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Report Presented by: Muhammad Zeshan
Roll No: BE-10-34
Session: 2010- 2014
Submission Date: September 17, 2013
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I dedicate all of my work to my teacher and all of the members of NBP who helpedme to do my internship and to prepare this report.
First of all I am thankful to ALLAH who always helped me in all of the ways in my
life and always gave me courage and patience to do all of my internship in a good
manner and secondly I am thankful to my teacher and all of the staff of the bank that
also helped me to do my internship.
This report is about National Bank of Pakistan. In November 8, 1949, National Bank
of Pakistan was established under National Bank of Pakistan Ordinance 1949.
National bank is owned by the government and act as an agent of the State bank of
Pakistan. Its headquarter is situated in Karachi. It has its national and international
level branches i.e. 1250 national and 22 international branches.National Bank ofPakistan maintains its positions as a pakistans premier bank for higher achievements.
Its subsidiaries include NBP Capital, NBP Modaraba Management Company, NBP
Exchange Company, Taurus Securities, NBP Almaty and others. It offers its unique
products that are affordable for all classes.
During my internship, I learn a lot about working in different departments that are
account opening, clearing and remittance. The main department of any bank is finance
department and the main function of any bank is to deal with finance. Any bank
secures the resources of general public and offers them a good profit. NBP also
provides services for government employees. One portion of bank is reserve for
government employees dealings only.
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Internship Report on NBP, Jalal Pur Pir Wala Branch Multan.
Sections Sub-
Section
Description Page
No.
0 Title Page 0
1 Dedication 2
2 Acknowledgement 23 Executive Summery 2
4 Table of Contents 3
5 Brief intoduction of the organizations business sector 4
6 Overview of the Organization 6
6.a Brief History 7
6.b Organizational Hierarchy Chart 9
6.c Business Volume 10
6.d Product Lines 10
6.e Competitors of NBP 14
6.f Brief Introduction of all the departments 14
6.g Comments on organizational structure 15
7 Plan of Internship Program 16
7.a Brief Introduction of the branch 17
7.b Starting & Ending dates of Internship 18
7.c Training Departments & Duration 18
8 Training Program 19
Detailed description of the Tasks during Internship 19
9
10
11
Ratio Analysis
Horizontal Analysis of Financial Statements
Vertical Analysis of Financial Statements
22
38-40
41-43
12 Banking Analysis (Competitiors of NBP). 4413 SWOT Analysis 44
14 PEST Analysis 45
15 Future Prospects of the Organization 46
16 Conclusion 47
17 Recommendations for Improvement 47-54
18 References & Sources used 54
19 Annexes 54
3
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Definition of Bank:
A bank is a financial institution that deals with de posits and advances and acts as a
financial intermediary. It receives money in the form of deposits and lends that money
to those who need it. A Bank derives a profit from the difference in the interest rates
paid and charged, respectively. Banks are usually charted by state bank or federal
government.
Banking in Pakistan:
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At the time of independence, commercial banking facilities were provided fairly well
here. There were 487 offices of scheduled banks in the territories now constituting
Pakistan. An Expert committee was appointed. The committee recommended that
the reserve bank of India should continue to function in Pakistan until 30th
September 1948, and Pakistan would take over the management of public debt andexchange control from Reserve Bank of India on 1st April 1948 and that India Notes
would continue to be legal tender in Pakistan till 30th September 1948. Moreover
the banks including those having their registered offices in Pakistan transferred them
to India in order to bring a collapse of a new state. By 30th June1948 the number
offices of scheduled banks in Pakistan declined from 487 to only 195.
The Governor General of Pakistan QUAID-E-AZAM MUHAMMAD ALI JINNAH
inaugurated the State Bank of Pakistan on July 1, 1948, after the state Bank of
Pakistan Order was promulgated on May 12, 1948. The first Pakistan notes were
issued in October 1948. As the Centered Bank of the country, the State Bank
addressed itself with the equally urgent task of creating a national banking system. In
order to attain this goal it provided every help and encouragement to Habib Bank to
expand its network of branches and also recommend to Government the establishment
of a new bank which could serve as an agent to the State Bank. As the result the
National Bank of Pakistan came into over the agency function from the Imperial Bank
of India. More Pakistan scheduled banks continued to be established which included
the Commerce Bank Limited and the Standard Bank Limited. By June 1965, the
number of scheduled banks stood at 36.
Banking structure in Pakistan:
Banking structure in Pakistan consists of the following:
1. (SBP) State Bank of Pakistan (Central Bank)
2. Commercial Banks
3. Exchange Banks
4. Saving Banks
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6. a. Brief History:
NBP is the largest commercial bank operation in Pakistan. In 1949, NBP was
established under National Bank of Pakistan Ordinance 1949. NBP head office is
located in Karachi. NBP has moved from a public sector organization into modern
commercial bank and acts as an agent of central bank. It provides both public sector
and commercial banking services. The bank also handles treasury transactions for the
government of Pakistan (GOP) as an agent of State Bank of Pakistan (SBP). The
National Bank of Pakistan was established on November 29, 1949 as a semi public
commercial bank.
NBP has diversified its business portfolio and is today a major lead player in the debt
equity market, corporate investment banking, retail and consumer banking,agricultural financing, treasury services and is showing growing interest in promoting
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and developing the country's small and medium enterprises and at the same time
fulfilling its social responsibilities.
Vision:
To be recognized as a leader and a brand synonymous with trust, highest
standards of service quality, international best practices and social
responsibility
Mission:
NBP will aspire to the values that make NBP truly the Nations Bank, by:
Institutionalizing a merit and performance culture
Creating a distinctive brand identity by providing the highest standards of
services
Adopting the best international management practices
Maximizing stakeholders value
Discharging our responsibility as a good corporate citizen of Pakistan and in
countries where we operate
Core Values:
Highest standards of Integrity
Institutionalizing team work and performance culture
Excellence in service
Advancement of skills for tomorrows challenges
Awareness of social and community responsibility
Value creation for all stakeholders
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Goal:
To enhance profitability and maximization ofNBP share through increasing leverage
of existing customer base and diversified range of products.
6. b. Organizational Hierarchy Chart:
Internship Report on NBP, Jalal Pur Pir Wala Branch Multan. 84. SVP 5. VP3. EVP2. SEVP
Executives
1. President
6. AVP
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6. c. Business Volume:
2012 (Particulars) (Rs.)
Total Assets 1309339305
Deposits 1037784947
Advances 657381154
Investments 343537529
Shareholders Equity 151277750
Pre-tax Profit 23257706
After-tax Profit 16162635
Earning Per Share (Rs.) 8.75Number of Branches 1289
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OG-I
Officers
OG-IIOG-III
Cash
Dept.
Clerical
Staff
Head Cashier
Cashier
Non Clerical
Staff
Peon, Guards
etc
Assistant
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Number of Employees 16457
6. d. Product lines:
1. NBP Premium Aamdani (Monthly Income Scheme):
Earn up to 12.25% p.a. +
Minimum deposit of Rs. 20,000/- with maximum balance of Rs. 10 million for 5
years
Free Demand Draft, Pay Order and Cheque Book*
Convenience of NBP online Aasan Banking (for online banking customers)
Free NBP Cash Card (ATM+Debit)
Running finance facility up to 90%
2. NBP Premium Saver (PLS Saving Account)
Earn up to 8.50% p.a. +.
Minimum saving balance of Rs. 20,001/- & a maximum balance of Rs. 1 million*.
Free NBP Cash Card (ATM + Debit).
Convenience of NBP Online Aasan Banking (for online banking customers).
Two debit withdrawals allowed in a month & no limit on number of deposit
transaction. Profit calculated on monthly and paid on half yearly basis.
3. NBP Saibaan (Home Financing):
NBP Saibaan
(Open the Door to Your Dream Home)
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Home Purchase
Home Construction
Home Renovation
Purchase of Land + Construction
Balance Transfer Facility (BTF)
4. Advance Salary (Personal Loan):
Easy installments of 1 to 60 months at your choice.
No minimum income, collateral & insurance charges required.
Quick processing and fastest disbursement.
