INTERNSHIP REPORT

ON
ALLIED BANK

Name: Saqib Hayat Khan

Roll No. IP-2833
Submitted in partial fulfillment of the requirements
For the degree of Bachelor of Business
Administration

At

National University of Modern Languages

Islamabad, Pakistan
August 2015

National University of Modern Languages Islamabad

Faculty of Management Sciences

It is here by certified that the report has been thoroughly and carefully read and recommended to
the Faculty of Management Sciences for acceptance of final internship report by Saqib Hayat
Khan Roll No. IP 2833 Session August 2011 to June 2015 morning. In partial fulfillment of the
requirement for the bachelors of business administration of National University of Modern
Languages Islamabad

Date: -------------------Supervisor Name

Dr. Muhammad Zubair Mumtaz

Supervisor Signature
Panel Member Name

_______________________
_______________________

Panel Member Signature _______________________

Head of Department

_______________________

DEDICATION

This project is dedicated to my Siblings and Parents who have never failed to give me financial
and moral support,who educated me and enabled me to reach at this level.

ACKNOWLEGEMENT
I glorify Almighty Allah for the splendid support to accomplish this report. I would also like to
thank and appreciate the effort of my supervisor Dr. Muhammad Zubair Mumtaz for his great
contribution and guidance in this work, without whom this study would be impossible. My
gratitude goes to whole faculty of the department of Management Sciences for their time and
efforts in realizing this report and providing me necessary help, not only to accomplish the report
but also in achieving many other goals during my stay in NUML, without their help I would not
have reached that far. My appreciation goes to my father Mr. Ghairat Mehmood Khanand my
siblings for their moral support and motivation. I would also like to thank my friends that have
been around all the time to support me morally.

EXECUTIVE SUMMARY
This report is about my internship program with Allied Bank Limited. In this comprehensive
report, I have discussed about every major aspect of the bank, which I observed and perceived
during my internship program. In this report you will find the detail about the bank right from its
incorporation to the current position. Along with it, the processes, policies and procedures of the
bank are also discussed in detail. During my internship program, I mainly worked in General
Banking & Finance. All the departments have been discussed in detail and all the policies and
procedures have been described thoroughly. As the main purpose of internship is to learn by
working in practical environment and to apply the knowledge acquired during the studies in a
real world scenario in order to tackle the problems using the knowledge and skill learned during
the academic process, In this report the detailed analysis of the organization has been done and
all the financial, technical, managerial and strategic aspects have been evaluated to analyze the
current position of the organization. Along with it, the background analysis, the prevailing
competition analysis, the business process analysis, and the internal environment and external
environment of the organization have been discussed and the recommendations for the
improvement have been made wherever required. In the end the learning and experiences section
consists of all the policies, processes, practices and procedures which I have undergone through
and learned during my internship program. This report also contains my perceptions about the
employees satisfaction, motivation level and the working environment of the organization. Last
but not the least, this report almost includes each and every aspect about Allied Bank which is
very helpful for every reader.

TABLE OF CONTENTS
Dedication
Acknowledgement
Executive Summary
Chapter 1: Introduction of the Company and its
background
Introduction
Vision
Mission

8
8
8

Chapter 2: Company Analysis

2.1. SWOT Analysis
2.2. External Analysis of the Organization
2.3 Competitor Analysis
2.4 HR and Marketing Analysis

18
18

Chapter 3: Financial Analysis

3.1. Ratio Analysis
3.2. Trend Analysis

35
42

16
17

Chapter 4: My internship experience and

contribution

52

Chapter 5: Recommendations and Conclusion

5.1. Recommendations

57
57

5.2. Conclusion

58

CHAPTER 1
INTRODUCTION
1. INTRODUCTION TO ALLIED BANK:
ABL is one of the largest banks in Pakistan, serving the Country for over 60 years in all spheres
at banking and financial Services

1.1 VISION
To become a dynamic and efficient bank providing integrated solutions and the first choice of
bank for all customers.

1.2 MISSOIN

To provide value-added services to our customers

To provide high-tech innovative solutions to meet customer requirements

To create sustainable value through growth, efficiency and diversity for all stakeholders

To provide a challenging work environment, and reward dedicated team members

To play a proactive role in contributing towards the society

1.3VALUES

Integrity

Excellence in Service

High Performance

Innovation and Growth

ABL has emerged as one of the foremost-privatized financial institutions in Pakistan endeavoring
to gear up its operations to meet the demands of the future.

1.4. MEANING OF BANK

Some authors write that the word bank is derived from Italian word bancus OR
banque which means a bench. Because in the old days the Jews were used to make banking
settlements by sitting on the benches & to deal the exchange of money in the market place. When
any one of them becomes insolvent means that he is unable to fulfill his requirements. Then his
bench was destroyed by the customer & this practice given birth to the word BANKRUPT.
Some other Authors are of the opinion that the word bank is derived from a German word
back, which means Joint Stock Fund. & when the major part of Italy was occupied by the
German then this word back was Italianized in to the word Bank.
However, no confident record is available to believe upon. Therefore, we are not in a position to
give any bounded meanings to bank inspire of all these we can define bank as follow.
1

The imperial dictionary defined a bank as An establishment for deposits & issue
money & also for granting loans discounting bills & facilitating the transaction

from

one place to another place.

1

It is an institution, which deals with money.

it buys & sells the uses of money.

In other words, we can say A bank is an institution for exchange of money, sanctioning credit,
transferring funds by domestic & foreign bills of exchange.

We can also say that it is a pipeline through which money moves into &on of circulation.
Shortly & conclusively we can say that the Bank is an institution that facilitates the matters in
which the money is involved.

1.5 MEANING OF BANKING

he Banking companies Ordinance, 1962 defines Banking as Banking means accepting
for the purpose of lending or investment, of deposits of money from public, repayable on
demand or otherwise and withdrawal by checks, drafts, order, or otherwise.

1.6 HISTORY of ABL

Established in December 1942 as the Australasia Bank at Lahore with a paid-up share
capital of PKR 0.12 million under the Chairmanship of Khawaja Bashir Bux, and his business
associates, including Abdul Rahman Malik who was amongst the original Board of Directors, the
bank had attracted deposits, equivalent to PKR 0.431 million in its first eighteen months of
business. Total assets then amounted to PKR 0.572 million. Today Allied Bank's paid up Capital
& Reserves amount to Rs. 10.5 billion, deposit exceeded Rs. 143 billion and total assets equal
Rs. 170 billion. The Allied Bank's story is one of dedication, commitment to professionalism,
adaptation to changing environmental challenges resulting into all round growth and stability,
envied and aspired by many.

1.6.1 1942 - 1947: Pre Independence

In the early 1940s the Muslim community was beginning to realize the need for the active
participation in the field of trade and industry. The Hindus had since the late 1880s established a
commanding presence in these areas and industry, trade and commerce in the undivided Sub-

continent was completely dominated by them. Banking, in particular, was an exclusive enclave
of the Hindus and it was widely believed, and wrongly so, that Muslims were temperamentally
unsuited for this profession.
It was particularly galling for Khawaja Bashir Bux and Abdul Rahman Malik to hear the gibe
that Muslims could not be successful bankers. They decided to respond to the challenge and took
lead in establishing this first Muslim bank on the soil of Punjab that was to become Pakistan in
December 1942; by the name of Australasia Bank Limited.
The initial equity of the Bank amounted to Rs 0.12 million, which was raised to Rs 0.5 million
by the end of first full year of operation, and by the end of 30th June 1947 capital increased to
Rs. 0.673 million and deposits raised to Rs 7.728 million.

