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Samina Ameer Din Mc090404110 MBA Finance. National Bank of Pakistan . Brief Introduction of the Organization . History of National Bank of Pakistan. NBP is the largest commercial bank. Acts as an agent of central bank. Moved from public sector organization to commercial bank. - PowerPoint PPT Presentation
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Samina Ameer Din Samina Ameer Din Mc090404110Mc090404110
MBAMBAFinanceFinance
National Bank of Pakistan National Bank of Pakistan
Brief Introduction of the Brief Introduction of the Organization Organization
History of National Bank of History of National Bank of PakistanPakistan
NBP is the largest commercial bank.NBP is the largest commercial bank. Acts as an agent of central bank.Acts as an agent of central bank. Moved from public sector organization to commercial Moved from public sector organization to commercial
bank.bank. Provide both public sector and commercial banking Provide both public sector and commercial banking
services. services. Handle treasury transactions.Handle treasury transactions. A major lead player.A major lead player.
Business Volume of NBPBusiness Volume of NBP2010 (Particulars) (Rs. in Million)2010 (Particulars) (Rs. in Million) Total Assets Total Assets 1,035,0251,035,025Deposits Deposits 832,152832,152Advances Advances 477,507477,507Investments Investments 301,324301,324Shareholder’s Equity Shareholder’s Equity 103,762103,762 Pre-tax Profit Pre-tax Profit 24,41524,415After-tax Profit After-tax Profit 17,56317,563Earning Per Share (Rs.) Earning Per Share (Rs.) 13.0513.05Number of Branches Number of Branches 1,289 1,289 Number of Employees Number of Employees 16,45716,457
Competitors of NBPCompetitors of NBP
Competitors at Public SectorCompetitors at Public Sector
First Women Bank Limited (FWB) First Women Bank Limited (FWB) The Bank of Khyber (KB)The Bank of Khyber (KB)The Bank of Punjab (BOP)The Bank of Punjab (BOP)
Competitors at Private SectorCompetitors at Private Sector
My Bank Limited Allied Bank Limited My Bank Limited Allied Bank Limited Bank Al-Falah Limited Atlas BankBank Al-Falah Limited Atlas BankBank Al Habib Limited Habib Bank LimitedBank Al Habib Limited Habib Bank LimitedAskari Bank Saudi Pak Bank LimitedAskari Bank Saudi Pak Bank LimitedFaysal Bank Limited Metropolitan Bank limited Faysal Bank Limited Metropolitan Bank limited Muslim Commercial Bank LimitedMuslim Commercial Bank Limited
Organizational Hierarchy ChartOrganizational Hierarchy Chart
4. SVP 5. VP3. EVP2. SEVP
OG-I
Executives
Officers
OG-II OG-III
Clerical Staff
Head Cashier
CashierNon
Clerical Staff
Peon, Guards etc
Assistant
1. President
6. AVP
CashDept.