For permanent employees of Government, Semi Government and Autonomous
bodies receiving salaries through NBP.
5. Cash Card (ATM + Debit Card):
Use it as an ATM in any of the ATMs in Pakistan
Use it as Debit Card in any of the outlets with ORIX POS machine
Cash withdrawal up to Rs. 20,000/- per day Account Balance Enquiry
Mini Statement (Only at NBP ATM)
PIN Change facility (Only at NBP ATM)
6. Investor Advantage ( Financing Facility for Stock Investors) :
Comfortable environment for trading
No security requirement, except for the customers equity
Customers equity freely available for investment
Equity acceptable in cash or approved shares
7. Cash n Gold (Ready Cash against Gold):
Facility of Rs. 20, 000/-against each 10 gms of net weight of Gold Ornaments
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http://www.nbp.com.pk/CashnGold/index.aspxhttp://www.nbp.com.pk/Margin/index.aspxhttp://www.nbp.com.pk/cashcard/index.aspxhttp://www.nbp.com.pk/advancesalary/index.aspx7/29/2019 INTERNSHIP REPORT on NBP 2013.doc
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No maximum limit of cash
Repayment after one year
Roll over facility
No penalty for each repayment
8. NBP Karobar (Mera Apna Karobar):
Minimum down payment, 10% of asset price (5% for PCO & Telecaster)
Tenure 1 to 5 years (for PCO 2 years)
Grace period 3 months
Maximum loan amount Rs. 200,000/-
Age 18-45 years Mark-up (variable) 1 year KIBOR + 2.00% p.a.
The customer will pay markup @ 6% p.a.
9. Kisan Dost:
Competitive mark-up rate
Quick & easy processing
Delivery at the farmers doorstep
Technical guidance to farmers
Wide range of financing schemes for farmers
Finance facility up to Rs. 500,000/- for landless farmers against personal
guarantee.
Financing available against pass book, residential/commercial property, gold
ornaments and paper security.
Loan facility on revolving basis for three years (renewable on yearly basis
without obtention of fresh documentation and approval).
10. NBP PAK Remit:
Pak remitis aninternet based Home Remittance Service. This service is
available to U.S. residents for sending money to their family and friends in
Pakistan.
One must have a valid US Dollar account with a U.S. bank or a US Dollarcredit or debit card in order to remit funds through this channel.
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Remitters in USA can log on to NBP user friendly website,
www.pakremit.com and easily remit funds to Pakistan from the comfort of
their homes, in a matter of minutes.
The service is fully secure with advance encryption application and is
available for use 24 hours a day, 7 days a week.
Fees and exchange rate have been set at competitive levels and the remitters
have the ability to track delivery of funds as well.
11. Protection Shield (Personal Accident Insurance):
(Life is precious)
No documentation
No medical required
Premium Auto Debit facility & choice of deactivation
Coverage includes death due to: Natural Calamities e.g. Earthquake, Flood,
Cyclone etc. Accident, Riots, Civil Commotion, Strikes and Acts of
Terrorism.
6. e. Competitors of NBP:
The competitors of NBP at public sector:
The competitors of NBP at private sector:
Competitors at Private SectorMy Bank Limited Allied Bank Limited
Internship Report on NBP, Jalal Pur Pir Wala Branch Multan.
Competitors at Public Sector
First Women Bank Limited (FWB)
The Bank of Khyber (KB)
The Bank of Punjab (BOP)
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Bank Al-Falah Limited Atlas Bank
Bank Al Habib Limited Habib Bank Limited
Askari Bank Saudi Pak Bank Limited
Faysal Bank Limited
Metropolitan Bank limited
Muslim Commercial Bank Limited
6. f. Brief Introduction of all the departments:
1. Finance department
2. Deposit department
3. Credit department4. Operation department
5. Human Resource (HR) department
1. Finance department:
Finance department of any organization controls and manage all routine financial
matters. This department helps to maintain the books of account of any organization.
It performs the investing and lending functions. This department not only prepares the
income statements and balance sheet of any bank but also it estimates the profit and
loss of any bank. It keeps record of total deposits of the bank. It keeps eye on total
worth of the bank.
2. Deposit department:
Deposits are the lifeblood of any bank. This department promotes all of the
departments in a bank. Without deposits, a bank can not perform its banking function.
This department keeps it eye on potential customers for deposits. This department
motivates the branches to get a fixed target through different schemes like cash prizes
and special increments. This department helps to run a banking function.
3. Credit department:
Credit department includes all the credit policies of the NBP. It controls all the credit
policies in this bank like loans and keeps eye on securities, mortgages, pledges and so
on. This department fixes the markup rate for credit.
4. Operation department:
Operation department concerned with the operation in a bank. This department helps
in handling the routine work in a bank. Without this department, bank cannot
maintain its operations. If there is any problem in working area in any branch, this
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department helps to correct the error and make sure that all operations are working
correctly. Account opening is also handled by this department.
5. Human Resource (HR) department:
Human resource department is basically concerned with the employees. Thisdepartment works for the benefits of the employees. This department also helps how
to assign the task and jobs of the employees. It helps to the employees to do their
work easily and to get more and more benefits and incentives for the employees. This
department works in hiring and firing to the employees. Its work is all about the
human resources/ work forces.
6. g. Comments on organizational structure:
NBP is one of the oldest banks in Pakistan. It has the biggest structure in Asia.
National Bank has not been changed its structure from many years so it is not so
good. NBP has its great contribution towards building structure and is serving for all
classes of the society. In any branch of NBP, branch manager perform all the
activities in a branch. NBP has not a rigid structure. It has decentralized structure that
can be adopted easily by all the employees. NBP has large its network because it is
the major business partner for the Government of Pakistan because of its special
emphasis to fostering pakistans economic growth through various services like
aggressive and balanced lending policies, technologically oreinted products and
services offered through its large networks of brances like nationally andinternationaly. So NBP has its good structure as compared to other banks.
7. a. Brief Introduction of the Branch:
National Bank of Pakistan
Main Branch, Jalal Pur Pir Wala
Branch Code: 0544
Branch Manager: Sabir Ali Khan (AVP/Manager).
Operations Manager: Mian Fiyyaz.
Hierarchy of Branch:
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Departments in Branch:
1. Cash Department:
Cash department is such department that purely deals with cash. It is the most critical
part of departments. Three main cashiers in cash department are cash receipts, cash
payments and bill payments. One deals with cash receipts, second deals with the cash
payments and the last one deal with the bill payments. It is supervised by CD in
charge and head.
2. Govt. Department:
This department deals with all the govt. things like govt. receipts, govt. payments
pension, taxes, bills, salaries etc.
3. Credit / Advances Department:
Credit department includes all the credit policies and control these policies. This
department gives different types of loan and chare a fix markup rate for credit. Threemain types of loans are:
Internship Report on NBP, Jalal Pur Pir Wala Branch Multan.
Branch
Manager
Credit Officer
Operations
Manager HR Officer
All other staff
16
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1. Personal loans 2. Agricultural loans 3. Commercial loans
4. Operation Department:
This department deals with all general banking operations. Dealing with customers,
HR maintenance and account opening etc all these dealings relate to this departmentand is controlled by it.
5. Account Opening Department:
Account opening department deals with opening the account of the customers on the
bank. In this department different types of account are opened like PLS saving
account, Current account etc.
6. Clearing Department:
Clearing department deals with clearance of the payments within the branches of the
same bank and with the branches of the other banks.
7. Remittance/ Bills Department:
Remittance department deals with the transfer of money. It transfers money from one
place to another place or from one branch to another branch.
8. Establishment Department / HRM:
This department basically works for staff benefits like medical, traveling etc
9. Electronic Banking System (EBS):
This controlls the over all banking system in a bank.
10. Compliance Group / Auditor:
The work of compliance group / auditor is to audit all the banking work.