1.6.2 1947 to 1974: Australasia Bank

Australasia Bank was the only fully functional Muslim Bank on Pakistan territory on
August the 14th, 1947.
It had been severely hit by the riots in East Punjab. The bank was identified with the Pakistan
Movement. At the time of independence all the branches in India, (Amritsar, Batala, Jalandhar,
Ludhaina, Delhi and Angra (Agra)) were closed down. New Branches were opened in Karachi,
Rawalpindi, Peshawar, Sialkot, Sargodha, Jhang, Gujranwala and Kasur. Later it network spread
to Multan&Quetta. The Bank financed trade in cloth and food grains and thus played an
important role in maintaining consumer supplies during riot affected early months of 1948.
Despite the difficult conditions prevailing and the substantial set back in the Banks business in
India, Australasia Bank made a profit of Rs 50,000 during 1947-48.

10

By the end of 1970 it had 101 branches. Unfortunately it lost 51 branches in the separation of
East Pakistan which became Bengladesh. The bank did well in despite losing lot of its assets. By
the end of 1973 the bank had 186 branches in West Pakistan.

1.6.3 1974 to 1991: Allied Bank

I 1974, the Board of Directors of Australasia Bank was dissolved and the bank was renamed as
Allied Bank. The first year was highly successful one: profit exceeded the Rs 10 million mark;
deposits rose by over 50 percent and approached Rs 1460 million. Investments rose by 72
percent and advances exceeded Rs 1080 million for the first time in bank history. 116 new
branches were opened during 1974 and the Bank started participation in the spot procurement
agriculture program of the Government. Those seventeen years of the Bank saw a rapid growth.
Branches increased from 353 in 1974 to 748 in 1991. Deposits rose from Rs 1.46 billion, and
Advances and investments from Rs 1.34 billion to Rs 22 billion during this period. It also opened
three branches in the UK.
1.6.4 ESOP Revolution
(Employee stock ownership plan)
Under the philosophy of ESOP ownership of an enterprise is transferred to its employees
who are in an advantageous position in running the enterprise. The added advantage of ESOP
that it strengthens the workers stake in the free enterprise system, in job securities, better
profitability & unique corporate culture symbolizing family feelings & professional fraternity.
September 10,1991 is the historical date as on this date the bank became the countrys 1st bank
to be reconstituted as an institution jointly owned by its employees through the unique concept of
Employees Stock Ownership plan [ESOP] developed by the Allied Management Group headed

11

by Mr. Khalid Latif enabled the bank staff to react creatively to the privatization challenge. More
that 7500 staff members acquired a share in the bank . The articulation of the ESOP is a
landmark in the financial history of Pakistan-indeed of the entire world .It is a practical step
ensuring an increase in workers participation and in productivity a means for enhancing an
equitable redistribution of financial assets & an effective strategy for achieving the cherished
goal of national self-reliance.

1.6.5 1991 to 2004: Privatization

As a result of privatization in September 1991, Allied Bank entered in a new phase of its
history, as the worlds first bank to be owned and managed by its employees. In 1993 the First
Allied Bank Modaraba (FABM) was floated.
After privatization, Allied Bank registered an unprecedented growth to become one of the
premier financial institutions of Pakistan. Allied Banks capital and reserves were Rs. 1.525
(Billion) and assets amounted to Rs. 87.536 (Billion) and deposits were Rs. 76.038 (Billion).
Allied Bank enjoyed an enviable position in the financial sector of Pakistan and was recognized
as one of the best amongst the major banks of the country.
In August 2004 as a result of capital reconstruction, the Banks ownership was transferred to a
consortium comprising Ibrahim Leasing Limited and Ibrahim Group.
Today the Bank stands on a solid foundation of over 63 years of its existence having a strong
equity, assets and deposits base offering universal banking services with higher focus on retail
banking. The bank has the largest network of on-line branches in Pakistan and offers various
technology based products and services to its diversified clientele through its network of more
than 700 branches.

12

1.6.6 2005:
In May 2005 Ibrahim Leasing Limited was amalgamated by transfer to and
vested in with and into Allied Bank Limited. ILL shareholders were issued ABL
shares in lieu of the ILL shares held by them. Application for the listing of ABL
shares in all the Stock Exchange Companies of Pakistan was made. ABL was
formally listed and trading of the shares of the Bank commenced w.e.f. the
following dates.

Islamabad Stock Exchange - 8th August 2005

Lahore Stock Exchange - 10th August 2005

Karachi Stock Exchange - 17th August 2005

1.6.7 2007
Mohammad AftabManzoor has taken charge as CEO and President of the Bank on
August 13 2007. He is an ex-president of MCB Bank Ltd.

1.6.8 Today
Today, with its existence of over 60 years, the Bank has built itself a foundation with a
strong equity, assets and deposit base. It offers universal banking services, while placing major
emphasis on retail banking. The Bank also has the largest network of over 700 online branches in
Pakistan and offers various technology-based products and services to its diverse clientele

13

1.7 IMPORTANT STATISTICS ABOUT ABL

Total customers
Employees
Total branches
Utility booths
Airport booths
Total clients in Peshawar region
Table 2.1

4,605,000
6,747
735
34
1
145,000

CHAPTER 2

14

COMPANY ANALYSIS
2.1 SWOT ANALYSIS
INTERNAL ANALYSIS OF ORGANIZATION
Strengths:
The bank is backed by strong a consortium which strengthens the reputation of the bank. The
customers give suggestions for the improvement of bank and these suggestions are listened
carefully as bank has strong belief in the voice of the customers. By this way they make their
customers loyal. Manager has good coordination with staff members and actively listens to their
problems and welcome suggestions from new employees as well. Because of this, the employees
dont hesitate and feel more committed to their work. Environment over there is also friendly.
They provide modernized banking facilities including online transactions. Each department is
fully computerized and every employee has his own system. It provides lockers to its customers.
Allied bank also provides free ATM service to the customers and the account holders can use
ATM card free of cost. This is a unique facility provided by the bank and also gives it advantage
over the competitors.
Weaknesses:
Alliedbank dont issue travelerscheque which is also one of the very important products of the
bank in todays world. They also dont have the services of car financing and house leasing
which the basic facility is provided by the commercial banks now-a-days. Their setup is also new
and it takes some time to establish reputation among the masses.

15

They also dont hold internal audit which the most of the banks hold twice a year. A team
fromState bank visits to hold the audit. They also dont have insurance department in I-8 Markaz
branch.
Opportunities:
As multinational companies are thriving, Allied bank can open branches in foreign countries. It
will be welcomed anywhere it goes as it is backed by strong consortium.
Threats:
The increasing competition in the banking industry and political instability pose a threat to
banking industry.

2.2 EXTERNAL ANALYSIS OF THE ORGANIZATION

(PEST ANALYSIS)
Political:
As there is political instability in Pakistan, it can lead to changes in laws and policies which can
be in favor or against the banking sector. Suppose that the government restricts the number of
branches for all the commercial banks; in this case the bank will have to suffer as they will have
to reduce their branches.
Economic:
The economy of Pakistan is facing issues regarding employment, inflation, illiteracy which
hinders business growth. Due to inflation demand of funds is increasing which in turn increases
the interest rates. The interest rates on advances have grown to almost 13 %.
There are also now many commercial banks and customers look for the bank that provides them
with the best rates that meet their needs.

16

Another issue is that of outstanding loans. The government has taken huge amount of loans
which have to be charged off at their request. The balance sheet has to suffer because of it.
Social:
Now days, our society is facing the dilemma of raising their status. Richer wants to become
richer. Due to increasing prices and expensive education the demand for consumer financing is
increasing day by day. The people out here want quality education, car and own their house. For
this they take loan from the banks and the bank has to provide them at the KIBOR rate.
Technology:
People are highly skilled and Alliedbank can introduce new technology to increase
competencies.

