of completion of studies, which ever is earlier.

2.4.11 Employees Services Safety, Health and Welfare National Bank of Pakistan is not only a commercial institution but also a welfare institution, who always strive for the well being and welfare of the employees and in this regard offers following f ollowing benefits to its employees.

1. Pension, insurance, gratuity and provident fund facility 2. Free medical facility for self, family and parents. 3. Scholarships for children. 4. Housing facility in the shape of housing colony in the big cities. 5. School fees for the children. 6. Car loan, Computer loan and House loan facility at easy Installments. 7. Five bonuses and awards to all employees every year. 8. Market based salary structure and increase in the salary every year. 9. Establishment of NBP Staff Welfare Trust. 2.4.11.1 Staff Loan

 

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To motivate employees of the bank, NBP is offering different loan facilities at subsidized rates. Following loan facilities are offered by the bank:1. Co Comp mput uter er Loan Loan 2. Mo Moto torc rcyc ycle le L Loa oan n 3. Mo Moto torc rcar ar Lo Loan an 4. Ho Hous use eB Bui uild ldin ing gL Loa oan n 5. Cl Clea ean n Ru Runn nnin ing g Fi Fina nanc nce e

2.4.12 Motorcar Loan 2.4.12.1 Eligibility  All confirmed employees having having service of 3 years can can avail this loan facility.

2.4.12.2 Limit Rs 350,000/- (for clerical/non-clerical staff) Rs 422,000/- (for OG-3 to OG-1 Officers) Rs 504,000/- (Above OG-1)

2.4.12.3 Rate of Interest 4 % per annum

2.4.12.4 Repayment Loan is repayable in 10 years with equal monthly installments .

2.4.13 House Building Loan 2.4.13.1 Eligibility  All confirmed employees having having service of 5 years can can avail this loan facility.

2.4.13.2 Limit

 

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1. Mi Min nim imu um

Rs

60 600, 0,00 000 0/-

(f (fo or

cle leri ric cal/n al/no on-cl n-cler eric ical al

st sta aff ff), ),

if

an any y

clerical/non-clerical staff having basic pay of above Rs 10,000/- then can avail facility up to 100 basic pays. 2. 100 bas basic ic pa pays ys ffor or a allll of offic ficers ers..

2.4.13.3 Rate of Interest Loan amount upto Rs 600,000/- is interest free for all officers, and for loan amount above Rs 600,000/- rate of mark-up is 3% per annum. Repayment

Loan is repayable in 20 years with equal monthly installments .

2.5. COMPETITORS The competitors of the National Bank of Pakistan are as follows: 1. Ask skaari Bank  2. Habi Habib b Ban Bank k Lim Limit ited ed 3. Unit United ed Ban Bank k Limi Limite ted d 4. Fi Firs rstt Woma Woman n Bank  Bank  5. Musl Muslim im Co Comm mmerc ercia iall Ban Bank  k  6. Bank Bank of Punjab njab 7. Duba Dubaii IIsl slam amic ic Bank  Bank  8. Nati Nation onal al Sa Savi ving ngss 9. Alli Allied ed Ban Bank k Lim Limit ited ed 10. Saudi Pak Commerc Commercial ial Bank etc.

2.6 Work done by me in National Bank of Pakistan Peshawar  city Branch There are 14 branches in Peshawar region and all the transactions of these branches are handled by main branch. All the branches send there transaction summaries to main branch on daily basis and main branch transfer these transaction transactionss into relevant relevant heads and send all government receipt and payments to state bank of Pakistan and relevant departments of the government .

 

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2.7 Mission Statement “To be recognized as a leader and brand synonymous with trust, highest

standards of services, quality, international best practices and social   responsibility’’.

2.8 Vision Statement To be the pre-eminent financial institution in Pakistan and achieve market recognition  both in the quality and delivery of service as well as the range of product offering.

2.9 Core Values NBP aims to be an organization that is founded on: Growth through creation of sustainable relationship with its customers. 1. Prude Prudence nce to g guide uide its busi business ness cond conduct. uct. 2. A nation national al prese presence nce with a his history tory of con contribut tribution ion to its com communit munities ies 2.9.1 NBP Shall Work to:

Meet expectations through market-based solutions and products. Reward entrepreneurial efforts 1. Cre Create ate va value lues s for al alll stak stakeho eholde lders. rs. We aim to be people who

2. Car Care ea abou boutt rel relati ations onship hips s 3. Lead thr through ough the s streng trength th of its comm commitmen itmentt and willin willingness gness tto o excel excel.. Prac Practic tice e in inte tegr grity ity,, ho hone nest sty y an and d ha hard rd wo work rk..

We be beliliev eve e that that thes these e are are

measures of true success. We have confidence that tomorrow we will be an organization maintaining the trust of its stakeholders.  An innovative, creative and dynamic institution responding to the needs of the internal and external Leaders in its industry environment.

 

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2.9.2 Code of Ethics and Practices NBP is cognizant of the importance of code of ethics to deliver best services to its  customers and introduced Code of Ethics which lays down fundamental principles of personal and professional conduct for all employees of NBP. These principles are as follows:1. Integrit rity 2. Co Conf nfid iden enti tial alit ity y 3. Pr Prof ofes essi sion onal alis ism m 4. Co Com mpl plia ianc nce e

2.9.3 Integrity Employees are required to behave with integrity and honesty in their dealings with customers and other parties with whom they interact and in respect of all internal matters.