7. b. Starting & Ending Dates of Internship:
Starting Date: 10-06-2013
Ending Date: 26-07-2013
7. c. Training Departments & Duration:
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Departments Duration
Account Opening 10-06-2013 28-06-2013
Clearing 01-07-2013 12-07-2013Remittance 15-07-2013 26-07-2013
Detailed description of the tasks assigned to me during myInternship:
1. Account Opening Department
2. Clearing Department
3. Remittance Department
1. Account Opening Department:
The first task assigned to me was the account opening. Fisrt of all I asked the
customer to give me his/her ID card. In ID card, I checked the Expiry Date of the ID
card. If the expiry date of the card is corect and it has not been expired then I took
interview of the customer so that I can know what type of account he wanna open
PLS saving or current account and what is his/her source of income for which he/shewant to open this account. After the interview, he asked me that he wanna open
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saving account. I said ok then I tell him that the minimum amount for opening the
saving account is Rs. 100 and maximum amount you want to deposit and I also told
him that in this account zakat will be deducted and profit will be added. He said ok I
will deposit Rs. 500. After this, I asked the customer you will have to take some
necessary things to open this account that are as follows:
Photocopy of your C.N.I.C
Photocopy of Next of Kin C.N.I.C
Photocopy of your mother C.N.I.C
Photocopy of the your home electricity bill
3 Photos if he/she cant sign means illiterate or sign in urdu and can be copied
by other.
After taking these documents I filled the Customer Information Folio (CIF) and in
CIF I asked the customer of whom person you want to make your Next of Kin. He
told me the name of next of kin, whats his relation with him/her, photocopy ofhis/her C.N.I.C and his mobile number. After filling these information I took a verisys
of his/her C.N.I.C from Nadra from the operations manager so I can know is this
correct C.N.I.C. After all these things I opened the account of customer . After this I
took print of all the forms and then I took the signature card and took the signature of
that person whose account I opened and I used the Brach Stapm on signature card.
After this I took the sign of the designation authority means my supervisor and I also
used the stamp of attested on the photocopy of C.N.I.C.After this, I filled his/ her
deposit slip with that amount from which he wanna open this account that is Rs. 500
and asked him to pay the money to the cash counter and then your account will be
opened. When he came back to pay the amount then I gave his all the forms and asked
him that a letter of thanks will be reached your home address by post. I told him youwill have to sign on letter of thanks and post it. Then I told him when the bank will
receive this letter of thanks then the bank will issue you the check book. At the last, I
asked the customer now you are free and you can go now. In this way , I opened the
account of a person completely and I accomplished my task.
The same procedure I used for opening the current account. But the minimum amount
for opening the current acount is Rs. 5000 and this account is not profit oriented and
no zakat deduction is made in this account and this account is for businessman and
companies etc.
2. Clearing Department:
The second task assigned to me was the clearing which means the clearance of
payments and cheques within city or with different cities. In clearing, I learnt about
the inward clearing, outward clearing, intercity clearing and local clearing. My
supervisor told me that the clearing we receive is inward clearing and that we sent to
other is outward clearing. After that my supervisor gave me some intercity and local
cheques and asked me to clear them. First of all I went to the clearance counter and
applied the CROSSING STAMP at the front of all the cheques. After that I separatedall the cheques of Lahore. And all the cheques of other cities like Islamabad,
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Gujranwala, and Faisalabad etc. After this I applied the CLEARING STAMP with the
same date of all the cheques of Lahore and the CLEARING STAMP with the next
day date of other cities cheques. After that I used the INTER CITY CLEARING
stamp of all the inter city cheques. After that I used Govt. Account Credited stamp for
all the govt. cheques and Payees Account Credited stamp for account holders. After
that I used the Collecting Bank Endorsement Confirmed stamp for other bankscheques which are made collection from our branch and Our Branch Endorsement
Confirmed stamp for those cheques if any branch from outside said to our bank to
collect money. After completing these stamps I took the registers of local clearing
and intercity clearing. In the register of local clearing, I entered all the local cheques
and in intercity register, I entered all the intercity cheques. After that entering the
cheques in register I total all the amount of entered cheques and confirm that total
with total amount of cheques. After completing this work, I made one list for local
cheques and the other list for intercity cheques and entered the amount of all the
cheques and made total of it. After this, I put them in an envelope and then I put
stamp of the bank on it. In this way, I completed my whole work
3. Remittance Department:
The third task assigned to me was the remittance. In remittance department, I learnt
about how the pay orders (PO), demand draft (DD) and call deposit at receipts (CDR)
are made. My supervisor asked me to make a pay order of the customer. First of all I
asked the customer, are you account holder of NBP or not? He asked me I am account
holder of NBP. I said ok the charges for making pay order for account holders of NBP
are Rs. 100 and for non account holders are Rs. 150. He asked me to make the payorder. Then I asked the customer gave me the photocopy of your C.N.I.C. He gave me
the photocopy of his C.N.I.C and told me his account number. After this I took the
pay order (PO) book and filled it with his name, account number, amount in figures
and words and the name of the bank. After writing these things, I applied two stamps
at the front of the pay order that are branch stamp and stamp of the date. After this my
supervisor signed the pay order (PO). After signed I gave the pay order (PO) to the
customer. In this way, I made the complete pay order of the customer.
The same procedure I used for making demand draft (DD) and call deposit at receipts
(CDR). But the charges rates for making demand draft (DD) and call deposit at
receipts (CDR) are also different for account holders & non account holders. During
making the demand draft (DD), I used the same stamps like branch stamp and stampof the date but the charges rates that I used for making the demand draft (DD) for
account holders are Rs. 80 and for non account holders are Rs. 100 that I used during
my work and I used the demand draft (DD) book for making DD. Similarly, the
charges rates that I used for making call deposit at receipts (CDR) for account holders
are Rs. 100 and for non account holders are Rs. 200 and I used the call deposits at
receipts (CDR) book for making CDR. In this way, I made all these things that are
pay order (PO), (DD) demand draft and call deposit at receipts (CDR). Hence, I
completed my whole in a good manner.
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We can use Ratio analysis to check out how profitable a business is, we can use it to
check out how much enough money a business has to pay its bill and we can even tell
whether its shareholders should be happy.
Ratio analysis can also help us to check whether a business is doing better this year
that it was last year, and it can tell us if our business is doing better or worse than
other businesses doing and selling the same things.
1. Net Profit Margin
Formula:
Net profit margin= (Net profit/ Revenue) *100
Calculation:
2012 2011 2010
Net profit= 16162635
Revenue/sales= 100092132= (net profit/ revenues)*100
= (16162635/ 100092132)*100
= 19.85%
Net profit= 17,709165
Revenue/sales= 95689741= (net profit/ revenues)*100
= (17,709165/ 95689741)*100= 18.50%
Net profit= 17738405
Revenue/sales= 88681381= (net profit/ revenues)*100
= (17738405/ 88681381)*100= 20.%
16.15% 18.50% 20.0%
Graphical Representation:
Internship Report on NBP, Jalal Pur Pir Wala Branch Multan. 21
0.00%
5.00%
10.00%
15.00%
20.00%
Year
2010
Ye ar
2011
Ye ar
2012
Net Profit Margin
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Interpretation:
This graph is showing that the net profit margin of NBP for the year 2010, 2011 &
2012 is 20%, 18.5% & 16.15% respectively. This ratio is not constant in all over the
years. Its showing that the net profit margin of NBP is decreasing day by day due toincrease in non mark-up interest expenses and taxes.
As the net profit margin of NBP is decreasing in all over the years it is showing that
the NBP is not efficient to converting its revenue into actual profits. As we know, the
higher the net profit margin the better it is. So this decreasing trend is not a good sign
for NBP.
.