2.3 COMPETITOR ANALYSIS

Following are the major competitors of Bank Allied:

Habib Bank
Muslim Commercial Bank(ALLIED BANK)
National Bank of Pakistan(NBP)
Allied Bank
United Bank Limited(UBL)

2.4 HR AND MARKETING ANALYSIS

HR FUNCTION ANALYSIS:
ALLIED BANK:
The human resource department at Allied bank using prearrangement, planned approach to
utilize employees effectively for their performance. They intended to establish a more open,
flexible and caring management style that make staff motivated, developed and managed in a
way that they can give their best to the bank. At Allied bank HR helps the other departments to
develop their values in a way which supports their mission, and objectives. The HR achieves all

17

this by linking functions such as performance management and training to departmental aims and
values.
VALUES:
Allied bank prides itself in being a conscientious and responsible corporate citizen with a
commitment to the development of Pakistan. At Allied bank their employees are encouraged to
give back to society and made concerted efforts towards the development of healthcare,
education and constructive, character building sports activities in the underdeveloped segments
of Pakistan.
STRATEGIC ROLE OF HR AT ALLIED BANK:
HR has developed and promoted policies, standards and good practices in employees; and
implements these policies through discussions, explanations, guidelines, regulations and
circulars.
CENTRAL FUNCTIONS OF HR:

Determines and communicates overall human resource policy.

Advises departments on the implementation of policies and the development of human

resource.

Formulates pay and conditions of service, benefits and allowances and deals with

changes to the structures of grades/ranks.

HR involved in dealing with appointment, promotion and discipline related procedure,

complaints and benefits

The key components of HR are:
1.

Manpower planning

2.

Recruitment

18

3.

Performance management

4.

Training & development

5.

Separation

1. Manpower Planning:
HR plans the demand for short to long term needs of each dept. so that they can meet the
changing environment. Planning shows:

The number of recruits required in a specified timeframe and the availability of talent

Early indications of potential recruitment or retention difficulties

Surpluses or deficiencies in certain ranks or grades

Availability of suitably qualified and experienced successors

2. Recruitment:
First department work out the type of staff it needs in terms of grade and rank, and the time scale
in which the staff is required. Key components of the recruitment process are;

Deciding in terms of appointment

Selection of candidates

Probation

Deciding on Terms of Appointment

The management has decided the term in which duties to be performed such as

Permanent

Agreement terms

19

Part-time

Selection of Candidates

Vacancies: HR uses referral source and vacancies in newspapers.

Screening and Selection: Departments screen applications to see if the applicants meet

the specified qualifications and other requirements of the post. Suitable candidates are then
shortlisted for subsequent examination and interviews.
Probation:
During probation staff is introduced to the mission, objectives and values of the bank. Probation
provides regular feedback on performance and assesses suitability for employment. It includes:

On the job training the newly inducted employee in a way that they can learn the skills

expected from them and managers can verify their long-term suitability.

3. Performance Management: Performance management is a very important HR function.

At Alliedbanks its objective is to improve overall productivity and effectiveness by
maximizing individual performance and potential. PMS is concerned with:

Improving individual and collective performance.

Communicating management's expectations to supervisors and staff.

Improving communication between senior management, supervisors and staff.

Assisting staff to enhance their career prospects through recognizing and rewarding

effective performance.

Identifying and resolving cases of underperformance

Providing important links to other HR functions such as training.

20

Performance management therefore consists of several key components:

Motivation

Performance appraisal

Promotion

Guidance and supervision

Addressing poor performance

4. Training & Development:
The objective of training and development is to enable employees to acquire the knowledge,

skills, abilities and attitudes necessary to improve their performance. Allied bank training and
development focus on the department's objectives and competencies required to achieve them. A
strategic approach has the following characteristics:

Commitment to training and developing people

Linking training and development of departmental goals

Joint responsibility between managers and staff in identifying and meeting training needs

ALLIED BANK PERFORMANCE MANAGEMENT SYSTEM

With the new name in highly competitive industry Allied bank wants its staff to be highly
energetic and motivated to progress in backing sector. For this after analyzing their position and
market demography, they wanted to make their workforce more powerful than others; they have
to take extraordinary measures to put the bank in best ranking by hard work in a short period of
time. For this purpose Allied bank several strategies to make their employees up to the required
level and created a road map like plan trainings, setting goals, timely measuring performance,
promoting and providing incremental and adopted force grading to leave out non-match able
members

21

1. Method:
Allied bank uses force distribution method for their performance appraisal. In this system bank
gives chance of three months to make their best efforts to meet the required standard of the bank
or leave out by set percentage criteria. And this is developing after market survey and the nature
of PMS (force distribution) communicate the expected performance.
The forced distribution is an evaluation method where managers are required to distribute
ratings for those being evaluated, in a pre-specified performance distribution ranking.
This approach is dictated to force managers to make the performance evaluation process truly
reflect how each team member is performing, relative to others, with the ultimate goal being
more productive employees, who perform at levels to make service, revenue, and growth goals
attainable.
In this system bank try to build a competitive environment where the performance relatively
small percentage of rates is required to be placed at the extremes and larger percentages of rates
are placed in the categories toward the middle of the performance distribution. And the
remaining bottom employees are set on probation to improve their performance in three months
otherwise they will be terminated.
2. Rate Criteria - Percentage Base:
It is based on a fixed percentage grading system which place group of employee in predetermine
incentive bracket. Before this step, bank performs market survey to find the market worth of the
employee and its market value in terms of remunerations. Then, according to its worth,
management sets the various percentage levels to compete in the market.
a)

Market survey:

22

Allied bank performs market survey in order to achieve real ground to set their remuneration.
The Bank takes the average market salary every positioning and allocates percentage level
accordingly.
3. Performance Appraisal Period and Procedure:
The Allied bank performance appraisal period begins from January of every year. And it consists
of three months, which decide the performance. Before proceeding bank follows some steps;
a)

Announcement: Bank follows an open policy as they inform every staff member about

the beginning of the appraisal period.

b)

Communicate: All the related information communicated to the staff the date when their

appraisal will be conducted, the supervisor who will conduct their appraisal, when will be
reviewed and submitted.
c)

Not disclosed: The employee information which was used for his/her performance are

becoming non-disclosure document.

d)

Decision: After review the manager take a decision for putting the staff in predetermine

percentage brackets.
4. Post Appraisal Discussion:
After completion of appraisal 2nd phase, supervisor and employee sit together to discuss and
review the performance, such as achievement of the desire past goals and set new objectives,
time limit, how they are going to achieve, what are their work area need improvement, what new
skills they need to develop his/her weakness, what are new expectations.
a)

Email Circulation: The human resource department circulates the email for making sure

the availability of staff and supervisor for after review discussion.