2.9.4 Confidentiality  All employees have a duty to safeguard confidential information obtained in the normal course of business and respect for customers’ private affairs which requires the same care as does the protection of the bank’s funds or other  interests.

2.9.5 Professionalism  All employees should carry out their duties in a professional and courteous manner. Financial matters should be conducted in a prudent manner and main ma inta tain in ma maxi ximu mum m leve levell of dign dignit ity y wh when en inte intera ract ctin ing g wi with th em empl ploy oyee ees s of  opposite sex.

2.9.6 Compliance  All employees should be fully committed that all business decisions and actions comply with all applicable laws and regulations. r egulations.

 

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Chapter -3 ORGANIZATIONAL STRUCTURE

CHAPTER 3

 

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ORGANIZATIONAL STRUCTURE 

3.1 Organizational Structure of NBP Organizational Organizati onal Chart PRESIDENT

SENIOR EXECUTIVE VICE PRESIDENT GRADE 22

EXECUTIVE VICE PRESIDENT GRADE 21

VICE PRESIDENT GRADE 20

ASSISTANT VICE PRESIDENT GRADE 19

GRADE I OFFICER  GRADE 18

GRADE II OFFICER  GRADE 17

GRADE III OFFICER  (GRADE 16)

3.2. NUMBER OF EMPLOYEES:

 

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Table # 3.1 PERMANENT

1327

TEMPERORY /CONTRACTUAL BASIS

842

BANK OWN STAFF STRENGTH

1479

OUT SOURCED

2350

TOTAL STAFFF STRENGTH

16429

NUMBER OF EMPLOYEES IN PESHAWAR CITY

85

BRANCH NUMBER OF EMPLOYEES IN PESHAWAR CITY BRANCH

18

 

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Management Structure Chief Manager 

Chief Operation Manager (CRA)

Manager Credit Processing

Manager  FEX*

Manager Credit Operation

Manager JB*

[Sections] FEX Export Import Remittance F/C A/C

Manager Admin

[Sections]

Inquiry Deposits Bills Clearing Utilities  Accounts Cash/Chest Govt. Collection

*FEX Foreign Exchange *JB Journal Banking

Manager  Compliance

[Sections] Reconciliation Dispatch Dead Stock Security Staff Welfare

 Audit /Inspection To sign all Br. Returns Money Laundering .etc

 

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3.3. MAIN OFFICES The Head Office of the National Bank of Pakistan is at Karachi. NBP carries on its business all the way through a wide set up of branches those are situated in the country and out of the country very professionally and in point of fact. All branches execute their functions under the rule of local Regional Offices and regional offices are proscribed by the Head Office situated a superb building in the heart of Karachi’s center. NBP has a wide domestic and overseas branches .

Overseas Branches 

19 Overseas Branches 4 Representative Offices 1 Subsidiary 1 Joint Venture

Domestic Branches

29 Regional Offices 1,219 Branches 130 Online Branches 4 Subsidiaries

 

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3.4 Departments in a Branch of NBP 3.4.1 Cash Department  A department that deals with the real payment and receipts of cash iis s called cash department. This department is headed by a Head Cashier and is responsible for the following duties. 1. Acc Accept eptanc ance e of uti utilit lity y bi bills lls.. 2. Pa Paym ymen entt o off cas cash. h. 3. Rec Receip eiptt of cas cash hd depo eposit sits. s. 4. Acc Accept eptanc ance e of Tre Treasu asury ry rec receip eipts. ts. 5. Cus Custod todian ian of G Gold old orn orname aments nts.. 6. Cu Cust stod odia ian no off C Cas ash. h. 7. Custo Custodian dian o off all the Secur Security ity Doc Document uments s of th the e Bran Branch. ch. 8. Custo Custodian dian o off all the keys of the B Bank ank Br Branch anch O Office. ffice. 9. Lia Liaisin ising g with the Pass Passing ing Off Office icers rs of bot both h Curre Current nt and PLS acco account unt section of

the branch.

10.Liaising with the Branch Manager and Operations Manager for the availability of cash in the Branch.

3.4.2 Deposit Department 1. Cu Curr rren entt acc accou ount nt se sect ctio ion n 2. PL PLS Sa acc ccou ount nt se sect ctio ion n 3. MI MIS Sa acc ccou ount nt se sect ctio ion n 4. TDR account section.

3.4.2.1 Current Account Section 1. Cheques are presented to the Posting Clerk on the counter . 2. He ent enters ers th the e cheq cheques ues in th the e ledg ledger er and ha hand nd ove overr the ledg ledger er to the Passing Officer. 3. Th The e Pa Pass ssin ing g Of Offi fice cerr pa pass sses es the the ch cheq eque ues s an and d au auth then enti tica cate tes s the the balances in the ledger. 4. Then en enter ter the ch cheque eques s in the pay payment ment si side de of his sc scroll roll and h hand and ov over  er  the cheques to the Cash department for payment.

 

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3.4.2.2 PLS Account Section The PLS Section performs the same function as Current account Section but separate scrolls are used by each section.