2. Gross Spread Ratio
Formula:
Gross Spread Ratio = (Mark-up / return / interest earned - Mark-up / return / interestexpensed) / Mark-up / return / interest earned*100
Calculation:
2012 2011 2010
Spread = 43674305
Revenue/ sales=
= (Spread / Revenue)*100
= 43674305/ 100092132*100= 43.63%
Spread = 47173224
Revenue/ sales= 95689741
= (Spread / Revenue)*100
= 47173224/ 95689741*100= 49.29%
Spread = 43511637
Revenue/ sales= 88681381
= (Spread / Revenue)*100
= 43511637/ 88681381*100= 49%
43.63% 49.29% 49.0%
Graphical Representation:
Interpretation:
This graph is showing that the Gross Spread Ratio of NBP for the year 2010, 2011&
2012 is 49%, 49.29% and 43.63%. It is showing that the Gross Spread Ratio of NBPis not constant and is going to decrease day by day due to increase in interest
Internship Report on NBP, Jalal Pur Pir Wala Branch Multan. 22
40.00%41.00%42.00%43.00%44.00%45.00%46.00%47.00%48.00%49.00%50.00%
Year
2010
Year
2011
Year
2012
Gross Spread Ratio
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expenses. This ratio was high in 2010 but due to increase in interest expenses this
ratio is decreasing in 2011 and 2012 that is not a good sign for the national bank.
3. Non Interest Income to Total Income Ratio
Formula:
(Non Mark-up / interest income to total income ratio= non mark-up / interest
income) / (non mark-up / interest income +Mark-up / return / interest earned)*100
Calculation:
2012 2011 2010
non mark-up / interest income=
23849322
Total income = 123941454
= (non mark-up / interest income /
Total income)*100
= (23849322 / 123941454)*100
= 19.24%
non mark-up / interest income=
19,754420
Total income= 115444161
= (non mark-up / interest
income / Total Income)*100
= (19,754420 / 115444161)*100
= 17.11
non mark-up / interest income=
18150883
Total income = 106832264
= (non mark-up / interest income /
TotalIncome)*100
= (18150883 / 106832264)*100
= 16.99%
19.24% 17.11% 16.99%
Working of Total Income:
Total Income = (non mark-up / interest income +Mark-up / return / interest
earned)
2012) Total Income = 23849322+100092132= 123941454
2011) Total Income = 19754420+95689741= 115444161
2010) Total Income = 18150883+88681381= 106832264
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Graphical Representation:
Interpretation:
This graph is indicating that the Non Interest Income to Total Income Ratio of NBP
for the year of 2010, 2011 & 2012 is 16.99%, 17.11% and 19.24% respectively. It is
showing that this ratio of NBP is not constant in all over the years. It is increasing day
by day.
It indicates that non markup income is how much percent of the total income of the
NBP. In 2010, this ratio is low but in 2011 and 2012 this ratio is increasing it means
in 2010 & 2011 NBP is not gaining more non interest income like commission,
brokerage income & income from dealing in foreign currencies etc due to which this
ratio is decreasing in 2010 & 2011 than 2012
4. Spread Ratio
Formula:
Spread Ratio = Interest Earned / Interest Expensed
Calculation:
2012 2011 2010
Interest Earned= 100092132
Interest Expensed= 56417827
= (Interest Earned / Interest
Expensed)
= (100092132 /56417827)
=1.77 times
Interest Earned = 95689741
Interest Expensed= 48516517
= (Interest Earned / Interest
Expensed)
= (95689741 / 48516517)
= 1.97 times
Interest Earned = 88681381
Interest Expensed = 45169744
= (Interest Earned / Interest
Expensed)
= (88681381 / 45169744)
= 1.96 times
1.77 1.97 1.96
Graphical Representation:
Internship Report on NBP, Jalal Pur Pir Wala Branch Multan. 24
15.50%
16.00%
16.50%
17.00%
17.50%
18.00%
18.50%
19.00%
19.50%
Year
2010
Year
2011
Year
2012
Non Interest Income
to Total Income Ratio
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Interpretation:
This graph is showing that the Spread ratio of NBP for the year 2010, 2011,& 2012 is
1.96, 1.97 & 1.77 Times respectively. Its showing that the Spread Ratio of NBP is
not constant. This ratio is much lower in 2012 as compared to 2010 and 2011. It is
showing that the interest expenses in 2012 are more than 2010 and 2011 that is
becoming cause to decrease the ratio.
5. Return on Asstes
Formula:
Return on Assets = (Net profit/ Total assets) *100
Calculation:
2012 2011 2010
Net profit= 16162635
Total Assets= 1309339305
= (Net profit/ Total assets) *100
= (16162635/1309339305)*100= 1.23%
Net profit=17709165
Total Assets= 1153480100
= (Net profit/ Total assets) *100
= (17,709165/ 1153480100)*100= 1.53%
Net profit= 17738405
Total Assets=1038018467
= (Net profit/ Total assets) *100
= (17738405/ 1038018467)*100= 1.70%
1.23% 1.53% 1.70%
Total Assets
Year 2010
1309339305
Year 2011
1153480100
Year 2012
1038018467
Graphical Representation:
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1.65
1.7
1.75
1.8
1.85
1.9
1.95
2
Year 2010 Year 2011 Ye ar 2012
Spread Ratio
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Interpretation:
This graph is indicating that the Return on Asset ratio of NBP for the year 2010, 2011
& 2012 is 1.70%, 1.53% and 1.23% respectively. It is showing that the Return on
Assets Ratio of NBP is not constant and is decreasing with the passage of time. This
ratio is high in 2010and 2011 but is decreasing in 2012. Its indicating that the
management of NBP is not utilizing its assets in an efficient manner in generating
earnings and revenues for the NBP.
6. Return on Total Equity
Formula:
Return on total Equity=Net Income/ Total equity*100
Calculation:
2012 2011 2010
Net income= 16162635
Total Equity= 116034637
=Net Income/ Total equity*100
= 16162635/ 116034637*100
= 13.92%
Net income= 17709165
Total Equity= 112736906
=Net Income/ Total equity*100
= 17,709165/ 112736906*100
= 15.70%
Net income= 17738405
Total Equity= 105687665
=Net Income/ Total equity*100
= 17738405/ 105687665*100
= 16.78%
13.92% 15.70% 16.78%
Working of Total Equity:
Total Equity
Internship Report on NBP, Jalal Pur Pir Wala Branch Multan. 26
0.00%
0.20%
0.40%
0.60%
0.80%1.00%
1.20%
1.40%
1.60%
1.80%
Year
2010
Year
2011
Year
2012
Return on Assets
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Description 2012 2011 2010
Share capital
Reserves
Un appropriated profit
18500114
28818528
68715995
16818286
26206507
69712113
13454629
25129425
67103611
Total Equity 116034637 112736906 105687665
Graphical Representation:
Interpretation:
The graph is showing that the Return on Total Equity Ratio of NBP for the year 2010,
2011 & 2012 is 16.78%, 15.70% and 13.92% respectively. Its indicating that this
ratio is not constant in all over the years and is decreasing with the passage of time.
The Return on Total Equity Ratio of NBP in 2012 is lower as compared to 2010 &
2011. This ratio measures the profitability of NBP and is showing that the NBP can
generate much profit by the money invested by shareholders. In 2012, NBP is less
effective in using contributions from stockholders to generate earnings due to which
this ratio is low in 2012.
7. Debt Ratio
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0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
Year
2010
Year
2011
Year
2012
Return on Total
Equity
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Formula:
Debt ratio= (Total debt/ Total assets)*100
Calculation:
Working of Total Debt:
Total Debt
Description 2012 2011 2010
Total Debt 1158061555 1017685691 906719635
Working of Total Assets:
Total Assets
Description 2012 2011 2010
Total Assets 1309339305 1153480100 1038018467
Graphical Representation:
Interpretation:
The graph is showing that the Debt Ratio of NBP for the year 2010, 2011 & 2012 is
approximately in between 87% and 88%. Its showing that the NBP is using much
debts to finance its assets. This ratio is very high and is not a good sign for NBP. NBP
Internship Report on NBP, Jalal Pur Pir Wala Branch Multan.
2012 2011 2010
Total Debt= 1158061555
Total Assets= 1309339305
=(115806155/1309339305)*100
=87%
Total Debt= 1017685691
Total Assets= 1153480100
=(1017685691/1153480100)*100
=87%
Total Debt= 906719635
Total Assets= 1038018467
=(906719635/1038018467)*100
=87.35%
88.44% 88.22% 87.35%
28
86.80%
87.00%
87.20%87.40%
87.60%
87.80%
88.00%
88.20%
88.40%
88.60%
Year 2010 Year 2011 Year 2012
Debt Ratio
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need to decrease to its debts because high debt shows the NBP has high risk of default
due to which investors will not like the NBP.