Hierarchy of BranchHierarchy of Branch
Branch Manager
Credit OfficerOperations
Manager HR Officer
All other staff
Training ProgramTraining Program
1)1) Account Opening Department Account Opening Department 2)2) Clearing Department Clearing Department 3)3) Remittance Department Remittance Department
Description of the Tasks Assigned to Description of the Tasks Assigned to me During my Internshipme During my Internship
PLS Saving A/C PLS Saving A/C Current A/CCurrent A/C Inward / Out ward ClearingInward / Out ward Clearing Local Clearing Local Clearing Intercity Clearing Intercity Clearing Pay Order (PO)Pay Order (PO) Demand Draft (DD)Demand Draft (DD) Call Deposit at Receipts (CDR)Call Deposit at Receipts (CDR)
Ratio Analysis Ratio Analysis
Financial StatementsFinancial Statements
All the financial statements for the preparation of these PPT All the financial statements for the preparation of these PPT slides are downloaded from the slides are downloaded from the Website of NBP: Website of NBP:
www.nbp.com.pkwww.nbp.com.pk
Ratio Ratio AnalysisAnalysis
National Bank of Pakistan National Bank of Pakistan (Net profit/ Revenue) *100(Net profit/ Revenue) *100
Year 2010Year 2010 Year 2009Year 2009 Year 2008Year 2008
1. Net 1. Net Profit Profit Margin Margin
17,563,214/17,563,214/88,472,134*10088,472,134*100=19.85%=19.85%
17,561,846/17,561,846/77,947,697*10077,947,697*100= 22.53%= 22.53%
15,458,590/15,458,590/60,942,798*10060,942,798*100= 25.36%= 25.36%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
Year 2008 Year 2009 Year 2010
Net Profit Margin
Ratio Ratio AnalysisAnalysis
National Bank of Pakistan National Bank of Pakistan ((Mark-up / return / interest earned - Mark-up / Mark-up / return / interest earned - Mark-up / return / interest expensed) / Mark-up / return / return / interest expensed) / Mark-up / return /
interest earned*100 interest earned*100 Year 2010Year 2010 Year 2009Year 2009 Year 2008Year 2008
2. Gross 2. Gross Spread Spread Ratio Ratio
43,221,658/43,221,658/88,472,134*100 88,472,134*100 = 48.85%= 48.85%
37,458,048/37,458,048/77,947,697*10077,947,697*100= 48.05%= 48.05%
37,058,030/37,058,030/60,942,798*10060,942,798*100= 60.80%= 60.80%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
Year 2008 Year 2009 Year 2010
Gross Spread Ratio
Working of Net Interest Margin Working of Net Interest Margin
Net Interest Margin = Net Interest Margin = Mark-up / return / interest earned - Mark-up / return / interest earned - Mark-up / return / interest expensedMark-up / return / interest expensed
2010)2010) Net interest margin = ( Net interest margin = (88,472,134-45,250,476)88,472,134-45,250,476) = = 43,221,65843,221,6582009)2009) Net interest margin = ( Net interest margin = (77,947,697-40,489,649)77,947,697-40,489,649) = = 37,458,04837,458,0482008)2008) Net interest margin = (60,942,798-23,884,768) Net interest margin = (60,942,798-23,884,768) = = 37,058,03037,058,030
Ratio Ratio AnalysisAnalysis
National Bank of Pakistan National Bank of Pakistan non mark-up/interest income/ (non mark-up/interest non mark-up/interest income/ (non mark-up/interest
income +Mark-up/return/interest earned)*100income +Mark-up/return/interest earned)*100Year 2010Year 2010 Year 2009Year 2009 Year 2008Year 2008
3. Non 3. Non Interest Interest Income Income to Total to Total Income Income
17,632,640/17,632,640/106,104,774*100 106,104,774*100 = 16.61% = 16.61%