3.4.2.3 MIS Account Section MIS stands for Monthly Income Scheme Scheme.. This section performs the following functions. 1. Of Offe ferin ring g a wi wide de rang range e of prod produc ucts ts for for va vari riou ous s ti time me peri period ods s i.e. i.e. Te Ten n years, Five years, Four years, Three years, Two years, one year, Six months, Three months, one months etc. 2. Pr Proc ocur urem emen entt of de depo posi sitt at diff differ eren entt diff differ eren enti tial al rate rates s of prof profit it an and d issuance of MIS certificate 3. Encas Encashmen hmentt of M MIS IS Ce Certifica rtificates tes o on n eve of ma maturity turity.. 4. Ap Appl plic icat atio ion n of prof profit it on mont monthl hly y ba basi sis s an and d cred crediti iting ng of prof profit it to the the respective accounts of the MIS holders.

3.4.2.4 TDR Account Section. TDR stands Term Deposit Receipt: this section performs the following job. 1. Off Offer er vario various us time base based d pro profit fit paym payment ent serv service ices s to the pur purcha chaser sers s of  the Term Deposit Receipts. 2. Appli Applicatio cation n of pro profit fit on the va various rious TDR in instrum struments ents 3. Encas Encashmen hmentt of TDR TDRs s on tthe he mat maturitie urities s of th the e instr instrumen uments. ts.

3.4.3 Bills and Remittance Department 1. Iss Issuan uance ce o off Ma Mailil T Tran ransfe sferr (MT (MT)) 2. Iss Issuan uance ce of Tele Telegra graphi phic c Tran Transfe sfer(T r(TT) T) 3. Iss Issuan uance ce o off De Dema mand nd D Draf raftt (D (DD) D) 4. Iss Issuan uance ce of Te Term rm Dep Deposi ositt Rece Receipt ipt (T (TDR) DR) 5. Iss Issuan uance ce o off Pa Payme yment nt O Orde rders rs (P (PO) O) 6. Iss Issuan uance ce of Ca Callll Dep Deposi ositt Rec Receip eiptt (CDR (CDR)) 7. Pa Paym ymen entt of D Dem eman and d Dr Draf aftt 8. Pa Paym ymen entt of M Mai aill tr tran ansf sfer  er  9. Pay Paymen mentt of Te Teleg legrap raphic hic T Tran ransfe sfer  r 

 

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3.4.4 Clearing/Collection Department This department is headed by an officer in charge of the bank and has the following functions. 1. Rece Receipt ipt of c chequ heques es for inwar inward d and o outward utward clear clearing ing 2. Entry of ch cheque eques s on the T Transf ransfer er cre credit dit s slips. lips. 3. Sig Signin ning g of conc concern erned ed offic officer er on the Tran Transfe sferr cre credit dit slip slips s an and d han handin ding g over a subjoined of the s slip lip to the c customer. ustomer. 4. Entry of ch cheque eques s recei received ved for cle clearing aring in th the e subs subsidiary idiary d day ay book book.. 5. Stamp Stamping ing on th the e face an and d back of th the e cheq cheques ues alo along ng with st stampin amping g on the transfer credit slips 6. En Endo dors rsem emen entt si sign gnat atur ures es on the the ba back ck of the the ch cheq eque ues s rece receiv ived ed for  for  clearing. 7. En Entr try y of all the the ch cheq eque ues s (B (Ban ank k vi vise se)) in the Cl Clea eari ring ng Reg Regis iste terr an and d preparation of

summary along with the total amount of cheques to be

sent for clearing. 8. Pre Prepar parati ation on of cle cleari aring ng shee sheets ts with the sig signat nature ures s of the aut author horize ized d officer. 9. Puttin Putting g of a allll the cheq cheques ues in a b bag ag w with ith a s seal. eal. 10.Handing 10. Handing over the bag to the representative of the Clearing House.\

3.4.5 Credit/Advances Department This department offers the following products: 1. Hous House e pu purchas rchase/ren e/renovati ovation/co on/constru nstruction ction loans loans.. 2. Fiftee Fifteen n adv advance ance salar salaries ies to the G Govt. ovt. e employ mployees. ees. 3. De Dema mand nd Fi Fina nanc nce e 4. Ru Runn nnin ing g Fi Fina nanc nce e 5. De Dem man and d Lo Loa an 6. Sm Smal alll Fi Fina nanc nce e 7. Small L Lo oan 8. L.M.M. L.M.M.(loca (locally lly Manu Manufactu factured red Mach Machinery inery)) lo loan an 9. I.D.A L Lo oan 10.Mortgage Loan 11.Cash Finance 12.Student Loan 13.Marketing of Financial products of the bank.

 

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14.Liaising with the businessmen and industry. 15.Documentation 15. Documentation of the pledged assets and Creatio Creation n of charge 16.Disbursement of loans. 17.Application of mark-up 18.Recovery of loans. 19.Visit to the borrowers and checking of hypothecated stocks. 20. Preparation of State Bank of Pakistan Statements .