8. Debt / Equity Ratio
Formula:
Debt / Equity Ratio = (total debt/ total equity)
Calculation:
Working of Total Equity:
Total Equity
Description 2012 2011 2010
Total Equity 116034637 112736906 105687665
Graphical Representation:
Interpretation:
This graph is indicating that the Debt to Equity Ratio of NBP for the year 2010, 2011
& 2012 is 8.79, 8.77 and 8.73 Times respectively. This ratio is not constant in all over
the years and is increasing with the passage of time. NBP has this ratio low in the year
2010 as compared to 2011 & 2012. But this ratio is approximately 9 which indicating
that the NBP has 9 times more debt than its equity that is not a good sign for NBP
because investors like this ratio to be low.
Internship Report on NBP, Jalal Pur Pir Wala Branch Multan.
2012 2011 2010
Total Debt= 115806155
Total Equity= 116034637
= (115806155/116034637)
= 9.98
Total Debts= 1017685691
Total Equity= 112736906
= (1017685691/ 112736906)
= 9.02
Total Debt= 906719635
Total Equity= 105687665
= (9067196935/105687665)
= 8.58
9.98 9.02 8.58
29
0.75
0.8
0.85
0.9
0.95
1
Year
2010
Year
2011
Ye ar
2012
Debt / Equity Ratio
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09. Time Interest Earned Ratio
Formula:
Time Interest Earned Ratio = (EBIT/ total interest)
Calculation:
2012 2011 2010
EBIT= 79675533
Total Interest= 56417827
= (EBIT/ total interest)
= 79675533/56417827
= 1.41 times
EBIT= 74632519
Total Interest= 48516517
= (EBIT/ total interest)
= 74632519/ 48516517
= 1.54 times
EBIT= 69792031
Total Interest= 45169744
= (EBIT/ total interest)
= 69792031/ 45169744
= 1.55 times
1.41 1.54 1.55
Working of EBIT:
EBIT= Profit before Taxation+ Mark-up / return / interest expensed
2010) EBIT = 24,622287+45,169744= 69,792031
2011) EBIT = 26116002+48516517= 74632519
2012) EBIT = 23257706+56417827= 79675533
Graphical Representation:
Interpretation:
This graph is indicating thatthe Time Interest Earned Ratio of NBP for the years
2010, 2011 & 2012 is 1.55, 1.54 and 1.41 times respectively. Its showing that the
Time Interest Earned Ratio of NBP is not constant. NBP has the ability to cover its
interest expenses with its EBIT in all over the years. This ratio is high in 2010 but it is
decreasing in 2011 and 2012 due to increase in interest expenses
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1.3
1.35
1.4
1.45
1.5
1.55
Year
2010
Year
2011
Year
2012
Time Interest EarnedRatio
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10. Advances / Deposits Ratio
Formula:
Advances / Deposits Ratio= Total Advances/ Total Deposits
Calculation:
2012 2011 2010
Advances= 657381154
Deposits= 1037784947
(Advances/ Deposits)
= 657381154/ 1037784947
= 0.633 times
Advances= 527109209
Deposits= 927415132
= (Advances/ Deposits)
= 527109209/ 927415132
= 0.5684 times
Advances= 478886755
Deposits= 832134054
= (Advances/ Deposits)
= 478886755/ 832134054
= 0.5754 times
0.633 0.5684 0.5754
Graphical Representation:
Interpretation:
This graph is indicating that the Adavnces to Deposits Ratio of NBP for the year
2010, 2011 & 2012 is 0.5754, 0.5684 and 0.633 respectively. This ratio is not constant
in all over the years . NBP has this ratio very low in all over the years but the standard
for this ratio is 1:1. This low ratio is showing that the NBP is not using its depositsefficiently in advancing to the borrowers. It means NBP has excess liquidity and
potentially low profits.
11. Dividend Per Share
Formula:
DPS = Dividends paid to Shareholders/ Average common shares outstanding
Calculation:
2012 2011 2010
Dividend paid= 12596042Average common shares
Dividend paid= 10077219Average common shares
Dividend paid= 8060510Average common shares
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0.530.540.550.560.570.580.59
0.60.610.620.630.64
Year
2010
Year
2011
Year
2012
Advances / Deposits
Ratio
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outstanding= 1850011.4
= Dividends paid to Shareholders
/ Average common shares
outstanding
= 12596042/ 1850011.4
= Rs.6.8 per share
outstanding= 1681828.6
= Dividends paid to Shareholders
/ Average common shares
outstanding
= 10077219/ 1681828.6
= Rs.6 per share
outstanding= 1,345,462.8
= Dividends paid to Shareholders
/ Average common shares
outstanding
= 8,060510/ 1,345,462.8
= Rs.6 per share
6.8 6 6
Graphical Representation:
Interpretation:
This graph is indicating that the Dividend per Share Ratio of NBP for the year 2010
and 2011 is Rs. 6 and Rs. 6.8for year 2012. Its showing that NBP has positive ratio in
all over the years. NBP is generating more earnings to pay its shareholders for their
common shares outstanding that is a good sign for NBP. It will attract more and more
investors to invest in NBP.
12. Earning Per Share(Given in Annual reports)
2012 2011 2010
8.74 10.53 13.24
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5.6
5.8
6
6.2
6.4
6.6
6.8
Year
2010
Year
2011
Year
2012
Dividend Per Share
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Graphical Representation:
Interpretation:
This graph is indicating that the Earning per Share Ratio of NBP for the year 2010,
2011 & 2012 Rs. 13.24, 10.36 and 8.74 respectively. It is showing that the Earning
per Share Ratio of NBP is decreasing in 2011 and 2012. The EPS ratio of NBP in
2010 is more due to the increasing net income than other years that is showing the
shareholders were earning more per share in 2010 as compared to 2011 and 2012.
Internship Report on NBP, Jalal Pur Pir Wala Branch Multan. 33
0
2
4
6
8
10
12
14
Year
2010
Year
2011
Year
2012
Earning Per Share
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BALANCE SHEETRupees in Millions
ASSETS 2010 2011 2012
Cash and balances with treasury banks 115,657,025 131,843,291 158,332,708Balances with other banks 30,743,368 28,069,897 30,222,338
Lendings to financial institutions 23,051,171 44,360,727 8,272,645
Investments 301,078.498 319,527,254 343,537,529
Advances 478,886,775 527,109,209 657,381,154
Other assets 54,026,725 66,469,884 80,162,206
Operating fixed assets 27,620,697 28,126,754 27,949,833
Deferred tax assets 6,954,228 7,973,084 3,480,892
1,038,018,46
7
1,153,480,10
0
1,309,339,30
5
LIABILITIES 2010 2011 2012
Bills payable 8,006631 9,104,710 14,367,639
Borrowings from financial institutions 19,657,207 26,371,675 50,250,684
Deposits and other accounts 832,134,054 927,415,132 1,037,784,947
Sub-ordinated loans _ _ _
Liabilities against assets subject to finance lease 123,413 92,739 29,619
Other liabilities 46,798,330 54,701,435 55,628,666
Deferred tax liabilities net _ _ _
Total 906,719,635 1,017,685,691 1,158,061,555
NET ASSETS 131,298,832 135,794,409 151,277,750
REPRESENTED BY
Share capital 13,454,629 16,818,286 18,500,114
Reserves 25,129,425 26,206,507 28,818,528
Unappropriated Profit 67,103,611 69,712,113 68,715,995
Non
Controling498076 495488 _
Surplus 25,113,091 22,462,015 35,243,113
131,298,832
135,794,409 151,277,750
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Income Statement2010 2011 2012
Markup/return/interest earned 88,681,381
95,689,74
1
100,092,13
2
Markup/return/interest expensed 45,169,744
48,516,51
7 56,417,827
Net markup/interest income 43,511,637
47,173,22
4 43,674,305
Provisions against non-performing advances 7,007,975 6,219,671 7,155,149
provision for/(reversal of) diminution in the value
of investments 2,904,949 3,138,494 842,111
provision against off balance sheet obligations 3,965 Nil Nil
bad debts written off directly 92,593 Nil Nil
10,009,482 9,358,165 7,997,260
Net markup/interest income after provisions 33,502,155
37,815,05
9 35,677,045
NON MARKUP/ INTEREST
INCOME
Fee, Commission & brokerage income 9,871,667 9,948,547 10,706,506
Dividend income 1,067,273 1,595,192 3,626,356
Income form dealing in foreign currencies
Profits from associates
2,278,898
66,906
3,196,630
83,559
3,703,319
_
Gain on revaluation of previously held
equity interest 180,131 _ _
Gain on sale & redemption of securities-net 2,512,363 2,390,211 3,220,442
Investments classified as held for trading
Loss from Joint Venture
6,730
(16,976)
(35039)
32,181
(2,472)
_
Other income 2,183,891 2,543,139 2,595,171
Total non-markup/ Interest income 18,150,883 19754420 23,849,322
Total income ( Interest + non-
Interest) 51,653,038 57569479 59,526,367
NON MARKUP/ INTERSET
EXPENSES
Administration expenses 26,732,045 30760815 35,736,823Other provisions written off 179,819 554,810 371,514
Other charges 118,887 137852 160,324
Total non markup/ Interest expenses 27,030,751 31453477 36,268,661
PROFIT BEFORE
TAXATION 24,662,287 26116002 23,257,706
Taxation Current 9,871,640 9229882 7,526,333
Prior years (938,158) 2,60,000 _
Deferred
(2,049,600
) (1083045) (431,262)
6,883,882 8406837 7,095,071PROFIT AFTER 17,738,405 17709165 16,162,635
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TAXATION
This technique is also known as comparative analysis. It is conducted by setting
consecutive balance sheet, income statement or statement of cash flow side-by-side
and reviewing changes in individual categories on a year-to-year or multiyear basis.