23

b)

Reward Calculation: Reward and benefit according to estimated level are offered to the

employee.
5. Employee meet Supervisor:
After an appraisal is made employee and supervisor sit together in agreement for current
increment on past performance and for future planning. There would be two conditions may
occur, as it is an open discussion, whether employee agree or disagree with his/her appraisal. In
the case of disagreement, the case will be forwarded to the department group head and he will
give his comments on this and get agreement from the employee.
6. Probation for improvement:
The top ranked employees are considered high potential employees and are often considered
targeted for a rapid career and leadership development programs.
In contrast, those ranked at the bottom are denied bonuses and pay increases. They will be given
a probationary period of three months to improve their performance or they may be terminated.
7. Short and long term goals:
Every employee gets assigned goals on the basis of an effective process. There are two key
elements to consider when developing goals. Goals are clearly communicating strategic in
factual KPI order to achieve business objectives and providing visibility to goals set by
department.
The process begins with departmental managers setting goals for their departments, based upon
organization-wide goals. Each manager shares the overall goals with his/her department and
meets with employees to identify individual performance goals and plans. When setting goals,
key job expectations and responsibilities act as SOP and reference.
8. Training Plan on Yearly bases:

24

The department plan training needs on appraisal basis according to the career development
phase, whether employee is in the phase of advancement or need training for improvement in
present job.
There are certain sections and checklist which measured the training need is;

Employees the needed skills and knowledge to complete assigned jobs, duties and tasks

Motivating employees to achieve higher standards

Increasing overall efficiency

Preparing employees for promotional opportunities

Giving employees the tools needed to analyze interpersonal and situational factors that

create obstacles to achieving high performance

9. Supervisor Nomination:
Supervisors play a critical role in promoting employee commitment, motivation, and retention,
and are key in developing and nurturing staff. As in bank manager decide that who will be the
supervisor for which staff for marking the appraisal. The role supervisor play during the
appraisal in setting the objectives and other means are;

Set meaningful, attainable expectations and measurable goals.

Approach the process as a collaborative effort

Communicate the progress regarding performance and get constructive feedback includes

timely, specific references to predefined targets and goals.

10. Counseling provided and Career Management:
Performance counseling is provided to employees to get to know their level of performance and
the area in which they need to improve. It attempts to help the employee in:

Understanding himself - his strengths and weaknesses.

25

Improving his professional and interpersonal competence by giving him feedback about

his behavior.

Setting goals and formulating action plans for further improvement

ANALYSIS OF THE SYSTEM

The system is well defined and develops to current market scenario. But there are some
weaknesses regarding future competition. As presently Allied bank is pursuing fast growth and
only talented people can survive to stay in the bank by eliminating lagers through force
distribution method.
But from the employee and HR department point of view to earn employee loyalty and edge-up
yourself in to the fierce world, you need to retain right talent at right place by analyzing their
competency. Terminated employee may give edge to bank if they were used on other section or
depart. So, transfer window should be open instead of sacking employee.
As bank has already identified the flaws of current appraisal system that is transparency. To
avoid or minimize bias factor bank is going to introduce balance scorecard in their system which
will ultimately give positive impact in the future growth of the bank.
At Allied bank there is an also need to emphasis on career management. The bank is looking
forward for long term future growth and for this purpose it need highly skilled and competitive
workforce. In order to retain the corporate develop assets, bank need to dedicate extra efforts on
career planning and their need fulfillment.

MARKETING ANALYSIS:
MARKETING OPERATIONS:

26

The priority banking marketing manager is responsible for the deposits of the require money in
the managers referral customers accounts. Also this department connects to the big account
holders and maintains good relation with them. And this propose they meet them and made
meetings with them that whether they satisfied with their services that the banks offers to them.
And in case any problems that the customers victim than that problem would be eradicated by
the following customers through meetings with them. The relational manager also has the
responsibilities that they give solutions if the deposits of the banks down due to un-satisfaction
by the customers and close an account in the particular branch. They also have the
responsibilities to open a number of fresh accounts in BAL. And for this they meet the number of
big clients in particular and other in general and convey them to be part of BAL. The relational
manager consults the branches under his custody. And they have the authority to know info
regarding bank accounts of big customers. Also they have little meetings about their business
products that whether the customers get benefits or not. And want give suggestions from the
operation officers for the betterment of their different products. Also they interact with the
operations officers and wanted to know the behavior of their loyal customers and what kind of
services they wants for them. And every month they build a report and send to the regional Head
of marketing department of BAL. Also branch is a source of retail marketing as well as for sound
marketing too. It really helps the BAL to carry their product info to other customers friends etc.,
and make their customers because of their good services provided to them. The marketing
department of Bank Allied Limited also involve in operation nationwide through 283 branches
and a comprehensive network of 236 ATMs. The banks countrywide operations are controlled
through two most critical systems, namely the web based Online Centralized Core Banking
software applications having Retail Banking, Trade Finance, Corporate and Commercial

27

Finance, Consumer Finance, Foreign Exchange & Treasury modules; and the ATM switch. Since
even a few minutes downtime is unaffordable and any data loss could be potentially catastrophic,
ensuring end-to-end data protection and 24 x 7 availability of these mission-critical systems is
indispensable to the banks enterprise wide remote banking operations. This will ensure high
availability of BAL mission critical applications and systems, particularly ATM switch and Core
Banking Host, with ideally zero data loss; thus avoiding complete failure and uninterrupted
services to banks customer over the branch counter as well as on all the delivery channels
including ATMs. This robust and reliable solution will assure data consistency and integrity at
primary as well as disaster recovery site.
Functions of marketing department:
MARKETING STRATEGIES:
It involves environmental forces around the main task. Due to these forces the traditional
orientation of the Bank has become the business of financial services with a much wider focus in
relation to consumer/market needs and consequent marketing strategies. However, these
environmental forces can create favorable opportunities that can be translated into overall
organizational goals and marketing objectives. At the second stage, the marketing mix is
manipulated in order to support and implement marketing strategies and plans. The marketing
managers of Bank Allied Ltd. have been trained and assigned the job ofblinding or combing of
all market activity. The managers have been trained in such a way that combination may likely
prove attractive to chosen customer market segments.

MARKET SEGMENTATION STRATEGIES:

28

A market segment is a subgroup of people or organizations sharing one or more characteristics

that cause them to have similar product needs. A true market segment meets all of the following
criteria: it is distinct from other segments (heterogeneity across segments), it is homogeneous
within the segment (exhibits common attributes); it responds similarly to a market stimulus, and
it can be reached by a market intervention. Bank through market segmentation classify market
into distinct subsets (segments) that behave in similar ways or have similar needs. Banks
managers tend to visualize fairly well defined and stable groups of customers. However,
experience and practice show that market segments are often fuzzy and dynamic in structure.
This fuzziness and dynamism are a function of the variability in customer needs and the actions
of competitors, and the factors in the business environment that influence them. Variability in
buyer behavior means that it is possible that a single buyer can be classified in more than one
segment. The bank segmentation process consists of segment identification, segment
characterization, segment evaluation and target segment selection. If each segment is fairly
homogeneous in its needs and attitudes, it is likely to respond similarly to a given marketing
strategy. That is, they are likely to have similar feelings and ideas about a marketing mix
comprising a given product or service, sold at a given price, and distributed and promoted in a
certain way. Bank segmentation generally segmentation conducted using demographic,
geographic, attitudinal or behavioral data. The process of segmentation is distinct from targeting
(choosing which segments to address) and positioning (designing an appropriate marketing mix
for each segment).The overall intent is to identify groups of similar customers and potential
customers; to prioritize the groups to address; to understand their behavior; and to respond with
appropriate marketing strategies that satisfy the different preferences of each chosen segment.
Revenues are thus improved. Improved segmentation can lead to significantly improved