3.4.6 COMPLIANCE DEPARTMENT This department is supervised by a Compliance Officer and has the following duties. 1. Ass Assuri uring ng of foo foolpr lproof oof ba bank nking ing sy syste stem. m. 2. Implem Implementin enting g an effe effective ctive iintern nternal al cont control rol wit within hin the b branch ranch.. 3. Surpr Surprise ise c check hecking ing of vario various us jo jobs bs of the b bank. ank. 4. Coord Coordinati ination on wit with h the inter internal nal au audit dit of the b bank. ank. 5. Coo Coordi rdinat nation ion w with ith tthe he S SBP BP a audi udit. t. 6. Pre Prepar parati ation on o off Re Remar marks ks S She heets ets.. 7. Prepa Preparatio ration n of Clear Clearance ance Certi Certificate ficates. s. 8. Pre Prepar parati ations ons o off Dail Daily y Rev Review iew S Shee heet. t. 9. (KYC) Know your customer implementation. Inspection of Branch

vouchers.

3.4.7 Branch Operation 3.4.7.1 NBP General Account

3.4.7.1.1 Deposit Accounts

Under this heading we are describing the types of accounts in which the bank receives money from general public at different rates of interest and different terms and and condit conditions. ions. Now NBP has s set et a limit of amoun amountt that shou should ld be in every account which which is Rs.5000/-. By Discussion, w we e came to know th that at NBP has made a rule to deduct Rs.50/- per month if the balance in an account is less les s tha than n Rs. Rs.500 5000/0/-..

But But,, in case of stu stude dents nts,, wid widow ows, s, pe pensi nsione oners, rs, and

salaried persons, there is no such deduction on balance. Following are the most common types of deposit accounts opened in a branch of NBP. 1. Cu Curr rren entt Ac Acco coun untt

 

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2. Per Perpet petual ual In Incom come e Dep Deposi ositt Acc Accoun ount. t. 3. PLS Ter Term mD Depo eposit sit Acc Accoun ount. t. 4. Mon Monthl thly y In Incom come e Sc Schem heme e (M (MIS) IS).. 5. Nat Nation ional al Inc Income ome D Daily aily A Acco ccount unt.. (NIDA (NIDA)) 6. Ca Callll De Depo posi sitt Ac Acco coun unt. t. 7. PL PLS SS Sav avin ing gA Acc ccou ount nt..

3.4.7.1.2 Accounts Payable 1. Pa Paym ymen entt Ord Order er Ac Acco coun unts ts.. 2. Dra Drafts fts Pay Payabl able eA Acc ccoun ounts. ts.

3.4.7.1.3 Advances Accounts 1. Ca Cash sh Cr Cred edit it A Acc ccou ount nt.. 2. Finan Finance ce agai against nst Impor Imported ted Merc Merchand handise. ise. 3. PLS H Hous ousing ing F Fina inance nce IInve nvestm stment ent 4. Ca Cash sh F Fin inan ance ce A Acc ccou ount nt.. 5. Dem Demand and Fin Financ ance e Acc Accoun ountt 6. Run Runnin ning gF Fina inance nce Acc Accoun ount. t. 7. Sm Smal alll Fin Finan ance ce Ac Acco coun unt. t. 8. NB NBP PA Adv dvan ance ce Sa Sala lary ry.. 9. NBP Cash against Gold.

3.4.7.1.4 Bills Discounted and Purchased 1. Dem Demand and D Draf rafts ts Pu Purch rchase ased d Acc Accou ount. nt. 2. Pr Prot otes este ted d Bil Billl Acc Accou ount nt.. 3. Hom Home e Remi Remitta ttance nces s Pay Payabl able e Acc Accoun ount. t. 4. Pak Trave Traveler’s ler’s Cheq Cheque ue (T (TC) C) Pu Purchas rchased ed A A/C. /C. 5. Inl Inland and Bil Bills ls Dis Discou counte nted. d. 6. Accep Acceptanc tance e fo forr Co Constitu nstituent ent Liab Liability ility A/C.

 

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  Chapter -4 CRITICAL ANALYSIS

 

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CHAPTER 4 CRITICAL ANALYSIS 4.1 Financial Analysis The Th e stre streng ngth th of an any y or orga gani niza zatio tion n ca can n be be bett tter er judg judged ed by an anal alyz yzin ing g its balance sheet and its other statements of accounts. The financial statement of  any an y orga organi niza zati tion on sh show ows s the the resu results lts of its its op oper erat atio ion n an and d its its po posi siti tion on in business.

National Bank of Pakistan Condensed Interim Statement of Financial Position As at March 31, 2011   (Un-Audited) (Audited) (Audited) March 31

December 31   2011

2010 Note----------------- (Rupees in '000) ---------------ASSETS

111,863,187 22,237,036 5, 588,765 270,490,544 484,545,988 27,353,035 7, 004,667 64,701,291

Cash and balances with treasury banks Balances with other banks Landings to financial institutions Investments  Advances Operating fixed assets Deferred tax assets - -

115,442,360 30,389,664 23,025,156 301,323,804 477,506,564 26,888,226 6,952,666 53,496,240

 

Other assets 993,784,513 LIABILITIES

1,035,024,680

Bills payable Borrowings Deposits and other accounts Sub-ordinated loans - Liabilities against assets subject to finance lease Deferred tax liabilities - net Other liabilities

 

8, 543,277 50,857,244 758,995,303 1 11,843 52,750,194

 

8,006,631 20,103,591 832,151,888 106,704 46,160,038

 

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  871,257,861

906,528,852

NET ASSETS 122,526,652

128,495,828

REPRESENTED BY

Share capital 13,454,628

13,454,628

Reserves 28,269,208

24,450,244

Unappropriate profit 56,228,928

65,857,438

  97,952,764

103,762,310

Surplus on revaluation of assets - net of tax 24,573,888 24,733,518   122,526,652

128,495,828

 

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The data of balance sheet and income statement give idea about firm position but it is better judged by analysis. By comparing of degree of changes in different items .the comparison shows the fluctuation in assets and liabilities of business. The financial statements of organization usually includes following: 1. 2.