The most important item revealed by comparative financial statement analysis is
trend. A comparison of statements over several years reveals direction, speed and
extent of a trend(s). The horizontal financial statements analysis is done by restating
amount of each item or group of items as a percentage. Such percentages are
calculated by selecting a base year and assign a weight of 100 to the amount of
each item in the base year statement. Thereafter, the amounts of similar items or
groups of items in prior or subsequent financial statements are expressed as a
percentage of the base year amount. The resulting figures are called index numbersor trend ratios.
Formula = Current Year amount / Base Year amount * 100.
10.a.Horizontal analysis Balance Sheet.
ASSETS 2010% age 2011% age 2012% age
Cash and balances with
treasury banks
100% 114% 137%
Balances with other banks 100% 91% 98%
Lendings to financial
institutions
100% 192% 36%
Investments net 100% 106% 114%
Advances net 100% 110% 137%
Operating fixed assets 100% 102% 101%
Deferred tax assets net 100% 115% 50%
Other assets net 100% 123% 148%
TOTAL 100% 111% 126%
LIABILITIES %age %age %age
Bills payable 100% 114% 179%Borrowings 100% 134% 257%
Deposits and other accounts 100% 111% 125%
Subordinate loan _
Liabilities against assets 100% 75% 24%
Deferred tax liabilities net - - -
Other liabilities 100% 116% 119%
TOTAL 100% 112% 128%
PRSEENTED BY 2010 %age 2011 %age 2012 %age
Share capital 100% 125% 137%
Reserves 100% 104% 115%unappropriate profit 100% 104% 102%
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Surplus on revaluation of
assets
100% 89% 140%
Non controlling 100% 99.5% -
TOTAL 100% 103% 115%
10.b. Horizontal analysis
Profit & Loss A/C:
Particulars 2010% 2011% 2012%
Markup / return / interest
earned
100% 108% 113%
Markup / return / interest
expensed
100% 107% 125%
Net markup / interest
income
100% 108% 100.04%
Provision against non
performing advances-net
100% 89% 102%
Provision for diminution in
the
value of investments net
100% 108% 29%
Provision against offbalance
sheet obligations
100% - -
Net markup / interest
income
100% 113% 106%
Nonmarkup / interest income
Fee, commission andbrokerage income 100% 101% 108%
Dividend income 100% 149% 339%
Income from dealing in foreign
currencies
100% 140% 163%
Gain on sale of securities
net
100% 95% 128%
Unrealized gain on revaluation
of investments
100% - -
Share of loss from joint
ventures
100% 190% -
Share of profits 100% 125% -
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Gain on revaluation of
previously held equity interest
100% - -
Other income 100% 116% 119%
Total nonmarkup / interest
income
100% 109% 131%
Total income ( Interest + non-
Interest)
100% 111% 115%
Nonmarkup / interest expenses
Administrative expenses 100% 115% 134%
Other provision net 100% 309% 206%
Other charges 100% 116% 135%
Total nonmarkup / interest
expenses
100% 116% 134%
Profit before taxation 100% 106% 94%
Taxation Current year 100% 93% 76%
Prior years 100% (28)% -
Deferred 100% (53)% (21)%
100% 122% 103%
Profit after taxation 100% 99% 91%
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Vertical analysis is a technique for identifying relationship between items
in the same financial statement by expressing all amounts as the
percentage of the total amount taken as 100. In a balance sheet, for
example, cash and other assets are shown as a percentage of the total
assets and, in an income statement, each expense is shown as apercentage of the sales revenue. In Vertical analysis, various components
of the financial statements are standardized by expressing them as a
percentage of some bases.
Examples of common-sized statements include:
1. Components of the balance sheet expressed as a percentage of total
assets
2. Components of the income statement expressed as a percentage of
sales orInterest earned
Formula:
The formula for Vertical Analysis is:
Individual item of financial statement/total of items head *100
Vertical analysis of Statement of Financial Position
ASSETS 2010%age 2011%age 2012%age
Cash and balances with
treasury banks
11% 12% 12.09%
Balances with other banks 3% 2% 2.3%
Lendings to financial
institutions
2% 2.7% 0.63%
Investments net 28% 26.5% 26.24%
Advances net 46% 44.3% 50%
Operating fixed assets 3% 2% 2.13%
Deferred tax assets net 5% 6% 0.265
Other assets net 4% 5% 6.12
TOTAL 100% 100% 100%
LIABILITIES
Bills payable .008% .008% 1.1%
Borrowings 1% 2% 3.83%
Deposits and other accounts 81% 83% 79%
Subordinate loan
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Liabilities against assets 0.0012% 0.011% 0.00226
Deferred tax liabilities
Other liabilities 3% 4% 0.0424
TOTAL LIABILITIES 86% 89% 88.4%NET ASSETS 14% 11% 11.6%
Vertical analysis of Profit & loss account
Particulars 2010% 2011% 2012%
Markup / return / interest earned 100% 100% 100%
Markup / return / interest
expensed
52% 51%
Net markup / interest income 49% 49% 43.6%
Provision against non performing
advances-net
8% 6% 7%
Provision for diminution in the
value of
investments net
3% 4% 1%
Impairment of goodwill .1% - -
Provision against off balance sheet
obligations
-.002 - -
11% 10% 8%
Net markup / interest income
after
provisions
40% 39% 35.8%
Non -markup / interest income
Fee, commission and brokerage
income
13% 11% 10.6%
Dividend income 1% 2% 4%Income from dealing in foreign
currencies
2% 3% 3.6%
Gain on sale of securities net 3% 2% 3.21%
Unrealized gain on revaluation
of
investments
- 0.1% -
Share of loss from joint ventures 0.009% 0.1% -
Share of profits from associates 0.1% .1% -
Gain on revaluation of .2% -0.0035 -0.0047
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previously
equity interest
Other income 2% 3% 2.6%
Total nonmarkup / interest
income
20% 21% 24%
Total income ( Interest + non-
Interest)
58% 60% 59.4%
Administrative expenses 31% 32% 35.70%
Other provision net .2% .6% .37%
Other charges .1% .2% .16%
Total nonmarkup / interest
expenses
30% 33% 36.23
Profit before taxation 11% 10% 23.23%
Taxation Current year 11.13% 9% 7.5
Prior years -3% .27% -
Deferred 7% 9%
Profit after taxation 20% 19% 16.14%
12.BANKANALYSISWITHREFERNCETO
COMMERCIAL BANKSLISTEDONSTOCKEXCHANGE
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Registered in Pakistan Name
of As of June 2012
Commercial Paid up Reserves Assets Deposits Advances Profit Earnings Branch Credit
Bank Capital (Rs. Bn)
(Rs.