29

marketing effectiveness. With the right segmentation, the right lists can be purchased, advertising
results can be improved and customer satisfaction can be increased. So with this strategies the
bank identify the core segments in which they see there long lasting business with their loyal
customers like business and with this they find big cities of the countries than main business
markets of the particular cities where they find business and open branch there.
PRODUCT PLANNING AND DEVELOPMENT:
In product and development they have a separate department for this work. The main purpose of
product and planning is to search the needs and wants of the peoples living in the particular
societies. After the market segmentation of theorganization they develop different products for
their customers. For example the business community wants cheap online transaction. So bank
Allied made AlliedKarobar Account puperly design for the local business community. And for
product development the supporting material that they get from branches marketing managers
BDOs officers they also have separate department for credits and all theseinfo are brainstorming
in the R&D department of the organization and then they create products for the required
customers with specification of theircustomers needs.
POSITIONING:
In this process bank marketers try to create an image or identity in the minds of their target
market for its product, brand, or organization. It is the relative competitive comparison their
product occupies in a given market as perceived by the target market.
Positioning is what the customer believes about bank products value, features, and benefits; it is
a comparison to the other available alternatives offered by the competition. These beliefs tend to
base on customer experiences and evidence,rather than awareness created by advertising or
promotion.Marketers manage product positioning by focusing their marketing activities on

30

apositioning strategy. Pricing, promotion, channels of distribution, and advertising all are geared
to maximize the chosen positioning strategy.It is the aggregate perception the market has of a
particular bank, product or service in relation to their perceptions of the competitors in the same
category.It will happen whether or not an organizations management is proactive, reactiveor
passive about the on-going process of evolving a position. But a company canpositively
influence the perceptions through enlightened strategic actions.Generally, there are following
strategies for product positioning.
POSITIONING STRATEGIES:
By attribute: Our current account offers extra interest
By benefit: Loan facilities to old customers
By price/quality: Enjoy maximum privileges with the minimum subscription fee
By competitor: No other bank offers so much
By user: BAL: Debit/Credit card facility
Hybrid strategy: combination of two strategies.
In conclusion Bank Allied is the fifth largest private bank of Pakistan operating nationwide with
283 network branches with the facilities of 232 ATM machines nationwide.
PRICING STRATEGIES:
A critical marketing mix tool is price. Price is important since it represents the amount of money
that customers have to pay for the services received and it is the only element of the bank
marketing mix that creates revenue. The most important pricing in the banking system relates to
interest rates; but as thegovernment controls basic interest rates therefore the use of price as an
important element in bank marketing has tended to be neglected. Bank Privatization, coupled
with the introduction of new technology and the arrival of the new aggressive bank and non-bank

31

competitors is forced a reappraisal of the use of pricingstrategy. In this regard the writer noticed
that Bank Allied Ltd has an advantage of credible bank image and on the basis of it the bank has
set out particular pricing system.Hence the banks strategic pricing objectives are:
1.
2.
3.
4.

Maximization of profit
Rate of return on investment
Obtaining market share
Attract more customers

Pricing Decisions:
1.
2.
3.
4.

Pricing policies
Pricing methods and its applications
Price determinants and interest rate settings
The role of branches and head office in price decisions

More the bank gives right to the branch managers to waived the inline bank charges of their loyal
customers having monthly balance of more than 2 lacs. So thisstrategies acting as sound
marketing strategies to attract more customers to deposits there accounts and enjoy that facilities.
Distribution Strategies:
In marketing, distribution is the means through which a seller makeshis product available to the
buyer. A channel of distribution for banking shouldbe considered in a somewhat different
manner. It can be regarded as any means of increasing the availability and / or convenience of a
service that increases its use or the revenue from its use.

CHAPTER 3
FINANCIAL ANALYSIS

32

The analysis of financial data employs various techniques to emphasize the comparative and
relative importance of the data presented and to evaluate the position of the firm. These
techniques include following:

Ratio Analysis

Horizontal Analysis and Vertical Analysis

3.1. RATIO ANALYSIS:

Financial ratios are usually expressed as a percentage or as times per period. Following are the
different types of ratios:
a. Liquidity Ratios:
Liquidity ratios measure a firms ability to meet its current obligations. They may include ratios
that measure the efficiency of the use of current assets.
i)

Current Ratio:

One of the most general and most frequent used of the ratios is current ratio. It measures how
much liquid assets the company have to meet its short term obligations. The current ratio shows
the relationship between the size of the current assets and size of current liabilities. The higher
the ratio, the greater the ability of the firm to pay its obligations. It is computed as follows:
Current Assets / Current Liabilities
Following table shows the current ratio for Allied bank over the last five years.
2010
0.065

2011
0.064

2012
0.058

Interpretation:

33

2013
0.050

2014
0.050

The above table shows that the current ratio for Allied bank has declined from 2010 to 2011 and
it is stable between 2013- 2014 at 0.050. This shows that for every 1 rupee of debt Allied bank
has 0.050 rupee of asset.

ii)

Cash Ratio:

The cash ratio indicates the immediate liquidity of the firm. Sometimes an analyst needs to view
the liquidity of a firm from an extremely conservative point of view. As sometimes the company
may have pledged its receivables and its inventory so, in that case the best indicator of the
companys short-term liquidity may be the cash ratio. It is computed as follows:
Cash / Current Ratio
Following table shows the cash ratio for Allied bank of last five years.
2010
0.061

2011
0.047

2012
0.045

2013
0.044

2014
0.048

Interpretation:
The cash ratio has declined from 2010 to 2012 indicating high amount of loans and advances.
The operating fixed assets for the bank has also increased from 2010 to 2012. Cash ratio has
increased from 0.044 to 0.048 from 2013 to 2014. This increase might be due to reduction in
operating fixed assets which the company has sold. Other liabilities have also decreased from
2011 to 2012.
Still the cash ratio of the bank is below the average of 1.00. The cash ratio of 0.048 indicates that
for every 1 rupee of liability the bank has 0.048 rupee of cash.
iii)

Sales To Working Capital:

34

Relating sales to working capital gives an indication of turnover in working capital per year. A
low working capital ratio indicates an unprofitable use of working capital. In other words, sales
are not adequate in relation to the available working capital. A high ratio indicates that the firm is
undercapitalized. An undercapitalized firm is particularly susceptible to liquidity problems when
major adverse changes in business conditions occur. It is computed as follows:
Sales / Working capital
Where:

Working capital = Current Assets Current Liabilities

The sale of banking company is equivalent to Interest Income.

Following table shows the respective ratio for the Allied bank Ltd from 2010 to 2014:
2010
(1.71)

2011
(0.77)

2012
(0.47)

2013
(0.39)

2014
(0.61)

Interpretation:
The ratio is negative throughout the period for five years. Although is depicting an increasing
trend. It was (1.171) in 2010 which shows unprofitable use of the working capital. The
borrowings of the bank are higher than the lending i.e. Rs. 8 million of the lending against the
borrowing of Rs 6 billion. In 2014 the ratio has increased as the borrowing as risen to Rs. 2
billion approximately.
b. Leverage Ratio:
The leverage ratio shows the ability to meet log-term obligations. It includes following ratios:
i.

Debt To Asset Ratio:

The debt to asset ratio indicates the percentage of assets financed by creditors, and it helps to
determine how well creditors are protected in case of insolvency. If creditors are not well
protected, the company is not in opposition to issue additional long-term debt. From the

35

perspective of long term debt paying ability, the lower this ratio, the better is the companys
position. It is computed as follows:
Total Liabilities / Total Assets
The following table depicts the debt to asset ratio of Allied bank from 2010 to 2014:
2010
96%

2011
92.35%

2012
97.14%

2013
97.21

2014
92.8%

Interpretation:
Allied bank has high debt to asset ratio. In 2010 it had 96% of debt to asset ratio which shows
that 96% of the assets were financed by creditors. It reduced in 2010 and then again rose to
97.14% in 2012. This increase may be attributed to high amount of deposits which rose from
2010 to 2012. In 2014 it again went down to 92.8% as the advances and other assets of bank
increased.
ii.