19,025,357/19,025,357/96,973,054*10096,973,054*100= 19.61%= 19.61%
16,415,862/16,415,862/77,358,660*10077,358,660*100= 21.22%= 21.22%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
Year 2008 Year 2009 Year 2010
Non Interest Income to Total Income Ratio
Working of Total Income Working of Total Income
Total Income = Total Income = (non mark-up / interest income +Mark-(non mark-up / interest income +Mark-up / return / interest earned)up / return / interest earned)
2010)2010) Total Income = (17,632,640+88,472,134) Total Income = (17,632,640+88,472,134) = = 106,104,774106,104,7742009)2009) Total Income = (19,025,357+77,947,697) Total Income = (19,025,357+77,947,697) = = 96,973,05496,973,0542008)2008) Total Income = (16,415,862+60,942,798) Total Income = (16,415,862+60,942,798) = = 77,358,66077,358,660
Ratio Ratio AnalysisAnalysis
National Bank of Pakistan National Bank of Pakistan Interest Earned / Interest ExpensedInterest Earned / Interest Expensed
Year 2010Year 2010 Year 2009Year 2009 Year 2008Year 2008
4.Spread 4.Spread Ratio Ratio
88,472,134 /88,472,134 /45,250,476 45,250,476 =1.95 times =1.95 times
77,947,697 /77,947,697 /40,489,64940,489,649= 1.92 times = 1.92 times
60,942,798 /60,942,798 /23,884,76823,884,768= 2.55 times = 2.55 times
0
0.5
1
1.5
2
2.5
3
Year 2008 Year 2009 Year 2010
Spread Ratio
Ratio Ratio AnalysisAnalysis
National Bank of Pakistan National Bank of Pakistan (Net profit/ Total assets) *100(Net profit/ Total assets) *100
Year 2010Year 2010 Year 2009Year 2009 Year 2008Year 2008
5.Return 5.Return on on AssetsAssets
17,563,214/17,563,214/1,035,024,680*1001,035,024,680*100= 1.69%= 1.69%
17,561,84617,561,846//944,582,762*100944,582,762*100= 1.85%= 1.85%
15,458,590/15,458,590/817,758,326*100817,758,326*100= 1.89% = 1.89%
1.55%
1.60%
1.65%
1.70%
1.75%
1.80%
1.85%
1.90%
Year 2008 Year 2009 Year 2010
Return on Assets
Working of Total AssetsWorking of Total AssetsTotal AssetsTotal Assets Year 2010Year 2010
(Rs)(Rs)Year 2009 Year 2009
(Rs)(Rs)Year 2008Year 2008
(Rs)(Rs)Cash and balancesCash and balances 115,442,360115,442,360 115,827,868115,827,868 106,503,756106,503,756Balances with other Balances with other banksbanks
30,389,66430,389,664 28,405,56428,405,564 38,344,608 38,344,608
Lending to financial Lending to financial institution-netinstitution-net
23,025,15623,025,156 19,587,176 19,587,176 17,128,032 17,128,032
Investments-netInvestments-net 301,323,804 301,323,804 217,642,822217,642,822 170,822,491 170,822,491 Advances-netAdvances-net 477,506,564477,506,564 475,243,431475,243,431 412,986,865 412,986,865 Operating fixed assetsOperating fixed assets 26,888,226 26,888,226 25,147,19225,147,192 24,217,65524,217,655Deffered tax assetsDeffered tax assets 6,952,6666,952,666 3,062,2713,062,271 3,204,5723,204,572Other assets-net Other assets-net 53,496,240 53,496,240 59,666,438 59,666,438 44,550,34744,550,347TotalTotal 1,035,024,6801,035,024,680 944,582,762 944,582,762 817,758,326 817,758,326
Ratio Ratio AnalysisAnalysis
National Bank of Pakistan National Bank of Pakistan ((net income/revenues)*(revenues/assets))*100 ((net income/revenues)*(revenues/assets))*100
Year 2010Year 2010 Year 2009Year 2009 Year 2008Year 2008
6. 6. Dupont Dupont Return Return on on AssetsAssets
((((17,563,214/17,563,214/88,472,134)*88,472,134)*(88,472,134/(88,472,134/1,035,024,680)*1001,035,024,680)*100= 1.69%= 1.69%
((17,561,846/((17,561,846/77,947,697)*77,947,697)*(77,947,697/(77,947,697/944,582,762)*100944,582,762)*100= 1.85% = 1.85%