Bn) (Rs. Bn) (Rs. Bn)
After
Tax
Per
share Network Rating
(Rs.
Bn)
(Rs.
Bn) (Rs) (Nos)
Habib Bank 7.59 23.6 735.71 584.85 411.36 7.5 9.75 1400 AA+
NBP 8.97 18.54 788.12 621.53 173.42 8.1 9.03 1249 AAAAllied Bank 6.46 5.48 344.7 293.97 168.45 2.51 3.88 757 AA
MCB 6.28 35.88 450.34 350.72 228.98 7.68 12.22 1038 AA+United Bank 10.12 12.82 576.02 465.54 328.55 5.59 5.53 1100 AA+
First Women 0.28 0.22 8.04 6.4 3.09 0.05 1.67 38 BBB+
Bank of Punjab 5.29 7.43 217.85 180.82 142.85 -2.63 -4.97 272 AA-
Soneri Bank 4.11 1.88 81.61 64.73 45.83 0.47 1.13 90 AA-
Askari Bank 4.06 7.59 194.21 153.32 114.04 0.05 1.01 155 AA
Bank Al- Habib 4.79 2.8 167.36 136.75 93.25 1.25 2.61 203 AA
Bank of Khyber 4 1.34 34.43 24.4 11.14 0.11 0.27 34 BBB+
Bank Al- Falah 8 2.95 333.02 287.77 180.02 1.69 2.12 231 AA
Saudi Pak 5 0.22 50.83 42.35 27.62 -0.81 -1.54 55 A-
Faysal Bank 5.3 3.57 137.31 99.61 87.61 0.75 1.41 111 AA
KASB Bank 4.02 0.17 53.66 44.33 32.65 0.08 0.39 41 A
Meezan Bank 4.54 0.81 71.74 57.84 38.3 0.44 0.98 111 A+
NIB Bank 28.44 8.46 177.98 112.12 85.43 -0.73 0.23 240 AA-
Mybank 4.24 0.41 45.47 31.96 23.03 0.43 1.02 69 AAtlas Bank 5.01 0.52 30.7 22.18 17.5 -0.2 -0.39 31 A-
Standard
Chartered 38.72 1.95 276.38 173.81 126.27 1.31 0.34 176 AA+
JS Bank 5.11 0.01 24.16 14.08 9.57 0.16 -0.31 11 A-Habib
Metropolitan 6.02 6.7 192.45 128.97 101.22 1.57 2.6 100 AA+
SWOT Analysis is a strategic planning method used to evaluate the Strengths,
Weaknesses, Opportunities, and Threats involved in a project or in a business venture.
It involves specifying the objective of the business venture or project and identifying
the internal and external factors that are favorable and unfavorable to achieving that
objective.If SWOT analysis does not start with defining a desired end state or
objective, it runs the risk of being useless. A SWOT analysis may be incorporated into
the strategic planning model. An example of a strategic planning technique that
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incorporates an objective-driven SWOT analysis is SCAN analysis. Strategic
Planning, including SWOT and SCAN analysis, has been the subject of much
research.
Strengths: Attributes of the organization that is helpful to achieving the
objective.
Weaknesses: Attributes of the organization that is harmful to achieving theobjective.
Opportunities: External conditions that is helpful to achieving the objective.
Threats: External conditions which could do damage to the business's
performance.
Strengths:
Advance salary product:
It exists in the list of top 10 banks in the ASIA.
It has the highest profit among the largest banks of the ASIA.
Its paid-up capital is very high
Very less uncertainty because of a Govt. bank
High confidence due to higher capital investment.
LC (letter of credit) is acceptable all over the world.
Chest branches can supply cash on the behalf of state bank.
Chest loans can be used for limited time
Stake holder is Govt. of Pakistan.
It holds the Govt. treasury.
The biggest customer of NBP is Govt. of Pakistan. Work as corresponding of ASKARI bank
Provide High packages to employees.
Provide high staff benefits.
Recruitment occurs after every year.
MTOs selection is planned till 2010.
Weaknesses:
The Major problem with NBP is its image as it is a Govt. bank so the vision of
the customer is not positive about it.
People think it will not provide them satisfactory services.
In many branches management is not up to date.
In small areas branches employees have less education.
Award and promotion policies are not implemented in all branches.
There is no concept of job rotation
Employees have low coordination level among each other.
Opportunities:
Advance salary for employees
Employee benefits
Pensions
Award for employee performance
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Promotions
Corporate planning learning.
Threats:
Turn out of employee
Job security and Strugglers
At a time do no. of jobs due to competitor.
NBP have to do those jobs which have no loss and no profit because of their
competition
Customer dissatisfaction
Slow actions on complains
Political environment.
It is very important that an organization considers its environment before beginning
the marketing process. In fact, environmental analysis should be continuous and feed
all aspects of planning. The organization's marketing environment is made up of:
1. The internal environment e.g. staff (or internal customers), office technology,
wages and finance, etc.
2. The micro-environment e.g. our external customers, agents and distributors,
suppliers, our competitors, etc.
3. The macro-environment e.g. Political (and legal) forces, Economic forces,
Sociocultural forces, and Technological forces. These are known as PEST factors.
Political:
Privatization policy and deregulation.
Impact of subsidized credit affecting and NCBs.
Employment practices, Unions, Associations.
Political Interference and harassment.
Incidents of high taxation on banking industry.
Economical:
Constraints in mobilization of public savings because of inflation.
Staff cost.
Operating cost.
Bad debts
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Social & Cultural:
Inadequate human resources.
Cultural strain to savings.
Defaulters lobby.
Declining education and work ethics.
Inadequate accountability.
Adequate empowerment.
Technological:
Inadequate communication infrastructure.
Inadequate computer facilities.
Inadequate IT training
NBP is the biggest bank of Pakistan that has its branches at national and international
level. This is only the bank that is owned by the government of Pakistan. NBP acts as
an agent of the State Bank of Pakistan. The future prospect of NBP is looking very
strong because it has its branches at the national and international level. It has huge
amount of profit. No other bank can compete this bank because it works on the behalf
of the government. Management of the NBP is also very efficient to meet the
requirements. Customers have trust on it. NBP also deals with government employees
and provides benefits to them. NBP can touch the heights by the computerized
system. Financial position of NBP is very good. Assets and profits of NBP are in a
position that no other bank will even think to earn. NBP plans to continue its strongfocus on recovery and reduction in non performing loans, deposit mobilization,
expense management and consolidation of loans. Financial position of NBP in 2010 is
good and is expected to be better in the future. NBP is taking IT initiatives to upgrade
and implement new application solutions to meet the challenges of the growing
competition. It will improve the operational efficiency and control, customer services.
It is expected that the NBP will lead to the other banks of Pakistan in the future.
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As a financial analyst I concluded that some ratios are good for NBP while some
ratios are not good. These ratios are as following:
The net profit margin of NBP in all of the years is good. Non Interest Income to Total Income Ratio of NBP is good.
Return on assets ratio of NBP is low.
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 good.
Debt to equity ratio is also too high of NBP that is not god.
Time Interest earned ratio of NBP is good.
Advances / Deposits ratio is very low and not good for NBP.
Operating Cash Flow ratio is also very low in all over the year that is not
good.
Dividend per share ratio of NBP is good. Earning per share ratio is very good.
P / E ratio is also good of NBP.
But despite of all these problems NBP is in good position. If it solves these problems
it can reach at the highest position and no one can touch its hights.
As a financial analyst I will recommend that some necessary points should be
improved that are as following: NBP can also increase the net profit margin ratio by decreasing its non mark-
up interest expenses and taxes.