Debt/Equity Ratio:

The debt to equity ratio is another computation that determines the entitys long-term debtpaying ability. This computation compares the total debt with the total shareholders equity. The
debt to equity ratio also helps to determine how well the creditors are protected in case of
insolvency. The lower this ratio the better is the companys position.
It is computed as follows:
Total Liabilities / Shareholders Equity
The following table shows the debt to equity ratio of Allied bank from 2010 to 2014:
2010
5.69

2011
7.43

2012
7.21

Interpretation:

36

2013
4.73

2014
2.52

The debt to equity ratio of the bank has decreased over the period which shows that funds
provided by shareholders have increased over the period of five years.
c. Coverage Ratios:
i)

Times Interest Earned:

This ratio involves the relation of earnings before interest and taxes to annual interest payments.
This ratio is useful in determining whether a borrower is going to be able to service interest
payments on loans. Even for highly leveraged transactions, lenders want a coverage ratio above
2.0. It is computed as follows:
EBIT / Interest Expense
Following table depicts the interest coverage ratio of Allied bank from 2010 to 2014
2010
(0.672)

2011
(0.726)

2012
(0.188)

2013
(0.146)

2014
(0.142)

Interpretation:
The interest coverage ratio of the bank is in negative but shows rising trend over the period of
time.
d. Profitability Ratios:
Profitability is the ability of the firm to generate earnings. Analysis of profit is vital concern to
stockholders since they derive revenue in the form of dividends. Further, increased profits can
cause rise in market price, leading to capital gains. Profits are also important to creditors because
profits are one source of funds for debt coverage.
Following are some of the profitability ratios.
i.

Gross Profit Margin:

37

This ratio gives a measure of gross income rupees generated by each rupee of sale. It is
computed as follows:
Gross Income / Net sales
In case of bank the gross profit margin will be equivalent to Net Interest Income / Mark-up
Interest Earned. Following table shows this ratio for Allied bank over the period of last five
years:
2010

2011

2012

2013

2014

8.05%

0.97%

2.73%

5.4%

10.93%

Interpretation:
The ratio decreased from 2010 to 2011. This decrease is attributed to high interest expense which
the bank incurred in 2009. But in 2014 the bank reported record gross profit margin of 10.93%.
This increase is mainly due to increase in lending and investments which generated high interest
income.
ii.

Net Profit Margin:

A commonly used profit measure is return on sales, often termed net profit margin. This ratio
gives a measure of net income rupees generated by each rupee of sales.
It is computed as follows:
Net Income / Net Sales
For bank it will be Net Income / Mark-up Interest Earned. Following table shows net profit
margin for Allied bank from 2010 to 2014.
2010

2011

2012

2013

2014

(43.90%)

(49.91%)

(14.12%)

(14.01)

(13.76)

38

Interpretation:
The bank has continuously reported net loss from last five years. The trend of the loss is variable.
It declined in 2010 and then rose considerably in 2011. But in 2012 the banks loss reduced from
49.91% to 13.76%. This reduction in loss is attributed to variety of the reasons. Provisions
against non-performing loans reduced and hence bad debts that were written-off were also
reduced. From 2010 to 2013 reversals against consumer financing were made but in 2014
provisions against consumer finance was made.

iii.

Return On Assets:

Return on assets measures the firms ability to utilize its assets to create profits by comparing
profits with the assets that generate the profits.
It is computed as follows:
Net Income / Average Total Assets
Following table shows ROA for Allied bank over the period of five years:
2010

2011

2012

2013

2014

(0.036)

(0.046)

(0.0098)

(0.015)

(0,0059)

Interpretation:
The ratio for the bank is negative which shows that the bank is not efficiently using its assets to
generate sales.
iv.

Return on Equity:

This ratio measures the return to the shareholders. It is computed as follows:

Net Income / Average Total Equity

39

Following table shows ROE for Allied bank over the period of five years:
2010

2011

2012

2013

2014

(0.287)

(0.322)

(0.039)

(0.038)

(0.036)

Interpretation:
The ROE is also negative which shows that the shareholders are in loss and are not earning
positive yields on their investments.

3.2. TREND ANALYSIS

Horizontal Analysis (Index Analysis)
The balance sheet and income statement can be supplemented by the expression of the items as
trends from a base year. For Allied banks financial statement the base year is 2008 and all
financial statement items are 100.00 for that year. Items for four subsequent years are expressed
as an index relative to that year.

BALANCE SHEETS OF ALLIED BANK LTD.

2010
2011
2012
Assets
Cash and balances with treasury banks
Balances with other banks
Lending to financial institutions
Investments
Advances
Operating fixed assets
Deferred tax assets - net
Other assets
Liabilities
Bills payable
Borrowings

2013

2014

100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0

95.23
147.45
163.89
67.26
120.14
126.79
147.87
143.43
103.69

96.80
117.11
127.11
112.99
124.04
157.13
224.93
272.25
127.96

99.2
95.18
311.71
77.61
164.05
102.00
236.09
249.54
135.71

99.34
92.43
321.05
76.34
169.06
101.68
236.03
244.83
168.96

100.0
100.0

75.61
127.00

111.71
219.30

150.02
153.99

152.76
154.01

40

Deposits and other accounts

Sub-ordinated loan
Liabilities against assets subject to
finance lease
Other liabilities
Net Assets
Represented By
Share capital
Reserves
Discount on issues of right shares
Accumulated losses
Surplus on revaluation of assets
net of tax

i)

100.0
100.0

96.89
-

117.07
-

129.62
-

131.34
-

100.0
100.0
100.0
100.0

49.56
106.73
99.55
201.42

13.06
168.00
129.95
80.87

10.65
129.51
131.28
240.36

10.37
118.89
165.17
258.67

100.0
100.0
100.0

180.02
100.00
148.84

180.02
102.78
219.22

534.21 537.23
63.41
198.85 195.50

100.0
100.0

120.57
201.42

145.13
80.87

(0.70)
240.36

11.38
258.66

Interpretation:

The cash of the bank is continuously showing the rising trend which is also evident from the
liquidity ratios as banks current ratio is also showing rising trend. Lending to financial
institutions also increased in FY13, while investments rose in FY10 but again declined in FY13.
Advances and other assets of the bank is also continuously showing an upward trend. The
increase of advances and lending accounts for the higher interest income which the bank
generated in FY13. On liability side of the balance sheet, bills payable, borrowing and deposits
are also depicting an upward trend over the period of five years. Liabilities subject to finance
lease has decreased over the period of five years.
Share capital was constant in FY10 while it rose considerably in FY13, the reserves of the bank
declined in FY13.
INCOME STATEMENTS OF ALLIED BANK LTD.
Mark-up / return / interest earned
Mark-up / return / interest expense

2010
100.0
100.0

41

20112012
2013
2014
95.60
123.21
103.35
95.00
131.86
99.48

174.70
146.73

Net mark-up / interest income

100.0
Provision against non-performing loans
and advances
100.0
Provision / (reversal) against
consumer finance
100.0
(Reversal)/ provision for diminution
in value of investment
100.0
Impairment for available-for-sale securities
Bad debts written off directly
100.0
Net mark-up / interest income
after provisions
Non Mark-Up / Interest Income
Fee, commission and brokerage income
Dividend income
Income from dealing in foreign currencies
Gain on sale of securities - net
Other income
Total non-markup / interestincome

150.97

154.62

53.06

69.24

91.44

93.75

230.31

109.88

(188.56)

116.68

379.57
52.42

199.86
73.72

93.77

45.88

81.20

(8.47)