Balance Sheet Profit & Loss Account

3.

Cash Flow Statement

4.

Statement of Changes in Equity

These statements can be suitable to make an idea about business performance. These statements have analyze two ways 1.

Horizontal Analysis

2.

Vertical Analysis

Horizontal Analysis: Through this analysis we can check that what are changes with in years in the items of balance sheet and profit and loss account. Last year become base for next year. And change can be easily analyzed.

Vertical Analysis: In this analysis the percentage of each item of statement is calculated to total and then the change in the percentages is checked with in year 

 

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VERTICAL ANALYSIS Balance Sheet As on 31st March Table # 4.1 31stMarch 2011

31st December  2010

Evaluation 2010-2011

Assets

Cash an Cash and d ba bala lanc nce e wi with th tre treas asur ury y 13.72% banks Balances with other banks 3.36%

14.66%

Worse

5.28%

Worse

Lending to financial institutions

2.32%

2.36

Worse

Investments

25.79%

23.50

Good

 Advances

56.32%

56.82%

Worse

Other assets

7.02%

6.13

Good

Operating fixed assets

3.00%

3.33%

Worse

Deferred tax assets

0.36%

0.44%

Worse

Total Assets

112.89%

112.50%

Good

Bills payable

1.26%

1.41

Good

Borrowings from financial institutions Deposits and other accounts Liabilities against assets Other liabilities

5.37%

5.57%

Good

86.084% 0.005% 5.008%

85.98% 0.003% 5.46%

Good Worse Good

_

same

Deferred tax liabilities

_

Total Liabilities

97.722%

98.41%

Good

Net Assets

14.16

14.096

Good

Share capital

1.28%

1.23%

Good

Reserves

2.67%

2.24%

Good

Unappropriated profit

7.27%

7.21%

Good

Owners equity

11.23%

11.19%

good

Surplus on revaluation of assets

14.16%

14.096%

Good

Represented By

 

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VERTICAL ANALYSIS Condensed Interim Profit & Loss Account - (Un-Audited) For the Three Months Ended March 31, 2011 Table # 4.2 Evaluation 31stMarch 31st 2011 Decemb 2010-2011 er  2010

Mark-up/return/interest earned Mark-up/return/interest expensed

8.91% 4.67% 1.31%

8.38% 3.29% 5.098% 1.46%

Net mark-up/interest income

5.057%

Provision against non-performing advances Provision for diminution in the value of investment Bad debts written off directly

Worse

0.071%

0.051%

Good

_

_

Same

Net mark-up/interest income after  provision Non Mark-Up/Interest Income

3.75%

1.51%

Good

Fee, commission and brokerage

1.18%

1.10%

Worse

0.23% 0.48%

0.40% 0.55%

Worse Worse

0.066% 2.34%

0.17% 2.26%

Worse Worse

2.7% 0.13% 0.038% 2.78%

2.5% 0.10% 0.080% 2.73%

Worse Worse Good

Extra ordinary items

_

_

same

Profit before tax

2.64%

3.16%

Worse

Taxation –current -prior year(s) -Deferred

1.12% (0.0059%) 0.48%

1.60% _ 1.03%

Good Worse Good

Profit after tax

2.15%

2.13%

Good

Unappropriated profit brought forward

6.22%

6.23%

Worse

Profit available for appropriation

8.48%

8.34%

Good

Earning per share

16.92%

14.36%

Good

income Dividend income Income from dealing in foreign currency Other income Total non mark-up/interest income Non Mark-Up/Interest Expenses

 Administrative expenses expenses Other provision/write offs Other charges Total non mark-up/interest expenses

Good Worse Worse

Worse

 

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HORIZONTAL HORI ZONTAL ANALYSIS Balance Sheet As on 31st March 31stMarch 2011

31stDecemb er  2010

Evaluation 2010-2011

Assets

Cash and balance with treasury 100% banks Balances with other banks 100%

108.75%

Increase 8.75% Decrease 26% Increase 14% Increase 27% Increase 15% Increase 33% Increase

74%

Lending to financial institutions

100%

114%

Investments

100%

127%

 Advances

100%

115%

Other assets

100%

133%

Operating fixed assets

100%

103.8%

Total Assets

100%

115%

Increase 15%

Bills payable 100% Borrowings from financial 100% institutions Deposits and other accounts 100%

104% 119%

Increase by 4% Increase by 19% Decrease by 16% Decrease by 67%

3.8%

by by by by by by by by

Liabilities

116%

assets 100% finance

167%

100%

106%

Increase by 6%

_ 100%

_ 115%

S Inacm reease

by

100%

117%

15% Increase 17%

by

Share capital

100%

120%

Unappropriated profit

100%

117%

Reserves

100%

114%

of  100%

117%

100%

117%

Liabili litties against subject to lease23068314 Other liabilities D eferrLiabilities ed tax liabilities Total Net Assets Represented By