NBP can increase more its gross spread ratio by decreasing the interest
expenses.
Return on assets ratio can also be increased by utilizing the assets in an
efficient manner.
NBP need to decrease its debts to manage the debt ratio because a high debt is
not a good sign for NBP.
Debt to equity ratio is also very high. NBP should decrease its debts because
the equity investors will not invest in it due to high debts. NBP can increase its advances / deposits ratio by giving advances to the
customers.
NBP needs to improve its liquidity by increasing assets for operating cash
flow.
Moreover,
Here I am giving some suggestions, which in my view can add some input for
efficiency and better performance of NBP as an organization in general and City
branch in particular.
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The recommendations are as follows:
Professional training
NBP staff lacks professionalism. They lack the necessary training to do the job
efficiently and properly. Although staff colleges in all major cities but they are not
performing well. For this purpose these staff colleges should be reorganized and their
syllabus should be made in such a way to help the employee understand the ever-
changing global economic scenario.
Delegation of authority
Employees of the bank should be given a task and authority and they should be asked
for their responsibility.
Performance Appraisal
The manager should strictly monitor the performance of every staff member. All of
them should be awarded according to their performance and result in the shape of
bonuses to motivated and incite them to work more efficiently.
Transfer
Transfer is not properly carried out. Some of the employees are continually serving at
the same post. They are simply rotated at the same branch. Therefore it is
recommended that evenly rotation of every employee should take place after every
three years in different branches of the bank.
Changes in Policies
There should not be any abrupt policies change by the upper management, as this
practice hurts the customer confidences in the bank. Government should make long-
term policies
Need of Qualified Staff
Required, qualified staff should be provided to branch in order to improve the
functioning of the branch. Especially a telephone operator should be appointed.
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Utility Bill Charges
Bank gets Rs. 10 to processes a utility bill, and it is very tire, tough and hard job.
These charges should be increased to RS 15 per bill to enable the branch to cover their
handling costs and make some profit.
Link with the Head Quarter
100 major branches of NBP should established a direct link with the, head quarter In
Karachi, through Internet or Intranet. This will make the functions and decision
making of the management easier and convenient.
Credit Card
National bank of Pakistan should start its operation in credit card. These cards are
very helpful for the ordinary customer in general and the business people in particular.
To make it more secure and to eliminate the misuse of it, the management is required
to keep proper security against the card.
Installing Validator and ATM
Validator machine is used to count the currency notes and its installation will help to
eliminate to counting errors and will save time.
This branch is situated in the City, which is supported to be the hub of business
activates. In this area an auto teller machine (ATM) is the need of the hour
businessmen can easily check their balance in the bank and also with draw their
money conveniently.
Clean Loans
Clean loan or clean overdraft is the credit facility extended to the customers to the
customers without any security. These types of small term loans should not be
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extended to anybody, because sometime these loans are provided to blue-eyed people
of the management and they become a part of bad debts.
Cash Financing
In this mode of financing the amount of credit not utilized by the borrower is
remained tax-free. It is recommended that a small amount of interest should be charge
on this amount as well because the bank gas kept-aside the amount for that borrower
and cannot advance it anywhere..
Needs to be Flexible in credit Policy
As mentioned earlier, NBP is very conservative in advances and loans policy. It
reduces the investment opportunities. Also loans should be given to the small
businessmen and the agriculture sector at the low markup rate. It should adopt flexible
credit policy while giving credit to the agriculture sector.
Technological Advancement
I would like to suggest that at least all the main branches of NBP should be fully
computerized in order to expedite the dealing process among bankers and their
customers. Every department should be provided a computer with adequate training
(especially Advances, Deposits and Foreign Exchange departments).Daily records
should be entered directly into these computers, (instead entering the overall daily
transactions after the banking hours). It will not only reduce transaction time, will
increase accuracy but will also be efficient as well. Not only it will be economical but
will also reduce the extra burden of work of the bank. It will also help in reducing the
use of excessive paper work.
Improper Distribution of Work
Proper distribution work leads to success in every organization. Proper distribution of
work prevents the employee from over and under work situation. So for a smooth
running of an organization proper distribution of work is the hint to be followed.
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During my internship I observed that there was no proper distribution of work in the
bank. I saw that some of the employee worked like ants other sat idle starting here and
there. So this created a lot of over work situation for while relaxation for other.
Favoritism and nepotism
In the City branch during my internship I saw that when some of the employees are
transfer to other places, due to their relation with influential people and with top
management they can cancel their transfer in few weeks, when they are unsatisfied at
that place.
So I suggest that in the organization there should be no favoritism, nepotism and
politics and their transfer and promotion should be made on merit and according to
the rules and regulations of the bank and provided favorable environment to the
employee to show their performances.
Inter Departmental Transfer
I watched during my internship that, there is number of employee who have worked
on one seat for many a year. It can have negative effects motivation of employee who
is hard working and intelligent. Take the example of advances section. In advance
section if the employee is transfer after sixth month or seven month, how can he be
able to show his performances and how can he be able to know the bank customer in a
short period of time.
Marketing Policy
The branch should adopt various marketing strategy and promotion strategy to
promote the bank and its product. The most important in my opinion is personal
marketing; it is the most effective of all when you think in term of branch level. But
on the whole organization level, they should arrange the seminar within the bank and
outside the bank.
Complaints of Customer
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There should be an information desk to provide the information and to receive the
complaints of the customer in the bank. There is no complaint box available in the
branch and not any person appointed to hear the complaints.
Every person cannot go to the manager for the complaint because most of the people
are hesitant. So I suggest management to install a compliant box in the branch, and
recruit a special person for that guidance of the customer when they are unable to
manage some difficulties in banking matters.
Analysis of the Business:
Proper analysis of the business reports should be conducted before extending any type
of loan. For this purpose professional training of the stuff member is required.
Organizational Commitment
It is suggested that employees working on daily wages basis should be given some
benefits, which the other employees are getting. Their salaries must increase
according to efficiency, performance and service.
Managerial Leadership
In the analysis, we have discussed the difficulties of the assistant in taking any
initiative; therefore it is recommended that the assistants should he given special
training to make them ready for the leadership.
Credit Monitoring
The credit department of the bank should carries out vigilant credit monitoring. They
should ensure the proper payment of installments and the mark-up by the borrower.
The staff members who have done all the paper work of the loan extension should
perform the monitoring, as he/she will be having more information about the
borrower.
Extended Banking Hours
The banking hours may be extended up to six, as being practiced by HBL opposite toit.
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Some of the business community due to law and order situation are now reluctant to
keep the fund in their premises and would want to depart with it. Therefore, City
Branch may extend the night banking to cater to demand of this business community.
The branch could also be opened to cater the requirements of this business community
Limited staff:
Staff of NBP in village branches is limited, they face much difficulty to perform their
task efficiently. So I recommended that staff should increase in those branches for
better development of resources. On other hand I observed that many branches of
NBP are overcrowded. Less people can work which extra people perform. Number of
employees should decrease or new branches should opens for the adjustment of theseextra employees. So there should be effective distribution of human resource achieve
goals effectively and efficiently.
Housing and House Hold Goods loans
Bank should initiate these loans because most of banks customers are middle class
and they cannot afford to buy house or household goods at once by their own.
I took help from the following sources:
Website of NBP: www.nbp.com.pk
www.google.com.pk
www.wikipedia.com
www.investopedia.com
Branch officers like
Operations manager
Compliance officer
Other staff etc
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http://www.nbp.com.pk/http://www.google.com.pk/http://www.wikipedia.com/http://www.investopedia.com/http://www.nbp.com.pk/http://www.google.com.pk/http://www.wikipedia.com/http://www.investopedia.com/7/29/2019 INTERNSHIP REPORT on NBP 2013.doc
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All the material used in this report is obtained from website of NBP. All financialstatements are downloaded from annual report ofwww.nbp.com.pk. Financial reports
are present in Annual reports. I took all the data from the financial statements of 2012.
2011 and 2010. I took the financial statements of 2012 for the preparation of this
report.
http://www.nbp.com.pk/http://www.nbp.com.pk/