100.0
100.0
100.0
100.0
100.0
100.0

50.94
61.11
82.94
229.26
109.27
49.48

88.61
62.79
176.56
278.10
152.61
85.31

93.91
56.34

65.85
50.97
167.18
352.05
819.39
131.18

100.0
100.0

152.36
24.95

216.29
(268.9)

100.0
100.0
100.0
-

5.76
146.97
-

118.61
201
-

19.01
157.40
-

100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0

85.36
46.52
110.92
66.25
45.28

128.07
23.78
7.87
184.61
95.46
51.52

25.0
168.04
25.19
23.02
35.12

Extra ordinary items

ii)

145.87

100.0

Non Mark-Up / Interest Expenses

Administrative expenses
Other (reversal) / provisions / write offs
Unrealized loss on revaluation of investments
Classified for trading
Other charges
Total non-markup/interest expenses
Amortization of deferred cost

Loss before Tax

Current
Prior year(s)
Deferred
Loss after Tax
Losses brought forward
Losses carried forward
Loss per share - Basic and Diluted

102.78

Interpretation:

42

66.79
48.32
167.01
311.65
563.76
131.54

175.98
178
(403) (414.8)
25.76
217
24.7
95.12
79.43
41.33
29.02

The interest income of Allied bank is showing positive and increasing trend over the period of
five years. This interest income of the bank decreased in FY13 but its net interest income
increased because its interest expense decreased considerably. Provisions against non-performing
loans increased in FY10, while it reduced in FY13. Non-markup interest income was highest in
FY10 as income from dealing in foreign currencies and the bank also had gain on sale of
securities. Loss before tax was highest in FY10 as administrative and non-markup expenses were
very high in this year. The loss was reduced greatly in FY13 as other charges and interest
expense was reduced.
VERTICAL ANALYSIS (COMMON SIZE ANALYSIS)
In common size analysis we express the various components of balance sheet as percentages of
the total assets of the company, while in income statement the items are related to sales. In case
of the banking industry the items in income statement are related to interest income.
BALANCE SHEET OF ALLIED BANK LTD:
2010
2011
2012
2013
Assets
Cash and balances with treasury banks
Balances with other banks
Lending to financial institutions
Investments
Advances
Operating fixed assets
Deferred tax assets - net
Other assets
Total Assets
Liabilities
Bills payable
Borrowings
Deposits and other accounts
Sub-ordinated loan
Liabilities against assets subject to
finance lease

2014
6.00
0.238
0.154
33.28
48.22
4.41
3.29
2.97
100.0

5.52
0.341
2.472
21.58
55.86
5.39
4.69
4.11
100.0

4.54
0.219
1.55
29.38
46.74
5.41
5.79
6.33
100.0

4.39
0.167
3.59
19.03
58.28
3.31
5.73
5.47
100.0

4.28
0.166
4.01
21.07
57.36
4.92
5.71
5.06
100.0

1.06
12.82
78.96
1.21

0.77
15.70
73.78
-

0.927
21.97
72.25
-

1.17
14.54
75.42
-

0.94
17.82
73.65
-

0.149

0.071

0.0145

0.013

43

0.010

Other liabilities
92.13
Net Assets
Represented By
Share capital
36.09
Reserves
Discount on issues of right shares
Accumulated losses
(11.61)
Surplus on revaluation of assets
net of tax

iii)

1.72
95.93

1.77
92.11

2.26
97.43

1.64

1.59
92.80

4.06

7.89

2.56

7.19

7.87

9.32

16.18

13.11

0.41
(7.67)

0.39
(11.02)

0.33
(13.15)

2.01
4.06

2.33
7.89

2.28
2.56

36.08
0.39
(18.24)

0.37
(11.24)

(10.43)
7.19

2.16
7.37

Interpretation:

The cash in FY08 was 6% of the total assets which the bank reduced over the period and in
FY13 it was 4.28% of total assets. Lending to financial institutions increased over the period
which was 0.154% of total assets in FY10 and in FY13 it rose to 4.01% of total assets.
Investments of the bank reduced constantly over the period of five years while the advances of
the bills payable of the bank reduced in FY10 but then rose in FY11. Deposits of the bank
reduced over the period. In FY10 the bank had deposit of 78.96% while in FY13 they were
73.65%. Share capital of the bank shows fluctuating trend. In FY11 it reduced from 16.18% to
13.11%, but in FY13 it went up to 36.09%.

Income Statement of Allied bank Ltd.

2010 2011
2012
2013
Mark-up / return / interest earned
Mark-up / return / interest expense

2014
100.0
92.51

44

100.0
91.93

100.0
99.02

100.0
89.05

100.0
83.11

Net mark-up / interest income

7.48
Provision against non-performing loans
And advances
65.30
Provision / (reversal) against
Consumer finance
(0.11)
(Reversal)/ provision for dimunation
In value of investment
0.062
Impairment for available-for-sale securities Bad debts written off directly
65.26
Net mark-up / interest income
After provisions
(57.76)
NON MARK-UP / INTEREST INCOME
Fee, commission and brokerage income
7.68
Dividend income
0.91
Income from dealing in foreign currencies 1.33
Gain on sale of securities - net
4.37
Other income
1.81
Total non-markup / interestincome
16.17
(41.57)
Non Mark-Up / Interest Expenses
Administrative expenses
26.46
Other (reversal) / provisions / write offs
0.79
Unrealized loss on revaluation of
Investments classified for trading
0.02
Other charges
0.29
Total non-markup/interest expenses
27.58
Amortization of deferred cost
Extra ordinary items
Loss before Tax
Current
Prior year(s)
Deferred
Loss after Tax
Losses brought forward
Losses carried forward
Loss per share - Basic and Diluted
iv)

8.04

0.97

10.92

8.91

36.24

36.69

45.96

38.28

(0.26)

(0.084)

0.18

0.27

(0.24)
35.79

0.10
2.33
39.04

46.17

33.16

(27.72)

(38.06)

4.73

4.67

4.09
0.588
1.15
0.41
2.07
8.37
(19.35)

5.53
0.45
1.91
0.98
2.25
11.19
(26.87)

4.89
0.44
2.15
1.49
4.47
20.52
25.26

5.01
0.42
2.11
1.76
4.32
20.54
25.72

42.17
0.19

46.45
1.72

45.06
3.08

45.03
3.51

0.018
42.41
-

0.28
45.03
-

0.04
42.02
-

0.07
43.56

(69.18)
0.72
9.14
(15.71)
5.81
(63.34)
(22.50)
(85.87)
(0.13)

Interpretation:

45

(61.76)
0.35
(18.22)
17.85
(61.76)
(0.061)

(71.91)
0.13
0.57
(23.54)
22.81
(49.07)
(0.054)

(61.73)
1.18
(23.83)
2.62
(14.11)
(0.0064)

(64.11)
1.19
(17.92)
7.96
(13.23)
(0.0067)

The interest expense of the bank is fluctuating over the period. In FY11 it was highest i.e.
99.02% of the interest income which was the reason that the bank reported lowest net interest
income i.e. 0.97%. In FY14 the interest expense reduced to 83.11% and thus it resulted an
increase in net interest income. In FY10 provisions against non-performing loans were 65.30%
of interest income which reduced to 38.28% in FY14. Net mark-up interest income shows a
fluctuating trend. Fee, commission and brokerage income also reduced over the period of five
years. In FY10 it was 7.68% of net income while in FY14 it was 5.01% of interest income.
Income from dealing in foreign currencies also increased over the period. Administrative
expenses were 26.46% of interest income in FY10 and rose to 45.03% in FY14. Loss is also
going in downwards trend. In FY10 the loss was (63.34%) of interest income while in FY14 it
reduced to (13.23%)