Surplu lus s assets Total

on

rev revaluation

Increase 20% Increase 17% Increase 14% Increase 17% Increase 17%

by by by by by

 

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HORIZONTAL HORI ZONTAL ANALYSIS Condensed Interim Profit & Loss Account - (Un-Audited) For the Three Months Ended March 31, 2011 Table # 4.4 Evaluation 31stMarch 31stDecembe 2010-2011 2011 r  2010

Mark-up/return/interest e ea arned

100%

127.90%

Mark-up/return/interest expensed

100%

165.33%

Net mark-up/interest income

100%

103.77%

Increase by 3.77%

Provision against nonperforming advances Provision for diminution in the value of investment Provision against off balance sheet obligations Bad debts written off directly

100%

104.24%

100%

162.258%

100%

505.925%

-

-

Increase by 4.24% Increase by 62.258% Increase by 405.925% Decrease by 77.09%

Net mark-up/interest income after provision Non Mark-Up/Interest Income

100%

102.68%

Increase by 2.68%

Fee, commission and brokerage income Dividend income

100%

112.68%

100%

66.70%

100%

76.29%

100%

44.34%

Increase by 12.68% Decrease by 33.30% Decrease by 23.71% Decrease by 55.66%

Total non mark-up/interest income Non Mark-Up/Interest Expenses

100%

115.90%

Increase by 15.90%

 Administrative expenses expenses

100%

124.21%

Other provision/write offs

100%

83.04%

Other charges

100%

55.13%

Increase by 24.21% Decrease by 16.96% Decrease by 44.87%

Total non mark-up/interest expenses

100%

120.57%

Extra ordinary items Profit before tax

100%

96.95%

Decrease by

Taxation –current

100%

78.39%

3.05%% Decrease by

Income from dealing in foreign currency Other income

I27.906% ncrease by by Increase by 65.33%

Increase by 20.57%

 

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-prior year(s) -Deferred

21.61% same Decrease by 76.31%

100%

(23.69%)

Profit after tax

100%

117.8%

Increase by 17.8%

Unappropriated profit brought forward

100%

115.68%

Increase by 15.68%

Profit available for  appropriation

100%

116.18%

Increase by 16.18%

Earning per share

16.92%

14.36%

Increase by 2.56%

4.2 Ratio Analysis Ratio analysis includes method of interpreting financial ratios to access the performance of any organization. The basic input to ratio analysis is profit and loss account and balance sheet. Ration analysis of any organization is in interest of its creditors, employees, shareholders and of its management as well. Bot well. Both h exi existi sting ng and pro prospe specti ctive ve cus custom tomer er are int intere ereste sted d in the rat ratio io analysis of organization Ratio analysis is a valuable aid to management in the discharge of its basic functions such as planning, forecasting, control etc. these ratios describe the relationship with the functioning of the business and helpful for controlling cost of goods manufactured. The great advantage of  ratio analysis is that it reduces raw data of widely varying magnitude to a common comparative basis..

1. Net Interest Income to Gross Income: It is the comparison of Net Interest income earned & the gross income by the bank. Net mark-up/ interest income /Gross Income X 100

31ist March  Year 2011

31ist December   Year 2010

Net mark-up/ interest income

9,275,015

8,112,709

Gross income

12932348

12113184

Net interest income to gross income

71.72%

66.97%

 

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Gross Income = Net interest income + Non- mark-up income 2011 9,275,015+3,657,333=12932348 2010

8,112,709+4,000,475=12113184

Comments:

The Net interest income to gross income is bad due to decrease in Income.

2. Risk Asset Turnover Ratio: It is a comparison of Net Mark-up/ Interest after provisions & Risk assets (Advances) of the bank. Net mark-up/ interest after provisions / Risk assets (Advances) Table # 4.6 31ist December   Year 2010

31ist March  Year 2011

Net mark-up / interest after  provisions

9,275,015

8,112,709

Risk assets

1,389,285

1,942,426

Risk asset turnover ratio

6.67 times

4.17 times

Comments: The Risk Asset Turnover Ratio of 2011is bad as compared to2010 due to decrease in markup. Percentage of decrease in markup is more than risk asset

3 .Operating profit Ratio This ratio is a comparison of Operating Profit to markup/ Interest of the Bank

 

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Operating Profit / Markup Earned X 100 Table # 4.7 31ist March 31ist December   Year 2011  Year 2010

Operating Profit

37058030

38458048

21,036,290

23,170,457

60.81%

49.33%

Markup/ interest Earned

Operating Profit Ratio

Comments: The operating Profit Ratio of 2011is bad as compared to that of 2010 this may be due to decrease in operating profit,

4. Net Profit Ratio before Tax: Net profit before tax/Interest Earned X 100 Table # 4.8 31ist December   Year 2010

31ist March  Year 2011

6,303,579

6,352,686

21,036,290

23,170,457

29.96%

27.41%

Net profit before tax

Interest Earned

Net Profit Ratio before Tax

Comments: In years 2011 it has decrease up to 27.41%from 29.96%in year 2010. This decrease in profit shows the satisfied performance of the bank.