((15,458,590/((15,458,590/60,942,798)*60,942,798)*(60,942,798/(60,942,798/817,758,326)*100817,758,326)*100= 1.88% = 1.88%
1.55%
1.60%
1.65%
1.70%
1.75%
1.80%
1.85%
1.90%
Year 2008 Year 2009 Year 2010
Dupont Return on Assets
Ratio Ratio AnalysisAnalysis
National Bank of Pakistan National Bank of Pakistan Net Income/ Total equity*100 Net Income/ Total equity*100
Year 2010Year 2010 Year 2009Year 2009 Year 2008Year 2008
7.Return 7.Return on Total on Total Equity Equity
17,563,214/17,563,214/103,762,310*100103,762,310*100= 16.92% = 16.92%
17,561,846/17,561,846/94,141,919*10094,141,919*100= 18.65% = 18.65%
15,458,590/15,458,590/81,367,002*10081,367,002*100= 18.99%= 18.99%
15.50%
16.00%
16.50%
17.00%
17.50%
18.00%
18.50%
19.00%
Year 2008 Year 2009 Year 2010
Return on Total Equity
Working of Total EquityWorking of Total Equity
Total Equity Total Equity Year 2010Year 2010(Rs)(Rs)
Year 2009 Year 2009 (Rs)(Rs)
Year 2008Year 2008(Rs)(Rs)
Share capitalShare capital 13,454,62813,454,628 10,763,70210,763,702 8,969,7518,969,751ReservesReserves 24,450,24424,450,244 22,681,70722,681,707 19,941,04719,941,047Un appropriated profit Un appropriated profit 65,857,438 65,857,438 60,696,51060,696,510 52,456,20452,456,204Total Total 103,762,310103,762,310 94,141,91994,141,919 170,822,491170,822,491
Ratio Ratio AnalysisAnalysis
National Bank of Pakistan National Bank of Pakistan (Total debt/ Total assets)*100(Total debt/ Total assets)*100
Year 2010Year 2010 Year 2009Year 2009 Year 2008Year 2008
8. Debt 8. Debt Ratio Ratio
906,528,852/906,528,852/1,035,024,680*1001,035,024,680*100=87%=87%
825,676,384/825,676,384/944,582,762*100944,582,762*100=87%=87%
715,299,108/715,299,108/817,758,326*100817,758,326*100=87%=87%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
Year 2008 Year 2009 Year 2010
Debt Ratio
Ratio Ratio AnalysisAnalysis
National Bank of Pakistan National Bank of Pakistan (total debt/ total equity) (total debt/ total equity)
Year 2010Year 2010 Year 2009Year 2009 Year 2008Year 2008
9. Debt /9. Debt /Equity Equity Ratio Ratio
906,528,852/ 906,528,852/ 103,762,310103,762,310= 8.73 times = 8.73 times
825,676,384/ 825,676,384/ 94,141,91994,141,919= 8.77 times = 8.77 times
715,299,108/ 715,299,108/ 81,367,00281,367,002= 8.79 times = 8.79 times
8.7
8.71
8.72
8.73
8.74
8.75
8.76
8.77
8.78
8.79
2008 2009 2010
Debt / Equity Ratio
Ratio Ratio AnalysisAnalysis
National Bank of Pakistan National Bank of Pakistan (EBIT/ total interest)(EBIT/ total interest)
Year 2010Year 2010 Year 2009Year 2009 Year 2008Year 2008
10. Time 10. Time Interest Interest Earned Earned Ratio Ratio
69,665,595/69,665,595/45,250,47645,250,476= 1.53 times = 1.53 times
61,789,822/61,789,822/40,489,649 40,489,649 = 1.52 times = 1.52 times
46,885,766/46,885,766/23,884,76823,884,768= 1.96 times = 1.96 times
00.20.40.60.8
11.21.41.61.8
2
2008 2009 2010
Time Interest Earned Ratio
Working of EBITWorking of EBIT
EBIT= Profit before Taxation+ Mark-up / return / interest EBIT= Profit before Taxation+ Mark-up / return / interest expensedexpensed
2010)2010) EBIT = 24,415,119+45,250,476 EBIT = 24,415,119+45,250,476= 69,665,595= 69,665,595
2009) 2009) EBIT = 21,300,173+40,489,649EBIT = 21,300,173+40,489,649= 61,789,822= 61,789,822
2008) 2008) EBIT = 23,000,998+23,884,768EBIT = 23,000,998+23,884,768= 46,885,766= 46,885,766
Ratio Ratio AnalysisAnalysis
National Bank of Pakistan National Bank of Pakistan Total Advances/ Total DepositsTotal Advances/ Total Deposits