CHAPTER 4
MY INTERNSHIP EXPERIENCE AND CONTRIBUTION
CONCERNED DEPARTMENT INFORMATION:
During my eight weeks internship, I have worked in different departments of the
bank to understand the environment and working in a bank.
FINANCE DEPARTMENT:

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Finance department is also one of the important and central departments of most of the
organizations. Within finance department there are sub departments i.e. budget & audit office,
accounts section, payment section, payroll sections. The various activities under finance
department are book keeping, preparation of ledger account, trial balance and other financial
report and statement. Similarly payments to various vendors and service providers and payment
of utility bills etc. is made on behalf of payment section. The preparation and calculation of
salary and provident fund etc. is the responsibility of payroll section. The budget section is
involved in preparation and comparing the current financial position with the annual budget of
the institute. The audit section is responsible for checking the accuracy and

status of various

financial transactions.
WORKING EXPERIENCE (DUTIES AND RESPONSIBILITIES):
During my internship, I helped manager by handling Mail Dispatch Register, Mail Receiving
Register, ATM Record Register, and Cheque Book Delivery Register.
i)

Account Opening

I also learned about different types of accounts the bank offers and how to open an account.
Borrowing funds from different sources has become an essential feature of todays business
enterprises. But in the case of bank borrowing funds from outside parties is more vital because
the borrowed capital of a bank is much greater their own capital. Banks borrowing is mostly in
the form of deposits. These deposits are lent out to different parties such deposit creation is done
through open an account in the bank.
The Bank does not make payment of a cheque bearing a six-month or older date. If an account is
not operated in six months, it is called Dormant Account.

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ii)

Cheque Book Issuance

When the account is opened, then the customer is given a cheque book to sign upon and en-cash
money.
Procedure:
All the account opening formalities must be completed before, issuance of cheque book.
Particulars of the cheque book requisition should be completed containing title of account,
account number, type of currency, number of leaves and

signature of the customer. Signature

of the customer is verified on the requisition.

If customer is unable to collect his cheque book, then he can give authority to the 'third person to
collect his cheque book' on his behalf by signing on the back of .the requisition. In such case, the
particulars of the third person are required like name of the person, CNIC number and signature
of that person on requisition and cheque book issuance register.
Cheque book is taken out from the safe/locker. It is assured that series of the cheque book is in
order. Particulars are entered in the cheque book issuance register. Account number is stamped
on every leaf of the cheque book and those leaves are counted. Name of the account holder is
written on the cover of the cheque book and requisition on the cheque book for further issuance
is properly filled stamped and signed by officer of the bank.
Cheque book is delivered to the customer and his signature is taken on the cheque book issuance
register, cheque serial number is entered in the system (T24).
Stock of cheque books are balanced at the end of each day and kept under safe custody.
Allied bank issues following cheque books:

Saving account - 25 leaves

Current account - 50 leaves
Current account - 25 leaves

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iii)

Calls To The Customers:

During my work in Customer Services Department, I made calls to those customers whose VDC
card was inactive and whose CNIC was expired. If CNIC of any customer is expired, the branch
has to face the penalty of Rupees 200,000 from the State Bank of Pakistan while list of inactive
VDCs dont cost any penalty however, the branch is considered as uncompetitive.

iv)

Checking Of Notice Board:

Following are the items to be displayed on the notice board and Customer Relationship Officer is
responsible for it. In the absence of any of the one, state Bank imposes penalty of Rupees
100,000 on the bank.

v)

License to operate the Bank from State Bank

NTN Number
Utility Bills are accepted here
Change of Rupees 5,000 is available
Small denominations are accepted here
Soiled, mutilated and defective notes are changed
Arms and Ammunitions are not allowed in the branch premises
CNIC is required for the transactions of Rupees 100,000 and above
Prize bonds are sold and purchased
Prize bond result list
Rates of Liability products
Schedule of Charges
Emergency contact numbers
Phone banking numbers
Latest Balance sheet of bank
Notice to the customers
Daily foreign exchange rates
Host of the week
Daily revised Forex rate list
Complaints From The Customers:

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If any customer had complaint regarding any matter we, launched it on Customer Services
Management System (CSMS), a software which shows complaint number, type of complaint, the
concerned branch and the number of resolved complaints. Every day I used to check these
complaints and reported them to Relationship Manager.

LEARNING AND ACHIEVEMENTS:

This internship helped me in learning the following things which will help me throughout my
life.

I learned how to interact with the customers in a professional setup.

I had the detailed experience of opening the account and negotiating with the customers.

I learned practically about single entry and double entry transactions.

I also had the learning about how to close the dormant accounts and how to re-activate

them.

I also had the understanding about how to use the database of the bank i.e. T24. Different

banks use different software but Allied bank is using T24 (Temenos 24).
SKILLS USED AND ACQUIRED:
I used the following skills during the internship:

General Communication
Learning
Hardworking
Computer Usage
Work diligently and with commitment

I acquired the following skills from this internship:

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Efficiently working in professional environment

Stress Management
Interpersonal interaction in a positive manner
Resource Management

CHAPTER 5
RECOMMENDATIONS AND CONCLUSION
RECOMMENDATIONS
Following are some suggestions for Alliedbank Ltd. These suggestions are based on my
experience with bank:

The deposit slips and AOF should not be filled by bank staff. It should be filled by the

customers. Bankers should avoid to fill-in the AOF and deposit slips because it can create
problem if the address, title of account or any other information provided by the customer has
not been written properly. Customer may be affected or he may claim that this information was
not provided by him, but if AOF and deposit slips are filled by the customer then banker cannot
be held responsible for any incorrect information provided by the customer.

The cheque books should not be given to any customer until all the formalities are

fulfilled.

There are two officers involved in cash deposit process, which is time consuming.

Cashier should be given certain powers to receive cash of US$ and GBP.

Similarly, there are two officers involved in cheque payment process, which is time

consuming. Cashier should be given certain powers to cash cheques up to Rupees. 25,000/- to
provide prompt services.

The bank should audit internally by an audit department in the branch to make audit on

daily basis.

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Travelers cheque should be issued.

Transfer of money through Western Union should be initiated to facilitate the customers.

CONCLUSION
Alliedbank under the leadership of Mr. Atif Bajwa has made significant contribution in building
of both the corporate and retail banking sectors in Pakistan.Conclusion
The eight weeks spent at Bank Allied Limited, G-9 branch were, no doubt a source of great
learning for me about a lot of things particularly working in banks atmosphere and system of
bank. Its my quite first experience to do work practically in some organization. This practical
training program did not only help me acquire loads of knowledge about the predominant
functions performed by banking companies, but also imparted a lot of training as regards the set
of behavioral traits which distinguish a particular person from the rest of the lot in a professional
environment.

During my internship I concluded that currently bank Allied has a high market share and

is not facing any type if risk.

Due to highly trained professionals it is used to make progress leaps and bound.
The main objective of bank is to build strong relationship with the customers and make
them believe that bank Allied is right for them by providing effective and efficient

services.
It has also created a strong goodwill and trust in the market.
At this point it is significant to write a word of gratefulness for the institute, which makes
it sure, that all the students get an exposure to practical lifein relatively well-reputed

organizations
I must highlight the fact that writing this internship report was anevenly memorable
experience as actually doing the internship.

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REFERENCES:
Annual reports BAL; 2008
Aslam, S 1999; Banking and Finance
Pakistan Banks Association
AlliedBank Limited Website (www.Alliedbank.com)
Pakistan Banks Association
Ifitkharchangazi, Allied bank, slideshare

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