5 Net Profit Ratios after Tax

 

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Net profit after tax/Interest Earned X 100 31ist December   Year 2010

31ist March  Year 2011

4,215,767

4,220,174

21,036,290 20.04%

23,170,457 18.21%

Net profit after tax Interest Earned Return on assts

Comments: This ratio also decreased up to a great extent so it shows than an organization is expenses on its assets after meeting all expenses and obligations.

6. Return on Total Assets Net Profit after Tax/total assets X 100 31ist December   Year 2010

31ist March  Year 2011

4,215,767 1,035,024,680

4,220,174 993,784,513

0.40%

0.42%

Net Profit after Tax Total assets Return on Total Assets

Comments: This ratio also increased up to a great extent so it shows that an organization is earning on its assets after meeting all the expenses and obligations.

7 Returns on Share Capital: Net profit after tax/Share Capital X 100 31ist December   Year 2010

31ist March  Year 2011

4,215,767 13,454,628

4,220,174 13,454,628

31.33%

31.36%

Net profit after tax Share Capital Return on Share Capital Comments:

 

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The ratio has decreased in year 2011 which shows that NBP has negative trend of earning on share capital.

8. Return on Deposit: Net profit after tax/Deposits X 100 31ist December   Year 2010

31ist March  Year 2011

4,215,767 832,151,888

4,220,174 758,995,303

0.50%

0.55%

Net profit after tax Deposits Return on Deposits

Comments:

By analyzing, I analyze that the ratio r atio has increased in Year 2011 which shows that bank is in good position.

9. Solvency Ratio: Total Assets/Total Liabilities-Issued Capital 31ist December   Year 2010 Total assets

1,035,024,680

31ist March  Year 2011 993,784,513

Total Liabilities-Issued

906,528,852-

871,257,861-

13,454,628

13,454,628

893074224

857803233

1.15 times

1.16 times

Capital Solvency ratio

Comments: This ratio shows that the asset of bank has increased as compared to liabilities of bank. This shows the better position of the business.

10. Advances to Deposits ratio: Total advances/total Deposits X 100

 

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31ist December   Year 2010 Total advances

477,506,564

31ist March  Year 2011 484,545,988

Total Deposits

832,151,888

758,995,303

57.38%

63.84%

Total advances/total Deposits X 100

Comments: The NBP has ratio of 63.84%in year 2011 as compare to 57.38%in year 2010. The increase in ratio is due to increase in promotion of short term as well as long term advances

11. Deposits to Capital: Total Deposits/Share Capital 31ist December   Year 2010

31ist March

Total Deposits

832,151,888

 Year 2011 758,995,303

Share Capital

13,454,628

13,454,628

61.84%

56.41%

Total Deposits/Share Capital

Comments: I analyze that NBP has negative trend of deposits to capital ratio from year  2010 to year 2011.

12. Total debts to Total Assets ratio: rat io: Total debts/Total assets X 100 31ist December   Year 2010 Total debts

20,103,591

31ist March  Year 2011 50,857,244

Total assets

1,035,024,680

993,784,513

1.94%

5.11%

Total debts/Total assets X 100

 

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Chapter -5 SWOT ANALYSIS

Chapter 5 SWOT ANALYSIS

5.1 STRENGTH The main strength of NBP is that it is a government owned institution and enjoys the following edges over other banks.

 

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1. Cus Custod todian ian o off gov govern ernmen mentt trea treasur sury y 2. Wo Work rkin ing g as ag agen entt of S SBP BP 3. Job sec securi urity ty ffor or emp employ loyees ees 4. Mai Main n cus custod todian ian o off pu publi blic c mo mone ney y 5. Gov Govern ernme ment nt b busi usines ness so owne wner  r  6. Len Lender der tto o the g gove overnm rnmen entt age agenci ncies es 7. Blind lim limitatio itation n of public o over ver NBP as g govern overnment ment ba bank(PU nk(PUCCA CCA BAN BANK) K) 8. Negot Negotiator iator wit with h the inter internatio national nal ins institutio titution n on beha behalf lf of gover government nment 9. Wor World ld w wide ide net networ work k of bra branch nches es 10. Lender to the public based projects .

5.2 WEAKNESSES Beside a public bank it has the following weaknesses. 1. The gen general eral outl outlook ook and in interior terior la layout yout of br branch anches es are not as rrequir equired ed according to modern banking. 2. NBP h has as no nott fast s serv ervice ice to tthe he cl clien ients. ts. 3. Letha Lethargic rgic an and d rude at attitud titude e of empl employee oyees s towa towards rds cus customers tomers.. 4. Les Less sm mark arketi eting ng exp expedi editio tion n 5. No in innov novati ation on and and n new ew p prod roduct ucts s 6. Wor Worst st co condi nditio tions ns o off bra branch nches. es.

5.3 OPPORTUNITIES But the NBP has the following opportunities. 1. Can laun launch ch a marke marketing ting stra strategy tegy to ca capture pture th the e busin business ess from its p peer  eer  banks. 2. Can be n numb umber er o one ne iin n Pa Pakis kistan tan 3. Can off offer er new a and nd inno innovativ vative e produ products cts to co compet mpete e rest of th the e bank banks. s. 4. With pr proper oper pl plannin anning g can hu hunt nt more a and nd mor more e busin business ess fro from m the pu public blic and private sector as people still trust over it.