Year 2010Year 2010 Year 2009Year 2009 Year 2008Year 2008
11.11.AdvancesAdvances/Deposits /Deposits Ratio Ratio
477,506,564/477,506,564/832,151,888832,151,888= 0.5738 times = 0.5738 times
475,243,431/475,243,431/727,464,825 727,464,825 = 0.6532 times = 0.6532 times
412,986,865/412,986,865/624,939,016 624,939,016 = 0.6608 times= 0.6608 times
0.52
0.54
0.56
0.58
0.6
0.62
0.64
0.66
0.68
2008 2009 2010
Advances / Deposits Ratio
Ratio Ratio AnalysisAnalysis
National Bank of Pakistan National Bank of Pakistan Net cash generated from operating activities/ Net cash generated from operating activities/
Current LiabilitiesCurrent LiabilitiesYear 2010Year 2010 Year 2009Year 2009 Year 2008Year 2008
12.12.OCF OCF Ratio Ratio
93,163,784/93,163,784/867,626,368 867,626,368 = 0.107 times = 0.107 times
41,576,364/41,576,364/725,293,720725,293,720= 0.057 times = 0.057 times
2,532,681/2,532,681/682,905,461682,905,461= 0.003 times = 0.003 times
0
0.02
0.04
0.06
0.08
0.1
0.12
2008 2009 2010
Operating Cash Flow Ratio
Working of Current LiabilitiesWorking of Current LiabilitiesTotal Current Total Current Liabilities Liabilities
Year 2010Year 2010(Rs)(Rs)
Year 2009 Year 2009 (Rs)(Rs)
Year 2008Year 2008(Rs)(Rs)
Bills payable (short Bills payable (short term)term)
8,006,6318,006,631 10,621,16910,621,169 10,219,06110,219,061
BorrowingsBorrowings (short term)(short term) 17,154,13117,154,131 37,057,18937,057,189 37,409,28837,409,288Deposits and other Deposits and other accounts (short term) accounts (short term)
816,172,861816,172,861 655,031,896655,031,896 614,538,859614,538,859
Liabilities against Liabilities against assets subject to finance assets subject to finance leaselease (short term)(short term)
43,96343,963 20,40820,408 16,51716,517
Other liabilities (short Other liabilities (short term) term)
26,248,78226,248,782 22,563,05822,563,058 20,721,73620,721,736
TotalTotal 867,626,368867,626,368 725,293,720725,293,720 682,905,461682,905,461
Ratio Ratio AnalysisAnalysis
National Bank of PakistanNational Bank of PakistanDividends paid to Shareholders/ Average common Dividends paid to Shareholders/ Average common
shares outstandingshares outstandingYear 2010Year 2010 Year 2009Year 2009 Year 2008Year 2008
13. Div 13. Div Per Per ShareShare
8,072,777/8,072,777/1,345,462.81,345,462.8= Rs.6 = Rs.6
5,830,338/5,830,338/1,076,370.21,076,370.2= Rs.5.41= Rs.5.41
6,115,739/6,115,739/869,975.1869,975.1= Rs.6.81= Rs.6.81
0
1
2
3
4
5
6
7
2008 2009 2010
Dividend Per Share
Ratio Ratio AnalysisAnalysis
National Bank of PakistanNational Bank of PakistanNet income/ outstanding number of sharesNet income/ outstanding number of shares
Year 2010Year 2010 Year 2009Year 2009 Year 2008Year 2008
14. 14. Earning Earning Per Per ShareShare
17,563,214/17,563,214/1,345,4631,345,463= Rs. 13.05= Rs. 13.05
17,561,846/17,561,846/1,345,4631,345,463= Rs. 13.05= Rs. 13.05
15,458,590/15,458,590/1,076,3701,076,370= Rs. 14.36= Rs. 14.36
12.212.412.612.8
1313.213.413.613.8
1414.214.4
2008 2009 2010
Earning Per Share
Ratio Ratio AnalysisAnalysis
National Bank of PakistanNational Bank of Pakistan
CurrentCurrent Market Share Price/ EPS Market Share Price/ EPSYear 2010Year 2010 Year 2009Year 2009 Year 2008Year 2008
15. Price 15. Price /Earning/EarningRatio Ratio
76.82/13.76.82/13.0505= Rs. = Rs. 5.885.88
74.37/13.074.37/13.055= Rs. 5.69= Rs. 5.69
50.32/14.350.32/14.366= Rs. 3.50= Rs. 3.50