5.4 THREATS Less qualified staff in NBP 1. Not ful fully ly com compute puterized rized a and nd on line b bankin anking g facil facilities ities 2. Com Compet petitio ition n wit with h for foreig eign n ba banks nks 3. Not fo follo llowin wing g mod modern ern ba banki nking ng sy syste stem m

 

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4. Gro Growth wth of m mush ushroo room mb ban anks. ks. 5. Aware Awareness ness o off the pu public blic wit with h the ne newly wly est establis ablished hed ba banks. nks. 6. Less partic participatio ipation n in capit capital al ma market rket activ activities ities 7. Use of trad tradition itional al syste system m of bankin banking g like led ledgers gers an and d book ke keeping eping e etc. tc. 8. Po Poliliti tica call in infl flue uenc nce. e.

 

 

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Chapter -6 CONCLUSION & RECOMMENDATION

Chapter 6 CONCLUSION & RECOMMENDATION RECOMMENDATION 6.1 Conclusion

 

P a g e | 58

From this SWOT Analysis we can conclude that beside the fact that National Bank of Pakistan is a government based institution but in these days of  cutt cu tthr hroa oatt co comp mpet etiti ition on it is no nott ea easy sy to su surv rviv ive e wi with thou outt ad adop opti ting ng mo mode dern rn techniques techn iques and late latest st tools of sophistic sophisticated ated techn technology ology.. Althou Although gh Nationa Nationall Bank of Pakistan is a Government Institution, but in the modern era it has achieved a destination where other competitive modern banks can simply re reac ach. h. Fr From om yea yearr 20 2001 01,, Th The e Ba Bank nk has mad made e a Ha Hatt Tric Trick k in wi winn nnin ing g Internation Intern ational al Awards. That is why peop people le have more trust in NBP and they are willingly depositing their money in it without any threat. In last, National Bank of Pakistan is a Government Institution, but in the modern era it has achieved a destination where other competitive modern   banks can simply reach. NBP is providing high standard and quality of services. They also take part pa rt in so soci cial al ac activ tiviti ities es su such ch as stud studen entt loan loans, s, pa paym ymen entt of pe pens nsio ion n to pensioners, payment of salaries to government employees, advance salary to their employees, agricultural finance to help farmers.

6.2 Recommendations 1. This is a computer era. With the use of computer we can increase our 

efficiency N.B.P should computerize all its branches. By the use of  comp co mput uter er pr prop oper erly ly thes these e br bran anch ches es ca can n incr increa ease se ther there e wo work rkin ing g efficiency. 2. N.B. N.B.P. P. as pu publ blic ic se serv rvic ice e or orien iente ted d inst institu ituti tion on ha has s to crea create te bu busi sine ness ss oppo op portu rtuni nitie ties s for for them themse selv lves es.. No Now w a da day y ther there e is a co comp mpet etit itio ion n between the banks. 3. Central Asian Republics have great opportunities of new business so

N.B.P should open new branches in these Republic . 4. Mode Modell Banks llike ike Cit City y Bank M M.C.B. .C.B. ar are e usin using g media v very ery eff effectiv ectively ely to increase the business of banks. So N.B.P should use electronic media for its business developments. 5. The inte interferen rference ce of unio union n in bank banking ing bus business iness s should hould b be e minimi minimized zed as it decreases the working efficiency of the employee as well as the bank.

 

P a g e | 59

6. The wor working king of the L Lahore ahore C Cantt. antt. Br Branch anch La Lahore hore is sa satisfac tisfactory tory bu butt still these working efficiencies are for from the standard of modern banking system. 7. The ban bank k shou should ld financ finance e its loans iin n those pro projects jects,, which are me meeting eting the required standard and should avoid the political pressure 8. The ban bank k shou should ld bring fo forward rward th the e new tale talent nt as fres fresh h knowl knowledge edge an and d education is considered very important to increase the efficiency and production. 9. Ke Keep epin ing g in vie view w the hard wo work rk by the sta staff ff mem membe bers rs at all all leve levels ls of  management, staff should be given bonus and increment every year. 10.CREDIT CARDS are issued by the different banks like MCB, ABP and City Bank etc. but NBP don’t issued this type of finance scheme, there is a place for this type of scheme in this bank.

Bibliography 1. NB NBP P (20 (2010 10-2 -201 011) 1),, Annual Report . 2. Sid Siddiq diqui, ui, M.A 199 1995a, 5a, credi creditt dis distrib tributi ution on & ag agric ricult ultura urall de devel velop opmen mentt in Pakistan:

 

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3. 27 (3): A probl problem em of acros across s to cre credit dit.. Journ Journal al of Rural Dev Develo elopme pment nt & administration 4. Si Sidd ddiq iqui ui,, M. M.A. A. 19 1996 96.. “A “Alt lter erna nati tive ve cred credit it po polilici cies es for for ag agri ricu cult ltur ural al develo dev elopme pment: nt: Cas Case e for par partic ticipa ipator tory y inv invest estmen ment”. t”. Jou Journa rnall of Rur Rural al Development & administration 28 (2): page 112. 5. ww www. w.nb nbp. p.co com. m.pk pk 6. Zahid Elahi 2003, major work on

economic development &

employment. Attached with the Association for creation of employment acts.