0
1
2
3
4
5
6
2008 2009 2010
Price / Earning Ratio
ConclusionConclusion
The net profit margin of NBP in all of the years is good. The net profit margin of NBP in all of the years is good. Gross spread ratio is also good in all of over the years.Gross spread ratio is also good in all of over the years. Spread ratio of NBP is also good because it covers its interest Spread ratio of NBP is also good because it covers its interest
expenses.expenses. Non Interest Income to Total Income Ratio of NBP is good. Non Interest Income to Total Income Ratio of NBP is good. Return on assets ratio of NBP is low.Return on assets ratio of NBP is low. Dupont return on assets ratio is also low.Dupont return on assets ratio is also low. Return on total equity ratio is good in all over the years.Return on total equity ratio is good in all over the years. Debt ratio of NBP is very high in all of the year that is not Debt ratio of NBP is very high in all of the year that is not
good.good.
ConclusionConclusion
Debt ratio of NBP is very high in all of the year that is not Debt ratio of NBP is very high in all of the year that is not good.good.
Debt to equity ratio is also too high of NBP that is not god.Debt to equity ratio is also too high of NBP that is not god. Time Interest earned ratio of NBP is good.Time Interest earned ratio of NBP is good. Advances / Deposits ratio is very low and not good for NBP.Advances / Deposits ratio is very low and not good for NBP. Operating Cash Flow ratio is also very low in all over the Operating Cash Flow ratio is also very low in all over the
year that is not good.year that is not good. Dividend per share ratio of NBP is good. Dividend per share ratio of NBP is good. Earning per share ratio is very good. Earning per share ratio is very good. P / E ratio is also good of NBP.P / E ratio is also good of NBP.
RecommendationsRecommendations
NBP can also increase the net profit margin ratio by NBP can also increase the net profit margin ratio by decreasing its non mark-up interest expenses and taxes.decreasing its non mark-up interest expenses and taxes.
NBP can increase more its gross spread ratio by decreasing NBP can increase more its gross spread ratio by decreasing the interest expenses.the interest expenses.
Return on assets ratio & Dupont return on assets ratio can Return on assets ratio & Dupont return on assets ratio can also be increased by utilizing the assets in an efficient also be increased by utilizing the assets in an efficient manner.manner.
NBP need to decrease its debts to manage the debt ratio NBP need to decrease its debts to manage the debt ratio because a high debt is not a good sign for NBP. because a high debt is not a good sign for NBP.
RecommendationsRecommendations
Debt to equity ratio is also very high. NBP should decrease Debt to equity ratio is also very high. NBP should decrease its debts because the equity investors will not invest in it its debts because the equity investors will not invest in it due to high debts.due to high debts.
NBP can increase its advances / deposits ratio by giving NBP can increase its advances / deposits ratio by giving advances to the customers.advances to the customers.
NBP needs to improve its liquidity by increasing assets for NBP needs to improve its liquidity by increasing assets for operating cash flow. operating cash flow.
Thank YouThank You
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